D. Applicability and Non-applicability of the Labor Code (Art.
6) HELD
1. Lasco v. UN Revolving Fund for Natural Resources Exploration, GR 109095-109107
2. Republic v. CA, GR 87676
3. PNOC-Energy Dev. Corp. V. NLRC, GR 100947
4. Juco v. NLRC & NHC, GR 98107
Lasco v. UN Revolving Fund for Natural Resources Exploration, GR 109095-109107
Facts: Petitioners were dismissed from their employment with private respondent, the United Nations
Revolving Fund for Natural Resources Exploration (UNRFNRE), which is a special fund and
subsidiary organ of the United Nations. The UNRFNRE is involved in a joint project of the Philippine
Government and the United Nations for exploration work in Dinagat Island. Petitioners are the
complainants for illegal dismissal and damages. Private respondent alleged that respondent Labor
Arbiter had no jurisdiction over its personality since it enjoyed diplomatic immunity.
Issue: WON specialized agencies enjoy diplomatic immunity
Held: YES. Petition is dismissed. This is not to say that petitioner have no recourse. Section 31 of
the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations
states that ³each specialized agency shall make a provision for appropriate modes of settlement of
(a) disputes arising out of contracts or other disputes of private character to which the specialized
agency is a party.´ Private respondent is not engaged in a commercial venture in the Philippines. Its
presence is by virtue of a joint project entered into by the Philippine Government and the United
Nations for mineral exploration in Dinagat Island.
REPUBLIC OF THE PHILIPPINES, represented by the NATIONAL PARKS DEVELOPMENT
COMMITTEE, petitioner, vs.
THE HON. COURT OF APPEALS and THE NATIONAL PARKS DEVELOPMENT SUPERVISORY
ASSOCIATION & THEIR MEMBERS, respondents.
FACTS
National Parks Development Committee (NPDC) was originally created in 1963 under Executive
Order No. 30, as the Executive Committee for the development of Quezon Memorial, Luneta and
other national parks. The Committee was registered with the SEC as a non-stock and non-profit
corporation.
However, in 1987, due to failure to comply with SEC requirements (i.e. to submit General Information
Sheet and Financial Statements from 1981 to 1987; to register its Corporate Books; and to operate
for a continuous period for at least 5 years since 1967) NPDC was attached to the Ministry of
Tourism. Pursuant thereto, Civil Service Commission notified NPDC that all appointments and other
personnel actions shall be submitted to the former.
The Rizal Park Supervisory Employees Association was organized, and it affiliated with the Trade
Union of the Philippines and Allied Service (TUPAS, for brevity) under Certificate No. 1206. However,
NPDC entered into a separate CBA with NPDCEA (TUPAS Local Chapter No. 967), and NPDCSA
(TUPAS Chapter No. 1206) for a period of two (2) years. Pursuant thereto, these unions staged a
strike alleging unfair labor practices by NPDC.
Contention of the NPDC: The strike is illegal on ground that the strikers, being government
employees, the strikers have no right to strike, although they may form a union.
Ruling of the Trial Court and CA: Complaint is dismissed for lack of jurisdiction, to wit: (1) there exists
an employer-employee relationship between NPDC and the strikers; (2) the acts complained of falls
under par 5, Art. 217, in relation to Art. 265 of the Labor Code. Hence, the case properly falls under
the jurisdiction of DOLE. On appeal, CA affirmed the decision of the trial court.
ISSUE
Whether the petitioner, National Parks Development Committee (NPDC), is a government agency,
or a private corporation, for on this issue depends the right of its employees to strike.
The NPDC is an agency of the government, not a government-owned or controlled corporation.
Since NPDC is a government agency, its employees are covered by civil service rules and
regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil service employees (Sec.
14, Executive Order No. 180).
While NPDC employees are allowed under the 1987 Constitution to organize and join unions of their
choice, there is as yet no law permitting them to strike. In case of a labor dispute between the
employees and the government, Section 15 of Executive Order No. 180 dated June 1, 1987 provides
that the Public Sector Labor- Management Council, not the Department of Labor and Employment,
shall hear the dispute. Clearly, the Court of Appeals and the lower court erred in holding that the
labor dispute between the NPDC and the members of the NPDSA is cognizable by the Department
of Labor and Employment.
PNOC-Energy Dev. Corp. V. NLRC, GR 100947
Facts: In November, 1987, while holding the position of Geothermal Construction Secretary,
Engineering and Construction Department, at Tongonan Geothermal Project, Ormoc City, Manuel
S. Pineda decided to run for councilor of the Municipality of Kananga, Leyte, in the local elections
scheduled in January, 1988, and filed the corresponding certificate of candidacy for the position.
Objection to Pineda’s being a candidate while retaining his job in the PNOC-EDC was shortly
thereafter registered by Mayor Arturo Cornejos of Kananga, Leyte.
Section 66 of the Election Code provides among others that officers and employees of GOCCs are
considered as ipso facto resigned upon the filing of their certificate of candidacy.
It was the argument of Pineda that PNOC-EDC was not created through a special law, it is not
covered by the Civil Service Law and, therefore, not contemplated under Section 66 of the Election
Code.
Issue: Whether or not an employee in a government- owned or controlled corporation without an
original charter falls within the scope of Section 66 of the Omnibus Election Code.
Held: Yes. If a corporation’s capital stock is owned by the Government, or it is operated and managed
by officers charged with the mission of fulfilling the public objectives for which it has been organized,
it is a government-owned or controlled corporation even if organized under the Corporation Code
and not under a special statute. Employees thereof, even if not covered by the Civil Service but by
the Labor Code, are nonetheless “employees in government-owned or controlled corporation,” and
come within the letter of Section 66 of the Omnibus Election Code, declaring them ipso facto resigned
from their office upon the filing of their certificate of candidacy.
Juco v. NLRC & NHC, GR 98107
FACTS:
Petitioner Benjamin C. Juco was hired as a project engineer of respondent National Housing
Corporation (NHC) from November 16, 1970 to May 14, 1975 when he was separated from the
service for having been implicated in a crime of theft and/or malversation of public funds.
On March 25, 1977, petitioner filed a complaint for illegal dismissal against the NHC with the
Department of Labor.
The Labor Arbiter rendered a decision on September 17, 1977 dismissing the complaint for lack of
jurisdiction.
The petitioner then elevated the case to the NLRC which rendered a decision on December 28,
1982, reversing the decision of the Labor Arbiter.
Dissatisfied with the decision of the NLRC, respondent NHC appealed before this Court which
rendered a decision on January 17, 1985 reinstating the decision of the Labor Arbiter and setting
aside the decision of NLRC.
On January 6, 1989, the petitioner filed with the Civil Services Commission a complaint for illegal
dismissal, with preliminary mandatory injunction.
On February 6, 1989, respondent NHC moved for the dismissal of the complaint on the ground that
the Civil Service Commission has no jurisdiction over the case.
On April 11, 1989, the Civil Service Commission issued an order dismissing the complaint for lack of
jurisdiction.
On April 28, 1989, petitioner filed with respondent NLRC a compliant for illegal dismissal with
preliminary mandatory injunction against respondent NHC.
On May 21, 1990, respondent NLRC through Labor Arbiter Manuel R. Caday ruled that petitioners
was illegally dismissed from his employment by respondent as there was evidence in the record that
the criminal case filed against him was purely fabricated, prompting the trial court to dismiss the
charges against him.
On June 1, 1990, respondent NHC filed its appeal before the NLRC and on March 14, 1981, the
NLRC promulgated a decision which reversed the decision of Labor Arbiter Manuel R. Caday on the
ground of lack of jurisdiction.
ISSUES:
(1) Whether or not public respondent NLRC committed grave abuse of discretion in holding that
petitioner is not governed by the Labor Code.
RULING:
(1) The NLRC erred in dismissing petitioner’s complaint for lack of jurisdiction.
Although we had earlier ruled in National Housing Corporation Vs. Juco, that employees of
government-owned and/or controlled corporations, whether created by special law or formed as
subsidiaries under the General Corporation Law, are governed by the Civil Service Law and not by
the Labor Code, this ruling has been supplanted by the 1987 Constitution which now provides:
The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charter. (Article
IX-B, Section 2(1).
The rule now is that the Civil Service now covers only government-owned or controlled corporations
with original charters. Having been incorporated under the Corporation Law, respondent NHC’s
relations with its personnel are governed by the Labor Code and come under the jurisdiction of the
National Labor Relations Commission.
WHEREFORE, the decision of the NLRC in NLRC NCR-04-02036089 dated March 14, 1991 is
hereby REVERSED and the decision of the Labor Arbiter dated May 21, 1990 is REINSTATED.
----------------------------
BOOK ONE / PRE-EMPLOYMENT
1. Recruitment and Placement of Workers
A. Definition
a. Recruitment and Placement
1. People v. Panis, GR L-58674-77
People v. Panis, GR L-58674-77
FACTS:
On January 9, 1981, four information were filed in the in the Court of First Instance (CFI) of Zambales
and Olongapo City alleging that herein private respondent Serapio Abug, "without first securing a
license from the Ministry of Labor as a holder of authority to operate a fee-charging employment
agency, did then and there wilfully, unlawfully and criminally operate a private fee charging
employment agency by charging fees and expenses (from) and promising employment in Saudi
Arabia" to four separate individuals. Abug filed a motion to quash contending that he cannot be
charged for illegal recruitment because according to him, Article 13(b) of the Labor Code says there
would be illegal recruitment only "whenever two or more persons are in any manner promised or
offered any employment for a fee.”
Denied at first, the motion to quash was reconsidered and granted by the Trial Court in its Orders
dated June 24, 1981, and September 17, 1981. In the instant case, the view of the private
respondents is that to constitute recruitment and placement, all the acts mentioned in this article
should involve dealings with two or more persons as an indispensable requirement. On the other
hand, the petitioner argues that the requirement of two or more persons is imposed only where the
recruitment and placement consists of an offer or promise of employment to such persons and
always in consideration of a fee.
ISSUE:
Whether or not Article 13(b) of the Labor Code provides for the innocence or guilt of the private
respondent of the crime of illegal recruitment
COURT RULING:
The Supreme Court reversed the CFI’s Orders and reinstated all four information filed against private
respondent.
The proviso was intended neither to impose a condition on the basic rule nor to provide an exception
thereto but merely to create a presumption. The presumption is that the individual or entity is
engaged in recruitment and placement whenever he or it is dealing with two or more persons to
whom, in consideration of a fee, an offer or promise of employment is made in the course of the
“canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers. ”
The number of persons dealt with is not an essential ingredient of the act of recruitment and
placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute
recruitment and placement even if only one prospective worker is involved. The proviso merely lays
down a rule of evidence that where a fee is collected in consideration of a promise or offer of
employment to two or more prospective workers, the individual or entity dealing with them shall be
deemed to be engaged in the act of recruitment and placement. The words “shall be deemed” create
that presumption.
----------------------------
C. Licensing
1. Hellenic Phil. Shipping, Inc. v. Siete, GR 84082
Hellenic Phil. Shipping, Inc. v. Siete, GR 84082
FACTS:
Capt. Epifanio Siete, was employed on May 22, 1985, as Master of M/V Houda G by Sultan Shipping
Co., Ltd., through its crewing agent, the herein petitioner. He boarded the vessel on May 24, 1985,
at Cyprus. From there, it sailed on June 1, 1985, to El Ferrol, Spain, where it loaded cargo that it
subsequently discharged at Tripoli, Lebanon, from June 25-29, 1985. It then proceeded back to
Cyprus, arriving there on June 30, 1985.
On July 8, 1985, Capt. Wilfredo Lim boarded the vessel and advised Siete that he had instructions
from the owners to take over its command. These instructions were confirmed by a telex sent[1] by
Sultan Shipping to Siete on July 10, 1985. Neither Lim nor the telex indicated the reason for his relief.
The private respondent claims this information was also withheld from him by the petitioner upon his
repatriation to Manila.
On July 12, 1985, Siete filed a complaint against the petitioner for illegal dismissal and non-payment
of his salary and other benefits under their employment contract. The petitioner alleged in its answer
that the complainant had been dismissed because of his failure to comply with the instruction of
Sultan Shipping to erase the timber load line on the vessel and for his negligence in the discharge
of the cargo at Tripoli that endangered the vessel and the stevedores. Siete denied these averments
in his reply dated September 23, 1985, and reiterated that he had not earlier been informed of the
cause of his dismissal and repatriation, either in Cyprus or later in Manila.
After considering the position papers and documentary evidence of the parties, Administrator Tomas
D. Achacoso of the Philippine Overseas Employment Administration (POEA) dismissed the
complaint, holding that there was valid cause for Siete's removal.[2] The decision placed much value
on the various communications presented by the petitioner to show that Siete was indeed guilty of
the charges that justified his separation.
The private respondent appealed to the NLRC, contending that the records presented by the
petitioner were prepared long after his dismissal and were especially suspect because they came
from persons in the employ of Sultan Shipping. He insisted that he was dismissed without even being
informed of the charges against him or given an opportunity to refute them. He added that, even
assuming he was negligent in the unloading of the cargo at Tripoli, this shortcoming did not warrant
such a severe penalty as his dismissal.
NLRC reversed the POEA Administrator, holding that the dismissal violated due process and that
the documents submitted by the petitioner were hearsay, self-serving, and not verified. Hence the
petition.
ISSUE: Whether private employment agencies are jointly and severally liable with the foreign-based
employer for any violation of the recruitment agreement or the contract of employment.
HELD: YES
The Court reiterates the ruling that private employment agencies are jointly and severally liable with
the foreign-based employer for any violation of the recruitment agreement or the contract of
employment.[8] As a requirement for the issuance to it of a license to operate a private recruiting
agency, a verified undertaking was made by the petitioner that it would "assume joint and solidary
liability with the employer for all claims and liabilities which (might) arise in connection with the
implementation of the contract of employment." It cannot now contend that as a mere crewing agent
it cannot be made to answer for the liabilities of Sultan Shipping.
The reason for the above-mentioned requirement is obvious. Were the rule otherwise, employees
with legitimate demands against the employer would be helpless to enforce them because the latter
has no office or properties in this jurisdiction. Violation of the employment contract would remain
unredressed. It was precisely to correct this difficulty that the recruiting agent is now required, as a
condition for the issuance to it of a license to operate, to assure the employee that he has remedies
available in this country even if the culpable employer is beyond the reach of our courts.
We are not persuaded that the NLRC committed grave abuse of discretion in reversing the findings
of the POEA sustaining the petitioner and dismissing the private respondent's complaint. On the
contrary, we agree that the private respondent was illegally dismissed because, first, he was not
accorded a fair investigation as required by law, and second, because the grounds invoked for his
separation have not been proved by the petitioner.
WHEREFORE, the challenged decision as above modified is AFFIRMED and the petition
DISMISSED, with costs against the petitioner. The temporary restraining order dated August 3, 1988,
is LIFTED.
----------------------------
II. Illegal Recruitment
Xx
B. Simple Illegal Recruitment
i. Elements of Simple Illegal Recruitment
ii. Illegal recruitment committed by Non-Licensee
1. Delia Romero v. People, GR 171644
2. People v. Melissa Chua and Clarita NG Chua, GR 187052
iii. Illegal recruitment v. Estafa
Case Study:
1. Darwin v. CA, GR 125044
2. Edgardo Panganiban v. Tara Trading Ship Management, GR 187032
3. People v. Lapiz, 391 SCRA 131
4. People v. Logan, 361 SCRA 581
5. People v. Chua, GR 128280
6. People v. Merris, GR 11745-50 & 7447
7. Millares v. NLRC, 385 SCRA 306
8. Gu-Miro v. Adorable, GR 160952
9. Rovago v. Esso Eastern Maritime LTD, GR 158324
10. OSM Shipping Phils, Inc v. NLRC, GR 138193
11. Trans Action Overseas Corporation v. Secretary of Labor, GR 109583
12. Catan v. NLRC, GR 77279
13. Royal Crown Internationale v. NLRC, GR 78085
14. People v. Calonzo, GR 115150-55
15. Salazar v. Achacoso and Marquez, GR 81510
16. People v. S. Angeles, GR 132376
Delia Romero v. People, GR 171644
FACTS: Petition for Review on Certiorari of petitioner DELIA D. ROMERO assailing the Decision
and Resolution of the Court of Appeals (CA) affirming the Decision of the Regional Trial Court (RTC)
of Dagupan City, finding petitioner guilty beyond reasonable doubt of the crime of Illegal Recruitment
as defined in paragraph (a) of Article 38 of Presidential Decree No. 2018[1].
Sometime in August 2000, ARTURO SIAPNO went to petitioner's stall. He was convinced by the
petitioner that if he could give her US$3,600.00 for the processing of his papers, he could leave the
country within 1 to 2 weeks for a job placement in Israel. Arturo was able to secure the amount
needed through relatives help then petitioner processed Arturo's papers and contacted Jonney Erez
Mokra. Jonney instructed Arturo to attend a briefing in Dau, Mabalacat, Pampanga. Afterwards,
Arturo left for Israel sometime in September 2000. He was able to work and receive US$800.00
salary per month. After three months of stay in Israel, he was caught by the immigration officials,
incarcerated for ten days and was eventually deported. After arriving in the country, Arturo
immediately sought the petitioner who then promised him that she would send him back to Israel,
which did not happen.
Meanwhile, sometime in September 2000, ROMULO PADLAN went to petitioner's stall at Calasiao,
Pangasinan to inquire about securing a job in Israel. Convinced by petitioner's words of
encouragement and inspired by a high potential salary, Romulo asked petitioner the amount of
money required in order for him to be able to go to Israel. Petitioner informed him that as soon as he
could give her US$3,600.00, his papers would be immediately processed. When he was able to raise
the amount, Romulo went back to petitioner and handed her the money. Petitioner contacted Jonney
Erez Mokra who instructed Romulo to attend a briefing at his house in Dau, Mabalacat, Pampanga.
Romulo was able to leave for Israel on October 26, 2000 and was able to secure a job but
unfortunately, after two and a half months, he was caught by Israel's immigration police and detained
for 25 days. He was subsequently deported because he did not possess a working visa. On his
return, Romulo demanded from petitioner the return of his money, but the latter refused and failed
to do so.
Petitioner also claims that the testimony of Arturo Siapno saying that he paid a certain amount of
money to the former must not be given any credence due to the absence of any receipt or any other
documentary evidence proving such.
ISSUE: Whether or not DELIA D. ROMERO is guilty of the act of Illegal Recruitment.
HELD: Yes. As testimonies of SIAPNO and PADLAN shows that petitioner was able to convince the
private respondents to apply for work in Israel after parting with their money in exchange for the
services she would render. Such act of the petitioner, without a doubt, falls within the meaning of
recruitment and placement as defined in Article 13 (b) of the Labor Code[2].
The Court ruled that in illegal recruitment cases, the failure to present receipts for money that was
paid in connection with the recruitment process will not affect the strength of the evidence presented
by the prosecution as long as the payment can be proved through clear and convincing testimonies
of credible witnesses.
WHEREFORE, the Petition for Review on Certiorari of petitioner Delia D. Romero is hereby DENIED.
Consequently, the Decision and Resolution of the Court of Appeals, affirming the Decision of the
Regional Trial Court, finding petitioner guilty beyond reasonable doubt of the crime of Illegal
Recruitment as defined in paragraph (a) of Article 38 of Presidential Decree (P.D.) No. 2018, are
hereby AFFIRMED with the MODIFICATION on the penalty to be imposed.
People v. Melissa Chua and Clarita NG Chua, GR 187052
FACTS: Private complainants Alberto A. Aglanao, Rey P. Tajadao, Billy R. Danan and Roylan
Ursulum filed a complaint for illegal dismissal in large scale against Melissa Chua alleging that the
latter offered them a job as factory workers in Taiwan for deployment within a month. She required
each of them on separate occasions to undergo medical examination and pay a placement fee of P
80,000 each. Chua assured each of them that whoever pays the application fee the earliest can
leave sooner. After completing payment, they followed-up their applications. However, they learned
that Chua was not licensed to recruit workers for overseas employment.
Chua denied having recruited private complainants for overseas employment and interposed the
defense that she was only a cashier at Golden Gate Office and that she has no knowledge of whether
the agency was licensed to recruit workers during her tenure as it has been delisted. The RTC of
Manila found Chua guilty of illegal recruitment in large scale, which was affirmed by the CA.
ISSUE: Is Melissa Chua liable for illegal recruitment in large scale?
LAW: Sections 6 and 7 of Republic Act R.A. No. 8042.
RULING: Yes. Melissa Chua is liable for illegal recruitment in large scale.
In order to hold a person liable for illegal recruitment, the following elements must concur:
(1) the offender undertakes any of the activities within the meaning of "recruitment and placement"
under Article 13(b) of the Labor Code, or any of the prohibited practices enumerated under Article
34 of the Labor Code (now Section 6 of Republic Act No. 8042); and
(2) the offender has no valid license or authority required by law to enable him to lawfully engage in
recruitment and placement of workers.
In the case of illegal recruitment in large scale, a third element is added: that the offender commits
any of the acts of recruitment and placement against three or more persons, individually or as a
group.
All three elements are present in the case at bar. Chua engaged in recruitment when she represented
to private complainants that she could send them to Taiwan as factory workers upon submission of
the required documents and payment of the placement fee. The four private complainants positively
identified appellant as the person who promised them employment as factory workers in Taiwan.
Chua cannot escape liability by conveniently limiting her participation as a cashier of Golden Gate.
The provisions of Article 13(b) of the Labor Code and Section 6 of R.A. No. 8042 are unequivocal
that illegal recruitment may or may not be for profit. It is immaterial, therefore, whether Chua remitted
the placement fees to "the agency’s treasurer" or appropriated them. The same provision likewise
provides that the persons criminally liable for illegal recruitment are the principals, accomplices and
accessories. Just the same, therefore, appellant can be held liable as a principal by direct
participation since she personally undertook the recruitment of private complainants without a license
or authority to do so.
Darwin v CA, GR 125044
Facts:
Imelda Darvin was convicted of simple illegal recruitment under the Labor Code by the RTC. It
stemmed from a complaint of one Macaria Toledo who was convinced by the petitioner that she has
the authority to recruit workers for abroad and can facilitate the necessary papers in connection
thereof. In view of this promise, Macaria gave her P150,000 supposedly intended for US Visa and
air fare.
On appeal, the CA affirmed the decision of the trial court in toto, hence this petition.
Issue:
Whether or not appellant is guilty beyond reasonable doubt of illegal recruitment.
Held: NO
Art. 13 of the Labor Code provides the definition of recruitment and placement as:
...b.) 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 reason 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.
Art. 38 of the Labor Code provides:
a.)Any recruitment activities, including the prohibited practices enumerated under Article 34 of the
Labor Code, to be undertaken by non-licensees or non-holders of authority shall be deemed illegal
and punishable under Article 39 of the Labor Code.
Applied to the present case, to uphold the conviction of accused-appellant, two elements need to be
shown: (1) the person charged with the crime must have undertaken recruitment activities: and (2)
the said person does not have a license or authority to do so.
In the case, the Court found no sufficient evidence to prove that accused-appellant offered a job to
private respondent. It is not clear that accused gave the impression that she was capable of providing
the private respondent work abroad. What is established, however, is that the private respondent
gave accused-appellant P150,000.
By themselves, procuring a passport, airline tickets and foreign visa for another individual, without
more, can hardly qualify as recruitment activities. Aside from the testimony of private respondent,
there is nothing to show that appellant engaged in recruitment activities.
At best, the evidence proffered by the prosecution only goes so far as to create a suspicion that
appellant probably perpetrated the crime charged. But suspicion alone is insufficient, the required
quantum of evidence being proof beyond reasonable doubt. When the People’s evidence fail to
indubitably prove the accused’s authorship of the crime of which he stand accused, then it is the
Court’s duty, and the accused’s right, to proclaim his innocence.
WHEREFORE, the appeal is hereby granted and the decision of the CA is REVERSED and SET
ASIDE. Appellant is hereby ACQUITTED on ground of reasonably doubt. The accused is ordered
immediately released from her confinement.
Edgardo Panganiban v. Tara Trading Ship Management, GR 187032

FACTS:
In November 2005, petitioner was hired by respondent Tara Trading Ship management, Inc. (Tara),
in behalf of its foreign principal, respondent Shinline SDN BHD (Shinline) to work as an Oiler on
board MV “Thailine 5”[6] with a monthly salary of US$409.00.
Sometime in April 2006, petitioner began exhibiting signs of mental instability. He was repatriated on
May 24, 2006 for further medical evaluation and management.[7]
Petitioner was referred by respondents to the Metropolitan Medical Center where he was diagnosed
to be suffering from “brief psychotic disorder.”[8]
Despite his supposed total and permanent disability and despite repeated demands for payment of
disability compensation, respondents allegedly failed and refused to comply with their contractual
obligations.[9]
Hence, petitioner filed a Complaint against respondents praying for the payment of US$60,000.00
as total and permanent disability benefits, reimbursement of medical and hospital expenses, moral
and exemplary damages, and attorney’s fees equivalent to 10% of total claims.
Respondents, on the other hand, maintained that petitioner requested for an early repatriation and
arrived at the point of hire on May 24, 2006; that while on board the vessel, he confided to a co-
worker, Henry Santos, that his eating and sleeping disorders were due to some family problems; that
Capt. Zhao, the master of the vessel, even asked him if he wanted to see a doctor; that he initially
declined; that on May 22, 2006, petitioner approached Capt. Zhao and requested for a vacation and
early repatriation; that the said request was granted; that upon arrival, petitioner was subjected to a
thorough psychiatric evaluation; and that after a series of check-ups, it was concluded that his illness
did not appear to be work-related. Respondents argued that petitioner was not entitled to full and
permanent disability benefits under the Philippine Overseas Employment Administration Standard
Employment Contract (POEA SEC) because there was no declaration from the company-designated
physician that he was permanently and totally disabled and that the claim for damages was without
basis as no bad faith can be attributed to them.
On September 17, 2007, the LA ruled in favor of the petitioner. Respondents appealed to the NLRC.
On March 25, 2008, the NLRC affirmed the decision of the LA.
Complainant is thus considered to be totally and permanently disabled as he is no longer capable of
earning wages in the same kind of work, or work of similar nature that he was trained for or
accustomed to perform. He is now incapacitated to work, hence, his earning capacity is impaired.
Jurisprudence has declared that disability should not be understood more on its medical significance
but on loss of earning capacity.
On October 29, 2008, the CA reversed the decision of the NLRC.
It is basic that a contract is the law between the parties. Obligations arising from contracts have the
force of law between the contracting parties and should be complied with in good faith. Unless the
stipulations in a contract are contrary to law, morals, good customs, public order or public policy, the
same are binding as between the parties.
A seafarer is a contractual, not a regular employee, and his employment is contractually fixed for a
certain period of time. His employment, including claims for death or illness compensations, is
governed by the contract he signs every time he is hired, and is not rooted from the provisions of the
Labor Code.
In order to claim disability benefits under the Standard Employment Contract, it is the company-
designated physician who must proclaim that the seaman suffered a permanent disability, whether
total or partial, due to either injury or illness, during the term of the latters employment. It is a cardinal
rule in the interpretation of contracts that if the terms of a contract are clear and leave no doubt upon
the intention of the contracting parties, the literal meaning of its stipulation shall control. There is no
ambiguity in the wording of the Standard Employment Contract the only qualification prescribed for
the physician entrusted with the task of assessing the seamans disability is that he be company-
designated.
ISSUE: Whether Edgardo Panganiban is entitled to disability benefits.
RULING: NO. The Court denies the petition.
It need not be overemphasized that in the absence of substantial evidence, working conditions
cannot be accepted to have caused or at least increased the risk of contracting the disease, in this
case, brief psychotic disorder. Substantial evidence is more than a mere scintilla. The evidence
must be real and substantial, and not merely apparent; for the duty to prove work-causation or work-
aggravation imposed by law is real and not merely apparent.
Even in case of death of a seafarer, the grant of benefits in favor of the heirs of the deceased is not
automatic. As in the case of Rivera v. Wallem Maritime Services, Inc.,[25] without a post-medical
examination or its equivalent to show that the disease for which the seaman died was contracted
during his employment or that his working conditions increased the risk of contracting the ailment,
the employer/s cannot be made liable for death compensation.
In this case, the findings of respondents designated physician that petitioner has been suffering from
brief psychotic disorder and that it is not work-related must be respected.
Lastly, it appears premature at this time to consider petitioner’s disability as permanent and total
because the severity of his ailment has not been established with finality to render him already
incapable of performing the work of a seafarer. In fact, the medical expert termed his condition as
brief psychotic disorder. The Court also takes note, as the CA correctly did, that petitioner did not
finish his treatment with the company-designated physician, hence, there is no final evaluation yet
on petitioner.
People v. Lapiz, 391 SCRA 131
Facts:
Complainants are husband and wife, residents of Baguio City, selling fish and vegetables in a rented
stall in said City. They closed shop for reasons of attending to the demands of the promised jobs for
them in Japan. Both categorically identified Jane Am-amlao (or Jean Am-amlaw), their co-vendor in
Baguio City Market, as the person who approached them and assured them that she knew a legal
recruiter, an ex-POEA employee, who had the capacity to send them both abroad. Jane Am-amlaw
(or Am-amlaw for brevity) recruited complainants and personally accompanied them on March 24,
1998 to meet the person she earlier referred to, or Aida de Leon (or Alma de Leon), in the latters
apartment at No. 7280 J. Victor St., Pio del Pilar, Makati.
Angel Mateo was introduced as their contact person for Japan-bound workers. In said meeting,
Mateo represented himself as having the capacity to send people abroad and showed complainants
various documents to convince them of his legitimate recruitment operations. Complainants handed
Mateo P15,000.00 which Mateo required them to pay for their processing fees.
Complainants were able to positively identify Mateo in court as the contact person of de Leon and
who collected from them, from March 24, 1998 to June 23, 1998, sums of money for the alleged
necessary expenses relative to the promised jobs awaiting them in Japan in the total amount of
P158,600.00.Complainants likewise categorically identified Mateo as the same person whose
authorization was needed for the recovery of P40,000.00 of the P45,000.00 they gave Mateo who in
turn deposited it to Sampaguita Travel Agency under his own name.
Complainants likewise positively identified appellant Vicenta Vicky Lapis (Lapis for brevity) in Court
as the person introduced to them by Mateo as his wife on April 29, 1998 at Maxs Restaurant in
Makati when Lapis required complainants to pay P49,240.00 for their plane tickets and travel taxes.
Lapis is, in fact, only the live-in partner of Mateo. Lapis told complainants that she was helping to
speed up the process[ing] of their papers relative to the promised jobs awaiting them in Japan.
Complainants met again Lapis, who was with Mateo on May 2, 1998 at the Makati Restaurant, annex
of Maxs Restaurant, when Lapis assured them that Mateo could really send them abroad and even
wrote in a piece of paper appellants address at Phase I, Lot 14, Blk 13 Mary Cris Subd., Imus, Cavite.
On May 17, 1998, complainants once more met Lapis who was with Mateo, de Leon and de Leons
husband in Baguio City at the house of Priscilla Marreos daughter. Both appellants updated
complainant as to the status of their paper and reiterated their promise that complainants would soon
be leaving for Japan, then collected from complainants unreceipted amount of P20,000.00.
Complainants met again with Lapis, who was again with Mateo, on May 19, 1998 at the Sampaguita
Travel Agency. Mateo extracted P45,000.00 from complainants and deposited it under his name. On
that occasion, Perpetua wanted to ask from the Sampaguita Travel Agencys employees where to
pay the P45,000.00 but failed to do so because Lapis took her attention away from asking while
Mateo asked Melchor to hand over to him said sum.
Priscilla Marreo is the sister of Melchor who loaned complainants part of the P158,000.00 which
appellants extracted from complainant[s]. Thus, she made herself present in most of the meetings
between complainants and appellants together with the two other accused where she witnessed the
assurances and promises made by appellants relative to complainants immediate departure for
Japan and their corresponding demands of sums of money. The testimony of Priscilla underscored
the testimony of complainants showing that Am-amlaw, de Leon, Lapis and Mateo indeed
corroborated and confederated in the commission of illegal recruitment.
The trial court held that the evidence for the prosecution sufficiently established the criminal liability
of appellants for the crimes charged.
Issues:
I The court a quo gravely erred in finding accused-appellants guilty beyond reasonable doubt of
violations of Republic Act No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995) committed
by a syndicate and Article 315 paragraph 2(a) of the Revised Penal Code.
II The court a quo gravely erred in finding accused-appellant Vicenta Medina Lapis guilty beyond
reasonable doubt of illegal recruitment and estafa.
III The court a quo gravely erred in finding accused-appellants guilty beyond reasonable doubt of
illegal recruitment committed by a syndicate.
IV The court a quo gravely erred in finding accused-appellants guilty beyond reasonable doubt of
the crime of estafa defined and penalized under Article 315 par. 2(a) of the Revised Penal Code as
amended.
Held:
First Issue: Illegal recruitment is committed when these two elements concur: (1) the offenders have
no valid license or authority required by law to enable them to lawfully engage in the recruitment and
placement of workers, and (2) the offenders undertake any activity within the meaning of recruitment
and placement defined in Article 13(b) or any prohibited practices enumerated in Article 34 of the
Labor Code.
Under Article 13(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. In the simplest
terms, illegal recruitment is committed by persons who, without authority from the government, give
the impression that they have the power to send workers abroad for employment purposes.
The case records reveal that appellants did in fact engage in recruitment and placement activities by
promising complainants employment in Japan. Undisputed is the fact that the former did not have
any valid authority or license to engage in recruitment and placement activities. Moreover, the pieces
of testimonial and documentary evidence presented by the prosecution clearly show that, in
consideration of their promise of foreign employment, they indeed received various amounts of
money from complainants totalling P158,600.
Where appellants made misrepresentations concerning their purported power and authority to recruit
for overseas employment, and in the process, collected from complainants various amounts in the
guise of placement fees, the former clearly committed acts constitutive of illegal recruitment. In fact,
this Court held that illegal recruiters need not even expressly represent themselves to the victims as
persons who have the ability to send workers abroad. It is enough that these recruiters give the
impression that they have the ability to enlist workers for job placement abroad in order to induce the
latter to tender payment of fees.
Section 6 of RA 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995,
provides that illegal recruitment shall be considered an offense involving economic sabotage when
it is committed by a syndicate or carried out by a group of three or more persons conspiring and
confederating with one another.
In several cases, illegal recruitment has been deemed committed by a syndicate if carried out by a
group of three or more persons conspiring and/or confederating with each other in carrying out any
unlawful or illegal transaction, enterprise or scheme defined under Article 38(b) of the Labor Code.
In this case, it cannot be denied that all four (4) accused -- Jane Am-amlaw, Aida de Leon, Angel
Mateo and Vicenta Medina Lapis participated in a network of deception. Verily, the active
involvement of each in the various phases of the recruitment scam formed part of a series of
machinations. Their scheme was to lure complainants to Manila and to divest them of their hard-
earned money on the pretext of guaranteed employment abroad. The prosecution evidence shows
that complainants were convinced by Jane Am-amlaw to go to Manila to meet someone who could
find employment for them abroad. Upon reaching the city, they were introduced to Aida de Leon and
Angel Mateo; Mateo claimed to have the contacts, the resources and the capacity to employ them
overseas. After that initial meeting, complainants made several payments to him, supposedly for the
processing requirements of their deployment to Japan. Later on, they met Vicenta Medina Lapis who
volunteered her assistance in the processing of their employment papers and assured them that
Mateo could easily send them abroad.
The individual actuations of all four (4) accused were directed at a singular criminal purpose -- to
delude complainants into believing that they would be employed abroad. The nature and the extent
of the formers interactions among themselves as well as with the latter clearly show unity of action
towards a common undertaking. Certainly, complainants would not have gone to Manila to meet Aida
de Leon and Angel Mateo without the prodding of Am-amlaw. They would not have made various
payments for their travel and employment papers without the fraudulent representations of Mateo
De Leon. Moreover, they would not have complied with further instructions and demands of Mateo
without the repeated assurances made by Lapis.
Even assuming that the individual acts of the accused were not necessarily indispensable to the
commission of the offense, conspiracy would have still been present. Their actions, when viewed in
relation to one another, showed a unity of purpose towards a common criminal enterprise and a
concurrence in their resolve to commit it.
In People v. Gamboa, the Court had occasion to discuss the nature of conspiracy in the context of
illegal recruitment as follows:
Conspiracy to defraud aspiring overseas contract workers was evident from the acts of the
malefactors whose conduct before, during and after the commission of the crime clearly indicated
that they were one in purpose and united in execution. Direct proof of previous agreement to commit
a crime is not necessary as it may be deduced from the mode and manner in which the offense was
perpetrated or inferred from the acts of the accused pointing to a joint purpose and design, concerted
action and community of interest. As such, all the accused, including accused-appellant, are equally
guilty of the crime of illegal recruitment since in a conspiracy the act of one is the act of all. (Emphasis
supplied)
To establish conspiracy, it is not essential that there be actual proof that all the conspirators took a
direct part in every act. It is sufficient that they acted in concert pursuant to the same objective.
Conspiracy is present when one concurs with the criminal design of another, indicated by the
performance of an overt act leading to the crime committed.
In a number of cases, this Court has affirmed the trial courts finding that victims of illegal recruitment
are entitled to legal interest on the amount to be recovered as indemnity, from the time of the filing
of the information until fully paid.

Second Issue: Estafa is committed by any person who defrauds another by using a fictitious name;
or by falsely pretending to possess power, influence, qualifications, property, credit, agency,
business; by imaginary transactions or similar forms of deceit executed prior to or simultaneous with
the fraud. Moreover, these false pretenses should have been the very reason that motivated
complainants to deliver property or pay money to the perpetrators of the fraud. While appellants insist
that these constitutive elements of the crime were not sufficiently shown by the prosecution, the
records of the case prove otherwise.
During almost all of their meetings, complainants paid various amounts of money to appellants only
after hearing the feigned assurances proffered by the latter regarding the formers employment
prospects in Japan. Even as early as their first meeting in the house of Aida de Leon, the payment
by complainants of the initial amount of P15,000 was immediately preceded by an onslaught of
promises. These enticing, albeit empty, promises were made by Angel Mateo, who even showed
them documents purportedly evincing his connections with various foreign companies. Equally
important, they relied on such misrepresentations, which convinced them to pay the initial amount
as processing fees.
False statements that convinced complainants of the authenticity of the transaction were made prior
to their payment of the various fees. Indubitably, the requirement that the fraudulent statements
should have been made prior to or simultaneous with the actual payment was satisfied.
Verily, by their acts of falsely representing themselves as persons who had the power and the
capacity to recruit workers for abroad, appellants induced complainants to pay the required fees.
There is estafa if, through insidious words and machinations, appellants deluded complainants into
believing that, for a fee, the latter would be provided overseas jobs.
Third Issue: Liability as Co-conspirator
Lapis not only knew of the conspiracy, but she also offered her assistance in the processing of the
employment requirements of complainants. Contrary to her claim that she was merely an unknowing
spectator in the underhanded transactions, she deliberately inveigled them into pursuing the promise
of foreign employment.
People v. Logan, 361 SCRA 581
FACTS: The appellant, Mercy Logan y Calderon, was charged with three (3) counts of the crime of
estafa, as defined and penalized under Article 315 of the Revised Penal Code, in three (3) separate
information which, save for the names of the private complainants and amounts involved.
On the other hand, the information charging the appellant Mercy Logan y Calderon with the crime of
illegal recruitment in large scale, under Article 38(b) in relation to Article 39(a) of the Labor Code of
the Philippines, without first securing the required license or authority from the Department of Labor
and Employment.
1. Rodrigo Acorda -------P65,000.00
2. Orlando Velasco -------P145,000.00
3. Florante Casia ---------P100,000.00
Upon being arraigned on October 1, 1996, the appellant, assisted by counsel of her choice, entered
separate pleas of "Not guilty" to each of the Informations in the instant criminal cases. Thereafter,
joint trial on the merits ensued.
Appellant Mercy Logan denied that she swindled the private complainants of their money nor
promised them any overseas employment. Appellant disclosed that she maintained a dance studio
at 180-D Monterey Street, 15th Avenue, Cubao, Quezon City that was available only to females, and
that a certain Gloria de Leon used to refer women to the appellant who wished to practice dancing
in her studio. Appellant claimed that the private complainants merely vented their anger on her after
Gloria de Leon whose services were earlier engaged by them, absconded without fulfilling her
undertaking to provide them overseas employment for a fee.
ISSUE: Whether Logan is guilty of large scale illegal recruitment and estafa.
RULING: YES
The essential elements of the crime of illegal recruitment in large scale which is punishable with
life imprisonment and a fine of One Hundred Thousand Pesos (P100,000.00) under Article 39(a) of
the Labor Code, as amended, are as follows: 1) the accused engages in the recruitment and
placement of workers, as defined under Article 13(b)23 or in any prohibited activities under Article
34 of the Labor Code; 2) the accused has not complied with the guidelines issued by the Secretary
of Labor and Employment, particularly with respect to the securing of a license or an authority to
recruit and deploy workers, whether locally or overseas; and 3) the accused commits the same
against three (3) or more persons, individually or as a group.24
It has been established that the three (3) private complainants met with the appellant on separate
occasions in her office at 180-D Monterey Street, 15th Avenue, Cubao, Quezon City to apply for
overseas employment. On the said occasions, she promised them employment either as
construction workers or piggery helpers in Japan for a fee. Despite subsequent payment of her
required fees, she failed to secure for the three (3) private complainants any overseas employment.
Clearly, the appellant was engaged in large scale recruitment and placement activities which were
illegal for the reason that she had no license nor authority from the Secretary of Labor and
Employment.
The elements of the above mode of committing estafa are: a) that there must be a false pretense,
fraudulent act or fraudulent means; b) that such false pretense, fraudulent act or fraudulent means
must be made or executed prior to or simultaneously with the commission of the fraud; c) that the
offended party must have relied on the false pretense, fraudulent act or fraudulent means, i.e., he
was induced to part with his money or property because of the false pretense, fraudulent act or
fraudulent means; and, d) that as a result thereof, the offended party suffered damage.31 The acts
of the appellant of deliberately misrepresenting herself to the private complainants as having the
necessary authority or license to recruit applicants for overseas employment so that she could as
she did collect money from them allegedly for processing fees and travel documents only to renege
on her promise to get them overseas employment and for failure to return the money she collected
from the private complainants, despite several demands, clearly amount to estafa punishable under
Article 315, paragraph 2(a), of the Revised Penal Code.
Consequently, in the light of these established facts, the appellant is guilty beyond reasonable doubt
of the crimes of three (3) counts of estafa and one count of illegal recruitment in large scale. Under
Article 39(a) of the Labor Code, the appellant should suffer, in the case of illegal recruitment in large
scale, the penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P100,000.00).
In addition, she is liable to indemnify the private complainants in the amounts which they respectively
paid to her.
People v. Chua, GR 128280
FACTS:
Accused Alicia Chua has appealed from the decision[1] of the Regional Trial Court, Manila, Branch
V finding her guilty beyond reasonable doubt of illegal recruitment committed in large scale and
sentencing her to life imprisonment and a fine of P100,000.00, and eight (8) counts of estafa
sentencing her to various penalties therefor.
In September 1992, accused Chua received a facsimile message from Harmony Electronics
Company in Taiwan.[14] The message was written in Chinese characters except for the names of
To-ong Zenon Tumenlaco and Tercenio Domingo Fornaliza. Harmony asked her to call up To-ong
and Tercenio and tell them that they were needed in Taiwan. Accused Chua contacted To-ong and
told him the message.[15]
In October 1992, To-ong and Tercenio went to the office of accused Chua, and the latter told them
that she could send them to Taiwan upon payment of a placement fee of P15,000.00 each. She also
asked them to secure NBI clearances and medical certificates.[16] On October 29, 1992, Tercenio,
together with private complainant Lonito Baluis, went back to the office of accused Chua and
submitted the requirements. Tercenio and Lonito Baluis paid P15,000.00 each for which they were
issued a receipt bearing the name Man Tai Trading and General Services with accused Chuas
signature.[17]
Accused Chua assured Tercenio and Lonito Baluis that they would be able to leave for Taiwan soon.
Three months passed, but they were not deployed. Tercenio became apprehensive and told accused
Chua that he would withdraw his application and ask for refund of the placement fee. Accused Chua
repeatedly promised that she would give back the money to him, but she never did. After a few more
months, Tercenio could not anymore locate accused Chua.[18]
Accused Chua used the same modus operandi on the other private complainants. After requiring
each complainant to pay a placement fee of P15,000.00 each, to secure NBI clearances and to
undergo medical examinations, she would go in hiding.
In time, complainants inquired from the Philippine Overseas Employment Agency (POEA) about
accused Chuas activities. The POEA issued a certification that accused Chua was not licensed to
recruit persons/workers for overseas employment.
In her brief, accused-appellant anchors her defense on the approval of her application for a license
to recruit on April 13, 1993, which, according to her, rendered her a genuine holder of authority. She
also claimed that she was denied her constitutional right to compulsory process.[22]
On the other hand, the Solicitor General contends that appellant was a non-licensee and had no
authority to recruit anyone for overseas employment, and that she failed to proffer any compelling
reason to justify her request for the production of POEA records.
ISSUE: Whether Chua is guilty of Illegal Recruitment and Estafa.
RULING: YES
Appellant interposes the defense that the approval of her application for a service contractors
authority on April 13, 1993 should be given a retroactive effect as to make all her previous recruitment
activities valid. However, this issue was not raised in the trial court. She cannot now be allowed to
raise it for the first time on appeal without offending basic rules of fair play, justice and due process.
The records show that the license was not issued due to her failure to comply with post-licensing
requirements.[25] It is the issuance of the license which makes the holder thereof authorized to
perform recruitment activities. The law specifically provides that every license shall be valid for at
least two (2) years from the date of issuance unless sooner cancelled or revoked by the Secretary.
WHEREFORE, the Court AFFIRMS the appealed decision in toto, with costs against appellant.
People v. LEONIDA MERIS y PADILLA, GR 11745-50 & 7447
FACTS OF THE CASE
Leonida Meris was convicted of six (6) counts of estafa and one count of illegal recruitment for
defrauding the six (6) complainants, Meris’ townmates in Pampanga and relatives in large scale in
the amount of P30,000.00 each for five complainants and one complainant for P20,000.00 for alleged
overseas employment which did not materialize.
Meris, who voluntarily appeared in court, pleaded not guilty to the charges and actively participated
in her defense. She interposed the defense of denial claiming that she merely introduced
complainants to Julie Micua, her recruiter in Manila, with whom complainants transacted with for their
employment abroad upon payment of placement fees denied having represented herself as having
the capacity to deploy workers abroad.
Evidence for the prosecution, however, disclosed, that complainants would not have known Julie
Micua were if not for appellant who even accompanied them to Manila to see Julie Micua. It was
appellant and her husband who received almost all the payments of complainants and who issued
receipts signed by Julie Micua. Certification from the POEA showed that Meris and Julie Micua were
not licensed to recruit workers for overseas employment.
In this appeal, appellant assailed the lack of jurisdiction of the trial court over his person because of
the warrantless arrest and its findings of fact.
ISSUE: Whether or not Meris committed the crimes large-scale illegal recruitment and estafa.
RULING Yes.
RATIO DECIDENDI
The prosecution undoubtedly proved that Meris, without license or authority, engaged in recruitment
and placement activities. This was done in collaboration with Julie Micua, when they promised
complainants’ employment in Hong Kong. Art. 13, par. (b) of the Labor Code defines recruitment and
placement as “any act of canvassing enlisting, contracting, transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services, promising or advertising for employment, locally
or abroad, whether for profit or not; 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.”
Although Meris was not an employee of the alleged illegal recruiter Julie Micua, the evidence show
that she was the one who approached complainants and prodded them to seek employment abroad.
It was through her that they met Julia Micua. This is clearly an act of referral. Worse, accused-
appellant declared that she was capable of placing them in jobs overseas. Suffice it to say that
complainants’ recruitment would not have been consummated were it not for the direct participation
of accused-appellant in the recruitment process.
Millares v. NLRC, 385 SCRA 306
Facts
Douglas Millares was employed by ESSO International through its local manning agency, Trans-
Global, in 1968 as a machinist. In 1975, he was promoted as Chief Engineer which position he
occupied until he opted to retire in 1989.
In 1989, petitioner Millares filed a leave of absence and applied for optional retirement plan under
the Consecutive Enlistment Incentive Plan (CEIP) considering that he had already rendered more
than twenty years of continuous service.
Esso International denied Millares’ request for optional retirement on the following grounds, to wit:
(1) he was employed on a contractual basis; (2) his contract of enlistment (COE) did not provide for
retirement before the age of sixty years; and (3) he did not comply with the requirement for claiming
benefits under the CEIP, i.e., to submit a written advice to the company of his intention to terminate
his employment within thirty days from his last disembarkation date.
Subsequently, after failing to return to work after the expiration of his leave of absence, Millares was
dropped from the roster of crew members effective September 1, 1989.
On the other hand, petitioner Lagda was employed by Esso International as wiper/oiler in 1969. He
was promoted as Chief Engineer in 1980, a position he continued to occupy until his last COE expired
in 1989.
In 1989, Lagda likewise filed a leave of absence and applied to avail of the optional early retirement
plan in view of his twenty years continuous service in the company.
Trans-global similarly denied Lagda’s request for availment of the optional early retirement scheme
on the same grounds upon which Millares request was denied.
Unable to return for contractual sea service after his leave of absence expire, Lagda was also
dropped from the roster of crew members effective September 1, 1989.
Millares and Lagda filed a complaint-affidavit for illegal dismissal and non-payment of employee
benefits against private respondents Esso International and Trans-Global before the POEA.
The POEA rendered a decision dismissing the complaint for lack of merit. On appeal, NLRC affirmed
the decision of the POEA dismissing the complaint.
NLRC rationcinated that Millares and Lagda, as seamen and overseas contract workers are not
covered by the term “regular employment” as defined under Article 280 of the Labor Code. The
POEA, which is tasked with protecting the rights of the Filipino workers for overseas employment to
fair and equitable recruitment and employment practices and to ensure their welfare, prescribes a
standard employment contract for seamen on board ocean-going vessels for a fixed period but in no
case to exceed twelve months
. from the company, petitioner requested that he be given the incentive bonus plus the additional
Issue: Whether or not seafarers are considered regular employees under Article 280 of the Labor
Code.
Ruling: NO.
It is for the mutual interest of both the seafarer and the employer why the employment status
must be contractual only or for a certain period of time.
Quoting Brent School Inc. v. Zamora, 1990, and Pablo Coyoca v. NLRC, 1995, the Supreme Court
ruled that seafarers are considered contractual employees. They can not be considered as regular
employees under Article 280 of the Labor Code. Their employment is governed by the contracts they
sign everytime they are rehired and their employment is terminated when the contract expires. Their
employment is contractually fixed for a certain period of time. They fall under the exception of Article
280 whose employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of engagement of the employee or where the
work or services to be performed is seasonal in nature and the employment is for the duration of the
season.
As ruled in Brent case, there are certain forms of employment which also require the performance
of usual and desirable functions and which exceed one year but do not necessarily attain regular
employment status under Article 280. Overseas workers including seafarers fall under this type of
employment which are governed by the mutual agreements of the parties.
And as stated in the Coyoca case, Filipino seamen are governed by the Rules and Regulations of
the POEA. The Standard Employment Contract governing the employment of All Filipino seamen on
Board Ocean-Going Vessels of the POEA, particularly in Part I, Sec. C specifically provides that the
contract of seamen shall be for a fixed period. And in no case should the contract of seamen be
longer than 12 months.
Moreover, the Court held that it is an accepted maritime industry practice that employment of
seafarers are for a fixed period only. Constrained by the nature of their employment which is quite
peculiar and unique in itself, it is for the mutual interest of both the seafarer and the employer why
the employment status must be contractual only or for a certain period of time. Seafarers spend most
of their time at sea and understandably, they can not stay for a long and an indefinite period of time
at sea. Limited access to shore society during the employment will have an adverse impact on the
seafarer. The national, cultural and lingual diversity among the crew during the COE is a reality that
necessitates the limitation of its period.
Gu-Miro v. Adorable, GR 160952
MARCIAL GU-MIRO, petitioner, vs. ROLANDO C. ADORABLE and BERGESEN D.Y. MANILA
FACTS:
Petitioner Marcial Gu-Miro was formerly employed as a Radio Officer of respondent Bergesen D.Y.
Philippines, which acted for and in behalf of its principal Bergesen D.Y. ASA, on board its different
vessels. A Certification dated April 14, 1998 was issued by Bergesen D.Y. Philippines, Inc.s
President and General Manager Rolando C. Adorable showing that petitioner served in the company
on board its vessels starting 1988.[2] The case before us involves an employment contract signed
by petitioner to commence service on board the M/V HEROS, which stipulated a monthly salary of
US$929.00 for a period of eight (8) months. It also provided for overtime pay of US$495.00 per month
and vacation leave with pay in the amount of US$201.00 per month equivalent to six and a half
days.[3] The contract of employment was signed on March 18, 1996 and petitioner commenced work
on April 15, 1996.
Record shows that respondent company traditionally gives an incentive bonus termed as Re-
employment Bonus to employees who decide to rejoin the company after the expiration of their
employment contracts. After the expiration of petitioners contract in December 1996, the same was
renewed by respondent company until September 9, 1997, as stated in the Certification issued by
Bergesen D.Y. Philippines, Inc. In September 1997, petitioners services were terminated due to the
installation of labor saving devices which made his services redundant. Upon his forced separation
allowances he was entitled to. Respondent company, however, refused to accede to his request.
Thus, in June 1999 petitioner filed a complaint with the NLRC, Regional Arbitration Branch of Cebu,
for payment of the incentive bonus from April 15, 1996 to September 15, 1997, 10% of the basic
wage, unclaimed payment for incentive bonus from September 1993 to June 1994, non-remittance
of provident fund from July 1992 to June 1994, moral and exemplary damages as well as attorneys
fees. On December 29, 1999, the complaint was provisionally dismissed by the NLRC due to the
failure of petitioner to file the required position paper. Petitioner re-filed the complaint on March 2,
2000 accordingly. Labor Arbiter dismissed the case for lack of merit.
Petitioner appealed to the NLRC, which set aside the Labor Arbiters decision and ordered
respondents to pay petitioner the amount of US$594.56.
ISSUE: Whether the petitioner is a regular employee and should be awarded backwages and
separation pay.
RULING: NO
The second and third grounds raised in this petition are related, based on petitioners allegation that
he should be considered a regular employee of respondent company, having been employed
onboard the latters different vessels for the span of 10 years. Hence, petitioner claims that he is
entitled to backwages or at the very least separation pay, invoking our decision in Millares, et al. v.
NLRC[12] where it was held that the repeated re-hiring of a Chief Engineer of a shipping company
for 20 years is sufficient evidence of the necessity and indispensability of the employees service to
the employers business or trade. Hence, applying the express provision of Article 280 of the Labor
Code,[13] such an employee should be considered as a regular employee. Petitioners argument is
not well-taken.
Clearly, petitioner cannot be considered as a regular employee notwithstanding that the work he
performs is necessary and desirable in the business of respondent company. As expounded in the
above-mentioned Millares Resolution, an exception is made in the situation of seafarers. The
exigencies of their work necessitates that they be employed on a contractual basis.
Thus, even with the continued re-hiring by respondent company of petitioner to serve as Radio
Officer onboard Bergesens different vessels, this should be interpreted not as a basis for
regularization but rather a series of contract renewals sanctioned under the doctrine set down by the
second Millares case. If at all, petitioner was preferred because of practical considerations namely,
his experience and qualifications. However, this does not alter the status of his employment from
being contractual.
With respect to the claim for backwages and separation pay, it is now well-settled that the award of
backwages and separation pay in lieu of reinstatement are reliefs that are awarded to an employee
who is unjustly dismissed.[16] In the instant case, petitioner was separated from his employment due
to the termination of an impliedly renewed contract with respondent company. Hence, there is no
illegal or unjust dismissal.
Petitioners claim that he be declared a regular employee and awarded backwages and separation
pay is DENIED for lack of merit.
Rovago v. Esso Eastern Maritime LTD, GR 158324
FACTS: The respondent Esso is a foreign company based in Singapore and engaged in maritime
commerce. It is represented in the Philippines by its manning agent and co-respondent Trans-Global,
a corporation organized under the Philippine laws. Roberto Ravago was hired by Trans-Global to
work as a seaman on board various Esso vessels. On February 13, 1970, Ravago commenced his
duty as S/N wiper on board the Esso Bataan under a contract that lasted until February 10, 1971.
Thereafter, he was assigned to work in different Esso vessels where he was designated diverse
tasks, such as oiler, then assistant engineer. He was employed under a total of 34 separate and
unconnected contracts, each for a fixed period, by three different companies, namely, Esso Tankers,
Inc. (ETI), EEM and Esso International Shipping (Bahamas) Co., Ltd. (EIS), Singapore Branch.
Ravago worked with Esso vessels until August 22, 1992, a period spanning more than 22 years.
Shortly after completing his latest contract with Esso, Ravago was granted a vacation leave with pay.
Preparatory to his embarkation under a new contract, he was ordered to report for a Medical Pre-
Employment Examination, which, according to the records, he passed. He, likewise, attended a Pre-
Departure Orientation Seminar conducted by the Capt. I.P. Estaniel Training Center, a division of
Trans-Global.
One night, a stray bullet hit Ravago on the left leg while he was waiting for a bus ride in Cubao,
Quezon City. He fractured his left proximal tibia and was hospitalized at the Philippine Orthopedic
Hospital. Ravago’s wife, Lolita, informed the petitioners of the incident for purposes of availing
medical benefits. As a result of his injury, Ravago’s doctor opined that he would not be able to cope
with the job of a seaman and suggested that he be given a desk job. For this reason, the company
physician found him to have lost his dexterity, making him unfit to work once again as a seaman.
Consequently, instead of rehiring Ravago, Esso paid him his Career Employment Incentive Plan
(CEIP) as of and his final tax refund. However, Ravago filed a complaint for illegal dismissal with
prayer for reinstatement, backwages, damages and attorney’s fees against Trans-Global and Esso
with the POEA Adjudication Office.
Respondents denied that Ravago was dismissed without notice and just cause. Rather, his services
were no longer engaged in view of the disability he suffered which rendered him unfit to work as a
seafarer. This fact was further validated by the company doctor and Ravago’s attending physician.
They averred that Ravago was a contractual employee and was hired under 34 separate contracts
by different companies.
Ravago insisted that he was fit to resume pre-injury activities and that he was not a mere contractual
employee because the respondents regularly and continuously rehired him for 23 years and, for his
continuous service, was awarded a CEIP payment upon his termination from employment.
ISSUE: Whether or not petitioner Ravago is a regular employee of respondent Esso.
HELD: Petition is denied.
The SC held that seafarers are contractual, not regular, employees. Seamen and overseas contract
workers are not covered by the term “regular employment” as defined in Article 280 of the Labor
Code.
It is clear from the foregoing that seafarers are contractual employees whose terms of employment
are fixed for a certain period of time. A fixed term is an essential and natural appurtenance of
seamens employment contracts to which, whatever the nature of the engagement, the concept of
regular employment under Article 280 of the Labor Code does not find application. The contract
entered into by a seafarer with his employer sets in detail the nature of his job, the amount of his
wage and, foremost, the duration of his employment. Only a satisfactory showing that both parties
dealt with each other on more or less equal terms with no dominance exercised by the employer
over the seafarer is necessary to sustain the validity of the employment contract. In the absence of
duress, as it is in this case, the contract constitutes the law between the parties.
Clearly, petitioner cannot be considered as a regular employee notwithstanding that the work he
performs is necessary and desirable in the business of respondent company. As expounded in the
above-mentioned Millares Resolution, an exception is made in the situation of seafarers. The
exigencies of their work necessitates that they be employed on a contractual basis.
Thus, even with the continued re-hiring by respondent company of petitioner to serve as Radio
Officer onboard Bergesens different vessels, this should be interpreted not as a basis for
regularization but rather a series of contract renewals sanctioned under the doctrine set down by the
second Millares case. If at all, petitioner was preferred because of practical considerations namely,
his experience and qualifications. However, this does not alter the status of his employment from
being contractual.
OSM Shipping Phils, Inc v. NLRC, GR 138193
Facts:
 A complaint for illegal dismissal and non-payment of salaries, overtime pay and vacation pay
was filed by Fermin Guerrero against OSM Shipping Phils. Guerrero was hired by petitioner, in
behalf of its principal Phil. Carrier Shipping Agency (PS-SLC) to board its vessel MV Princess
Hoa as Master Mariner for a contract of 10 months.
 He boarded the ship on July 21, 1994. Almost 7 months later, he was forced to disembark the
ship because he was never paid any compensation for his work since he boarded the ship and
as such, he could not even buy his basic necessities.
 OSM story:
o Concorde Pacific, the American company which owns the MV Princess Hoa,
appointed Phil. Carrier Shipping Agency Services Co. (PC-SASCO) as ship
manager, one of whose responsibilities was the selection or determination of
qualifications of Filipino Seamen.
o On the same date, OSM entered into a Crew Agreement with PC -SASCO for
the purpose of processing the documents of crew members of the vessel.
o The initial plan was to use the vessel for overseas trade. But Concorde changed
its plans for the vessel and decided to use it instead for coastwide trade, thus
the vessel never left the Philippines. It had the vessel converted to Philippine
registry by way of bareboat chartering it out to another entity named PS-SLC.
o To do this, Concorde, through its representative had to terminate is crew
agreement with PS-SASCO. Consequently, the latter terminated its crew
agreement with OSM.
o PS-SLC, the bareboat charterer, is now the disponent owner/employer of the
crew and is thus responsible for the payment of the complainant’s wages.
 Labor Arbiter rendered its decision in favor of Guerrero, ordering OSM and PS-SASCO to jointly
and severally pay Guerrero’s claims. NLRC affirmed with modification.
 OSM filed with the CA a petition to set aside the NLRC judgment. This was dismissed because
petitioner did not comply with the requirements of Sec. 3 Rule 46 of the ROC by failing to attach
a duplicate original or certified true copy of the LA’s decision. They only attached a mere machine
copy.
 Hence this petition.
Issue:
1) Procedural – WON CA was correct in dismissing the petition for failure to comply with the
said requirement? – NO
2) Substantive – WON OSM is jointly liable with PC-SASCO, as its agent. - YES
Held:
1) Sec. 3 rule 46 of the ROC requires that a duplicate original or certified true copy of only
the questioned decision should be attached to the petition and not all supporting papers.
Since the LA’s decision was not questioned ruling, a machine copy of it would suffice. The
duplicate original of the questioned decision of the NLRC should be attached, and this was
complied with. However, even if petitioner’s procedural contention was correct, this Court
still ruled for Guerrero on the merits. To remand this case to the CA would further delay
the recovery of wages.
2) On behalf of its principal, OSM does not deny hiring Guerrero as master mariner. Petitioner
was the legitimate manning agent of PS-SASCO and it was allowed to recruit, hire and
deploy seamen on board the vessel.
a. It argues that since Guerrero was never deployed overseas, his employment
contract became ineffective because its object was allegedly absent. –
 Employment contract like any contract is perfected upon the concurrence of
essential elements such as consent of the parties, object certain (subject matter
of the contract) and the cause of the obligation. Contrary to petitioner’s
contention, the object of the contract was the rendition of service by
Guerrero on board the vessel. The non-deployment overseas of the ship
did not affect the validity of the perfected employment contract.
b. OSM also contends that there was a novation of the contract when Concorde
decided to use the ship for coastwide trade. – A contract cannot be novated
solely by the will of one party.
3) Joint and solidary liability is meant to assure aggrieved workers of immediate and sufficient
payment of what is due them.
Decision of NLRC affirmed.
Trans Action Overseas Corporation v. Secretary of Labor, GR 109583
FACTS:
A group of individuals sought employment as domestic helpers and paid placement fee ranging from
P1,000 to P14,000 but Transaction Overseas Corporation failed to deploy them. Their demands for
refund proved unavailing, thus they were constrained to institute complaints against petitioner for
violation of Art. 32 and 34(a) of the Labor Code, as amended.
Petitioner denied having received the amounts allegedly collected from respondents and averred
that the company’s employee whose only duty was to pre-screen and interview applicants and was
not authorized to collect fees from the applicants. Petitioner maintains that it even warned
respondents not to give any money to unauthorized individuals.
ISSUES: Whether or not the Secretary of Labor and Employment has Jurisdiction to cancel or revoke
the license of a private fee-charging employment agency.
HELD: 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, and the National Seamen Board, or for violation of the provisions
of this and other applicable laws, General Orders and Letters of Instructions.
Yes, the power to suspend or cancel any license or authority to recruit employees for overseas
employment is vested upon the secretary of Labor and Employment under Art.35 of the Labor Code
as amended. This is in connection in the case of Eastern Assurance and Surety Corp. v. Secretary
of Labor. The Secretary of Labor has also the authority conferred by Section 36, not only to restrict
and regulate the recruitment and placement of activities of all agencies, but also to promulgate rules
and regulations to carry out the objectives and implement the provisions governing said activities.
In view of the Courts disposition on the matter, we rule that the power to suspend or cancel any
license or authority to recruit employees for overseas employment is concurrently vested with the
POEA and the Secretary of Labor.
As regards petitioners alternative argument that the non-filing of the 1987 POEA Schedule of
Penalties with the UP Law Center rendered it ineffective and, hence, cannot be utilized as basis for
penalizing them, we agree with Secretary Confesors explanation.
Under the circumstances, the license of the respondent agency was cancelled on the authority of
Article 35 of the Labor Code, as amended, and not pursuant to the 1987 POEA Revised Rules on
Schedule of Penalties. The instant petition is hereby DISMISSED.
Catan v. NLRC, GR 77279
MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY v.
THE NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION and FRANCISCO D. REYES
FACTS
Petitioner, a duly licensed recruitment agency, recruited private respondent to work in Saudi Arabia
as a steelman.
The term of the contract provides for 1 year and with automatic renewal. It was renewed when private
respondent was not repatriated by his Saudi employer but instead was assigned to work as a crusher
plant operator and crushed his ankle by the machine he was operating. After the expiration of the
renewed term, private respondent returned to the Philippines, had his ankle operated and incurred
expenses.
After, he returned to Saudi Arabia to resume his work and was repatriated. Upon his return, he had
his ankle treated for which he incurred further expenses.
On the basis of the provision in the employment contract that the employer shall compensate the
employee if he is injured or permanently disabled in the course of employment, private respondent
filed a claim, against petitioner with respondent Philippine Overseas Employment Administration.
The POEA rendered judgment in favor of private respondent.
On appeal, respondent NLRC affirmed the decision. Not satisfied with the resolution of the POEA,
petitioner instituted the instant special civil action for certiorari, alleging grave abuse of discretion on
the part of the NLRC.
ISSUE: Whether the employer should compensate the employee if he is injured or permanently
disabled in the course of employment. YES
RULING:
1. The court said that there is no merit in petitioner’s contention.
A private employment agency may be sued jointly and solidarily with its foreign principal for violations
of the recruitment agreement and the contracts of employment.
2. Even if indeed petitioner and the Saudi principal had already severed their agency agreement at
the time private respondent was injured, petitioner may still be sued for a violation of the employment
contract because no notice of the agency agreement's termination was given to the private
respondent:
3. Petitioner contends that even if it is liable for disability benefits, the NLRC gravely abused its
discretion when it affirmed the award of medical expenses when the said expenses were the
consequence of private respondent's negligence in returning to work in Saudi Arabia when he knew
that he was not yet medically fit to do so.
4. The court said that there’s No evidence introduced to prove that private respondent was not
medically fit to work when he returned to Saudi Arabia. Nowhere does it say it the medical certificate
issued by the camp doctor that he was not medically fit to work.
The petition is DISMISSED for lack of merits.
Royal Crown Internationale v. NLRC, GR 78085
FACTS:
In 1983, Royal Crown International, a private employment agency, recruited and deployed Virgilio P.
Nacionales for employment with ZAMEL as an architectural draftsman in Saudi Arabia. On February
13,1984, ZAMEL terminated the employment of private respondent on the ground that his
performance was below at par. For the next three successive days, the private respondent was
detained at his quarters and was not allowed to report to work until his exit papers were ready. On
February 16, 1984, he was made to board a plane bound for the Philippines.
Private respondent filed a complaint for illegal termination against petitioner and ZAMEL with POEA,
docketed as POEA Case no. (L) 84- 04-40.
Petitioner filed a motion for reconsideration but the NLRC denied it for lack of merit. Hence petitioner
filed a petition for review.
ISSUES:
1. Whether or not petitioner as a private employment agency may be held jointly and
severally liable with the foreign-based employer for any claim which may arise in
connection with the implementation of the employment contracts of the employees
recruited and deployed abroad.
2. Whether or not sufficient evidence was presented by petitioner to establish the termination
of private respondent’s employment for justified valid cause.
HELD:
1. Yes, for petitioner voluntarily assumed solidarity liability under various contractual
undertakings it submitted to the Bureau of Employment services. Under Sec.2 (e) Rule V Book 1,
Rules to Implement the Labor Code (1976), the requirement to operate a private employment agency
for overseas recruitment and placement is to submit a document whereby it assumed all
responsibilities for the proper use of its license and the implementation of the contracts of
employment with the workers it recruited and deployed for overseas employment. And also it is
required to file with the Bureau a formal appointment or agency contract executed by foreign-based
employer in its favor to recruit and hire personnel for the former, which contained a provision
empowering it to sue and be sued jointly and solidarity with foreign principle for any of the violations
of the recruitment and the contracts of employment. This is under Sec. 10 (a)(2), Rule V Book 1,
Rules to Implement the Labor Code (1976). It was required as well to post such cash and surety
bonds as determined by the Secretary of Labor to gurantee compliance with prescribed recruitment
procedure, rules and regulations and terms and conditions of employment as appropriate [Section 1
of Pres. Dec. 1412 (1978) amending Article 31 of the Labor Code].
It cannot be denied that the petitioner is an agent of ZAMEL, one of the documents
presented by the petitioner contains an admission that it is the representative and agent of ZAMEL.
2. No, the NLRC upheld the POEA finding that the petitioner’s evidence was insufficient to
prove termination of employment for just and valid cause. When termination cases involve a Filipino
worker recruited and deployed for overseas employment, the burden naturally devolves upon both
the foreign base employer and the employment agency or recruitment entity which recruited the
workers for the latter is not the only agent of the former, but is also solidarity liable with its foreign
principal for any claims or liabilities arising from the dismissal of the worker. (Art.277 of the Labor
Code).
People v. Calonzo, GR 115150-55
FACTS: Reydante Calonzo told Bernardo Miranda, Danilo de los Reyes, Elmer Clamor, Belarmino
Torregrosa, and Hazel de Paula that he can help them find work in Italy if they can pay him
P120,000.00 as processing fee. Although all of them were able to pay the processing fee that
Calonzo asked for, the latter was not able to send them to Italy. When they tried to verify from the
POEA whether Calonzo is licensed or authorized to recruit, they found out that Calonzo was not.
Thus, they charged Calonzo with Illegal Recruitment.
For his part, Calonzo admits being engaged in the consultancy business through his RAC Business
Agency but denies any involvement in recruitment activities. He denies knowing the complainants
except Danilo de los Reyes and Belarmino Torregrosa who once visited him in his office. While he
disclaims the receipts presented by the prosecution as official receipts of his RAC Business Agency
he admits that the signatures thereon were similar to his.
Accused-appellant in this appeal assails his conviction by the trial court. He claims that the court
below erred in disregarding the testimony of Nenita Mercado, an employee of the Philippine
Overseas Employment Administration (POEA), who categorically stated that their records indicated
that Calonzo never processed complainants' applications for employment abroad. He concludes
from that fact alone that he cannot be deemed to have engaged in the recruitment of workers for
employment abroad.
As regards the estafa cases, accused-appellant contends that the court a quo erred in giving
credence to the testimonies of prosecution witnesses considering that the amounts claimed to have
been collected by him did not correspond to the amounts indicated in the receipts presented by the
complaining witnesses.
ISSUE: Whether Calonzo is guilty of estafa and illegal recruitment.
RULING YES;
In the case before us, we are convinced that Calonzo defrauded complainants through deceit. They
were obviously misled into believing that he could provide them employment in Italy. As a result, the
five (5) complainants who desperately wanted to augment their income and improve their lot parted
with their hard-earned money. In Crim. Cases Nos. 98850, 98851, 98852 and 98854 the amount
defrauded of each complainant was P120,000.00. In consonance with Art. 315 of the Revised Penal
Code, the imposable penalty is prision correccional in its maximum period to prision mayor in its
minimum period.
The judgment of the court a quo finding accused-appellant REYDANTE CALONZO Y AMBROSIO
guilty of Illegal Recruitment in Large Scale and of Estafa, corresponding penalties imposed by the
court a quo is AFFIRMED.
Salazar v. Achacoso and Marquez, GR 81510
FACTS: This concerns the validity of the power of the Secretary of Labor to issue warrants of arrest
and seizure under Article 38 of the Labor Code, prohibiting illegal recruitment.
On October 21, 1987, Rosalie Tesoro filed with the POEA a complaint against petitioner. Having
ascertained that the petitioner had no license to operate a recruitment agency, public respondent
Administrator Tomas D. Achacoso issued his challenged CLOSURE AND SEIZURE ORDER.
The POEA brought a team to the premises of Salazar to implement the order. There it was found
that petitioner was operating Hannalie Dance Studio. Before entering the place, the team served
said Closure and Seizure order on a certain Mrs. Flora Salazar who voluntarily allowed them entry
into the premises. Mrs. Flora Salazar informed the team that Hannalie Dance Studio was accredited
with Moreman Development (Phil.). However, when required to show credentials, she was unable to
produce any. Inside the studio, the team chanced upon twelve talent performers — practicing a
dance number and saw about twenty more waiting outside, The team confiscated assorted costumes
which were duly receipted for by Mrs. Asuncion Maguelan and witnessed by Mrs. Flora Salazar.
A few days after, petitioner filed a letter with the POEA demanding the return of the confiscated
properties. They alleged lack of hearing and due process, and that since the house the POEA raided
was a private residence, it was robbery.
On February 2, 1988, the petitioner filed this suit for prohibition. Although the acts sought to be barred
are already fait accompli, thereby making prohibition too late, we consider the petition as one for
certiorari in view of the grave public interest involved.
ISSUE: May the Philippine Overseas Employment Administration (or the Secretary of Labor) validly
issue warrants of search and seizure (or arrest) under Article 38 of the Labor Code? NO
HELD: PETITION GRANTED. it is only a judge who may issue warrants of search and arrest. Neither
may it be done by a mere prosecuting body.
We reiterate that the Secretary of Labor, not being a judge, may no longer issue search or arrest
warrants. Hence, the authorities must go through the judicial process. To that extent, we declare
Article 38, paragraph (c), of the Labor Code, unconstitutional and of no force and effect.
Moreover, the search and seizure order in question, assuming, ex gratia argumenti, that it was validly
issued, is clearly in the nature of a general warrant. We have held that a warrant must identify clearly
the things to be seized, otherwise, it is null and void
For the guidance of the bench and the bar, we reaffirm the following principles:
1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and no other, who
may issue warrants of arrest and search:
2. The exception is in cases of deportation of illegal and undesirable aliens, whom the
President or the Commissioner of Immigration may order arrested, following a final order
of deportation, for the purpose of deportation.
People v. S. Angeles, GR 132376
FACTS: Accused-appellant Samina Angeles y Calma was charged with four (4) counts of estafa and
one (1) count of illegal recruitment.
That sometime during the month of September 1994 in the City of Manila, Philippines, the said
accused, representing herself to have the capacity to contract, enlist and transport Filipino workers
for employment abroad, did then and there willfully and unlawfully for a fee, recruit and promise
employment/job placement abroad to the following persons:
1. Marceliano T. Tolosa
2. Precila P. Olpindo
3. Vilma S. Brina
4. Maria Tolosa de Sardea y Tablada
Without first having secured the required license or authority from the Department of Labor and
Employment.
In her defense, accused-appellant averred that, contrary to the prosecution's allegations, she never
represented to the complainants that she can provide them with work abroad. She insisted that she
was a marketing consultant and an international trade fair organizer. In June 1994, she went to Paris,
France to organize a trade fair. There she met Priscilla Agoncillo, a domestic helper, and they
became friends. Priscilla asked her to assist her siblings, Maria and Marceliano, particularly in the
processing of their travel documents for France. Accused-appellant told Priscilla that she can only
help in the processing of travel documents and nothing more. It was Priscilla who promised
employment to Maria and Marceliano. She received money from complainants not in the form of
placement fees but for the cost of tickets, hotel accommodations and other travel requirements.
The five (5) cases were consolidated and tried jointly by the Regional Trial Court of Manila, Branch
50. - After trial on the merits, the trial court found accused-appellant guilty of illegal recruitment and
four (4) counts of estafa and correspondingly sentenced her.
Accused-appellant is now before us on appeal, arguing that the prosecution failed to prove her guilt
for estafa and illegal recruitment by proof beyond reasonable doubt.
ISSUE: Whether Accused-appellant is guilty of (1) estafa and (2) illegal recruitment.
RULING: YES. NO.
Article 13(b), of the Labor Code provides, thus:
(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.
To prove illegal recruitment, it must be shown that the accused-appellant gave complainants the
distinct impression that he had the power or ability to send complainants abroad for work such that
the latter were convinced to part with their money in order to be employed.[4] To be engaged in the
practice of recruitment and placement, it is plain that there must at least be a promise or offer of an
employment from the person posing as a recruiter whether locally or abroad.
In the case at bar, accused-appellant alleges that she never promised nor offered any job to the
complainants. Hence, accused-appellant Samina Angeles cannot be lawfully convicted of illegal
recruitment.
For Illegal Recruitment, accused-appellant Samina Angeles is ACQUITTED for failure of the
prosecution to prove her guilt beyond reasonable doubt.
Anent the four charges of estafa, under Article 315, paragraph 2(a) of the Revised Penal Code, the
elements of estafa are: (1) the accused has defrauded another by abuse of confidence or by means
of deceit and (2) damage or prejudice capable of pecuniary estimation is caused to the offended
party or third person. Clearly, these elements are present in this case. CONVICTED.
----------------------------
C. Illegal Recruitment considered a crime involving Economic sabotage (Art. 38 LC)
i. Syndicated
1. People v. Goce, 247 SCRA 780 (1995)
2. People v. Avendano, 216 SCRA 187
3. People v. Badoza, 215 SCRA 33
ii. In Large Scale or Qualified
1. People v. Tan Tiong Meng, GR 120835-40
2. People v. Sadiosa, GR 107084
3. People v. Bautista, 241 SCRA 216
4. People v. Coronacion, 237 SCRA 227
5. People v. Comia, GR 109761
People v. Goce, 247 SCRA 780 (1995)
FACTS: On January 12, 1988, an information for illegal recruitment committed by a syndicate and in
large scale, punishable under Articles 38 and 39 of the Labor Code (Presidential Decree No. 442)
as amended by Section 1(b) of Presidential Decree No. 2018, was filed against spouses Dan and
Loma Goce and herein accused-appellant Nelly Agustin in the Regional Trial Court of Manila, Branch
5.
That in or about and during the period comprised between May 1986 and June 25, 1987, both dates
inclusive, in the City of Manila, Philippines, the said accused, conspiring and confederating together
and helping one another, representing themselves to have the capacity to contract, enlist and
transport Filipino workers for employment abroad, did then and there willfully and unlawfully, for a
fee, recruit and promise employment/job placement abroad, to (1) Rolando Dalida y Piernas, (2)
Ernesto Alvarez y Lubangco, (3) Rogelio Salado y Savillo, (4) Ramona Salado y Alvarez, (5) Dionisio
Masaya y de Guzman, (6) Dave Rivera y de Leon, (7) Lorenzo Alvarez y Velayo, and (8) Nelson
Trinidad y Santos, without first having secured the required license or authority from the Department
of Labor.
On January 21, 1987, a warrant of arrest was issued against the three accused but not one of them
was arrested. 2 Hence, on February 2, 1989, the trial court ordered the case archived but it issued
a standing warrant of arrest against the accused.
Only herein appellant Agustin testified for the defense. She asserted that Dan and Loma Goce were
her neighbors at Tambo, Parañaque and that they were licensed recruiters and owners of the Clover
Placement Agency. Previously, the Goce couple was able to send her son, Reynaldo Agustin, to
Saudi Arabia. Agustin met the aforementioned complainants through Lorenzo Alvarez who
requested her to introduce them to the Goce couple, to which request she acceded. 18
Denying any participation in, the illegal recruitment and maintaining that the recruitment was
perpetrated only by the Goce couple, Agustin denied any knowledge of the receipts presented by
the prosecution. She insisted that the complainants included her in the complaint thinking that this
would compel her to reveal the whereabouts of the Goce spouses. She failed to do so because in
truth, so she claims, she does not know the present address of the couple. All she knew was that
they had left their residence in l987.
Herein appellant is accused of violating Articles 38 and 39 of the Labor Code. Article 38 of the Labor
Code, as amended by Presidential Decree No. 2018, provides that any recruitment activity, including
the prohibited practices enumerated in Article 34 of said Code, undertaken by non-licensees or non-
holders of authority shall be deemed illegal and punishable under Article 39 thereof. The same article
further provides that illegal recruitment shall be considered an offense involving economic sabotage
if any of these qualifying circumstances exist, namely, (a) when illegal recruitment is committed by a
syndicate, i.e., if it is carried out by a group of three or more persons conspiring and/or confederating
with one another; or (b) when illegal recruitment is committed in large scale, i.e., if it is committed
against three or more persons individually or as a group.
ISSUE: Whether the accused-appellant (Agustin) are guilty of illegal recruitment.
RULING: YES
There is illegal recruitment when one gives the impression of having the ability to send a worker
abroad." 29 It is undisputed that appellant gave complainants the distinct impression that she had
the power or ability to send people abroad for work such that the latter were convinced to give her
the money she demanded in order to be so employed.
At the outset, it should be made clear that all the accused in this case were not authorized to engage
in any recruitment activity, as evidenced by a certification issued by Cecilia E. Curso, Chief of the
Licensing and Regulation Office of the Philippine Overseas Employment Administration, on
November 10, 1987. Said certification states that Dan and Loma Goce and Nelly Agustin are neither
licensed nor authorized to recruit workers for overseas employment. 23 Appellant does not dispute
this. As a matter of fact her counsel agreed to stipulate that she was neither licensed nor authorized
to recruit applicants for overseas employment. Appellant, however, denies that she was in any way
guilty of illegal recruitment.
Despite Agustin's pretensions that she was but a neighbor of the Goce couple, the testimonies of
the prosecution witnesses paint a different picture. Rogelio Salado and Dionisio Masaya testified that
appellant represented herself as the manager of the Clover Placement Agency. Ramona Salado was
offered a job as a cutter/sewer by Agustin the first time they met, while Ernesto Alvarez remembered
that when he first met Agustin, the latter represented herself as "nagpapaalis papunta sa Oman." 28
Indeed, Agustin played a pivotal role in the operations of the recruitment agency, working together
with the Goce couple.
WHEREFORE, the appealed judgment of the court a quo is hereby AFFIRMED in toto, with costs
against accused-appellant Nelly D. Agustin.
People v. Avendano, 216 SCRA 187
FACTS: Six (6) separate informations for Illegal Recruitment of some 38 workers were filed against
appellant Abelardo Avendaño y Crespo in the Regional Trial Court, Branch 170, at Malabon, Metro
Manila.
Upon arraignment, Avendaño pleaded not guilty to the six (6) informations. His co-accused,
Carmelito Soriano, Jr., Renato M. Soriano and Manuel Calanog have remained at large. The cases
were consolidated and jointly tried.
The accused (Abelardo C. Avendaño) is the Treasurer of MCBRAJ Agro-Industrial Development
Company (MAINDECO), with offices at 26 Sta. Cecilia St., Sto. Rosario Village, Malabon, Metro
Manila, which is also his residence. The company is not licensed nor authorized to recruit workers
for overseas employment. Carmelito Soriano, Jr. is the President of said Company. Manuel Calanog
is the personnel manager.
It appears that the receipts issued by the accused to the complainants show that the payments made
by them were in the form of trust deposit for one unit of share in the company. The receipts were
subsequently surrendered to the company in exchange of certificates of common share in MCARM
Agro-Industrial Development Corporation, making the complainants stockholders of the corporation.
However, Henry Camba refused to surrender his receipt in exchange for a certificate of common
share as he was insisting that the money he paid be returned to him. Moreover, while some of the
complainants paid P5,500.00, the receipts issued to them reflected only the amount of P4,500.00 as
the balance of P1,000.00 was allegedly for the processing of their passport and physical
examination. Some of the complainants underwent physical examination and made to attend
orientation seminars while waiting for their departure to Papua New Guinea. The complainants finally
got tired of waiting for the promised employment abroad and filed their complaints against the
accused.
Because the accused was sentenced to suffer the penalty of life imprisonment in three (3) of the six
(6) cases, he appealed to this Court.
ISSUE: Whether the accused is guilty of Illegal Recruitment committed in large scale.
RULING: YES
It is admitted that MAINDECO is not licensed or authorized by the Department of Labor and
Employment to engage in recruitment of persons for overseas employment. Consequently, the
recruitment activities undertaken by MAINDECO are illegal. Illegal recruitment, when committed by
a syndicate or in large scale shall be considered an offense involving economic sabotage. Illegal
recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons
conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction,
enterprise or scheme, and it is deemed committed in large scale if committed against three (3) or
more persons individually or as a group. (Article 38, paragraphs [a] and [b], Labor Code). The penalty
of life imprisonment and a fine of P100,000.00 shall be imposed if illegal recruitment constitutes
economic sabotage. Any person who is neither a licensee nor a holder of authority found violating
any provision of the Code shall suffer the penalty of imprisonment of not less than four years nor
more than eight years or a fine of not less than P20,000.00 nor more than P100,000.00 or both such
imprisonment and fine at the discretion of the court. 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. (Article 39, paragraphs [a], [c] and [d],
Labor Code.)
WHEREFORE, as the trial court did not commit any reversible error in finding Avendaño guilty of
large scale illegal recruitment in Criminal Cases Nos. 6113, 6114 and 6125, and of simple illegal
recruitment in Criminal Cases Nos. 6131, 6143 and 6148, and as the penalties imposed are in
accordance with the law, the appealed decision is hereby AFFIRMED in toto.
People v. Bodozo, G.R. No. 96620, October 21, 1992, 215 SCRA 33.
FACTS:
Accused-appellants were charged before the Regional Trial Court with five (5) counts of Estafa
(docketed as Criminal Case No. 89-73609 to 89-73613) and a separate charge for Illegal
Recruitment (docketed as Criminal Case No. 89-73608).
On May 30, 1989, the Assistant Prosecutor filed the following information for illegal recruitment
against Joey Bodozo and Nimfa Bodozo.
When the accused Nimfa Bodozo was in Luna, La Union, she told the private complainants, who are
simple farmers, and at the time unemployed, that she was recruiting workers for employment in
Saudi Arabia and Singapore. The accused Nimfa Bodozo required the five (5) private complainants
to submit to her, in addition to their respective applications, NBI clearances and medical certificates
in connection with their applications. The private complainants Prudencio Renon and Fernando
Gagtan were told by the accused Nimfa Bodozo that their salary in Saudi Arabia was US$200.00 a
month, while the accused Nimfa Bodozo assured private complainants, Angelino Obiacoro, Ludovico
Gagtan and Domingo Obiacoro that they were going to be paid, by their respective employers, in
Singapore, the amount of Singapore 16.00 dollars a day. The private complainants Prudencio Renon
and Fernando Gagtan submitted passports, their NBI clearances and medical certificates to the
accused Nimfa Bodozo in their residence at Quirino Avenue, Manila. Domingo Obiacoro, Angelino
Obiacoro and Ludovico Gagtan likewise submitted to the accused their NBI clearances and medical
certificates as required by the accused. Moreover, the accused demanded from the private
complainant Prudencio Renon the amount of P19,000.00 in connection with his application for
employment abroad. Of the said amount, P15,000.00 was to be used by the accused as processing
fee for the application and papers of the private complainant for his employment abroad. Prudencio
Renon paid to the accused Nimfa Bodozo, on October 3, 1988, the amount of P15,000.00 for which
the said accused signed a Receipt. 5 The mother of Prudencio Renon paid the balance of P4,000.00
to the same accused but the latter did not issue any receipt for said amount.
TC finds both Accused guilty, beyond reasonable doubt, of the crime of illegal recruitment defined in
and penalized by Article 13 in relation to Article 38 of the Labor Code, as amended, and hereby
metes on each of them the penalty of LIFE IMPRISONMENT and hereby condemns each of them
"to pay" a fine of P100,000.00, without subsidiary imprisonment in case of insolvency. Hence the
instant appeal by the accused Joey Bodozo and Nimfa Bodozo.
ISSUE: Whether or not the guilt of the accused-appellants have been proven beyond reasonable
doubt.
RULING: YES
After a careful scrutiny of the evidence, We found no cause to disapprove the facts as stated above
and we adopt the same as Our findings of facts. In the absence of any substantial proof that the trial
court's decision was grounded entirely on speculations, surmises or conjectures, the same must be
accorded full consideration and respect. After all, the trial court is in a much better position to observe
and correctly appreciate the respective parties' evidence as they were presented.
The crime of illegal recruitment has two elements:
1. The offender is a non-license or non-holder of authority to lawfully engage in the
recruitment and placement of workers; and
2. That the offender undertakes either any recruitment activities defined under Article 13(b),
or any prohibited practices enumerated under Article 34 of the Labor Code.
In this case at bar, it is undisputed that accused-appellants Joey Bodozo and Nimfa Bodozo are
neither licensed nor authorized to recruit workers for overseas employment as shown by the
certification 14 issued by the Philippine Overseas Employment Administration (POEA).
Records show that private complainants are simple farmers, unemployed and natives of La Union,
who see employment abroad as a means to alleviate their living conditions, only to find out that they
have been the victims of illegal recruiters preying on poor workers. It has been held that "the absence
of evidence as to an improper motive actuating the principal witnesses of the prosecution strongly
tends to sustain no improper motive existed and their testimony is worthy full faith and credit."
In the light of foregoing findings and for reasons indicated, We hold that the evidence was sufficient
to sustain the verdict finding the accused guilty of the crime of illegal recruitment as charged.
People v. Tan Tiong Meng, GR 120835-40
FACTS:
Six(6) complainants went to Borja’s house to meet accused, Tan Tiong Meng, allegedly a job
recruiter . Accused promised to complainants that they could get jobs as factory worker in Taiwan
with a monthly salary of P20K. Accused required them to submit their passports, bio-data and their
high school diploma as well as to pay P15K each for placement and processing fees. Accused kept
on promising to complainants that they would be able to leave, but the promises were never fulfilled.
When complainants knew that accused was not a licensed or authorized overseas recruiter, they
filed for complaints for illegal recruitment and estafa against accused.
Accused contend that he merely acted as a collector of money for the principal recruiter Borja who
made the representations that he(accused) could give the applicants jobs in Taiwan.
ISSUE: WON accused is guilty of the offense of illegal recruitment in large scale and 6 counts of
estafa.
HELD: YES.
Circumstances belie the version of accused: (1) Mascardo(one of the complainants) testified that
accused could no longer return the money because he had already sent it to his brother-in-law in
Taiwan; (2) all the receipts issued to complainants were signed by accused; (3) Accused admitted
that he and his wife are respondents in about 70 cases of estafa and illegal recruitment; (4)
complainants pointed to Tan and not Borja as the one who had represented to them that he could
give them jobs in Taiwan.
The accused’ acts of accepting placement fees from job applicants and representing to said
applicants that he could get them jobs in Taiwan constitute recruitment and placement under the
Labor Code and is deemed illegal and punishable under Art. 39 of the Labor Code.
The offense committed against the 6 complainants is illegal recruitment in large scale. Accused is
also guilty of 6 separate crimes of estafa. A person convicted for illegal recruitment under the Labor
Code can be convicted for violation of the RPC provisions on estafa provided the elements are
present: (1) the accused defrauded another by abuse of confidence or by means of deceit; and (2)
damage or prejudice capable of pecuniary estimation is caused to the offended party or third person.
People v. Sadiosa, GR 107084
FACTS:
Accused-appellant Delia Sadiosa was charged with illegal recruitment in an information that reads:
That on or about and during the period comprise (sic) from January 1992 to March 1992, in Pasay
City, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above named
accused Delia Sadiosa y Cabenta, well knowing that she is not a duly licensed job recruiter, by
means of false representations and fraudulent allegations to the effect that she could secure
employment as domestic helpers abroad for Benilda Sabado y Domingo, Marcela Tabernero y
Manzano, Erly Tuliao y Sabado and Cely Navarro y Manzano, did then and there wilfully (sic),
unlawfully and feloniously recruit aforesaid persons and collected from them the amount of
P8,000.00 each, which amount were given to the accused by the aforesaid complainants upon
receipt of which, far from complying with her obligation aforestated, accused appropriated for herself
the said amount and failed to deploy complainants abroad.
Arsenia Conse went to Bayombong, Nueva Ecija in early 1992 where she met the four complainants,
Cely Navarro, Marcela Manzano, Erly Tuliao and Benilda Domingo. She enticed the four to apply for
overseas employment informing them that she had a cousin who could send them to Kuwait as
domestic helpers. Apparently convinced by Arsenia Conse, the four went with her on February 5,
1992 to Manila. Upon arrival, they proceeded to Room 210, Diamond Building, Libertad St., Pasay
City where Arsenia Conse introduced the group to accused-appellant Delia Sadiosa. The four then
applied for work as domestic helpers.
On that occasion, accused-appellant assured the four that she could dispatch them to Kuwait[4] and
forthwith demanded P8,000.00 from each of them for processing fee and P1,000.00 for passport
(P1,500.00 from complainant Cely Navarro).[5] She assured the group that she would facilitate the
processing of all the necessary documents needed by them. She further promised them that upon
payment of the required fees, they would be able to leave for Kuwait immediately.
The trial court found accused-appellant guilty of illegal recruitment in large scale defined by Article
38 (b) and penalized under Article 39 (a) of the Labor Code, as amended by Presidential Decree
Nos. 1920 and 2018.
ISSUE: Whether accused is guilty of illegal recruitment in large scale.
RULING: YES
In the instant case, the information filed against accused-appellant sufficiently shows that it is for the
crime of illegal recruitment in large scale, as defined in Art. 38 (b) of the Labor Code and penalized
in Art. 39 of the same Code although it is designated as for illegal recruitment only. Under the Code,
the essential elements of the crime of illegal recruitment in large scale are as follows:

(1) the accused engages in the recruitment and placement of workers, as defined under Article 13
(b) or in any prohibited activities under Article 34 of the Labor Code;
(2) accused has not complied with the guidelines issued by the Secretary of Labor and Employment,
particularly with respect to the securing of a license or an authority to recruit and deploy workers,
whether locally or overseas; and
(3) accused commits the same against three (3) or more persons, individually or as a group.
All these elements are to be found in the information. It alleges that accused-appellant, knowing fully
well that she was not a duly licensed job recruiter, falsely represented that she could secure
employment as domestic helpers abroad for the four complainants.
The prosecution clearly established the fact that accused-appellant had no license to recruit from the
POEA. Yet, the latter entertained the four complainants when they applied, promised them jobs as
domestic helpers in Kuwait, and collected fees from them for processing travel documents only to
renege on her promise and fail to return the money she collected from complainants despite several
demands.
For engaging in recruitment of the four complainants without first obtaining the necessary license
from the POEA, accused-appellant, therefore, is guilty of illegal recruitment in large scale, an offense
involving economic sabotage. She should, accordingly, be punished with life imprisonment and a
fine of P100,000 under Article 39 (a) of the Labor Code, as amended.
Delia Sadiosa y Cabenta GUILTY beyond reasonable doubt of the crime of illegal recruitment in
large scale and imposing on her life imprisonment, the payment of the fine of P100,000.00 and the
reimbursement of the amounts defrauded from complainants is hereby AFFIRMED.
People v. Bautista, 241 SCRA 216
Facts:
Anita Bautista approached Romeo Paguio and offered job openings abroad. Bautista introduced him
to Rosa Abrero. Abrero informed him that the applicants could leave for Taiwan within a period of
one-month from the payment of placement fees. Bautista and Abrero also recruited Paguio’s
relatives- Remigio Fortes, Dominador Costales and Anastacio Amor.
Despite payment of the placement fees, the deployment never materialized. Paguio then required
Bautista to sign the "Acknowledgment Receipt," in which Bautista admitted having received payment
for processing and other expenses. From POEA, Paguio secured a certification attesting that
Bautista and Abrero are not licensed or authorized to recruit workers for overseas employment.
Paguio and his relatives filed four separate Informations against Bautista charging her with the
crimes of Illegal Recruitment In Large Scale and Estafa.
In her defense, Bautista denied she recruited complainants for employment abroad. She claimed
that she only introduced Abrero to Paguio since the latter asked her for someone who could help his
relatives work abroad. She also stressed that she did not receive the payment as stated in the
Acknowledgment Receipt but merely acknowledged that said sum was received by Abrero from
Paguio.
The lower court convicted Bautista with the crimes of Illegal Recruitment In Large Scale and estafa
and sentenced him to a prison term. The Court of Appeals affirmed the decision of the lower court
but modified the penalty imposed.
Held:
Conviction for illegal recruitment in large scale is proper when there are at least three (3) victims
1. It is settled that the essential elements of the crime of illegal recruitment in large scale are:
(a) the accused engages in the recruitment and placement of workers, as defined under Article 13
(b) or in any prohibited activities under Article 34 of the Labor Code;
(b) accused has not complied with the guidelines issued by the Secretary of Labor and Employment,
particularly with respect to the securing of a license or an authority to recruit and deploy workers,
either locally or overseas; and
(c) accused commits the same against three (3) or more persons, individually or a group.
2. In the instant case, Bautista actively participated in the recruitment process of complainants.
Complainants' recruitment was initiated by Bautista during her initial meeting with Paguio. Bautista
gave the impression to Paguio and the complainants that her cohort, Abrero, could send workers for
employment abroad. Bautista and Abrero both assured the departure of complainants to Taiwan
within one month from payment of the placement fee. Moreover, it was Bautista who informed Paguio
that complainants' scheduled trip to Taiwan was scheduled due to some problems on their visas and
travel documents.
3. Bautista’s close association with Abrero is further strengthened by the Acknowledgment Receipt
which was prepared by Paguio. The receipt shows that Bautista collected the payment for and in
behalf of Rosa Abrero.
4. It is uncontroverted that Bautista and Abrero are not authorized or licensed to engage in
recruitment activities. Despite the absence of such license or authority, Bautista participated in the
recruitment of complainants. Since there are at least three (3) victims in this case, Bautista is
correctly held criminally liable for illegal recruitment in large scale.
Estafa is committed when accused deceived the complainants of employment abroad
5. The elements of estafa are as follows:
(a) that the accused defrauded another (a) by abuse of confidence, or (b) by means of deceit; and
(b) that damage or prejudice capable of pecuniary estimation is caused by the offended party or third
party.
6. In the case at bench, the complainants were deceived by Bautista and Abrero into believing that
there were, indeed, jobs waiting for them in Taiwan. The assurances given by these two women
made complainants parted their money in exchange for the promised job.
People v. Coronacion, 237 SCRA 227
FACTS: Once again, the pernicious practice of illegal recruitment is the matter at hand. Nelia
Coronacion, Eduardo Aquino, and June Mendez were charged with the crime of illegal recruitment
in large scale and by a syndicate for falsely representing themselves to have the capacity to contract,
enlist and transport Filipino workers for employment abroad. We are now asked to adjudge them
guilty or not.
The narration by the People of the prosecution's evidence as found by the trial court concerning the
recruitment activities of herein accused-appellants is hereby adopted, it being fully supported by the
testimonies of the complaining witnesses.
The prosecution likewise proved through the unrebutted testimony of Orlino Regualos, Assistant
Chief of the Licensing Division of the Philippine Overseas Employment Administration (POEA), that
Nelia Coronacion and Eduardo Aquino do not have any license or authority from POEA to recruit
workers for overseas employment.6
Upon the other hand, the defense of accused-appellants rests on denial and alibi. Accused Eduardo
Aquino maintained that he had not knowledge of the transactions between the complainants and his
co-accused as he was always out of town, hence out of the office during the weeks when the alleged
transactions took place therein. On her part, accused Nelia Coronacion claimed that she did not
know anything about the said transactions, reasoning that she herself is a victim of June Mendez'
nefarious activities.
ISSUE: Whether the accused is guilty of illegal recruitment.

RULING: YES
Evidently, the crime of illegal recruitment in large scale is committed when a person (a) undertakes
any recruitment activity defined under Article 13(b) or any prohibited practice enumerated under
Article 34 of the Labor Code; (b) does not have a license or authority to lawfully engage in the
recruitment and placement of workers; and (c) commits the same against three or more persons,
individually or as a group. 10
In the case at bench, the presence of the second and third elements is not disputed. The appellants
are neither licensees or holders of any authority from POEA to engage in recruitment and placement
activities as evidenced by a certification of the said agency dated September 8, 1987. 11 It was
likewise established that the private complainants were unaware of the appellants' lack of authority
when they transacted business with them. It was only later, upon inquiry at POEA, that they
discovered the appellants' lack of authority. Finally, the number of private complainants, certainly
more than three, is beyond dispute.
Now, we resolve whether the first element of the offense of illegal recruitment, i.e., that the appellants
undertook any of the recruitment activities defined under Article 13(b) of the Labor Code, as
amended, or any of the prohibited activities defined under Article 34 of the same Code, was
successfully established by the prosecution.
To satisfy the first element, the prosecution presented the testimonies of the complainants clearly
pointing to the appellants as two of the three persons who promised them employment abroad and
who collected and received varying amounts from them. The appellants, on the other hand,
vigorously maintain that the lower court erred (a) in finding that there was conspiracy and (b) in giving
credence to the conflicting testimonies of the private complainants.
We find the submission untenable.
People v. Comia, GR 109761
FACTS:
For falsely representing herself to have the capacity and power to contract, enlist, and recruit workers
for employment abroad, Carmelita Puertollano Comia was charged with illegal recruitment in large
scale under paragraphs (a) and (b) of Article 38, in relation to paragraph (a) of Article 39, of the Labor
Code. The information 1 was filed with the Regional Trial Court of Makati, Metro Manila, docketed
therein as Criminal Case No. 91-6443, and assigned to Branch 141 of the said court. After trial on
the merits, the court promulgated on 4 February 1993 its decision 2 finding the accused guilty beyond
reasonable doubt of the offense charged and sentencing her to suffer the penalty of life imprisonment
and to pay a fine of P100,000.00.
The complaining victims of the illegal recruitment activities of the accused were Fe Dadap, Susana
Belloso, Marilyn Bibar, Sandra Cosart, and Remedios Asis. With the exception of Fe Dadap, who
withdrew her complaint because she had moved to the province with her two children, they testified
in open court that the accused defrauded each of them of sizeable cash on the assurance that they
would be given janitorial jobs in Hongkong.
The trial court accepted the version of the prosecution because the statements of the complaining
witnesses were positive and affirmative in nature and were worthy of credit than the mere
uncorroborated and self-serving denial of the accused. It further observed that the accused had not
shown any ill motive on the part of the complainants and that the accused's reference to a certain
Dr. Zenaida Andres as the employer and, therefore, the real recruiter does not inspire belief.
The accused seasonably filed her notice of appeal which did not, however, indicate the court to which
she was appealing. 7 In its order of 23 February 1993, the trial court erroneously directed the
elevation of the records of the case to the Court of Appeals. Hence, this petition.
ISSUE: Whether the accused is liable for with illegal recruitment in large scale.
RULING: YES
Article 38 of the Labor Code provides in part as follows:
Illegal Recruitment. — (a) Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of
authority shall be deemed illegal and punishable under Article 39 of this Code. The Ministry of Labor
and Employment or any law enforcement officers 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.
Article 13(b) of the same Code defines recruitment as follows:
Recruitment and placement refers to any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers, and includes referrals, contract services, promising or
advertising for 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.
It is clear from the foregoing provisions that there is illegal recruitment in large scale when a person
(a) undertakes any recruitment activity defined under Article 13(b) or any prohibited practice
enumerated under Article 34 of the Labor Code; (b) does not have a license or authority to lawfully
engage in the recruitment and placement of workers; and (c) commits the same against three or
more persons, individually or as a group.
In this case, the presence of the second and third elements is beyond dispute. That the accused is
not authorized by the Philippine Overseas Employment Administration (POEA) to engage in the
recruitment and placement of workers is evidenced by a certification of the said agency dated 1
October 1991. In fact, to abbreviate the proceedings, the parties duly stipulated on the due issuance,
authenticity, and truth of the said certification. 13 There are no less than four complainants who
patiently endured the rigors of trial to denounce the accused and expose her illegal recruitment
activities.
WHEREFORE, the appealed decision of the Regional Trial Court of Makati, Metro Manila, in Criminal
Case No. 91-6443 is hereby AFFIRMED.
----------------------------
F. Liabilities
iii. Pre-termination of contract of migrant workers and Money Claims (Sec 10, RA 8042 as amended
by Sec 7, RA 10022)
1. Millares v. NLRC, GR 110524
2. Pentagon International Shipping Inc. v. Adelantar, GR 157373
3. Skippers United Pacific, Inc. v. Doza, GR 175558
4. Elizabeth M. Gagui v. Simeon Dejero and Teodoro R. Permejo, GR 196036
5. ATCI Overseas Corporation v. Echin, GR 178551
6. Serrano v. Gallant, GR 167614
7. Yap v. The Namarias, GR 79532
8. Sameer Overseas Placement Agency, Inc. v. Joyy C. Cabiles, GR 170139
Millares v. NLRC, GR 110524
Facts
Douglas Millares was employed by ESSO International through its local manning agency, Trans-
Global, in 1968 as a machinist. In 1975, he was promoted as Chief Engineer which position he
occupied until he opted to retire in 1989.
In 1989, petitioner Millares filed a leave of absence and applied for optional retirement plan under
the Consecutive Enlistment Incentive Plan (CEIP) considering that he had already rendered more
than twenty years of continuous service.
Esso International denied Millares’ request for optional retirement on the following grounds, to wit:
(1) he was employed on a contractual basis; (2) his contract of enlistment (COE) did not provide for
retirement before the age of sixty years; and (3) he did not comply with the requirement for claiming
benefits under the CEIP, i.e., to submit a written advice to the company of his intention to terminate
his employment within thirty days from his last disembarkation date.
Subsequently, after failing to return to work after the expiration of his leave of absence, Millares was
dropped from the roster of crew members effective September 1, 1989.
On the other hand, petitioner Lagda was employed by Esso International as wiper/oiler in 1969. He
was promoted as Chief Engineer in 1980, a position he continued to occupy until his last COE expired
in 1989.
In 1989, Lagda likewise filed a leave of absence and applied to avail of the optional early retirement
plan in view of his twenty years continuous service in the company.
Trans-global similarly denied Lagda’s request for availment of the optional early retirement scheme
on the same grounds upon which Millares request was denied.
Unable to return for contractual sea service after his leave of absence expire, Lagda was also
dropped from the roster of crew members effective September 1, 1989.
Millares and Lagda filed a complaint-affidavit for illegal dismissal and non-payment of employee
benefits against private respondents Esso International and Trans-Global before the POEA.
The POEA rendered a decision dismissing the complaint for lack of merit. On appeal, NLRC affirmed
the decision of the POEA dismissing the complaint.
NLRC rationcinated that Millares and Lagda, as seamen and overseas contract workers are not
covered by the term “regular employment” as defined under Article 280 of the Labor Code. The
POEA, which is tasked with protecting the rights of the Filipino workers for overseas employment to
fair and equitable recruitment and employment practices and to ensure their welfare, prescribes a
standard employment contract for seamen on board ocean-going vessels for a fixed period but in no
case to exceed twelve months
. almost a year of waiting with no work forthcoming, Adelantar filed a complaint for illegal dismissal
Issue: Whether or not seafarers are considered regular employees under Article 280 of the Labor
Code.
Ruling
It is for the mutual interest of both the seafarer and the employer why the employment status
must be contractual only or for a certain period of time.
Quoting Brent School Inc. v. Zamora, 1990, and Pablo Coyoca v. NLRC, 1995, the Supreme Court
ruled that seafarers are considered contractual employees. They can not be considered as regular
employees under Article 280 of the Labor Code. Their employment is governed by the contracts they
sign everytime they are rehired and their employment is terminated when the contract expires. Their
employment is contractually fixed for a certain period of time. They fall under the exception of Article
280 whose employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of engagement of the employee or where the
work or services to be performed is seasonal in nature and the employment is for the duration of the
season.
As ruled in Brent case, there are certain forms of employment which also require the performance
of usual and desirable functions and which exceed one year but do not necessarily attain regular
employment status under Article 280. Overseas workers including seafarers fall under this type of
employment which are governed by the mutual agreements of the parties.
And as stated in the Coyoca case, Filipino seamen are governed by the Rules and Regulations of
the POEA. The Standard Employment Contract governing the employment of All Filipino seamen on
Board Ocean-Going Vessels of the POEA, particularly in Part I, Sec. C specifically provides that the
contract of seamen shall be for a fixed period. And in no case should the contract of seamen be
longer than 12 months.
Moreover, the Court held that it is an accepted maritime industry practice that employment of
seafarers are for a fixed period only. Constrained by the nature of their employment which is quite
peculiar and unique in itself, it is for the mutual interest of both the seafarer and the employer why
the employment status must be contractual only or for a certain period of time. Seafarers spend most
of their time at sea and understandably, they can not stay for a long and an indefinite period of time
at sea. Limited access to shore society during the employment will have an adverse impact on the
seafarer. The national, cultural and lingual diversity among the crew during the COE is a reality that
necessitates the limitation of its period.
Pentagon International Shipping Inc. v. Adelantar, GR 157373
FACTS:
On August 16, 1997, respondent William B. Adelantar was hired by Dubai Ports Authority of Jebel
Ali under an employment contract (first contract) which provided for an unlimited period of
employment with a monthly salary of five thousand five hundred dirhams (Dhs 5,500).
On September 3, 1997, Adelantar and petitioner Pentagon International Shipping, Inc. (Pentagon),
for and in behalf of Dubai Ports Authority of Jebel Ali, entered into a Philippine Overseas Employment
Administration (POEA) standard employment contract (second contract), this time providing for a 12-
month period with basic monthly salary of US$380.00 and fixed overtime pay of US$152.00.
Upon completion of his probationary period on April 5, 1998, Adelantars basic salary was increased
to five thousand eight hundred ninety dirhams (Dhs 5,890), while his overtime pay was increased to
two thousand three hundred fifty-six dirhams (Dhs 2,356) effective April 1, 1998.
On June 11, 1998, however, the management barred Adelantar from entering the port due to a
previous dispute with his superior. He was asked to hand in his health and employment card. On the
same date, he received a letter from his employer, stating that he was being terminated for assaulting
his superior officer, although he was promised employment in another company.
Adelantar was eventually repatriated after nine (9) months and seven (7) days of service. After
with money claim against Pentagon International Shipping, Inc. with the NLRC, docketed as NLRC
NCR OFW (M) 99-05-0693.
The Labor Arbiter found that the dismissal of Adelantar was illegal. Consequently, he ordered
Pentagon to pay Adelantar the amount of Dhs 24,738.00 representing the latters three (3) months
basic salary inclusive of overtime pay. All other claims were denied for lack of merit.[3]
Adelantar appealed to the NLRC arguing that the Labor Arbiter erred in granting backwages of only
three (3) months and in not granting attorneys fees, moral and exemplary damages and
reinstatement.
The NLRC affirmed the Labor Arbiters decision and held that under Section 10 of R.A. 8042,
otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, an illegally dismissed
contract worker is entitled to the salaries corresponding to the unexpired portion of his contract, or
for three (3) months for every year of the unexpired term, whichever is less. Thus, the NLRC awarded
backwages to Adelantar equivalent to three (3) months of his basic salary, but exclusive of overtime
pay.[4]
 loudly somewhere down the corridors. The incident was evidenced by the Captain’s Report sent on
Aggrieved, Adelantar filed a petition for certiorari with the Court of Appeals. said date.

The Court of Appeals awarded full backwages to respondent computed from the time of the dismissal
up to the finality of the decision. It ruled that Section 10 of R.A. No 8042 is not applicable in this case
because said provision only contemplates a fixed period of employment. Moreover, Article 279 of
the Labor Code should apply and not Section 10 of R.A. No. 8042, considering that Adelantars first
contract provided for an unlimited period of employment.
Furthermore, Skippers also claim that on January 22, 1999, Aprosta, De Gracia, Lata and Daza
arrived in the master’s cabin and demanded immediate repatriation because they were not satisfied
with the ship. De Gracia, et al. threatened that they may become crazy any moment and demanded
for all outstanding payments due to them. The incident is evidenced by a telex of Cosmoship MV
Wisdom to skippers but had conflicting dates.

ISSUE: Whether the Court of Appeals properly used as basis Article 279 of the Labor Code in its De Gracia claims that Skippers failed to remit their respective allotments, compelling them to vent
their grievances with the Romanian Seafarers Union. On January 28, 1999, the Filipino seafarers
award for backwages to Adelantar.
were unceremoniously discharged and immediately repatriated. Upon arrival in the Philippines, they
filed a complaint for illegal dismissal with the LA.
RULING: As early as the case of Coyoca v. NLRC,[9] we held that Filipino seamen are governed by
the Rules and Regulations of the POEA. The Standard Employment Contract governing the
The LA dismissed the seafarers’ complaint as the seafarers’ demand for immediate repatriation due
Employment of All Filipino Seamen on Board Ocean-Going Vessels of the POEA, particularly in Part
to the dissatisfaction with the ship is considered a voluntary pre-termination of employment. Such
I, Sec. C specifically provides that the contract of seamen shall be for a fixed period. In no case
act was deemed akin to resignation recognized under Article 285 of the LC. The LA gave credence
should the contract of seamen be longer than 12 months.
to the telex of the master’s report that the seafarers indeed demanded immediate repatriation.
Under the circumstances, the Court of Appeals erred in resolving the issue of backwages based on
The NLRC agreed with the LA’s decision.
the first contract which provided for an unlimited period of employment as this violated the explicit
The CA however reversed the LA’s and the NLRC’s decision. The Court deemed the telex message
provision of the Rules and Regulations of the POEA. While we recognize that Adelantar executed a
as a self-serving document that does not satisfy the requirement of substantial evidence, or that
contract with Dubai Ports Authority of Ali Jebel and might even have applied said contract in his
amount of relevant evidence which a reasonable mind might accept as adequate to justify the
overseas station, this contract was not sanctioned by the POEA. We agree with the NLRC when it
conclusion that petitioners indeed voluntarily demanded their immediate repatriation.
observed thus:
Aggrieved, Skippers appeals the case with the Supreme Court.
It should be stressed that whatever status of employment or increased benefits that the complainant
may have gained while under the employ of Dubai Ports Authority, the undisputed fact remains that
Issue: Whether or not the seafarer’s demand for immediate repatriation can be considered an act of
prior to his deployment, he agreed to be hired under a 12-month POEA contract, the duration of
voluntary resignation.
which is the basis for the determination of the extent of the respondents liability.
Held:
Besides, in Millares v. NLRC,[11] we held that:
For a worker's dismissal to be considered valid, it must comply with both procedural and substantive
due process. The legality of the manner of dismissal constitutes procedural due process, while the
. . . [I]t is clear that seafarers are considered contractual employees. They can not be considered as
legality of the act of dismissal constitutes substantive due process.
regular employees under Article 280 of the Labor Code. Their employment is governed by the
contracts they sign every time they are rehired and their employment is terminated when the contract
Procedural due process in dismissal cases consists of the twin requirements of notice and hearing.
expires. Their employment is contractually fixed for a certain period of time. They fall under the
The employer must furnish the employee with two written notices before the termination of
exception of Article 280 whose employment has been fixed for a specific project or undertaking the
employment can be effected: (1) the first notice apprises the employee of the particular acts or
completion or termination of which has been determined at the time of engagement of the employee
omissions for which his dismissal is sought; and (2) the second notice informs the employee of the
or where the work or services to be performed is seasonal in nature and the employment is for the
employer's decision to dismiss him. Before the issuance of the second notice, the requirement of a
duration of the season.
hearing must be complied with by giving the worker an opportunity to be heard. It is not necessary
that an actual hearing be conducted.
Therefore, Adelantar, a seafarer, is not a regular employee as defined in Article 280 of the Labor
Code. Hence, he is not entitled to full backwages and separation pay in lieu of reinstatement as
Substantive due process, on the other hand, requires that dismissal by the employer be made under
provided in Article 279 of the Labor Code. As we held in Millares, Adelantar is a contractual employee
a just or authorized cause under Articles 282 to 284 of the Labor Code.
whose rights and obligations are governed primarily by Rules and Regulations of the POEA and,
more importantly, by R.A. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995.
In this case, there was no written notice furnished to De Gracia, et al., regarding the cause of their
dismissal. Cosmoship furnished a written notice (telex) to Skippers, the local manning agency,
Petitioner Pentagon International Shipping, Inc. is ORDERED to pay private respondent William B.
claiming that De Gracia, et al., were repatriated because the latter voluntarily pre-terminated their
Adelantar the amount equivalent to the unexpired portion of the September 3, 1997 POEA Standard
contracts. This telex was given credibility and weight by the Labor Arbiter and NLRC in deciding that
Contract of Employment plus ten percent (10%) of the award as attorneys fees.
there was pre-termination of the employment contract "akin to resignation" and no illegal dismissal.
However, as correctly ruled by the CA, the telex message is "a biased and self-serving document
Skippers United Pacific, Inc. v. Doza, GR 175558
that does not satisfy the requirement of substantial evidence." If, indeed, De Gracia, et al., voluntarily
pre-terminated their contracts, then De Gracia, et al., should have submitted their written
Facts:
resignations.
Petitioner deployed De Gracia, Lata and Aprosta to work on board the vessel MV Wisdom Star.
On December 3 1998, Skippers alleges that De Garcia smelling strongly of alcohol, went to the cabin
Article 285 of the Labor Code recognizes termination by the employee of the employment contract
of Gabriel Oleszek, MV Wisdom Stars’ Master. Skippers claims that he was rude and shouted noisily
by "serving written notice on the employer at least one (1) month in advance." Given that provision,
to the master. De Gracia left the master’s cabin after a few minutes and was heard shouting very
the law contemplates the requirement of a written notice of resignation. In the absence of a written
resignation, it is safe to presume that the employer terminated the seafarers. In addition, the telex
message relied upon by the Labor Arbiter and NLRC bore conflicting dates of 22 January 1998 and
22 January 1999, giving doubt to the veracity and authenticity of the document. In 22 January 1998,
De Gracia, et al., were not even employed yet by the foreign principal.
Elizabeth M. Gagui v. Simeon Dejero and Teodoro R. Permejo, GR 196036
FACTS:
On 14 December 1993, respondents Simeon Dejero and Teodoro Permejo filed separate Complaints
for illegal dismissal, nonpayment of salaries and overtime pay, refund of transportation expenses,
damages, and attorney fees against PRO Agency Manila, Inc., and Abdul Rahman Al Mahwes.
The Labor Arbiter Pedro Ramos rendered a decision ordering respondents Pro Agecy Manila Inc.,
and Abdul Rahman Al Mahwes to pay complainants. The LA also issued a Writ of Execution. When
the writ was returned unsatisfied, an Alias Writ of Execution was issued, but was also returned
unsatisfied.
Respondents filed a Motion to Implead Respondent Pro Agency Manila, Inc. Corporate Officers and
Directors as Judgment Debtor. It included petitioner as the Vice-president/Stockholder/Director of
PRO Agenct, Manila, Inc. The LA granted the motion.
A 2nd Alias Writ of Execution was issued, which resulted in the garnishment of petitioner bank
deposit in the amount of P85,430.48. Since, judgment remained unsatisfied, respondents sought a
3rd alias writ of execution. The motion was granted resulting in the levying of two parcels of lot owned
by petitioner located in San Fernando Pampanga.
Petitioner filed a Motion to Quash 3rd Alias Writ of Execution. Petitioner alleged that apart from not
being made aware that she was impleaded as one of the parties to the case, the LA decision did not
hold her liable in any form whatsoever. Executive Labor Arbiter denied the motion.
Upon appeal, NLRC denied the appeal for lack of merit. NLRC ruled that in so far as overseas
migrant workers are concerned, it is R.A. 8042 itself that describes the nature of the liability of the
corporation and its officers and directors. It is not essential that the individual officers and directors
be impleaded as party respondents to the case instituted by the worker. A finding of liability on the
part of the corporation will necessarily mean the liability of the corporate officers or directors.
The CA affirmed the NLRC decision. The two Motions for Reconsideration were denied.
ISSUE: Whether or not petitioner may be held jointly and severally liable with PRO Agency Manila,
Inc. in accordance with Section 10 of R.A. 8042?
HELD: The Petitioner may not be held jointly and severally liable.
LABOR LAW: liability of corporate officers
The pertinent portion of Section 10, R.A. 8042 reads as follows: The liability of the principal/employer
and the recruitment/placement agency for any and all claims under this section shall be joint and
several. This provision shall be incorporated in the contract for overseas employment and shall be a
condition precedent for its approval.
In Sto. Tomas v. Salac, we had the opportunity to pass upon the constitutionality of this provision.
We have thus maintained: the Court has already held, pending adjudication of this case, that the
liability of corporate directors and officers is not automatic. To make them jointly and solidarily liable
with their company, there must be a finding that they were remiss in directing the affairs of that
company, such as sponsoring or tolerating the conduct of illegal activities.
Hence, for petitioner to be found jointly and solidarily liable, there must be a separate finding that
she was remiss in directing the affairs of the agency, resulting in the illegal dismissal of respondents.
Examination of the records would reveal that there was no finding of neglect on the part of the
petitioner in directing the affairs of the agency. In fact, respondents made no mention of any instance
when petitioner allegedly failed to manage the agency in accordance with law, thereby contributing
to their illegal dismissal.
Petition for review on certiorari is GRANTED.
ATCI Overseas Corporation vs. Echin (2010)
G.R. No. 178551 | 2010-10-11
Subject: Local recruitment agency solidarily liable with foreign principal for money claims of OFWs;
Obligations of local agent and foreign principal do not terminate even after the expiration of their
agreement, but continue for the full period of the employment contract of the worker recruited;
Processual presumption; Proof of foreign law; Joint and solidary liability as a corporate officer
Facts:
Josefina Echin (respondent) was hired by petitioner ATCI Overseas Corporation in behalf of its
principal, the Ministry of Public Health of Kuwait (the Ministry), for the position of medical technologist
under a two-year contract, denominated as a Memorandum of Agreement (MOA), with a monthly
salary of US$1,200.
Under the MOA, all newly-hired employees undergo a probationary period of one (1) year and are
covered by Kuwait's Civil Service Board Employment Contract No. 2.
Josefina was deployed on February 17, 2000 but was terminated from employment on February 11,
2001, she not having allegedly passed the probationary period. She returned to the Philippines on
March 17, 2001, shouldering her own air fare.
Josefina filed with the National Labor Relations Commission (NLRC) a complaint for illegal dismissal
against ATCI as the local recruitment agency, represented by Amalia Ikdal, and the Ministry, as the
foreign principal.
The Labor Arbiter (LA), finding that petitioners neither showed that there was just cause to warrant
Josefina's dismissal nor that she failed to qualify as a regular employee, held that Josefina was
illegally dismissed and accordingly ordered petitioners to pay her US$3,600.00, representing her
salary for the three months unexpired portion of her contract.
The NLRC affirmed the Labor Arbiter's decision. ATCI appealed to the Court of Appeals, contending
that their principal, the Ministry, being a foreign government agency, is immune from suit and, as
such, the immunity extended to them. Furthermore, respondent Echin was validly dismissed for her
failure to meet the performance rating within the one-year period as required under Kuwait's Civil
Service Laws.
The Court of Appeals affirmed the NLRC and LA decision. The CA noted that under the law, a private
employment agency shall assume all responsibilities for the implementation of the contract of
employment of an overseas worker, hence, it can be sued jointly and severally with the foreign
principal for any violation of the recruitment agreement or contract of employment.
As to Ikdal's liability, the CA held that under Sec. 10 of Republic Act No. 8042, the "Migrant and
Overseas Filipinos' Act of 1995," corporate officers, directors and partners of a recruitment agency
may themselves be jointly and solidarily liable with the recruitment agency for money claims and
damages awarded to overseas workers.
In the present petition, ATCI maintains that they should not be held liable because the employment
contract specifically stipulates that the employment shall be governed by the Civil Service Law and
Regulations of Kuwait. They thus conclude that it was patent error for the labor tribunals and the
appellate court to apply the Labor Code provisions governing probationary employment in deciding
the present case. Moreover, given that the foreign principal is a government agency which is immune
from suit, ATCI, being a mere agent, cannot likewise be held liable.
Held:
Local recruitment agency solidarily liable with foreign principal for money claims of OFWs
1. ATCI, as a private recruitment agency, cannot evade responsibility for the money claims of
Overseas Filipino workers (OFWs) which it deploys abroad by the mere expediency of claiming that
its foreign principal is a government agency clothed with immunity from suit, or that such foreign
principal's liability must first be established before it, as agent, can be held jointly and solidarily liable.
2. In providing for the joint and solidary liability of private recruitment agencies with their foreign
principals, Republic Act No. 8042 precisely affords the OFWs with a recourse and assures them of
immediate and sufficient payment of what is due them. To allow petitioners to simply invoke the
immunity from suit of its foreign principal or to wait for the judicial determination of the foreign
principal's liability before petitioner can be held liable renders the law on joint and solidary liability
inutile.
Obligations of local agent and foreign principal do not terminate even after the expiration of their
agreement, but continue for the full period of the employment contract of the worker recruited
3. The obligations covenanted in the recruitment agreement entered into by and between the local
agent and its foreign principal are not coterminous with the term of such agreement so that if either
or both of the parties decide to end the agreement, the responsibilities of such parties towards the
contracted employees under the agreement do not at all end, but the same extends up to and until
the expiration of the employment contracts of the employees recruited and employed pursuant to the
said recruitment agreement. Otherwise, this will render nugatory the very purpose for which the law
governing the employment of workers for foreign jobs abroad was enacted. (see Skippers United
Pacific v. Maguad)
Processual presumption
4. The contention that Philippine labor laws on probationary employment are not applicable since it
was expressly provided in respondent's employment contract, which she voluntarily entered into,
that the terms of her engagement shall be governed by prevailing Kuwaiti Civil Service Laws and
Regulations, has not been substantiated.
5. The party invoking the application of a foreign law has the burden of proving the law. The foreign
law is treated as a question of fact to be properly pleaded and proved as the judge or labor arbiter
cannot take judicial notice of a foreign law. He is presumed to know only domestic or forum law.
6. Under the International Law doctrine of presumed-identity approach or processual presumption,
where a foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign
law is the same as ours. Thus, the Philippine courts will apply Philippine labor laws in determining
the issues presented before it.
Proof of foreign law
7. To prove a foreign law, the party invoking it must present a copy thereof and comply with Sections
24 and 25 of Rule 132 of the Revised Rules of Court which reads:
SEC. 24. Proof of official record. The record of public documents referred to in paragraph (a) of
Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or
by a copy attested by the officer having the legal custody of the record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a foreign country, the certificate may be made
by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or
by any officer in the foreign service of the Philippines stationed in the foreign country in which the
record is kept, and authenticated by the seal of his office.
SEC. 25. What attestation of copy must state. - Whenever a copy of a document or record is attested
for the purpose of the evidence, the attestation must state, in substance, that the copy is a correct
copy of the original, or a specific part thereof, as the case may be. The attestation must be under the
official seal of the attesting officer, if there be any, or if he be the clerk of a court having a seal, under
the seal of such court.
8. To prove the Kuwaiti law, petitioners submitted the following: MOA between respondent and the
Ministry, as represented by ATCI, which provides that the employee is subject to a probationary
period of one (1) year and that the host country's Civil Service Laws and Regulations apply; a
translated copy (Arabic to English) of the termination letter to respondent stating that she did not
pass the probation terms, without specifying the grounds therefor, and a translated copy of the
certificate of termination, both of which documents were certified by Mr. Mustapha Alawi, Head of
the Department of Foreign Affairs-Office of Consular Affairs Inslamic Certification and Translation
Unit; and respondent's letter of reconsideration to the Ministry, wherein she noted that in her first
eight (8) months of employment, she was given a rating of "Excellent" albeit it changed due to
changes in her shift of work schedule.
9. These documents, whether taken singly or as a whole, do not sufficiently prove that respondent
was validly terminated as a probationary employee under Kuwaiti civil service laws. Instead of
submitting a copy of the pertinent Kuwaiti labor laws duly authenticated and translated by Embassy
officials thereat, as required under the Rules, what petitioners submitted were mere certifications
attesting only to the correctness of the translations of the MOA and the termination letter which does
not prove at all that Kuwaiti civil service laws differ from Philippine laws and that under such Kuwaiti
laws, respondent was validly terminated.
Joint and solidary liability as a corporate officer
10. Ikdal is likewise joint and solidary liable as a corporate officer under Section 10, R.A. 8042 on
money claims:
SEC. 10. Money Claims.-Notwithstanding any provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction
to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers
for overseas deployment including claims for actual moral, exemplary and other forms of 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 provision shall be incorporated in the contract for
overseas employment and shall be a condition precedent for its approval. The performance bond to
be filed by the recruitment/placement agency, as 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. (emphasis and underscoring supplied)
Serrano v. Gallant Maritime Services, Inc. (2009)
G.R. No. 167614 | 2009-03-24
Subject: The power of judicial review; The non-impairment clause is aligned with the general principle
that laws newly enacted have only a prospective operation; All private contracts must yield to the
police power of the State; Section 10 par 5 of R.A. No. 8042 is unconstitutional for it violates the
rights of OFWs to equal protection; No compelling state interest for the enforcement of the subject
clause; Salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses
Facts:
Antonio Serrano was hired by Gallant Maritime Services and Marlow Navigation. But on the date of
his departure, Serrano was constrained to accept a downgraded employment contract for the
position of Second Officer, upon the assurance and representation of Gallant and Marlow that he
would be made Chief Officer.
Gallant and Marlow did not deliver on their promise. Hence, Serrano refused to stay on as Second
Officer and was repatriated to the Philippines.
Serrano’s employment contract was for a period of 12 months but at the time of his repatriation, he
had served only two months and seven days of his contract, leaving an unexpired portion of nine
months and twenty-three days. He filed with the Labor Arbiter a complaint for constructive dismissal
and for payment of salary for the whole unexpired portion of his contract.
The Labor Arbiter found that Serrano was illegally dismissed and awarded him a lump-sum
representing his salary for three months of the unexpired portion of his contract of employment.
Serrano appealed to the NLRC to question the constitutionality of the last paragraph of Section 10,
R.A. No. 8042. Serrano claimed that the last clause of the law limited the OFWs entitlement in case
of illegal dismissal to their lump-sum salary either for the unexpired portion of their employment
contract “or for three months for every year of the unexpired term, whichever is less.” He argued that
it impairs the OFWs constitutional rights to negotiate in terms of their contract, deprives them of equal
protection and denies them due process.
The NLRC affirmed the decision but corrected the computation of the salary. The Court of Appeals
affirmed the NLRC ruling but did not rule on the constitutional issue raised by Serrano.
Held: The power of judicial review
1. For the Supreme Court to exercise its power of judicial review of the acts of its co-equals, such as
the Congress, the conditions must be obtained:
(1) that there is an actual case or controversy involving a conflict of rights susceptible of judicial
determination
(2) that the constitutional question is raised by a proper party ;
(3) the constitutional question is raised at the earliest opportunity; and
(3) that the constitutional question is the very lis mota of the case.
2. In the instant case, all the conditions are present. First, there exists an actual controversy directly
involving Serrano who is personally aggrieved that the labor tribunals and the CA computed his
monetary award based on the salary period of three months only as provided under the subject
clause. Second, the constitutional challenge is also timely. The requirement that a constitutional
issue be raised at the earliest opportunity entails the interposition of the issue in the pleadings before
a competent court. In this case, the issue is deemed seasonably raised at the Court of Appeals which
has the competence to resolve the constitutional issue. And third, the monetary claim of Serrano to
his lump-sum salary for the entire unexpired portion of his 12-month employment contract strikes at
the very core of the subject clause which is the constitutional issue.
The non-impairment clause is aligned with the general principle that laws newly enacted have only
a prospective operation
3. The non-impairment clause under Section 10, Article II is aligned with the general principle that
laws newly enacted have only a prospective operation and cannot affect acts or contracts already
perfected.
4. In this case, the enactment of R.A. No. 8042 in 1995 preceded the execution of the employment
contract between Serrano and Gallant Maritime in 1998. Hence, R.A. No. 8042, particularly the
subject clause, does not impair the employment contract of the parties. Rather, when the parties
executed their 1998 employment contract, they were deemed to have incorporated into it all the
provisions of R.A. No. 8042.
All private contracts must yield to the police power of the State
5. The law was enacted in the exercise of the police power of the State to regulate a business,
profession or calling, particularly the recruitment and deployment of OFWs, with the noble end in
view of ensuring respect for the dignity and well-being of OFWs wherever they may be employed.
Police power legislations adopted by the State to promote the general welfare of the people are
generally applicable not only to future contracts but even to those already in existence. All private
contracts must yield to the superior and legitimate measures taken by the State to promote public
welfare.
5th paragraph of Section 10 of R.A. No. 8042 is unconstitutional for it violates the rights of OFWs to
equal protection
6. Section 18, Article II and Section 3, Article XIII of the Constitution accord all members of the labor
sector, without distinction as to place of deployment, full protection of their rights and welfare. But
these rights are not absolute but subject to the inherent power of Congress to incorporate a system
of classification into its legislation. However, to be valid, the classification must comply with these
requirements:
1) it is based on substantial distinctions;
2) it is germane to the purposes of the law;
3) it is not limited to existing conditions only; and
4) it applies equally to all members of the class.
7. There are three levels of scrutiny at which the Court reviews the constitutionality of a classification
embodied in a law:
a) the deferential or rational basis scrutiny in which the challenged classification needs only be shown
to be rationally related to serving a legitimate state interest;
b) the middle-tier or intermediate scrutiny in which the government must show that the challenged
classification serves an important state interest and that the classification is at least substantially
related to serving that interest; and
c) strict judicial scrutiny in which a legislative classification which impermissibly interferes with the
exercise of a fundamental right or operates to the peculiar disadvantage of a suspect class[ is
presumed unconstitutional, and the burden is upon the government to prove that the classification is
necessary to achieve a compelling state interest and that it is the least restrictive means to protect
such interest.
8. In the instant case, upon employing the standard of strict judicial scrutiny, the subject clause in
R.A. 8042 classifies OFWs into two categories. The first category includes OFWs with fixed-period
employment contracts of less than one year and in case of illegal dismissal, they are entitled to their
salaries for the entire unexpired portion of their contract. The second category consists of OFWs
with fixed-period employment contracts of one year or more and in case of illegal dismissal, they are
entitled to monetary award equivalent to only 3 months of the unexpired portion of their contracts.
9. The disparity in the treatment of these two groups becomes more aggravating because prior to
R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired portions thereof, were
treated alike in terms of the computation of their monetary benefits in case of illegal dismissal. Their
claims were subjected to a uniform rule of computation: their basic salaries multiplied by the entire
unexpired portion of their employment contracts. This uniform system was applicable even to local
workers with fixed-term employment.
10. The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of
computation of the money claims of illegally dismissed OFWs based on their employment periods,
in the process singling out one category whose contracts have an unexpired portion of one year or
more and subjecting them to the peculiar disadvantage of having their monetary awards limited to
their salaries for 3 months or for the unexpired portion thereof, whichever is less, but all the while
sparing the other category from such prejudice, simply because the latter's unexpired contracts fall
short of one year.
No compelling state interest for the enforcement of the subject clause
11. In the present case, there is no compelling state interest that the subject clause may possibly
serve. The rationale of the subject clause in the transcripts of the “Bicameral Conference Committee
Meetings on the Magna Carta on OCWs” has no discernible state interest that is sought to be
protected or advanced by the adoption of the subject clause.
11. The argument by the OSG that the purpose of the subject clause is to protect the employment
of OFWs by mitigating the solidary liability of placement agencies must be rejected. There can never
be a justification for any form of government action that alleviates the burden of one sector, but
imposes the same burden on another sector, especially when the favored sector is composed of
private businesses such as placement agencies, while the disadvantaged sector is composed of
OFWs whose protection no less than the Constitution commands. Resort to these administrative
measures is undoubtedly the less restrictive means of aiding local placement agencies in enforcing
the solidary liability of their foreign principals.
12. The subject clause does not state or imply any definitive governmental purpose; and it is for that
precise reason that the clause violates not just petitioner's right to equal protection, but also her right
to substantive due process. Hence, Serrano is entitled to his salaries for the entire unexpired period
of nine months and 23 days of his employment contract.
Salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses
13. The word salaries in Section 10 (5) do not include overtime and leave pay. For seafarers, DOLE
Department Order No. 33 provides a Standard Employment Contract of Seafarers, in which salary
is understood as the basic wage, exclusive of overtime, leave pay and other bonuses; whereas
overtime pay is compensation for all work “performed” in excess of the regular eight hours, and
holiday pay is compensation for any work “performed” on designated rest days and holidays. Hence,
there is no basis for the automatic inclusion of overtime and holiday pay in the computation of
petitioner's monetary award unless there is evidence that he performed work during those periods.
Yap v. Thenamaris, GR 179532
Facts:
Yap was employed as electrician of the vessel, M/T SEASCOUT... by Intermare Maritime Agencies,
Inc. in behalf of its principal, Vulture Shipping Limited. The contract of employment... was for a
duration of 12 months
Yap boarded M/T SEASCOUT and commenced his job as electrician. However... the vessel was
sold.
Yap, along with the other crewmembers, was informed... that the same was sold and will be
scrapped.
Yap received his seniority bonus, vacation bonus, extra bonus along with the scrapping bonus.
However, with respect to the payment of his wage, he refused to accept the payment of one-month
basic wage.
He insisted that he was entitled to the payment of the unexpired... portion of his contract since he
was illegally dismissed from employment.
He alleged that he opted for immediate transfer but none was made.
[Respondents], for their part, contended that
Yap's employment contract was validly terminated due to the sale of the vessel and no arrangement
was made for Yap's transfer to Thenamaris' other vessels.
Thus,... Yap... filed a complaint for Illegal Dismissal with Damages... before the Labor Arbiter (LA).
laimed that he was entitled to the salaries corresponding to the unexpired portion of his contract.
LA rendered a decision... in favor of petitioner... respondents sought recourse from the NLRC.
In its decision
, the NLRC affirmed the LA's findings
Respondents filed a Motion for Partial Reconsideration... the NLRC reversed its earlier
Decision, holding that "there can be no choice to grant only three (3) months salary for every year of
the unexpired term because there is no full year of unexpired term which this can be applied."
Hence -
CA affirmed the findings and ruling of the LA and the NLRC... petitioner posits that, assuming said...
provision of law is constitutional, the CA gravely abused its discretion when it reduced petitioner's
backwages from nine months to three months as his nine-month unexpired term cannot
accommodate the lesser relief of three months for every year of the unexpired term.[24]
Issues: Whether or not Section 10 of R.A. [No.] 8042, to the extent that it affords an illegally dismissed
migrant worker the lesser benefit of - "salaries for [the] unexpired portion of his employment contract
or for three (3) months for every... year of the unexpired term, whichever is less" - is constitutional
Assuming that it is, whether or not the Court of Appeals gravely erred in granting petitioner only three
(3) months backwages when his unexpired term of 9 months is far short of the "every year of the
unexpired term" threshold.
Ruling:
the 5th paragraph of Section 10, R.A. No. 8042, is violative of Section 1,... Article III and Section 3,...
Article XIII of the
Constitution to the extent that it gives an erring employer the option to pay an illegally dismissed
migrant worker only three months for every year of the unexpired term of his contract; that said
provision of law has long been a source of abuse by callous employers against... migrant workers
; and that said provision violates the equal protection clause under the Constitution because, while
illegally dismissed local workers are guaranteed under the Labor Code of reinstatement with full
backwages computed from the time compensation was withheld from... them up to their actual
reinstatement, migrant workers, by virtue of Section 10 of R.A. No. 8042, have to waive nine months
of their collectible backwages every time they have a year of unexpired term of contract to reckon
with.
The petition is impressed with merit
Veril... y, we have already declared in Serrano that the clause "or for three months for every year of
the unexpired term, whichever is less" provided in the 5th paragraph of Section 10 of R.A. No. 8042
is unconstitutional for being violative of... the rights of Overseas Filipino Workers (OFWs) to equal
protection of the laws. In an exhaustive discussion of the intricacies and ramifications of the said
clause, this Court, in Serrano, pertinently held:
The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged, it
imposes a 3-month cap on the claim of OFWs with an unexpired portion of... one year or more in
their contracts, but none on the claims of other OFWs or local workers with fixed-term employment.
The subject clause singles out one classification of OFWs and burdens it with a peculiar
disadvantage.
As a general rule, an unconstitutional act is not a law; it confers no rights; it imposes no duties; it
affords no protection; it creates no office; it is inoperative as if it has not been passed at all.
The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity
and fair play. It nullifies the effects of an unconstitutional law by recognizing that the existence of a
statute prior to a determination of unconstitutionality... is an operative fact and may have
consequences which cannot always be ignored.
The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on
those who have relied on the invalid law.
Following Serrano, we hold that this case should not be included in the aforementioned exception.
After all, it was not the fault of petitioner that he lost his job due to an act of illegal dismissal committed
by respondents.
To rule otherwise would be iniquitous to... petitioner and other OFWs, and would, in effect, send a
wrong signal that principals/employers and recruitment/manning agencies may violate an OFW's
security of tenure which an employment contract embodies and actually profit from such violation
based on an unconstitutional... provision of law.
WHEREFORE, the Petition is GRANTED.
Sameer Overseas Placement Agency, Inc. v. Joyy C. Cabiles, GR 170139
Subject: Management prerogative to impose productivity and quality standards at work is balanced
with the employee's right to security of tenure; With respect to the rights of overseas Filipino workers
(OFWs), the principle of lex loci contractus governs; Overseas Filipino workers (OFWs) may only be
terminated for a just or authorized cause and after compliance with procedural due process
requirements; Just causes for termination; Inefficiency as a ground for termination, requisites; Joy's
dismissal was illegal for being without just cause and for failure to comply with procedural due
process; Illegally dismissed OFW, monetary claims; Entitlement to salaries for unexpired portion of
employment contract; Entitlement to refund of repatriation costs; Entitlement to attorney's fees;
Reinstated clause in RA 10022 is unconstitutional (for being violative of the equal protection and due
process clause); Legal interest applicable; Reimbursement of placement fee — 12% interest per
annum; Reimbursement of salary for the unexpired portion of the employment contract — 6% interest
per annum; Solidary liability of the foreign principal and the employment agency
Facts:
Joy C. Cabiles applied for a quality control job in Taiwan with petitioner Sameer Overseas Placement
Agency, Inc., a recruitment and placement agency.
Joy was later asked to sign a one-year employment contract for a monthly salary of NT$15,360.00.8
She alleged that petitioner required her to pay a placement fee of P70,000.00 when she signed the
employment contract.
Joy was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal) on June 26, 1997. While her
employment contract stated that would work as quality control, in Taiwan, she was asked to work as
a cutter
On July 14, 1997, a certain Mr. Huwang from Wacoal informed Joy, without prior notice, that she
was terminated and that she should immediately report to their office to get her salary and passport.
She was asked to “prepare for immediate repatriation.”
Joy claims that she was told that from June 26 to July 14, 1997, she only earned a total of NT$9,000.
According to her, Wacoal deducted NT$3,000 to cover her plane ticket to Manila
Upon her return, Joy filed a complaint with the National Labor Relations Commission (NLRC) against
petitioner and Wacoal. She claimed that she was illegally dismissed and asked for the return of her
placement fee, the withheld amount for repatriation costs, payment of her salary for 23 months as
well as moral and exemplary damages.
Petitioner Sameer Agency alleged that Joy's termination was due to her inefficiency, negligence in
her duties, and her “failure to comply with the work requirements of her foreign employer.” The
agency also claimed that it did not ask for a placement fee of 70,000.00 and showed Official Receipt
No. 14860 bearing the amount of 20,360.00.23 Petitioner added that Wacoal's accreditation with
petitioner had already been transferred to the Pacific Manpower & Management Services, Inc. as of
August 6, 1997.24 Thus, petitioner asserts that it was already substituted by Pacific Manpower.
The Labor Arbiter dismissed Joy’s complaint ruling that her complaint was based on mere
allegations.It also found no excess payment of placement fees.
The NLRC, however, declared that Joy was illegally dismissed. It found that Sameer Agency failed
to prove that there were just causes for termination. Furthermore, procedural due process was not
observed in terminating Joy. The NLRC awarded Joy only three months worth of salary in the amount
of NT$46,080, the reimbursement of the NT$3,000 withheld from her, and attorney’s fees of
NT$300.46
The Court of Appeals affirmed the decision of the NLRC but remanded the case to the NLRC to
address the validity of Sameer's allegations against Pacific.
Dissatisfied, Sameer Agency filed a petition with the Supreme Court.
Held:
Management prerogative to impose productivity and quality standards at work is balanced with the
employee's right to security of tenure
1. Employers have the prerogative to impose productivity and quality standards at work. They may
also impose reasonable rules to ensure that the employees comply with these standards. Failure to
comply may be a just cause for their dismissal. Certainly, employers cannot be compelled to retain
the services of an employee who is guilty of acts that are inimical to the interest of the employer.
While the law acknowledges the plight and vulnerability of workers, it does not “authorize the
oppression or self-destruction of the employer.”Management prerogative is recognized in law and in
our jurisprudence
2. This prerogative, however, should not be abused. It is tempered with the employee’s right to
security of tenure. Workers are entitled to substantive and procedural due process before
termination. They may not be removed from employment without a valid or just cause as determined
by law and without going through the proper procedure.
With respect to the rights of overseas Filipino workers (OFWs), the principle of lex loci contractus
governs
3. Security of tenure for labor is guaranteed by our Constitution. Employees are not stripped of their
security of tenure when they move to work in a different jurisdiction. With respect to the rights of
overseas Filipino workers, we follow the principle of lex loci contractus.
4. The rule that lex loci contractus (the law of the place where the contract is made) governs in this
jurisdiction. There is no question that the contract of employment in this case was perfected here in
the Philippines. Therefore, the Labor Code, its implementing rules and regulations, and other laws
affecting labor apply in this case. (see Triple Eight Integrated Services, Inc. v. NLRC)
Overseas Filipino workers (OFWs) may only be terminated for a just or authorized cause and after
compliance with procedural due process requirements
5. Settled is the rule that the courts of the forum will not enforce any foreign claim obnoxious to the
forum’s public policy. Here in the Philippines, employment agreements are more than contractual in
nature. The Constitution itself, in Article XIII, Section 3, guarantees the special protection of workers.
This public policy should be borne in mind in this case because to allow foreign employers to
determine for and by themselves whether an overseas contract worker may be dismissed on the
ground of illness would encourage illegal or arbitrary pretermination of employment contracts (see
Triple Eight Integrated Services, Inc. v. NLRC)
6. By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or authorized
cause and after compliance with procedural due process requirements.
Just causes for termination
7. Article 282 of the Labor Code enumerates the just causes of termination by the employer. Thus:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer
or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representatives; and
(e) Other causes analogous to the foregoing.
Inefficiency as a ground for termination, requisites
8. Petitioner’s allegation that Joy was inefficient in her work and negligent in her duties may
constitute a just cause for termination under Article 282(b)
9. To show that dismissal resulting from inefficiency in work is valid, it must be shown that:
(a) the employer has set standards of conduct and workmanship against which the employee will be
judged;
(b) the standards of conduct and workmanship must have been communicated to the employee; and
(c) the communication was made at a reasonable time prior to the employee’s performance
assessment.
10. This is similar to the law and jurisprudence on probationary employees, which allow termination
of the employee only when there is “just cause or when [the probationary employee] fails to qualify
as a regular employee in accordance with reasonable standards made known by the employer to
the employee at the time of his [or her] engagement.” However, we do not see why the application
of that ruling should be limited to probationary employment. That rule is basic to the idea of security
of tenure and due process, which are guaranteed to all employees, whether their employment is
probationary or regular.
11. The pre-determined standards that the employer sets are the bases for determining the
probationary employee’s fitness, propriety, efficiency, and qualifications as a regular employee. Due
process requires that the probationary employee be informed of such standards at the time of his or
her engagement so he or she can adjust his or her character or workmanship accordingly.
12. Assessing an employee’s work performance does not stop after regularization. The employer,
on a regular basis, determines if an employee is still qualified and efficient, based on work standards.
Based on that determination, and after complying with the due process requirements of notice and
hearing, the employer may exercise its management prerogative of terminating the employee found
unqualified. The regular employee must constantly attempt to prove to his or her employer that he
or she meets all the standards for employment. This time, however, the standards to be met are set
for the purpose of retaining employment or promotion.
Joy's dismissal was illegal
(a) Sameer Overseas Placement Agency failed to show that there was just cause for causing Joy’s
dismissal
13. The burden of proving that there is just cause for termination is on the employer. The employer
must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause.
Failure to show that there was valid or just cause for termination would necessarily mean that the
dismissal was illegal.
14. In this case, petitioner merely alleged that Joy failed to comply with her foreign employer’s work
requirements and was inefficient in her work. No evidence was shown to support such allegations.
Petitioner did not even bother to specify what requirements were not met, what efficiency standards
were violated, or what particular acts of respondent constituted inefficiency.
15. There was also no showing that Joy was sufficiently informed of the standards against which
her work efficiency and performance were judged. The parties’ conflict as to the position held by Joy
showed that even the matter as basic as the job title was not clear.
(b) The employer, Wacoal, failed to accord her due process of law
16. The employer is required to give the charged employee at least two written notices before
termination. One of the written notices must inform the employee of the particular acts that may
cause his or her dismissal. The other notice must “inform the employee of the employer’s decision.”
Aside from the notice requirement, the employee must also be given “an opportunity to be heard.”
17. Petitioner failed to comply with the twin notices and hearing requirements. Joy started working
on June 26, 1997. She was told that she was terminated on July 14, 1997 effective on the same day
and barely a month from her first workday. She was also repatriated on the same day that she was
informed of her termination. The abruptness of the termination negated any finding that she was
properly notified and given the opportunity to be heard. Her constitutional right to due process of law
was violated.
Illegally dismissed OFW, monetary claims
18. Joy Cabiles, having been illegally dismissed, is entitled to her salary for the unexpired portion of
the employment contract together with attorney’s fees and reimbursement of the amounts withheld
from her salary.
(a) Entitlement to salaries for unexpired portion of employment contract
19. The Court of Appeals affirmed the NLRC’s decision to award Joy NT$46,080.00 or the three-
month equivalent of her salary. The award should be increased to the amount equivalent to the
unexpired term of the employment contract.
20. Section 10 of Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995, states that overseas workers who were terminated without just, valid, or
authorized cause “shall be entitled to the full reimbursement of his placement fee with interest of
twelve (12%) per annum, plus his salaries for the unexpired portion of his employment contract or
for three (3) months for every year of the unexpired term, whichever is less.”
21. In Serrano vs. Gallant Maritime Services, Inc. (2009), the court ruled that the clause “or for three
(3) months for every year of the unexpired term, whichever is less” is unconstitutional for violating
the equal protection clause and substantive due process.
22. Notably, the clause “or for three (3) months for every year of the unexpired term, whichever is
less” was reinstated in Republic Act No. 8042 upon promulgation of Republic Act No. 10022 in 2010.
23. Republic Act No. 10022 was promulgated on March 8, 2010. This means that the reinstatement
of the clause in Republic Act No. 8042 was not yet in effect at the time of respondent Joy’s
termination from work in 1997. Republic Act No. 8042 before it was amended by Republic Act No.
10022 governs this case.
(b) Entitlement to refund of repatriation costs
24. Section 15 of Republic Act No. 8042 states that “repatriation of the worker and the transport of
his [or her] personal belongings shall be the primary responsibility of the agency which recruited or
deployed the worker overseas.” The exception is when “termination of employment is due solely to
the fault of the worker,” which as we have established, is not the case
(c) Entitlement to attorney's fees
25. The Labor Code also entitles the employee to 10% of the amount of withheld wages as attorney’s
fees when the withholding is unlawful.
Reinstated clause in RA 10022 is unconstitutional (for being violative of the equal protection and due
process clause)
26. When a law or a provision of law is null because it is inconsistent with the Constitution, the nullity
cannot be cured by reincorporation or reenactment of the same or a similar law or provision. A law
or provision of law that was already declared unconstitutional remains as such unless circumstances
have so changed as to warrant a reverse conclusion.
27. We are not convinced that the situation has so changed so as to cause us to reverse binding
precedent. The new law puts our overseas workers in the same vulnerable position as they were
prior to Serrano.
28. We reiterate our finding in Serrano v. Gallant Maritime that limiting wages that should be
recovered by an illegally dismissed overseas worker to three months is both a violation of due
process and the equal protection clauses of the Constitution.
29. The reinstated clause does not satisfy the requirement of reasonable classification. A reasonable
classification “(1) must rest on substantial distinctions; (2) must be germane to the purposes of the
law; (3) must not be limited to existing conditions only; and (4) must apply equally to all members of
the same class.”
30. The classifications made by the reinstated clause distinguished between fixed-period overseas
workers and fixed period local workers. It also distinguished between overseas workers with
employment contracts of less than one year and overseas workers with employment contracts of at
least one year. Within the class of overseas workers with at least one-year employment contracts,
there was a distinction between those with at least a year left in their contracts and those with less
than a year left in their contracts when they were illegally dismissed.
31. We noted in Serrano that before the passage of Republic Act No. 8042, the money claims of
illegally terminated overseas and local workers with fixed-term employment were computed in the
same manner. Their money claims were computed based on the “unexpired portions of their
contracts.”The adoption of the reinstated clause in Republic Act No. 8042 subjected the money
claims of illegally dismissed overseas workers with an unexpired term of at least a year to a cap of
three months worth of their salary.There was no such limitation on the money claims of illegally
terminated local workers with fixed-term employment.
32. Moreover, illegally dismissed overseas workers whose employment contracts had a term of less
than one year were granted the amount equivalent to the unexpired portion of their employment
contracts. Meanwhile, illegally dismissed overseas workers with employment terms of at least a year
were granted a cap equivalent to three months of their salary for the unexpired portions of their
contracts.
33. These classifications do not rest on any real or substantial distinctions that would justify different
treatments in terms of the computation of money claims resulting from illegal termination. The rights
violated when a fixed-period local worker is illegally terminated are neither greater than nor less than
the rights violated when a fixed-period overseas worker is illegally terminated. It is state policy to
protect the rights of workers without qualification as to the place of employment
34. The reinstated clause also violates due process rights. It is arbitrary as it deprives overseas
workers of their monetary claims without any discernable valid purpose.
Legal interest applicable
(a) Reimbursement of placement fee — 12% interest per annum
35. The Bangko Sentral ng Pilipinas Circular No. 799 of June 21, 2013 revised the interest rate for
loan or forbearance from 12% to 6% per annum in the absence of stipulation.
36. BSP Circular No. 799 is applicable only in loans and forbearance of money, goods, or credits,
and in judgments when there is no stipulation on the applicable interest rate. Further, it is only
applicable if the judgment did not become final and executory before July 1, 2013.
37. BSP Circular No. 799 is not applicable when there is a law that states otherwise. While the
Bangko Sentral ng Pilipinas has the power to set or limit interest rates, these interest rates do not
apply when the law provides that a different interest rate shall be applied. A Central Bank Circular
cannot repeal a law. Only a law can repeal another law.”
38. Section 10 of Republic Act No. 8042 provides that unlawfully terminated overseas workers are
entitled to the reimbursement of his or her placement fee with an interest of 12% per annum. Since
Bangko Sentral ng Pilipinas circulars cannot repeal Republic Act No. 8042, the issuance of Circular
No. 799 does not have the effect of changing the interest on awards for reimbursement of placement
fees from 12% to 6%. This is despite Section 1 of Circular No. 799, which provides that the 6%
interest rate applies even to judgments.
39. Moreover, laws are deemed incorporated in contracts. The contracting parties need not repeat
them. They do not even have to be referred to. Every contract, thus, contains not only what has been
explicitly stipulated, but the statutory provisions that have any bearing on the matter. There is,
therefore, an implied stipulation in contracts between the placement agency and the overseas worker
that in case the overseas worker is adjudged as entitled to reimbursement of his or her placement
fees, the amount shall be subject to a 12% interest per annum. This implied stipulation has the effect
of removing awards for reimbursement of placement fees from Circular No. 799’s coverage.
(b) Reimbursement of salary for the unexpired portion of the employment contract — 6% interest per
annum
40. The same cannot be said for awards of salary for the unexpired portion of the employment
contract under Republic Act No. 8042. These awards are covered by Circular No. 799 because the
law does not provide for a specific interest rate that should apply.
41. In sum, if judgment did not become final and executory before July 1, 2013 and there was no
stipulation in the contract providing for a different interest rate, other money claims under Section 10
of Republic Act No. 8042 shall be subject to the 6% interest per annum in accordance with Circular
No. 799.
42. This means that respondent Joy is also entitled to an interest of 6% per annum on her money
claims from the finality of this judgment.
Solidary liability of the foreign principal and the employment agency
43. Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 provides that the foreign
employer and the local employment agency are jointly and severally liable for money claims including
claims arising out of an employer-employee relationship and/or damages. This section also provides
that the performance bond filed by the local agency shall be answerable for such money claims or
damages if they were awarded to the employee.
44. In overseas employment, the filing of money claims against the foreign employer is attended by
practical and legal complications. The distance of the foreign employer alone makes it difficult for an
overseas worker to reach it and make it liable for violations of the Labor Code. There are also
possible conflict of laws, jurisdictional issues, and procedural rules that may be raised to frustrate an
overseas worker’s attempt to advance his or her claims. The provision on joint and several liability
in the Migrant Workers and Overseas Filipinos Act of 1995 assures overseas workers that their rights
will not be frustrated with these complications.
45. The fundamental effect of joint and several liability is that “each of the debtors is liable for the
entire obligation.” A final determination may, therefore, be achieved even if only one of the joint and
several debtors are impleaded in an action. Hence, in the case of overseas employment, either the
local agency or the foreign employer may be sued for all claims arising from the foreign employer’s
labor law violations. This way, the overseas workers are assured that someone — the foreign
employer’s local agent — may be made to answer for violations that the foreign employer may have
committed. By providing that the liability of the foreign employer may be “enforced to the full extent”
against the local agent, the overseas worker is assured of immediate and sufficient payment of what
is due them.

46. Corollary to the assurance of immediate recourse in law, the provision on joint and several
liability in the Migrant Workers and Overseas Filipinos Act of 1995 shifts the burden of going after
the foreign employer from the overseas worker to the local employment agency. However, it must
be emphasized that the local agency that is held to answer for the overseas worker’s money claims
is not left without remedy. The law does not preclude it from going after the foreign employer for
reimbursement of whatever payment it has made to the employee to answer for the money claims
against the foreign employer.

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III. Employment of Non-resident Aliens

D. Prohibition against transfer of employment (Art 41 LC)
1. General Milling Corp. v. Torres, GR 9366

General Milling Corporation vs. Torres

G.R No. 9366, April 22, 1991

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

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

HELD:
The Secretary of Labor did not act with grave abuse of discretion in revoking Cone’s Alien
Employment Permit. GMC’s claim that hiring of a foreign coach is an employer’s prerogative has no
legal basis. Under Section 40 of the Labor Code, an employer seeking employment of an alien must
first obtain an employment permit from the Department of labor. GMC’s right to choose whom to
employ is limited by the statutory requirement of an employment permit.

The Labor Code empowers the Labor Secretary to determine as to the availability of the
services of a “person in the Philippines who is competent, able and willing at the time of the
application to perform the services for which an alien is desired.”

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