G.R. No.
L-49582 January 7, 1986 be contrary to the law itself should not bar the right of the union to claim for its
CBTC EMPLOYEES UNION, petitioner,
vs.
THE HONORABLE JACOBO C. CLAVE, Presidential Executive Assistant, and
COMMERCIAL BANK & TRUST COMPANY OF THE PHILIPPINES, respondents.
Francisco F. Angeles for petitioner.
Pacis, Reyes, De Leon & Cruz Law, Office for respondent CBTC.
Edmundo R. AbigaN, Jr. for respondent Union.
DE LA FUENTE, J.:
Petition for certiorari seeking to annul and set aside the decision of the respondent
Presidential Executive Assistant 1 affirming that of the Acting Secretary of Labor who
reversed the decision of the National Labor Relations Comission which upheld the
Voluntary Arbitrator's order directing the private respondent bank to pay its monthly
paid employees their "legal holiday pay."
Petitioner Commercial Bank and Trust Company Employees' Union (Union for short)
lodged a complaint with the Regional Office No. IV, Department of Labor, against
private respondent bank (Comtrust) for non-payment of the holiday pay benefits
provided for under Article 95 of the Labor Code in relation to Rule X, Book III of the
Rules and Regulations Implementing the Labor Code.
Failing to arrive at an amicable settlement at conciliation level, the parties opted to
submit their dispute for voluntary arbitration. The issue presented was: "Whether the
permanent employees of the Bank within the collective bargaining unit paid on a
monthly basis are entitled to holiday pay effective November 1, 1974, pursuant to
Article 95 (now Article 94) of the Labor Code, as amended and Rule X (now Rule
IV), Book III of the Rules and Regulations Implementing the Labor Code. "
In addition, the disputants signed a Submission Agreement stipulating as final,
unappealable and executory the decision of the Arbitrator, including subsequent
issuances for clarificatory and/or relief purposes, notwithstanding Article 262 of the
Labor Code which allow appeal in certain instances. 2
In the course of the hearing, the Arbitrator apprised the parties of an interpretative
bulletin on "holiday pay" about to be issued by the Department of Labor.
Whereupon, the Union filed a Manifestation 3 which insofar as relevant stated:
6. That complainant union . . . has manifested its apprehension on the contents of
the said Interpretative Bulletin in view of a well-nigh irresistible move on the part of
the employers to exclude permanent workers similarly situated as the employees of
Comtrust from the coverage of the holiday pay benefit despite the express and self-
explanatory provisions of the law, its implementing rules and opinions thereon . . . .
7. That in the event that said Interpretative Bulletin regarding holiday pay would be
adverse to the present claim . . . in that it would in effect exclude the said
employees from enjoyment of said benefit, whether wholly or partially, complainant
union respectfully reserves the right to take such action as may be appropriate to
protect its interests, a question of law being involved. . . . An Interpretative Bulletin
which was inexistent at the time the said commitment was made and which may
holiday pay benefits.
On April 22, 1976, the Arbitrator handed down an award on the dispute. Relevant
portions thereof read as follows:
The uncontroverted facts of this case are as follows:
(1) That the complainant Union is the recognized sole and exclusive collective
bargaining representative of all the permanent rank-and-file employees of the Bank
with an existing Collective Bargaining Agreement covering the period from July 1,
1974 up to June 30, 1977;
(2) That ... the standard workweek of the Bank generally consists of five (5) days of
eight (8) hours each day which, . . . said five days are generally from Monday thru
Friday; and, as a rule, Saturdays, Sundays and the regular holidays are not
considered part of the standard workweek.
(3) That, in computing the equivalent daily rate of its employees covered by the
CBA who are paid on a monthly basis, the following computation is used, as per the
provisions of Section 4, Article VII, of the CBA (Annex "A"):
Daily Rate = Basic Monthly Salary plus CLA x 12 250
Basic Hourly Rate = Daily Rate 8
(4) That the divisor of '250', . . . was arrived at by subtracting the 52 Sundays, 52
Saturdays, the 10 regular holidays and December 31 (secured thru bargaining), or a
total of 115 off-days from the 365 days of the year or a difference of 250 days.
Considering the above uncontroverted facts, the principal question to be resolved
is whether or not the monthly pay of the covered employees already includes what
Article 94 of the Labor Code requires as regular holiday pay benefit in the amount
of his regular daily wage (100% if unworked or 200% if worked) during the regular
holidays enumerated therein, i.e., Article 94(c) of the Labor Code.
In its latest Memorandum, filed on March 26, 1976, the Bank relies heavily on the
provisions of Section 2, Rule IV, Book 111, of the Rules and Regulations implementing
particularly Article 94 (formerly Article 208) of the Labor Code, which Section reads
as follows:
SECTION 2. Status of employees paid by the month -Employees who are uniformly
paid by the month, irrespective of the number of' working days therein with a salary
of not less than the statutory or established minimum wage, shall be presumed to be
paid for all days in the month whether worked or not.
For this purpose, the monthly minimum wage shall not be less than the statutory
minimum wage multiplied by 365 days divided by twelve. (Emphasis supplied).
While admitting that there has virtually been no change effected by Presidential
Decree No. 850, which amended the Labor Code, other than the re-numbering of
the original Article 208 of said Code to what is now Article 94, the Bank, however,
attaches a great deal of significance in the above-quoted Rule as to render the
question at issue 'moot and academic'.
On the other hand, the Union maintains, in its own latest Memorandum, filed also on
March 26, 1976, that the legal presumption established in the above-quoted Rule is
merely a disputable presumption. This contention of the Union is now supported by
a pronouncement categorically to that effect by no less than the National Labor
Relations Commission (NLRC) in the case of The Chartered Bank Employees
Association vs. The Chartered Bank. NLRC Case No. (s) RB-IV-1739-75 (RO4-5-3028-
75), which reads, in part, as follows:
. . . A disputable presumption was sea in that it would be presumed the salary of
monthly-paid employees may already include rest days, such as Saturdays,
Sundays, special and legal holidays, worked or unworked, in effect connoting
that evidence to the contrary may destroy such a supposed legal
presumption. Indeed, the Rule merely sets a presumption. It does not conclusively
presume that the salary of monthly-paid employees already includes unworked
holidays. . . .
The practice of the Bank of paying its employees a sum equivalent to Base pay plus
Premium on Saturdays, Sundays and special and legal holidays, destroys the legal
presumption that monthly pay is for an days of the month. For if the monthly pay is
payment for all days of the month, then why should the employee be
paid again for working on such rest days. (Emphasis supplied)
There is no reason at present not to adopt the above ruling of the Honorable
Comission, especially considering the fact that this Arbitrator, in asking a query on
the nature of the presumption established by the above Rule, from the Director of
Labor Standards in the PMAP Conference held at the Makati Hotel on March 13,
1976, was given the categorical answer that said presumption is merely disputable.
This answer from the Labor Standards Director is significant inasmuch as it is his
office, the Bureau of Labor Standards, that is reportedly instrumental in the
preparation of the implementing Rules, particularly on Book III of the Labor Code on
Conditions of Employment, to which group the present Rule under discussion
belongs.
So, rather than rendering moot and academic the issue at hand, as suggested by
the Bank, the more logical step to take is to determine whether or not there is
sufficient evidence to overcome the disputable presumption established by the
Rule.
It is unquestioned, and as provided for in the CBA itself, that the divisor used in
determining the daily rate of the monthly-paid employees is '250'.
xxx xxx xxx
Against this backdrop, certain relevant and logical conclusions result, namely:
(A) The Bank maintains that, since its inception or start of operations in 1954, all
monthly-paid employees in the Bank are paid their monthly salaries without any
deduction for unworked Saturdays, Sundays, legals and special holidays. On the
other hand, it also maitains that, as a matter of fact, 'always conscious of its
employee who has to work, on respondent's rest days of Saturdays and Sundays or
on a legal holiday, an employee who works overtime on any of said days is paid
one addition regular pay for the day plus 50% of said regular pay (Bank's
Memorandum, page 3, filed January 21, 1976). . . .
xxx xxx xxx
On the other hand, there is more reason to believe that, if the Bank has never made
any deduction from its monthly-paid employees for unworked Saturdays, Sundays,
legal and special holidays, it is because there is really nothing to deduct properly
since the monthly, salary never really included pay for such unworked days-and
which give credence to the conclusion that the divisor '250' is the proper one to use
in computing the equivalent daily rate of the monthly-paid employees.
(B) The Bank further maintains that the holiday pay is intended only for daily-paid
workers. In this regard, the NLRC has this to say , in the same above-quoted
Chartered Bank case:
It is contended that holiday pay is primarily for daily wage earners. Let us examine
the law, more specifically Article 95 (now Article 94) of the Labor Code to see
whether it supports this contention. The words used in the Decree are 'every worker',
while the framers of the Implementing Rules preferred the use of the phrase 'all
employees.' Both the decree itself and the Rules mentioned enumerated the
excepted workers. It is a basic rule of statutory construction that putting an
exception limits or modifies the enumeration or meaning made in the law. it is thus
easy to see that a mere reading of the Decree and of the Rules would show that
the monthly-paid employees of the Bank are not expressly included in the
enumeration of the exception.
Special notice is made of the fact that the criteria at once readable from the
exception referred to is the nature of the job and the number of employees
involved, and not whether the employee is a daily-wage earner or a regular
monthly-paid employee.
There is no reason at all to digress from the above-quoted observation of the
Honorable Commission for purposes of the present case.
xxx xxx xxx
Finally, inasmuch as Article 94 of the Labor Code is one of its so-called self-executing
provisions, conjointly with its corresponding implementing Rules, it is to be taken to
have taken effect, as of November 1, 1974, as per Section I (1), Rule IV, Book III , of
the Implementing Rules.

WHEREAS, all the above premises considered, this Arbitrator rules that:
(1) All the monthly-paid employees of the Bank herein represented by the Union
and as governed by their Collective Bargaining Agreement, are entitled to the
holiday pay benefits as provided for in Article 94 of the labor Code and as
implemented by Rule IV, Book III, of the corresponding implementing Rules, except
for any day or any longer period designated by lawor holding a general election or
referendum;
(2) Paragraph (1) hereof means that any covered employee who does not work on
any of the regular holidays enumerated in Article 94 (c) of the Labor Code, except
that which is designated for election or referendum purposes, is still entitled to
receive an amount equivalent to his regular daily wage in addition to his monthly
salary. If he work on any of the regular holidays, other than that which is designated
for election or referendum purposes, he is entitled to twice, his regular daily wage in
addition to his monthly salary. The 50% premium pay provided for in the CBA for
working on a rest day (which has been interpreted by the parties to include the
holidays) shall be deemed already included in the 200% he receives for working on
a regular holiday. With respect to the day or any longer period designated by law
for holding a general election or referendum, if the employee does not work on
such day or period he shall no longer be entitled to receive any additional amount
other than his monthly salary which is deemed to include already his regular daily
wage for such day or period. If he works on such day or period, he shall be entitled
to an amount equivalent to his regular daily wage (100%) for that day or period in
addition to his monthly salary. The 50% premium pay provided for in the CBA for
working on that day or period shall be deemed already included in the additional
100% he receives for working on such day or period; and
(3) The Bank is hereby ordered to pay all the above employees in accordance with
the above paragraphs (1) and (2), retroactive from November 1, 1974.
SO ORDERED.
April 22, 1976, Manila, Philippines. 4
The next day, on April 23, 1976, the Department of Labor released Policy Instructions
No. 9, hereinbelow quoted:
The Rules implementing PD 850 have clarified the policy in the implementation of
the ten (10) paid legal holidays. Before PD 850, the number of working days a year
in a firm was considered important in determining entitlement to the benefit. Thus,
where an employee was working for at least 313 days, he was considered definitely
already paid. If he was working for less than 313, there was no certainty whether the
ten (10) paid legal holidays were already paid to him or not.
The ten (10) paid legal holidays law, to start with, is intended to benefit principally
daily employees. In the case of monthly, only those whose monthly salary did not
yet include payment for the ten (10) paid legal holidays are entitled to the benefit.
Under the rules implementing PD 850, this policy has been fully clarified to eliminate
controversies on the entitlement of monthly paid employees. The new determining
rule is this: If the monthly paid employee is receiving not less than P 240, the
maximum monthly minimum wage, and his monthly pay is uniform from January to
December, he is presumed to be already paid the ten (10) paid legal holidays.
However, if deductions are made from his monthly salary on account of holidays in
months where they occur, then he is still entitled to the ten (10) paid legal holidays.
These new interpretations must be uniformly and consistently upheld.
This issuance shall take effect immediately.
After receipt of a copy of the award, private respondent filed a motion for
reconsideration, followed by a supplement thereto. Said motion for reconsideration
was denied. A copy of the order of denial was received by private respondent on
July 8, 1976.
Said private respondent interposed an appeal to the National Labor Relations
Commission (NLRC), contending that the Arbitrator demonstrated gross
incompetence and/or grave abuse of discretion when he entirely premised the
award on the Chartered Bank case and failed to apply Policy Instructions No. 9. This
appeal was dismissed on August 16, 1976, by the NLRC because it was filed way
beyond the ten-day period for perfecting an appeal and because it contravened
the agreement that the award shall be final and unappealable.
Private respondent then appealed to the Secretary of Labor. On June 30, 1977, the
Acting Secretary of Labor reversed the NLRC decision and ruled that the appeal
was filed on time and that a review of the case was inevitable as the money claim
exceeded P100,000.00. 5 Regarding the timeliness of the appeal, it was pointed out
that the labor Department had on several occasions treated a motion for
reconsideration (here, filed before the Arbitrator) as an appeal to the proper
appellate body in consonance with the spirit of the Labor Code to afford the
parties a just, expeditious and inexpensive disposition of their claims, liberated from
the strict technical rules obtaining in the ordinary courts.
Anent the issue whether or not the agreement barred the appeal, it was noted that
the Manifestation, supra, "is not of slight significance because it has in fact
abrogated complainant's commitment to abide with the decision of the Voluntary
Arbitrator without any reservation" and amounted to a "virtual repudiation of the
agreement vesting finality" 6 on the arbitrator's disposition.
And on the principal issue of holiday pay, the Acting Secretary, guided by Policy
Instructions No. 9, applied the same retrospectively, among other things.
In due time, the Union appealed to the Office of the President. In affirming the
assailed decision, Presidential Executive Assistant Jacobo C. Clave relied heavily on
the Manifestation and Policy Instructions No. 9.
Hence, this petition.
On January 10, 1981, petitioner filed a motion to substitute the Bank of the Philippine
Islands as private respondent, as a consequence of the Articles of Merger executed
by said bank and Commercial Bank & Trust Co. which inter alia designated the
former as the surviving corporate entity. Said motion was granted by the Court.
We find the petitioner impressed with merit.
In excluding the union members of herein petitioner from the benefits of the holiday
pay law, public respondent predicated his ruling on Section 2, Rule IV, Book III of the
Rules to implement Article 94 of the labor Code promulgated by the then Secretary
of labor and Policy Instructions No. 9.
In Insular Bank of Asia and America Employees' Union (IBAAEU) vs. Inciong, 7 this
Court's Second Division, speaking through former Justice Makasiar, expressed the
view and declared that the aforementioned section and interpretative bulletin are
null and void, having been promulgated by the then Secretary of Labor in excess of
his rule-making authority. It was pointed out, inter alia, that in the guise of clarifying
the provisions on holiday pay, said rule and policy instructions in effect amended
the law by enlarging the scope of the exclusions. We further stated that the then
Secretary of Labor went as far as to categorically state that the benefit is principally
intended for daily paid employees whereas the law clearly states that every worker
shall be paid their regular holiday pay-which is incompatible with the mandatory
directive, in Article 4 of the Labor Code, that "all doubts in the implementation and
interpretation of the provisions of Labor Code, including its implementing rules and
regulations, shall be resolved in favor of labor." Thus, there was no basis at all to
deprive the union members of their right to holiday pay.
In the more recent case of The Chartered Bank Employees Association vs. Hon.
Ople, 8 this Court in an en bancdecision had the occasion to reiterate the above-
stated pronouncement. We added:
The questioned Section 2, Rule IV, Book III of the Integrated Rules
and the Secretary's Policy Instruction No. 9 add another excluded
group, namely, 'employees who are uniformly paid by the month'.
While the additional exclusion is only in the form of a presumption
that all monthly paid employees have already been paid holiday
pay, it constitutes a taking away or a deprivation which must be in
the law if it is to be valid. An administrative interpretation which
diminishes the benefits of labor more than what the statute delimits
or withholds is obviously ultra vires.
In view of the foregoing, the challenged decision of public respondent has no leg
to stand on as it was premised principally on the same Section 2, Rule IV, Book III of
the Implementing Rules and Policy Instructions No. 9. This being the decisive issue to
be resolved, We find no necessity to pass upon the other issues raised, such as the
effects of the Union's Manifestation and the propriety of applying Policy Instructions
No. 9 retroactively to the instant case.
WHEREFORE, the questioned decisions of the respondent Presidential Executive
Assistant and the Acting Secretary of labor are hereby set aside, and the award of
the Arbitrator reinstated. Costs against the private respondent.
IT IS SO ORDERED.
NELSON V. BEGINO v. ABS-CBN CORPORATION
PEREZ, J.:
The existence of an employer-employee relationship is at the heart of this Petition for
Review on Certiorari filed pursuant to Rule 45 of the Rules of Court, primarily assailing
the 29 June 2011 Decision[1] rendered by the Fourth Division of the Court of Appeals
(CA) in CA-G.R. SP No. 116928 which ruled out said relationship between the parties.
The Facts
Respondent ABS-CBN Corporation (formerly ABS-CBN Broadcasting Corporation) is a
television and radio broadcasting corporation which, for its Regional Network
Group in Naga City, employed respondent Amalia Villafuerte (Villafuerte) as
Manager. There is no dispute regarding the fact that, thru Villafuerte, ABS-CBN
engaged the services of petitioners Nelson Begino (Begino) and Gener Del Valle
(Del Valle) sometime in 1996 as Cameramen/Editors for TV Broadcasting. Petitioners
Ma. Cristina Sumayao (Sumayao) and Monina Avila-Llorin (Llorin) were likewise
similarly engaged as reporters sometime in 1996 and 2002, respectively. With their
services engaged by respondents thru Talent Contracts which, though regularly
renewed over the years, provided terms ranging from three (3) months to one (1)
year, petitioners were given Project Assignment Forms which detailed, among other
matters, the duration of a particular project as well as the budget and the daily
technical requirements thereof. In the aforesaid capacities, petitioners were tasked
with coverage of news items for subsequent daily airings in respondents’ TV Patrol
Bicol Program.[2]
While specifically providing that nothing therein shall be deemed or construed to
establish an employer-employee relationship between the parties, the aforesaid
Talent Contracts included, among other matters, provisions on the following
matters: (a) the Talent’s creation and performance of work in accordance with the
ABS-CBN’s professional standards and compliance with its policies and guidelines
covering intellectual property creators, industry codes as well as the rules and
regulations of the Kapisanan ng mga Broadcasters sa Pilipinas (KBP) and other
regulatory agencies; (b) the Talent’s non-engagement in similar work for a person or
entity directly or indirectly in competition with or adverse to the interests of ABS-CBN
and non-promotion of any product or service without prior written consent; and (c)
the results-oriented nature of the talent’s work which did not require them to
observe normal or fixed working hours.[3] Subjected to contractor’s tax, petitioners’
remunerations were denominated as Talent Fees which, as of last renewal, were
admitted to be pegged per airing day at P273.35 for Begino, P302.92 for Del Valle,
P323.08 for Sumayao and P315.39 for Llorin.[4]
Claiming that they were regular employees of ABS-CBN, petitioners filed against
respondents the complaint[5] docketed as Sub-RAB 05-04-00041-07 before the
National Labor Relations Commission’s (NLRC) Sub- Regional Arbitration Branch No.
5, Naga City. In support of their claims for regularization, underpayment of overtime
pay, holiday pay, 13th month pay, service incentive leave pay, damages and
attorney's fees, petitioners alleged that they performed functions necessary and
desirable in ABS-CBN's business. Mandated to wear company IDs and provided all
the equipment they needed, petitioners averred that they worked under the direct
control and supervision of Villafuerte and, at the end of each day, were informed
about the news to be covered the following day, the routes they were to take and,
whenever the subject of their news coverage is quite distant, even the start of their
workday. Due to the importance of the news items they covered and the necessity
of their completion for the success of the program, petitioners claimed that, under
pain of immediate termination, they were bound by the company’s policy on,
among others, attendance and punctuality.[6]
Aside from the constant evaluation of their actions, petitioners were reportedly
subjected to an annual competency assessment alongside other ABS-CBN
employees, as condition for their continued employment. Although their work
involved dealing with emergency situations at any time of the day or night,
petitioners claimed that they were not paid the labor standard benefits the law
extends to regular employees. To avoid paying what is due them, however,
respondents purportedly resorted to the simple expedient of using said Talent
Contracts and/or Project Assignment Forms which denominated petitioners as
talents, despite the fact that they are not actors or TV hosts of special skills. As a
result of this iniquitous situation, petitioners asseverated that they merely earned an
average of P7,000.00 to P8,000.00 per month, or decidedly lower than the
P21,773.00 monthly salary ABS-CBN paid its regular rank-and-file employees.
Considering their repeated re-hiring by respondents for ostensible fixed periods, this
situation had gone on for years since TV Patrol Bicol has continuously aired from
1996 onwards.[7]
In refutation of the foregoing assertions, on the other hand, respondents argued
that, although it occasionally engages in production and generates programs thru
various means, ABS-CBN is primarily engaged in the business of broadcasting
television and radio content. Not having the full manpower complement to
produce its own program, the company had allegedly resorted to engaging
independent contractors like actors, directors, artists, anchormen, reporters,
scriptwriters and various production and technical staff, who offered their services in
relation to a particular program. Known in the industry as talents, such independent
contractors inform ABS- CBN of their availability and were required to accomplish
Talent Information Forms to facilitate their engagement for and appearance on
designated project days. Given the unpredictability of viewer preferences,
respondents argued that the company cannot afford to provide regular work for
talents with whom it negotiates specific or determinable professional fees on a per
project, weekly or daily basis, usually depending on the budget allocation for a
project.[8]
Respondents insisted that, pursuant to their Talent Contracts and/or Project
Assignment Forms, petitioners were hired as talents, to act as reporters and/or
cameramen for TV Patrol Bicol for designated periods and rates. Fully aware that
they were not considered or to consider themselves as employees of a particular
production or film outfit, petitioners were supposedly engaged on the basis of the
skills, knowledge or expertise they already possessed and, for said reason, required
no further training from ABS-CBN. Although petitioners were inevitably subjected to
some degree of control, the same was allegedly limited to the imposition of general
guidelines on conduct and performance, simply for the purpose of upholding the
standards of the company and the strictures of the industry. Never subjected to any
control or restrictions over the means and methods by which they performed or
discharged the tasks for which their services were engaged, petitioners were, at
most, briefed whenever necessary regarding the general requirements of the
project to be executed.[9]
Having been terminated during the pendency of the case, Petitioners filed on 10
July 2007 a second complaint against respondents, for regularization, payment of
labor standard benefits, illegal dismissal and unfair labor practice, which was
docketed as Sub-RAB 05-08-00107-07. Upon respondents’ motion, this complaint was
dismissed for violation of the rules against forum shopping in view of the fact that
the determination of the issues in the second case hinged on the resolution of those
raised in the first.[10] On 19 December 2007, however, Labor Arbiter Jesus Orlando
Quiñones (Labor Arbiter Quiñones) resolved Sub-RAB 05-04-00041-07 in favor of
petitioners who, having rendered services necessary and related to ABS-CBN’s
business for more than a year, were determined to be its regular employees. With
said conclusion found to be buttressed by, among others, the exclusivity clause and
prohibitions under petitioners’ Talent Contracts and/or Project Assignment Forms
which evinced respondents’ control over them,[11] Labor Arbiter Quiñones disposed
of the case in the following wise:
WHEREFORE, finding merit in the causes of action set forth by the complainants,
judgment is hereby rendered declaring complainants MONINA AVILA-LLORIN,
GENER L. DEL VALLE, NELSON V. BEGINO and MA. CRISTINA V. SUMAYAO, as regular
employees of respondent company, ABS-CBN BROADCASTING CORPORATION.
Accordingly, respondent ABS-CBN Broadcasting Corporation is hereby ORDERED to
pay complainants, subject to the prescriptive period provided under Article 291 of
the Labor Code, however applicable, the total amount of Php2,440,908.36,
representing salaries/wage differentials, holiday pay, service incentive leave pay
and 13th month pay, to include 10% of the judgment award as attorney’s fees of the
judgment award (computation of the monetary awards are attached hereto as
integral part of this decision).
Moreover, respondents are directed to admit back complainants to work under the
same terms and conditions prevailing prior to their separation or, at respondents'
option, merely reinstated in the payroll.
Other than the above, all other claims and charges are ordered DISMISSED for lack
of merit.[12]
Aggrieved by the foregoing decision, respondents elevated the case on appeal
before the NLRC, during the pendency of which petitioners filed a third complaint
against the former, for illegal dismissal, regularization, non- payment of salaries and
13th month pay, unfair labor practice, damages and attorney’s fees. In turn
docketed as NLRC Case No. Sub-RAB-V-05-03-00039-08, the complaint was raffled
to Labor Arbiter Quiñones who issued an Order dated 30 April 2008, inhibiting himself
from the case and denying respondents’ motion to dismiss on the grounds of res
judicata and forum shopping.[13] Finding that respondents’ control over petitioners
was indeed manifest from the exclusivity clause and prohibitions in the Talent
Contracts and/or Project Assignment Forms, on the other hand, the NLRC rendered
a Decision dated 31 March 2010, affirming said Labor Arbiter’s appealed The Court's Ruling
decision.[14] Undeterred by the NLRC’s 31 August 2010 denial of their motion for
reconsideration,[15] respondents filed the Rule 65 petition for certiorari docketed The Court finds the petition impressed with merit.
before the CA as CA-G.R. SP No. 116928 which, in addition to taking exceptions to
the findings of the assailed decision, faulted petitioners for violating the rule against Petitioners preliminarily fault the CA for not dismissing respondents’ Rule 65 petition
forum shopping.[16] for certiorari in view of the fact that the latter failed to file a Notice of Appeal from
the Labor Arbiter’s decision and to verify and certify the Memorandum of Appeal
On 29 June 2011, the CA rendered the herein assailed decision, reversing the they filed before the NLRC. While concededly required under the NLRC Rules of
findings of the Labor Arbiter and the NLRC. Ruling out the existence of forum Procedure, however, these matters should have been properly raised during and
shopping on the ground that petitioners' second and third complaints were primarily addressed at the appellate stage before the NLRC. Instead, the record shows that
anchored on their termination from employment after the filing of their first the NLRC took cognizance of respondents’ appeal and proceeded to resolve the
complaint, the CA nevertheless discounted the existence of an employer-employee same in favor of petitioners by affirming the Labor Arbiter’s decision. Not having filed
relation between the parties upon the following findings and conclusions: (a) their own petition for certiorari to take exception to the liberal attitude the NLRC
petitioners, were engaged by respondents as talents for periods, work and the appears to have adopted towards its own rules of procedure, petitioners were
program specified in the Talent Contracts and/or Project Assignment Forms hardly in the proper position to raise the same before the CA or, for that matter,
concluded between them; (b) instead of fixed salaries, petitioners were paid talent before this Court at this late stage. Aside from the settled rule that a party who has
fees depending on the budget allocated for the program to which they were not appealed is not entitled to affirmative relief other than the ones granted in the
assigned; (c) being mainly concerned with the result, respondents did not exercise decision[19] rendered, liberal interpretation of procedural rules on appeal had, on
control over the manner and method by which petitioner accomplished their work occasion, been favored in the interest of substantive justice. [20]
and, at most, ensured that they complied with the standards of the company, the
KBP and the industry; and, (d) the existence of an employer-employee relationship is Although the existence of an employer-employee relationship is, on the other hand,
not necessarily established by the exclusivity clause and prohibitions which are but a question of fact[21] which is ordinarily not the proper subject of a Rule 45 petition
terms and conditions on which the parties are allowed to freely stipulate. [17] for review on certiorari like the one at bar, the conflicting findings between the
labor tribunals and the CA justify a further consideration of the matter. [22] To
Petitioners’ motion for reconsideration of the foregoing decision was denied in the determine the existence of said relation, case law has consistently applied the four-
CA's 3 October 2011 Resolution,[18] hence, this petition. fold test, to wit: (a) the selection and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal; and (d) the employer's power to
control the employee on the means and methods by which the work is
The Issues accomplished.[23] Of these criteria, the so-called “control test” is generally regarded
as the most crucial and determinative indicator of the presence or absence of an
Petitioners seek the reversal of the CA’s assailed Decision and employer-employee relationship. Under this test, an employer-employee
relationship is said to exist where the person for whom the services are performed
Resolution on the affirmative of the following issues: reserves the right to control not only the end result but also the manner and means
utilized to achieve the same.[24]
1. Whether or not the CA seriously and reversibly erred in not dismissing respondents’
petition for certiorari in view of the fact that they did file a Notice of Appeal at the In discounting the existence of said relationship between the parties, the CA ruled
NLRC level and did not, by themselves or through their duly authorized that Petitioners' services were, first and foremost, engaged thru their Talent
representative, verify and certify the Memorandum of Appeal they filed thereat, in Contracts and/or Project Assignment Forms which specified the work to be
accordance with the NLRC Rules of Procedure; and performed by them, the project to which they were assigned, the duration thereof
and their rates of pay according to the budget therefor allocated. Because they
2. Whether or not the CA seriously and reversibly erred in brushing aside the are imbued with public interest, it cannot be gainsaid, however, that labor
determination made by both the Labor Arbiter and the NLRC of the existence of an contracts are subject to the police power of the state and are placed on a higher
employer-employee relationship between the parties, despite established plane than ordinary contracts. The recognized supremacy of the law over the
jurisprudence supporting the same. nomenclature of the contract and the stipulations contained therein is aimed at
bringing life to the policy enshrined in the Constitution to afford protection to
labor.[25] Insofar as the nature of one’s employment is concerned, Article 280 of the
Labor Code of the Philippines also provides as follows:
ART. 280. Regular and Casual Employment. — The provisions of written agreement
to the contrary notwithstanding and regardless of the oral agreement of the parties,
an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has been fixed for
a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or
service to be performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such actually exists.
It has been ruled that the foregoing provision contemplates four kinds of
employees, namely: (a) regular employees or those who have been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer; (b) project employees or those whose employment has
been fixed for a specific project or undertaking, the completion or termination of
which has been determined at the time of the engagement of the employee; (c)
seasonal employees or those who work or perform services which are seasonal in
nature, and the employment is for the duration of the season; and (d) casual
employees or those who are not regular, project, or seasonal employees. [26] To the
foregoing classification of employee, jurisprudence has added that of contractual
or fixed term employee which, if not for the fixed term, would fall under the
category of regular employment in view of the nature of the employee’s
engagement, which is to perform activity usually necessary or desirable in the
employer’s business.[27]
The Court finds that, notwithstanding the nomenclature of their Talent Contracts
and/or Project Assignment Forms and the terms and condition embodied therein,
petitioners are regular employees of ABS-CBN. Time and again, it has been ruled
that the test to determine whether employment is regular or not is the reasonable
connection between the activity performed by the employee in relation to the
business or trade of the employer.[28] As cameramen/editors and reporters,
petitioners were undoubtedly performing functions necessary and essential to ABS-
CBN’s business of broadcasting television and radio content. It matters little that
petitioners’ services were engaged for specified periods for TV Patrol Bicol and that
they were paid according to the budget allocated therefor. Aside from the fact
that said program is a regular weekday fare of the ABS-CBN’s Regional Network
Group in Naga City, the record shows that, from their initial engagement in the
aforesaid capacities, petitioners were continuously re-hired by respondents over the
years. To the mind of the Court, respondents’ repeated hiring of petitioners for its
long-running news program positively indicates that the latter were ABS-CBN’s
regular employees.
If the employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the repeated
or continuing performance as sufficient evidence of the necessity, if not
indispensability of that activity in the business.[29] Indeed, an employment stops
being co-terminous with specific projects where the employee is continuously re-
hired due to the demands of the employer’s business.[30] When circumstances show,
moreover, that contractually stipulated periods of employment have been imposed
to preclude the acquisition of tenurial security by the employee, this Court has not
hesitated in striking down such arrangements as contrary to public policy, morals,
good customs or public order.[31] The nature of the employment depends, after all,
on the nature of the activities to be performed by the employee, considering the
nature of the employer’s business, the duration and scope to be done, and, in some
cases, even the length of time of the performance and its continued existence.[32] In
the same manner that the practice of having fixed-term contracts in the industry
does not automatically make all talent contracts valid and compliant with labor
law, it has, consequently, been ruled that the assertion that a talent contract exists
does not necessarily prevent a regular employment status. [33]
As cameramen/editors and reporters, it also appears that petitioners were subject
to the control and supervision of respondents which, first and foremost, provided
them with the equipments essential for the discharge of their functions. Prepared at
the instance of respondents, petitioners’ Talent Contracts tellingly provided that
ABS-CBN retained “all creative, administrative, financial and legal control” of the
program to which they were assigned. Aside from having the right to require
petitioners “to attend and participate in all promotional or merchandising
campaigns, activities or events for the Program,” ABS-CBN required the former to
perform their functions “at such locations and Performance/Exhibition Schedules” it
provided or, subject to prior notice, as it chose determine, modify or change. Even if
they were unable to comply with said schedule, petitioners were required to give
advance notice, subject to respondents’ approval.[34] However obliquely worded,
the Court finds the foregoing terms and conditions demonstrative of the control
respondents exercised not only over the results of petitioners’ work but also the
means employed to achieve the same.
In finding that petitioners were regular employees, the NLRC further ruled that the
exclusivity clause and prohibitions in their Talent Contracts and/or Project
Assignment Forms were likewise indicative of respondents’ control over them.
Brushing aside said finding, however, the CA applied the ruling in Sonza v. ABS-CBN
Broadcasting Corporation[35] where similar restrictions were considered not
necessarily determinative of the existence of an employer-employee relationship.
Recognizing that independent contractors can validly provide his exclusive services
to the hiring party, said case enunciated that guidelines for the achievement of
mutually desired results are not tantamount to control. As correctly pointed out by
petitioners, however, parallels cannot be expediently drawn between this case and
that of Sonza case which involved a well-known television and radio personality
who was legitimately considered a talent and amply compensated as such. While
possessed of skills for which they were modestly recompensed by respondents,
petitioners lay no claim to fame and/or unique talents for which talents like actors
and personalities are hired and generally compensated in the broadcast industry.
Later echoed in Dumpit-Murillo v. Court of Appeals,[36] this Court has rejected the
application of the ruling in the Sonza case to employees similarly situated as
petitioners in ABS-CBN Broadcasting Corporation v. Nazareno.[37] The following
distinctions were significantly observed between employees like petitioners and
television or radio personalities like Sonza, to wit:
First. In the selection and engagement of respondents, no peculiar or unique skill,
talent or celebrity status was required from them because they were merely hired
through petitioner’s personnel department just like any ordinary employee.
Second. The so-called "talent fees" of respondents correspond to wages given as a
result of an employer-employee relationship. Respondents did not have the power
to bargain for huge talent fees, a circumstance negating independent contractual
relationship.
Third. Petitioner could always discharge respondents should it find their work
unsatisfactory, and respondents are highly dependent on the petitioner for
continued work.
Fourth. The degree of control and supervision exercised by petitioner over
respondents through its supervisors negates the allegation that respondents are
independent contractors.
The presumption is that when the work done is an integral part of the regular
business of the employer and when the worker, relative to the employer, does not
furnish an independent business or professional service, such work is a regular
employment of such employee and not an independent contractor. The Court will
peruse beyond any such agreement to examine the facts that typify the parties’
actual relationship.[38] (Emphasis omitted)
Rather than the project and/or independent contractors respondents claim them to
be, it is evident from the foregoing disquisition that petitioners are regular
employees of ABS-CBN. This conclusion is borne out by the ineluctable showing that
petitioners perform functions necessary and essential to the business of ABS-CBN
which repeatedly employed them for a long-running news program of its Regional
Network Group in Naga City. In the course of said employment, petitioners were
provided the equipments they needed, were required to comply with the
Company's policies which entailed prior approval and evaluation of their
performance. Viewed from the prism of these considerations, we find and so hold
that the CA reversibly erred when it overturned the NLRC's affirmance of the Labor
Arbiter's finding that an employer-employee relationship existed between the
parties. Given the fact, however, that Sub-RAB-V-05-03-00039-08 had not been
consolidated with this case and appears, for all intents and purposes, to be pending
still, the Court finds that the reinstatement of petitioners ordered by said labor officer
and tribunal should, as a relief provided in case of illegal dismissal, be left for
determination in said case.
WHEREFORE, the Court of Appeals' assailed Decision dated 29 June 2011 and
Resolution dated 3 October 2011 in CA-G.R. SP No. 116928 are REVERSED and SET
ASIDE. Except for the reinstatement of Nelson V. Begino, Gener Del Valle, Monina
Avila-Llorin and Ma. Cristina Sumayao, the National Labor and Relations·
Commission's 31 March 2010 Decision is, accordingly, REINSTATED.
SO ORDERED.
G.R. No. 186621 March 12, 2014
SOUTH EAST INTERNATIONAL RATTAN, INC. and/or ESTANISLAO1 AGBAY, Petitioners,
vs.
JESUS J. COMING, Respondent.
DECISION
VILLARAMA, JR., J.:
Before the Court is a petition for review on certiorari under Rule 45 to reverse and set
aside the Decision2 dated February 21, 2008 and Resolution3 dated February 9, 2009
of the Court of Appeals (CA) in CA-GR. CEB-SP No. 02113.
Petitioner South East International Rattan, Inc. (SEIRI) is a domestic corporation
engaged in the business of manufacturing and exporting furniture to various
countries with principal place of business at Paknaan, Mandaue City, while
petitioner Estanislao Agbay, as per records, is the President and General Manager
of SEIRI.4
On November 3, 2003, respondent Jesus J. Coming filed a complaint 5 for illegal
dismissal, underpayment of wages, non-payment of holiday pay, 13th month pay
and service incentive leave pay, with prayer for reinstatement, back wages,
damages and attorney’s fees.
Respondent alleged that he was hired by petitioners as Sizing Machine Operator on
March 17, 1984. His work schedule is from 8:00 a.m. to 5:00 p.m. Initially, his
compensation was on "pakiao" basis but sometime in June 1984, it was fixed at
₱150.00 per day which was paid weekly. In 1990, without any apparent reason, his
employment was interrupted as he was told by petitioners to resume work in two
months time. Being an uneducated person, respondent was persuaded by the
management as well as his brother not to complain, as otherwise petitioners might
decide not to call him back for work. Fearing such consequence, respondent
accepted his fate. Nonetheless, after two months he reported back to work upon
order of management.6
Despite being an employee for many years with his work performance never
questioned by petitioners, respondent was dismissed on January 1, 2002 without
lawful cause. He was told that he will be terminated because the company is not
doing well financially and that he would be called back to work only if they need
his services again. Respondent waited for almost a year but petitioners did not call
him back to work. When he finally filed the complaint before the regional arbitration
branch, his brother Vicente was used by management to persuade him to withdraw
the case.7
On their part, petitioners denied having hired respondent asserting that SEIRI was
incorporated only in 1986, and that respondent actually worked for SEIRI’s furniture
suppliers because when the company started in 1987 it was engaged purely in
buying and exporting furniture and its business operations were suspended from the
last quarter of 1989 to August 1992. They stressed that respondent was not included
in the list of employees submitted to the Social Security System (SSS). Moreover,
respondent’s brother, Vicente Coming, executed an affidavit8 in support of
petitioners’ position while Allan Mayol and Faustino Apondar issued notarized
certifications9 that respondent worked for them instead.10
With the denial of petitioners that respondent was their employee, the latter
submitted an affidavit11 signed by five former co-workers stating that respondent
was one of the pioneer employees who worked in SEIRI for almost twenty years.
In his Decision12 dated April 30, 2004, Labor Arbiter Ernesto F. Carreon ruled that
respondent is a regular employee of SEIRI and that the termination of his
employment was illegal. The dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering the
respondent South East (Int’l.) Rattan, Inc. to pay complainant Jesus J. Coming the
following:
1. Separation pay ₱114,400.00
2. Backwages P 30,400.00
3. Wage differential P 15,015.00
4. 13th month pay P 5,958.00
5. Holiday pay P 4,000.00
6. Service incentive leave pay P 2,000.00
Total award ₱171,773.00
The other claims and the case against respondent Estanislao Agbay are dismissed
for lack of merit.
SO ORDERED.13
Petitioners appealed to the National Labor Relations Commission (NLRC)-Cebu City
where they submitted the following additional evidence: (1) copies of SEIRI’s
payrolls and individual pay records of employees;14 (2) affidavit15of SEIRI’s Treasurer,
Angelina Agbay; and (3) second affidavit16 of Vicente Coming.
On July 28, 2005, the NLRC’s Fourth Division rendered its Decision, 17 the dispositive
portion of which states:
WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET
ASIDE and VACATED and a new one entered DISMISSING the complaint.
SO ORDERED.18
The NLRC likewise denied respondent’s motion for reconsideration.19
Respondent elevated the case to the CA via a petition for certiorari under Rule 65.
By Decision dated February 21, 2008, the CA reversed the NLRC and ruled that there
existed an employer-employee relationship between petitioners and respondent
who was dismissed without just and valid cause.
The CA thus decreed:
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The assailed
Decision dated July 28, 2005 issued by the National Labor Relations Commission
(NLRC), Fourth Division, Cebu City in NLRC Case No. V-000625-2004 is REVERSED and
SET ASIDE. The Decision of the Labor Arbiter dated April 30, 2004 is REINSTATED with
MODIFICATION on the computation of backwages which should be computed from
the time of illegal termination until the finality of this decision.
Further, the Labor Arbiter is directed to make the proper adjustment in the
computation of the award of separation pay as well as the monetary awards of
wage differential, 13th month pay, holiday pay and service incentive leave pay.
SO ORDERED.20
Petitioners filed a motion for reconsideration but the CA denied it under Resolution
dated February 9, 2009.
Hence, this petition raising the following issues:
6.1
WHETHER UNDER THE FACTS AND EVIDENCE ON RECORD, THE FINDING OF THE
HONORABLE COURT OF APPEALS THAT THERE EXISTS EMPLOYER-EMPLOYEE
RELATIONSHIP BETWEEN PETITIONERS AND RESPONDENT IS IN ACCORD WITH LAW
AND APPLICABLE DECISIONS OF THIS HONORABLE COURT.
6.2
WHETHER THE HONORABLE COURT OF APPEALS CORRECTLY APPRECIATED IN
ACCORDANCE WITH APPLICABLE LAW AND JURISPRUDENCE THE EVIDENCE
PRESENTED BY BOTH PARTIES.
6.3
WHETHER UNDER THE FACTS AND EVIDENCE PRESENTED, THE FINDING OF THE
HONORABLE COURT OF APPEALS THAT PETITIONERS ARE LIABLE FOR ILLEGAL
DISMISSAL OF RESPONDENT IS IN ACCORD WITH APPLICABLE LAW AND
JURISPRUDENCE.
6.4
WHETHER UNDER THE FACTS PRESENTED, THE RULING OF THE HONORABLE COURT OF
APPEALS THAT THE BACKWAGES DUE THE RESPONDENT SHOULD BE COMPUTED FROM
THE TIME OF ILLEGAL TERMINATION UNTIL THE FINALITY OF THE DECISION IS SUPPORTED
BY PREVAILING JURISPRUDENCE.21
Resolution of the first issue is paramount in view of petitioners’ denial of the
existence of employer-employee relationship.
The issue of whether or not an employer-employee relationship exists in a given case
is essentially a question of fact. As a rule, this Court is not a trier of facts and this
applies with greater force in labor cases.22 Only errors of law are generally reviewed
by this Court.23 This rule is not absolute, however, and admits of exceptions. For one,
the Court may look into factual issues in labor cases when the factual findings of the
Labor Arbiter, the NLRC, and the CA are conflicting.24 Here, the findings of the NLRC
differed from those of the Labor Arbiter and the CA, which compels the Court’s
exercise of its authority to review and pass upon the evidence presented and to
draw its own conclusions therefrom.25
To ascertain the existence of an employer-employee relationship jurisprudence has
invariably adhered to the four-fold test, to wit: (1) the selection and engagement of
the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
power to control the employee’s conduct, or the so-called "control test."26 In
resolving the issue of whether such relationship exists in a given case, substantial
evidence – that amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion – is sufficient. Although no particular
form of evidence is required to prove the existence of the relationship, and any
competent and relevant evidence to prove the relationship may be admitted, a
finding that the relationship exists must nonetheless rest on substantial evidence.27
In support of their claim that respondent was not their employee, petitioners
presented Employment Reports to the SSS from 1987 to 2002, the Certifications
issued by Mayol and Apondar, two affidavits of Vicente Coming, payroll sheets
(1999-2000), individual pay envelopes and employee earnings records (1999-2000)
and affidavit of Angelina Agbay (Treasurer and Human Resources Officer). The
payroll and pay records did not include the name of respondent. The affidavit of
Ms. Agbay stated that after SEIRI started its business in 1986 purely on export trading,
it ceased operations in 1989 as evidenced by Certification dated January 18, 1994
from the Securities and Exchange Commission (SEC); that when business resumed in
1992, SEIRI undertook only a little of manufacturing; that the company never hired
any workers for varnishing and pole sizing because it bought the same from various
suppliers, including Faustino Apondar; respondent was never hired by SEIRI; and
while it is true that Mr. Estanislao Agbay is the company President, he never
dispensed the salaries of workers.28
In his first affidavit, Vicente Coming averred that:
6. [Jesus Coming] is a furniture factory worker. In 1982 to 1986, he was
working with Ben Mayol as round core maker/splitter.
7. Thereafter, we joined Okay Okay Yard owned by Amelito Montececillo.
This is a rattan trader with business address near Cebu Rattan Factory on a
"Pakiao" basis.
8. However, Jesus and I did not stay long at Okay Okay Yard and instead
we joined Eleuterio Agbay in Labogon, Cebu in 1989. In 1991, we went
back to Okay Okay located near the residence of Atty. Vicente de la Serna
in Mandaue City. We were on a "pakiao" basis. We stayed put until 1993
when we resigned and joined Dodoy Luna in Labogon, Mandaue City as
classifier until 1995. In 1996[,] Jesus rested. It was only in 1997 that he worked
back. He replaced me, as a classifier in Rattan Traders owned by Allan
Mayol. But then, towards the end of the year, he left the factory and
relaxed in our place of birth, in Sogod, Cebu.
9. It was only towards the end of 1999 that Jesus was taken back by Allan
Mayol as sizing machine operator. However, the work was off and on basis.
Not regular in nature, he was harping a side line job with me knowing that I
am now working with Faustino Apondar that supplies rattan furniture’s [sic]
to South East (Int’l) Rattan, Inc. As a brother, I allowed Jesus to work with me
and collect the proceeds of his services as part of my collectibles from
Faustino Apondar since I was on a "pakiao" basis. He was working at his
pleasure. Which means, he works if he likes to? That will be until 10:00
o’clock in the evening.
x x x x29
The Certification dated January 20, 2004 of Allan Mayol reads:
This is to certify that I personally know Jesus Coming, the brother of Vicente Coming.
Jesus is a rattan factory worker and he was working with me as rattan pole
sizing/classifier of my business from 1997 up to part of 1998 when he left my factory
at will. I took him back towards the end of 1999, this time as a sizing machine
operator. In all these years, his services are not regular. He works only if he likes to.30
Faustino Apondar likewise issued a Certification which states:
This is to certify that I am a maker/supplier of finished Rattan Furniture. As such, I
have several rattan furniture workers under me, one of whom is Vicente Coming,
the brother of Jesus Coming.
That sometime in 1999, Vicente pleaded to me for a side line job of his brother, Jesus
who was already connected with Allan Mayol. Having vouched for the integrity of
his brother and knowing that the job is temporary in character, I allowed Jesus to
work with his brother Vicente. However, the proceeds will be collected together
with his brother Vicente since it was the latter who was working with me. He renders
services to his brother work only after the regular working hours but off and on
basis.31
On the other hand, respondent submitted the affidavit executed by Eleoterio Brigoli,
Pedro Brigoli, Napoleon Coming, Efren Coming and Gil Coming who all attested
that respondent was their co-worker at SEIRI.
Their affidavit reads:
We, the undersigned, all of legal ages, Filipino, and resident[s] of Cebu, after having
been duly sworn to in accordance with law, depose and say:
That we are former employees of SOUTH EAST RATTAN which is owned by Estan Eslao
Agbay;
That we personally know JESUS COMING considering that we worked together in
one company SOUTH EAST RATTANT [sic];
That we together with JESUS COMING are all under the employ of ESTAN ESLAO
AGBAY considering that the latter is the one directly paying us and holds the
absolute control of all aspects of our employment;
That it is not true that JESUS COMING is under the employ of one person other than
ESTAN ESLAO AGBAY OF SOUTH EAST RATTAN;
That Jesus Coming is one of the pioneer employees of SOUTH EAST RATTAN and had
been employed therein for almost twenty years;
That we executed this affidavit to attest to the truth of the foregoing facts and to
deny any contrary allegation made by the company against his employment with
SOUTH EAST RATTAN.32
In his decision, Labor Arbiter Carreon found that respondent’s work as sizing
machine operator is usually necessary and desirable to the rattan furniture business
of petitioners and their failure to include respondent in the employment report to
SSS is not conclusive proof that respondent is not their employee. As to the affidavit
of Vicente Coming, Labor Arbiter Carreon did not give weight to his statement that
respondent is not petitioners’ employee but that of one Faustino Apondar. Labor
Arbiter Carreon was not convinced that Faustino Apondar is an independent
contractor who has a contractual relationship with petitioners.
In reversing the Labor Arbiter, the NLRC reasoned as follows:
First complainant alleged that he worked continuously from March 17, 1984 up to
January 21, 2002.1âwphi1 Records reveal however that South East (Int’l.) Rattan,
Inc. was incorporated only last July 18, 1986 (p. 55 records)[.] Moreover, when they
started to actually operate in 1987, the company was engaged purely on "buying
and exporting rattan furniture" hence no manufacturing employees were hired.
Furthermore, from the last quarter of 1989 up to August of 1992, the company
suspended operations due to economic reverses as per Certification issued by the
Securities and Exchange Commission (p. 56 records)[.]
Second, for all his insistence that he was a regular employee, complainant failed to
present a single payslip, voucher or a copy of a company payroll showing that he
rendered service during the period indicated therein. x x x
From the above established facts we are inclined to give weight and credence to
the Certifications of Allan Mayol and Faustino Apondar, both suppliers of finished
Rattan Furniture (pp. 442-43, records). It appears that complainant first worked with
Allan Mayol and later with Faustino Apondar upon the proddings of his brother
Vicente. Vicente’s affidavit as to complainant’s employment history was more
detailed and forthright. x x x
xxxx
In the case at bar, there is likewise substantial evidence to support our findings that
complainant was not an employee of respondents. Thus:
1. Complainant’s name does not appear in the list of employees reported
to the SSS.
2. His name does not also appear in the sample payrolls of respondents’
employees.
3. The certification of Allan Mayol and Fasutino Apondar[,] supplier of
finished rattan products[,] that complainant had at one time or another
worked with them.
4. The Affidavit of Vicente Coming, complainant’s full brother[,] attesting
that complainant had never been an employee of respondent. The only
connection was that their employer Faustino Apondar supplies finished
rattan products to respondents.33
On the other hand, the CA gave more credence to the declarations of the five
former employees of petitioners that respondent was their co-worker in SEIRI. One of
said affiants is Vicente Coming’s own son, Gil Coming. Vicente averred in his
second affidavit that when he confronted his son, the latter explained that he was
merely told by their Pastor to sign the affidavit as it will put an end to the
controversy. Vicente insisted that his son did not know the contents and implications
of the document he signed. As to the absence of respondent’s name in the payroll
and SSS employment report, the CA observed that the payrolls submitted were only
from January 1, 1999 to December 29, 2000 and not the entire period of eighteen
years when respondent claimed he worked for SEIRI. It further noted that the names
of the five affiants, whom petitioners admitted to be their former employees,
likewise do not appear in the aforesaid documents. According to the CA, it is
apparent that petitioners maintained a separate payroll for certain employees or
willfully retained a portion of the payroll.
x x x As to the "control test", the following facts indubitably reveal that respondents
wielded control over the work performance of petitioner, to wit: (1) they required
him to work within the company premises; (2) they obliged petitioner to report every
day of the week and tasked him to usually perform the same job; (3) they enforced
the observance of definite hours of work from 8 o’clock in the morning to 5 o’clock
in the afternoon; (4) the mode of payment of petitioner’s salary was under their
discretion, at first paying him on pakiao basis and thereafter, on daily basis; (5) they
implemented company rules and regulations; (6) [Estanislao] Agbay directly paid
petitioner’s salaries and controlled all aspects of his employment and (7) petitioner
rendered work necessary and desirable in the business of the respondent
company.34
We affirm the CA.
In Tan v. Lagrama,35 the Court held that the fact that a worker was not reported as
an employee to the SSS is not conclusive proof of the absence of employer-
employee relationship. Otherwise, an employer would be rewarded for his failure or
even neglect to perform his obligation.36
Nor does the fact that respondent’s name does not appear in the payrolls and pay
envelope records submitted by petitioners negate the existence of employer-
employee relationship. For a payroll to be utilized to disprove the employment of a
person, it must contain a true and complete list of the employee.37 In this case, the
exhibits offered by petitioners before the NLRC consisting of copies of payrolls and
pay earnings records are only for the years 1999 and 2000; they do not cover the
entire 18-year period during which respondent supposedly worked for SEIRI.
In their comment to the petition filed by respondent in the CA, petitioners
emphasized that in the certifications issued by Mayol and Apondar, it was shown
that respondent was employed and working for them in those years he claimed to
be working for SEIRI. However, a reading of the certification by Mayol would show
that while the latter claims to have respondent under his employ in 1997, 1998 and
1999, respondent’s services were not regular and that he works only if he wants to.
Apondar’s certification likewise stated that respondent worked for him since 1999
through his brother Vicente as "sideline" but only after regular working hours and "off
and on" basis. Even assuming the truth of the foregoing statements, these do not
foreclose respondent’s regular or full-time employment with SEIRI. In effect,
petitioners suggest that respondent was employed by SEIRI’s suppliers, Mayol and
Apondar but no competent proof was presented as to the latter’s status as
independent contractors.
In the same comment, petitioners further admitted that the five affiants who
attested to respondent’s employment with SEIRI are its former workers whom they
describe as "disgruntled workers of SEIRI" with an axe to grind against petitioners,
and that their execution of affidavit in support of respondent’s claim is "their very
way of hitting back the management of SEIRI after disciplinary measures were
meted against them."38 This allegation though was not substantiated by petitioners.
Instead, after the CA rendered its decision reversing the NLRC’s ruling, petitioners
subsequently changed their theory by denying the employment relationship with
the five affiants in their motion for reconsideration, thus:
x x x Since the five workers were occupying and working on a leased premises of
the private respondent, they were called workers of SEIRI (private respondent). Such
admission however, does not connote employment. For the truth of the matter, all
of the five employees of the supplier assigned at the leased premises of the private
respondent. Because of the recommendation of the private respondent with
regards to the disciplinary measures meted on the five workers, they wanted to hit
back against the private respondent. Their motive to implicate private respondent
was to vindicate. Definitely, they have an axe to grind against the private
respondent. Mention has to be made that despite the dismissal of these five (5)
witnesses from their service, none of them ever went to the National Labor
[Relations] Commission and invoked their rights, if any, against their employer or at
the very least against the respondent. The reason is obvious, since they knew pretty
well that they were not employees of SEIRI but rather under the employ of Allan
Mayol and Faustino Apondar, working on a leased premise of respondent. x x x39
Petitioners’ admission that the five affiants were their former employees is binding
upon them. While they claim that respondent was the employee of their suppliers
Mayol and Apondar, they did not submit proof that the latter were indeed
independent contractors; clearly, petitioners failed to discharge their burden of
proving their own affirmative allegation.40 There is thus no showing that the five
former employees of SEIRI were motivated by malice, bad faith or any ill-motive in
executing their affidavit supporting the claims of respondent.
In any controversy between a laborer and his master, doubts reasonably arising
from the evidence are resolved in favor of the laborer.41
As a regular employee, respondent enjoys the right to security of tenure under
Article 27942 of the Labor Code and may only be dismissed for a just43 or
authorized44 cause, otherwise the dismissal becomes illegal.
Respondent, whose employment was terminated without valid cause by petitioners,
is entitled to reinstatement without loss of seniority rights and other privileges and to
his full back wages, inclusive of allowances and other benefits or their monetary
equivalent, computed from the time his compensation was withheld from him up to
the time of his actual reinstatement. Where reinstatement is no longer viable as an
option, back wages shall be computed from the time of the illegal termination up to
the finality of the decision. Separation pay equivalent to one month salary for every
year of service should likewise be awarded as an alternative in case reinstatement
in not possible.45
WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated
February 21, 2008 and Resolution dated February 9, 2009 of the Court of Appeals in
CA-G.R. No. CEB-SP No. 02113 are hereby AFFIRMED and UPHELD.
Petitioners to pay the costs of suit.
SO ORDERED.
G.R. No. 192998 April 2, 2014
BERNARD A. TENAZAS, JAIME M. FRANCISCO and ISIDRO G. ENDRACA, Petitioners,
vs.
R. VILLEGAS TAXI TRANSPORT and ROMUALDO VILLEGAS, Respondents.
DECISION
REYES, J.:
This is a petition for review on certiorari 1 filed under Rule 45 of the Rules of Court,
assailing the Decision2 dated March 11, 2010 and Resolution3 dated June 28, 2010 of
the Court of Appeals (CA) in CA-G.R. SP No. 111150, which affirmed with
modification the Decision4 dated June 23, 2009 of the National Labor Relations
Commission (NLRC) in NLRC LAC Case No. 07-002648-08.
The Antecedent Facts
On July 4, 2007, Bernard A. Tenazas (Tenazas) and Jaime M. Francisco (Francisco)
filed a complaint for illegal dismissal against R. Villegas Taxi Transport and/or
Romualdo Villegas (Romualdo) and Andy Villegas (Andy) (respondents). At that
time, a similar case had already been filed by Isidro G. Endraca (Endraca) against
the same respondents. The two (2) cases were subsequently consolidated.5
In their position paper,6 Tenazas, Francisco and Endraca (petitioners) alleged that
they were hired and dismissed by the respondents on the following dates:
Name Date of Hiring Date of Dismissal Salary
Bernard A. Tenazas 10/1997 07/03/07 Boundary System
Jaime M. Francisco 04/10/04 06/04/07 Boundary System
Isidro G. Endraca 04/2000 03/06/06 Boundary System7
Relaying the circumstances of his dismissal, Tenazas alleged that on July 1, 2007, the
taxi unit assigned to him was sideswiped by another vehicle, causing a dent on the
left fender near the driver seat. The cost of repair for the damage was estimated at
₱500.00. Upon reporting the incident to the company, he was scolded by
respondents Romualdo and Andy and was told to leave the garage for he is
already fired. He was even threatened with physical harm should he ever be seen in
the company’s premises again. Despite the warning, Tenazas reported for work on
the following day but was told that he can no longer drive any of the company’s
units as he is already fired.8
Francisco, on the other hand, averred that his dismissal was brought about by the
company’s unfounded suspicion that he was organizing a labor union. He was
instantaneously terminated, without the benefit of procedural due process, on June
4, 2007.9
Endraca, for his part, alleged that his dismissal was instigated by an occasion when
he fell short of the required boundary for his taxi unit. He related that before he was
dismissed, he brought his taxi unit to an auto shop for an urgent repair. He was
charged the amount of ₱700.00 for the repair services and the replacement parts.
As a result, he was not able to meet his boundary for the day. Upon returning to the
company garage and informing the management of the incident, his driver’s
license was confiscated and was told to settle the deficiency in his boundary first
before his license will be returned to him. He was no longer allowed to drive a taxi
unit despite his persistent pleas.10
For their part, the respondents admitted that Tenazas and Endraca were employees
of the company, the former being a regular driver and the latter a spare driver. The
respondents, however, denied that Francisco was an employee of the company or
that he was able to drive one of the company’s units at any point in time.11
The respondents further alleged that Tenazas was never terminated by the
company. They claimed that on July 3, 2007, Tenazas went to the company garage
to get his taxi unit but was informed that it is due for overhaul because of some
mechanical defects reported by the other driver who takes turns with him in using
the same. He was thus advised to wait for further notice from the company if his unit
has already been fixed. On July 8, 2007, however, upon being informed that his unit
is ready for release, Tenazas failed to report back to work for no apparent reason.12
As regards Endraca, the respondents alleged that they hired him as a spare driver in
February 2001. They allow him to drive a taxi unit whenever their regular driver will
not be able to report for work. In July 2003, however, Endraca stopped reporting for
work without informing the company of his reason. Subsequently, the respondents
learned that a complaint for illegal dismissal was filed by Endraca against them.
They strongly maintained, however, that they could never have terminated
Endraca in March 2006 since he already stopped reporting for work as early as July
2003. Even then, they expressed willingness to accommodate Endraca should he
wish to work as a spare driver for the company again since he was never really
dismissed from employment anyway.13
On May 29, 2008, the petitioners, by registered mail, filed a Motion to Admit
Additional Evidence.14 They alleged that after diligent efforts, they were able to
discover new pieces of evidence that will substantiate the allegations in their
position paper. Attached with the motion are the following: (a) Joint Affidavit of the
petitioners;15 (2) Affidavit of Good Faith of Aloney Rivera, a co-driver;16 (3) pictures
of the petitioners wearing company shirts;17 and (4) Tenazas’ Certification/Record of
Social Security System (SSS) contributions.18
The Ruling of the Labor Arbiter
On May 30, 2008, the Labor Arbiter (LA) rendered a Decision,19 which pertinently
states, thus:
In the case of complainant Jaime Francisco, respondents categorically denied the
existence of an employer-employee relationship. In this situation, the burden of
proof shifts to the complainant to prove the existence of a regular employment.
Complainant Francisco failed to present evidence of regular employment available
to all regular employees, such as an employment contract, company ID, SSS,
withholding tax certificates, SSS membership and the like.
In the case of complainant Isidro Endraca, respondents claim that he was only an
extra driver who stopped reporting to queue for available taxi units which he could
drive. In fact, respondents offered him in their Position Paper on record, immediate
reinstatement as extra taxi driver which offer he refused.
In case of Bernard Tenazas, he was told to wait while his taxi was under repair but he
did not report for work after the taxi was repaired. Respondents[,] in their Position
Paper, on record likewise, offered him immediate reinstatement, which offer he
refused.
We must bear in mind that the complaint herein is one of actual dismissal. But there
was no formal investigations, no show cause memos, suspension memos or
termination memos were never issued. Otherwise stated, there is no proof of overt
act of dismissal committed by herein respondents.
We are therefore constrained to rule that there was no illegal dismissal in the case at
bar.
The situations contemplated by law for entitlement to separation pay does [sic] not
apply.
WHEREFORE, premises considered, instant consolidated complaints are hereby
dismissed for lack of merit.
SO ORDERED.20
The Ruling of the NLRC
Unyielding, the petitioners appealed the decision of the LA to the NLRC.
Subsequently, on June 23, 2009, the NLRC rendered a Decision,21 reversing the
appealed decision of the LA, holding that the additional pieces of evidence
belatedly submitted by the petitioners sufficed to establish the existence of
employer-employee relationship and their illegal dismissal. It held, thus:
In the challenged decision, the Labor Arbiter found that it cannot be said that the
complainants were illegally dismissed, there being no showing, in the first place, that
the respondent [sic] terminated their services. A portion thereof reads:
"We must bear in mind that the complaint herein is one of actual dismissal. But there
were no formal investigations, no show cause memos, suspension memos or
termination memos were never issued. Otherwise stated, there is no proof of overt
act of dismissal committed by herein respondents.
We are therefore constrained to rule that there was no illegal dismissal in the case at
bar."
Issue: [W]hether or not the complainants were illegally dismissed from employment.
It is possible that the complainants’ Motion to Admit Additional Evidence did not
reach the Labor Arbiter’s attention because he had drafted the challenged
decision even before they submitted it, and thereafter, his staff attended only to
clerical matters, and failed to bring the motion in question to his attention. It is now
up to this Commission to consider the complainants’ additional evidence. Anyway,
if this Commission must consider evidence submitted for the first time on appeal
(Andaya vs. NLRC, G.R. No. 157371, July 15, 2005), much more so must it consider
evidence that was simply overlooked by the Labor Arbiter.
Among the additional pieces of evidence submitted by the complainants are the
following: (1) joint affidavit (records, p. 51-52) of the three (3) complainants; (2)
affidavit (records, p. 53) of Aloney Rivera y Aldo; and (3) three (3) pictures (records,
p. 54) referred to by the complainant in their joint affidavit showing them wearing t-
shirts bearing the name and logo of the respondent’s company.
xxxx
WHEREFORE, the decision appealed from is hereby REVERSED. Respondent
Rom[u]aldo Villegas doing business under the name and style Villegas Taxi Transport
is hereby ordered to pay the complainants the following (1) full backwages from the
date of their dismissal (July 3, 2007 for Tena[z]as, June 4, 2004 for Francisco, and
March 6, 2006 for Endraca[)] up to the date of the finality of this decision[;] (2)
separation pay equivalent to one month for every year of service; and (3)
attorney’s fees equivalent to ten percent (10%) of the total judgment awards.
SO ORDERED.22
On July 24, 2009, the respondents filed a motion for reconsideration but the NLRC
denied the same in its Resolution23 dated September 23, 2009.
The Ruling of the CA
Unperturbed, the respondents filed a petition for certiorari with the CA. On March
11, 2010, the CA rendered a Decision,24 affirming with modification the Decision
dated June 23, 2009 of the NLRC. The CA agreed with the NLRC’s finding that
Tenazas and Endraca were employees of the company, but ruled otherwise in the
case of Francisco for failing to establish his relationship with the company. It also
deleted the award of separation pay and ordered for reinstatement of Tenazas and
Endraca. The pertinent portions of the decision read as follows:
At the outset, We declare that respondent Francisco failed to prove that an
employer-employee relationship exists between him and R. Transport. If there is no
employer-employee relationship in the first place, the duty of R. Transport to adhere
to the labor standards provisions of the Labor Code with respect to Francisco is
questionable.
xxxx
Although substantial evidence is not a function of quantity but rather of quality, the
peculiar environmental circumstances of the instant case demand that something
more should have been proffered. Had there been other proofs of employment,
such as Francisco’s inclusion in R.R.
Transport’s payroll, this Court would have affirmed the finding of employer-
employee relationship.1âwphi1 The NLRC, therefore, committed grievous error in
ordering R. Transport to answer for Francisco’s claims.
We now tackle R. Transport’s petition with respect to Tenazas and Endraca, who are
both admitted to be R. Transport’s employees. In its petition, R. Transport puts forth
the theory that it did not terminate the services of respondents but that the latter
deliberately abandoned their work. We cannot subscribe to this theory.
xxxx
Considering that the complaints for illegal dismissal were filed soon after the alleged
dates of dismissal, it cannot be inferred that respondents Tenazas and Endraca
intended to abandon their employment. The complainants for dismissal are, in
themselves, pleas for the continuance of employment. They are incompatible with
the allegation of abandonment. x x x.
For R. Transport’s failure to discharge the burden of proving that the dismissal of
respondents Tenazas and Endraca was for a just cause, We are constrained to
uphold the NLRC’s conclusion that their dismissal was not justified and that they are
entitled to back wages. Because they were illegally dismissed, private respondents
Tenazas and Endraca are entitled to reinstatement and back wages x x x.
xxxx
However, R. Transport is correct in its contention that separation pay should not be
awarded because reinstatement is still possible and has been offered. It is well[-
]settled that separation pay is granted only in instances where reinstatement is no
longer feasible or appropriate, which is not the case here.
xxxx
WHEREFORE, the Decision of the National Labor Relations Commission dated 23
June 2009, in NLRC LAC Case No. 07-002648-08, and its Resolution dated 23
September 2009 denying reconsideration thereof are AFFIRMED with MODIFICATION
in that the award of Jaime Francisco’s claims is DELETED. The separation pay
granted in favor of Bernard Tenazas and Isidro Endraca is, likewise, DELETED and
their reinstatement is ordered instead.
SO ORDERED.25 (Citations omitted)
On March 19, 2010, the petitioners filed a motion for reconsideration but the same
was denied by the CA in its Resolution26 dated June 28, 2010.
Undeterred, the petitioners filed the instant petition for review on certiorari before
this Court on July 15, 2010.
The Ruling of this Court
The petition lacks merit.
Pivotal to the resolution of the instant case is the determination of the existence of
employer-employee relationship and whether there was an illegal dismissal.
Remarkably, the LA, NLRC and the CA had varying assessment on the matters at
hand. The LA believed that, with the admission of the respondents, there is no longer
any question regarding the status of both Tenazas and Endraca being employees
of the company. However, he ruled that the same conclusion does not hold with
respect to Francisco whom the respondents denied to have ever employed or
known. With the respondents’ denial, the burden of proof shifts to Francisco to
establish his regular employment. Unfortunately, the LA found that Francisco failed
to present sufficient evidence to prove regular employment such as company ID,
SSS membership, withholding tax certificates or similar articles. Thus, he was not
considered an employee of the company. Even then, the LA held that Tenazas and
Endraca could not have been illegally dismissed since there was no overt act of
dismissal committed by the respondents.27
On appeal, the NLRC reversed the ruling of the LA and ruled that the petitioners
were all employees of the company. The NLRC premised its conclusion on the
additional pieces of evidence belatedly submitted by the petitioners, which it
supposed, have been overlooked by the LA owing to the time when it was received
by the said office. It opined that the said pieces of evidence are sufficient to
establish the circumstances of their illegal termination. In particular, it noted that in
the affidavit of the petitioners, there were allegations about the company’s
practice of not issuing employment records and this was not rebutted by the
respondents. It underscored that in a situation where doubt exists between
evidence presented by the employer and the employee, the scales of justice must
be tilted in favor of the employee. It awarded the petitioners with: (1) full
backwages from the date of their dismissal up to the finality of the decision; (2)
separation pay equivalent to one month of salary for every year of service; and (3)
attorney’s fees.
On petition for certiorari, the CA affirmed with modification the decision of the
NLRC, holding that there was indeed an illegal dismissal on the part of Tenazas and
Endraca but not with respect to Francisco who failed to present substantial
evidence, proving that he was an employee of the respondents. The CA likewise
dismissed the respondents’ claim that Tenazas and Endraca abandoned their work,
asseverating that immediate filing of a complaint for illegal dismissal and persistent
pleas for continuance of employment are incompatible with abandonment. It also
deleted the NLRC’s award of separation pay and instead ordered that Tenazas and
Endraca be reinstated.28
"Well-settled is the rule that the jurisdiction of this Court in a petition for review on
certiorari under Rule 45 of the Revised Rules of Court is limited to reviewing only
errors of law, not of fact, unless the factual findings complained of are completely
devoid of support from the evidence on record, or the assailed judgment is based
on a gross misapprehension of facts."29 The Court finds that none of the mentioned
circumstances is present in this case.
In reviewing the decision of the NLRC, the CA found that no substantial evidence
was presented to support the conclusion that Francisco was an employee of the
respondents and accordingly modified the NLRC decision. It stressed that with the
respondents’ denial of employer-employee relationship, it behooved Francisco to
present substantial evidence to prove that he is an employee before any question
on the legality of his supposed dismissal becomes appropriate for discussion.
Francisco, however, did not offer evidence to substantiate his claim of employment
with the respondents. Short of the required quantum of proof, the CA correctly ruled
that the NLRC’s finding of illegal dismissal and the monetary awards which
necessarily follow such ruling lacked factual and legal basis and must therefore be
deleted.
The action of the CA finds support in Anonas Construction and Industrial Supply
Corp., et al. v. NLRC, et al.,30where the Court reiterated:
[J]udicial review of decisions of the NLRC via petition for certiorari under Rule 65, as
a general rule, is confined only to issues of lack or excess of jurisdiction and grave
abuse of discretion on the part of the NLRC. The CA does not assess and weigh the
sufficiency of evidence upon which the LA and the NLRC based their conclusions.
The issue is limited to the determination of whether or not the NLRC acted without or
in excess of its jurisdiction, or with grave abuse of discretion in rendering the
resolution, except if the findings of the NLRC are not supported by substantial
evidence.31 (Citation omitted and emphasis ours)
It is an oft-repeated rule that in labor cases, as in other administrative and quasi-
judicial proceedings, "the quantum of proof necessary is substantial evidence, or
such amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion."32 "[T]he burden of proof rests upon the party who
asserts the affirmative of an issue."33 Corollarily, as Francisco was claiming to be an
employee of the respondents, it is incumbent upon him to proffer evidence to prove
the existence of said relationship.
"[I]n determining the presence or absence of an employer-employee relationship,
the Court has consistently looked for the following incidents, to wit: (a) the selection
and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer’s power to control the employee on the means and
methods by which the work is accomplished. The last element, the so-called control
test, is the most important element."34
There is no hard and fast rule designed to establish the aforesaid elements. Any
competent and relevant evidence to prove the relationship may be admitted.
Identification cards, cash vouchers, social security registration, appointment letters
or employment contracts, payrolls, organization charts, and personnel lists, serve as
evidence of employee status.35
In this case, however, Francisco failed to present any proof substantial enough to
establish his relationship with the respondents. He failed to present documentary
evidence like attendance logbook, payroll, SSS record or any personnel file that
could somehow depict his status as an employee. Anent his claim that he was not
issued with employment records, he could have, at least, produced his social
security records which state his contributions, name and address of his employer, as
his co-petitioner Tenazas did. He could have also presented testimonial evidence
showing the respondents’ exercise of control over the means and methods by
which he undertakes his work. This is imperative in light of the respondents’ denial of
his employment and the claim of another taxi operator, Emmanuel Villegas
(Emmanuel), that he was his employer. Specifically, in his Affidavit, 36 Emmanuel
alleged that Francisco was employed as a spare driver in his taxi garage from
January 2006 to December 2006, a fact that the latter failed to deny or question in
any of the pleadings attached to the records of this case. The utter lack of
evidence is fatal to Francisco’s case especially in cases like his present predicament
when the law has been very lenient in not requiring any particular form of evidence
or manner of proving the presence of employer-employee relationship.
In Opulencia Ice Plant and Storage v. NLRC,37 this Court emphasized, thus:
No particular form of evidence is required to prove the existence of an employer-
employee relationship. Any competent and relevant evidence to prove the
relationship may be admitted. For, if only documentary evidence would be required
to show that relationship, no scheming employer would ever be brought before the
bar of justice, as no employer would wish to come out with any trace of the illegality
he has authored considering that it should take much weightier proof to invalidate
a written instrument.38
Here, Francisco simply relied on his allegation that he was an employee of the
company without any other evidence supporting his claim. Unfortunately for him, a
mere allegation in the position paper is not tantamount to evidence. 39Bereft of any
evidence, the CA correctly ruled that Francisco could not be considered an
employee of the respondents.
The CA’s order of reinstatement of Tenazas and Endraca, instead of the payment of
separation pay, is also well in accordance with prevailing jurisprudence. In
Macasero v. Southern Industrial Gases Philippines,40 the Court reiterated, thus:
[A]n illegally dismissed employee is entitled to two reliefs: backwages and
reinstatement.1âwphi1 The two reliefs provided are separate and distinct. In
instances where reinstatement is no longer feasible because of strained relations
between the employee and the employer, separation pay is granted. In effect, an
illegally dismissed employee is entitled to either reinstatement, if viable, or
separation pay if reinstatement is no longer viable, and backwages.
The normal consequences of respondents’ illegal dismissal, then, are reinstatement
without loss of seniority rights, and payment of backwages computed from the time
compensation was withheld up to the date of actual reinstatement. Where
reinstatement is no longer viable as an option, separation pay equivalent to one (1)
month salary for every year of service should be awarded as an alternative. The
payment of separation pay is in addition to payment of backwages.41 (Emphasis
supplied)
Clearly, it is only when reinstatement is no longer feasible that the payment of
separation pay is ordered in lieu thereof. For instance, if reinstatement would only
exacerbate the tension and strained relations between the parties, or where the
relationship between the employer and the employee has been unduly strained by
reason of their irreconcilable differences, it would be more prudent to order
payment of separation pay instead of reinstatement.42
This doctrine of strained relations, however, should not be used recklessly or applied
loosely43 nor be based on impression alone. "It bears to stress that reinstatement is
the rule and, for the exception of strained relations to apply, it should be proved
that it is likely that if reinstated, an atmosphere of antipathy and antagonism would
be generated as to adversely affect the efficiency and productivity of the
employee concerned."44
Moreover, the existence of strained relations, it must be emphasized, is a question of
fact. In Golden Ace Builders v. Talde,45 the Court underscored:
Strained relations must be demonstrated as a fact, however, to be adequately
supported by evidence—substantial evidence to show that the relationship
between the employer and the employee is indeed strained as a necessary
consequence of the judicial controversy.46 (Citations omitted and emphasis ours)
After a perusal of the NLRC decision, this Court failed to find the factual basis of the
award of separation pay to the petitioners. The NLRC decision did not state the
facts which demonstrate that reinstatement is no longer a feasible option that
could have justified the alternative relief of granting separation pay instead.
The petitioners themselves likewise overlooked to allege circumstances which may
have rendered their reinstatement unlikely or unwise and even prayed for
reinstatement alongside the payment of separation pay in their position paper.47 A
bare claim of strained relations by reason of termination is insufficient to warrant the
granting of separation pay. Likewise, the filing of the complaint by the petitioners
does not necessarily translate to strained relations between the parties. As a rule, no
strained relations should arise from a valid and legal act asserting one’s
right.48 Although litigation may also engender a certain degree of hostility, the
understandable strain in the parties’ relation would not necessarily rule out
reinstatement which would, otherwise, become the rule rather the exception in
illegal dismissal cases.49 Thus, it was a prudent call for the CA to delete the award of
separation pay and order for reinstatement instead, in accordance with the
general rule stated in Article 27950 of the Labor Code.
Finally, the Court finds the computation of the petitioners' backwages at the rate of
₱800.00 daily reasonable and just under the circumstances. The said rate is
consistent with the ruling of this Court in Hyatt Taxi Services, Inc. v. Catinoy, 51 which
dealt with the same matter.
WHEREFORE, in view of the foregoing disquisition, the petition for review on certiorari
is DENIED. The Decision dated March 11, 2010 and Resolution dated June 28, 2010 of
the Court of Appeals in CA-G.R. SP No. 111150 are AFFIRMED.
SO ORDERED.
G.R. No. 220399
ENRIQUE Y. SAGUN, Petitioner,
vs.
ANZ GLOBAL SEVICES AND OPERATIONS (MANILA), INC., GAY CRUZADA, and PAULA
ALCARAZ, Respondents.
RESOLUTION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1are the Decision2 dated May 25, 2015
and the Resolution3 dated August 27, 2015 of the Court of Appeals (CA) in CA-G.R.
SP No. 127777, which affirmed the Decision4 dated July 31, 2012 and the
Resolution5 dated September 28, 2012 of the National Labor Relations Commission
(NLRC) in NLRC LAC No. 07-001962-12, dismissing petitioner Enrique Y. Sagun's
(petitioner) complaint for illegal dismissal for lack of merit.
The Facts
Petitioner was employed at Hongkong and Shanghai Banking Corporation
Electronic Data Processing (Philippines), Inc. (HSBC-EDPI) when he applied online for
the position of Payments and Cash Processing Lead at respondent ANZ Global
Services and Operations (Manila), Inc. (ANZ), a domestic corporation whose
businesses involve a full range of banking products and services.6
After passing the interview and online examination, ANZ, through its Senior Vice
President for Operations, Gay Cruzada (Cruzada), offered petitioner the position of
Customer Service Officer, Payments and Cash Resolution,7which the latter
accepted on June 8, 2011. 8
In the letter of confirmation of the offer 9 which constituted petitioner's employment
agreement with ANZ, the terms and conditions of his employment required, among
others, a satisfactory result of his pre-employment screening. 10The pertinent portions
of which read as follows:
13. Pre-employment screening & ongoing screening
In accordance with its legal and regulatory obligations, and in accordance with
ANZ policy, you may be required to undergo a police record check prior to
commencing work with ANZ, or at other times during your employment.
You may also be required to undergo other checks (e.g. bankruptcy checks,
sanctions screening, reference checks, etc.). ANZ may engage the services of an
external provider to conduct these checks.
Your initial and ongoing employment is conditional on ANZ being satisfied that the
results of:
• a police record check are compatible with the inherent requirements of your
position; and
• any other required background or other checks are to the satisfaction of
ANZ (keeping in mind your position and ANZ's role as a financial institution).
ANZ may use any information you provide to conduct reference checks and any
other background checks.
Your employment is also conditional upon you holding all necessary visas and
meeting all immigration requirements necessary for you to work in Philippines in this
position.
If, in the opinion of ANZ, any of your background checks, reference checks or visas
are not satisfactory, ANZ may choose not to commence your employment, or
where you have already started, to end your employment immediately, with no
liability to pay compensation to you. 11(Emphases supplied)
In addition, the Schedules, 12 which likewise formed part of the employment
agreement, provided that petitioner was to be placed on a probationary status for
a period of six (6) months 13 and that his appointment would take effect from the
date of reporting, which was to be not later than July 11, 2011.14
Accordingly, on June 11, 2011, petitioner tendered his resignation 15 at HSBC-EDPI
and the acknowledged copy thereof was transmitted to ANZ together with his other
pre-employment documentary requirements. 16
On July 11, 2011, petitioner was instructed to report to ANZ 17 and was handed a
letter of retraction 18 signed by ANZ's Human Resources Business Partner, Paula
Alcaraz (Alcaraz), informing him that the job offer had been withdrawn on the
ground that the company found material inconsistencies in his declared information
and documents provided after conducting a background check with his previous
employer, particularly at Siemens.19
Asserting that his employment contract had already been perfected upon his
acceptance of the offer on June 8, 2011, and as such, was already deemed an
employee of ANZ who can only be dismissed for cause, petitioner filed a complaint
for illegal dismissal with money claims against ANZ, Cruzada, and Alcaraz
(respondents) before the NLRC, National Capital Region, docketed as NLRC NCR
Case No. 08-11752-11.
For their part, respondents countered that the NLRC had no jurisdiction over the
complaint as they have no employer-employee relationship with
petitioner.1âwphi1 They contended that their offer was conditional and the
effectivity of petitioner's employment contract was subject to a term or
period.20 They claimed that petitioner made material misrepresentations in his job
application and interview that prompted them to withdraw the offer. They pointed
out that the discrepancies in his declarations, namely: (a) that he only held the
position of a Level 1 and not a Level 2 Technical Support Representative at Siemens;
and (b) that he was terminated for cause due to his absence without official leave
(AWOL) and not because of his resignation, were not satisfactorily explained
despite the opportunity accorded to him. They added that petitioner likewise failed
to report for work on or before July 11, 2011; hence, his employment never took
effect and no employer-employee relationship was created. Thus, they asserted
that petitioner was never dismissed, more so, illegally. Finally, they denied his money
claims for lack of basis and further averred that the impleaded officers cannot be
held personally liable under the circumstances. 21
The LA Ruling
In a Decision 22 dated April 23, 2012, the Labor Arbiter (LA) dismissed the complaint,
holding that there was no perfected employment contract between petitioner and
respondents since there was a valid cause for the withdrawal of the offer that was
made prior to the commencement of petitioner's service with the company. The LA
held that the material misrepresentation committed by petitioner was a reasonable
ground to withdraw the employment offer and as such, no employer-employee
relationship was created between them. 23
Aggrieved, petitioner appealed to the NLRC.24
The NLRC Ruling
In a Decision25 dated July 31, 2012, the NLRC affirmed the findings of the LA, ruling
that no employer-employee relationship existed between petitioner and
respondents. It held that petitioner's employment with ANZ never took effect since
its effectivity was dependent on his reporting for work on or before July 11, 2011,
which he admittedly failed to comply. The NLRC added that the withdrawal of job
offer was valid and reasonable, there being substantial evidence to show that
petitioner committed misrepresentations in his job application.26
Petitioner filed a motion for reconsideration,27 which was, however, denied in a
Resolution 28 dated September 28, 2012, prompting him to elevate his case to the
CA via a petition for certiorari,29docketed as CA-G.R. SP. No. 127777.
The CA Ruling
In a Decision30 dated May 25, 2015, the CA found no grave abuse of discretion to
have been committed by the NLRC in upholding the dismissal of the complaint. The
CA distinguished between the perfection of an employment contract and the
commencement of the employer-employee relationship, citing the case
of Santiago v. CF Sharp Crew Management, Inc. (Santiago). 31It held that the
contract was perfected on June 8, 2011 when it was signed by the parties.
However, it ruled that the employment contract did not commence since
respondents did not allow petitioner to begin work due to the misrepresentations he
made in his application form. The CA also pointed out that since the employment
offer was conditioned on the satisfactory completion of his background check, his
failure to comply with the same rendered the withdrawal of the offer justified.
Hence, no employer-employee relationship was created between the
parties.32 Lastly, relying on the Santiago case, it clarified that even if there was no
employer-employee relationship, the NLRC still had jurisdiction over the complaint
since the LA's jurisdiction was not limited to claims arising from employer-employee
relationship.
Dissatisfied, petitioner moved for reconsideration, 33 but was denied in a
Resolution34 dated August 27, 2015; hence, this petition.
The Issue Before the Court
The core issue for the Court's resolution is whether or not the CA erred in not finding
grave abuse of discretion on the part of the NLRC in holding that no employer-
employee relationship existed between petitioner and respondent.
The Court's Ruling
The petition lacks merit.
A contract is a meeting of minds between two persons whereby one binds himself,
with respect to the other, to give something or to render some service. 35 There is no
contract unless the following essential requisites concur: (a) consent of the
contracting parties; (b) object certain which is the subject matter of the contract;
and (c) cause of the obligation which is established. 36
In general, contracts undergo three distinct stages. These are negotiation,
perfection or birth, and consummation. Negotiation begins from the time the
prospective contracting parties manifest their interest in the contract and ends at
the moment of their agreement. Thereafter, perfection or birth of the contract takes
place when the parties agree upon the essential elements of the contract. Finally,
consummation occurs when the parties fulfill or perform the terms agreed upon in
the contract, culminating in the extinguishment thereof. 37
An employment contract, like any other contract, is perfected at the moment the
parties come to agree upon its terms and conditions, and thereafter, concur in the
essential elements thereof. 38 In this relation, the contracting parties may establish
such stipulations, clauses, terms, and conditions as they may deem convenient,
provided they are not contrary to law, morals, good customs, public order or public
policy.39
In this case, the Court agrees with the finding of the CA that there was already a
perfected contract of employment when petitioner signed ANZ's employment offer
and agreed to the terms and conditions that were embodied therein. Nonetheless,
the offer of employment extended to petitioner contained several conditions
before he may be deemed an employee of ANZ. Among those conditions for
employment was the "satisfactory completion of any checks (e.g. background,
bankruptcy, sanctions and reference checks) that may be required by
ANZ." 40 Accordingly, petitioner's employment with ANZ depended on the outcome
of his background check, which partakes of the nature of a suspensive condition,
and hence, renders the obligation of the would-be employer, i.e., ANZ in this case,
conditional. Article 1181 of the Civil Code provides:
Art. 1181. In conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the happening
of the event which constitutes the condition.
In the realm of civil law, a condition is defined as "every future and uncertain event
upon which an obligation or provision is made to depend. It is a future and
uncertain event upon which the acquisition or resolution of rights is made to
depend by those who execute the juridical act." 41 Jurisprudence states that when
a contract is subject to a suspensive condition, its effectivity shall take place only if
and when the event which constitutes the condition happens or is fulfilled. 42 A
contract is one of the five (5) sources of obligations as stated in the Civil Code.43 An
obligation is defined as the juridical necessity to give, to do or not to do. 44 While a
contract may be perfected in the manner of operation described above, the
efficacy of the obligations created thereby may be held in suspense pending the
fulfillment of particular conditions agreed upon. In other words, a perfected
contract may exist, although the obligations arising therefrom - if premised upon a
suspensive condition - would yet to be put into effect.
Here, the subject employment contract required a satisfactory completion of
petitioner's background check before he may be deemed an employee of ANZ.
Considering, however, that petitioner failed to explain the discrepancies in his
declared information and documents that were required from him relative to his
work experience at Siemens, namely: (a) that he was only a Level 1 and not a Level
2 Technical Support Representative that conducts troubleshooting for both
computer hardware and software problems; and (b) that he was found to have
been terminated for cause and not merely resigned from his post, that rendered his
background check unsatisfactory, ANZ's obligations as a would-be employer were
held in suspense and thus, had yet to acquire any obligatory force. 45 To reiterate, in
a contract with a suspensive condition, if the condition does not happen, the
obligation does not come into effect. Thus, until and unless petitioner complied with
the satisfactory background check, there exists no obligation on the part of ANZ to
recognize and fully accord him the rights under the employment contract. In fact,
records also show that petitioner failed to report for work on or before July 11, 2011,
which was also a suspensive condition mandated under sub-paragraph 4 of
Schedule 1 of the contract.
Consequently, no employer-employee relationship was said to have been created
between petitioner and ANZ under the circumstances, and the dismissal of the
farmer's complaint for illegal termination from work, as held by the NLRC, was
correctly sustained by the CA.
WHEREFORE, the petition is DENIED. The Decision dated May 25, 2015 and the
Resolution dated August 27, 2015 of the Court of Appeals in CA-G.R. SP No. 127777
are hereby AFFIRMED.
SO ORDERED.
G.R. No. 196134, October 12, 2016
VALENTIN S. LOZADA, Petitioner, v. MAGTANGGOL MENDOZA, Respondent.
DECISION
BERSAMIN, J.:
This appeal seeks the reversal of the decision promulgated on September 28,
2010,1 whereby the Court Appeals (CA), in CA-G.R. SP No. 111722, set aside the
decision of the National Labor Relations Commission (NLRC) upon finding that the
NLRC had gravely abused its discretion amounting to lack or excess of jurisdiction in
reversing the ruling of the Labor Arbiter dated February 24, 2009, 2 and reinstated
such ruling in favor of the respondent holding the petitioner liable for the satisfaction
of the money judgment in favor of the respondent.
Antecedents
The factual and procedural antecedents are as follows:ChanRoblesVirtualawlibrary
On October 13, 1997, the petitioner Magtanggol Mendoza was employed as a
technician by VSL Service Center, a single proprietorship owned and managed by
Valentin Lozada.
Sometime in August 2003, the VSL Service Center was incorporated and changed its
business name to LB&C Services Corporation. Subsequently, the petitioner was
asked by respondent Lozada to sign a new employment contract. The petitioner
did not accede because the respondent company did not consider the number of
years of service that he had rendered to VSL Service Center. From then on, the
petitioner's work schedule was reduced to one to three days a week.
In December 2003, the petitioner was given his regular working schedule by the
respondent company. However, on January 12, 2004, the petitioner was advised by
the respondent company's Executive Officer, Angeline Aguilar, not to report for
work and just wait for a cal1 from the respondent company regarding his work
schedule.
The petitioner patiently waited for the respondent company's call regarding his work
schedule. However, he did not receive any call from it. Considering that his family
depends on him for support, he asked his wife to call the respondent company and
inquire on when he would report back to work. Still, the petitioner was not given any
work schedule by the respondent company.
Aggrieved, the petitioner filed a complaint against the respondent company on
January 21, 2004 for illegal dismissal with a prayer for the payment of his 13 th month
pay, service incentive leave pay, holiday pay and separation pay and with a claim
for moral and exemplary damages, and attorney's fees. The case was docketed as
NLRC NCR Case No. 00-01-00968-2004.
The Labor Arbiter denied the motion to quash the writ of execution on April 16,
A mandatory conciliation conference was conducted, but to no avail, thus, they 2007.7 In due course, the sheriff garnished P5,767.77 in the petitioner's deposit under
were ordered by the Labor Arbiter to submit their respective position papers. the account of Valor Appliances Services at the Las Pi�as Branch of the First Macro
Bank.
In his Position paper dated March 2, 2004, the petitioner alleged that he was
constructively dismissed as he was not given any work assignment for his refusal to On November 19, 2007, the Labor Arbiter directed the sheriff to proceed with further
sign a new contract of employment. He was dismissed from his work without any execution of the properties of the petitioner for the satisfaction of the monetary
valid authorized cause. He was not given any separation pay for the services that award in favor of the respondent.8chanrobleslaw
he rendered for almost six (6) years that he worked with VSL Service Center. He thus
claimed that his termination from employment was effected illegally, hastily, On December 19, 2007, the sheriff issued to the petitioner a notice of levy upon
arbitrarily and capriciously. realty. The sheriff notified the Registry of Deeds of Las Pi�as City on the levy made
on the petitioner's real property with an area of 31.30 square meters covered by
In its Position paper, dated March 9, 2004, the respondent company vehemently Transfer Certificate of Title No. T-43336 of that office.
denied the allegation of the petitioner that he was dismissed from employment. The
petitioner was still reporting for work with the respondent company even after he LB&C Services Corporation moved for the lifting of the levy because the real
filed a complaint with the arbitration board of the NLRC up to February 10, 2004. It property levied upon had been constituted by the petitioner as the family
also denied that the petitioner was its employee since 1997. The truth of the matter, home;9 and that the decision of the Labor Arbiter did not adjudge the petitioner as
according to the respondent company, was that it employed the petitioner only on jointly and solidarily liable for the obligation in favor of the respondent.
August 1, 2003 because the respondent company started its corporate existence
only on August 27, 2002 and started its business operation on August 1, 2003. It After the Labor Arbiter denied its motion for the lifting of the levy on February 24,
further averred that respondent Valentin Lozada was not an officer or employee of 2009,10 LB&C Services Corporation appealed the denial to the NLRC, which, on May
the respondent company nor (sic) its authorized representative. The respondent 29, 2009, reversed the Labor Arbiter, as follows:ChanRoblesVirtualawlibrary
company finally claimed that it was the petitioner who severed his relationship with WHEREFORE, premises considered, respondents' appeal is hereby GRANTED.
it.3chanroblesvirtuallawlibrary Accordingly, the order of the labor arbiter is hereby REVERSED and SET ASIDE.
On February 23, 2005, the Labor Arbiter declared the dismissal of the petitioner from
employment as illegal, disposing thusly:ChanRoblesVirtualawlibrary As prayed for by the respondents, the levy constituted over such Las Pi�as property
WHEREFORE, premises considered, judgment is rendered declaring the dismissal of which is covered by Transfer Certificate of Title No. (sic) is hereby LIFTED.
complainant as illegal and ordering his reinstatement with full backwages plus
payment of his 13th month pay (less P500.00 pesos) and service incentive leave pay SO ORDERED.11chanroblesvirtuallawlibrary
all computed three years backward, as follows: The respondent assailed the reversal by motion for reconsideration, which the NLRC
thereafter denied.
chanRoblesvirtualLawlibraryx x x x
Thence, a petition for certiorari was filed in the CA to assail the ruling of the NLRC on
SO ORDERED.4chanroblesvirtuallawlibrary the ground of grave abuse of discretion amounting to lack or excess of jurisdiction.
LB&C Services Corporation appealed, but the NLRC dismissed the appeal for non-
perfection thereof due to failure to deposit the required cash or surety bond. Thus, As stated, the CA promulgated the assailed decision on September 28, 2010
the Labor Arbiter's decision attained finality on August 4, 2006, and the entry of granting the petition for certiorari, and reinstating the Labor Arbiter's decision. It
judgment was issued by the NLRC on August 16, 2006. opined that the petitioner was still liable despite the fact that the Labor Arbiter's
decision had not specified his being jointly and severally liable for the monetary
The respondent moved for the issuance of the writ of execution, which the Labor awards in favor of the respondent; that LB&C Services Corporation, being an
Arbiter granted on November 21, 2006. artificial being, must have an officer who could be presumed to be the employer,
being the person acting in the interest of the corporate employer; 12 that with LB&C
The petitioner and LB&C Services Corporation filed a motion to quash the writ of Services Corporation having already ceased its operation, the respondent could no
execution,5 alleging that there was no employer-employee relationship between longer recover the monetary benefits awarded to him, thereby rendering the entire
the petitioner and the respondent; and that LB&C Services Corporation "has been procedure and the award nugatory; and that the petitioner was the corporate
closed and no longer in operation due to irreversible financiallosses." 6chanrobleslaw officer liable by virtue of his having acted on behalf of the corporation.

Hence, this appeal by the petitioner.
Issue
Was the petitioner liable for the monetary awards granted to the respondent
despite the absence of a pronouncement of his being solidarity liable with LB&C
Services Corporation?
Ruling of the Court
The appeal is meritorious.
A corporation, as a juridical entity, may act only through its directors, officers and
employees. Obligations incurred as a result of the acts .of the directors and officers
as the corporate agents are not their personal liability but the direct responsibility of
the corporation they represent.13 As a general rule, corporate officers are not held
solidarily liable with the corporation for separation pay because the corporation is
invested by law with a personality separate and distinct from those of the persons
composing it as well as from that of any other legal entity to which it may be
related. Mere ownership by a single stockholder or by another corporation of all or
nearly all of the capital stock of a corporation is not of itself sufficient ground for
disregarding the separate corporate personality.14chanrobleslaw
To hold a director or officer personally liable for corporate obligations, two requisites
must concur, to wit: (1) the complaint must allege that the director or officer
assented to the patently unlawful acts of the corporation, or that the director or
officer was guilty of gross negligence or bad faith; and (2) there must be proof that
the director or officer acted in bad faith.15chanrobleslaw
A perusal of the respondent's position paper and other submissions indicates that he
neither ascribed gross negligence or bad faith to the petitioner nor alleged that the
petitioner had assented to patently unlawful acts of the corporation. The
respondent only maintained that the petitioner had asked him to sign a new
employment contract, but that he had refused to do the petitioner's bidding. The
respondent did not thereby clearly and convincingly prove that the petitioner had
acted in bad faith. Indeed, there was no evidence whatsoever to corroborate the
petitioner's participation in the respondent's illegal dismissal. Accordingly, the twin
requisites of allegation and proof of bad faith necessary to hold the petitioner
personally liable for the monetary awards in favor of the respondent were lacking.
The CA reinstated the Labor Arbiter's decision by relying on the pronouncement
in Restaurante Las Conchas v. Llego,16 where the Court held that when the
employer corporation was no longer existing and the judgment rendered in favor of
the employees could not be satisfied, the officers of the corporation should be held
liable for acting on behalf of the corporation.17chanrobleslaw
A close scrutiny of Restaurante Las Conchas shows that the pronouncement
applied the exception instead of the general rule. The Court opined therein that, as
a rule, the officers and members of the corporation were not personally liable for
acts done in the performance of their duties;18 but that the exception instead of the
general rule should apply because of the peculiar circumstances of the case. The
Court observed that if the general rule were to be applied, the employees would
end up with an empty victory inasmuch as the restaurant had been closed for lack
of venue, and there would be no one to pay its liability because the respondents
thereat claimed that the restaurant had been owned by a different entity that had
not been made a party in the case.19chanrobleslaw
It is notable that the Court has subsequently opted not to adhere to Restaurante Las
Conchas in the cases of Mandaue Dinghow Dimsum House, Co., Inc. v. National
Labor Relations Commission-Fourth Division20 and Pantranco Employees Association
(PEA-PTGWO) v. National Labor Relations Commission.21chanrobleslaw
In Mandaue Dinghow Dimsum House, Co., Inc., the Court declined to
follow Restaurante Las Conchasbecause there was showing that the respondent
therein, Henry Uytengsu, had acted in bad faith or in excess of his authority. It
stressed that every corporation was invested by law with a personality separate and
distinct from those of the persons composing it as well as from that of any other
legal entity to which it might be related; and that the doctrine of piercing the veil of
corporate fiction must be resorted to with caution.22 The Court noted that corporate
directors and officers were solidarily liable with the corporation for the termination of
employees done with malice or bad faith; and declared that bad faith did not
connote bad judgment or negligence, but a dishonest purpose or some moral
obliquity and conscious doing of wrong, or meant a breach of a known duty
through some motive or interest or ill will, or partook of the nature of fraud.
In Pantranco Employees Association, the Court rejected the invocation
of Restaurante Las Conchas and refused to pierce the veil of corporate fiction,
explaining:ChanRoblesVirtualawlibrary
As between PNB and PNEI, petitioners want us to disregard their separate
personalities, and insist that because the company, PNEI, has already ceased
operations and there is no other way by which the judgment in favor of the
employees can be satisfied, corporate officers can be held jointly and severally
liable with the company. Petitioners rely on the pronouncement of this Court in A.C.
Ransom Labor Union-CCLU v. NLRC and subsequent cases.
This reliance fails to persuade. We find the aforesaid decisions inapplicable to the
instant case.
For one, in the said cases, the persons made liable after the company's cessation of
operations were the officers and agents of the corporation. The rationale is that,
since the corporation is an artificial person, it must have an officer who can be
presumed to be the employer, being the person acting in the interest of the
employer. The corporation, only in the technical sense, is the employer. In the
instant case, what is being made liable is another corporation (PNB) which acquired
the debtor corporation (PNEI).

Moreover, in the recent cases Carag v. National Labor Relations Commission and
McLeod v. National Labor Relations Commission, the Court explained the doctrine
laid down in AC Ransom relative to the personal liability of the officers and agents
of the employer for the debts of the latter. In AC Ransom, the Court imputed liability
to the officers of the corporation on the strength of the definition of an employer in
Article 212(c) (now Article 212[e]) of the Labor Code. Under the said provision,
employer includes any person acting in the interest of an employer, directly or
indirectly, but does not include any labor organization or any of its officers or agents
except when acting as employer. It was clarified in Carag and McLeod that Article
212(e) of the Labor Code, by itself, does not make a corporate officer personally
liable for the debts of the corporation. It added that the governing law on personal
liability of directors or officers for debts of the corporation is still Section 31 of the
Corporation Code.
More importantly, as aptly observed by this Court in AC Ransom, it appears that
Ransom, foreseeing the possibility or probability of payment of backwages to its
employees, organized Rosario to replace Ransom, with the latter to be eventually
phased out if the strikers win their case. The execution could not be implemented
against Ransom because of the disposition posthaste of its leviable assets evidently
in order to evade its just and due obligations. Hence, the Court sustained the
piercing of the corporate veil and made the officers of Ransom personally liable for
the debts of the latter.
Clearly, what can be inferred from the earlier cases is that the doctrine of piercing
the corporate veil applies only in three (3) basic areas, namely: 1) defeat of public
convenience as when the corporate fiction is used as a vehicle for the evasion of
an existing obligation; 2) fraud cases or when the corporate entity is used to justify a
wrong, protect fraud, or defend a crime; or 3) alter ego cases, where a corporation
is merely a farce since it is a mere alter ego or business conduit of a person, or
where the corporation is so organized and controlled and its affairs are so
conducted as to make it merely an instrumentality, agency, conduit or adjunct of
another corporation. In the absence of malice, bad faith, or a specific provision of
law making a corporate officer liable, such corporate officer cannot be made
personally liable for corporate liabilities.23[Bold Emphasis supplied]
The records of this case do not warrant the application of the exception. The rule,
which requires malice or bad faith on the part of the directors or officers of the
corporation, must still prevail. The petitioner might have acted in behalf of LB&C
Services Corporation but the corporation's failure to operate could not be hastily
equated to bad faith on his part. Verily, the closure of a business can be caused by
a host of reasons, including mismanagement, bankruptcy, lack of demand,
negligence, or lack of business foresight. Unless the closure is clearly demonstrated
to be deliberate, malicious and in bad faith, the general rule that a corporation has,
by law, a personality separate and distinct from that of its owners should hold sway.
In view of the dearth of evidence indicating that the petitioner had acted
deliberately, maliciously or in bad faith in handling the affairs of LB&C Services
Corporation, and such acts had eventually resulted in the closure of its business, he
could not be validly held to be jointly and solidarily liable with LB&C Services
Corporation.
The CA imputed bad faith to LB&C Services Corporation in respect of the cessation
of its operations because it still filed an appeal tot he NLRC,24 which the CA
construed as evincing its intent to evade liability. For that reason, the CA deemed it
mandatory to pierce the corporate fiction and then identified the petitioner as the
person responsible for the payment of the respondent's money claims. However, the
CA pointed out nothing else in the records that showed the petitioner as being
responsible for the acts complained of. At the very least, we consider it to be highly
improbable that LB&C Services Corporation deliberately ceased its operations if
only to evade the payment of the monetary awards adjudged in favor of a single
employee like the respondent.
In reinstating the decision of the Labor Arbiter, the CA, although conceding that the
petitioner was not among those who should be liable for the monetary award, still
went on to pierce the veil of corporate fiction and to declare as
follows:ChanRoblesVirtualawlibrary
Undoubtedly, respondent Lozada cannot be absolved from his liability as corporate
officer. Although, as a rule, the officers and members of a corporation are not
personally liable for the acts done in the performance of their duties, this rule admits
of exceptions one of which is when the employer corporation is no longer existing
and is unable to satisfy the judgment in favor of the employee. The corporate
officer in such case should be held for acting on behalf of the corporation. Here,
the respondent company already ceased its business operation.
x x x x
x x x The petitioner's claim that respondent Lozada was the real owner of the LB & C
Corporation is thus correct and tenable. The conclusion is bolstered by the fact that
the respondent company never revealed who were the officers of the LB & C
Corporation if only to pinpoint responsibility in the closure of the company that
resulted in the dismissal of the petitioner from employment. Respondent Lozada is,
therefore, personally liable for the payment of the monetary benefits due to the
petitioner, its former employee.25cralawredchanroblesvirtuallawlibrary
The Labor Arbiter did not render any findings about the petitioner perpetrating the
wrongful act against the respondent, or about the petitioner being personally liable
along with LB&C Services Corporation for the monetary award. The lack of such
findings was not assailed by the respondent. On its part, the NLRC did not discuss
the matter at all in its decision of May 31, 2006, which ultimately attained finality. To
hold the petitioner liable after the decision had become final and executory would
surely alter the tenor of the decision in a manner that would exceed its terms.
Moreover, by declaring that the petitioner's liability as solidary, the Labor Arbiter
modified the already final and executory February 23, 2005 decision. The
modification was impermissible because the decision had already become
immutable, even if the modification was intended to correct erroneous conclusions
of fact and law. The only recognized exceptions to the immutability of the decision CONSTI ART 2 SECTION 9
are the corrections of clerical errors, the making of so-called nunc pro tunc entries SECTION 9. The State shall promote a just and dynamic social order that will ensure
that cause no prejudice to any party, and where the judgment is void. 26 None of the prosperity and independence of the nation and free the people from poverty
such exceptions applied herein. through policies that provide adequate social services, promote full employment, a
rising standard of living, and an improved quality of life for all.
It is fully warranted, therefore, that we quash and lift the alias writ of execution as a REPUBLIC ACT NO. 8042
patent nullity by virtue of its not conforming to, or of its being different from and Migrant Workers and Overseas Filipinos Act of 1995
going beyond or varying the tenor of the judgment that gave it life. To insist on its SEC. 2. DECLARATION OF POLICIES--
validity would be defying the constitutional guarantee against depriving any person (a) In the pursuit of an independent foreign policy and while considering national
of his property without due process of law. sovereignty, territorial integrity, national interest and the right to self-determination
paramount in its relations with other states, the State shall, at all times, uphold the
In sum, there was no justification for holding the petitioner jointly and solidarily liable dignity of its citizens whether in country or overseas, in general, and Filipino migrant
with LB&C Services Corporation to pay to the respondent the adjudged monetary workers, in particular.
award. To start with, the respondent had not alleged the petitioner's act of bad (b) The State shall afford full protection to labor, local and overseas, organized and
faith, whether in his complaint or in his position paper, or anywhere else in his other unorganized, and promote full employment and equality of employment
submissions before the Labor Arbiter, that would have justified the piercing of the opportunities for all. Towards this end, the State shall provide adequate and timely
veil of corporate identity. Hence, we reverse the CA. social, economic and legal services to Filipino migrant workers.
(c) While recognizing the significant contribution of Filipino migrant workers to the
WHEREFORE, the Court GRANTS the petition for review national economy through their foreign exchange remittances, the State does not
on certiorari; REVERSES and SETS ASIDE the decision promulgated by the Court of promote overseas employment as a means to sustain economic growth and
Appeals on September 28, 2010; ANNULS and SETS ASIDE the order issued on April achieve national development. The existence of the overseas employment
16, 2007 by Labor Arbiter Antonio R. Macam; QUASHES and LIFTS the alias writ of program rests solely on the assurance that the dignity and fundamental human
execution; and DIRECTS the National Labor Relations Commission Labor Arbiter to rights and freedoms of the Filipino citizens shall not, at any time, be compromised or
implement with utmost dispatch the final and executory decision rendered on May violated. The State, therefore, shall continuously create local employment
31, 2006 against the assets of LB&C Service Corporation only. opportunities and promote the equitable distribution of wealth and the benefits of
development.
No pronouncement on costs of suit. (d) The State affirms the fundamental equality before the law of women and men
and the significant role of women in nation-building. Recognizing the contribution of
SO ORDERED.chanRoblesvirtualLawlibrary overseas migrant women workers and their particular vulnerabilities, the State shall
apply gender sensitive criteria in the formulation and implementation of policies
D. PRE-EMPLOYMENT , RECRUITMENT AND PLACEMENT OF WORKERS and programs affecting migrant workers and the composition of bodies tasked for
the welfare of migrant workers.
1. PRE-EMPLOYMENT POLICY STATEMENT AND OBJECTIVES (e) Free access to the courts and quasi-judicial bodies and adequate legal
BOOK ONE PRE-EMPLOYMENT assistance shall not be denied to any persons by reason of poverty. In this regard, it
Art. 12. Statement of objectives. It is the policy of the State: a. To promote and is imperative that an effective mechanism be instituted to ensure that the rights and
maintain a state of full employment through improved manpower training, interest of distressed overseas Filipinos, in general, and Filipino migrant workers, in
allocation and utilization; b. To protect every citizen desiring to work locally or particular, documented or undocumented, are adequately protected and
overseas by securing for him the best possible terms and conditions of employment; safeguarded.
c. To facilitate a free choice of available employment by persons seeking work in (f) The right of Filipino migrant workers and all overseas Filipinos to participate in the
conformity with the national interest; d. To facilitate and regulate the movement of democratic decision-making processes of the State and to be represented in
workers in conformity with the national interest; e. To regulate the employment of institutions relevant to overseas employment is recognized and guaranteed.
aliens, including the establishment of a registration and/or work permit system; f.To (g) The State recognizes that the ultimate protection to all migrant workers is the
strengthen the network of public employment offices and rationalize the possession of skills. Pursuant to this and as soon as practicable, the government shall
participation of the private sector in the recruitment and placement of workers, deploy and/or allow the deployment only to skilled Filipino workers.
locally and overseas, to serve national development objectives; g. To insure careful (h) Non-governmental organizations, duly recognized as legitimate, are partners of
selection of Filipino workers for overseas employment in order to protect the good the State in the protection of Filipino migrant workers and in the promotion of their
name of the Philippines abroad. welfare, the State shall cooperate with them in a spirit of trust and mutual respect.
 (I) Government fees and other administrative costs of recruitment, introduction,
placement and assistance to migrant workers shall be rendered free without
prejudice to the provision of Section 36 hereof.
Nonetheless, the deployment of Filipino overseas workers, whether land-based or
sea-based by local service contractors and manning agencies employing them
shall be encouraged. Appropriate incentives may be extended to them.
I. DEPLOYMENT
SEC. 4. Deployment of Migrant Workers - The State shall deploy overseas Filipino
workers only in countries where the rights of Filipino migrant workers are protected.
The government recognizes any of the following as guarantee on the part of the
receiving country for the protection and the rights of overseas Filipino workers:
(a) It has existing labor and social laws protecting the rights of migrant workers;
(b) It is a signatory to multilateral conventions, declaration or resolutions relating to
the protection of migrant workers;
(c) It has concluded a bilateral agreement or arrangement with the government
protecting the rights of overseas Filipino workers; and
(d) It is taking positive, concrete measures to protect the rights of migrant workers.
SEC. 5. TERMINATION OR BAN ON DEPLOYMENT - Notwithstanding the provisions of
Section 4 hereof, the government, in pursuit of the national interest or when public
welfare so requires, may, at any time, terminate or impose a ban on the
deployment of migrant workers.
2. PRIVATE SECTOR – AGENCIES AND ENTITIES
A. PARTIES
i. WORKER
Art. 13. Definitions. a. "Worker" means any member of the labor force, whether
employed or unemployed.
ii. PRIVATE EMPLOYMENT AGENCY
c. "Private fee-charging employment agency" means any person or entity engaged
in recruitment and placement of workers for a fee which is charged, directly or
indirectly, from the workers or employers or both.
d. "License" means a document issued by the Department of Labor authorizing a
person or entity to operate a private employment agency
ART. 12 (F)
f.To strengthen the network of public employment offices and rationalize the
participation of the private sector in the recruitment and placement of workers,
locally and overseas, to serve national development objectives;
Art. 14. Employment promotion. The Secretary of Labor shall have the power and
authority:
a. To organize and establish new employment offices in addition to the
existing employment offices under the Department of Labor as the
need arises;
3. PRIVATE RECRUITMENT ENTITY
ART. 13
e. "Private recruitment entity" means any person or association engaged in the
recruitment and placement of workers, locally or overseas, without charging,
directly or indirectly, any fee from the workers or employers.
f."Authority" means a document issued by the Department of Labor authorizing a
person or association to engage in recruitment and placement activities as a
private recruitment entity.
12 (F) REPEATED
14(A) REPEATED
B. RECUITMENT AND PLACEMENT
1. LOCAL EMPLOYMENT
ART 13 (B)
b. "Recruitment and placement" refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally or abroad,
whether for profit or not: Provided, That any person or entity which, in any manner,
offers or promises for a fee, employment to two or more persons shall be deemed
engaged in recruitment and placement.
2. OVERSEAS EMPLOYMENT SEC 6 RA 8042
II. ILLEGAL RECRUITMENT
Sec. 6. DEFINITIONS. - For purposes of this Act, illegal recruitment shall mean any act
of canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring workers
and includes referring, contact services, promising or advertising for employment
abroad, whether for profit or not, when undertaken by a non-license or non-holder
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
such non-license 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 persons, whether a
non-licensee, non-holder, licensee or holder of authority.
(a) To charge or accept directly or indirectly any amount greater than the specified
in the schedule of allowable fees prescribed by the Secretary of Labor and
Employment, or to make a worker pay any amount greater than that actually
received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any act
of misrepresentation for the purpose of securing a license or authority under the
Labor Code;
(d) To induce or attempt to induce a worker already employed to quit his
employment in order to offer him another unless the transfer is designed to liberate
a worker from oppressive terms and conditions of employment;
(e) To influence or attempt to influence any persons or entity not to employ any
worker who has not applied for employment through his agency;
(f) To engage in the recruitment of placement of workers in jobs harmful to public
health or morality or to dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and
Employment or by his duly authorized representative;
(h) To fail to submit reports on the status of employment, placement vacancies,
remittances of foreign exchange earnings, separations from jobs, departures and
such other matters or information as may be required by the Secretary of Labor and
Employment;
(i) To substitute or alter to the prejudice of the worker, employment contracts
approved and verified by the Department of Labor and Employment from the time
of actual signing thereof by the parties up to and including the period of the
expiration of the same without the approval of the Department of Labor and
Employment;
(j) For an officer or agent of a recruitment or placement agency to become an
officer or member of the Board of any corporation engaged in travel agency or to
be engaged directly on indirectly in the management of a travel agency;
(k) To withhold or deny travel documents from applicant workers before departure
for monetary or financial considerations other than those authorized under the
Labor Code and its implementing rules and regulations;
(l) Failure to actually deploy without valid reasons as determined by the
Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the workers 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
recruitment when committed by a syndicate or in large scale shall be considered as
offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate 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.
The persons criminally liable for the above offenses are the principals, accomplices
and accessories. In case of juridical persons, the officers having control,
management or direction of their business shall be liable.
C. ALLOWED AND PROTECTED ENTITIES
1. ALLOWED PRIVATE AGENCIES AND ENTITIES
Art. 16. Private recruitment. Except as provided in Chapter II of this Title,
no person or entity other than the public employment offices, shall
engage in the recruitment and placement of workers.
Art. 18. Ban on direct-hiring. No employer may hire a Filipino worker for
overseas employment except through the Boards and entities
authorized by the Secretary of Labor. Direct-hiring by members of the
diplomatic corps, international organizations and such other employers
as may be allowed by the Secretary of Labor is exempted from this
provision.
Art. 25. Private sector participation in the recruitment and placement of
workers. Pursuant to national development objectives and in order to
harness and maximize the use of private sector resources and initiative
in the development and implementation of a comprehensive
employment program, the private employment sector shall participate
in the recruitment and placement of workers, locally and overseas,
under such guidelines, rules and regulations as may be issued by the
Secretary of Labor.
12 (f)
f.To strengthen the network of public employment offices and
rationalize the participation of the private sector in the recruitment and
placement of workers, locally and overseas, to serve national
development objectives;
2. PROHIBITED BUSINESS AGENCIES
Art. 16. Private recruitment. Except as provided in Chapter II of this Title, no
person or entity other than the public employment offices, shall engage in
the recruitment and placement of workers.
Art. 18. Ban on direct-hiring. No employer may hire a Filipino worker for
overseas employment except through the Boards and entities authorized
by the Secretary of Labor. Direct-hiring by members of the diplomatic
corps, international organizations and such other employers as may be
allowed by the Secretary of Labor is exempted from this provision.
ART 18 (R)
ART 25 (R)
Art. 26. Travel agencies prohibited to recruit. Travel agencies and sales
agencies of airline companies are prohibited from engaging in the business
of recruitment and placement of workers for overseas employment whether
for profit or not.
D. GOVERNMENT TECHNIQUES OF REGULATION
1. LICENSING
Art. 27. Citizenship requirement. Only Filipino citizens or corporations, partnerships or
entities at least seventy-five percent (75%) of the authorized and voting capital
stock of which is owned and controlled by Filipino citizens shall be permitted to
participate in the recruitment and placement of workers, locally or overseas.
Art. 28. Capitalization. All applicants for authority to hire or renewal of license to
recruit are required to have such substantial capitalization as determined by the
Secretary of Labor.
Art. 29. Non-transferability of license or authority. No license or authority shall be
used directly or indirectly by any person other than the one in whose favor it was
issued or at any place other than that stated in the license or authority be
transferred, conveyed or assigned to any other person or entity. Any transfer of
business address, appointment or designation of any agent or representative
including the establishment of additional offices anywhere shall be subject to the
prior approval of the Department of Labor.
Art. 30. Registration fees. The Secretary of Labor shall promulgate a schedule of fees
for the registration of all applicants for license or authority.
Art. 31. Bonds. All applicants for license or authority shall post such cash and surety
bonds as determined by the Secretary of Labor to guarantee compliance with
prescribed recruitment procedures, rules and regulations, and terms and conditions
of employment as may be appropriate
POEA RULES BOOK 2 SECTION 1
Section 1. Qualifications for Participation in the Overseas Employment Program. -
Only applicants who possess the following qualifications may be permitted to
participate in the overseas employment program:
a. Filipino citizens, partnerships or corporations at least seventy five percent (75%) of
the authorized and voting capital stock of which is owned and controlled by Filipino
citizens;
b. A minimum capitalization of One Million Pesos (P1,000,000.00) in case of a single
proprietorship or partnership and a minimum paid-up capital of One Million Pesos
(1,000,000.00) in case of a corporation; and
c. Those not otherwise disqualified by law or these guidelines to engage in the
recruitment and placement of workers for overseas employment.
BOOK 2 RULE 2
RULE II
ISSUANCE OF LICENSE
Section 1. Requirements for Issuance of License. - Every applicant for license to
operate a private employment agency or manning agency shall submit a written
application together with the following requirements:
a. A certified copy of the Articles of Incorporation or of Partnership duly registered
with the Securities and Exchange Commission (SEC), in the case of corporation or
partnership or Certificate of Registration of firm or business name with the Bureau of
Domestic Trade (BDT) in the case of a single proprietorship;
b. Proof of financial capacity: In the case of a single proprietorship or partnership,
verified income tax returns for the past two (2) years and a bank certificate of a
cash deposit of P250,000.00, provided that the applicant should submit an authority
to examine such bank deposit.
In the case of a newly organized corporation, submission of a bank certificate of a
cash deposit of at least P250,000.00 with authority to examine the same. For an
existing corporation, submission of a verified financial statement, corporate tax
returns for the past two (2) years and bank certification of a cash deposit of at least
P250,000.00 with the corresponding authority to examine such deposit.
c. Escrow agreement in the amount of P200,000.00 with an accredited reputable
banking corporation to primarily answer for valid and legal claims of recruited
workers as a result of recruitment violations or money claims;
d. Clearance of all members of the Board of Directors, partner, or proprietor of the
applicant agency from the National Bureau of Investigation (NBI) and other
government agencies as the need may require, Fiscal’s clearance in case of
persons with criminal cases; provided that where the member or partner concerned
is a foreigner, clearance from his country of origin shall be acceptable;
e. Proof of marketing capability;
For land-based applicants:
An applicant with an actual principal/foreign employer to be serviced, shall at the
time of application submit the following documents for evaluation:
(1) A duly executed Special Power of Attorney authenticated by the Philippine
Embassy/Consulate or Labor Attache in the place where the principal/employers
hold their office; or
(2) A concluded service/recruitment agreement authenticated by the Philippine
Embassy/Consulate, or Labor Attache in the place where the project/job site is
located;
(3) An authenticated manpower mobilization request or visa approval of not less
than fifty (50) workers for deployment within a period not exceeding six (6) months
from issuance of approved license;
An applicant who, at the time of application is unable to present a foreign
principal/employer shall, upon compliance with all other licensing requirements as
herein provided, be issued a provisional license, subject to submission of a verified
undertaking to deploy at least fifty (50) workers, exclusive of direct hired, within a
period not exceeding six (6) months from date of issuance of provisional license. It is
understood that failure to comply with this undertaking shall result in the automatic
revocation of the provisional license.
For manning applicants:
(1) A duly executed Special Power of Attorney authenticated by the Philippine
Embassy/Consulate or Labor Attache in place where the vessel
owners/operators/manager hold their principal office; or
(2) A duly concluded manning agreement authenticated by the Philippine
Embassy, Consulate, or Labor Attache in the place where the
vessel/owners/operators/ manager hold their principal office;
(3) A manpower mobilization request of not less than fifty (50) seafarers for
deployment within a period not exceeding six (6) months from issuance of
approved license.
f. A verified undertaking stating that the applicant:
(1) Shall select only medically and technically qualified recruits;
(2) Shall assume full and complete responsibility for all claims and liabilities which
may arise in connection with the use of license;
(3) Shall assume joint and solidary liability with the employer for all claims and
liabilities which may arise in connection with the implementation of the contract,
including but not limited to payment of wages, death and disability compensation
and repatriation;
(4) Shall guarantee compliance with the existing labor and social legislations of the
Philippines and of the country of employment of recruited workers; and
(5) Shall assume full and complete responsibility for all acts of its officials, employees
and representatives done in connection with recruitment and placement;
g. List of all officials and personnel involved in the recruitment and placement,
together with their appointment, bio-data and two (2) copies of their passport-size
pictures.
h. Copy of contract of lease or proof of building ownership together with office
address.
Section 2. Action on the Application. - Within thirty (30) calendar days from receipt
of application or requirements including proof of payment of a non-refundable filing
fee of P5,000.00, the Administration shall evaluate pertinent documents of the
applicant, inspect the offices and equipment and recommend to the Secretary the
approval or denial of the application.
Section 3. Issuance of License. - The Administration shall recommend to the
Secretary issuance of the corresponding license upon due evaluation and
compliance with licensing requirements and operational standards.
Section 4. Payment of Fees and Posting of Bonds. - Upon approval of the
application, the applicant shall pay a license fee of P30,000.00. It shall also post a
cash bond of P100,000.00 and a surety bond of P50,000.00 from a bonding
company acceptable to the Administration and duly accredited by the Insurance
Commission. The bonds shall answer for all valid and legal claims arising from
violations of the conditions for the grant and use of the license, and/or
accreditation and contracts of employment. The bonds shall likewise guarantee
compliance with the provisions of the Code and its implementing rules and
regulations relating to recruitment and placement, the Rules of the Administration
and relevant issuances of the Department and all liabilities which the Administration
may impose. The surety bonds shall include the condition “that notice to the
principal is notice to the surety and that any judgment against the principal in
connection with matters falling under POEA’s jurisdiction shall be binding and
conclusive on the surety. The surety bonds shall be co-terminus with the validity
period of the license.
Section 5. Validity of License. - Every license shall be valid for at least two (2) years
from the date of issuance unless sooner cancelled or revoked by the Secretary or
suspended by the Administration for violation of the Code and its rules and relevant
decrees, orders and issuances and other rules and regulations of the Department.
Such license shall be valid only at the place/s stated therein and when used by the
licensed person, partnership or corporation.
Section 6. Non-Transferability of License. - No license shall be transferred, conveyed
or assigned to any person, partnership or corporation. It shall not be used directly or
indirectly by any person, partnership or corporation other than the one in whose
favor it was issued. Violation shall cause automatic revocation of license.
In case of death of the sole proprietor, and in order to prevent disruption of
operation and so as not to prejudice the interest of legitimate heirs, the licensed
single proprietorship may be allowed to continue only for the purpose of winding up
its business operation.
Section 7. Change of Ownership/Relationship of Single Proprietorship or Partnership.
- Transfer or change of ownership of a single proprietorship licensed to engage in
overseas employment shall cause the automatic revocation of the license. The
new owner shall be required to apply for a license in accordance with these Rules.
A change in the relationship of the partners in a partnership duly licensed to
engage in overseas employment which materially interrupts the course of the
business or results in the actual dissolution of the partnership shall likewise cause the
automatic revocation of the license.
Section 8. Upgrading of Single Proprietorship or Partnerships. - License holders which
are single proprietorships or partnerships may, subject to the guidelines of the
Administration, convert into corporation for purposes of upgrading or raising their
capabilities to respond adequately to developments/changes in the international
labor market and to enable them to better comply with their responsibilities arising
from the recruitment and deployment of workers overseas.
The approval of merger, consolidation or upgrading shall automatically revoke or
cancel the licenses of the single proprietorships, partnerships or corporations so
merged, consolidated or upgraded.
Section 9. Change of Directors of Corporation. - Every change in the composition
of the Board of Directors of a corporation licensed to participate in overseas
employment shall be registered with the Administration within thirty (30) calendar
days from the date the change was decided or approved. The corporation shall
be required to submit to the Administration the Minutes of Proceedings duly certified
by the SEC, the bio-data and clearances of the new members of the Board from
the government agencies identified in Section 1 (e) of this Rule.
Section 10. Change of Other Officers and Personnel. - Every change or termination
of appointment of officers, representatives and personnel shall be registered with
the Administration within thirty (30) calendar days from the date of such change.
The Administration reserves the right to deny the appointment of officers and
employees who were directly involved in recruitment irregularities.
Section 11. Appointment of Representatives. - Every appointment of
representatives or agents of licensed agency shall be subject to prior approval or
authority of the Administration.
The approval may be issued upon submission of or compliance with the following
requirements:
a. Proposed appointment or special power of attorney;
b. Clearances of the proposed representative or agent from NBI;
c. A sworn or verified statement by the designating or appointing person or
company assuming full responsibility for all acts of the agent or representative done
in connection with the recruitment and placement of workers;
Section 12. Publication of Change of Directors/Other Officers and Personnel/
Revocation or Amendment of Appointment of Representatives. - In addition to the
requirement of registration with and submission to the Administration, every change
in the membership of the Board of Directors, resignation/termination of other officers
and personnel, revocation or amendment of appointment of representatives shall
be published at least once in a newspaper of general circulation, in order to bind
third parties. Proof of such publication shall be submitted to the Administration
Section 13. Transfer of Business Address and Studio. - Any transfer of business
address shall be effected only with prior authority or approval of the Administration.
The approval shall be issued only upon formal notice of the intention to transfer with
the following attachments:
a. Copy of the company’s notice to the BDT or the SEC on the transfer of business
address;
b. In the case of a corporation, a Board Resolution duly registered with the SEC
authorizing the transfer of business address;
c. In the case of a single proprietorship, a copy of the BDT’s acknowledgment of the
notice to transfer; and
d. Copy of the contract of lease or proof of building ownership.
The new office shall be subject to the normal ocular inspection procedures by duly
authorized representatives of the Administration.
A notice to the public of the new address shall be published in a newspaper of
general circulation.
Section 14. Establishment of Executive Office. - The establishment of an executive
office outside of the registered address shall be effected only with prior approval or
authority of the Administration. The approval may be issued upon submission of an
affidavit of undertaking to the effect that no recruitment activity whatsoever shall
be conducted thereat and that the agency has a valid contract of lease or
building ownership.
Section 15. Establishment of Branch and Extension Offices. - Branch and extension
offices may be established in areas approved by the Secretary, subject to
implementing guidelines.
Section 16. Conduct of Recruitment Outside of Registered Office, Branch or
Extension Office. - No licensed agency shall conduct any provincial recruitment,
job fairs or recruitment activities of any form outside of the address stated in the
license, acknowledged Branch or Extension Office or without first securing prior
authority from the Administration of the Center.
Section 17. Renewal of License. - An agency shall submit an application for the
renewal thereof to the Administration. Such application shall be supported by the
following documents:
a. Proof of foreign exchange earnings issued by the Central Bank;
b. Surety bond duly renewed or revalidated;
c. Escrow agreement in the amount of P200,000.00 with an accredited reputable
banking corporation to primarily answer for valid and legal claims of recruited
workers as a result of recruitment violations or money claims;
d. Replenishment of the cash bond in case such or any part thereof is garnished;
e. Proof of financial capacity such as but not limited to verified financial statements
for the past two (2) years, verified corporate or individual tax returns with
confirmation receipts, and compliance with capitalization requirements and
infusion thereof as the case may be, as certified by the Securities and Exchange
Commission;
f. Summary of deployment reports during the validity of the license sought to be
renewed;
g. Summary of payroll reports in case of contractors and manning agencies during
the validity of the license sought to be renewed; and
h. Other requirements as may be imposed by the Administration.
Section 18. Non-expiration of License. - Where the license holder has made timely
and sufficient application for renewal, the existing license shall not expire until the
application shall have been finally determined by the Administration.
Section 19. Action on Renewal of License. - Within thirty (30) calendar days from
receipt of the application for renewal the Administration shall undertake evaluation
and inspection and thereafter recommend to the Secretary the grant or denial of
the application.
Section 20. Failure to Renew. - Any agency which fails to obtain a renewal of its
license within thirty (30) calendar days from expiration thereof, shall be immediately
deemed delisted and disallowed from conducting recruitment and placement.
Section 21. Denial of Renewal of Licenses. - Licenses of agencies which fail to
conclude a recruitment or manning agreement and/or undertake minimum levels
of worker deployment and foreign exchange generation or those which fail to meet
the minimum operational standards and requirements set by the Administration,
shall not be renewed.
Section 22. When to Consider Cash Bond/Deposit in Escrow Garnished. - As soon as
an Order of Garnishment is served upon the Administration/Bank, and the same is
correspondingly earmarked, the cash bond/deposit in escrow of an agency shall
no longer be considered sufficient. The Administration shall forthwith serve upon the
agency a notice to replenish.
Section 23. Replenishment of Cash or Surety Bonds/Deposit in Escrow. - Within
fifteen (15) calendar days from date of receipt of notice from the Administration
that the bonds/deposit in escrow, or any part thereof had been garnished, the
agency shall replenish the same. Failure to replenish such bonds/deposit in escrow
within the said period shall cause the suspension of the license.
Section 24. Refund of Cash Bond/Release of Deposit in Escrow. - A licensed
agency which voluntarily surrenders its license shall be entitled to the refund of its
deposited cash bond and release of the deposit in escrow, only after posting a
surety bond of similar amount valid for four (4) years from expiration of license.
Section 25. Evaluation of Performance of Agencies. - The Administration shall
undertake the annual evaluation and rating of the performance of licensed
agencies to determine the merits of their continued participation in the overseas
employment program taking into consideration compliance with laws and
regulations and such other criteria as it may deem proper.
Section 26. Classification and Ranking. - The Administration may undertake the
classification and ranking of agencies. In recognition of exemplary performance, it
may undertake schemes for incentives and rewards.
2. WORKERS FEES
Art. 32. Fees to be paid by workers. Any person applying with a private feecharging
employment agency for employment assistance shall not be charged any fee until
he has obtained employment through its efforts or has actually commenced
employment. Such fee shall be always covered with the appropriate receipt clearly
showing the amount paid. The Secretary of Labor shall promulgate a schedule of
allowable fees.
3. REPORTS/ employment information
Art. 33. Reports on employment status. Whenever the public interest requires, the
Secretary of Labor may direct all persons or entities within the coverage of this Title
to submit a report on the status of employment, including job vacancies, details of
job requisitions, separation from jobs, wages, other terms and conditions and other
employment data.
Art. 14. Employment promotion. The Secretary of Labor shall have the power and
authority:
d. To require any person, establishment, organization or institution to submit such
employment information as may be prescribed by the Secretary of Labor.
4. PROHIBITED PRACTICE
Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or
holder of authority:
a. To charge or accept, directly or indirectly, any amount greater than that
specified in the schedule of allowable fees prescribed by the Secretary of Labor, or
to make a worker pay any amount greater than that actually received by him as a
loan or advance;
b. To furnish or publish any false notice or information or document in relation to
recruitment or employment;
c. To give any false notice, testimony, information or document or commit any act
of misrepresentation for the purpose of securing a license or authority under this
Code.
d. To induce or attempt to induce a worker already employed to quit his
employment in order to offer him to another unless the transfer is designed to
liberate the worker from oppressive terms and conditions of employment;
e. To influence or to attempt to influence any person or entity not to employ any
worker who has not applied for employment through his agency;
f.To engage in the recruitment or placement of workers in jobs harmful to public
health or morality or to the dignity of the Republic of the Philippines;
g. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his
duly authorized representatives;
h. To fail to file reports on the status of employment, placement vacancies,
remittance of foreign exchange earnings, separation from jobs, departures and
such other matters or information as may be required by the Secretary of Labor.
i.To substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties up to
and including the periods of expiration of the same without the approval of the
Secretary of Labor;
j.To become an officer or member of the Board of any corporation engaged in
travel agency or to be engaged directly or indirectly in the management of a travel
agency; and
k. To withhold or deny travel documents from applicant workers before departure
for monetary or financial considerations other than those authorized under this
Code and its implementing rules and regulations
5. IILEGAL RECRUITMENT
Art. 38. Illegal recruitment.
a. Any recruitment activities, including the prohibited practices enumerated under
Article 34 of this Code, to be undertaken by non-licensees or non-holders of
authority, shall be deemed illegal and punishable under Article 39 of this Code. The
Department of Labor and Employment or any law enforcement officer may initiate
complaints under this Article.
b. Illegal recruitment when committed by a syndicate or in large scale shall be
considered an offense involving economic sabotage and shall be penalized in
accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring and/or confederating with one another in
carrying out any unlawful or illegal transaction, enterprise or scheme defined under
the first paragraph hereof. Illegal recruitment is deemed committed in large scale if
committed against three (3) or more persons individually or as a group.
a. The Secretary of Labor and Employment or his duly authorized representatives
shall have the power to cause the arrest and detention of such non-
licensee or non-holder of authority if after investigation it is determined
that his activities constitute a danger to national security and public
order or will lead to further exploitation of job-seekers. The Secretary
shall order the search of the office or premises and seizure of
documents, paraphernalia, properties and other implements used in
illegal recruitment activities and the closure of companies,
establishments and entities found to be engaged in the recruitment of
workers for overseas employment, without having been licensed or
authorized to do so.
Ra 8042
II. ILLEGAL RECRUITMENT
Sec. 6. DEFINITIONS. - For purposes of this Act, illegal recruitment shall mean any act
of canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring workers
and includes referring, contact services, promising or advertising for employment
abroad, whether for profit or not, when undertaken by a non-license or non-holder
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
such non-license 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 persons, whether a
non-licensee, non-holder, licensee or holder of authority.
(a) To charge or accept directly or indirectly any amount greater than the specified
in the schedule of allowable fees prescribed by the Secretary of Labor and
Employment, or to make a worker pay any amount greater than that actually
received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any act
of misrepresentation for the purpose of securing a license or authority under the
Labor Code;
(d) To induce or attempt to induce a worker already employed to quit his
employment in order to offer him another unless the transfer is designed to liberate
a worker from oppressive terms and conditions of employment;
(e) To influence or attempt to influence any persons or entity not to employ any
worker who has not applied for employment through his agency;
(f) To engage in the recruitment of placement of workers in jobs harmful to public
health or morality or to dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and
Employment or by his duly authorized representative;
(h) To fail to submit reports on the status of employment, placement vacancies,
remittances of foreign exchange earnings, separations from jobs, departures and
such other matters or information as may be required by the Secretary of Labor and
Employment;
(i) To substitute or alter to the prejudice of the worker, employment contracts
approved and verified by the Department of Labor and Employment from the time
of actual signing thereof by the parties up to and including the period of the
expiration of the same without the approval of the Department of Labor and
Employment;
(j) For an officer or agent of a recruitment or placement agency to become an
officer or member of the Board of any corporation engaged in travel agency or to
be engaged directly on indirectly in the management of a travel agency;
(k) To withhold or deny travel documents from applicant workers before departure
for monetary or financial considerations other than those authorized under the
Labor Code and its implementing rules and regulations;
(l) Failure to actually deploy without valid reasons as determined by the
Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the workers 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
recruitment when committed by a syndicate or in large scale shall be considered as
offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate 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.
The persons criminally liable for the above offenses are the principals, accomplices
and accessories. In case of juridical persons, the officers having control,
management or direction of their business shall be liable.
6. ENFORCEMENT
A. REGULATORY POWER
Art. 36. Regulatory power. The Secretary of Labor shall have the power to restrict
and regulate the recruitment and placement activities of all agencies within the
coverage of this Title and is hereby authorized to issue orders and promulgate rules
and regulations to carry out the objectives and implement the provisions of this T
B. RULE MAKING POWER (SAME ART 36)
C. VISITORIAL POWER
Art. 37. Visitorial Power. The Secretary of Labor or his duly authorized representatives
may, at any time, inspect the premises, books of accounts and records of any
person or entity covered by this Title, require it to submit reports regularly on
prescribed forms, and act on violation of any provisions of this Title.
7. JOINT AND SEVERAL LIABILITY OF AGENT AND PRINCIPAL, POEA RULES
Under Section 1 (f), Rule II, Book II of the 1991 POEA Rules and Regulations, the
local agency shall assume joint and solidary liability with the employer for all claims
and liabilities which may arise in connection with the implementation of the
contract, including but not limited to payment of wages, health and disability
compensation and repatriation.
E. JURISDICTION
1. Rtc over criminal action
SEC. 9. VENUE. - A criminal action arising from illegal recruitment as defined herein
shall be filed with the Regional Trial Court of the province or city where the offense
was committed or where the offended party actually resides at the same time of
the commission of the offense: Provided, That the court where the criminal action is
first filed shall acquire jurisdiction to the exclusion of other courts. Provided, however,
That the aforestated provisions shall also apply to those criminal actions that have
already been filed in court at the time of the effectivity of this Act.
2. LA over money claims
SEC. 10. MONEY CLAIMS. - Botwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
priginal 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 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 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.
Non-compliance with the mandatory periods for resolutions of cases
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
resolutions 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 disqualifications 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 incurred under other
existing laws or rules and regulations as a consequence of violating the provisions of
this paragraph.
3. POEA over admin cases
a. Pre-employment cases
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 cases
SECTION 28
(b) disciplinary action cases and other special cases, which are administrative in
character, involving employers, principals, contracting partners and Filipino migrant
workers.
3. Public Sector agencies
Art. 12. Statement of objectives. It is the policy of the State:
f.To strengthen the network of public employment offices and rationalize the
participation of the private sector in the recruitment and placement of workers,
locally and overseas, to serve national development objectives;
Art. 14. Employment promotion. The Secretary of Labor shall have the power and
authority: a. To organize and establish new employment offices in addition to the
existing employment offices under the Department of Labor as the need arises;
E0 247 REORGANIZING POEA
Sec. 3. Powers and Functions. - In the pursuit of its mandate, the Administration shall
have the following powers and functions:
(a) Regulate private sector participation in the recruitment and overseas
placement of workers by setting up a licensing and registration system;
(b) Formulate and implement, in coordination with appropriate entities concerned,
when necessary, a system for promoting and monitoring the overseas employment
of
Filipino workers taking into consideration their welfare and the domestic manpower
requirements;
(c) Protect the rights of Filipino workers for overseas employment to fair and
equitable recruitment and employment practices and ensure their welfare;
(d) Exercise original and exclusive jurisdiction to hear and decide all claims arising
out of an employer-employee relationship or by virtue of any law or contract
involving
Filipino workers for overseas employment including the disciplinary cases; and all
preemployment cases which are administrative in character involving or arising out
of violation or requirement laws, rules and regulations including money claims arising
therefrom, or violation of the conditions for issuance of license or authority to recruit
workers.
All prohibited recruitment activities and practices which are penal in character as
enumerated and defined under and by virtue of existing laws, shall be prosecuted
in the regular courts in close coordination with the appropriate Departments and
agencies concerned;
(e) Maintain a registry of skills for overseas placement;
(f) Recruit and place workers to service the requirements for trained and competent
Filipino workers by foreign governments and their instrumentalities and such other
employers as public interest may require;
(g) Promote the development of skills and careful selection of Filipino workers;
(h) Undertake overseas market development activities for placement of Filipino
workers;
(i) Secure the best terms and conditions of employment of Filipino contract workers
and ensure compliance therewith;
(j) Promote and protect the well-being of Filipino workers overseas;
(k) Develop and implement programs for the effective monitoring of returning
contract workers, promoting their re-training and re-employment or their smooth re-
integration into the mainstream of national economy in coordination with other
government agencies;
(l) Institute a system for ensuring fair and speedy disposition of cases involving
violation or recruitment rules and regulations as well as violation of terms and
conditions of overseas employment;
(m) Establish a system for speedy and efficient enforcement of decisions laid down
through the exercise of its adjudicatory function;
(n) Establish and maintain close relationship and enter into joint projects with the
Department of Foreign Affairs, Philippine Tourism Authority, Manila International
Airport Authority, Department of Justice, Department of Budget and Management
and other relevant government entities, in the pursuit of its objectives. The
Administration shall also establish and maintain joint projects with private
organizations, domestic or foreign, in the furtherance of its objectives.
4. Sanctions
Art. 35. Suspension and/or cancellation of license or authority. The Minister of Labor
shall have the power to suspend or cancel any license or authority to recruit
employees for overseas employment for violation of rules and regulations issued by
the Ministry of Labor, the Overseas Employment Development Board, or for violation
of the provisions of this and other applicable laws, General Orders and Letters of
Instructions.
Art. 39. Penalties.
a. The penalty of life imprisonment and a fine of One Hundred Thousand Pesos
(P1000,000.00) shall be imposed if illegal recruitment constitutes economic
sabotage as defined herein;
b. Any licensee or holder of authority found violating or causing another to violate
any provision of this Title or its implementing rules and regulations shall, upon
conviction thereof, suffer the penalty of imprisonment of not less than two years nor
more than five years or a fine of not less than P10,000 nor more than P50,000, or both
such imprisonment and fine, at the discretion of the court;
c. Any person who is neither a licensee nor a holder of authority under this Title
found violating any provision thereof or its implementing rules and regulations shall,
upon conviction thereof, suffer the penalty of imprisonment of not less than four
years nor more than eight years or a fine of not less than P20,000 nor more than
P100,000 or both such imprisonment and fine, at the discretion of the court;
d. If the offender is a corporation, partnership, association or entity, the penalty shall
be imposed upon the officer or officers of the corporation, partnership, association
or entity responsible for violation; and if such officer is an alien, he shall, in addition
to the penalties herein prescribed, be deported without further proceedings;
e. In every case, conviction shall cause and carry the automatic revocation of the
license or authority and all the permits and privileges granted to such person or
entity under this Title, and the forfeiture of the cash and surety bonds in favor of the
Overseas Employment Development Board or the National Seamen Board, as the
case may be, both of which are authorized to use the same exclusively to promote
their objectives.
RA 8042
Sec. 6. DEFINITIONS. - For purposes of this Act, illegal recruitment shall mean any act
of canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring workers
and includes referring, contact services, promising or advertising for employment
abroad, whether for profit or not, when undertaken by a non-license or non-holder
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
such non-license 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 persons, whether a
non-licensee, non-holder, licensee or holder of authority.
(a) To charge or accept directly or indirectly any amount greater than the specified
in the schedule of allowable fees prescribed by the Secretary of Labor and
Employment, or to make a worker pay any amount greater than that actually
received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any act
of misrepresentation for the purpose of securing a license or authority under the
Labor Code;
(d) To induce or attempt to induce a worker already employed to quit his
employment in order to offer him another unless the transfer is designed to liberate
a worker from oppressive terms and conditions of employment;
(e) To influence or attempt to influence any persons or entity not to employ any
worker who has not applied for employment through his agency;
(f) To engage in the recruitment of placement of workers in jobs harmful to public
health or morality or to dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and
Employment or by his duly authorized representative;
(h) To fail to submit reports on the status of employment, placement vacancies,
remittances of foreign exchange earnings, separations from jobs, departures and
such other matters or information as may be required by the Secretary of Labor and
Employment;
(i) To substitute or alter to the prejudice of the worker, employment contracts
approved and verified by the Department of Labor and Employment from the time
of actual signing thereof by the parties up to and including the period of the
expiration of the same without the approval of the Department of Labor and
Employment;
(j) For an officer or agent of a recruitment or placement agency to become an
officer or member of the Board of any corporation engaged in travel agency or to
be engaged directly on indirectly in the management of a travel agency;
(k) To withhold or deny travel documents from applicant workers before departure
for monetary or financial considerations other than those authorized under the
Labor Code and its implementing rules and regulations;
(l) Failure to actually deploy without valid reasons as determined by the
Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the workers 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
recruitment when committed by a syndicate or in large scale shall be considered as
offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate 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.
The persons criminally liable for the above offenses are the principals, accomplices
and accessories. In case of juridical persons, the officers having control,
management or direction of their business shall be liable.
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 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.
Provided, however, that the maximum penalty shall be imposed if the person
illegally recruited is less than eighteen (18) years of age or committed by a non-
licensee or non-holder of authority.
SEC. 10. MONEY CLAIMS. - Botwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
priginal 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 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 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.
Non-compliance with the mandatory periods for resolutions of cases
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
resolutions 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 disqualifications 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 incurred under other
existing laws or rules and regulations as a consequence of violating the provisions of
this paragraph.
a. Local employment (ART 39 SAME)
b. Overseas Employment (ART 35 SAME ; SECTION 7 SAME)
5. Issues and questions on Overseas Employment
READINGS:
- SORIANO MA. TERESA
- KING AMELIA M
- KING AMELIA’LICUANAN
6. TRAFFICKING IN PERSONS
Republic Act No. 9208 May 26, 2003
AN ACT TO INSTITUTE POLICIES TO ELIMINATE TRAFFICKING IN PERSONS ESPECIALLY
WOMEN AND CHILDREN, ESTABLISHING THE NECESSARY INSTITUTIONAL MECHANISMS
FOR THE PROTECTION AND SUPPORT OF TRAFFICKED PERSONS, PROVIDING PENALTIES
FOR ITS VIOLATIONS, AND FOR OTHER
Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:
Section 1. Title. This Act shall be known as the "Anti-Trafficking in Persons Act of
2003".
Section 2. Declaration of Policy. – It is hereby declared that the State values the
dignity of every human person and guarantees the respect of individual rights. In
pursuit of this policy, the State shall give highest priority to the enactment of
measures and development of programs that will promote human dignity, protect
the people from any threat of violence and exploitation, eliminate trafficking in
persons, and mitigate pressures for involuntary migration and servitude of persons,
not only to support trafficked persons but more importantly, to ensure their recovery,
rehabilitation and reintegration into the mainstream of society.
It shall be a State policy to recognize the equal rights and inherent human dignity of
women and men as enshrined in the United Nations Universal Declaration on
Human Rights, United Nations Convention on the Rights of the Child, United Nations
Convention on the Protection of Migrant Workers and their Families. United Nations
Convention Against Transnational Organized Crime Including its Protocol to Prevent,
Suppress and Punish Trafficking in Persons, Especially Women and Children and all
other relevant and universally accepted human rights instruments and other
international conventions to which the Philippines is a signatory.
Section 3. Definition of Terms. - As used in this Act:
(a) Trafficking in Persons - refers to the recruitment, transportation, transfer or
harboring, or receipt of persons with or without the victim's consent or
knowledge, within or across national borders by means of threat or use of
force, or other forms of coercion, abduction, fraud, deception, abuse of
power or of position, taking advantage of the vulnerability of the person, or,
the giving or receiving of payments or benefits to achieve the consent of a
person having control over another person for the purpose of exploitation
which includes at a minimum, the exploitation or the prostitution of others or
other forms of sexual exploitation, forced labor or services, slavery, servitude
or the removal or sale of organs.
The recruitment, transportation, transfer, harboring or receipt of a child for
the purpose of exploitation shall also be considered as "trafficking in
persons" even if it does not involve any of the means set forth in the
preceding paragraph.
(b) Child - refers to a person below eighteen (18) years of age or one who is
over eighteen (18) but is unable to fully take care of or protect
himself/herself from abuse, neglect, cruelty, exploitation, or discrimination
because of a physical or mental disability or condition.
(c) Prostitution - refers to any act, transaction, scheme or design involving
the use of a person by another, for sexual intercourse or lascivious conduct
in exchange for money, profit or any other consideration.
(d) Forced Labor and Slavery - refer to the extraction of work or services
from any person by means of enticement, violence, intimidation or threat,
use of force or coercion, including deprivation of freedom, abuse of
authority or moral ascendancy, debt-bondage or deception.
(e) Sex Tourism - refers to a program organized by travel and tourism-related
establishments and individuals which consists of tourism packages or
activities, utilizing and offering escort and sexual services as enticement for
tourists. This includes sexual services and practices offered during rest and
recreation periods for members of the military.
(f) Sexual Exploitation - refers to participation by a person in prostitution or
the production of pornographic materials as a result of being subjected to
a threat, deception, coercion, abduction, force, abuse of authority, debt
bondage, fraud or through abuse of a victim's vulnerability.
(g) Debt Bondage - refers to the pledging by the debtor of his/her personal
services or labor or those of a person under his/her control as security or
payment for a debt, when the length and nature of services is not clearly
defined or when the value of the services as reasonably assessed is not
applied toward the liquidation of the debt.
(h) Pornography - refers to any representation, through publication,
exhibition, cinematography, indecent shows, information technology, or by
whatever means, of a person engaged in real or simulated explicit sexual
activities or any representation of the sexual parts of a person for primarily
sexual purposes.
(i) Council - shall mean the Inter-Agency Council Against Trafficking
created under Section 20 of this Act.
Section 4. Acts of Trafficking in Persons. - It shall be unlawful for any person, natural
or juridical, to commit any of the following acts:
(a) To recruit, transport, transfer; harbor, provide, or receive a person by any
means, including those done under the pretext of domestic or overseas
 employment or training or apprenticeship, for the purpose of prostitution,
pornography, sexual exploitation, forced labor, slavery, involuntary
servitude or debt bondage;
(b) To introduce or match for money, profit, or material, economic or other
consideration, any person or, as provided for under Republic Act No. 6955,
any Filipino woman to a foreign national, for marriage for the purpose of
acquiring, buying, offering, selling or trading him/her to engage in
prostitution, pornography, sexual exploitation, forced labor, slavery,
involuntary servitude or debt bondage;
(c) To offer or contract marriage, real or simulated, for the purpose of
acquiring, buying, offering, selling, or trading them to engage in prostitution,
pornography, sexual exploitation, forced labor or slavery, involuntary
servitude or debt bondage;
(d) To undertake or organize tours and travel plans consisting of tourism
packages or activities for the purpose of utilizing and offering persons for
prostitution, pornography or sexual exploitation;
(e) To maintain or hire a person to engage in prostitution or pornography;
(f) To adopt or facilitate the adoption of persons for the purpose of
prostitution, pornography, sexual exploitation, forced labor, slavery,
involuntary servitude or debt bondage;
(g) To recruit, hire, adopt, transport or abduct a person, by means of threat
or use of force, fraud, deceit, violence, coercion, or intimidation for the
purpose of removal or sale of organs of said person; and
(h) To recruit, transport or adopt a child to engage in armed activities in the
Philippines or abroad.
Section 5. Acts that Promote Trafficking in Persons. - The following acts which
promote or facilitate trafficking in persons, shall be unlawful:
(a) To knowingly lease or sublease, use or allow to be used any house,
building or establishment for the purpose of promoting trafficking in persons;
(b) To produce, print and issue or distribute unissued, tampered or fake
counseling certificates, registration stickers and certificates of any
government agency which issues these certificates and stickers as proof of
compliance with government regulatory and pre-departure requirements
for the purpose of promoting trafficking in persons;
(c) To advertise, publish, print, broadcast or distribute, or cause the
advertisement, publication, printing, broadcasting or distribution by any
means, including the use of information technology and the internet, of any
brochure, flyer, or any propaganda material that promotes trafficking in
persons;
(d) To assist in the conduct of misrepresentation or fraud for purposes of
facilitating the acquisition of clearances and necessary exit documents
from government agencies that are mandated to provide pre-departure
registration and services for departing persons for the purpose of promoting
trafficking in persons;
(e) To facilitate, assist or help in the exit and entry of persons from/to the
country at international and local airports, territorial boundaries and
seaports who are in possession of unissued, tampered or fraudulent travel
documents for the purpose of promoting trafficking in persons;
(f) To confiscate, conceal, or destroy the passport, travel documents, or
personal documents or belongings of trafficked persons in furtherance of
trafficking or to prevent them from leaving the country or seeking redress
from the government or appropriate agencies; and
(g) To knowingly benefit from, financial or otherwise, or make use of, the
labor or services of a person held to a condition of involuntary servitude,
forced labor, or slavery.
Section 6. Qualified Trafficking in Persons. - The following are considered as qualified
trafficking:
(a) When the trafficked person is a child;
(b) When the adoption is effected through Republic Act No. 8043,
otherwise known as the "Inter-Country Adoption Act of 1995" and said
adoption is for the purpose of prostitution, pornography, sexual exploitation,
forced labor, slavery, involuntary servitude or debt bondage;
(c) When the crime is committed by a syndicate, or in large scale.
Trafficking 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;
(d) When the offender is an ascendant, parent, sibling, guardian or a
person who exercises authority over the trafficked person or when the
offense is committed by a public officer or employee;
(e) When the trafficked person is recruited to engage in prostitution with
any member of the military or law enforcement agencies;
(f) When the offender is a member of the military or law enforcement
agencies; and
(g) When by reason or on occasion of the act of trafficking in persons, the
offended party dies, becomes insane, suffers mutilation or is afflicted with
Human Immunodeficiency Virus (HIV) or the Acquired Immune Deficiency
Syndrome (AIDS).
Section 6. Confidentiality. - At any stage of the investigation, prosecution and trial of
an offense under this Act, law enforcement officers, prosecutors, judges, court
personnel and medical practitioners, as well as parties to the case, shall recognize
the right to privacy of the trafficked person and the accused. Towards this end, law
enforcement officers, prosecutors and judges to whom the complaint has been
referred may, whenever necessary to ensure a fair and impartial proceeding, and
after considering all circumstances for the best interest of the parties, order a
closed-door investigation, prosecution or trial. The name and personal
circumstances of the trafficked person or of the accused, or any other information
tending to establish their identities and such circumstances or information shall not
be disclosed to the public.
In cases when prosecution or trial is conducted behind closed-doors, it shall be
unlawful for any editor, publisher, and reporter or columnist in case of printed
materials, announcer or producer in case of television and radio, producer and
director of a film in case of the movie industry, or any person utilizing tri-media
facilities or information technology to cause publicity of any case of trafficking in
persons.
Section 8. Prosecution of Cases. - Any person who has personal knowledge of the
commission of any offense under this Act, the trafficked person, the parents, spouse,
siblings, children or legal guardian may file a complaint for trafficking.
Section 9. Venue. - A criminal action arising from violation of this Act shall be filed
where the offense was committed, or where any of its elements occurred, or where
the trafficked person actually resides at the time of the commission of the
offense: Provided, That the court where the criminal action is first filed shall acquire
jurisdiction to the exclusion of other courts.
Section 10. Penalties and Sanctions. - The following penalties and sanctions are
hereby established for the offenses enumerated in this Act:
(a) Any person found guilty of committing any of the acts enumerated in
Section 4 shall suffer the penalty of imprisonment of twenty (20) years and a
fine of not less than One million pesos (P1,000,000.00) but not more than
Two million pesos (P2,000,000.00);
(b) Any person found guilty of committing any of the acts enumerated in
Section 5 shall suffer the penalty of imprisonment of fifteen (15) years and a
fine of not less than Five hundred thousand pesos (P500,000.00) but not
more than One million pesos (P1,000,000.00);
(c) Any person found guilty of qualified trafficking under Section 6 shall
suffer the penalty of life imprisonment and a fine of not less than Two million
pesos (P2,000,000.00) but not more than Five million pesos (P5,000,000.00);
(d) Any person who violates Section 7 hereof shall suffer the penalty of
imprisonment of six (6) years and a fine of not less than Five hundred
thousand pesos (P500,000.00) but not more than One million pesos
(P1,000,000.00);
(e) If the offender is a corporation, partnership, association, club,
establishment or any juridical person, the penalty shall be imposed upon
the owner, president, partner, manager, and/or any responsible officer who
participated in the commission of the crime or who shall have knowingly
permitted or failed to prevent its commission;
(f) The registration with the Securities and Exchange Commission (SEC) and
license to operate of the erring agency, corporation, association, religious
group, tour or travel agent, club or establishment, or any place of
entertainment shall be cancelled and revoked permanently. The owner,
president, partner or manager thereof shall not be allowed to operate
similar establishments in a different name;
(g) If the offender is a foreigner, he shall be immediately deported after
serving his sentence and be barred permanently from entering the country;
(h) Any employee or official of government agencies who shall issue or
approve the issuance of travel exit clearances, passports, registration
certificates, counseling certificates, marriage license, and other similar
documents to persons, whether juridical or natural, recruitment agencies,
establishments or other individuals or groups, who fail to observe the
prescribed procedures and the requirement as provided for by laws, rules
and regulations, shall be held administratively liable, without prejudice to
criminal liability under this Act. The concerned government official or
employee shall, upon conviction, be dismissed from the service and be
barred permanently to hold public office. His/her retirement and other
benefits shall likewise be forfeited; and
(i) Conviction by final judgment of the adopter for any offense under this
Act shall result in the immediate rescission of the decree of adoption.
Section 11. Use of Trafficked Persons. - Any person who buys or engages the services
of trafficked persons for prostitution shall be penalized as follows:
(a) First offense - six (6) months of community service as may be determined
by the court and a fine of Fifty thousand pesos (P50,000.00); and
(b) Second and subsequent offenses - imprisonment of one (1) year and a
fine of One hundred thousand pesos (P100,000.00).
Section 12. Prescriptive Period. - Trafficking cases under this Act shall prescribe in ten
(10) years: Provided, however, That trafficking cases committed by a syndicate or in
a large scale as defined under Section 6 shall prescribe in twenty (20) years.
The prescriptive period shall commence to run from the day on which the trafficked
person is delivered or released from the conditions of bondage and shall be
interrupted by the filing of the complaint or information and shall commence to run
again when such proceedings terminate without the accused being convicted or
acquitted or are unjustifiably stopped for any reason not imputable to the accused.
Section 13. Exemption from Filing Fees. - When the trafficked person institutes a
separate civil action for the recovery of civil damages, he/she shall be exempt from
the payment of filing fees.
Section 14. Confiscation and Forfeiture of the Proceeds and Instruments Derived
from Trafficking in Persons. - In addition to the penalty imposed for the violation of
this Act, the court shall order the confiscation and forfeiture, in favor of the
government, of all the proceeds and properties derived from the commission of the
crime, unless they are the property of a third person not liable for the unlawful
act; Provided, however, That all awards for damages shall be taken from the
personal and separate properties of the offender; Provided, further, That if such
properties are insufficient, the balance shall be taken from the confiscated and
forfeited properties.
When the proceeds, properties and instruments of the offense have been
destroyed, diminished in value or otherwise rendered worthless by any act or
omission, directly or indirectly, of the offender, or it has been concealed, removed,
converted or transferred to prevent the same from being found or to avoid
forfeiture or confiscation, the offender shall be ordered to pay the amount equal to
the value of the proceeds, property or instruments of the offense.
Section 15. Trust Fund. - All fines imposed under this Act and the proceeds and
properties forfeited and confiscated pursuant to Section 14 hereof shall accrue to a
Trust Fund to be administered and managed by the Council to be used exclusively
for programs that will prevent acts of trafficking and protect, rehabilitate,
reintegrate trafficked persons into the mainstream of society. Such programs shall
include, but not limited to, the following:
(a) Provision for mandatory services set forth in Section 23 of this Act;
 (b) Sponsorship of a national research program on trafficking and
establishment of a data collection system for monitoring and evaluation
purposes;
(c) Provision of necessary technical and material support services to
appropriate government agencies and non-government organizations
(NGOs);
(d) Sponsorship of conferences and seminars to provide venue for
consensus building amongst the public, the academe, government, NGOs
and international organizations; and
(e) Promotion of information and education campaign on trafficking.
Section 16. Programs that Address Trafficking in Persons. - The government shall
establish and implement preventive, protective and rehabilitative programs for
trafficked persons. For this purpose, the following agencies are hereby mandated to
implement the following programs;
(a) Department of Foreign Affairs (DFA) - shall make available its resources
and facilities overseas for trafficked persons regardless of their manner of
entry to the receiving country, and explore means to further enhance its
assistance in eliminating trafficking activities through closer networking with
government agencies in the country and overseas, particularly in the
formulation of policies and implementation of relevant programs.
The DFA shall take necessary measures for the efficient implementation of
the Machine Readable Passports to protect the integrity of Philippine
passports, visas and other travel documents to reduce the incidence of
trafficking through the use of fraudulent identification documents.
It shall establish and implement a pre-marriage, on-site and pre-departure
counseling program on intermarriages.
(b) Department of Social Welfare and Development (DSWD) - shall
implement rehabilitative and protective programs for trafficked persons. It
shall provide counseling and temporary shelter to trafficked persons and
develop a system for accreditation among NGOs for purposes of
establishing centers and programs for intervention in various levels of the
community.
(c) Department of Labor and Employment (DOLE) - shall ensure the strict
implementation and compliance with the rules and guidelines relative to
the employment of persons locally and overseas. It shall likewise monitor,
document and report cases of trafficking in persons involving employers
and labor recruiters.
(d) Department of Justice (DOJ) - shall ensure the prosecution of persons
accused of trafficking and designate and train special prosecutors who
shall handle and prosecute cases of trafficking. It shall also establish a
mechanism for free legal assistance for trafficked persons, in coordination
with the DSWD, Integrated Bar of the Philippines (IBP) and other NGOs and
volunteer groups.
(e) National Commission on the Role of Filipino Women (NCRFW) - shall
actively participate and coordinate in the formulation and monitoring of
policies addressing the issue of trafficking in persons in coordination with
relevant government agencies. It shall likewise advocate for the inclusion of
the issue of trafficking in persons in both its local and international
advocacy for women's issues.
(f) Bureau of Immigration (BI) - shall strictly administer and enforce
immigration and alien administration laws. It shall adopt measures for the
apprehension of suspected traffickers both at the place of arrival and
departure and shall ensure compliance by the Filipino fiancés/fiancées and
spouses of foreign nationals with the guidance and counseling requirement
as provided for in this Act.
(g) Philippine National Police (PNP) - shall be the primary law enforcement
agency to undertake surveillance, investigation and arrest of individuals or
persons suspected to be engaged in trafficking. It shall closely coordinate
with various law enforcement agencies to secure concerted efforts for
effective investigation and apprehension of suspected traffickers. It shall
also establish a system to receive complaints and calls to assist trafficked
persons and conduct rescue operations.
(h) Philippine Overseas Employment Administration (POEA) - shall implement
an effective pre-employment orientation seminars and pre-departure
counseling programs to applicants for overseas employment. It shall likewise
formulate a system of providing free legal assistance to trafficked persons.
(i) Department of the Interior and Local Government (DILG) - shall institute a
systematic information and prevention campaign and likewise maintain a
databank for the effective monitoring, documentation and prosecution of
cases on trafficking in persons.
(j) Local government units (LGUs) - shall monitor and document cases of
trafficking in persons in their areas of jurisdiction, effect the cancellation of
licenses of establishments which violate the provisions of this Act and ensure
effective prosecution of such cases. They shall also undertake an
information campaign against trafficking in persons through the
establishment of the Migrants Advisory and Information Network (MAIN)
desks in municipalities or provinces in coordination with DILG, Philippine
Information Agency (PIA), Commission on Filipinos Overseas (CFO), NGOs
and other concerned agencies. They shall encourage and support
community based initiatives which address the trafficking in persons.
In implementing this Act, the agencies concerned may seek and enlist the
assistance of NGOs, people's organizations (Pos), civic organizations and
other volunteer groups.
Section 17. Legal Protection to Trafficked Persons. - Trafficked persons shall be
recognized as victims of the act or acts of trafficking and as such shall not be
penalized for crimes directly related to the acts of trafficking enumerated in this Act
or in obedience to the order made by the trafficker in relation thereto. In this regard,
the consent of a trafficked person to the intended exploitation set forth in this Act
shall be irrelevant.
Section 18. Preferential Entitlement Under the Witness Protection Program. - Any
provision of Republic Act No. 6981 to the contrary notwithstanding, any trafficked
person shall be entitled to the witness protection program provided therein.
Section 19. Trafficked Persons Who are Foreign Nationals. - Subject to the guidelines
issued by the Council, trafficked persons in the Philippines who are nationals of a
foreign country shall also be entitled to appropriate protection, assistance and
services available to trafficked persons under this Act: Provided, That they shall be
permitted continued presence in the Philippines for a length of time prescribed by
the Council as necessary to effect the prosecution of offenders.
Section 20. Inter-Agency Council Against Trafficking. - There is hereby established an
Inter-Agency Council Against Trafficking, to be composed of the Secretary of the
Department of Justice as Chairperson and the Secretary of the Department of
Social Welfare and Development as Co-Chairperson and shall have the following as
members:
(a) Secretary, Department of Foreign Affairs;
(b) Secretary, Department of Labor and Employment;
(c) Administrator, Philippine Overseas Employment Administration;
(d) Commissioner, Bureau of Immigration;
(e) Director-General, Philippine National Police;
(f) Chairperson, National Commission on the Role of Filipino Women; and
(g) Three (3) representatives from NGOs, who shall be composed of one (1)
representative each from among the sectors representing women,
overseas Filipino workers (OFWs) and children, with a proven record of
involvement in the prevention and suppression of trafficking in persons.
These representatives shall be nominated by the government agency
representatives of the Council, for appointment by the President for a term
of three (3) years.
The members of the Council may designate their permanent
representatives who shall have a rank not lower than an assistant secretary
or its equivalent to meetings, and shall receive emoluments as may be
determined by the Council in accordance with existing budget and
accounting, rules and regulations.
Section 21. Functions of the Council. - The Council shall have the following powers
and functions:
(a) Formulate a comprehensive and integrated program to prevent and
suppress the trafficking in persons;
(b) Promulgate rules and regulations as may be necessary for the effective
implementation of this Act;
(c) Monitor and oversee the strict implementation of this Act;
(d) Coordinate the programs and projects of the various member agencies
to effectively address the issues and problems attendant to trafficking in
persons;
(e) Coordinate the conduct of massive information dissemination and
campaign on the existence of the law and the various issues and problems
attendant to trafficking through the LGUs, concerned agencies, and NGOs;
(f) Direct other agencies to immediately respond to the problems brought
to their attention and report to the Council on action taken;
(g) Assist in filing of cases against individuals, agencies, institutions or
establishments that violate the provisions of this Act;
(h) Formulate a program for the reintegration of trafficked persons in
cooperation with DOLE, DSWD, Technical Education and Skills Development
Authority (TESDA), Commission on Higher Education (CHED), LGUs and
NGOs;
(i) Secure from any department, bureau, office, agency, or instrumentality
of the government or from NGOs and other civic organizations such
assistance as may be needed to effectively implement this Act;
(j) Complement the shared government information system for migration
established under Republic Act No. 8042, otherwise known as the "Migrant
Workers and Overseas Filipinos Act of 1995" with data on cases of trafficking
in persons, and ensure that the proper agencies conduct a continuing
research and study on the patterns and scheme of trafficking in persons
which shall form the basis for policy formulation and program direction;
(k) Develop the mechanism to ensure the timely, coordinated, and
effective response to cases of trafficking in persons;
(l) Recommend measures to enhance cooperative efforts and mutual
assistance among foreign countries through bilateral and/or multilateral
arrangements to prevent and suppress international trafficking in persons;
(m) Coordinate with the Department of Transportation and
Communications (DOTC), Department of Trade and Industry (DTI), and
other NGOs in monitoring the promotion of advertisement of trafficking in
the internet;
(n) Adopt measures and policies to protect the rights and needs of
trafficked persons who are foreign nationals in the Philippines;
(o) Initiate training programs in identifying and providing the necessary
intervention or assistance to trafficked persons; and
(p) Exercise all the powers and perform such other functions necessary to
attain the purposes and objectives of this Act.
Section 22. Secretariat to the Council. - The Department of Justice shall establish the
necessary Secretariat for the Council.
Section 23. Mandatory Services to Trafficked Persons. - To ensure recovery,
rehabilitation and reintegration into the mainstream of society, concerned
government agencies shall make available the following services to trafficked
persons:
(a) Emergency shelter or appropriate housing;
(b) Counseling;
(c) Free legal services which shall include information about the victims'
rights and the procedure for filing complaints, claiming compensation and
such other legal remedies available to them, in a language understood by
the trafficked person;
(d) Medical or psychological services;
(e) Livelihood and skills training; and
(f) Educational assistance to a trafficked child.
Sustained supervision and follow through mechanism that will track the progress of
recovery, rehabilitation and reintegration of the trafficked persons shall be adopted
and carried out.
Section 24. Other Services for Trafficked Persons. -
(a) Legal Assistance. - Trafficked persons shall be considered under the
category "Overseas Filipino in Distress" and may avail of the legal assistance
 created by Republic Act No. 8042, subject to the guidelines as provided by
law.
(b) Overseas Filipino Resource Centers. - The services available to overseas
Filipinos as provided for by Republic Act No. 8042 shall also be extended to
trafficked persons regardless of their immigration status in the host country.
(c) The Country Team Approach. - The country team approach under
Executive Order No. 74 of 1993, shall be the operational scheme under
which Philippine embassies abroad shall provide protection to trafficked
persons insofar as the promotion of their welfare, dignity and fundamental
rights are concerned.
Section 25. Repatriation of Trafficked Persons. - The DFA, in coordination with DOLE
and other appropriate agencies, shall have the primary responsibility for the
repatriation of trafficked persons, regardless of whether they are documented or
undocumented.
If, however, the repatriation of the trafficked persons shall expose the victims to
greater risks, the DFA shall make representation with the host government for the
extension of appropriate residency permits and protection, as may be legally
permissible in the host country.
Section 26. Extradition. - The DOJ, in consultation with DFA, shall endeavor to include
offenses of trafficking in persons among extraditable offenses.
Section 27. Reporting Requirements. - The Council shall submit to the President of the
Philippines and to Congress an annual report of the policies, programs and activities
relative to the implementation of this Act.
Section 28. Funding. - The heads of the departments and agencies concerned shall
immediately include in their programs and issue such rules and regulations to
implement the provisions of this Act, the funding of which shall be included in the
annual General Appropriations Act.
Section 29. Implementing Rules and Regulations. - The Council shall promulgate the
necessary implementing rules and regulations within sixty (60) days from the
effectivity of this Act.
Section 30. Non-restriction of Freedom of Speech and of Association, Religion and
the Right to Travel. - Nothing in this Act shall be interpreted as a restriction of the
freedom of speech and of association, religion and the right to travel for purposes
not contrary to law as guaranteed by the Constitution.
Section 31. Separability Clause. - If, for any reason, any section or provision of this
Act is held unconstitutional or invalid, the other sections or provisions hereof shall not
be affected thereby.
Section 32. Repealing clause. - All laws, presidential decrees, executive orders and
rules and regulations, or parts thereof, inconsistent with the provisions of this Act are
hereby repealed or modified accordingly: Provided, That this Act shall not in any
way amend or repeal the provision of Republic Act No. 7610, otherwise known as
the "Special Protection of Children Against Child Abuse, Exploitation and
Discrimination Act".
Section 33. Effectivity. - This Act shall take effect fifteen (15) days from the date of its
complete publication in at least two (2) newspapers of general circulation.
IRR OF RA 9208
RA 9208 AS AMENDED
REPUBLIC ACT No. 10364
AN ACT EXPANDING REPUBLIC ACT NO. 9208, ENTITLED "AN ACT TO INSTITUTE
POLICIES TO ELIMINATE TRAFFICKING IN PERSONS ESPECIALLY WOMEN AND
CHILDREN, ESTABLISHING THE NECESSARY INSTITUTIONAL MECHANISMS FOR THE
PROTECTION AND SUPPORT OF TRAFFICKED PERSONS, PROVIDING PENALTIES FOR ITS
VIOLATIONS AND FOR OTHER PURPOSES"
Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:
Section 1. Short Title. – This Act shall be known as the "Expanded Anti-Trafficking in
Persons Act of 2012″.
Section 2. Section 2 of Republic Act No. 9208 is hereby amended to read as follows:
"SEC. 2. Declaration of Policy. – It is hereby declared that the State values
the dignity of every human person and guarantees the respect of individual
rights. In pursuit of this policy, the State shall give highest priority to the
enactment of measures and development of programs that will promote
human dignity, protect the people from any threat of violence and
exploitation, eliminate trafficking in persons, and mitigate pressures for
involuntary migration and servitude of persons, not only to support
trafficked persons but more importantly, to ensure their recovery,
rehabilitation and reintegration into the mainstream of society.
"It shall be a State policy to recognize the equal rights and inherent human
dignity of women and men as enshrined in the United Nations Universal
Declaration on Human Rights, United Nations Convention on the Elimination
of All Forms of Discrimination Against Women, United Nations Convention on
the Rights of the Child, United Nations Convention on the Protection of
Migrant Workers and their Families, United Nations Convention Against
Transnational Organized Crime Including its Protocol to Prevent, Suppress
and Punish Trafficking in Persons, Especially Women and Children and all
other relevant and universally accepted human rights instruments and
other international conventions to which the Philippines is a signatory."
Section 3. Section 3 of Republic Act No. 9208 is hereby amended to read as follows:
"SEC. 3. Definition of Terms. – As used in this Act:
"(a) Trafficking in Persons – refers to the recruitment, obtaining,
hiring, providing, offering, transportation, transfer, maintaining,
harboring, or receipt of persons with or without the victim’s consent
or knowledge, within or across national borders by means of threat,
or use of force, or other forms of coercion, abduction, fraud,
deception, abuse of power or of position, taking advantage of the
vulnerability of the person, or, the giving or receiving of payments
or benefits to achieve the consent of a person having control over
another person for the purpose of exploitation which includes at a
minimum, the exploitation or the prostitution of others or other forms
of sexual exploitation, forced labor or services, slavery, servitude or
the removal or sale of organs.
"The recruitment, transportation, transfer, harboring, adoption or
receipt of a child for the purpose of exploitation or when the
adoption is induced by any form of consideration for exploitative
purposes shall also be considered as ‘trafficking in persons’ even if it
does not involve any of the means set forth in the preceding
paragraph.
"(b) Child – refers to a person below eighteen (18) years of age or
one who is over eighteen (18) but is unable to fully take care of or
protect himself/herself from abuse, neglect, cruelty, exploitation, or
discrimination because of a physical or mental disability or
condition.
"(c) Prostitution – refers to any act, transaction, scheme or design
involving the use of a person by another, for sexual intercourse or
lascivious conduct in exchange for money, profit or any other
consideration.
"(d) Forced Labor – refers to the extraction of work or services from
any person by means of enticement, violence, intimidation or
threat, use of, force or coercion, including deprivation of freedom,
abuse of authority or moral ascendancy, debt-bondage or
deception including any work or service extracted from any person
under the menace of penalty.
"(e) Slavery – refers to the status or condition of a person over
whom any or all of the powers attaching to the right of ownership
are exercised.
"(f) Involuntary Servitude – refers to a condition of enforced and
compulsory service induced by means of any scheme, plan or
pattern, intended to cause a person to believe that if he or she did
not enter into or continue in such condition, he or she or another
person would suffer serious harm or other forms of abuse or physical
restraint, or threat of abuse or harm, or coercion including
depriving access to travel documents and withholding salaries, or
the abuse or threatened abuse of the legal process.
"(g) Sex Tourism – refers to a program organized by travel and
tourism-related establishments and individuals which consists of
tourism packages or activities, utilizing and offering escort and
sexual services as enticement for tourists. This includes sexual
services and practices offered during rest and recreation periods
for members of the military.
"(h) Sexual Exploitation – refers to participation by a person in
prostitution, pornography or the production of pornography, in
exchange for money, profit or any other consideration or where the
participation is caused or facilitated by any means of intimidation
or threat, use of force, or other forms of coercion, abduction, fraud,
deception, debt bondage, abuse of power or of position or of
legal process, taking advantage of the vulnerability of the person,
or giving or receiving of payments or benefits to achieve the
consent of a person having control over another person; or in
sexual intercourse or lascivious conduct caused or facilitated by
any means as provided in this Act.
"(i) Debt Bondage – refers to the pledging by the debtor of his/her
personal services or labor or those of a person under his/her control
as security or payment for a debt, when the length and nature of
services is not clearly defined or when the value of the services as
reasonably assessed is not applied toward the liquidation of the
debt.
"(j) Pornography – refers to any representation, through publication,
exhibition, cinematography, indecent shows, information
technology, or by whatever means, of a person engaged in real or
simulated explicit sexual activities or any representation of the
sexual parts of a person for primarily sexual purposes.
"(k) Council – shall mean the Inter-Agency Council Against
Trafficking created under Section 20 of this Act."
Section 4. Section 4 of Republic Act No. 9208 is hereby amended to read as follows:
"SEC. 4. Acts of Trafficking in Persons. – It shall be unlawful for any person,
natural or juridical, to commit any of the following acts:
"(a) To recruit, obtain, hire, provide, offer, transport, transfer,
maintain, harbor, or receive a person by any means, including
those done under the pretext of domestic or overseas employment
or training or apprenticeship, for the purpose of prostitution,
pornography, or sexual exploitation;
"(b) To introduce or match for money, profit, or material, economic
or other consideration, any person or, as provided for under
Republic Act No. 6955, any Filipino woman to a foreign national, for
marriage for the purpose of acquiring, buying, offering, selling or
trading him/her to engage in prostitution, pornography, sexual
exploitation, forced labor, slavery, involuntary servitude or debt
bondage;
"(c) To offer or contract marriage, real or simulated, for the purpose
of acquiring, buying, offering, selling, or trading them to engage in
prostitution, pornography, sexual exploitation, forced labor or
slavery, involuntary servitude or debt bondage;
"(d) To undertake or organize tours and travel plans consisting of
tourism packages or activities for the purpose of utilizing and
offering persons for prostitution, pornography or sexual exploitation;
"(e) To maintain or hire a person to engage in prostitution or
pornography;
"(f) To adopt persons by any form of consideration for exploitative
purposes or to facilitate the same for purposes of prostitution,
pornography, sexual exploitation, forced labor, slavery, involuntary
servitude or debt bondage;
"(g) To adopt or facilitate the adoption of persons for the purpose
of prostitution, pornography, sexual exploitation, forced labor,
slavery, involuntary servitude or debt bondage;
"(h) To recruit, hire, adopt, transport, transfer, obtain, harbor,
maintain, provide, offer, receive or abduct a person, by means of
threat or use of force, fraud, deceit, violence, coercion, or
 intimidation for the purpose of removal or sale of organs of said
person;
"(i) To recruit, transport, obtain, transfer, harbor, maintain, offer, hire,
provide, receive or adopt a child to engage in armed activities in
the Philippines or abroad;
"(j) To recruit, transport, transfer, harbor, obtain, maintain, offer, hire,
provide or receive a person by means defined in Section 3 of this
Act for purposes of forced labor, slavery, debt bondage and
involuntary servitude, including a scheme, plan, or pattern
intended to cause the person either:
"(1) To believe that if the person did not perform such labor
or services, he or she or another person would suffer serious
harm or physical restraint; or
"(2) To abuse or threaten the use of law or the legal
processes; and
"(k) To recruit, transport, harbor, obtain, transfer, maintain, hire,
offer, provide, adopt or receive a child for purposes of exploitation
or trading them, including but not limited to, the act of baring
and/or selling a child for any consideration or for barter for
purposes of exploitation. Trafficking for purposes of exploitation of
children shall include:
"(1) All forms of slavery or practices similar to slavery,
involuntary servitude, debt bondage and forced labor,
including recruitment of children for use in armed conflict;
"(2) The use, procuring or offering of a child for prostitution,
for the production of pornography, or for pornographic
performances;
"(3) The use, procuring or offering of a child for the
production and trafficking of drugs; and
"(4) The use, procuring or offering of a child for illegal
activities or work which, by its nature or the circumstances
in which it is carried out, is likely to harm their health, safety
or morals; and
"(l) To organize or direct other persons to commit the offenses defined as
acts of trafficking under this Act."
Section 5. A new Section 4-A is hereby inserted in Republic Act No. 9208, to read as
follows:
"SEC. 4-A. Attempted Trafficking in Persons. – Where there are acts to initiate
the commission of a trafficking offense but the offender failed to or did not
execute all the elements of the crime, by accident or by reason of some
cause other than voluntary desistance, such overt acts shall be deemed as
an attempt to commit an act of trafficking in persons. As such, an attempt
to commit any of the offenses enumerated in Section 4 of this Act shall
constitute attempted trafficking in persons.
"In cases where the victim is a child, any of the following acts shall also be
deemed as attempted trafficking in persons:
"(a) Facilitating the travel of a child who travels alone to a foreign
country or territory without valid reason therefor and without the
required clearance or permit from the Department of Social
Welfare and Development, or a written permit or justification from
the child’s parent or legal guardian;
"(b) Executing, for a consideration, an affidavit of consent or a
written consent for adoption;
"(c) Recruiting a woman to bear a child for the purpose of selling
the child;
"(d) Simulating a birth for the purpose of selling the child; and
"(e) Soliciting a child and acquiring the custody thereof through
any means from among hospitals, clinics, nurseries, daycare
centers, refugee or evacuation centers, and low-income families,
for the purpose of selling the child."
Section 6. A new Section 4-B is hereby inserted in Republic Act No. 9208, to read as
follows:
"SEC. 4-B. Accomplice Liability. – Whoever knowingly aids, abets,
cooperates in the execution of the offense by previous or simultaneous acts
defined in this Act shall be punished in accordance with the provisions of
Section 10(c) of this Act."
Section 7. A new Section 4-C is hereby inserted in Republic Act No. 9208, to read as
follows:
"SEC. 4-C. Accessories. – Whoever has the knowledge of the commission of
the crime, and without having participated therein, either as principal or as
accomplices, take part in its commission in any of the following manners:
"(a) By profiting themselves or assisting the offender to profit by the
effects of the crime;
"(b) By concealing or destroying the body of the crime or effects or
instruments thereof, in order to prevent its discovery;
"(c) By harboring, concealing or assisting in the escape of the
principal of the crime, provided the accessory acts with abuse of
his or her public functions or is known to be habitually guilty of some
other crime.
"Acts defined in this provision shall be punished in accordance with the
provision of Section 10(d) as stated thereto."
Section 8. Section 5 of Republic Act No. 9208 is hereby amended to read as follows:
"SEC. 5. Acts that Promote Trafficking in Persons. – The following acts which
promote or facilitate trafficking in persons, shall be unlawful:
"(a) xxx
"(b) To produce, print and issue or distribute unissued, tampered or
fake counseling certificates, registration stickers, overseas
employment certificates or other certificates of any government
agency which issues these certificates, decals and such other
markers as proof of compliance with government regulatory and
pre-departure requirements for the purpose of promoting trafficking
in persons;
"(c) xxx
 "(d) xxx
"(e) xxx
"(f) xxx
"(g) xxx
"(h) To tamper with, destroy, or cause the destruction of evidence,
or to influence or attempt to influence witnesses, in an investigation
or prosecution of a case under this Act;
"(i) To destroy, conceal, remove, confiscate or possess, or attempt
to destroy, conceal, remove, confiscate or possess, any actual or
purported passport or other travel, immigration or working permit or
document, or any other actual or purported government
identification, of any person in order to prevent or restrict, or
attempt to prevent or restrict, without lawful authority, the person’s
liberty to move or travel in order to maintain the labor or services of
that person; or
"(j) To utilize his or her office to impede the investigation,
prosecution or execution of lawful orders in a case under this Act."
Section 9. Section 6 of Republic Act No. 9208 is hereby amended to read as follows:
"SEC. 6. Qualified Trafficking in Persons. – Violations of Section 4 of this Act
shall be considered as qualified trafficking:
"x x x
"(d) When the offender is a spouse, an ascendant, parent, sibling, guardian
or a person who exercises authority over the trafficked person or when the
offense is committed by a public officer or employee;
"x x x
"(f) When the offender is a member of the military or law enforcement
agencies;
"(g) When by reason or on occasion of the act of trafficking in persons, the
offended party dies, becomes insane, suffers mutilation or is afflicted with
Human Immunodeficiency Virus (HIV) or the Acquired Immune Deficiency
Syndrome (AIDS);
"(h) When the offender commits one or more violations of Section 4 over a
period of sixty (60) or more days, whether those days are continuous or not;
and
"(i) When the offender directs or through another manages the trafficking
victim in carrying out the exploitative purpose of trafficking."
Section 10. Section 7 of Republic Act No. 9208 is hereby amended to read as
follows:
"SEC. 7. Confidentiality. – At any stage of the investigation, rescue,
prosecution and trial of an offense under this Act, law enforcement officers,
prosecutors, judges, court personnel, social workers and medical
practitioners, as well as parties to the case, shall protect the right to privacy
of the trafficked person. Towards this end, law enforcement officers,
prosecutors and judges to whom the complaint has been referred may,
whenever necessary to ensure a fair and impartial proceeding, and after
considering all circumstances for the best interest of the parties, order a
closed-door investigation, prosecution or trial. The name and personal
circumstances of the trafficked person or any other information tending to
establish the identity of the trafficked person and his or her family shall not
be disclosed to the public.
"It shall be unlawful for any editor, publisher, and reporter or columnist in
case of printed materials, announcer or producer in case of television and
radio, producer and director of a film in case of the movie industry, or any
person utilizing tri-media facilities or electronic information technology to
cause publicity of the name, personal circumstances, or any information
tending to establish the identity of the trafficked person except when the
trafficked person in a written statement duly notarized knowingly, voluntarily
and willingly waives said confidentiality.
"Law enforcement officers, prosecutors, judges, court personnel, social
workers and medical practitioners shall be trained on the importance of
maintaining confidentiality as a means to protect the right to privacy of
victims and to encourage victims to file complaints."
Section 11. Section 8 of Republic Act No. 9208 is hereby amended to read as
follows:
"SEC. 8. Initiation and Prosecution of Cases. –
"(a) Initiation of Investigation. – Law enforcement agencies are mandated
to immediately initiate investigation and counter-trafficking-intelligence
gathering upon receipt of statements or affidavit from victims of trafficking,
migrant workers, or their families who are in possession of knowledge or
information about trafficking in persons cases.
"(b) Prosecution of Cases. – Any person who has personal knowledge of the
commission of any offense under this Act, such as the trafficked person, the
parents, spouse, siblings, children or legal guardian may file a complaint for
trafficking.
"(c) Affidavit of Desistance. – Cases involving trafficking in persons should
not be dismissed based on the affidavit of desistance executed by the
victims or their parents or legal guardians. Public and private prosecutors
are directed to oppose and manifest objections to motions for dismissal.
"Any act involving the means provided in this Act or any attempt thereof for
the purpose of securing an Affidavit of Desistance from the complainant
shall be punishable under this Act."
Section 12. Section 10 of Republic Act No. 9208 is hereby amended to read as
follows:
"SEC. 10. Penalties and Sanctions. – The following penalties and sanctions
are hereby established for the offenses enumerated in this Act:
"(a) Any person found guilty of committing any of the acts enumerated in
Section 4 shall suffer the penalty of imprisonment of twenty (20) years and a
fine of not less than One million pesos (P1,000,000.00) but not more than
Two million pesos (P2,000,000.00);
"(b) Any person found guilty of committing any of the acts enumerated in
Section 4-A of this Act shall suffer the penalty of imprisonment of fifteen (15)
years and a fine of not less than Five hundred thousand pesos (P500,000.00)
but not more than One million pesos (P1,000,000.00);
"(c) Any person found guilty of Section 4-B of this Act shall suffer the penalty
of imprisonment of fifteen (15) years and a fine of not less than Five hundred
thousand pesos (P500,000.00) but not more than One million pesos
(P1,000,000.00);
"In every case, conviction shall cause and carry the automatic revocation
of the license or registration of the recruitment agency involved in
trafficking. The license of a recruitment agency which trafficked a child
shall be automatically revoked.
"(d) Any person found, guilty of committing any of the acts enumerated in
Section 5 shall suffer the penalty of imprisonment of fifteen (15) years and a
fine of not less than Five hundred thousand pesos (P500,000.00) but not
more than One million pesos (P1,000,000.00);
"(e) Any person found guilty of qualified trafficking under Section 6 shall
suffer the penalty of life imprisonment and a fine of not less than Two million
pesos (P2,000,000.00) but not more than Five million pesos (P5,000,000.00);
"(f) Any person who violates Section 7 hereof shall suffer the penalty of
imprisonment of six (6) years and a fine of not less than Five hundred
thousand pesos (P500,000.00) but not more than One million pesos
(P1,000,000.00);
"(g) If the offender is a corporation, partnership, association, club,
establishment or any juridical person, the penalty shall be imposed upon
the owner, president, partner, manager, and/or any responsible officer who
participated in the commission of the crime or who shall have knowingly
permitted or failed to prevent its commission;
"(h) The registration with the Securities and Exchange Commission (SEC) and
license to operate of the erring agency, corporation, association, religious
group, tour or travel agent, club or establishment, or any place of
entertainment shall be cancelled and revoked permanently. The owner,
president, partner or manager thereof shall not be allowed to operate
similar establishments in a different name;
"(i) If the offender is a foreigner, he or she shall be immediately deported
after serving his or her sentence and be barred permanently from entering
the country;
"(j) Any employee or official of government agencies who shall issue or
approve the issuance of travel exit clearances, passports, registration
certificates, counseling certificates, marriage license, and other similar
documents to persons, whether juridical or natural, recruitment agencies,
establishments or other individuals or groups, who fail to observe the
prescribed procedures and the requirement as provided for by laws, rules
and regulations, shall be held administratively liable, without prejudice to
criminal liability under this Act. The concerned government official or
employee shall, upon conviction, be dismissed from the service and be
barred permanently to hold public office. His or her retirement and other
benefits shall likewise be forfeited; and
"(k) Conviction, by final judgment of the adopter for any offense under this
Act shall result in the immediate rescission of the decree of adoption."
Section 13. Section 11 of Republic Act No. 9208 is hereby amended to read as
follows:
"SEC. 11. Use of Trafficked Persons. – Any person who buys or engages the
services of a trafficked person for prostitution shall be penalized with the
following: Provided, That the Probation Law (Presidential Decree No. 968)
shall not apply:
"(a) Prision Correccional in its maximum period to prision mayor or
six (6) years to twelve (12) years imprisonment and a fine of not less
than Fifty thousand pesos (P50,000.00) but not more than One
hundred thousand pesos (P100,000.00): Provided, however, That
the following acts shall be exempted thereto:
"(1) If an offense under paragraph (a) involves sexual intercourse or
lascivious conduct with a child, the penalty shall be reclusion
temporal in its medium period to reclusion perpetua or seventeen
(17) years to forty (40) years imprisonment and a fine of not less
than Five hundred thousand pesos (P500,000.00) but not more than
One million pesos (P1,000,000.00);
"(2) If an offense under paragraph (a) involves carnal knowledge
of, or sexual intercourse with, a male or female trafficking victim
and also involves the use of force or intimidation, to a victim
deprived of reason or to an unconscious victim, or a victim under
twelve (12) years of age, instead of the penalty prescribed in the
subparagraph above the penalty shall be a fine of not less than
One million pesos (P1,000,000.00) but not more than Five million
pesos (P5,000,000.00) and imprisonment of reclusionperpetua or
forty (40) years imprisonment with no possibility of parole; except
that if a person violating paragraph (a) of this section knows the
person that provided prostitution services is in fact a victim of
trafficking, the offender shall not be likewise penalized under this
section but under Section 10 as a person violating Section 4; and if
in committing such an offense, the offender also knows a qualifying
circumstance for trafficking, the offender shall be penalized under
Section 10 for qualified trafficking. If in violating this section the
offender also violates Section 4, the offender shall be penalized
under Section 10 and, if applicable, for qualified trafficking instead
of under this section;
"(b) Deportation. – If a foreigner commits any offense described by
paragraph (1) or (2) of this section or violates any pertinent
provision of this Act as an accomplice or accessory to, or by
attempting any such offense, he or she shall be immediately
deported after serving his or her sentence and be barred
permanently from entering the country; and
"(c) Public Official. – If the offender is a public official, he or she shall
be dismissed from service and shall suffer perpetual absolute
disqualification to hold public, office, in addition to any
imprisonment or fine received pursuant to any other provision of this
Act."
Section 14. Section 12 of Republic Act No. 9208 is hereby amended to read as
follows:
"SEC. 12. Prescriptive Period. – Trafficking cases under this Act shall prescribe
in ten (10) years: Provided, however, That trafficking cases committed by a
syndicate or in a large scale as defined under Section 6, or against a child,
shall prescribe in twenty (20) years.
"The prescriptive period shall commence to run from the day on which the
trafficked person is delivered or released from the conditions of bondage,
or in the case of a child victim, from the day the child reaches the age of
majority, and shall be interrupted by the filing of the complaint or
information and shall commence to run again when the proceedings
terminate without the accused being convicted or acquitted or are
unjustifiably stopped for any reason not imputable to the accused."
Section 15. Section 16 of Republic Act No. 9208 is hereby amended to read as
follows:
"SEC. 16. Programs that Address Trafficking in Persons. – The government
shall establish and implement preventive, protective and rehabilitative
programs for trafficked persons. For this purpose, the following agencies are
hereby mandated to implement the following programs:
"(a) Department of Foreign Affairs (DFA) – shall make available its
resources and facilities overseas for trafficked persons regardless of
their manner of entry to the receiving country, and explore means
to further enhance its assistance in eliminating trafficking activities
through closer networking with government agencies in the
country and overseas, particularly in the formulation of policies and
implementation of relevant programs. It shall provide Filipino victims
of trafficking overseas with free legal assistance and counsel to
pursue legal action against his or her traffickers, represent his or her
interests in any criminal investigation or prosecution, and assist in
the application for social benefits and/or regular immigration status
as may be allowed or provided for by the host country. The DFA
shall repatriate trafficked Filipinos with the consent of the victims.
"The DFA shall take necessary measures for the efficient
implementation of the Electronic Passporting System to protect the
integrity of Philippine passports, visas and other travel documents to
reduce the incidence of trafficking through the use of fraudulent
identification documents.
"In coordination with the Department of Labor and Employment, it
shall provide free temporary shelters and other services to Filipino
victims of trafficking overseas through the migrant workers and
other overseas Filipinos resource centers established overseas under
Republic Act No. 8042, as amended.
"(b) Department of Social Welfare and Development (DSWD) – shall
implement rehabilitative and protective programs for trafficked
persons. It shall provide counseling and temporary shelter to
trafficked persons and develop a system for accreditation among
NGOs for purposes of establishing centers and programs for
intervention in various levels of the community. It shall establish free
temporary shelters, for the protection and housing of trafficked
persons to provide the following basic services to trafficked
persons:
"(1) Temporary housing and food facilities;
"(2) Psychological support and counseling;
"(3) 24-hour call center for crisis calls and technology-
based counseling and referral system;
"(4) Coordination with local law enforcement entities; and
"(5) Coordination with the Department of Justice, among
others.
"The DSWD must conduct information campaigns in communities
and schools teaching parents and families that receiving
consideration in exchange for adoption is punishable under the
law. Furthermore, information campaigns must be conducted with
the police that they must not induce poor women to give their
children up for adoption in exchange for consideration.
"(c) Department of Labor and Employment (DOLE) – shall ensure
the strict implementation and compliance with the rules and
guidelines relative to the employment of persons locally and
overseas. It shall likewise monitor, document and report cases of
trafficking in persons involving employers and labor recruiters.
"(d) Department of Justice (DOJ) – shall ensure the prosecution of
persons accused of trafficking and designate and train special
prosecutors who shall handle and prosecute cases of trafficking. It
shall also establish a mechanism for free legal assistance for
trafficked persons, in coordination with the DSWD, Integrated Bar of
the Philippines (IBP) and other NGOs and volunteer groups.
"(e) Philippine Commission on Women (PCW) – shall actively
participate and coordinate in the formulation and monitoring of
policies addressing the issue of trafficking in persons in coordination
with relevant government agencies. It shall likewise advocate for
the inclusion of the issue of trafficking in persons in both its local and
international advocacy for women’s issues.
"(f) Bureau of Immigration (BI) – shall strictly administer and enforce
immigration and alien administration laws. It shall adopt measures
for the apprehension of suspected traffickers both at the place of
arrival and departure and shall ensure compliance by the Filipino
fiancés/fiancées and spouses of foreign nationals with the
guidance and counseling requirement as provided for in this Act.
"(g) Philippine National Police (PNP) and National Bureau of
Investigation (NBI) – shall be the primary law enforcement agencies
to undertake surveillance, investigation and arrest of individuals or
persons suspected to be engaged in trafficking. They shall closely
coordinate with each other and with other law enforcement
agencies to secure concerted efforts for effective investigation and
apprehension of suspected traffickers. They shall also establish a
system to receive complaints and calls to assist trafficked persons
and conduct rescue operations.
"(h) Philippine Overseas Employment Administration (POEA) and
Overseas Workers and Welfare Administration (OWWA) – POEA shall
implement Pre-Employment Orientation Seminars (PEOS) while Pre-
Departure Orientation Seminars (PDOS) shall be conducted by the
OWWA. It shall likewise formulate a system of providing free legal
assistance to trafficked persons, in coordination with the DFA.
"The POEA shall create a blacklist of recruitment agencies, illegal
recruiters and persons facing administrative, civil and criminal
complaints for trafficking filed in the receiving country and/or in the
Philippines and those agencies, illegal recruiters and persons
involved in cases of trafficking who have been rescued by the DFA
and DOLE in the receiving country or in the Philippines even if no
formal administrative, civil or criminal complaints have been
filed: Provided, That the rescued victims shall execute an affidavit
attesting to the acts violative of the anti-trafficking law. This blacklist
shall be posted in conspicuous places in concerned government
agencies and shall be updated bi-monthly.
"The blacklist shall likewise be posted by the POEA in the shared
government information system, which is mandated to be
established under Republic Act No. 8042, as amended.
"The POEA and OWWA shall accredit NGOs and other service
providers to conduct PEOS and PDOS, respectively. The PEOS and
PDOS should include the discussion and distribution of the blacklist.
"The license or registration of a recruitment agency that has been
blacklisted may be suspended by the POEA upon a review of the
complaints filed against said agency.
"(i) Department of the Interior and Local Government (DILG) – shall
institute a systematic information and prevention campaign in
coordination with pertinent agencies of government as provided
for in this Act. It shall provide training programs to local government
units, in coordination with the Council, in ensuring wide
understanding and application of this Act at the local level.
"(j) Commission on Filipinos Overseas – shall conduct pre-departure
counseling services for Filipinos in intermarriages. It shall develop a
system for accreditation of NGOs that may be mobilized for
purposes of conducting pre-departure counseling services for
Filipinos in intermarriages. As such, it shall ensure that the counselors
contemplated under this Act shall have the minimum qualifications
and training of guidance counselors as provided for by law.
"It shall likewise assist in the conduct of information campaigns
against trafficking in coordination with local government units, the
Philippine Information Agency, and NGOs.
"(k) Local government units (LGUs) – shall monitor and document
cases of trafficking in persons in their areas of jurisdiction, effect the
cancellation of licenses of establishments which violate the
provisions of this Act and ensure effective prosecution of such
cases. They shall also undertake an information campaign against
trafficking in persons through the establishment of the Migrants
Advisory and Information Network (MAIN) desks in municipalities or
provinces in coordination with the DILG, Philippine Information
Agency (PIA), Commission on Filipinos Overseas (CFO), NGOs and
other concerned agencies. They shall encourage and support
community-based initiatives which address the trafficking in
persons.
"In implementing this Act, the agencies concerned may seek and
enlist the assistance of NGOs, people’s organizations (POs), civic
organizations and other volunteer groups."
Section 16. A new Section 16-A is hereby inserted into Republic Act No. 9208, to
read as follows:
"SEC. 16-A. Anti-Trafficking in Persons Database. – An anti-trafficking in
persons central database shall be established by the Inter-Agency Council
Against Trafficking created under Section 20 of this Act. The Council shall
submit a report to the President of the Philippines and to Congress, on or
before January 15 of every year, with respect to the preceding year’s
programs and data on trafficking-related cases.
"All government agencies tasked under the law to undertake programs and
render assistance to address trafficking in persons shall develop their
respective monitoring and data collection systems, and databases, for
purposes of ensuring efficient collection and storage of data on cases of
trafficking in persons handled by their respective offices. Such data shall be
submitted to the Council for integration in a central database system.
"For this purpose, the Council is hereby tasked to ensure the harmonization
and standardization of databases, including minimum data requirements,
definitions, reporting formats, data collection systems, and data verification
systems. Such databases shall have, at the minimum, the following
information:
"(a) The number of cases of trafficking in persons, sorted according
to status of cases, including the number of cases being
investigated, submitted for prosecution, dropped, and filed and/or
pending before the courts and the number of convictions and
acquittals;
"(b) The profile/information on each case;
"(c) The number of victims of trafficking in persons referred to the
agency by destination countries/areas and by area of origin; and
"(d) Disaggregated data on trafficking victims and the
accused/defendants."
Section 17. Section 17 of Republic Act No. 9208 is hereby amended to read as
follows:
"SEC. 17. Legal Protection to Trafficked Persons. – Trafficked persons shall be
recognized as victims of the act or acts of trafficking and as such, shall not
be penalized for unlawful acts committed as a direct result of, or as an
incident or in relation to, being trafficked based on the acts of trafficking
 enumerated in this Act or in obedience to the order made by the trafficker
in relation thereto. In this regard, the consent of a trafficked person to the
intended exploitation set forth in this Act shall be irrelevant.
"Victims of trafficking for purposes of prostitution as defined under Section 4
of this Act are not covered by Article 202 of the Revised Penal Code and as
such, shall not be prosecuted, fined, or otherwise penalized under the said
law."
Section 18. A new Section 17-A is hereby inserted into Republic Act No. 9208, to
read as follows:
"SEC. 17-A. Temporary Custody of Trafficked Victims. – The rescue of victims
should be done as much as possible with the assistance of the DSWD or an
accredited NGO that services trafficked victims. A law enforcement officer,
on a reasonable suspicion that a person is a victim of any offense defined
under this Act including attempted trafficking, shall immediately place that
person in the temporary custody of the local social welfare and
development office, or any accredited or licensed shelter institution
devoted to protecting trafficked persons after the rescue."
Section 19. A new Section 17-B is hereby inserted into Republic Act No. 9208, to read
as follows:
"SEC. 17-B. Irrelevance of Past Sexual Behavior, Opinion Thereof or
Reputation of Victims and of Consent of Victims in Cases of Deception,
Coercion and Other Prohibited Means. – The past sexual behavior or the
sexual predisposition of a trafficked person shall be considered inadmissible
in evidence for the purpose of proving consent of the victim to engage in
sexual behavior, or to prove the predisposition, sexual or otherwise, of a
trafficked person. Furthermore, the consent of a victim of trafficking to the
intended exploitation shall be irrelevant where any of the means set forth in
Section 3(a) of this Act has been used."
Section 20. A new Section 17-C is hereby inserted into Republic Act No. 9208, to
read as follows:
"SEC. 17-C. Immunity from Suit, Prohibited Acts and Injunctive Remedies. –
No action or suit shall be brought, instituted or maintained in any court or
tribunal or before any other authority against any: (a) law enforcement
officer; (b) social worker; or (c) person acting in compliance with a lawful
order from any of the above, for lawful acts done or statements made
during an authorized rescue operation, recovery or
rehabilitation/intervention, or an investigation or prosecution of an anti-
trafficking case: Provided, That such acts shall have been made in good
faith.
"The prosecution of retaliatory suits against victims of trafficking shall be held
in abeyance pending final resolution and decision of criminal complaint for
trafficking.
"It shall be prohibited for the DFA, the DOLE, and the POEA officials, law
enforcement officers, prosecutors and judges to urge complainants to
abandon their criminal, civil and administrative complaints for trafficking.
"The remedies of injunction and attachment of properties of the traffickers,
illegal recruiters and persons involved in trafficking may be issued motu
proprio by judges."
Section 21. Section 20 of Republic Act No. 9208 is hereby amended to read as
follows:
"SEC. 20. Inter-Agency Council Against Trafficking. – There is hereby
established an Inter-Agency Council Against Trafficking, to be composed of
the Secretary of the Department of Justice as Chairperson and the
Secretary of the Department of Social Welfare and Development as Co-
Chairperson and shall have the following as members:
"(a) Secretary, Department of Foreign Affairs;
"(b) Secretary, Department of Labor and Employment;
"(c) Secretary, Department of the Interior and Local Government;
"(d) Administrator, Philippine Overseas Employment Administration;
"(e) Commissioner, Bureau of Immigration;
"(f) Chief, Philippine National Police;
"(g) Chairperson, Philippine Commission on Women;
"(h) Chairperson, Commission on Filipinos Overseas;
"(i) Executive Director, Philippine Center for Transnational Crimes;
and
"(j) Three (3) representatives from NGOs, who shall include one (1)
representative each from among the sectors representing women,
overseas Filipinos, and children, with a proven record of
involvement in the prevention and suppression of trafficking in
persons. These representatives shall be nominated by the
government agency representatives of the Council, for
appointment by the President for a term of three (3) years.
"The members of the Council may designate their permanent
representatives who shall have a rank not lower than an assistant secretary
or its equivalent to meetings, and shall receive emoluments as may be
determined by the Council in accordance with existing budget and
accounting rules and regulations."
Section 22. Section 22 of Republic Act No. 9208 is hereby amended to read as
follows:
"SEC. 22. Secretariat to the Council. – The Department of Justice shall
establish the necessary Secretariat for the Council.
"The secretariat shall provide support for the functions and projects of the
Council. The secretariat shall be headed by an executive director, who
shall be appointed by the Secretary of the DOJ upon the recommendation
of the Council. The executive director must have adequate knowledge on,
training and experience in the phenomenon of and issues involved in
trafficking in persons and in the field of law, law enforcement, social work,
criminology, or psychology.
"The executive director shall be under the supervision of the Inter-Agency
Council Against Trafficking through its Chairperson and Co-Chairperson,
and shall perform the following functions:
 "(a) Act as secretary of the Council and administrative officer of its
secretariat;
"(b) Advise and assist the Chairperson in formulating and
implementing the objectives, policies, plans and programs of the
Council, including those involving mobilization of government
offices represented in the Council as well as other relevant
government offices, task forces, and mechanisms;
"(c) Serve as principal assistant to the Chairperson in the overall
supervision of council administrative business;
"(d) Oversee all council operational activities;
"(e) Ensure an effective and efficient performance of council
functions and prompt implementation of council objectives,
policies, plans and programs;
"(f) Propose effective allocations of resources for implementing
council objectives, policies, plans and programs;
"(g) Submit periodic reports to the Council on the progress of
council objectives, policies, plans and programs;
"(h) Prepare annual reports of all council activities; and
"(i) Perform other duties as the Council may assign."
Section 23. A new Section 26-A is hereby inserted into Republic Act No. 9208, to
read as follows:
"SEC. 26-A. Extra-Territorial Jurisdiction. – The State shall exercise jurisdiction
over any act defined and penalized under this Act, even if committed
outside the Philippines and whether or not such act or acts constitute an
offense at the place of commission, the crime being a continuing offense,
having been commenced in the Philippines and other elements having
been committed in another country, if the suspect or accused:
"(a) Is a Filipino citizen; or
"(b) Is a permanent resident of the Philippines; or
"(c) Has committed the act against a citizen of the Philippines.
"No prosecution may be commenced against a person under this section if
a foreign government, in accordance with jurisdiction recognized by the
Philippines, has prosecuted or is prosecuting such person for the conduct
constituting such offense, except upon the approval of the Secretary of
Justice.
ALIEN EMPLOYMENT REGULATION
ART. 12
e. To regulate the employment of aliens, including the establishment of a
registration and/or work permit system;
Title II EMPLOYMENT OF NON-RESIDENT ALIENS
Art. 40. Employment permit of non-resident aliens. Any alien seeking admission to
the Philippines for employment purposes and any domestic or foreign employer
who desires to engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor. The employment permit may be
issued to a non-resident alien or to the applicant employer after a determination of
the non-availability of a person in the Philippines who is competent, able and willing
at the time of application to perform the services for which the alien is desired. For
an enterprise registered in preferred areas of investments, said employment permit
may be issued upon recommendation of the government agency charged with the
supervision of said registered enterprise. Art. 41. Prohibition against transfer of
employment. a. After the issuance of an employment permit, the alien shall not
transfer to another job or change his employer without prior approval of the
Secretary of Labor. b. Any non-resident alien who shall take up employment in
violation of the provision of this Title and its implementing rules and regulations shall
be punished in accordance with the provisions of Articles 289 and 290 of the Labor
Code. In addition, the alien worker shall be subject to deportation after service of
his sentence.
Art. 42. Submission of list. Any employer employing non-resident foreign nationals on
the effective date of this Code shall submit a list of such nationals to the Secretary
of Labor within thirty (30) days after such date indicating their names, citizenship,
foreign and local addresses, nature of employment and status of stay in the
country. The Secretary of Labor shall then determine if they are entitled to an
employment permit.
Book 1 rule xiv (cant find)
DO 12 2001 (SEPARATE) AND AMENDED
CONSTI ART 12 SECTION 12
SECTION 12. The State shall promote the preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt measures that help make them
competitive.
A. COVERAGE
G.R. No. 100641 June 14, 1993
FARLE P. ALMODIEL, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), RAYTHEON PHILS.,
INC., respondents.
Apolinario Lomabao, Jr. for petitioner.
Vicente A. Cruz, Jr., for private respondent.
NOCON, J.:
Subject of this petition for certiorari is the decision dated March 21, 1991 of the
National Labor Relations Commission in NLRC Case No.
00-00645-89 which reversed and set aside the Labor Arbiter's decision dated
September 27, 1989 and ordered instead the payment of separation pay and
financial assistance of P100,000.00. Petitioner imputes grave abuse of discretion on
the part of the Commission and prays for the reinstatement of the Labor Arbiter's
decision which declared his termination on the ground of redundancy illegal.
Petitioner Farle P. Almodiel is a certified public accountant who was hired in
October, 1987 as Cost Accounting Manager of respondent Raytheon Philippines,
Inc. through a reputable placement firm, John Clements Consultants, Inc. with a
starting monthly salary of P18,000.00. Before said employment, he was the accounts
executive of Integrated Microelectronics, Inc. for several years. He left his lucrative
job therein in view of the promising career offered by Raytheon. He started as a
probationary or temporary employee. As Cost Accounting Manager, his major
duties were: (1) plan, coordinate and carry out year and physical inventory; (2)
formulate and issue out hard copies of Standard Product costing and other
cost/pricing analysis if needed and required and (3) set up the written Cost
Accounting System for the whole company. After a few months, he was given a
regularization increase of P1,600.00 a month. Not long thereafter, his salary was
increased to P21,600.00 a month.
On August 17, 1988, he recommended and submitted a Cost Accounting/Finance
Reorganization, affecting the whole finance group but the same was disapproved
by the Controller. However, he was assured by the Controller that should his position
or department which was apparently a one-man department with no staff
becomes untenable or unable to deliver the needed service due to manpower
constraint, he would be given a three (3) year advance notice.
In the meantime, the standard cost accounting system was installed and used at
the Raytheon plants and subsidiaries worldwide. It was likewise adopted and
installed in the Philippine operations. As a consequence, the services of a Cost
Accounting Manager allegedly entailed only the submission of periodic reports that
would use computerized forms prescribed and designed by the international head
office of the Raytheon Company in California, USA.
On January 27, 1989, petitioner was summoned by his immediate boss and in the
presence of IRD Manager, Mr. Rolando Estrada, he was told of the abolition of his
position on the ground of redundancy. He pleaded with management to defer its
action or transfer him to another department, but he was told that the decision of
management was final and that the same has been conveyed to the Department
of Labor and Employment. Thus, he was constrained to file the complaint for illegal
dismissal before the Arbitration Branch of the National Capital Region, NLRC,
Department of Labor and Employment.
On September 27, 1989, Labor Arbiter Daisy Cauton-Barcelona rendered a decision,
the dispositive portion of which reads as follows:
WHEREFORE, judgment is hereby rendered declaring that
complainant's termination on the ground of redundancy is highly
irregular and without legal and factual basis, thus ordering the
respondents to reinstate complainant to his former position with full
backwages without lost of seniority rights and other benefits.
Respondents are further ordered to pay complainant P200,000.00
as moral damages and P20,000.00 as exemplary damages, plus ten
percent (10%) of the total award as attorney's fees.1
Raytheon appealed therefrom on the grounds that the Labor Arbiter committed
grave abuse of discretion in denying its rights to dismiss petitioner on the ground of
redundancy, in relying on baseless surmises and self-serving assertions of the
petitioner that its act was tainted with malice and bad faith and in awarding moral
and exemplary damages and attorney's fees.
On March 21, 1991, the NLRC reversed the decision and directed Raytheon to pay
petitioner the total sum of P100,000.00 as separation pay/financial assistance. The
dispositive portion of which is hereby quoted as follows:
WHEREFORE, the appealed decision is hereby set aside. In its stead,
Order is hereby issued directing respondent to pay complainant
the total separation pay/financial assistance of One Hundred
Thousand Pesos (P100,000.00).
SO ORDERED.2
From this decision, petitioner filed the instant petition averring that:
The public respondent committed grave abuse of discretion
amounting to (lack of) or in excess of jurisdiction in declaring as
valid and justified the termination of petitioner on the ground of
redundancy in the face of clearly established finding that
petitioner's termination was tainted with malice, bad faith and
irregularity.3
Termination of an employee's services because of redundancy is governed by
Article 283 of the Labor Code which provides as follows:
Art. 283. Closure of establishment and reduction of personnel. —
The employer may also terminate the employment of any
employee due to installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is
for the purpose of circumventing the provisions of this Title, by
serving a written notice on the worker and the Department of
Labor and Employment at least one (1) month before the intended
date thereof. In case of termination due to installation of labor-
saving devices or redundancy, the worker affected thereby shall
be entitled to a separation pay equivalent to at least one (1)
month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closure or cessation
of operations of establishment or undertaking not due to serious
business losses or financial reverses, the separation pay shall be
equivalent to at least one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher. A fraction
of at least six (6) months shall be considered as one (1) whole year.
There is no dispute that petitioner was duly advised, one (1) month before, of the
termination of his employment on the ground of redundancy in a written notice by
his immediate superior, Mrs. Magdalena B.D. Lopez sometime in the afternoon of
January 27, 1989. He was issued a check for P54,863.00 representing separation pay
but in view of his refusal to acknowledge the notice and the check, they were sent
to him thru registered mail on January 30, 1989. The Department of Labor and
Employment was served a copy of the notice of termination of petitioner in
accordance with the pertinent provisions of the Labor Code and the implementing
rules.
The crux of the controversy lies on whether bad faith, malice and irregularity crept in
the abolition of petitioner's position of Cost Accounting Manager on the ground of
redundancy. Petitioner claims that the functions of his position were absorbed by
the Payroll/Mis/Finance Department under the management of Danny Ang Tan
Chai, a resident alien without any working permit from the Department of Labor
and Employment as required by law. Petitioner relies on the testimony of Raytheon's
witness to the effect that corollary functions appertaining to cost accounting were
dispersed to other units in the Finance Department. And granting that his
department has to be declared redundant, he claims that he should have been
the Manager of the Payroll/Mis/Finance Department which handled general
accounting, payroll and encoding. As a B. S. Accounting graduate, a CPA with
M.B.A. units, 21 years of work experience, and a natural born Filipino, he claims that
he is better qualified than Ang Tan Chai, a B.S. Industrial Engineer, hired merely as a
Systems Analyst Programmer or its equivalent in early 1987, promoted as MIS
Manager only during the middle part of 1988 and a resident alien.
On the other hand, Raytheon insists that petitioner's functions as Cost Accounting
Manager had not been absorbed by Ang Tan Chai, a permanent resident born in
this country. It claims to have established below that Ang Tan Chai did not displace
petitioner or absorb his functions and duties as they were occupying entirely
different and distinct positions requiring different sets of expertise or qualifications
and discharging functions altogether different and foreign from that of petitioner's
abolished position. Raytheon debunks petitioner's reliance on the testimony of Mr.
Estrada saying that the same witness testified under oath that the functions of the
Cost Accounting Manager had been completely dispensed with and the position
itself had been totally abolished.
Whether petitioner's functions as Cost Accounting Manager have been dispensed
with or merely absorbed by another is however immaterial. Thus, notwithstanding
the dearth of evidence on the said question, a resolution of this case can be arrived
at without delving into this matter. For even conceding that the functions of
petitioner's position were merely transferred, no malice or bad faith can be imputed
from said act. A survey of existing case law will disclose that in Wiltshire File Co., Inc.
v. NLRC,4 the position of Sales Manager was abolished on the ground of
redundancy as the duties previously discharged by the Sales Manager simply
added to the duties of the General Manager to whom the Sales Manager used to
report. In adjudging said termination as legal, this Court said that redundancy, for
purposes of our Labor Code, exists where the services of an employee are in excess
of what is reasonably demanded by the actual requirements of the enterprise. The
characterization of an employee's services as no longer necessary or sustainable,
and therefore, properly terminable, was an exercise of business judgment on the
part of the employer. The wisdom or soundness of such characterization or decision
was not subject to discretionary review on the part of the Labor Arbiter nor of the
NLRC so long, of course, as violation of law or merely arbitrary and malicious action
is not shown.
In the case of International Macleod, Inc. v. Intermediate Appellate Court,5 this
Court also considered the position of Government Relations Officer to have
become redundant in view of the appointment of the International Heavy
Equipment Corporation as the company's dealer with the government. It held
therein that the determination of the need for the phasing out of a department as a
labor and cost saving device because it was no longer economical to retain said
services is a management prerogative and the courts will not interfere with the
exercise thereof as long as no abuse of discretion or merely arbitrary or malicious
action on the part of management is shown.
In the same vein, this Court ruled in Bondoc v. People's Bank and Trust Co., 6 that the
bank's board of directors possessed the power to remove a department manager
whose position depended on the retention of the trust and confidence of
management and whether there was need for his services. Although some
vindictive motivation might have impelled the abolition of his position, this Court
expounded that it is undeniable that the bank's board of directors possessed the
power to remove him and to determine whether the interest of the bank justified
the existence of his department.
Indeed, an employer has no legal obligation to keep more employees than are
necessary for the operation of its business. Petitioner does not dispute the fact that a
cost accounting system was installed and used at Raytheon subsidiaries and plants
worldwide; and that the functions of his position involve the submission of periodic
reports utilizing computerized forms designed and prescribed by the head office
with the installation of said accounting system. Petitioner attempts to controvert
these realities by alleging that some of the functions of his position were still
indispensable and were actually dispersed to another department. What these
indispensable functions that were dispersed, he failed however, to specify and point
out. Besides, the fact that the functions of a position were simply added to the
duties of another does not affect the legitimacy of the employer's right to abolish a
position when done in the normal exercise of its prerogative to adopt sound
business practices in the management of its affairs.
Considering further that petitioner herein held a position which was definitely
managerial in character, Raytheon had a broad latitude of discretion in abolishing
his position. An employer has a much wider discretion in terminating employment
relationship of managerial personnel compared to rank and file employees. 7 The
reason obviously is that officers in such key positions perform not only functions
which by nature require the employer's full trust and confidence but also functions
that spell the success or failure of an enterprise.
Likewise destitute of merit is petitioner's imputation of unlawful discrimination when
Raytheon caused corollary functions appertaining to cost accounting to be
absorbed by Danny Ang Tan Chai, a resident alien without a working permit. Article
40 of the Labor Code which requires employment permit refers to non-resident
aliens. The employment permit is required for entry into the country for employment
purposes and is issued after determination of the non-availability of a person in the
Philippines who is competent, able and willing at the time of application to perform
the services for which the alien is desired. Since Ang Tan Chai is a resident alien, he
does not fall within the ambit of the provision.
Petitioner also assails Raytheon's choice of Ang Tan Chai to head the
Payroll/Mis/Finance Department, claiming that he is better qualified for the position.
It should be noted, however, that Ang Tan Chai was promoted to the position
during the middle part of 1988 or before the abolition of petitioner's position in early
1989. Besides the fact that Ang Tan Chai's promotion thereto is a settled matter, it
has been consistently held that an objection founded on the ground that one has
better credentials over the appointee is frowned upon so long as the latter
possesses the minimum qualifications for the position. In the case at bar, since
petitioner does not allege that Ang Tan Chai does not qualify for the position, the
Court cannot substitute its discretion and judgment for that which is clearly and
exclusively management prerogative. To do so would take away from the employer
what rightly belongs to him as aptly explained in National Federation of Labor
Unions v. NLRC:8
It is a well-settled rule that labor laws do not authorize interference
with the employer's judgment in the conduct of his business. The
determination of the qualification and fitness of workers for hiring
and firing, promotion or reassignment are exclusive prerogatives of
management. The Labor Code and its implementing Rules do not
vest in the Labor Arbiters nor in the different Divisions of the NLRC
(nor in the courts) managerial authority. The employer is free to
determine, using his own discretion and business judgment, all
elements of employment, "from hiring to firing" except in cases of
unlawful discrimination or those which may be provided by law.
There is none in the instant case.
Finding no grave abuse of discretion on the part of the National Labor Relations
Commission in reversing and annulling the decision of the Labor Arbiter and that on
the contrary, the termination of petitioner's employment was anchored on a valid
and authorized cause under Article 283 of the Labor Code, the instant petition
for certiorari must fail.
SO ORDERED.
B. CONDITIONS FOR GRANT
G.R. No. 93666 April 22, 1991
GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners,
vs.
HON. RUBEN D. TORRES, in his capacity as Secretary of Labor and Employment, HON.
BIENVENIDO E. LAGUESMA, in his capacity as Acting Secretary of Labor and
Employment, and BASKETBALL COACHES ASSOCIATION OF THE
PHILIPPINES, respondents.
Sobrevinas, Diaz, Hayudini & Bodegon Law Office for petitioners.
Rodrigo, Cuevas & De Borja for respondent BCAP.
RESOLUTION
FELICIANO, J.:
On 1 May 1989, the National Capital Region of the Department of Labor and
Employment issued Alien Employment Permit No. M-0689-3-535 in favor of petitioner
Earl Timothy Cone, a United States citizen, as sports consultant and assistant coach
for petitioner General Milling Corporation ("GMC").
On 27 December 1989, petitioners GMC and Cone entered into a contract of
employment whereby the latter undertook to coach GMC's basketball team.
On 15 January 1990, the Board of Special Inquiry of the Commission on Immigration
and Deportation approved petitioner Cone's application for a change of admission
status from temporary visitor to pre-arranged employee.
On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien
employment permit. GMC also requested that it be allowed to employ Cone as full-
fledged coach. The DOLE Regional Director, Luna Piezas, granted the request on 15
February 1990.
On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25
December 1990, was issued.
Private respondent Basketball Coaches Association of the Philippines ("BCAP")
appealed the issuance of said alien employment permit to the respondent
Secretary of Labor who, on 23 April 1990, issued a decision ordering cancellation of
petitioner Cone's employment permit on the ground that there was no showing that
there is no person in the Philippines who is competent, able and willing to perform
the services required nor that the hiring of petitioner Cone would redound to the
national interest.
Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental
Motions for Reconsideration but said Motions were denied by Acting Secretary of
Labor Bienvenido E. Laguesma in an Order dated 8 June 1990.
Petitioners are now before the Court on a Petition for Certiorari, dated 14 June 1990,
alleging that:
1. respondent Secretary of Labor gravely abused his discretion when he
revoked petitioner Cone's alien employment permit; and
2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the
Labor Code is null and void as it is in violation of the enabling law as the
Labor Code does not empower respondent Secretary to determine if the
employment of an alien would redound to national interest.
Deliberating on the present Petition for Certiorari, the Court considers that
petitioners have failed to show any grave abuse of discretion or any act without or
in excess of jurisdiction on the part of respondent Secretary of Labor in rendering his
decision, dated 23 April 1990, revoking petitioner Cone's Alien Employment Permit.
The alleged failure to notify petitioners of the appeal filed by private respondent
BCAP was cured when petitioners were allowed to file their Motion for
Reconsideration before respondent Secretary of Labor.1
Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative
has no legal basis at all. Under Article 40 of the Labor Code, an employer seeking
employment of an alien must first obtain an employment permit from the
Department of Labor. Petitioner GMC's right to choose whom to employ is, of
course, limited by the statutory requirement of an alien employment permit.
Petitioners will not find solace in the equal protection clause of the Constitution. As
pointed out by the Solicitor-General, no comparison can be made between
petitioner Cone and Mr. Norman Black as the latter is "a long time resident of the
country," and thus, not subject to the provisions of Article 40 of the Labor Code
which apply only to "non-resident aliens." In any case, the term "non-resident alien"
and its obverse "resident alien," here must be given their technical connotation
under our law on immigration.
Neither can petitioners validly claim that implementation of respondent Secretary's
decision would amount to an impairment of the obligations of contracts. The
provisions of the Labor Code and its Implementing Rules and Regulations requiring
alien employment permits were in existence long before petitioners entered into
their contract of employment. It is firmly settled that provisions of applicable laws,
especially provisions relating to matters affected with public policy, are deemed
written into contracts.2 Private parties cannot constitutionally contract away the
otherwise applicable provisions of law.
Petitioners' contention that respondent Secretary of Labor should have deferred to
the findings of Commission on Immigration and Deportation as to the necessity of
employing petitioner Cone, is, again, bereft of legal basis. The Labor Code itself
specifically empowers respondent Secretary to make a determination as to the
availability of the services of a "person in the Philippines who is competent, able and
willing at the time of application to perform the services for which an alien is
desired."3
In short, the Department of Labor is the agency vested with jurisdiction to determine
the question of availability of local workers. The constitutional validity of legal
provisions granting such jurisdiction and authority and requiring proof of non-
availability of local nationals able to carry out the duties of the position involved,
cannot be seriously questioned.
Petitioners apparently also question the validity of the Implementing Rules and
Regulations, specifically Section 6 (c), Rule XIV, Book I of the Implementing Rules, as
imposing a condition not found in the Labor Code itself. Section 6 (c), Rule XIV, Book
I of the Implementing Rules, provides as follows:
Section 6. Issuance of Employment Permit –– the Secretary of Labor may
issue an employment permit to the applicant based on:
a) Compliance by the applicant and his employer with the requirements of
Section 2 hereof;
b) Report of the Bureau Director as to the availability or non-availability of
any person in the Philippines who is competent and willing to do the job for
which the services of the applicant are desired.
(c) His assessment as to whether or not the employment of the applicant
will redound to the national interest;
(d) Admissibility of the alien as certified by the Commission on Immigration
and Deportation;
(e) The recommendation of the Board of Investments or other appropriate
government agencies if the applicant will be employed in preferred areas
of investments or in accordance with the imperative of economic
development;
xxx xxx xxx
(Emphasis supplied)
Article 40 of the Labor Code reads as follows:
Art. 40. Employment per unit of non-resident aliens. –– Any alien seeking
admission to the Philippines for employment purposes and any domestic or
foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of
Labor.
The employment permit may be issued to a non-resident alien or to the
applicant employer after a determination of the non-availability of a
person in the Philippines who is competent, able and willing at the time of
application to perform the services for which the alien is desired.
For an enterprise registered in preferred areas of investments, said
employment permit may be issued upon recommendation of the
government agency charged with the supervision of said registered
enterprise. (Emphasis supplied)
Petitioners apparently suggest that the Secretary of Labor is not authorized to take
into account the question of whether or not employment of an alien applicant
would "redound to the national interest" because Article 40 does not explicitly refer
to such assessment. This argument (which seems impliedly to concede that the
relationship of basketball coaching and the national interest is tenuous and unreal)
is not persuasive. In the first place, the second paragraph of Article 40 says: "[t]he
employment permit may be issued to a non-resident alien or to the applicant
employer after a determination of the non-availability of a person in the Philippines
who is competent, able and willing at the time of application to perform the
services for which the alien is desired." The permissive language employed in the
Labor Code indicates that the authority granted involves the exercise of discretion
on the part of the issuing authority. In the second place, Article 12 of the Labor
Code sets forth a statement of objectives that the Secretary of Labor should, and
indeed must, take into account in exercising his authority and jurisdiction granted by
the Labor Code,
Art. 12. Statement of Objectives. –– It is the policy of the State:
a) To promote and maintain a state of full employment through improved
manpower training, allocation and utilization;
xxx xxx xxx
c) To facilitate a free choice of available employment by persons seeking
work in conformity with the national interest;
d) To facilitate and regulate the movement of workers in conformity with
the national interest;
e) To regulate the employment of aliens, including the establishment of a
registration and/or work permit system;
xxx xxx xxx
Thus, we find petitioners' arguments on the above points of constitutional law too
insubstantial to require further consideration.1avvphi1
Petitioners have very recently manifested to this Court that public respondent
Secretary of Labor has reversed his earlier decision and has issued an Employment
Permit to petitioner Cone. Petitioners seek to withdraw their Petition for Certiorari on
the ground that it has become moot and academic.
While ordinarily this Court would dismiss a petition that clearly appears to have
become moot and academic, the circumstances of this case and the nature of the
questions raised by petitioners are such that we do not feel justified in leaving those
questions unanswered.4
Moreover, assuming that an alien employment permit has in fact been issued to
petitioner Cone, the basis of the reversal by the Secretary of Labor of his earlier An appeal from the decision of the DOLE Regional Director may be filed with the
decision does not appear in the record. If such reversal is based on some view of Secretary of labor and Employment within ten (10) calendar days from receipt of an
constitutional law or labor law different from those here set out, then such Order from the DOLE Regional Director. The decision of the Secretary of Labor and
employment permit, if one has been issued, would appear open to serious legal Employment shall be final and unappealable.
objections.
ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack of
merit. Costs against petitioners.

C. VALIDITY OF AEP

Rule II
Procedures in the Processing of Applications for AEP

1. All foreign nationals seeking employment in the Philippines under Rule 1 hereof or
their prospective employers, shall file their applications with the DOLE Regional
Office having jurisdiction over the intended place of work.

D. REVOCATION

Rule III
Revocation/Cancellation of Employment Permits Issued

1. The permits issued may, motu proprio or upon a petition, be cancelled or revoked
based on any of the following grounds:chanroblesvirtuallawlibrary
1.1 Misrepresentation of facts or falsification of the documents submitted;

1.2 The foreign national has been declared as an undesirable alien by competent
authorities;

1.3 Non-compliance with the conditions for which the AEP was issued;

1.4 Failure to renew AEP within one (1) year after its expiration.
2. Petitions for cancellation or revocation of permits issued shall be resolved within
thirty (30) calendars from receipt thereof.
3. Any aggrieved party may file a Motion for Reconsideration and/or Appeal and
the same shall be resolved based on Paragraph 4 of this Rule.

4. Remedies in Case of Denial or Cancellation - A Motion for Reconsideration

maybe filed by an aggrieved party within seven (7) calendar days after receipt of
the Order of Denial/Cancellation. The DOLE Regional Director shall resolve the said
Motion for Reconsideration within ten (10) calendar days from receipt thereof.

A motion for Reconsideration filed after the period of seven (7) calendar days but
within ten (10) calendar days after receipt of the denial shall be treated as an
appeal.