G.R. Nos.

L-58674-77 July 11, 1990

PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of
First Instance of Zambales & Olongapo City, Branch III and
SERAPIO ABUG, respondents.

CRUZ, J:
The basic issue in this case is the correct interpretation of Article
13(b) of P.D. 442, otherwise known as the Labor Code, reading as
follows:
(b) Recruitment and placement' refers to any act of
canvassing, enlisting, contracting, transporting, 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.
Four informations were filed on January 9, 1981, in the Court of
First Instance of Zambales and Olongapo City alleging that Serapio
Abug, private respondent herein, "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 named therein, in violation of Article 16 in relation to
Article 39 of the Labor Code. 1
Abug filed a motion to quash on the ground that the informations
did not charge an offense because he was accused of illegally
recruiting only one person in each of the four informations. Under
the proviso in Article 13(b), he claimed, there would be illegal
recruitment only "whenever two or more persons are in any
manner promised or offered any employment for a fee. " 2
Denied at first, the motion was reconsidered and finally granted in
the Orders of the trial court dated June 24 and September 17,
1981. The prosecution is now before us on certiorari. 3

The number of persons dealt with is not an essential ingredient of

the act of recruitment and placement of workers. Any of the acts
mentioned in the basic rule in Article 13(b) win constitute
recruitment and placement even if 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.
This is not unlike the presumption in article 217 of the Revised
Penal Code, for example, regarding the failure of a public officer to
produce upon lawful demand funds or property entrusted to his
custody. Such failure shall beprima facie evidence that he has put
them to personal use; in other words, he shall be deemed to have
malversed such funds or property. In the instant case, the word
"shall be deemed" should by the same token be given the force of
a disputable presumption or of prima facie evidence of engaging
in recruitment and placement. (Klepp vs. Odin Tp., McHenry
County 40 ND N.W. 313, 314.)
It is unfortunate that we can only speculate on the meaning of the
questioned provision for lack of records of debates and
deliberations that would otherwise have been available if the
Labor Code had been enacted as a statute rather than a
presidential decree. The trouble with presidential decrees is that
they could be, and sometimes were, issued without previous
public discussion or consultation, the promulgator heeding only
his own counsel or those of his close advisers in their lofty
pinnacle of power. The not infrequent results are rejection,
intentional or not, of the interest of the greater number and, as in
the instant case, certain esoteric provisions that one cannot read
against the background facts usually reported in the legislative
journals.
At any rate, the interpretation here adopted should give more
force to the campaign against illegal recruitment and placement,
which has victimized many Filipino workers seeking a better life in
a foreign land, and investing hard- earned savings or even
borrowed funds in pursuit of their dream, only to be awakened to
the reality of a cynical deception at the hands of theirown
countrymen.
WHEREFORE, the Orders of June 24, 1981, and September 17,
1981, are set aside and the four informations against the private
respondent reinstated. No costs.
SO ORDERED.

The posture of the petitioner is that the private respondent is

being prosecuted under Article 39 in relation to Article 16 of the
Labor Code; hence, Article 13(b) is not applicable. However, as the
first two cited articles penalize acts of recruitment and placement
without proper authority, which is the charge embodied in the
informations, application of the definition of recruitment and
placement in Article 13(b) is unavoidable.
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 mre 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. The other acts mentioned in the body of
the article may involve even only one person and are not
necessarily for profit.
Neither interpretation is acceptable. We fail to see why the proviso
should speak only of an offer or promise of employment if the
purpose was to apply the requirement of two or more persons to
all the acts mentioned in the basic rule. For its part, the petitioner
does not explain why dealings with two or more persons are
needed where the recruitment and placement consists of an offer
or promise of employment but not when it is done through
"canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring (of) workers.
As we see it, the proviso was intended neither to impose a
condition on the basic rule nor to provide an exception thereto but
merely to create a 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. "

G.R. No. L-79436-50 January 17, 1990

EASTERN ASSURANCE & SURETY CORPORATION, petitioner,
vs.
SECRETARY OF LABOR, PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION, ELVIRA VENTURA, ESTER
TRANGUILLAN, et al., respondents.
Tanjuatco, Oreta, Tanjuatco, Berenguer & San Vicente for
petitioner.

NARVASA, J.:
In connection with the application with the Philippine Overseas
Employment Administration (POEA) of J & B Manpower Specialist,
Inc. for a license to engage in business as a recruitment agency, a
surety bond was filed on January 2, 1985 by the applicant and the
Eastern Assurance and Surety Corporation, herein petitioner, in
virtue of which they both held themselves
. . . firmly bound unto (said) Philippine Overseas Employment
Administration, Ministry of Labor in the penal sum of PESOS
ONE HUNDRED FIFTY THOUSAND ONLY . . . (Pl50,000.00) for
the payment of which will and truly to be made, . . . (they
bound themselves, their) heirs, executors, administrators,
successors and assigns, jointly and severally . .
The bond stipulated that:

a) it was "conditioned upon the true and faithful performance and

observance of the . . . principal (J & B Manpower Specialist, Inc.) of
its duties and obligations in accordance with all the rules and
regulations promulgated by the Ministry of Labor Philippine
Overseas Employment Administration and with the terms and
conditions stipulated in the License;
b) the liability of the . . . Surety (petitioner) shall in no case exceed
the sum of PESOS ONE HUNDRED FIFTY THOUSAND (P150,000.00)
ONLY, PHILIPPINE CURRENCY; 1
c) notice to the Principal is also a notice to the Surety; and
d) LIABILITY of the surety . . . shall expire on JANUARY 02, 1986
and this bond shall be automatically cancelled ten (10) days after
its expiration and the surety shall not be liable for any claim not
discovered and presented to it in writing within said period of . . .
from expiration and the obligee hereby expressly waives the rights
to file any court action against the Surety after termination of said
period of . . . . above cited. 2
As narrated by respondent Secretary of Labor, the facts are as
follows: 3
From June 1983 to December 1985 . . . thirty three (33) . . .
(persons) applied for overseas employment with . . . (J & B).
In consideration of promised deployment, complainants paid
respondent various amounts for various fees. Most of' the
receipts issued were sighed by Mrs. Baby Bundalian,
Executive Vice-President of . . . (J & B).
Because of non-deployment . . . (the applicants) filed
separate complaints with the Licensing and Regulation Office
of POEA against . . . (J & B) for violation of Articles 32 and 34
(a) of the Labor Code between the months of April to October
1985.
Despite summons/notices of hearing,, . . . (J & B) failed to file
Answer nor appear in the hearings conducted.
In its separate Answer, . . . EASCO essentially disclaimed
liability on the ground that the claims were not expressly
covered by the bond, that POEA had no jurisdiction to order
forfeiture of the bond, that some of the claims were paid
beyond or prior to the period of effectivity of the bond.
On September 8, 1986, the POEA Administrator issued the
Order in favor of complainants ruling thus:
After careful evaluation, we find that the receipts and
testimonies of complainants, in the absence of
controverting evidence substantially establish that
respondent charged and collected fees from them in
amounts exceeding what is prescribed by this
Administration. Complainants' non-deployment strongly
indicates that there was no employment obtained for
them. Hence, violation of Articles 32 and 34 (a) of the
Labor Code, as amended, is established against
respondent. The claims of complainants having arose
(arisen) out of acts of the principal covered under the
surety (bond), the respondent surety is equally liable
therefor.
Except for complainants Ramos, Samson, de Leon and
Rizada, whose claims were transacted prior to the effectivity
of the bond, . . . EASCO was declared jointly and severally
liable with . . . (J & B) to twenty-nine (29) complainants.
(The dispositive portion of the POEA Administrator's Order
also contained the following statement and direction, viz.:
Respondent was suspended on May 23, 1985, June 26,
1985 and January 17, 1986 all for illegal exaction.
Considering its track record of illegal exaction activities
and considering further the gross violation of
recruitment rules and regulations established against it
in the instant cases, and the expiration of its license on
February 15, 1985, it is hereby forever banned from
participation in the overseas employment program. It is
ordered to cease and desist from further engaging in
recruitment activities otherwise it shall be prosecuted for
illegal recruitment.')

(J & B filed a motion for reconsideration). On December 19,

1986, the then deputy Minister of Labor and Employment
denied the . . . Motion for Reconsideration for lack of merit
and affirmed the findings in the Order of the POEA
Administrator finding no reversible error therein.
On appeal by EASCO J & B having as aforestated taken no part
in the proceeding despite due service of summons the
judgment was modified by the Secretary of Labor, by Order dated
July 1, 1987, disposing as follows: 4
WHEREFORE, in view of the foregoing, the Resolution of the
then Deputy Minister of Labor dated December 19, 1986
affirming the Order of the POEA Administrator dated
September 8, 1986 is hereby MODIFIED. Respondent J & B
Manpower Specialist is directed to refund all thirty-three (33)
complainants as listed in the Order of September 8, 1986 in
the amounts listed thereto with the modification that
complainants Lucena Cabasal and Felix Rivero are both
entitled only to P15,980 and not P15,980 each. Respondent
Eastern Assurance and Surety Corporation is hereby found
jointly and severally liable with respondent J & B Manpower
Specialist to refund nineteen (19) complainants in the
modified amounts . . . (particularly specified).
The other findings in the Order of the POEA Administrator
dated September 8, 1986 affirmed in the Resolution of the
then Deputy Minister . . . are also hereby AFFIRMED. This
Order is FINAL. No further Motion for Reconsideration hereof
shall be entertained.
It is noteworthy that EASCO's liability for the refund, jointly and
severally with its principal, was limited to 19 named complainants
(in contrast to verdicts of the POEA and the Deputy Minister which
both ordered payment to no less than 33 complainants) and was
correspondingly reduced from P308,751.75 and US $ 400.00 5 to
the aggregate amount of P 140,817.75. 6
The special civil action of certiorari at bar was thereafter instituted
by EASCO 7 praying for the nullification of the POEA
Administrator's Order of September 8, 1986, the Resolution of the
Deputy Minister of Labor of' December 19, 1986, and the Order of
the Secretary of Labor of July 1, 1987, It theorizes that:
1) the POEA had no jurisdiction over the claims for refund
filed by non-employees;
2) neither did the Secretary of Labor have jurisdiction of the
claims;
3) assuming they had jurisdiction, both the POEA and
Secretary of Labor also committed legal errors and acted with
grave abuse of discretion when they ruled that petitioner is
liable on the claims.
EASCO contends that the POEA had no "adjudicatory jurisdiction"
over the monetary claims in question because the same "did not
arise from employer-employee relations." Invoked in support of
the argument is Section 4 (a) of EO 797 providing in part 8 that the
POEA has
. . . original and exclusive jurisdiction over all cases,
including money claims, involving employer-employee
relations arising out of or by virtue of any law or contract
involving Filipino workers for overseas employment
including seamen . . .
The complaints are however for violation of Articles 32 and
34 a) of the Labor Code. Article 32 and paragraph (a) of
Article 34 read as follows:
Art. 32. Fees to be paid by workers.Any person
applying with a private fee-charging employment agency
for employment assistance shall not be charged any fee
until he has obtained employment through its efforts or
has actually commenced employment. Such fee shall be
always covered with the approved receipt clearly
showing the amount paid. The Secretary of Labor shall
promulgate a schedule of allowable fees.
Art. 34. Prohibited practices.It shall be unlawful for any
individual, entity, licensee, or holder of authority:

a) To charge or accept, directly or indirectly, any amount

greater than that specified in the schedule of allowable
fees prescribed by the Secretary of Labor, or to make a
worker pay any amount greater than actually received
by him as a loan or advance; . . .
The penalties of suspension and cancellation of license or
authority are prescribed for violations of the above quoted
provisions, among others. And the Secretary of Labor has the
power under Section 35 of the law to apply these sanctions, as
well as the authority, conferred by Section 36, not only, to "restrict
and regulate the recruitment and placement activities of all
agencies," but also to "promulgate rules and regulations to carry
out the objectives and implement the provisions" governing said
activities. Pursuant to this rule-making power thus granted, the
Secretary of Labor gave the POEA 9 "on its own initiative or upon
filing of a complaint or report or upon request for investigation by
any aggrieved person, . . . (authority to) conduct the necessary
proceedings for the suspension or cancellation of the license or
authority of any agency or entity" for certain enumerated offenses
including
1) the imposition or acceptance, directly or indirectly, of any
amount of money, goods or services, or any fee or bond in excess
of what is prescribed by the Administration, and
2) any other violation of pertinent provisions of the Labor Code
and other relevant laws, rules and regulations. 10
The Administrator was also given the power to "order the
dismissal of the case or the suspension of the license or
authority of the respondent agency or contractor or
recommend to the Minister the cancellation thereof." 11

respondent agency, was notified/ summoned prior to the

expiration period or before January 12, 1986. Respondent
agency received summons on July 24, 1985 with respect to
claims of complainants Penarroyo, dela Cruz and Canti. It also
received summons on November 26, 1985 with respect to
Giovanni Garbillons' claim. Respondent agency was likewise
considered constructively notified of the claims of
complainants Calayag, Danuco Domingo and Campena on
October 6, 1985. In this connection, it may be stressed that
the surety bond provides that notice to the principal is notice
to the surety. Besides, it has been held that the contract of a
compensated surety like respondent EASCO is to be
interpreted liberally in the interest of the promises and
beneficiaries rather than strictly in favor of the surety
(Acoustics Inc. v. American Surety, 74 Nev-6, 320 P2d. 626,
74 Am. Jur. 2d).
So, too, EASCO's claim that it had not been properly served with
summons as regards a few of the complaints must be rejected,
the issue being factual, and the Court having been cited to no
grave error invalidating the respondent Secretary's conclusion
that summons had indeed been duly served.
Finally, EASCO's half-hearted argument that its liability should be
limited to the maximum amount set in its surety bond, i.e.,
P150,000.00, is palpably without merit, since the aggregate
liability imposed on it, P140,817.75, supra, does not in fact exceed
that limit.
WHEREFORE, the petition is DISMISSED for lack of merit, and this
decision is declared to be immediately executory. Costs against
petitioner.
SO ORDERED.

Implicit in these powers is the award of appropriate relief to the

victims of the offenses committed by the respondent agency or
contractor, specially the refund or reimbursement of such fees as
may have been fraudulently or otherwise illegally collected, or
such money, goods or services imposed and accepted in excess of
what is licitly prescribed. It would be illogical and absurd to limit
the sanction on an offending recruitment agency or contractor to
suspension or cancellation of its license, without the concomitant
obligation to repair the injury caused to its victims. It would result
either in rewarding unlawful acts, as it would leave the victims
without recourse, or in compelling the latter to litigate in another
forum, giving rise to that multiplicity of actions or proceedings
which the law abhors.

G.R. No. 104995 August 26, 1993

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
BALTAZAR DE LEON and MARIETTA DE LEON @ "BENJIE,"
accused. BALTAZAR DE LEON, accused-appellant.
The Solicitor General for plaintiff-appellee.

Even more untenable is EASCO's next argument that the recruiter

and its victims are in pari delicto the former for having required
payment, and the latter for having voluntarily paid, "prohibited
recruitment fees" and therefore, said victims are barred from
obtaining relief. The sophistical, if not callous, character of the
argument is evident upon the most cursory reading thereof; it
merits no consideration whatever.

Reynaldo S. Fajardo, Al A. Cosata & Bartolome P. Reus for

accused-appellant.

The Court is intrigued by EASCO's reiteration of its argument that

it should not be held liable for claims which accrued prior to or
after the effectivity of its bond, considering that the respondent
Secretary had conceded the validity of part of said argument, at
least. The Secretary ruled that EASCO's "contention that it should
not be held liable for claims/payments made to respondent
agency before the effectivity of the surety bond on January 2,
1985 is well taken." According to the Secretary: 12

This case, involves the crime of illegal recruitment. At its bottom

are the hapless citizens in search of a better life who still fall
victim to the false promise of employment in foreign lands and the
inhumanity of illegal recruiters who prey upon the misfortunes of
the former and make a mockery of the law.

. . . A close examination of the records reveal(s) that

respondent EASCO is not jointly and severally liable with
respondent agency to refund complainants Lucena Cabasal,
Felix Rivero, Romulo del Rosario, Rogelio Banzuela, Josefina
Ogatis, Francisco Sorato, Sonny Quiazon, Josefina Dictado,
Mario del Guzman and Rogelio Mercado (10 in all). These
complainants paid respondent agency in 1984, or before the
effectivity of the bond on January 2, 1985 as evidence by the
reciept and their testimonies.
The related argument, that it is also not liable for claims filed after
the expiry (on January 2, 1986) of the period stipulated in the
surety bond for the filing of claims against the bond, must
however be rejected, as the Secretary did. The Court discerns no
grave abuse of discretion in the Secretary's statement of his
reasons for doing so, to wit:
. . . While it may be true that respondent EASCO received
notice of their claims after the ten (10) day expiration period
from cancellation or after January 12, 1986 as provided in the
surety bond, records show that . . . EASCO's principal,

DAVIDE, JR., J.:

In an information filed on 28 February 1991 by the Office of the

Provincial Prosecutor of Rizal with the Regional Trial Court (RTC) of
Pasig, Metro Manila, and assigned to Branch 156 1 thereof, the
accused Baltazar de Leon and Marietta de Leon, alias "Benjie,"
who are husband and wife, were charged with "the crime of Illegal
Recruitment under P.D. No. 2018 (Large Scale)" in that:
. . . on or about the period comprised of the month of August
and September, 1990 in the Municipality of Taguig, Metro
Manila, Philippines, and within the jurisdiction of this
Honorable Court the above-named accused, representing
themselves to have the capacity to contract, enlist and
transport Filipino workers [for] employment abroad conspiring
and confederating together and mutually helping and aiding
with one another, did then and there willfully, unlawfully and
feloniously, for a fee recruit and promise employment/job
placement abroad [to] the following persons to wit:
Francisco Beo P6,380.00
Lourdes Raya Bernabe P6,700.00
Cesar Cortez P4,505.00
Eugenia Panganiban Cruz P6,380.00
Alfredo Gutierrez P4,505.00
Daniel Perez P6,380.00
Lourdes Perez P3,000.00

without first securing the required license or authority from

the Department of Labor and Employment, by falsely
representing to the said persons that they were in a position
to obtain overseas jobs from them and in violation of the
aforementioned law against Illegal Recruitment committed in
large scale and amounting to economic sabotage.
CONTRARY TO LAW." 2
Only Baltazar de Leon was arrested. Marietta de Leon remains at
large up to the present. The former entered a plea of not guilty at
his arraignment on 2 April 1991 3 and the trial on the merits
proceeded with respect to him.
In its decision promulgated on 7 April 1992, the trial court 4 found
Baltazar de Leon guilty as charged and decreed as follows:
WHEREFORE, premises considered, the Court finds the
accused BALTAZAR DE LEON guilty beyond reasonable doubt
of the crime of Illegal Recruitment (in Large Scale)
constituting economic sabotage and hereby sentences said
accused BALTAZAR DE LEON to suffer the penalty of life
imprisonment,to pay a fine of ONE HUNDRED THOUSAND
PESOS (P100,000.00), to reimburse the complainant-victims,
namely: Francisco Beo through Flordeliza Beo in the amount
of P6,380.00; Lourdes Raya-Bernabe in the amount of
P6,700.00; Cesar Cortez in the amount of P3,505.00; Eugenia
Panganiban-Cruz in the amount of P6,380.00; Alfredo
Gutierrez in the amount of P3,500.00; Daniel and Lourdes
Perez in the amount of P5,000.00 plus P1,380.00 through
Noeta Perez and to pay the costs.
In the service of his sentence, the accused shall be credited
in full with the period of his preventive imprisonment.
Let alias warrant be issued for the arrest of accused
MARIETTA DE LEON alias "Benjie", the same to be served by
the NBI, PNP/CIS and other national police agencies.
SO ORDERED. 5
The judgment of conviction is based upon the following findings
and conclusion of the trial court:
Clearly accused Baltazar de Leon is neither authorized nor
licensed to recruit workers for overseas jobs and yet he and
his wife recruited workers, talked to the applicants and
collected fees for requirements that each applicant had to
comply with in order that their applications may be
processed. Although Mrs. De Leon was more active in the
recruitment, accused Baltazar played an important part as
both spouses convincingly played out their roles resulting in
the applicants' reposing their trust and belief in them. It is of
little surprise that the complaining witnesses conclusively
identified accused Baltazar as the man who recruited them or
their relatives. Said witnesses even gave in evidence the list
of requirements and fees that they were told to pay. Said lists
clearly show that a great deal of money was involved and
received by the accused. The charade played by both
accused show a unity of purpose and unity in execution of
their unlawful objective establishing the existence of a
conspiracy for which both accused must suffer the same
penalty. (People vs. Talla, 181 SCRA 133)." 6
The summary by the People of the prosecution's evidence
concerning the recruitment of the appellant is hereby adopted, it
being fully supported by the testimonies of the complaining
witnesses:
Camila del Rosario, who was a neighbor of appellant, told
Noeta Perez, Eugene Panganiban, Elvira Alonzo, Lourdes
Bernabe, and one Ador, all of whom were working for the
same employer, that del Rosario's daughter was able to work
abroad through the efforts of appellant and his wife. (TSN, N.
Perez, June 26, 1991, p. 4).
On September 16, 1990 del Rosario, together with Noeta
Perez and the latter's sister, Lourdes and brother Daniel, went
to appellant's house in Pateros, Rizal. Noeta Perez's purpose
in going to appellant's house was to apply for overseas jobs
for her brother Daniel and sister Lourdes. When del Rosario,
Noeta Perez and her brother reached appellant's house, they
met appellant and his wife who informed them that they have
already sent persons to Micronesia who were hired as
chambermaids and roomboys. Noeta Perez then asked her

sister and brother to apply, and she gave P1,380.00 to

appellant's wife (Id., pp. 5-6).
The following day, September 17, 1990, appellant's wife
asked Daniel to go back together with Lourdes to file their
application and to undergo medical examination. On the
same day, Daniel and Lourdes gave appellant and his wife
P2,500.00 for the passport, and, in addition, they paid
P5,000.00 to appellant. For helping Daniel and Lourdes get
jobs abroad, appellant demanded P6,380.00 from each of the
applicants allegedly for the processing of the papers, medical
examination, pictures and passport. Noeta Perez was able top
give P3,000.00 to appellant for her sister Lourdes'
application, but she was unable to give any amount for
Daniel's application (Id., pp. 6-9).
Sometime in November, 1990, Noeta Perez received a letter
from the National Bureau of Investigation ("NBI") saying that
the applications for overseas jobs sent to Micronesia were
sent to the NBI because there were no such job orders from
Micronesia. Upon getting this information, Noeta, together
with her sister Lourdes and brother Daniel could not have
gone to Micronesia since the alleged jobs offered to them by
appellant never existed (Id., pp. 9-11).
Cesar Cortez suffered a similar fate as that of Daniel and
Lourdes Perez. Cortez came to know appellant through a
friend, Alfredo Gutierrez, who applied with appellant for an
overseas job in Micronesia. Because his friend applied, Cortez
also applied with appellant for a job as roomboy in
Micronesia. When Cortez filed his application, appellant
immediately required him to give P680.00 for alleged medical
fee, which Cortez paid. After paying the medical fee,
appellant's wife asked Cortez to pay P175.00 as
transportation fee for securing the passport. Then appellant
asked P1,000.00 as downpayment for the passport, which
amount was paid to and received by appellant's wife. In
addition, Cortez paid P1,650.00, which was received by
appellant's wife in the presence of the appellant, for full
payment of the passport. Cortez gave these amounts to
appellant or his wife between the second week of August,
1990 and second week of September, 1990. Appellant
promised Cortez that he could leave for Micronesia in the
month of September, 1990, and when this did not
materialize, appellant promised again that Cortez could leave
by November, 1990. Cortez, however, was unable to leave for
Micronesia for it turned out that appellant had no business
partner in Micronesia (TSN, C. Cortez, October 29, 1991, pp.
2-4).
Alfredo Gutierrez, a friend of Cortez, also applied with
appellant for the job of driver in Guam. Gutierrez knew
appellant because a certain Mila introduced him to appellant
who represented that he could send workers abroad. The
introduction occurred at appellant's house in the first week of
August, 1990. Appellant asked for P680.00 allegedly for
medical fee and pictures, which Gutierrez paid. Gutierrez was
required to give additional amounts, and the total amount he
paid reached P3,500.00. He paid this amount to appellant for
the promised job as driver in Guam. Gutierrez, however, was
unable to leave for Guam because it turned out that there
was no such job order in Guam (TSN, A. Gutierrez, October
21, 1991, pp. 2-4). 7
The prosecution further proved through the unrebutted testimony
of Elisa Roque, Senior Officer of the Licensure Division of the
Philippine Overseas Employment Administration (POEA), that the
appellant does not have
any license or authority from the POEA to recruit workers for
overseas employment. 8
On the other hand, there is nothing in the appellant's brief
testimony except the denial of the separate accusations of the
complaining witnesses and the assertion that he does not know
anything about the transactions between the complainants and
his co-accused as he was always out of his residence at daytime.
He declared that he was employed as a driver by Reymar
Advertising, which is owned by Mr. Reynaldo Bucsit. He served as
such daily from 8:00 a.m. to 5:00 p.m. and oftentimes worked
from 6:30 p.m. to midnight as a driver of a passenger
jeepney. 9 Mr. Bucsit testified that the appellant was his driver
from July 1987 to 22 November 1990 and that the latter worked
"[s]ometimes four or five days in a week because he had to rest
after driving the whole
day." 10
Immediately after the promulgation of the judgment, Baltazar de
Leon (hereinafter referred to as the appellant) filed his notice of

appeal 11 and, in his main brief 12 filed on 27 November 1992,

raised this sole error allegedly committed by the trial court:
THE COURT A QUO ERRED IN HOLDING THAT THE GUILT OF
ACCUSED BALTAZAR DE LEON FOR THE CRIME CHARGED
WAS PROVEN BEYOND REASONABLE DOUBT.
We find no merit in this appeal.
Before proceeding any further, some observations on the
information filed are in order.
The information charges the appellant with "the crime of Illegal
Recruitment under P.D. No. 2018 (Large Scale)." However, this
decree merely further amended Articles 38 and 39 of the Labor
Code 13 by making large-scale illegal recruitment, i.e., committed
against three or more persons individually or collectively, a crime
of economic sabotage and punishable with life imprisonment.
More precisely then, the information should have been for the
violation of Article 38 in relation to Article 39 of the Labor Code, as
amended. Although this error seems to be innocuous since the
body of the complaint recites the elements of large-scale illegal
recruitment, proof beyond reasonable doubt of which would
sustain a conviction under Articles 38 and 39 of the said Code, we,
nevertheless, make these observations by way of advice to
prosecutors to exercise the greatest care in the preparation of
informations.
The pertinent portions of Articles 38 and 39 of the Labor Code, as
amended by P.D. No. 2018, read as follows:
Art. 38. Illegal Recruitment. (a) Any recruitment activities,
including the prohibited practices enumerated under Article
34 of this Code, to be undertaken by non-licensees or nonholders of authority shall be deemed illegal and punishable
under Article 39 of this Code. The Ministry of Labor and
Employment or any law enforcement officer may initiate
complaints under this Article.
(b) Illegal recruitment when committed by a syndicate or in
large scale shall be considered an offense involving economic
sabotage and shall be penalized in accordance with Article 39
hereof.
Illegal recruitment is deemed committed by a syndicate if
carried out by a group of three (3) or more persons conspiring
and/or confederating with one another in carrying out any
unlawful or illegal transaction, enterprise or scheme defined
under the first paragraph hereof. Illegal recruitment is
deemed committed in large scale if committed against three
(3) or more persons individually or as a group.
xxx xxx xxx
Art. 39. Penalties. (a) The penalty of life imprisonment and
a fine of One Hundred Thousand Pesos (P100,000) shall be
imposed if illegal recruitment constitutes economic sabotage
as defined herein:"
xxx xxx xxx
Article 13(b) 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 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.
While among the prohibited practices enumerated in Article 34 of
the said Code is:
(b) To furnish or publish any false notice or information or
document in relation to recruitment or employment.
And now to the merits of this appeal.
In support of the assigned error, the appellant contends that: (a)
he did not transact business with any one of the complaining
witnesses nor did he receive any monetary consideration from

them; (b) granting for the sake of argument that his wife was
engaged in illegal recruitment, there is no sufficient evidence to
prove that he acted in conspiracy with his wife; (c) he had no
opportunity to engage in recruitment because he was then
employed as a driver by one Reynaldo Bucsit with a work schedule
from 8:00 a.m. to 5:00 p.m. and likewise worked as a driver of a
passenger jeepney until midnight or the morning of the following
day; and (d) the complaining witnesses implicated him because he
is the husband of Marietta de Leon who allegedly recruited them
but who is now at large.
Our own reading and evaluation of the testimonies of the
complaining witnesses lead to no other conclusion than that the
appellant and his wife were co-conspirators in the illegal
recruitment business conducted in their residence with each
contributing coordinative and cooperative acts to insure the
success of an enterprise that provided them with income for their
mutual benefit and advantage. The complainants separately came
to the appellant's residence on various dates because they were
informed by their co-workers that he and his wife were known to
be recruiting for employment in Micronesia, Guam and Singapore.
In all the occasions when they came to his house, the appellant
was always there. Complainant Noeta Perez categorically declared
that the appellant and his wife told her and her companions that
"they sent people abroad, in Micronesia, hired [sic] there as
chambermaid and roomboy" and that she gave the money
demanded in connection with the application of her brother and
sister to Marietta in the presence of the appellant. 14 Complainant
Eugenia Cruz declared that when she and her companions, Elma
Conde and Adelaida Cabungkay, were in the house of the
appellant filling up the papers in connection with their application
for employment abroad, the latter help [sic] us how to file the
papers given to" them and told them that they "would be
receiving salary of $2.15/hour," and that she gave P6,380.00 to
Marietta in the presence of the appellant. 15 Complainant
Flordeliza Beo testified that when she accompanied her husband
to apply for employment, the appellant explained to them the
terms of employment and was present when she gave the amount
of P6,380.00 to Marietta.16 Complainant Alfredo Gutierrez was
directly introduced to the appellant by Mila and the appellant
himself asked from him various sums, amounting to P3,500.00,
ostensibly in connection with his application for employment, and
personally received it from Alfredo. 17 Complainant Cesar Cortes
was also directly introduced to the appellant and paid the various
sums demanded from him to Marietta in the presence of the
appellant. 18 Complainant Lourdes Bernabe testified that the
appellant offered her the job of domestic helper in Singapore,
informed her of the requirements for her application, and,
together with his wife, received her payment of P2,500.00
purportedly for the processing of her papers. 19
All these acts of the appellant and his wife conclusively
established a common criminal design mutually deliberated upon
and accomplished through coordinated moves.
Such acts constitute enlisting, contracting or procuring workers for
or promising them overseas employment, which are among the
acts of recruitment embraced in Article 13(b) of the Labor Code,
as amended. The furnishing of the victims with certain documents
which they were required to fill up allegedly in connection with
their overseas employment, which actually did not exist, also
constitutes the violation of paragraph (b), Article 34 of the same
Code. Since the appellant does not have the license or authority
to recruit and he committed the said acts against at least three
individuals, he is guilty of large-scale illegal recruitment under
Article 38, which offense is penalized with life imprisonment and a
fine of P100,000.00 in the succeeding Article 39.
We are not persuaded by the appellant's contention that he could
not have transacted business with the complainants and
participated in the activities of his wife because he was not in his
residence during the daytime in view of his employment at
Reymar Advertising and his driving of a passenger jeepney after
working hours until midnight. He sets up, in effect, the defense of
alibi. We have carefully searched for a statement in his testimony
in court as to the specific dates he was employed by Reymar
Advertising. We found none. Rather, it was his witness, Mr.
Reynaldo Bucsit, who attempted to do so by claiming that the
appellant was his personal driver from July 1987 to 22 November
1990. 20 We then have a situation where a party who claimed that
it was impossible for him to have committed a crime because he
was somewhere else at the time of its commission did not even
specifically and explicitly testify that the dates when he was
allegedly somewhere else coincided with the dates specified in the
information and proven by the evidence as the dates when the
crime was committed. This is rather strange and only manifests
the weakness of his plea. In any case, the trial court disregarded
the testimony of Mr. Bucsit. Settled is the rule that a trial court's
finding on the credibility of a witness is entitled to the highest

degree of respect and will not be disturbed on appeal in the

absence of any showing that the said court overlooked,
misunderstood or misapplied some facts or circumstances of
weight and substance which would have affected the result of the
case. 21 But even if Mr. Bucsit's testimony were to be given full
faith, it discloses that it was not at all impossible for the appellant
to have met and transacted business with the complainants or to
have participated in the business of his wife since he drove for Mr.
Bucsit for only four or five days a week. The latter declared:
Q In a week, how many days did he perform his job?
A Sometimes four or five days in a week because he had to
rest after driving the whole day, sir. 22
Moreover, the appellant was positively identified by the
complainants. It is axiomatic that alibi cannot prevail over the
positive identification of the accused. 23
Appellant's final argument that the complainants filed the case
against him in order to harass him and compel him "to answer
their money claims, after failing to recover from the real
culprit," 24 is nothing but a flimsy excuse which we cannot accept.
As previously discussed, the appellant is a co-conspirator in the
crime of illegal recruitment, and in conspiracy the act of one is the
act of
all. 25
The decision appealed from is therefore fully supported by facts
which established the guilt of the appellant beyond reasonable
doubt.
We cannot end this case without some parting thoughts to
conclude what we had stated at the beginning. Something must
be wrong somewhere if, in spite of the stiff penalties for illegal
recruitment, some still brazenly take advantage of the misery of
others and profit from their misfortunes while many still fall for the
false promises of illegal recruiters despite the painful lessons the
experiences of others have taught. What is clear to us is that
illegal recruiters cannot flout our laws and prey on the hard lot of
others if the Government had the will to resolutely enforce the
laws against illegal recruitment and to be merciless against the
violators. They do not deserve any mercy. Large-scale illegal
recruitment is a crime which is not difficult to discover, prosecute
and prove, for it cannot be done in absolute secrecy. That there
must be an end to illegal recruitment is a matter of public policy
for not only must the State protect those who, because of
economic difficulties or lack of employment opportunities in the
country, seek greener pastures in foreign lands and from whose
earnings the State itself benefits, it must also punish to the fullest
extent of the law illegal recruiters, especially those engaged in
syndicated or large-scale illegal recruitment, who continue to
wreak havoc on our economy. It is thus earnestly wished that the
Government flex its muscles to eradicate this pernicious evil.

Employment Administration in POEA Case No. (M)85-12-0953

entitled "Norberto Soriano v. Offshore Shipping and Manning
Corporation and Knut Knutsen O.A.S.", which denied petitioner's
claim for salary differential and overtime pay and limited the
reimbursement of his cash bond to P15,000.00 instead of
P20,000.00.
In search for better opportunities and higher income, petitioner
Norberto Soriano, a licensed Second Marine Engineer, sought
employment and was hired by private respondent Knut Knutsen
O.A.S. through its authorized shipping agent in the Philippines,
Offshore Shipping and Manning Corporation. As evidenced by the
Crew Agreement, petitioner was hired to work as Third Marine
Engineer on board Knut Provider" with a salary of US$800.00 a
month on a conduction basis for a period of fifteen (15) days. He
admitted that the term of the contract was extended to six (6)
months by mutual agreement on the promise of the employer to
the petitioner that he will be promoted to Second Engineer. Thus,
while it appears that petitioner joined the aforesaid vessel on July
23, 1985 he signed off on November 27, 1985 due to the alleged
failure of private respondent-employer to fulfill its promise to
promote petitioner to the position of Second Engineer and for the
unilateral decision to reduce petitioner's basic salary from
US$800.00 to US$560.00. Petitioner was made to shoulder his
return airfare to Manila.
In the Philippines, petitioner filed with the Philippine Overseas
Employment Administration (POEA for short), a complaint against
private respondent for payment of salary differential, overtime
pay, unpaid salary for November, 1985 and refund of his return
airfare and cash bond allegedly in the amount of P20,000.00
contending therein that private respondent unilaterally altered the
employment contract by reducing his salary of US$800.00 per
month to US$560.00, causing him to request for his repatriation to
the Philippines. Although repatriated, he claims that he failed to
receive payment for the following:
1. Salary for November which is equivalent to US$800.00;
2. Leave pay equivalent to his salary for 16.5 days in the sum
of US$440.00;
3. Salary differentials which is equivalent to US$240.00 a
month for four (4) months and one (1) week in the total sum
of US$1,020,00;
4. Fixed overtime pay equivalent to US$240.00 a month for
four (4) months and one (1) week in the sum of US$1,020.00;
5. Overtime pay for 14 Sundays equivalent to US$484.99;
6. Repatriation cost of US$945.46;
7. Petitioner's cash bond of P20,000.00.

WHEREFORE, the judgment appealed from is hereby AFFIRMED in

toto.
Costs against the appellant.
SO ORDERED.

G.R. No. 78409 September 14, 1989

NORBERTO SORIANO, petitioner,
vs.
OFFSHORE SHIPPING AND MANNING CORPORATION, KNUT
KNUTSEN O.A.S., and NATIONAL LABOR RELATIONS
COMMISSION (Second Division), respondents.

In resolving aforesaid case, the Officer-in-Charge of the Philippine

Overseas Employment Administration or POEA found that
petitioner-complainant's total monthly emolument is US$800.00
inclusive of fixed overtime as shown and proved in the Wage Scale
submitted to the Accreditation Department of its Office which
would therefore not entitle petitioner to any salary differential;
that the version of complainant that there was in effect contract
substitution has no grain of truth because although the
Employment Contract seems to have corrections on it, said
corrections or alterations are in conformity with the Wage Scale
duly approved by the POEA; that the withholding of a certain
amount due petitioner was justified to answer for his repatriation
expenses which repatriation was found to have been requested by
petitioner himself as shown in the entry in his Seaman's Book; and
that petitioner deposited a total amount of P15,000.00 only
instead of P20,000.00 cash bond. 2
Accordingly, respondent POEA ruled as follows:

R. C. Carrera Law Firm for petitioner.

Elmer V. Pormento for private respondents.

VIEWED IN THE LIGHT OF THE FOREGOING, respondents are

hereby ordered to pay complainant, jointly and severally
within ten (10) days from receipt hereof the amount of
P15,000.00 representing the reimbursement of the cash bond
deposited by complainant less US$285.83 (to be converted to
its peso equivalent at the time of actual payment).

FERNAN, C.J.:
This is a petition for certiorari seeking to annul and set aside the
decision of public respondent National Labor Relations
Commission affirming the decision of the Philippine Overseas

Further, attorney's fees equivalent to 10 % of the aforesaid

award is assessed against respondents.

All other claims are hereby dismissed for lack of merit.

SO ORDERED.

Dissatisfied, both parties appealed the aforementioned decision of

the POEA to the National Labor Relations Commission.
Complainant-petitioner's appeal was dismissed for lack of merit
while respondents' appeal was dismissed for having been filed out
of time.
Petitioner's motion for reconsideration was likewise denied. Hence
this recourse.
Petitioner submits that public respondent committed grave abuse
of discretion and/or acted without or in excess of jurisdiction by
disregarding the alteration of the employment contract made by
private respondent. Petitioner claims that the alteration by private
respondent of his salary and overtime rate which is evidenced by
the Crew Agreement and the exit pass constitutes a violation of
Article 34 of the Labor Code of the Philippines. 6
On the other hand, public respondent through the Solicitor
General, contends that, as explained by the POEA: "Although the
employment contract seems to have corrections, it is in
conformity with the Wage Scale submitted to said office. 7
Apparently, petitioner emphasizes the materiality of the alleged
unilateral alteration of the employment contract as this is
proscribed by the Labor Code while public respondent finds the
same to be merely innocuous. We take a closer look at the effects
of these alterations upon petitioner's right to demand for his
differential, overtime pay and refund of his return airfare to
Manila.
A careful examination of the records shows that there is in fact no
alteration made in the Crew Agreement 8 or in the Exit Pass. 9 As
the original data appear, the figures US$800.00 fall under the
column salary, while the word "inclusive" is indicated under the
column overtime rate. With the supposed alterations, the figures
US$560.00 were handwritten above the figures US$800.00 while
the figures US$240.00 were also written above the word
"inclusive".
As clearly explained by respondent NLRC, the correction was
made only to specify the salary and the overtime pay to which
petitioner is entitled under the contract. It was a mere breakdown
of the total amount into US$560.00 as basic wage and US$240.00
as overtime pay. Otherwise stated, with or without the
amendments the total emolument that petitioner would receive
under the agreement as approved by the POEA is US$800.00
monthly with wage differentials or overtime pay included. 10
Moreover, the presence of petitioner's signature after said items
renders improbable the possibility that petitioner could have
misunderstood the amount of compensation he will be receiving
under the contract. Nor has petitioner advanced any explanation
for statements contrary or inconsistent with what appears in the
records. Thus, he claimed: [a] that private respondent extended
the duration of the employment contract indefinitely, 11 but
admitted in his Reply that his employment contract was extended
for another six (6) months by agreement between private
respondent and himself: 12 [b] that when petitioner demanded for
his overtime pay, respondents repatriated him 13 which again was
discarded in his reply stating that he himself requested for his
voluntary repatriation because of the bad faith and insincerity of
private respondent; 14 [c] that he was required to post a cash bond
in the amount of P20,000.00 but it was found that he deposited
only the total amount of P15,000.00; [d] that his salary for
November 1985 was not paid when in truth and in fact it was
petitioner who owes private respondent US$285.83 for cash
advances 15 and on November 27, 1985 the final pay slip was
executed and signed; 16 and [e] that he finished his contract when
on the contrary, despite proddings that he continue working until
the renewed contract has expired, he adamantly insisted on his
termination.
Verily, it is quite apparent that the whole conflict centers on the
failure of respondent company to give the petitioner the desired
promotion which appears to be improbable at the moment
because the M/V Knut Provider continues to be laid off at Limassol
for lack of charterers. 17
It is axiomatic that laws should be given a reasonable
interpretation, not one which defeats the very purpose for which
they were passed. This Court has in many cases involving the
construction of statutes always cautioned against narrowly

interpreting a statute as to defeat the purpose of the legislator

and stressed that it is of the essence of judicial duty to construe
statutes so as to avoid such a deplorable result (of injustice or
absurdity) and that therefore "a literal interpretation is to be
rejected if it would be unjust or lead to absurd results." 18
There is no dispute that an alteration of the employment contract
without the approval of the Department of Labor is a serious
violation of law.
Specifically, the law provides:
Article 34 paragraph (i) of the Labor Code
reads:
Prohibited Practices. It shall be unlawful for any individual,
entity, licensee, or holder of authority:
xxxx
(i) To substitute or alter employment contracts approved and
verified by the Department of Labor from the time of actual
signing thereof by the parties up to and including the period
of expiration of the same without the approval of the
Department of Labor.
In the case at bar, both the Labor Arbiter and the National Labor
Relations Commission correctly analyzed the questioned
annotations as not constituting an alteration of the original
employment contract but only a clarification thereof which by no
stretch of the imagination can be considered a violation of the
above-quoted law. Under similar circumstances, this Court ruled
that as a general proposition, exceptions from the coverage of a
statute are strictly construed. But such construction nevertheless
must be at all times reasonable, sensible and fair. Hence, to rule
out from the exemption amendments set forth, although they did
not materially change the terms and conditions of the original
letter of credit, was held to be unreasonable and unjust, and not in
accord with the declared purpose of the Margin Law. 19
The purpose of Article 34, paragraph 1 of the Labor Code is clearly
the protection of both parties. In the instant case, the alleged
amendment served to clarify what was agreed upon by the parties
and approved by the Department of Labor. To rule otherwise would
go beyond the bounds of reason and justice.
As recently laid down by this Court, the rule that there should be
concern, sympathy and solicitude for the rights and welfare of the
working class, is meet and proper. That in controversies between a
laborer and his master, doubts reasonably arising from the
evidence or in the interpretation of agreements and writings
should be resolved in the former's favor, is not an unreasonable or
unfair rule. 20 But to disregard the employer's own rights and
interests solely on the basis of that concern and solicitude for
labor is unjust and unacceptable.
Finally, it is well-settled that factual findings of quasi-judicial
agencies like the National Labor Relations Commission which have
acquired expertise because their jurisdiction is confined to specific
matters are generally accorded not only respect but at times even
finality if such findings are supported by substantial evidence. 21
In fact since Madrigal v. Rafferty 22 great weight has been
accorded to the interpretation or construction of a statute by the
government agency called upon to implement the same. 23
WHEREFORE, the instant petition is DENIED. The assailed decision
of the National Labor Relations Commission is AFFIRMED in toto.
SO ORDERED.

G.R. No. L-58011 & L-58012 November 18, 1983

VIR-JEN SHIPPING AND MARINE SERVICES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ROGELIO
BISULA RUBEN ARROZA JUAN GACUTNO LEONILO ATOK,
NILO CRUZ, ALVARO ANDRADA, NEMESIO ADUG SIMPLICIO
BAUTISTA, ROMEO ACOSTA, and JOSE ENCABO respondents.
Antonio R. Atienza for petitioner.

The Solicitor General for respondent NLRC,

Quasha, Asperilia, Ancheta &- Valmonte Pena Marcos Law Offices
for private respondents.
RESOLUTION

GUTIERREZ, JR., J.:+.wph!1

Before the Court en banc is a motion to reconsider the decision
promulgated on July 20, 1982 which set aside the decision of
respondent National Labor Relations Commission and reinstated
the decision of the National Seamen Board.
To better understand the issues raised in the motion for
reconsideration, we reiterate the background facts of the case,
Taken from the decision of the National Labor Relations
Commission: t.hqw
It appears that on different dates in December, 1978 and
January, 1979, the Seamen entered into separate contracts of
employment with the Company, engaging them to work on
board M/T' Jannu for a period of twelve (12) months. After
verification and approval of their contracts by the NSB, the
Seamen boarded their vessel in Japan.
On 10 January 1919, the master of the vessel complainant
Rogelio H. Bisula, received a cable from the Company
advising him of the possibility that the vessel might be
directed to call at ITF-controlled ports said at the same time
informing him of the procedure to be followed in the
computation of the special or additional compensation of
crew members while in said ports. ITF is the acronym for the
International Transport Workers Federation, a militant
international labor organization with affiliates in different
ports of the world, which reputedly can tie down a vessel in a
port by preventing its loading or unloading, This is a sanction
resorted to by ITF to enforce the payment of its wages rates
for seafarers the so-called ITF rates, if the wages of the crew
members of a vessel who have affiliated with it are below its
prescribed rates.) In the same cable of the Company, the
expressed its regrets for hot clarifying earlier the procedure in
computing the special compensation as it thought that the
vessel would 'trade in Caribbean ports only.
On 22 March 1979, the Company sent another cable to
complainant Bisula, this time informing him of the respective
amounts each of the officers and crew members would
receive as special compensation when the vessel called at
the port of Kwinana Australia, an ITF-controlled port. This was
followed by another cable on 23 March 1979, informing him
that the officers and crew members had been enrolled as
members of the ITF in Sidney, Australia, and that the
membership fee for the 28 personnel complement of the
vessel had already been paid.
In answer to the Company's cable last mentioned,
complainant Bisula, in representation of the other officers and
crew members, sent on 24 March 1979 a cable informing the
Company that the officers and crew members were not
agreeable to its 'suggestion'; that they were not contented
with their present salaries 'based on the volume of works,
type of ship with hazardous cargo and registered in a world
wide trade': that the 'officers and crew (were) not interested
in ITF membership if not actually paid with ITF rate that their
'demand is only 50% increase based on present basic salary
and that the proposed wage increase is the 'best and only
solution to solve ITF problem' since the Company's salary
rates 'especially in tankers (are) very far in comparison with
other shipping agencies in Manila ...
In reply, the Company proposed a 25% increase in the basic
pay of the complainant crew members, although it claimed,
that it would "suffer and absorb considerable amount of
losses." The proposal was accepted by the Seamen with
certain conditions which were accepted by the Company.
Conformably with the agreement of the parties which was
effected through the cables abovementioned, the Seamen
were paid their new salary rates.
Subsequently, the Company sought authority from the NSB to
cancel the contracts of employment of the Seamen, claiming
that its principals had terminated their manning agreement

because of the actuations of the Seamen. The request was

granted by the NSB Executive Director in a letter dated 10
April 1979. Soon thereafter, the Company cabled the Seamen
informing them that their contracts would be terminated
upon the vessel's arrival in Japan. On 19 April 1979 they
Arere asked to disembark from the vessel, their contracts
were terminated, and they were repatriated to Manila. There
is no showing that the Seamen were given the opportunity to
at least comment on the Company's request for the
cancellation of their contracts, although they had served only
three (3) out of the twelve (12) months' duration of their
contracts.
The private respondents filed a complaint for illegal dismissal and
non-payment of earned wages with the National Seamen Board.
The Vir-jen Shipping and Marine Services Inc. in turn filed a
complaint for breach of contract and recovery of excess salaries
and overtime pay against the private respondents. On July 2,
1980, the NSB rendered a decision declaring that the seamen
breached their employment contracts when they demanded and
received from Vir-jen Shipping wages over and above their
contracted rates. The dismissal of the seamen was declared legal
and the seamen were ordered suspended.
The seamen appealed the decision to the NLRC which reversed
the decision of the NSB and required the petitioner to pay the
wages and other monetary benefits corresponding to the
unexpired portion of the manning contract on the ground that the
termination of the contract by the petitioner was without valid
cause. Vir-jen Shipping filed the present petition.
The private respondents submit the following issues in their
motion for reconsideration: t.hqw
A. THIS HONORABLE COURT DID VIOLENCE TO LAW AND
JURISPRUDENCE WHEN IT HELD THAT THE FINDING OF FACT
OF THE NATIONAL SEAMEN BOARD THAT THE SEAMEN
VIOLATED THEIR CONTRACTS IS MORE CREDIBLE THAN THE
FINDING OF FACT OF THE NATIONAL LABOR RELATIONS
COMMISSION THAT THE SEAMEN DID NOT VIOLATE THEIR
CONTRACT.
B. THIS HONORABLE COURT ERRED IN FINDING THAT VIRJEN'S HAVING AGREED TO A 25% INCREASE OF THE
SEAMEN'S BASIC WAGE WAS NOT VOLUNTARY BUT WAS DUE
TO THREATS.
C. THIS HONORABLE COURT ERRED WHEN IT TOOK
COGNIZANCE OF THE ADDENDUM AGREEMENT; ASSUMING
THAT THE ADDENDUM AGREEMENT COULD BE TAKEN
COGNIZANCE OF, THIS HONORABLE COURT ERRED WHEN' IT
FOUND THAT PRIVATE RESPONDENTS HAD VIOLATED THE
SAME.
D, THIS HONORABLE COURT ERRED WHEN IT DID NOT FIND
PETITIONER VIRJEN LIABLE FOR HAVING TERMINATED BEFORE
EXPIRY DATE THE EMPLOYMENT CONTRACTS OF PRIVATE
RESPONDENTS, THERE BEING NO LEGAL AND JUSTIFIABLE
GROUND FOR SUCH TERMINATION.
E. THIS HONORABLE COURT ERRED IN FINDING THAT THE
PREPARATION BY PETITIONER OF THE TWO PAYROLLS AND
THE EXECUTION OF THE SIDE CONTRACT WERE NOT MADE IN
BAD FAITH.
F. THIS HONORABLE COURT INADVERTENTLY DISCRIMINATED
AGAINST PRIVATE RESPONDENTS.
At the outset, we are faced with the question whether or not the
Court en banc should give due course to the motion for
reconsideration inspite of its having been denied twice by the
Court's Second Division. The case was referred to and accepted by
the Court en banc because of the movants' contention that the
decision in this case by the Second Division deviated from Wallem
Phil. Shipping Inc. v. Minister of Labor (L-50734-37, February 20,
1981), a First Division case with the same facts and issues. We are
constrained to answer the initial question in the affirmative.
A fundamental postulate of Philippine Constitutional Law is the
fact, that there is only one Supreme Court from whose decisions
all other courts are required to take their bearings. (Albert v. Court
of First Instance, 23 SCRA 948; Barrera v. Barrera, 34 SCRA 98;
Tugade v. Court of Appeals, 85 SCRA 226). The majority of the
Court's work is now performed by its two Divisions, but the Court
remains one court, single, unitary, complete, and supreme.
Flowing from this nature of the Supreme Court is the fact that,

while ' individual Justices may dissent or partially concur with one
another, when the Court states what the law is, it speaks with only
one voice. And that voice being authoritative should be a clear as
possible.
Any doctrine or principle of law laid down by the Court, whether
en banc or in Division, may be modified or reversed only by the
Court en banc. (Section 2(3), Article X, Constitution.) In the rare
instances when one Division disagrees in its views with the other
Division, or the necessary votes on an issue cannot be had in a
Division, the case is brought to the Court en banc to reconcile any
seeming conflict, to reverse or modify an earlier decision, and to
declare the Court's doctrine. This is what has happened in this
case.
The decision sought to be reconsidered appears to be a deviation
from the Court's decision, speaking through the First Division,
in Wallem Shipping, Inc. v. Hon. Minister of Labor (102 SCRA 835).
Faced with two seemingly conflicting resolutions of basically the
same issue by its two Divisions, the Court. therefore, resolved to
transfer the case to the Court en banc. Parenthetically, the
petitioner's comment on the third motion for reconsideration
states that the resolution of the motion might be the needed
vehicle to make the ruling in the Wallem case clearer and more in
time with the underlying principles of the Labor Code. We agree
with the petitioner.
After an exhaustive, painstaking, and perspicacious consideration
of the motions for reconsideration and the comments, replies, and
other pleadings related thereto, the Court en banc is constrained
to grant the motions. To grant the motion is to keep faith with the
constitutional mandate to afford protection to labor and to assure
the rights of workers to self-organization and to just and humane
conditions of work. We sustain the decision of the respondent
National labor Relations Commission.
There are various arguments raised by the petitioners but the
common thread running through all of them is the contention, if
not the dismal prophecy, that if the respondent seamen are
sustained by this Court, we would in effect "kill the en that lays
the golden egg." In other words, Filipino seamen, admittedly
among the best in the world, should remain satisfied with
relatively lower if not the lowest, international rates of
compensation, should not agitate for higher wages while their
contracts of employment are subsisting, should accept as sacred,
iron clad, and immutable the side contracts which require them to
falsely pretend to be members of international labor federations,
pretend to receive higher salaries at certain foreign ports only to
return the increased pay once the ship leaves that port, should
stifle not only their right to ask for improved terms of employment
but their freedom of speech and expression, and should suffer
instant termination of employment at the slightest sign of
dissatisfaction with no protection from their Government and their
courts. Otherwise, the petitioners contend that Filipinos would no
longer be accepted as seamen, those employed would lose their
jobs, and the still unemployed would be left hopeless.
This is not the first time and it will not be the last where the threat
of unemployment and loss of jobs would be used to argue against
the interests of labor; where efforts by workingmen to better their
terms of employment would be characterized as prejudicing the
interests of labor as a whole.
In 1867 or one hundred sixteen years ago. Chief Justice Beasley of
the Supreme Court of New Jersey was ponente of the court's
opinion declaring as a conspiracy the threat of workingmen to
strike in connection with their efforts to promote unionism, t.
hqw
It is difficult to believe that a right exists in law which we
can scarcely conceive can produce, in any posture of affairs,
other than injuriois results. It is simply the right of workmen,
by concert of action, and by taking advantage of their
position, to control the business of another, I am unwilling to
hold that a right which cannot, in any, event, be
advantageous to the employee, and which must always be
hurtful to the employer, exists in law. In my opinion this
indictment sufficiently shows that the force of the
confederates was brought to bear upon their employer for
the purpose of oppression and mischief and that this
amounts to a conspiracy, (State v. Donaldson, 32 NJL 151,
1867. Cited in Chamberlain, Sourcebook on Labor, p. 13.
Emphasis supplied)
The same arguments have greeted every major advance in the
rights of the workingman. And they have invariably been proved
unfounded and false.

Unionism, employers' liability acts, minimum wages, workmen's

compensation, social security and collective bargaining to name a
few were all initially opposed by employers and even well
meaning leaders of government and society as "killing the hen or
goose which lays the golden eggs." The claims of workingmen
were described as outrageously injurious not only to the employer
but more so to the employees themselves before these claims or
demands were established by law and jurisprudence as "rights"
and before these were proved beneficial to management, labor,
and the nation as a whole beyond reasonable doubt.
The case before us does not represent any major advance in the
rights of labor and the workingmen. The private respondents
merely sought rights already established. No matter how much
the petitioner-employer tries to present itself as speaking for the
entire industry, there is no evidence that it is typical of employers
hiring Filipino seamen or that it can speak for them.
The contention that manning industries in the Philippines would
not survive if the instant case is not decided in favor of the
petitioner is not supported by evidence. The Wallem case was
decided on February 20, 1981. There have been no severe
repercussions, no drying up of employment opportunities for
seamen, and none of the dire consequences repeatedly
emphasized by the petitioner. Why should Vir-jen be all exception?
The wages of seamen engaged in international shipping are
shouldered by the foreign principal. The local manning office is an
agent whose primary function is recruitment and who .usually
gets a lump sum from the shipowner to defray the salaries of the
crew. The hiring of seamen and the determination of their
compensation is subject to the interplay of various market factors
and one key factor is how much in terms of profits the local
manning office and the foreign shipowner may realize after the
costs of the voyage are met. And costs include salaries of officers
and crew members.
Filipino seamen are admittedly as competent and reliable as
seamen from any other country in the world. Otherwise, there
would not be so many of them in the vessels sailing in every
ocean and sea on this globe. It is competence and reliability, not
cheap labor that makes our seamen so greatly in demand. Filipino
seamen have never demanded the same high salaries as seamen
from the United States, the United Kingdom, Japan and other
developed nations. But certainly they are entitled to government
protection when they ask for fair and decent treatment by their
employer.-, and when they exercise the right to petition for
improved terms of employment, especially when they feel that
these are sub-standard or are capable of improvement according
to internationally accepted rules. In the domestic scene, there are
marginal employers who prepare two sets of payrolls for their
employees one in keeping with minimum wages and the other
recording the sub-standard wages that the employees really
receive, The reliable employers, however, not only meet the
minimums required by fair labor standards legislation but even go
way above the minimums while earning reasonable profits and
prospering. The same is true of international employment. There
is no reason why this Court and the Ministry of Labor and.
Employment or its agencies and commissions should come out
with pronouncements based on the standards and practices of
unscrupulous or inefficient shipowners, who claim they cannot
survive without resorting to tricky and deceptive schemes, instead
of Government maintaining labor law and jurisprudence according
to the practices of honorable, competent, and law-abiding
employers, domestic or foreign.
If any minor advantages given to Filipino seamen may somehow
cut into the profits of local manning agencies and foreign
shipowners, that is not sufficient reason why the NSB or the ILRC
should not stand by the former instead of listening to
unsubstantiated fears that they would be killing the hen which
lays the golden eggs.
Prescinding from the above, we now hold that neither the National
Seamen Board nor the National Labor Relations Commission
should, as a matter of official policy, legitimize and enforce
cubious arrangements where shipowners and seamen enter into
fictitious contracts similar to the addendum agreements or side
contracts in this case whose purpose is to deceive. The Republic of
the Philippines and its ministries and agencies should present a
more honorable and proper posture in official acts to the whole
world, notwithstanding our desire to have as many job openings
both here and abroad for our workers. At the very least, such as
sensitive matter involving no less than our dignity as a people and
the welfare of our workingmen must proceed from the Batasang
Pambansa in the form of policy legislation, not from administrative
rule making or adjudication

Another issue raised by the movants is whether or not the seamen

violated their contracts of employment.
The form contracts approved by the National Seamen Board are
designed to protect Filipino seamen not foreign shipowners who
can take care of themselves. The standard forms embody' the
basic minimums which must be incorporated as parts of the
employment contract. (Section 15, Rule V, Rules and Regulations
Implementing the Labor Code.) They are not collective bargaining
agreements or immutable contracts which the parties cannot
improve upon or modify in the course of the agreed period of
time. To state, therefore, that the affected seamen cannot petition
their employer for higher salaries during the 12 months duration
of the contract runs counter to established principles of labor
legislation. The National Labor Relations Commission, as the
appellate tribunal from decisions of the National Seamen Board,
correctly ruled that the seamen did not violate their contracts to
warrant their dismissal.

law would be termed illegal, oppressive, or malicious. Whatever

pressure existed, it was mild compared to accepted valid modes of
labor activity.
We reiterate our ruling in Wallem. t.hqw
Petitioner claims that the dismissal of private respondents
was justified because the latter threatened the ship
authorities in acceding to their demands, and this constitutes
serious misconduct as contemplated by the Labor Code. This
contention is not well-taken. The records fail to establish
clearly the commission of any threat, But even if there had
been such a threat, respondents' behavior should not be
censured because it is but natural for them to employ some
means of pressing their demands for petitioner, who refused
to abide with the terms of the Special Agreement, to honor
and respect the same, They were only acting in the exercise
of their rights, and to deprive them of their form of
expression is contrary to law and public policy. ...

The respondent Commission ruled: t.hqw

In the light of all the foregoing facts, we find that the cable of
the seamen proposing an increase in their wage rates was
not and could not have been intended as a threat to comp el
the Company to accede to their proposals. But even
assuming, if only for the sake of argument, that the demand
or proposal for a wage increase was accompanied by a
threat that they would report to ITF if the Company did not
accede to the contract revision - although there really was no
such threat as pointed out earlier the Seamen should not
be held at fault for asking such a demand. In the same case
cited above, the Supreme Court held: t.hqw
Petitioner claims that the dismissal of private
respondents was justified because the latter threatened
the ship authorities in acceding to their demands, and
this constitutes serious misconduct as contemplated by
the Labor Code. This contention is not well-taken. But
even if there had been such a threat, respondents'
behavior should not be censured because it is but
natural for them to employ some means of pressing
their demands for petitioner, the refusal to abide with
the terms of the Special Agreement, to honor and
respect the same, They were only acting in the exercise
of their rights, and to deprive them of their freedom of
expression is contrary to law and public policy. There is
no serious misconduct to speak of in the case at bar
which would justify respondents' dismissal just because
of their firmness in their demand for the fulfillment by
petitioner of its obligation it entered into without any
coercion, specially on the part of private respondents.
(Emphasis supplied).
The above citation is from Wallem.
The facts show that when the respondents boarded the M/T Jannu
there was no intention to send their ship to Australia. On January
10, 1979, the petitioner sent a cable to respondent shipmaster
Bisula informing him of the procedure to be followed in the
computation of special compensation of crewmembers while in ITF
controlled ports and expressed regrets for not having earlier
clarified the procedure as it thought that the vessel would trade in
Carribean ports only.
On March 22, 1979, the petitioner sent another cable informing
Bisula of the special compensation when the ship would call at
Kwinana Australia.
The following day, shipmaster Bisula cabled Vir-jen stating that
the officers and crews were not interested in ITF membership if
not paid ITF rates and that their only demand was a 50 percent
increase based on their then salaries. Bisula also pointed out that
Vir-jen rates were "very far in comparison with other shipping
agencies in Manila."
In reply, Vir-jen counter proposed a 25 percent increase. Only after
Kyoei Tanker Co., Ltd., declined to increase the lumps sum amount
given monthly to Vir-jen was the decision to terminate the
respondents' employment formulated.
The facts show that Virjen Initiated the discussions which led to
the demand for increased . The seamen made a proposal and the
petitioner organized with a counter-proposal. The ship had not vet
gone to Australia or any ITF controlled port. There was absolutely
no mention of any strike. much less a threat to strike. The seamen
had done in act which under Philippine law or any other civilized

Our dismissing the petition is premised on the assumption that the

Ministry of Labor and Employment and all its agencies exist
primarily for the workinginan's interests and, of course, the nation
as a whole. The points raised by the Solicitor-General in his
comments refer to the issue of allowing what the petitioner
importunes under the argument of "killing the hen which lays the
golden eggs." This is one of policy which should perhaps be
directed to the Batasang Pambansa and to our country's other
policy makers for more specific legislation on the matter, subject
to the constitutional provisions protecting labor, promoting social
justice, and guaranteeing non-abridgement of the freedom of
speech, press, peaceable assembly and petition. We agree with
the movants that there is no showing of any cause, which under
the Labor Code or any current applicable law, would warrant the
termination of the respondents' services before the expiration of
their contracts. The Constitution guarantees State assurance of
the rights of workers to security of tenure. (Sec. 9, Article II,
Constitution). Presumptions and provisions of law, the evidence on
record, and fundamental State policy all dictate that the motions
for reconsideration should be granted.
WHEREFORE, the motions for reconsideration are hereby
GRANTED. The petition is DISMISSED for lack of merit. The
decision of the National Labor Relations Commission is AFFIRMED.
No costs.
SO ORDERED.1wph1.t

G.R. Nos. L-57999, 58143-53 August 15, 1989

RESURRECCION SUZARA, CESAR DIMAANDAL, ANGELITO
MENDOZA, ANTONIO TANEDO, AMORSOLO CABRERA,
DOMINADOR SANTOS, ISIDRO BRACIA, RAMON DE BELEN,
ERNESTO SABADO, MARTIN MALABANAN, ROMEO HUERTO
and VITALIANO PANGUE, petitioners,
vs.
THE HON. JUDGE ALFREDO L. BENIPAYO and MAGSAYSAY
LINES, INC., respondents.
G.R. Nos. L-64781-99 August 15, 1989
RESURRECCION SUZARA, CESAR DIMAANDAL, ANGELITO
MENDOZA, ANTONIO TANEDO, RAYMUNDO PEREZ,
AMORSOLO CABRERA, DOMINADOR SANTOS, ISIDRO
BRACIA, CATALINO CASICA, VITALIANO PANGUE, RAMON DE
BELEN, EDUARDO PAGTALUNAN, ANTONIO MIRANDA,
RAMON UNIANA, ERNESTO SABADO, MARTIN MALABANAN,
ROMEO HUERTO and WILFREDO CRISTOBAL, petitioners,
vs.
THE HONORABLE NATIONAL LABOR RELATIONS
COMMISSION, THE NATIONAL SEAMEN BOARD (now the
Philippine Overseas Employment Administration), and
MAGSAYSAY LINES, INC., respondents.
Quasha, Asperilla, Ancheta, Pe;a and Nolasco for petitioners.
Samson S. Alcantara for private respondent.

GUTIERREZ, JR., J.:

These petitions ask for a re-examination of this Court's precedent

setting decision in Vir-Jen Shipping and Marine Services Inc. v.
National Labor Relations Commission, et al. (125 SCRA 577
[1983]). On constitutional, statutory, and factual grounds, we find
no reason to disturb the doctrine in Vir-Jen Shipping and to turn
back the clock of progress for sea-based overseas workers. The
experience gained in the past few years shows that, following said
doctrine, we should neither deny nor diminish the enjoyment by
Filipino seamen of the same rights and freedoms taken for granted
by other working-men here and abroad.
The cases at bar involve a group of Filipino seamen who were
declared by the defunct National Seamen Board (NSB) guilty of
breaching their employment contracts with the private respondent
because they demanded, upon the intervention and assistance of
a third party, the International Transport Worker's Federation (ITF),
the payment of wages over and above their contracted rates
without the approval of the NSB. The petitioners were ordered to
reimburse the total amount of US$91,348.44 or its equivalent in
Philippine Currency representing the said over-payments and to be
suspended from the NSB registry for a period of three years. The
National Labor Relations Commission (NLRC) affirmed the decision
of the NSB.
In a corollary development, the private respondent, for failure of
the petitioners to return the overpayments made to them upon
demand by the former, filed estafa charges against some of the
petitioners. The criminal cases were eventually consolidated in the
sala of then respondent Judge Alfredo Benipayo. Hence, these
consolidated petitions, G.R. No. 64781-99 and G.R. Nos. 57999
and 58143-53, which respectively pray for the nullification of the
decisions of the NLRC and the NSB, and the dismissal of the
criminal cases against the petitioners.
The facts are found in the questioned decision of the NSB in G.R.
No. 64781-99.
From the records of this case it appears that the facts
established and/or admitted by the parties are the following:
that on different dates in 1977 and 1978 respondents entered
into separate contracts of employment (Exhs. "B" to "B-17",
inclusive) with complainant (private respondent) to work
aboard vessels owned/operated/manned by the latter for a
period of 12 calendar months and with different
rating/position, salary, overtime pay and allowance,
hereinbelow specified: ...; that aforesaid employment
contracts were verified and approved by this Board; that on
different dates in April 1978 respondents (petitioners) joined
the M/V "GRACE RIVER"; that on or about October 30, 1978
aforesaid vessel, with the respondents on board, arrived at
the port of Vancouver, Canada; that at this port respondent
received additional wages under rates prescribed by the
Intemational Transport Worker's Federation (ITF) in the total
amount of US$98,261.70; that the respondents received the
amounts appearing opposite their names, to wit: ...; that
aforesaid amounts were over and above the rates of pay of
respondents as appearing in their employment contracts
approved by this Board; that on November 10, 1978,
aforesaid vessel, with respondent on board, left Vancouver,
Canada for Yokohama, Japan; that on December 14, 1978,
while aforesaid vessel, was at Yura, Japan, they were made to
disembark. (pp. 64-66, Rollo)
Furthermore, according to the petitioners, while the vessel was
docked at Nagoya, Japan, a certain Atty. Oscar Torres of the NSB
Legal Department boarded the vessel and called a meeting of the
seamen including the petitioners, telling them that for their own
good and safety they should sign an agreement prepared by him
on board the vessel and that if they do, the cases filed against
them with NSB on November 17, 1978 would be dismissed. Thus,
the petitioners signed the. "Agreement" dated December 5, 1978.
(Annex C of Petition) However, when they were later furnished
xerox copies of what they had signed, they noticed that the line
"which amount(s) was/were received and held by CREWMEMBERS
in trust for SHIPOWNERS" was inserted therein, thereby making it
appear that the amounts given to the petitioners representing the
increase in their wages based on ITF rates were only received by
them in trust for the private respondent.
When the vessel reached Manila, the private respondent
demanded from the petitioners the "overpayments" made to them
in Canada. As the petitioners refused to give back the said
amounts, charges were filed against some of them with the NSB
and the Professional Regulations Commission. Estafa charges were
also filed before different branches of the then Court of First
Instance of Manila which, as earlier stated, were subsequently
consolidated in the sala of the respondent Judge Alfredo Benipayo
and which eventually led to G.R. Nos. 57999 and 58143-53.

In G.R. Nos. 64781-99, the petitioners claimed before the NSB that
contrary to the private respondent's allegations, they did not
commit any illegal act nor stage a strike while they were on board
the vessel; that the "Special Agreement" entered into in
Vancouver to pay their salary differentials is valid, having been
executed after peaceful negotiations. Petitioners further argued
that the amounts they received were in accordance with the
provision of law, citing among others, Section 18, Rule VI, Book I
of the Rules and Regulations Implementing the Labor Code which
provides that "the basic minimum salary of seamen shall not be
less than the prevailing minimum rates established by the
International Labor Organization (ILO) or those prevailing in the
country whose flag the employing vessel carries, whichever is
higher ..."; and that the "Agreement" executed in Nagoya, Japan
had been forced upon them and that intercalations were made to
make it appear that they were merely trustees of the amounts
they received in Vancouver.
On the other hand, the private respondent alleged that the
petitioners breached their employment contracts when they,
acting in concert and with the active participations of the ITF while
the vessel was in Vancouver, staged an illegal strike and by means
of threats, coercion and intimidation compelled the owners of the
vessel to pay to them various sums totalling US$104,244.35; that
the respondent entered into the "Special Agreement" to pay the
petitioners' wage differentials because it was under duress as the
vessel would not be allowed to leave Vancouver unless the said
agreement was signed, and to prevent the shipowner from
incurring further delay in the shipment of goods; and that in view
of petitioners' breach of contract, the latter's names must be
removed from the NSB's Registry and that they should be ordered
to return the amounts they received over and above their
contracted rates.
The respondent NSB ruled that the petitioners were guilty of
breach of contract because despite subsisting and valid NSBapproved employment contracts, the petitioners sought the
assistance of a third party (ITF) to demand from the private
respondent wages in accordance with the ITF rates, which rates
are over and above their rates of pay as appearing in their NSBapproved contracts. As bases for this conclusion, the NSB stated:
1) The fact that respondents sought the aid of a third party
(ITF) and demanded for wages and overtime pay based on
ITF rates is shown in the entries of their respective Pay-Off
Clearance Slips which were marked as their Exhs. "1" to "18",
and we quote "DEMANDED ITF WAGES, OVERTIME,
DIFFERENTIALS APRIL TO OCTOBER 1978". Respondent
Suzara admitted that the entries in his Pay-Off Clearance Slip
(Exh. "1") are correct (TSN., p. 16, Dec. 6,
1979).lwph1.t Moreover, it is the policy (reiterated very
often) by the ITF that it does not interfere in the affairs of the
crewmembers and masters and/or owners of a vessel unless
its assistance is sought by the crewmembers themselves.
Under this pronounced policy of the ITF, it is reasonable to
assume that the representatives of the ITF in Vancouver,
Canada assisted and intervened by reason of the assistance
sought by the latter.
2) The fact that the ITF assisted and intervened for and in
behalf of the respondents in the latter's demand for higher
wages could be gleaned from the answer of the respondents
when they admitted that the ITF acted in their behalf in the
negotiations for increase of wages. Moreover, respondent
Cesar Dimaandal admitted that the ITF differential pay was
computed by the ITF representative (TSN, p. 7, Dec. 12,
1979)
3) The fact that complainant and the owner/operator of the
vessel were compelled to sign the Special Agreement (Exh.
"20") and to pay ITF differentials to respondents in order not
to delay the departure of the vessel and to prevent further
losses is shown in the "Agreement" (Exhs. "R-21") ... (pp. 6970, Rollo)
The NSB further said:
While the Board recognizes the rights of the respondents to
demand for higher wages, provided the means are peaceful
and legal, it could not, however, sanction the same if the
means employed are violent and illegal. In the case at bar,
the means employed are violent and illegal for in demanding
higher wages the respondents sought the aid of a third party
and in turn the latter intervened in their behalf and prohibited
the vessel from sailing unless the owner and/or operator of
the vessel acceded to respondents' demand for higher
wages. To avoid suffering further incalculable losses, the
owner and/or operator of the vessel had no altemative but to

pay respondents' wages in accordance with the ITF scale. The

Board condemns the act of a party who enters into a contract
and with the use of force/or intimidation causes the other
party to modify said contract. If the respondents believe that
they have a valid ground to demand from the complainant a
revision of the terms of their contracts, the same should have
been done in accordance with law and not thru illegal means.
(at p. 72, Rollo).
Although the respondent NSB found that the petitioners were
entitled to the payment of earned wages and overtime
pay/allowance from November 1, 1978 to December 14, 1978, it
nevertheless ruled that the computation should be based on the
rates of pay as appearing in the petitioners' NSB-approved
contracts. It ordered that the amounts to which the petitioners are
entitled under the said computation should be deducted from the
amounts that the petitioners must return to the private
respondent.
On appeal, the NLRC affirmed the NSB's findings. Hence, the
petition in G.R. Nos. 64781-99.
Meanwhile, the petitioners in G.R. Nos. 57999 and 58143-53
moved to quash the criminal cases of estafa filed against them on
the ground that the alleged crimes were committed, if at all, in
Vancouver, Canada and, therefore, Philippine courts have no
jurisdiction. The respondent judge denied the motion. Hence, the
second petition.
The principal issue in these consolidated petitions is whether or
not the petitioners are entitled to the amounts they received from
the private respondent representing additional wages as
determined in the special agreement. If they are, then the
decision of the NLRC and NSB must be reversed. Similarly, the
criminal cases of estafa must be dismissed because it follows as a
consequence that the amounts received by the petitioners belong
to them and not to the private respondent.
In arriving at the questioned decision, the NSB ruled that the
petitioners are not entitled to the wage differentials as determined
by the ITF because the means employed by them in obtaining the
same were violent and illegal and because in demanding higher
wages the petitioners sought the aid of a third party, which, in
turn, intervened in their behalf and prohibited the vessel from
sailing unless the owner and/or operator of the vessel acceded to
respondents' demand for higher wages. And as proof of this
conclusion, the NSB cited the following: (a) the entries in the
petitioners Pay-Off Clearance Slip which contained the phrase
"DEMANDED ITF WAGES ..."; (b) the alleged policy of the ITF in not
interfering with crewmembers of a vessel unless its intervention is
sought by the crewmembers themselves; (c), the petitioners'
admission that ITF acted in their behalf; and (d) the fact that the
private respondent was compelled to sign the special agreement
at Vancouver, Canada.
There is nothing in the public and private respondents' pleadings,
to support the allegations that the petitioners used force and
violence to secure the special agreement signed in Vancouver.
British Columbia. There was no need for any form of intimidation
coming from the Filipino seamen because the Canadian
Brotherhood of Railways and Transport Workers (CBRT), a strong
Canadian labor union, backed by an international labor federation
was actually doing all the influencing not only on the ship-owners
and employers but also against third world seamen themselves
who, by receiving lower wages and cheaper accommodations,
were threatening the employment and livelihood of seamen from
developed nations.
The bases used by the respondent NSB to support its decision do
not prove that the petitioners initiated a conspiracy with the ITF or
deliberately sought its assistance in order to receive higher
wages. They only prove that when ITF acted in petitioners' behalf
for an increase in wages, the latter manifested their support. This
would be a logical and natural reaction for any worker in whose
benefit the ITF or any other labor group had intervened. The
petitioners admit that while they expressed their conformity to
and their sentiments for higher wages by means of placards, they,
nevertheless, continued working and going about their usual
chores. In other words, all they did was to exercise their freedom
of speech in a most peaceful way. The ITF people, in turn, did not
employ any violent means to force the private respondent to
accede to their demands. Instead, they simply applied effective
pressure when they intimated the possibility of interdiction should
the shipowner fail to heed the call for an upward adjustment of
the rates of the Filipino seamen. Interdiction is nothing more than
a refusal of ITF members to render service for the ship, such as to
load or unload its cargo, to provision it or to perform such other
chores ordinarily incident to the docking of the ship at a certain

port. It was the fear of ITF interdiction, not any action taken by the
seamen on board the vessel which led the shipowners to yield.
The NSB's contusion that it is ITF's policy not to intervene with the
plight of crewmembers of a vessel unless its intervention was
sought is without basis. This Court is cognizant of the fact that
during the period covered by the labor controversies in Wallem
Philippines Shipping, Inc. v. Minister of Labor (102 SCRA 835
[1981]; Vir-Jen Shipping and Marine Services, Inc. v. NLRC (supra)
and these consolidated petitions, the ITF was militant worldwide
especially in Canada, Australia, Scandinavia, and various
European countries, interdicting foreign vessels and demanding
wage increases for third world seamen. There was no need for
Filipino or other seamen to seek ITF intervention. The ITF was
waiting on its own volition in all Canadian ports, not particularly
for the petitioners' vessel but for all ships similarly situated. As
earlier stated, the ITF was not really acting for the petitioners out
of pure altruism. The ITF was merely protecting the interests of its
own members. The petitioners happened to be pawns in a higher
and broader struggle between the ITF on one hand and
shipowners and third world seamen, on the other. To subject our
seamen to criminal prosecution and punishment for having been
caught in such a struggle is out of the question.
As stated in Vir-Jen Shipping (supra):
The seamen had done no act which under Philippine law or
any other civilized law would be termed illegal, oppressive, or
malicious. Whatever pressure existed, it was mild compared
to accepted and valid modes of labor activity. (at page 591)
Given these factual situations, therefore, we cannot affirm the
NSB and NLRC's finding that there was violence, physical or
otherwise employed by the petitioners in demanding for additional
wages. The fact that the petitioners placed placards on the
gangway of their ship to show support for ITF's demands for wage
differentials for their own benefit and the resulting ITF's
threatened interdiction do not constitute violence. The petitioners
were exercising their freedom of speech and expressing
sentiments in their hearts when they placed the placard We Want
ITF Rates." Under the facts and circumstances of these petitions,
we see no reason to deprive the seamen of their right to freedom
of expression guaranteed by the Philippine Constitution and the
fundamental law of Canada where they happened to exercise it.
As we have ruled in Wallem Phil. Shipping Inc. v. Minister of Labor,
et al. supra:
Petitioner claims that the dismissal of private respondents
was justified because the latter threatened the ship
authorities in acceding to their demands, and this constitutes
serious misconduct as contemplated by the Labor Code. This
contention is now well-taken. The records fail to establish
clearly the commission of any threat. But even if there had
been such a threat, respondents' behavior should not be
censured because it is but natural for them to employ some
means of pressing their demands for petitioner, who refused
to abide with the terms of the Special Agreement, to honor
and respect the same. They were only acting in the exercise
of their rights, and to deprive them of their freedom of
expression is contrary to law and public policy. ... (at page
843)
We likewise, find the public respondents' conclusions that the acts
of the petitioners in demanding and receiving wages over and
above the rates appearing in their NSB-approved contracts is in
effect an alteration of their valid and subsisting contracts because
the same were not obtained through. mutual consent and without
the prior approval of the NSB to be without basis, not only
because the private respondent's consent to pay additional wages
was not vitiated by any violence or intimidation on the part of the
petitioners but because the said NSB-approved form contracts are
not unalterable contracts that can have no room for improvement
during their effectivity or which ban any amendments during their
term.
For one thing, the employer can always improve the working
conditions without violating any law or stipulation.
We stated in the Vir-Jen case (supra) that:
The form contracts approved by the National
Seamen Board are designed to protect Filipino
seamen not foreign shipowners who can take
care of themselves. The standard forms
embody the basic minimums which must be

incorporated as parts of the employment

contract. (Section 15, Rule V, Rules and
Regulations Implementing the Labor
Code).lwph1.t They are not collective
bargaining agreements or immutable contracts
which the parties cannot improve upon or
modify in the course of the agreed period of
time. To state, therefore, that the affected
seamen cannot petition their employer for
higher salaries during the 12 months duration
of the contract runs counter to estabhshed
principles of labor legislation. The National
Labor Relations Commission, as the appellate
tribunal from the decisions of the National
Seamen Board, correctly ruled that the seamen
did not violate their contracts to warrant their
dismissal. (at page 589)
It is impractical for the NSB to require the petitioners, caught in
the middle of a labor struggle between the ITF and owners of
ocean going vessels halfway around the world in Vancouver,
British Columbia to first secure the approval of the NSB in Manila
before signing an agreement which the employer was willing to
sign. It is also totally unrealistic to expect the petitioners while in
Canada to exhibit the will and strength to oppose the ITF's
demand for an increase in their wages, assuming they were so
minded.
An examination of Annex C of the petition, the agreement signed
in Japan by the crewmembers of the M/V Grace River and a certain
M. Tabei, representative of the Japanese shipowner lends credence
to the petitioners' claim that the clause "which amount(s) was
received and held by CREWMEMBERS in trust for SHIPOWNER"
was an intercalation added after the execution of the agreement.
The clause appears too closely typed below the names of the 19
crewmen and their wages with no similar intervening space as
that which appears between all the paragraphs and the triple
space which appears between the list of crewmembers and their
wages on one hand and the paragraph above which introduces
the list, on the other. The verb "were" was also inserted above the
verb "was" to make the clause grammatically correct but the
insertion of "were" is already on the same line as "Antonio
Miranda and 5,221.06" where it clearly does not belong. There is
no other space where the word "were" could be intercalated. (See
Rollo, page 80).
At any rate, the proposition that the petitioners should have
pretended to accept the increased wages while in Vancouver but
returned them to the shipowner when they reached its country,
Japan, has already been answered earlier by the Court:
Filipino seamen are admittedly as competent and reliable as
seamen from any other country in the world. Otherwise, there
would not be so many of them in the vessels sailing in every
ocean and sea on this globe. It is competence and reliability,
not cheap labor that makes our seamen so greatly in
demand. Filipino seamen have never demanded the same
high salaries as seamen from the United States, the United
Kingdom, Japan and other developed nations. But certainly
they are entitled to government protection when they ask for
fair and decent treatment by their employer and when they
exercise the right to petition for improved terms of
employment, especially when they feel that these are substandard or are capable of improvement according to
internationally accepted rules. In the domestic scene, there
are marginal employers who prepare two sets of payrolls for
their employees one in keeping with minimum wages and
the other recording the sub-standard wages that the
employees really receive. The reliable employers, however,
not only meet the minimums required by fair labor standards
legislation but even go away above the minimums while
earning reasonable profits and prospering. The same is true
of international employment. There is no reason why this
court and the Ministry of Labor and Employment or its
agencies and commissions should come out with
pronouncements based on the standards and practices of
unscrupulous or inefficient shipowners, who claim they
cannot survive without resorting to tricky and deceptive
schemes, instead of Government maintaining labor law and
jurisprudence according to the practices of honorable,
competent, and law-abiding employers, domestic or foreign.
(Vir-Jen Shipping, supra, pp. 587-588)
It is noteworthy to emphasize that while the Intemational Labor
Organization (ILO) set the minimum basic wage of able seamen at
US$187.00 as early as October 1976, it was only in 1979 that the
respondent NSB issued Memo Circular No. 45, enjoining all
shipping companies to adopt the said minimum basic wage. It was
correct for the respondent NSB to state in its decision that when

the petitioners entered into separate contracts between 19771978, the monthly minimum basic wage for able seamen ordered
by NSB was still fixed at US$130.00. However, it is not the fault of
the petitioners that the NSB not only violated the Labor Code
which created it and the Rules and Regulations Implementing the
Labor Code but also seeks to punish the seamen for a
shortcoming of NSB itself.
Article 21(c) of the Labor Code, when it created the NSB,
mandated the Board to "(O)btain the best possible terms and
conditions of employment for seamen."
Section 15, Rule V of Book I of the Rules and Regulations
Implementing the Labor Code provides:
Sec. 15. Model contract of employment. The
NSB shall devise a model contract of
employment which shall embody all the
requirements of pertinent labor and social
legislations and the prevailing standards set by
applicable International Labor Organization
Conventions. The model contract shall set the
minimum standards of the terms and
conditions to govern the employment of
Filipinos on board vessels engaged in overseas
trade. All employers of Filipinos shall adopt the
model contract in connection with the hiring
and engagement of the services of Filipino
seafarers, and in no case shall a shipboard
employment contract be allowed where the
same provides for benefits less than those
enumerated in the model employment
contract, or in any way conflicts with any other
provisions embodied in the model contract.
Section 18 of Rule VI of the same Rules and Regulations provides:
Sec. 18. Basic minimum salary of able-seamen.
The basic minimum salary of seamen shall
be not less than the prevailing minimxun rates
established by the International Labor
Organization or those prevailing in the country
whose flag the employing vessel carries,
whichever is higher. However, this provision
shall not apply if any shipping company pays
its crew members salaries above the minimum
herein provided.
Section 8, Rule X, Book I of the Omnibus Rules provides:
Section 8. Use of standard format of service
agreement. The Board shall adopt a
standard format of service agreement in
accordance with pertinent labor and social
legislation and prevailing standards set by
applicable International Labor Organization
Conventions. The standard format shall set the
minimum standard of the terms and conditions
to govern the employment of Filipino seafarers
but in no case shall a shipboard employment
contract (sic), or in any way conflict with any
other provision embodied in the standard
format.
It took three years for the NSB to implement requirements which,
under the law, they were obliged to follow and execute
immediately. During those three years, the incident in Vancouver
happened. The terms and conditions agreed upon in Vancouver
were well within ILO rates even if they were above NSB standards
at the time.
The sanctions applied by NSB and affirmed by NLRC are moreover
not in keeping with the basic premise that this Court stressed in
the Vir-Jen Shipping case (supra) that the Ministry now the
Department of Labor and Employment and all its agencies exist
primarily for the workingman's interest and the nation's as a
whole.
Implicit in these petitions and the only reason for the NSB to take
the side of foreign shipowners against Filipino seamen is the
"killing the goose which lays the golden eggs" argument. We
reiterate the ruling of the Court in Vir-Jen Shipping (supra)
There are various arguments raised by the petitioners but the
common thread running through all of them is the contention,
if not the dismal prophecy, that if the respondent seamen are

sustained by this Court, we would in effect "kill the hen that

lays the golden egg." In other words, Filipino seamen,
admittedly among the best in the world, should remain
satisfied with relatively lower if not the lowest, international
rates of compensation, should not agitate for higher wages
while their contracts of employment are subsisting, should
accept as sacred, iron clad, and immutable the side contracts
which require: them to falsely pretend to be members of
international labor federations, pretend to receive higher
salaries at certain foreign ports only to return the increased
pay once the ship leaves that port, should stifle not only their
right to ask for improved terms of employment but their
freedom of speech and expression, and should suffer instant
termination of employment at the slightest sign of
dissatisfaction with no protection from their Government and
their courts. Otherwise, the petitioners contend that Filipinos
would no longer be accepted as seamen, those employed
would lose their jobs, and the still unemployed would be left
hopeless.
This is not the first time and it will not be the last where the threat
of unemployment and loss of jobs would be used to argue against
the interests of labor; where efforts by workingmen to better their
terms of employment would be characterized as prejudicing the
interests of labor as a whole.
xxx xxx xxx
Unionism, employers' liability acts, minimum wages,
workmen's compensation, social security and collective
bargaining to name a few were all initially opposed by
employers and even well meaning leaders of government and
society as "killing the hen or goose which lays the golden
eggs." The claims of workingmen were described as
outrageously injurious not only to the employer but more so
to the employees themselves before these claims or
demands were established by law and jurisprudence as
"rights" and before these were proved beneficial to
management, labor, and the national as a whole beyond
reasonable doubt.
The case before us does not represent any major advance in
the rights of labor and the workingmen. The private
respondents merely sought rights already established. No
matter how much the petitioner-employer tries to present
itself as speaking for the entire industry, there is no evidence
that it is typical of employers hiring Filipino seamen or that it
can speak for them.

compared to those of landbased workers. (The Business

Star, Indicators, January 11, 1988 at page 2)
Augmenting this optimistic report of POEA Administrator Tomas
Achacoso is the statement of Secretary of Labor Franklin M. Drilon
that the Philippines has a big jump over other crewing nations
because of the Filipinos' abilities compared with any European or
westem crewing country. Drilon added that cruise shipping is also
a growing market for Filipino seafarers because of their flexibility
in handling odd jobs and their expertise in handling almost all
types of ships, including luxury liners. (Manila Bulletin, More
Filipino Seamen Expected Development,December 27, 1988 at
page 29).lwph1.t Parenthetically, the minimum monthly salary
of able bodied seamen set by the ILO and adhered to by the
Philippines is now $276.00 (id.) more than double the $130.00
sought to be enforced by the public respondents in these
petitions.
The experience from 1981 to the present vindicates the finding
in Vir-Jen Shipping that a decision in favor of the seamen would
not necessarily mean severe repercussions, drying up of
employment opportunities for seamen, and other dire
consequences predicted by manning agencies and recruiters in
the Philippines.
From the foregoing, we find that the NSB and NLRC committed
grave abuse of discretion in finding the petitioners guilty of using
intimidation and illegal means in breaching their contracts of
employment and punishing them for these alleged offenses.
Consequently, the criminal prosecutions for estafa in G.R. Nos.
57999 and 58143-53 should be dismissed.
WHEREFORE, the petitions are hereby GRANTED. The decisions of
the National Seamen Board and National Labor Relations
Commission in G. R. Nos. 64781-99 are REVERSED and SET ASIDE
and a new one is entered holding the petitioners not guilty of the
offenses for which they were charged. The petitioners' suspension
from the National Seamen Board's Registry for three (3) years is
LIFTED. The private respondent is ordered to pay the petitioners
their earned but unpaid wages and overtime pay/allowance from
November 1, 1978 to December 14, 1978 according to the rates in
the Special Agreement that the parties entered into in Vancouver,
Canada.
The criminal cases for estafa, subject matter of G. R. Nos. 57999
and 58143-53, are ordered DISMISSED.
SO ORDERED.

The contention that manning industries in the Philippines

would not survive if the instant case is not decided in favor of
the petitioner is not supported by evidence. The Wallem case
was decided on February 20, 1981. There have been no
severe repercussions, no drying up of employment
opportunities for seamen, and none of the dire consequences
repeatedly emphasized by the petitioner. Why should Vir-Jen
be an exception?

G.R. No. 82252 February 28, 1989

The wages of seamen engaged in international shipping are

shouldered by the foreign principal. The local manning office
is an agent whose primary function is recruitment and who
usually gets a lump sum from the shipowner to defray the
salaries of the crew. The hiring of seamen and the
determination of their compensation is subject to the
interplay of various market factors and one key factor is how
much in terms of profits the local manning office and the
foreign shipowner may realize after the costs of the voyage
are met. And costs include salaries of officers and crew
members. (at pp. 585-586)

Tanjuatco, Oreta, Tanjuatco, Berenguer & San Vicente for

petitioners.

The Wallem Shipping case, was decided in 1981. Vir-Jen

Shipping was decided in 1983. It is now 1989. There has'been no
drying up of employment opportunities for Filipino seamen. Not
only have their wages improved thus leading ITF to be placid and
quiet all these years insofar as Filipinos are concerned but the
hiring of Philippine seamen is at its highest level ever.
Reporting its activities for the year 1988, the Philippine Overseas
Employment Administration (POEA) stated that there will be an
increase in demand for seamen based overseas in 1989 boosting
the number to as high as 105,000. This will represent a 9.5
percent increase from the 1988 aggregate. (Business World, News
Briefs,January 11, 1989 at page 2) According to the POEA,
seabased workers numbering 95,913 in 1988 exceeded by a wide
margin of 28.15 percent the year end total in 1987. The report
shows that sea-based workers posted bigger monthly increments

SEAGULL MARITIME CORP. AND PHILIMARE SHIPPING &

EQUIPMENT SUPPLY, petitioners
vs.
NERRY D. BALATONGAN, NATIONAL LABOR RELATIONS
COMMISSION AND PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, respondents.

The Solicitor General for public respondent.

Benjamin B. Vergara for private respondent

GANCAYCO, J.:
On November 2, 1982, a "crew Agreement" was entered into by
private respondent Nerry D. Balatongan and Philimare Shipping
and Equipment Supply (hereinafter called Philimare) whereby the
latter employed the former as able seaman on board its vessel
"Santa Cruz" (renamed "Turtle Bay") with a monthly salary of US $
300.00. Said agreement was processed and approved by the
National Seaman's Board (NSB) on November 3, 1982. 1
While on board said vessel the said parties entered into a
supplementary contract of employment on December 6,
1982 2 which provides among others:

1. The employer shall be obliged to insure the employee

during his engagement against death or permanent invalidity
caused by accident on board up to:
US $ 40,000 - for death caused by accident
US $ 50,000 - for permanent total disability caused by
accident. 3
On October 6, 1983 Balatongan met an accident in the Suez
Canal, Egypt as a result of which he was hospitalized at the Suez
Canal Authority Hospital. Later, he was repatriated to the
Philippines and was hospitalized at the Makati Medical Center from
October 23, 1983 to March 27, 1984. On August 19, 1985 the
medical certificate was issued describing his disability as
"permanent in nature."
Balatongan demanded payment for his claim for total disability
insurance in the amount of US $ 50,000.00 as provided for in the
contract of employment but his claim was denied for having been
submitted to the insurers beyond the designated period for doing
so.
Thus, Balatongan filed on June 21, 1985 a complaint against
Philimare and Seagull Maritime Corporation (hereinafter called
Seagull) in the Philippine Overseas Employment Administration
(POEA) for non-payment of his claim for permanent total disability
with damages and attorney's fees.
After the parties submitted their respective position papers with
the corresponding documentary evidence, the officer-in-charge of
the Workers Assistance and Adjudication Office of the POEA
rendered a decision on May 2, 1986, the dispositive part of which
reads as follows:
WHEREFORE, premises considered, respondents are hereby
ordered to pay complainant the amount of US $ 50,000.00
representing permanent total disability insurance and
attorney's fees at 10% of the award. Payment should be
made in this Office within ten (10) days from receipt hereof at
the prevailing rate of exchange. This Office cannot however
rule on damages, having no jurisdiction on the matter.
SO ORDERED.

Seagull and Philimare appealed said decision to the National Labor

Relations Commission (NLRC) on June 4, 1986. Pending resolution
of their appeal because of the alleged transfer of the agency of
Seagull to Southeast Asia Shipping Corporation, Seagull filed on
April 28, 1987 a Motion For Substitution/Inclusion of Party
Respondent which was opposed by Balatongan. 5 This was
followed by an ex-parte motion for leave to file third party
complaint on June 4, 1987 by Seagull. A decision was promulgated
on December 7, 1987 denying both motions and dismissing the
appeal for lack of merit. 6 A motion for reconsideration of said
decision was denied for lack of merit in a resolution dated
February 26, 1988. 7
Hence, Seagull and Philimare filed this petition for certiorari with a
prayer for the issuance of a temporary restraining order based on
the following grounds:
1. Respondent POEA erred in applying the Supplemental
Contract;
2. Respondents POEA and NLRC acted with grave abuse of
discretion in holding that the Supplemental Contract was
signed on board MV Santa Cruz by and between private
respondent and your petitioner; and
3. Respondent NLRC acted with grave abuse of discretion in
not giving due course to your petitioners' Motion for Leave to
File Third Party Complaint as well as their Motion for
Inclusion/Substitution of respondents. 8
On March 21, 1988, the Court issued a temporary restraining
order enjoining respondents from enforcing the questioned
decision and resolution of public respondents.
Petitioners argue that prior to private respondent's departure he
executed a crew agreement on November 2, 1982 which was duly
approved by the POEA; that the supplementary contract of
employment that was entered into on board the vessel "Turtle
Bay" which provides for a US $ 50,000.00 insurance benefit in

case of permanent disability was neither approved nor verified by

respondent POEA; and that the same violates Article 34(i) of the
Labor Code, as amended, which provides as follows:
Art. 34. Prohibited Practices. - It shall be unlawful for any
individual, entity, licensee, or holder of authority:
xxx xxx xxx
xxx xxx xxx
(i) to substitute or alter employment contracts approved and
verified by the Department of Labor from the time of actual
signing thereof by the parties up to and including the period
of expiration of the same without the approval of the
Department of Labor.
Petitioners also call attention to Article VIII, paragraph 2 of the
Supplementary Contract which provides as follows:
2. Notwithstanding his claim against the insurers the
employee hereby expressly waives all claims of his own or his
heirs for compensation of damages due to death or
permanent invalidity which he suffered during his
engagement against the employers ... unless his death or
permanent invalidity has been caused by willful act of any of
the above-named persons. 9
Petitioners stress that while public respondents upheld the
applicability of said supplementary contract insofar as it increased
the benefits to private respondent, public respondents considered
the provision on the waiver against all claims by private
respondent to be contrary to public policy.
In its questioned decision dated December 7, 1987, the
respondent NLRC made the following disquisition:
The focal issue for determination is the validity and
enforceability of the second contract of employment entered
into by and between complainant and respondents on board
the vessel where the former had served as a member of its
complement despite the absence of NSB verification or
approval. With respect to the findings of facts in the appealed
decision, We consider the same as duly supported by
substantial evidence and the admissions of the parties in
their pleadings.
Much stress and emphasis are made by the respondents in
their appeal that this claim has no legal basis or footing
inasmuch as the second contract of employment containing a
total disability insurance benefit of US $ 50,000.00, much
more than that embodied in the first contract of employment
which was approved by the defunct NSB, was not verified or
approved by the latter. Accordingly, the respondents posit the
argument that subject claim may not prosper pursuant to the
provisions of Art. 34(i) of the Labor Code, as amended, which
provides that it shall be unlawful for any individual, entity,
licensee, or holder of authority '(T)o substitute or alter
employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof
by the parties up to and including the period of expiration of
the same without the approval of the Department of Labor.
Did the POEA commit a reversible error when it considered
the second contract of employment as valid sans any
verification or approval thereof by the NSB? Our answer to
this query is in the negative. Apparently, the intention of the
law when Art. 34 of the Labor Code was enacted is to provide
for the prohibited and unlawful practices relative to
recruitment and placement. As shown in the 'Explanatory
Note' of Parliamentary Bill No. 4531, pertaining to Art. 34
(supra), thus:
Many of the provisions are already existing and were simply
restated. Some however were restated with modifications and
new ones were introduced to reflect what in the past have
been noted to be pernicious practices which tend to place
workers at a disadvantage.'
it is indubitably clear that the purpose of having overseas
contracts of employment approved by the NSB(POEA) is
whether or not such contracts conform to the minimum terms
and conditions prescribed by the NSB (POEA). In other words,
the law did not at all prohibit any alteration which provided
for increases in wages or other benefits voluntarily granted

by the employer. Precisely, under Section 2, Rule 1, Book V of

the Rules and Regulations of the POEA, '(t)he standard format
of employment contracts shall set the minimum standards of
the terms and conditions of employment. All employers and
principals shall adopt the model contract in connection with
the hiring of workers without prejudice to their adopting other
terms and conditions of employment over and above the
minimum standards of the Administration.' Where, as here, it
is admitted that the second contract although not verified or
approved by the NSB (POEA) granted more benefits by way of
total disability insurance to the complainant, the respondents
may not be allowed to disvow their own voluntary acts by
insisting that such beneficial contract in favor of the seaman
is null and void. (Emphasis supplied.)10
We agree.
The supplementary contract of employment was entered into
between petitioner and private respondent to modify the original
contract of employment The reason why the law requires that the
POEA should approve and verify a contract under Article 34(i) of
the Labor Code is to insure that the employee shall not thereby be
placed in a disadvantageous position and that the same are within
the minimum standards of the terms and conditions of such
employment contract set by the POEA. This is why a standard
format for employment contracts has been adopted by the
Department of Labor. However, there is no prohibition against
stipulating in a contract more benefits to the employee than those
required by law. Thus, in this case wherein a "supplementary
contract" was entered into affording greater benefits to the
employee than the previous one, and although the same was not
submitted for the approval of the POEA, the public respondents
properly considered said contract to be valid and enforceable.
Indeed, said pronouncements of public respondents have the
effect of an approval of said contract. Moreover, as said contract
was voluntarily entered into by the parties the same is binding
between them. 11 Not being contrary to law, morals, good
customs, public policy or public order, its validity must be
sustained. 12 By the same token, the court sustains the ruling of
public respondents that the provision in the supplementary
contract whereby private respondent waives any claim against
petitioners for damages arising from death or permanent disability
is against public policy, oppressive and inimical to the rights of
private respondent. The said provision defeats and is inconsistent
with the duty of petitioners to insure private respondent against
said contingencies as clearly stipulated in the said contract.
Petitioners however argue that they could not have entered into
said supplementary contract of employment as Philimare was a
mere manning agent in the Philippines of the shipping company
managed by Navales Shipping Management and Marine
Consultant (Pte) Ltd., its principal. Petitioners assert that the said
supplementary contract was entered into by private respondent
with their principal, Navales Shipping Management and Marine
Consultant (Pte) Ltd. on board the vessel Turtle Bay so petitioners
cannot be held responsible thereunder.
This Court is not a trier of facts and the findings of the public
respondents are conclusive in this proceeding. Public respondents
found that petitioner Philimare and private respondent entered
into said supplementary contract of employment on December 6,
1982. Assuming for the sake of argument that it was petitioners'
principal which entered into said contract with private respondent,
nevertheless petitioner, as its manning agent in the Philippines, is
jointly responsible with its principal thereunder. 13
There is no question that under the said supplementary contract
of employment, it is the duty of the employer, petitioners herein,
to insure the employee, during his engagement, against death
and permanent invalidity caused by accident on board up to $
50,000.00. Consequently, it is also its concomitant obligation to
see to it that the claim against the insurance company is duly filed
by private respondent or in his behalf, and within the time
provided for by the terms of the insurance contract.
In this case, the private respondent met the accident on October
6, 1983. Since then, he was hospitalized at the Suez Canal
Authority Hospital and thereafter be was repatriated to the
Philippines wherein he was also hospitalized from October 22,
1983 to March 27, 1984. It was only on August 19, 1985 that he
was issued a medical certificate describing his disability to be
permanent in nature. It was not possible for private respondent to
file a claim for permanent disability with the insurance company
within the one-year period from the time of the injury, as his
disability was ascertained to be permanent only thereafter.
Petitioners did not exert any effort to assist private respondent to
recover payment of his claim from the insurance company. They
did not even care to dispute the finding of the insurer that the

claim was not flied on time. 14 Petitioners must, therefore, be held

responsible for its omission, if not negligence, by requiring them
to pay the claim of private respondent.
The Court finds that the respondent NLRC did not commit a grave
abuse of discretion in denying petitioners, motion for leave to file
third-party complaint and substitution inclusion of party
respondent. Such motion is largely addressed to the discretion of
the said Commission. Inasmuch as the alleged transfer of interest
took place only after the POEA had rendered its decision, the
denial of the motion so as to avoid further delay in the settlement
of the claim of private respondent was well-taken. At any rate,
petitioners may pursue their claim against their alleged successorin-interest in a separate suit.
WHEREFORE, the petition is hereby DISMISSED for lack of merit
and the temporary restraining order issued by this Court on March
21, 1988 is hereby LIFTED. No costs. This decision is immediately
executory.
SO ORDERED.

G.R. No. 158324. March 14, 2005

ROBERTO RAVAGO, Petitioners,
vs.
ESSO EASTERN MARINE, LTD. and TRANS-GLOBAL
MARITIME AGENCY, INC., Respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the
1997 Rules of Court, as amended, of the Decision 1 of the Court of
Appeals (CA) as well as its Resolution in CA-G.R. SP No. 66234
which denied the motion for reconsideration thereof.
The Factual Antecedents
The Esso Eastern Marine Ltd. (EEM), now the Petroleum Shipping
Ltd., 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 Maritime Agency,
Inc. (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, thus:
CONTRACT FROM DURATION TO POSITION

VESSEL

13 Feb 70

10 Feb 71

SN/Wiper

Esso Bataan

07 May 71

27 May 72

Wiper

Esso Yokohama

07 Aug 72

02 Jul 73

Oiler

Esso Kure

03 Oct 73

30 Jun 74

Oiler

Esso Bangkok

18 Sep 74

26 July 75

Oiler

Esso Yokohama

23 Oct 75

22 Jun 76

Oiler

Esso Port Dickson

10 Sep 76

26 Dec 76

Oiler

Esso Bangkok

27 Dec 76

29 Apr 77

Temporary Jr. 3AE Esso Bangkok

08 Jul 77

15 Mar 78

Jr. 3AE

Esso Bombay

03 Jun 78

03 Feb 79

Temporary 3AE

Esso Hongkong

04 Apr 79

24 Jun 79

3AE

Esso Orient

25 Jun 79

16 Jul 79

3AE

Esso Yokohama

17 Jul 79

05 Dec 79

3AE

Esso Orient

10 Feb 80

25 Oct 80

3AE

Esso Orient

19 Jan 81

03 Jun 81

3AE

Esso Port Dickson

04 Jun 81

11 Sep 81

3AE

Esso Orient

06 Dec 81

20 Apr 82

3AE

Esso Chawan

21 Apr 82

01 Aug 82

Temporary 2AE

Esso Chawan

03 Nov 82

06 Feb 83

2AE

Esso Jurong

07 Feb 83

10 Jul 83

2AE

Esso Yokohama

31 Aug 83

13 Mar 84

2AE

Esso Tumasik

04 May 84

08 Jan 85

2AE

Esso Port Dickson

13 Mar 85

31 Oct 85

2AE

Esso Castellon

29 Dec 85

22 Jul 86

2AE

Esso Jurong

13 Sep 86

09 Jan 87

2AE

Esso Orient

21 Mar 87

15 Oct 87

2AE

Esso Port Dickson

20 Nov 87

18 Dec 87
Temporary

1AE

Esso Chawan

19 Dec 87

25 Jun 88

2AE

Esso Melbourne

04 Aug 88

19 Mar 89

Temporary 1AE

Esso Port Dickson

20 Mar 89

19 May 89

1AE

Esso Port Dickson

28 Jul 89

17 Feb 90

1AE

Esso Melbourne

16 Apr 90

11 Dec 90

1AE

Esso Orient

09 Feb 91

06 Oct 91

1AE

Esso Melbourne

16 Dec 91

22 Aug 92

1AE

Esso Orient
5

* Upgraded/Confirmed on regular rank on board.

On August 24, 1992, or shortly after completing his latest contract
with EIS, Ravago was granted a vacation leave with pay from
August 23, 1992 until October 28, 1992. Preparatory to his
embarkation under a new contract, he was ordered to report, on
September 28, 1992, for a Medical Pre-Employment
Examination.6 The Pre-Employment Physical Examination Record
shows that Ravago passed the medical examination conducted by
the O.P. Jacinto Medical Clinic, Inc. on October 6, 1992. 7 He,
likewise, attended a Pre-Departure Orientation Seminar conducted
by the Capt. I.P. Estaniel Training Center, a division of TransGlobal, on October 7, 1992.8
On the night of October 12, 1992, 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. Ravagos wife, Lolita, informed
Trans-Global and EIS of the incident on October 13, 1992 for
purposes of availing medical benefits. As a result of his injury,
Ravagos 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.9 Ravagos left leg had become apparently shorter, making him
walk with a limp. For this reason, the company physician, Dr.
Virginia G. Manzo, found him to have lost his dexterity, making
him unfit to work once again as a seaman.10 Citing the opinion of
Ravagos doctor, Dr. Manzo wrote:
Because of his unsteady gait, pronounced limp, and loss of
normal dexterity of his leg and foot, we doubted whether Mr.
Ravago can physically tackle the usual activities of a seaman in
the course of his work without any added risk over and above the
ordinary or standard risk inherent to his job. These activities
include climbing up and down the engine room through a long
flight of iron stairs with narrow steps which could be slippery at
times due to grease or oil, jumping from an unsteady and floating
motor launch or boat to board or alight a tanker through a flight of
steps or climbing up and down a pilot ladder, wearing of heavy
safety shoes, etc.
Mr. Ravagos doctor replied that, after being informed about the
nature of the job, he believes that Mr. Ravago would not be able to
cope with these kinds of activities. In effect, the Orthopedic doctor
said Mr. Ravago is not fit to go back to his work as a seaman.
We concur with the opinion of the doctor that Mr. Ravago is not fit
to go back to his job as a seaman in view of the risk of physical
injury to himself as result of the deformity and loss of dexterity of
his injured leg.
As a seaman, we consider his inability partial permanent. His
injury corresponds to Grade 13 in the Schedule of Disability of the
Standard Employment Contract. 11
Consequently, instead of rehiring Ravago, EIS paid him his Career
Employment Incentive Plan (CEIP)12 as of March 1, 1993 and his
final tax refund for 1992. After deducting his Social Security
System and medical contributions from November 1992 to
February 1993, EIS remitted the net amount of P162,232.65,
following Ravagos execution of a Deed of Quitclaim and/or
Release.13
However, on March 22, 1993, Ravago filed a complaint 14 for illegal
dismissal with prayer for reinstatement, backwages, damages and
attorneys fees against Trans-Global and EIS with the Philippine
Overseas Employment Administration Adjudication Office.
In their Answer dated April 14, 1993, 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 Ravagos
attending physician. They averred that Ravago was a contractual
employee and was hired under 34 separate contracts by different
companies.
In his position paper, Ravago insisted that he was fit to resume
pre-injury activities as evidenced by the certification 15 issued by
Dr. Marciano Foronda M.D., one of his attending physicians at the
Philippine Orthopedic Hospital, that "at present, fracture of tibia

has completely healed and patient is fit to resume pre-injury

activities anytime."16 Ravago, likewise, asserted 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.
On December 15, 1996, Labor Arbiter Ramon Valentin C. Reyes
rendered a decision in favor of Ravago, the complainant. He ruled
that Ravago was a regular employee because he was engaged to
perform activities which were usually necessary or desirable in the
usual trade or business of the employer. The Labor Arbiter noted
that Ravagos services were repeatedly contracted; he was even
given several promotions and was paid a monthly service
experience bonus. This was in keeping with the increasing number
of long term careers established with the respondents. Finally, the
Labor Arbiter resolved that an employer cannot terminate a
workers employment on the ground of disease unless there is a
certification by a competent public health authority that the said
disease is of such nature or at such a stage that it cannot be cured
within a period of six months even with proper medical treatment.
He concluded that Ravago was illegally dismissed. The decretal
portion of the Labor Arbiters decision reads:
WHEREFORE, premises considered, judgment is hereby rendered
finding the dismissal illegal and ordering respondents to reinstate
complainant to his former position without loss of seniority rights
and other benefits. Further, the respondents are jointly and
severally liable to pay complainant backwages from the time of
his dismissal up to the promulgation of this decision. Such
backwages is provisionally fixed at US$96,285.00 less
theP162,285.83 (sic) paid to the complainant as Career
Employment Incentive Plan. And ordering respondents to pay
complainant 10% of the total monetary award as attorneys fees.
All other claims are dismissed for lack of merit.
SO ORDERED.17
Aggrieved, the respondents appealed the decision to the National
Labor Relations Commission (NLRC) on July 3, 1997, raising the
following grounds:
THE DECISION IS VITIATED BY SERIOUS ERRORS IN THE FINDINGS
OF FACT WHICH, IF NOT CORRECTED, WOULD CAUSE GRAVE OR
IRREPARABLE DAMAGE OR INJURY TO THE RESPONDENTS. THESE
FINDINGS ARE:
(A) THAT COMPLAINANT WAS A REGULAR EMPLOYEE BECAUSE HE
WAS HIRED AND REHIRED IN VARIOUS CAPACITIES ON BOARD
ESSO VESSELS IN A SPAN OF 23 YEARS;
(B) THAT COMPLAINANT WAS A REGULAR EMPLOYEE BECAUSE HE
WAS ENGAGED IN THE SERVICES INDISPENSABLE IN THE
OPERATION OF THE VARIOUS VESSELS OF RESPONDENTS;
(C) THAT COMPLAINANT WAS FIT TO RESUME PRE-INJURY
ACTIVITIES AND HIS FRACTURE COMPLETELY HEALED
NOTWITHSTANDING A CONTRARY MEDICAL OPINION OF
COMPLAINANTS OWN PHYSICIAN AND RESPONDENTS COMPANY
PHYSICIAN; AND
(D) THAT COMPLAINANT WAS ILLEGALLY DISMISSED BY
RESPONDENTS.18
On April 26, 2001, the NLRC rendered a decision affirming that of
the Labor Arbiter. The NLRC based its decision in the case
of Millares v. National Labor Relations Commission,19 wherein it
was held that:
It is, likewise, clear that petitioners had been in the employ of the
private respondents for 20 years. The records reveal that
petitioners were repeatedly re-hired by private respondents even
after the expiration of their respective eight-month contracts.
Such repeated re-hiring which continued for 20 years, cannot but
be appreciated as sufficient evidence of the necessity and
indispensability of petitioners service to the private respondents
business or trade.
Verily, as petitioners had rendered 20 years of service, performing
activities which were necessary and desirable in the business or
trade of private respondents, they are, by express provision of
Article 280 of the Labor Code, considered regular employees. 20
The NLRC, likewise, declared that Ravago was illegally dismissed
and that the quitclaim executed by him could not be considered
as a waiver of his right to question the validity of his dismissal and
seek reinstatement and other reliefs. According to the NLRC, such
quitclaim is against public policy, considering the economic
disadvantage of the employee and the inevitable pressure brought
about by financial capacity.
The respondents filed a motion for reconsideration of the decision,
claiming that the ruling of the Court in Millares v. NLRC21 had not
yet become final and executory. However, the NLRC denied the
motion.
Thereafter, the respondents filed a petition for certiorari before
the CA on the following grounds: (a) the ruling inMillares v.
NLRC had not yet acquired finality, nor has it become a law of the
case or stare decisis because the Court was still resolving the
pending motion for reconsideration; (b) Ravago was not illegally
dismissed because after the expiration of his contract, there was
no obligation on the part of the respondents to rehire him; and (c)
the quitclaim signed by Ravago was voluntarily entered into and
represented a reasonable settlement of the account due him.
On August 29, 2001, the respondents filed an Urgent Application
for the Issuance of a Temporary Restraining Order and Writ of
Preliminary Injunction to enjoin and restrain the Labor Arbiter from
enforcing his decision. On September 5, 2001, the CA issued a

Resolution22 temporarily restraining NLRC Sheriff Manolito Manuel

from enforcing and/or implementing the decision of the Labor
Arbiter as affirmed by the NLRC.
On November 14, 2001, the CA granted the application for
preliminary injunction upon filing by the respondents of a bond in
the amount of P500,000.00. Thus, the respondents filed the surety
bond as directed by the appellate court. Before the approval
thereof, however, Ravago filed a motion to set aside the
Resolution dated November 14, 2001, principally arguing that the
instant case was a labor dispute, wherein an injunction is
proscribed under Article 25423 of the Labor Code of the Philippines.
In their comment on Ravagos motion, the respondents professed
that the case before the CA did not involve a labor dispute within
the meaning of Article 212(l)24 of the Labor Code of the
Philippines, but a money claim against the employer as a result of
termination of employment.
On August 28, 2002, the CA rendered a decision in favor the
respondents. The fallo of the decision reads:
WHEREFORE, the petition is GRANTED. The assailed decisions of
the NLRC are hereby REVERSED and SET ASIDE and the
injunctive writ issued on November 14, 2001, is hereby
made PERMANENT.
SO ORDERED.25
The CA ratiocinated as follows:
The employment, deployment, rights and obligation of Filipino
seafarers are particularly set forth under the rules and regulations
governing overseas employment promulgated by the POEA.
Section C, Part I of the Standard Employment Contract Governing
the Employment of All Filipino Seamen on Board Ocean-Going
Vessels emphatically provides the following:
"SECTION C. DURATION OF CONTRACT
The period of employment shall be for a fix ( sic) period but in no
case to exceed 12 months and shall be stated in the Crew
Contract. Any extension of the Contract period shall be subject to
the mutual consent of the parties."
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. 26
The CA noted that the employment status of seafarers has been
established with finality by the Courts reconsideration of its
decision in Millares v. National Labor Relations
Commission,27 wherein it was ruled that seamen are contractual
employees. According to the CA, the fact that Ravago was not
rehired upon the completion of his contract did not result in his
illegal dismissal; hence, he was not entitled to reinstatement or
payment of separation pay. The CA, likewise, affirmed the writ of
preliminary injunction it earlier issued, declaring that an injunction
is a preservative remedy issued for the protection of a substantive
right or interest, an antidote resorted to only when there is a
pressing necessity to avoid injurious consequences which cannot
be rendered under any standard compensation.
Hence, the present recourse.
Ravago, now the petitioner, has raised the following issues:
I.
[WHETHER OR NOT] THE COURT OF APPLEALS GRAVELY ERRED
AND VIOLATED THE LABOR CODE WHEN IT ISSUED A RESTRAINING
ORDER AND THEREAFTER A WRIT OF PRELIMINARY INJUNCTION IN
CA-G.R. SP NO. 66234.
II.
[WHETHER OR NOT] THE COURT OF APPEALS GRAVELY ERRED,
[AND] BLATANTLY DISREGARDED THE CONSTITUTIONAL MANDATE
ON PROTECTION TO FILIPINO OVERSEAS WORKERS, AND
COUNTENANCED UNWARRANTED DISCRIMINATION WHEN IT
RULED THAT PETITIONER CANNOT BECOME A REGULAR
EMPLOYEE.28
On the first issue, the petitioner asserts that the CA violated
Article 254 of the Labor Code when it issued a temporary
restraining order, and thereafter a writ of preliminary injunction, to
derail the enforcement of the final and executory judgment of the
Labor Arbiter as affirmed by the NLRC. On the other hand, the
respondents contend that the issue has become academic since
the CA had already decided the case on its merits.
The contention of the petitioner does not persuade.
The petitioners reliance on Article 25429 of the Labor Code is
misplaced. The law proscribes the issuance of injunctive
relief only in those cases involving or growing out of a labor
dispute. The case before the NLRC neither involves nor grows out
of a labor dispute. It did not involve the fixing of terms or
conditions of employment or representation of persons with
respect thereto. In fact, the petitioners complaint revolves around
the issue of his alleged dismissal from service and his claim for
backwages, damages and attorneys fees. Moreover, Article 254 of

the Labor Code specifically provides that the NLRC may grant
injunctive relief under Article 218 thereof.
Besides, the anti-injunction policy of the Labor Code, basically, is
freedom at the workplace. It is more appropriate in the promotion
of the primacy of free collective bargaining and negotiations,
including voluntary arbitration, mediation and conciliation, as
modes of settling labor and industrial disputes. 30
Generally, an injunction is a preservative remedy for the
protection of a persons substantive rights or interests. It is not a
cause of action in itself but a mere provisional remedy, an
appendage to the main suit. Pressing necessity requires that it
should be resorted to only to avoid injurious consequences which
cannot be remedied under any measure of consideration. The
application of an injunctive writ rests upon the presence of an
exigency or of an exceptional reason before the main case can be
regularly heard. The indispensable conditions for granting such
temporary injunctive relief are: (a) that the complaint alleges facts
which appear to be satisfactory to establish a proper basis for
injunction, and (b) that on the entire showing from the contending
parties, the injunction is reasonably necessary to protect the legal
rights of the plaintiff pending the litigation. 31
It bears stressing that in the present case, the respondents
petition contains facts sufficient to warrant the issuance of an
injunction under Article 218, paragraph (e) of the Labor Code of
the Philippines.32 Further, respondents had already posted a surety
bond more than adequate to cover the judgment award.
On the second issue, the petitioner earnestly urges this Court to
re-examine its Resolution dated July 29, 2002 inMillares v.
National Labor Relations Commission 33 and reinstate the doctrine
laid down in its original decision rendered on March 14, 2000,
wherein it was initially determined that a seafarer is a regular
employee. The petitioner asserts that the decision of the CA and,
indirectly, that of the Resolution of this Court dated July 29, 2002,
are violative of the constitutional mandate of full protection to
labor,34 whether local or overseas, because it deprives overseas
Filipino workers, such as seafarers, an opportunity to become
regular employees without valid and serious reasons. The
petitioner maintains that the decision is discriminatory and
violates the constitutional provision on equal protection of the
laws, in addition to being partial to and overly protective of foreign
employers.
The respondents, on the other hand, asseverate that there is no
law or administrative rule or regulation imposing an obligation to
rehire a seafarer upon the completion of his contract. Their refusal
to secure the services of the petitioner after the expiration of his
contract can never be tantamount to a termination. The
respondents aver that the petitioner is not entitled to backwages,
not only because it is without factual justification but also because
it is not warranted under the law. Furthermore, the respondents
assert that the rulings in the Coyoca v. NLRC,35 and the
latest Millares case remain good and valid precedents that need to
be reaffirmed. The respondents cited the ruling of the Court
in Coyoca case where the Court ruled that a Filipino seamans
contract does not provide for separation or termination pay
because it is governed by the Rules and Regulations Governing
Overseas Employment.
The contention of the respondents is correct.
In a catena of cases, this Court has consistently ruled that
seafarers are contractual, not regular, employees.
In Brent School, Inc. v. Zamora,36 the Court ruled that seamen and
overseas contract workers are not covered by the term "regular
employment" as defined in Article 280 of the Labor Code. The
Court said in that case:
The question immediately provoked ... is whether or not a
voluntary agreement on a fixed term or period would be valid
where the employee "has been engaged to perform activities
which are usually necessary or desirable in the usual business or
trade of the employer." The definition seems non sequitur. From
the premise that the duties of an employee entail "activities
which are usually necessary or desirable in the usual business or
trade of the employer" the conclusion does not necessarily
follow that the employer and employee should be forbidden to
stipulate any period of time for the performance of those
activities. There is nothing essentially contradictory between a
definite period of an employment contract and the nature of the
employees duties set down in that contract as being "usually
necessary or desirable in the usual business or trade of the
employer." The concept of the employees duties as being
"usually necessary or desirable in the usual business or trade of
the employer" is not synonymous with or identical to employment
with a fixed term. Logically, the decisive determinant in term
employment should not be the activities that the employee is
called upon to perform, but the day certain agreed upon by the
parties for the commencement and termination of their
employment relationship, a day certain being understood to be
"that which must necessarily come, although it may not be known
when." Seasonal employment, and employment for a particular
project are merely instances of employment in which a period,
were not expressly set down, is necessarily implied.37
...
Some familiar examples may be cited of employment contracts
which may be neither for seasonal work nor for specific projects,
but to which a fixed term is an essential and natural
appurtenance: overseas employment contracts, for one, to
which, whatever the nature of the engagement, the concept of

regular employment with all that it implies does not appear ever
to have been applied, Article 280 of the Labor Code
notwithstanding; also appointments to the positions of dean,
assistant dean, college secretary, principal, and other
administrative offices in educational institutions, which are by
practice or tradition rotated among the faculty members, and
where fixed terms are a necessity without which no reasonable
rotation would be possible. ... 38
...
Accordingly, and since the entire purpose behind the development
of legislation culminating in the present Article 280 of the Labor
Code clearly appears to have been, as already observed, to
prevent circumvention of the employees right to be secure in his
tenure, the clause in said article indiscriminately and completely
ruling out all written or oral agreements conflicting with the
concept of regular employment as defined therein should be
construed to refer to the substantive evil that the Code itself has
singled out: agreements entered into precisely to circumvent
security of tenure. It should have no application to instances
where a fixed period of employment was agreed upon knowingly
and voluntarily by the parties, without any force, duress or
improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee dealt with
each other on more or less equal terms with no moral dominance
whatever being exercised by the former over the latter. Unless,
thus, limited in its purview, the law would be made to apply to
purposes other than those explicitly stated by its framers; it thus
becomes pointless and arbitrary, unjust in its effects and apt to
lead to absurd and unintended consequences.39
The Court made the same ruling in Coyoca v. National Labor
Relations Commission40 and declared that a seafarer, not being a
regular employee, is not entitled to separation or termination pay.
Furthermore, petitioners contract did not provide for separation
benefits. In this connection, it is important to note that neither
does the POEA standard employment contract for Filipino seamen
provide for such benefits.
As a Filipino seaman, petitioner is governed by the Rules and
Regulations Governing Overseas Employment and the said Rules
do not provide for separation or termination pay. ...
...
Therefore, although petitioner may not be a regular employee of
private respondent, the latter would still have been liable for
payment of the benefits had the principal failed to pay the same.
41
In the July 29, 2002 Resolution of this Court in Millares v. National
Labor Relations Commission,42 it reiterated its ruling that seafarers
are contractual employees and, as such, are not covered by
Article 280 of the Labor Code of the Philippines:
From the foregoing cases, it is clear that seafarers are considered
contractual employees. They cannot be considered as 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 expires. Their employment is contractually fixed for a
certain period of time. They fall under the exception of Article
280whose 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. We need not depart
from the rulings of the Court in the two aforementioned cases
which indeed constitute stare decisis with respect to the
employment status of seafarers.
...
... 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. It reads:
Section C. Duration of Contract
The period of employment shall be for a fixed period but in no
case to exceed 12 months and shall be stated in the Crew
Contract. Any extension of the Contract period shall be subject to
the mutual consent of the parties.

Petitioners make much of the fact that they have been continually
re-hired or their contracts renewed before the contracts expired
(which has admittedly been going on for twenty [20] years). By
such circumstance they claim to have acquired regular status with
all the rights and benefits appurtenant to it.

Such contention is untenable. Undeniably, this circumstance of

continuous re-hiring was dictated by practical considerations that
experienced crew members are more preferred. Petitioners were
only given priority or preference because of their experience and
qualifications but this does not detract the fact that herein
petitioners are contractual employees. They can not be
considered regular employees. We quote with favor the
explanation of the NLRC in this wise:
xxx The reference to "permanent" and "probationary" masters and
employees in these papers is a misnomer and does not alter the
fact that the contracts for enlistment between complainantsappellants and respondent-appellee Esso International were for a
definite periods of time, ranging from 8 to 12 months. Although
the use of the terms "permanent" and "probationary" is
unfortunate, what is really meant is "eligible for-re-hire." This is
the only logical conclusion possible because the parties cannot
and should not violate POEAs requirement that a contract of
enlistment shall be for a limited period only; not exceeding twelve
(12) months.
From all the foregoing, we hereby state that petitioners are not
considered regular or permanent employees under Article 280 of
the Labor Code. Petitioners employment have automatically
ceased upon the expiration of their contracts of enlistment
(COE). Since there was no dismissal to speak of, it follows that
petitioners are not entitled to reinstatement or payment of
separation pay or backwages, as provided by law. 43
The Court ruled that the employment of seafarers for a fixed
period is not discriminatory against seafarers and in favor of
foreign employers. As explained by this Court in its July 29, 2002
Resolution in Millares:
Moreover, 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.44
In Pentagon International Shipping, Inc. v. William B.
Adelantar,45 the Court cited its rulings in Millares andCoyoca and
reiterated that a seafarer is not a regular employee entitled to
backwages and separation pay:
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
provided in Article 279 of the Labor Code. As we held in Millares,
Adelantar is a contractual employee whose rights and obligations
are governed primarily by [the] Rules and Regulations of the POEA
and, more importantly, by R.A. 8042, or the Migrant Workers and
Overseas Filipinos Act of 1995.
The latest ruling of the Court in Marcial Gu-Miro v. Rolando C.
Adorable and Bergesen D.Y. Manila46 reaffirmed yet again its
rulings that a seafarer is employed only on a contractual basis:
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 MillaresResolution, 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.
The petitioner failed to convince the Court why it should restate
its decision in Millares and reverse its July 29, 2002 Resolution in
the same case.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby
DENIED. The assailed Decision dated August 28, 2002 of the Court
of Appeals is hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.