[G.R. Nos. 129577-80. February 15, 2000.

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. BULU CHOWDURY, Accused-Appellant.

DECISION

PUNO, J.:

In November 1995, Bulu Chowdury and Josephine Ong were charged before the Regional Trial Court of
Manila with the crime of illegal recruitment in large scale committed as follows: chanrobles.com : law library

"That sometime between the period from August 1994 to October 1994 in the City of 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 workers for employment abroad, conspiring, confederating and
mutually helping one another, did then and there willfully, unlawfully and feloniously recruit the herein
complainants: Estrella B. Calleja, Melvin C. Miranda and Aser S. Sasis, individually or as a group for
employment in Korea without first obtaining the required license and/or authority from the Philippine
Overseas Employment Administration." 1

They were likewise charged with three counts of estafa committed against private complainants. 2 The State
Prosecutor, however, later dismissed the estafa charges against Chowdury 3 and filed an amended
information indicting only Ong for the offense. 4

Chowdury was arraigned on April 16, 1996 while Ong remained at large. He pleaded "not guilty" to the
charge of illegal recruitment in large scale. 5

Trial ensued. chanrobles.com : virtual law library

The prosecution presented four witnesses: private complainants Aser Sasis, Estrella Calleja and Melvin
Miranda, and Labor Employment Officer Abbelyn Caguitla. chanroblesvirtual|awlibrary

Sasis testified that he first met Chowdury in August 1994 when he applied with Craftrade Overseas
Developers (Craftrade) for employment as factory worker in South Korea. Chowdury, a consultant of
Craftrade, conducted the interview. During the interview, Chowdury informed him about the requirements
for employment. He told him to submit his passport, NBI clearance, passport size picture and medical
certificate. He also required him to undergo a seminar. He advised him that placement would be on a first-
come-first-serve basis and urged him to complete the requirements immediately. Sasis was also charged a
processing fee of P25,000.00. Sasis completed all the requirements in September 1994. He also paid a total
amount of P16,000.00 to Craftrade as processing fee. All payments were received by Ong for which she
issued three receipts. 6 Chowdury then processed his papers and convinced him to complete his payment. 7

Sasis further said that he went to the office of Craftrade three times to follow up his application but he was
always told to return some other day. In one of his visits to Craftrade’s office, he was informed that he
would no longer be deployed for employment abroad. This prompted him to withdraw his payment but he
could no longer find Chowdury. After two unsuccessful attempts to contact him, he decided to file with the
Philippine Overseas Employment Administration (POEA) a case for illegal recruitment against Chowdury.
Upon verification with the POEA, he learned that Craftrade’s license had already expired and has not been
renewed and that Chowdury, in his personal capacity, was not a licensed recruiter. 8

Calleja testified that in June 1994, she applied with Craftrade for employment as factory worker in South
Korea. She was interviewed by Chowdury. During the interview, he asked questions regarding her marital
status, her age and her province. Toward the end of the interview, Chowdury told her that she would be
working in a factory in Korea. He required her to submit her passport, NBI clearance, ID pictures, medical
certificate and birth certificate. He also obliged her to attend a seminar on overseas employment. After, she
submitted all the documentary requirements, Chowdury required her to pay P20,000.00 as placement fee.
Calleja made the payment on August 11, 1994 to Ong for which she was issued a receipt. 9 Chowdury
assured her that she would be able to leave on the first week of September but it proved to be an empty
promise. Calleja was not able to leave despite several follow-ups. Thus, she went to the POEA where she
discovered that Craftrade’s license had already expired. She tried to withdraw her money from Craftrade to
no avail. Calleja filed a complaint for illegal recruitment against Chowdury upon advice of POEA’s legal
counsel. 10

Miranda testified that in September 1994, his cousin accompanied him to the office of Craftrade in Ermita,
Manila and introduced him to Chowdury who presented himself as consultant and interviewer. Chowdury
required him to fill out a bio-data sheet before conducting the interview. Chowdury told Miranda during the
interview that he would send him to Korea for employment as factory worker. Then he asked him to submit
the following documents: passport, passport size picture, NBI clearance and medical certificate. After he
complied with the requirements, he was advised to wait for his visa and to pay P25,000.00 as processing
fee. He paid the amount of P25,000.00 to Ong who issued receipts therefor. 11 Craftrade, however, failed to
deploy him. Hence, Miranda filed a complaint with the POEA against Chowdury for illegal recruitment. 12

Labor Employment Officer Abbelyn Caguitla of the Licensing Branch of the POEA testified that she prepared
a certification on June 9, 1996 that Chowdury and his co-accused, Ong, were not, in their personal
capacities, licensed recruiters nor were they connected with any licensed agency. She nonetheless stated
that Craftrade was previously licensed to recruit workers for abroad which expired on December 15, 1993. It
applied for renewal of its license but was only granted a temporary license effective December 16, 1993
until September 11, 1994. From September 11, 1994, the POEA granted Craftrade another temporary
authority to process the expiring visas of overseas workers who have already been deployed. The POEA
suspended Craftrade’s temporary license on December 6, 1994. 13

For his defense, Chowdury testified that he worked as interviewer at Craftrade from 1990 until 1994. His
primary duty was to interview job applicants for abroad. As a mere employee, he only followed the
instructions given by his superiors, Mr. Emmanuel Geslani, the agency’s President and General Manager, and
Mr. Utkal Chowdury, the agency’s Managing Director. Chowdury admitted that he interviewed private
complainants on different dates. Their office secretary handed him their bio-data and thereafter he led them
to his room where he conducted the interviews. During the interviews, he had with him a form containing
the qualifications for the job and he filled out this form based on the applicant’s responses to his questions.
He then submitted them to Mr. Utkal Chowdury who in turn evaluated his findings. He never received money
from the applicants. He resigned from Craftrade on November 12, 1994. 14

Another defense witness, Emelita Masangkay who worked at the Accreditation Branch of the POEA presented
a list of the accredited principals of Craftrade Overseas Developers 15 and a list of processed workers of
Craftrade Overseas Developers from 1988 to 1994. 16

The trial court found Chowdury guilty beyond reasonable doubt of the crime of illegal recruitment in large
scale. It sentenced him to life imprisonment and to pay a fine of P100,000.00. It further ordered him to pay
Aser Sasis the amount of P16,000.00, Estrella Calleja, P20,000.00 and Melvin Miranda, P25,000.00. The
dispositive portion of the decision reads:chanrobles.com : virtuallawlibrary

"WHEREFORE, in view of the foregoing considerations, the prosecution having proved the guilt of the
accused Bulu Chowdury beyond reasonable doubt of the crime of Illegal Recruitment in large scale, he is
hereby sentenced to suffer the penalty of life imprisonment and a fine of P100,000.00 under Art. 39 (b) of
the New Labor Code of the Philippines. The accused is ordered to pay the complainants Aser Sasis the
amount of P16,000.00; Estrella Calleja the amount of P20,000.00; Melvin Miranda the amount of
P25,000.00. 17

Chowdury appealed.

The elements of illegal recruitment in large scale are: chanrobles.com : law library

(1) The accused undertook any recruitment activity defined under Article 13 (b) or any prohibited practice
enumerated under Article 34 of the Labor Code;

(2) He did not have the license or authority to lawfully engage in the recruitment and placement of workers;
and

(3) He committed the same against three or more persons, individually or as a group. 18

The last paragraph of Section 6 of Republic Act (RA) 8042 19 states who shall be held liable for the offense,
thus:chanrobles.com : virtuallawlibrary

"The persons criminally liable for the above offenses are the principals, accomplices and accessories. In case
of juridical persons, the officers having control, management or direction of their business shall be
liable."
chanroblesvirtuallawlibrary

The Revised Penal Code which supplements the law on illegal recruitment 20 defines who are the principals,
accomplices and accessories. The principals are: (1) those who take a direct part in the execution of the act;
(2) those who directly force or induce others to commit it; and (3) those who cooperate in the commission
of the offense by another act without which it would not have been accomplished. 21 The accomplices are
those persons who may not be considered as principal as defined in Section 17 of the Revised Penal Code
but cooperate in the execution of the offense by previous or simultaneous act. 22 The accessories are those
who, having knowledge of the commission of the crime, and without having participated therein, either as
principals or accomplices, take part subsequent to its commission in any of the following manner: (1) by
profiting themselves or assisting the offenders to profit by the effects of the crime; (2) by concealing or
destroying the body of the crime, or the effects or instruments thereof, in order to prevent its discovery;
and (3) by harboring, concealing, or assisting in the escape of the principal of the crime, provided the
accessory acts with abuse of his public functions or whenever the author of the crime is guilty of treason,
parricide, murder, or an attempt at the life of the chief executive, or is known to be habitually guilty of some
other crime. 23

Citing the second sentence of the last paragraph of Section 6 of RA 8042, Accused-appellant contends that
he may not be held liable for the offense as he was merely an employee of Craftrade and he only performed
the tasks assigned to him by his superiors. He argues that the ones who should be held liable for the offense
are the officers having control, management and direction of the agency. chanroblesvirtuallawlibrary

As stated in the first sentence of Section 6 of RA 8042, the persons who may be held liable for illegal
recruitment are the principals, accomplices and accessories. An employee of a company or corporation
engaged in illegal recruitment may be held liable as principal, together with his employer, 24 if it is shown
that he actively and consciously participated in illegal recruitment. 25 It has been held that the existence of
the corporate entity does not shield from prosecution the corporate agent who knowingly and intentionally
causes the corporation to commit a crime. The corporation obviously acts, and can act, only by and through
its human agents, and it is their conduct which the law must deter. The employee or agent of a corporation
engaged in unlawful business naturally aids and abets in the carrying on of such business and will be
prosecuted as principal if, with knowledge of the business, its purpose and effect, he consciously contributes
his efforts to its conduct and promotion, however slight his contribution may be. 26 The law of agency, as
applied in civil cases, has no application in criminal cases, and no man can escape punishment when he
participates in the commission of a crime upon the ground that he simply acted as an agent of any party. 27
The culpability of the employee therefore hinges on his knowledge of the offense and his active participation
in its commission. Where it is shown that the employee was merely acting under the direction of his
superiors and was unaware that his acts constituted a crime, he may not be held criminally liable for an act
done for and in behalf of his employer. 28

The fundamental issue in this case, therefore, is whether accused-appellant knowingly and intentionally
participated in the commission of the crime charged. chanrobles.com : virtuallawlibrary

We find that he did not.

Evidence shows that accused-appellant interviewed private complainants in the months of June, August and
September in 1994 at Craftrade’s office. At that time, he was employed as interviewer of Craftrade which
was then operating under a temporary authority given by the POEA pending renewal of its license. 29 The
temporary license included the authority to recruit workers. 30 He was convicted based on the fact that he
was not registered with the POEA as employee of Craftrade. Neither was he, in his personal capacity,
licensed to recruit overseas workers. Section 10 Rule II Book II of the Rules and Regulation Governing
Overseas Employment (1991) requires that every change, termination or appointment of officers,
representatives and personnel of licensed agencies be registered with the POEA. Agents or representatives
appointed by a licensed recruitment agency whose appointments are not previously approved by the POEA
are considered "non-licensee" or "non-holder of authority" and therefore not authorized to engage in
recruitment activity. 31

Upon examination of the records, however, we find that the prosecution failed to prove that accused-
appellant was aware of Craftrade’s failure to register his name with the POEA and that he actively engaged
in recruitment despite this knowledge. The obligation to register its personnel with the POEA belongs to the
officers of the agency. 32 A mere employee of the agency cannot be expected to know the legal
requirements for its operation. The evidence at hand shows that accused-appellant carried out his duties as
interviewer of Craftrade believing that the agency was duly licensed by the POEA and he, in turn, was duly
authorized by his agency to deal with the applicants in its behalf. Accused-appellant in fact confined his
actions to his job description. He merely interviewed the applicants and informed them of the requirements
for deployment but he never received money from them. Their payments were received by the agency’s
cashier, Josephine Ong. Furthermore, he performed his tasks under the supervision of its president and
managing director. Hence, we hold that the prosecution failed to prove beyond reasonable doubt accused-
appellant’s conscious and active participation in the commission of the crime of illegal recruitment. His
conviction, therefore, is without basis. chanrobles.com : red

This is not to say that private complainants are left with no remedy for the wrong committed against them.
The Department of Justice may still file a complaint against the officers having control, management or
direction of the business of Craftrade Overseas Developers (Craftrade), so long as the offense has not yet
prescribed. Illegal recruitment is a crime of economic sabotage which need to be curbed by the strong arm
of the law. It is important, however, to stress that the government’s action must be directed to the real
offenders, those who perpetrate the crime and benefit from it.

IN VIEW WHEREOF, the assailed decision of the Regional Trial Court is REVERSED and SET ASIDE. Accused-
appellant is hereby ACQUITTED. The Director of the Bureau of Corrections is ordered to RELEASE accused-
appellant unless he is being held for some other cause, and to REPORT to this Court compliance with this
order within ten (10) days from receipt of this decision. Let a copy of this Decision be furnished the
Secretary of the Department of Justice for his information and appropriate action.

SO ORDERED. chanrobles.com.ph : red

Davide, Jr., C.J., Kapunan, Pardo and Ynares-Santiago, JJ., concur.

Endnotes:

1. Information, Original Records. p. 2.

2. Original Records, pp. 16-23.

3. Resolution dated March 20, 1996, Original Records, pp. 63-69.

4. Amended Information for Criminal Case No. 146336, Original Records, pp. 61-62; Amended Information
for Criminal Case No. 146337, Original Records, pp. 89-90.

5. Original Records, p. 95.

6. Exh. "A", "B" and "C" .

7. TSN, May 14, 1996, pp. 5-17.

8. Id., pp. 19-22.

9. Exh. "E" .

10. TSN, May 15, 1996, pp. 6-21.

11. Exh. "L", "M", "N" .

12. TSN, October 23, 1996, pp. 6-19.

13 TSN, July 2, 1996, pp. 8-32.

14. TSN, December 17, 1996, pp. 4-30.

15. Exh. "7" .

16. Exh. "8" .

17. Rollo, p. 24.

18. People v. Peralta, 283 SCRA 81 (1997); People v. Villas, 277 SCRA 391 (1997); People v. Santos, 276
SCRA 329 (1997); People v. Garcia, 271 SCRA 621 (1997).

19. Migrants and Overseas Filipinos Act of 1995.

20. Article 10, Revised Penal Code.

21. Article 17, supra.

22. Article 18, supra.

23. Article 19, supra.

24. The corporation also incurs criminal liability for the act of its employee or agent if (1) the employee or
agent committed the offense while acting within the scope of his employment and (2) the offense was
committed with at least some intent to benefit the employer. The liability is imputed to the corporation not
because it actively participated in the malice or fraud but because the act is done for the benefit of the
corporation while the employee or agent was acting within the scope of his employment in the business of
the corporation, and justice requires that the latter shall be held responsible for damages to the individual
who suffered by such conduct. [New York Central & Hudson River Railroad Co. v. US, 212 U.S. 481, 53 L.
ed. 613 (1909); US v. Basic Construction Co., Et Al., 711 F.2d 570 (1983); US v. Automated Medical
Laboratories, Inc., 770 F 2d 399 (1985)].

25. See People v. Goce, 247 SCRA 780 (1995); People v. Alforte, 219 SCRA 458 1993).

26. State v. Placzek, 380 A.2d 1010 (1977); Wainer v. US, 82 F.2d 305 (1936).

27. People v. Mc Cauley, 561 P.2d 335 (1977).

28. US v. Gold, 743 F.2d 800 (1984); La Vielle v. People, 157 P.2d 621 (1945).

29. Exh. "K", Certification dated July 1, 1996 signed by Ma. Salome S. Mendoza, Manager, Licensing Branch,
POEA, Original Records, p. 147.

30. Testimony of Labor Employment Officer Abbelyn Caguitla, TSN, July 2, 1996, pp. 27-28.

31. Abaca v. CA, 290 SCRA 657 (1998).

32. Supra at 30.

 [G.R. No. 184058 : March 10, 2010]

PEOPLE OF THE PHILIPPINES, APPELLEE, VS. MELISSA CHUA, APPELLANT.

DECISION

CARPIO MORALES, J.:

Melissa Chua (appellant) was indicted for Illegal Recruitment (Large Scale) and was convicted thereof by the
Regional Trial Court (RTC) of Manila. She was also indicted for five counts of Estafa but was convicted only
for three. The Court of Appeals, by Decision[1] dated February 27, 2008, affirmed appellant's conviction.

The Information[2] charging appellant, together with one Josie Campos (Josie), with Illegal Recruitment
(Large Scale), docketed as Criminal Case No. 04-222596, reads:

The undersigned accuses JOSIE CAMPOS and MELISSA CHUA of violation of Article 38 (a) PD 1413,
amending certain provisions of Book I, PD 442, otherwise known as the New Labor Code of the Philippines,
in relation to Art. 13 (b) and (c ) of said Code, as further amended by PD Nos. 1693, 1920 and 2019 and as
further amended by Sec. 6 (a), (1) and (m) of RA 8042 committed in a [sic] large scale as follows:

That sometime during the month of September, 2002, in the City of Manila, Philippines, the said accused,
conspiring and confederating together and mutually helping each other, representing themselves to have the
capacity to contract, enlist and transport Filipino workers for employment abroad, did then and there
willfully, unlawfully and knowingly for a fee, recruit and promise employment/job placement abroad to ERIK
DE GUIA TAN, MARILYN O. MACARANAS, NAPOLEON H. YU, JR., HARRY JAMES P. KING and ROBERTO C.
ANGELES for overseas employment abroad without first having secured the required license from the
Department of Labor and Employment as required by law, and charge or accept directly from:

ERIK DE GUIA TAN - P73,000.00

MARILYN D. - 83,000.00
MACARANAS
NAPOLEON H. YU, JR. - 23,000.00
HARRY JAMES P. KING - 23,000.00
ROBERTO C. ANGELES - 23,000.00

For purposes of their deployment, which amounts are in excess of or greater than that specified in the
schedule of allowable fees as prescribed by the POEA, and without valid reasons and without the fault of said
complainants, failed to actually deploy them and failed to reimburse expenses incurred in connection with
their documentation and processing for purposes of their deployment.

xxxx

The five Informations[3] charging appellant and Josie with Estafa, docketed as Criminal Case Nos. 04-
222597-601, were similarly worded and varied only with respect to the names of the five complainants and
the amount that each purportedly gave to the accused. Thus each of the Information reads:

xxxx

That on or about . . . in the City of Manila, Philippines, the said accused, conspiring and confederating
together and mutually helping each other, did then and there willfully, unlawfully and feloniously defraud
xxx in the following manner, to wit: the said accused by means of false manifestations which they made to
the said . . . to the effect that they had the power and capacity to recruit the latter as factory worker to
work in Taiwan and could facilitate the processing of the pertinent papers if given the necessary amount to
meet the requirements thereof, and by means of other similar deceits, induced and succeeded in inducing
said xxx to give and deliver, as in fact he gave and delivered to the said accused the amount of . . . on the
strength of said manifestations and representations, said accused well knowing that the same were false
and fraudulent and were made solely to obtain, as in fact they did obtain the amount of . . . which amount
once in their possession, with intent to defraud, they willfully, unlawfully and feloniously misappropriated,
misapplied and converted to their own personal use and benefit, to the damage of said . . . in the aforesaid
amount of . . ., Philippine Currency.

xxxx

Appellant pleaded not guilty on arraignment. Her co-accused Josie remained at large. The cases were
consolidated, hence, trial proceeded only with respect to appellant.

Of the five complainants, only three testified, namely, Marilyn D. Macaranas (Marilyn), Erik de Guia Tan
(Tan) and Harry James King (King). The substance of their respective testimonies follows:

Marilyn's testimony:

After she was introduced in June 2002 by Josie to appellant as capacitated to deploy factory workers to
Taiwan, she paid appellant P80,000 as placement fee and P3,750 as medical expenses fee, a receipt [4]for the
first amount of which was issued by appellant.

Appellant had told her that she could leave for Taiwan in the last week of September 2002 but she did not,
and despite appellant's assurance that she would leave in the first or second week of October, just the same
she did not.

She thus asked for the refund of the amount she paid but appellant claimed that she was not in possession
thereof but promised anyway to raise the amount to pay her, but she never did.

She later learned in June 2003 that appellant was not a licensed recruiter, prompting her to file the
complaint against appellant and Josie.

Tan's testimony:

After he was introduced by Josie to appellant at the Golden Gate, Inc., (Golden Gate) an agency situated in
Paragon Tower Hotel in Ermita, Manila, he underwent medical examination upon appellant's assurance that
he could work in Taiwan as a factory worker with a guaranteed monthly salary of 15,800 in Taiwan currency.

He thus paid appellant, on September 6, 2002, P70,000[5] representing placement fees for which she issued
a receipt. Appellant welched on her promise to deploy him to Taiwan, however, hence, he demanded the
refund of his money but appellant failed to. He later learned that Golden Gate was not licensed to deploy
workers to Taiwan, hence, he filed the complaint against appellant and Josie.

King's testimony:

His friend and a fellow complainant Napoleon Yu introduced him to Josie who in turn introduced appellant as
one who could deploy him to Taiwan.

On September 24, 2002,[6] he paid appellant P20,000 representing partial payment for placement fees
amounting to P80,000, but when he later inquired when he would be deployed, Golden Gate's office was
already closed. He later learned that Golden Gate's license had already expired, prompting him to file the
complaint.

Appellant denied the charges. Claiming having worked as a temporary cashier from January to October,
2002 at the office of Golden Gate, owned by one Marilyn Calueng, [7] she maintained that Golden Gate was a
licensed recruitment agency and that Josie, who is her godmother, was an agent.

Admitting having received P80,000 each from Marilyn and Tan, receipt of which she issued but denying
receiving any amount from King, she claimed that she turned over the money to the documentation officer,
one Arlene Vega, who in turn remitted the money to Marilyn Calueng whose present whereabouts she did
not know.

By Decision of April 5, 2006, Branch 36 of the Manila RTC convicted appellant of Illegal Recruitment (Large
Scale) and three counts of Estafa, disposing as follows:
WHEREFORE, the prosecution having established the guilt of accused Melissa Chua beyond reasonable
doubt, judgment is hereby rendered convicting the accused as principal of a large scale illegal recruitment
and estafa three (3) counts and she is sentenced to life imprisonment and to pay a fine of Five Hundred
Thousand Pesos (P500,000.00) for illegal recruitment.

The accused is likewise convicted of estafa committed against Harry James P. King and she is sentenced to
suffer the indeterminate penalty of Four (4) years and Two (2) months of prision correctional as minimum,
to Six (6) years and One (1) day of prision mayor as maximum; in Criminal Case No. 04-22598; in Criminal
Case No. 04-222600 committed against Marilyn Macaranas, accused is sentence [sic] to suffer the
indeterminate penalty of Four (4) years and Two (2) months of prision correctional as minimum, to Twelve
(12) years and one (1) day of reclusion temporal as maximum; and in Criminal Case No. 04-222601
committed against Erik de Guia Tan, she is likewise sentence [sic] to suffer an indeterminate penalty of Four
(4) years and Two (2) months of prision correctional as minimum, to Eleven (11) years and One (1) day of
prision mayor as maximum.

Accused Melissa Chua is also ordered to return the amounts of P20,000.00 to Harry James P. King,
P83,750.00 to Marilyn D. Macaranas, and P70,000.00 to Erik de Guia Tan.

As regards Criminal Cases Nos. 04-222597 and 04-222599, both are dismissed for lack of interest of
complainants Roberto Angeles and Napoleon Yu, Jr.

In the service of her sentence, the accused is credited with the full period of preventive imprisonment if she
agrees in writing to abide by the disciplinary rules imposed, otherwise only 4/5 shall be credited.

SO ORDERED.

The Court of Appeals, as stated early on, affirmed the trial court's decision by the challenged Decision of
February 27, 2008, it holding that appellant's defense that, as temporary cashier of Golden Gate, she
received the money which was ultimately remitted to Marilyn Calueng is immaterial, she having failed to
prove the existence of an employment relationship between her and Marilyn, as well as the legitimacy of the
operations of Golden Gate and the extent of her involvement therein.

Citing People v. Sagayaga,[8] the appellate court ruled that an employee of a company engaged in illegal
recruitment may be held liable as principal together with his employer if it is shown that he, as in the case of
appellant, actively and consciously participated therein.

Respecting the cases for Estafa, the appellate court, noting that a person convicted of illegal recruitment
may, in addition, be convicted of Estafa as penalized under Article 315, paragraph 2(a) of the Revised Penal
Code, held that the elements thereof were sufficiently established, viz: that appellant deceived the
complainants by assuring them of employment in Taiwan provided they pay the required placement fee;
that relying on such representation, the complainants paid appellant the amount demanded; that her
representation turned out to be false because she failed to deploy them as promised; and that the
complainants suffered damages when they failed to be reimbursed the amounts they paid.

Hence, the present appeal, appellant reiterating the same arguments she raised in the appellate court.

The appeal is bereft of merit.

The term "recruitment and placement" is defined under Article 13(b) of the Labor Code of the Philippines as
follows:

(b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not. Provided,
That any person or entity which, in any manner, offers or promises for a fee employment to two or more
persons shall be deemed engaged in recruitment and placement. (emphasis supplied)

On the other hand, Article 38, paragraph (a) of the Labor Code, as amended, under which appellant was
charged, provides:
Art. 38. Illegal Recruitment. - (a) Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of
authority shall be deemed illegal and punishable under Article 39 of this Code. The 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. (emphasis supplied)

From the foregoing provisions, it is clear that any recruitment activities to be undertaken by non-licensee or
non-holder of contracts, or as in the present case, an agency with an expired license, shall be deemed illegal
and punishable under Article 39 of the Labor Code of the Philippines. And illegal recruitment is deemed
committed in large scale if committed against three or more persons individually or as a group.

Thus for illegal recruitment in large scale to prosper, the prosecution has to prove three essential elements,
to wit: (1) the accused undertook a recruitment activity under Article 13(b) or any prohibited practice under
Article 34 of the Labor Code; (2) the accused did not have the license or the authority to lawfully engage in
the recruitment and placement of workers; and (3) the accused committed such illegal activity against three
or more persons individually or as a group.[9]

In the present case, Golden Gate, of which appellant admitted being a cashier from January to October
2002, was initially authorized to recruit workers for deployment abroad. Per the certification from the POEA,
Golden Gate's license only expired on February 23, 2002 and it was delisted from the roster of licensed
agencies on April 2, 2002.

Appellant was positively pointed to as one of the persons who enticed the complainants to part with their
money upon the fraudulent representation that they would be able to secure for them employment abroad.
In the absence of any evidence that the complainants were motivated by improper motives, the trial court's
assessment of their credibility shall not be interfered with by the Court. [10]

Even if appellant were a mere temporary cashier of Golden Gate, that did not make her any less an
employee to be held liable for illegal recruitment as principal by direct participation, together with the
employer, as it was shown that she actively and consciously participated in the recruitment process. [11]

Assuming arguendo that appellant was unaware of the illegal nature of the recruitment business of Golden
Gate, that does not free her of liability either. Illegal Recruitment in Large Scale penalized under Republic
Act No. 8042, or "The Migrant Workers and Overseas Filipinos Act of 1995," is a special law, a violation of
which is malum prohibitum, not malum in se. Intent is thus immaterial. And that explains why appellant
was, aside from Estafa, convicted of such offense.

[I]llegal recruitment is malum prohibitum, while estafa is malum in se. In thefirst, the criminal
intent of the accused is not necessary for conviction. In the second, such an intent is
imperative. Estafa under Article 315, paragraph 2, of the Revised Penal Code, is committed by
any person who defrauds another by using fictitious name, or falsely pretends to possess power,
influence, qualifications, property, credit, agency, business or imaginary transactions, or by
means of similar deceits executed prior to or simultaneously with the commission of fraud.
[12]
(emphasis supplied)

WHEREFORE, the appeal is hereby DENIED.

SO ORDERED.

Puno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Villarama, Jr., JJ., concur.

Endnotes:
 Penned by Associate Justice Remedios Salazar-Fernando and concurred in by Associate Justices Rosalinda
[1]

Asuncion-Vicente and Enrico A. Lanzanas; rollo, pp. 2-15.

[2]
Records, pp. 2-3.

[3]
Id. at 61-76.

[4]
Vide Cash Voucher dated September 6, 2002, id. at 13.

[5]
Vide Cash Voucher dated September 6, 2002, id. at 10.

[6]
Vide Cash Voucher receipt, id. at 19.

Spelled as GOLDEN GATE INTERNATIONAL CORPORATION and as MARILEN L. CALLUENG per

[7]

certification dated June 23, 2003 of Atty. Felicitas Q. Bay, Director II, Licensing Branch of the POEA, id. at 8.

[8]
G.R. No. 143726, February 23, 2004, 423 SCRA 468.

[9]
People v. Jamilosa, G.R. No. 169076, January 23, 2007, 512 SCRA 340, 352.

[10]
People v. Saulo, G.R. No. 125903, November 15, 2000, 344 SCRA 605, 614.

[11]
People v. Nogra, G.R. No. 170834, August 29, 2008, 563 SCRA 723, 724.

[12]
People v. Comila, G.R. No. 171448, February 28, 2007, 517 SCRA 153, 167.
 [G.R. NO. 146530 : January 17, 2005]

PEDRO CHAVEZ, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION, SUPREME PACKAGING,

INC. and ALVIN LEE, Plant Manager, Respondents.

DECISION

CALLEJO, SR., J.:

Before the Court is the Petition for Review on Certiorari of the Resolution1 dated December 15, 2000 of the
Court of Appeals (CA) reversing its Decision dated April 28, 2000 in CA-G.R. SP No. 52485. The assailed
resolution reinstated the Decision dated July 10, 1998 of the National Labor Relations Commission (NLRC),
dismissing the complaint for illegal dismissal filed by herein petitioner Pedro Chavez. The said NLRC decision
similarly reversed its earlier Decision dated January 27, 1998 which, affirming that of the Labor Arbiter,
ruled that the petitioner had been illegally dismissed by respondents Supreme Packaging, Inc. and Mr. Alvin
Lee.

The case stemmed from the following facts:

The respondent company, Supreme Packaging, Inc., is in the business of manufacturing cartons and other
packaging materials for export and distribution. It engaged the services of the petitioner, Pedro Chavez, as
truck driver on October 25, 1984. As such, the petitioner was tasked to deliver the respondent company's
products from its factory in Mariveles, Bataan, to its various customers, mostly in Metro Manila. The
respondent company furnished the petitioner with a truck. Most of the petitioner's delivery trips were made
at nighttime, commencing at 6:00 p.m. from Mariveles, and returning thereto in the afternoon two or three
days after. The deliveries were made in accordance with the routing slips issued by respondent company
indicating the order, time and urgency of delivery. Initially, the petitioner was paid the sum of P350.00 per
trip. This was later adjusted to P480.00 per trip and, at the time of his alleged dismissal, the petitioner was
receiving P900.00 per trip.

Sometime in 1992, the petitioner expressed to respondent Alvin Lee, respondent company's plant manager,
his (the petitioner's) desire to avail himself of the benefits that the regular employees were receiving such
as overtime pay, nightshift differential pay, and 13th month pay, among others. Although he promised to
extend these benefits to the petitioner, respondent Lee failed to actually do so.

On February 20, 1995, the petitioner filed a complaint for regularization with the Regional Arbitration Branch
No. III of the NLRC in San Fernando, Pampanga. Before the case could be heard, respondent company
terminated the services of the petitioner. Consequently, on May 25, 1995, the petitioner filed an amended
complaint against the respondents for illegal dismissal, unfair labor practice and non-payment of overtime
pay, nightshift differential pay, 13th month pay, among others. The case was docketed as NLRC Case No.
RAB-III-02-6181-95.

The respondents, for their part, denied the existence of an employer-employee relationship between the
respondent company and the petitioner. They averred that the petitioner was an independent contractor as
evidenced by the contract of service which he and the respondent company entered into. The said contract
provided as follows:

That the Principal [referring to Supreme Packaging, Inc.], by these presents, agrees to hire and the
Contractor [referring to Pedro Chavez], by nature of their specialized line or service jobs, accepts the
services to be rendered to the Principal, under the following terms and covenants heretofore mentioned:

1. That the inland transport delivery/hauling activities to be performed by the contractor to the principal,
shall only cover travel route from Mariveles to Metro Manila. Otherwise, any change to this travel route shall
be subject to further agreement by the parties concerned.
2. That the payment to be made by the Principal for any hauling or delivery transport services fully rendered
by the Contractor shall be on a per trip basis depending on the size or classification of the truck being used
in the transport service, to wit:

a) If the hauling or delivery service shall require a truck of six wheeler, the payment on a per trip basis from
Mariveles to Metro Manila shall be THREE HUNDRED PESOS (P300.00) and EFFECTIVE December 15, 1984.

b) If the hauling or delivery service require a truck of ten wheeler, the payment on a per trip basis, following
the same route mentioned, shall be THREE HUNDRED FIFTY (P350.00) Pesos and Effective December 15,
1984.

3. That for the amount involved, the Contractor will be to [sic] provide for [sic] at least two (2) helpers;

4. The Contractor shall exercise direct control and shall be responsible to the Principal for the cost of any
damage to, loss of any goods, cargoes, finished products or the like, while the same are in transit, or due to
reckless [sic] of its men utilized for the purpose above mentioned;

5. That the Contractor shall have absolute control and disciplinary power over its men working for him
subject to this agreement, and that the Contractor shall hold the Principal free and harmless from any
liability or claim that may arise by virtue of the Contractor's non-compliance to the existing provisions of the
Minimum Wage Law, the Employees Compensation Act, the Social Security System Act, or any other such
law or decree that may hereafter be enacted, it being clearly understood that any truck drivers, helpers or
men working with and for the Contractor, are not employees who will be indemnified by the Principal for any
such claim, including damages incurred in connection therewith;

6. This contract shall take effect immediately upon the signing by the parties, subject to renewal on a year-
to-year basis.2

This contract of service was dated December 12, 1984. It was subsequently renewed twice, on July 10, 1989
and September 28, 1992. Except for the rates to be paid to the petitioner, the terms of the contracts were
substantially the same. The relationship of the respondent company and the petitioner was allegedly
governed by this contract of service.

The respondents insisted that the petitioner had the sole control over the means and methods by which his
work was accomplished. He paid the wages of his helpers and exercised control over them. As such, the
petitioner was not entitled to regularization because he was not an employee of the respondent company.
The respondents, likewise, maintained that they did not dismiss the petitioner. Rather, the severance of his
contractual relation with the respondent company was due to his violation of the terms and conditions of
their contract. The petitioner allegedly failed to observe the minimum degree of diligence in the proper
maintenance of the truck he was using, thereby exposing respondent company to unnecessary significant
expenses of overhauling the said truck.

After the parties had filed their respective pleadings, the Labor Arbiter rendered the Decision dated February
3, 1997, finding the respondents guilty of illegal dismissal. The Labor Arbiter declared that the petitioner
was a regular employee of the respondent company as he was performing a service that was necessary and
desirable to the latter's business. Moreover, it was noted that the petitioner had discharged his duties as
truck driver for the respondent company for a continuous and uninterrupted period of more than ten years.

The contract of service invoked by the respondents was declared null and void as it constituted a
circumvention of the constitutional provision affording full protection to labor and security of tenure. The
Labor Arbiter found that the petitioner's dismissal was anchored on his insistent demand to be regularized.
Hence, for lack of a valid and just cause therefor and for their failure to observe the due process
requirements, the respondents were found guilty of illegal dismissal. The dispositive portion of the Labor
Arbiter's decision states:

WHEREFORE, in the light of the foregoing, judgment is hereby rendered declaring respondent SUPREME
PACKAGING, INC. and/or MR. ALVIN LEE, Plant Manager, with business address at BEPZ, Mariveles, Bataan
guilty of illegal dismissal, ordering said respondent to pay complainant his separation pay equivalent to one
(1) month pay per year of service based on the average monthly pay of P10,800.00 in lieu of reinstatement
as his reinstatement back to work will not do any good between the parties as the employment relationship
has already become strained and full backwages from the time his compensation was withheld on February
23, 1995 up to January 31, 1997 (cut-off date) until compliance, otherwise, his backwages shall continue to
run. Also to pay complainant his 13th month pay, night shift differential pay and service incentive leave pay
hereunder computed as follows:

a) Backwages '. . P248,400.00

b) Separation Pay . '. .. P140,400.00

c) 13th month pay . P 10,800.00

d) Service Incentive Leave Pay .. 2,040.00

TOTAL P401,640.00

Respondent is also ordered to pay ten (10%) of the amount due the complainant as attorney's fees.

SO ORDERED.3

The respondents seasonably interposed an appeal with the NLRC. However, the appeal was dismissed by the
NLRC in its Decision4 dated January 27, 1998, as it affirmed in toto the decision of the Labor Arbiter. In the
said decision, the NLRC characterized the contract of service between the respondent company and the
petitioner as a "scheme" that was resorted to by the respondents who, taking advantage of the petitioner's
unfamiliarity with the English language and/or legal niceties, wanted to evade the effects and implications of
his becoming a regularized employee.5

The respondents sought reconsideration of the January 27, 1998 Decision of the NLRC. Acting thereon, the
NLRC rendered another Decision6 dated July 10, 1998, reversing its earlier decision and, this time, holding
that no employer-employee relationship existed between the respondent company and the petitioner. In
reconsidering its earlier decision, the NLRC stated that the respondents did not exercise control over the
means and methods by which the petitioner accomplished his delivery services. It upheld the validity of the
contract of service as it pointed out that said contract was silent as to the time by which the petitioner was
to make the deliveries and that the petitioner could hire his own helpers whose wages would be paid from
his own account. These factors indicated that the petitioner was an independent contractor, not an employee
of the respondent company.

The NLRC ruled that the contract of service was not intended to circumvent Article 280 of the Labor Code on
the regularization of employees. Said contract, including the fixed period of employment contained therein,
having been knowingly and voluntarily entered into by the parties thereto was declared valid citing Brent
School, Inc. v. Zamora.7 The NLRC, thus, dismissed the petitioner's complaint for illegal dismissal.

The petitioner sought reconsideration of the July 10, 1998 Decision but it was denied by the NLRC in its
Resolution dated September 7, 1998. He then filed with this Court a petition for certiorari , which was
referred to the CA following the ruling in St. Martin Funeral Home v. NLRC .8

The appellate court rendered the Decision dated April 28, 2000, reversing the July 10, 1998 Decision of the
NLRC and reinstating the decision of the Labor Arbiter. In the said decision, the CA ruled that the petitioner
was a regular employee of the respondent company because as its truck driver, he performed a service that
was indispensable to the latter's business. Further, he had been the respondent company's truck driver for
ten continuous years. The CA also reasoned that the petitioner could not be considered an independent
contractor since he had no substantial capital in the form of tools and machinery. In fact, the truck that he
drove belonged to the respondent company. The CA also observed that the routing slips that the respondent
company issued to the petitioner showed that it exercised control over the latter. The routing slips indicated
the chronological order and priority of delivery, the urgency of certain deliveries and the time when the
goods were to be delivered to the customers.
The CA, likewise, disbelieved the respondents' claim that the petitioner abandoned his job noting that he
just filed a complaint for regularization. This actuation of the petitioner negated the respondents' allegation
that he abandoned his job. The CA held that the respondents failed to discharge their burden to show that
the petitioner's dismissal was for a valid and just cause. Accordingly, the respondents were declared guilty
of illegal dismissal and the decision of the Labor Arbiter was reinstated.

In its April 28, 2000 Decision, the CA denounced the contract of service between the respondent company
and the petitioner in this wise:

In summation, we rule that with the proliferation of contracts seeking to prevent workers from attaining the
status of regular employment, it is but necessary for the courts to scrutinize with extreme caution their
legality and justness. Where from the circumstances it is apparent that a contract has been entered into to
preclude acquisition of tenurial security by the employee, they should be struck down and disregarded as
contrary to public policy and morals. In this case, the "contract of service" is just another attempt to exploit
the unwitting employee and deprive him of the protection of the Labor Code by making it appear that the
stipulations of the parties were governed by the Civil Code as in ordinary transactions. 9

However, on motion for reconsideration by the respondents, the CA made a complete turn around as it
rendered the assailed Resolution dated December 15, 2000 upholding the contract of service between the
petitioner and the respondent company. In reconsidering its decision, the CA explained that the extent of
control exercised by the respondents over the petitioner was only with respect to the result but not to the
means and methods used by him. The CA cited the following circumstances: (1) the respondents had no say
on how the goods were to be delivered to the customers; (2) the petitioner had the right to employ workers
who would be under his direct control; and (3) the petitioner had no working time.

The fact that the petitioner had been with the respondent company for more than ten years was, according
to the CA, of no moment because his status was determined not by the length of service but by the contract
of service. This contract, not being contrary to morals, good customs, public order or public policy, should be
given the force and effect of law as between the respondent company and the petitioner. Consequently, the
CA reinstated the July 10, 1998 Decision of the NLRC dismissing the petitioner's complaint for illegal
dismissal.

Hence, the recourse to this Court by the petitioner. He assails the December 15, 2000 Resolution of the
appellate court alleging that:

(A)

THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OF

JURISDICTION IN GIVING MORE CONSIDERATION TO THE "CONTRACT OF SERVICE" ENTERED INTO BY
PETITIONER AND PRIVATE RESPONDENT THAN ARTICLE 280 OF THE LABOR CODE OF THE PHILIPPINES
WHICH CATEGORICALLY DEFINES A REGULAR EMPLOYMENT NOTWITHSTANDING ANY WRITTEN
AGREEMENT TO THE CONTRARY AND REGARDLESS OF THE ORAL AGREEMENT OF THE PARTIES;

(B)

THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OF

JURISDICTION IN REVERSING ITS OWN FINDINGS THAT PETITIONER IS A REGULAR EMPLOYEE AND IN
HOLDING THAT THERE EXISTED NO EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN PRIVATE RESPONDENT
AND PETITIONER IN AS MUCH AS THE "CONTROL TEST" WHICH IS CONSIDERED THE MOST ESSENTIAL
CRITERION IN DETERMINING THE EXISTENCE OF SAID RELATIONSHIP IS NOT PRESENT. 10

The threshold issue that needs to be resolved is whether there existed an employer-employee relationship
between the respondent company and the petitioner. We rule in the affirmative.

The elements to determine the existence of an employment relationship are: (1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer's
power to control the employee's conduct.11 The most important element is the employer's control of the
employee's conduct, not only as to the result of the work to be done, but also as to the means and methods
to accomplish it.12 All the four elements are present in this case.

First. Undeniably, it was the respondents who engaged the services of the petitioner without the intervention
of a third party.

Second. Wages are defined as "remuneration or earnings, however designated, capable of being expressed
in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, or other
method of calculating the same, which is payable by an employer to an employee under a written or
unwritten contract of employment for work done or to be done, or for service rendered or to be
rendered."13 That the petitioner was paid on a per trip basis is not significant. This is merely a method of
computing compensation and not a basis for determining the existence or absence of employer-employee
relationship. One may be paid on the basis of results or time expended on the work, and may or may not
acquire an employment status, depending on whether the elements of an employer-employee relationship
are present or not.14 In this case, it cannot be gainsaid that the petitioner received compensation from the
respondent company for the services that he rendered to the latter.

Moreover, under the Rules Implementing the Labor Code, every employer is required to pay his employees
by means of payroll.15 The payroll should show, among other things, the employee's rate of pay, deductions
made, and the amount actually paid to the employee. Interestingly, the respondents did not present the
payroll to support their claim that the petitioner was not their employee, raising speculations whether this
omission proves that its presentation would be adverse to their case. 16

Third. The respondents' power to dismiss the petitioner was inherent in the fact that they engaged the
services of the petitioner as truck driver. They exercised this power by terminating the petitioner's services
albeit in the guise of "severance of contractual relation" due allegedly to the latter's breach of his contractual
obligation.

Fourth. As earlier opined, of the four elements of the employer-employee relationship, the "control test" is
the most important. Compared to an employee, an independent contractor is one who carries on a distinct
and independent business and undertakes to perform the job, work, or service on its own account and under
its own responsibility according to its own manner and method, free from the control and direction of the
principal in all matters connected with the performance of the work except as to the results thereof. 17 Hence,
while an independent contractor enjoys independence and freedom from the control and supervision of his
principal, an employee is subject to the employer's power to control the means and methods by which the
employee's work is to be performed and accomplished.18

Although the respondents denied that they exercised control over the manner and methods by which the
petitioner accomplished his work, a careful review of the records shows that the latter performed his work
as truck driver under the respondents' supervision and control. Their right of control was manifested by the
following attendant circumstances:

1. The truck driven by the petitioner belonged to respondent company;

2. There was an express instruction from the respondents that the truck shall be used exclusively to deliver
respondent company's goods; 19

3. Respondents directed the petitioner, after completion of each delivery, to park the truck in either of two
specific places only, to wit: at its office in Metro Manila at 2320 Osmeña Street, Makati City or at BEPZ,
Mariveles, Bataan;20 and

4. Respondents determined how, where and when the petitioner would perform his task by issuing to him
gate passes and routing slips.21

A. The routing slips indicated on the column REMARKS, the chronological order and priority of delivery such
as 1st drop, 2nd drop, 3rd drop, etc. This meant that the petitioner had to deliver the same according to the
order of priority indicated therein.
b. The routing slips, likewise, showed whether the goods were to be delivered urgently or not by the word
RUSH printed thereon.

c. The routing slips also indicated the exact time as to when the goods were to be delivered to the
customers as, for example, the words "tomorrow morning" was written on slip no. 2776.

These circumstances, to the Court's mind, prove that the respondents exercised control over the means and
methods by which the petitioner accomplished his work as truck driver of the respondent company. On the
other hand, the Court is hard put to believe the respondents' allegation that the petitioner was an
independent contractor engaged in providing delivery or hauling services when he did not even own the
truck used for such services. Evidently, he did not possess substantial capitalization or investment in the
form of tools, machinery and work premises. Moreover, the petitioner performed the delivery services
exclusively for the respondent company for a continuous and uninterrupted period of ten years.

The contract of service to the contrary notwithstanding, the factual circumstances earlier discussed
indubitably establish the existence of an employer-employee relationship between the respondent company
and the petitioner. It bears stressing that the existence of an employer-employee relationship cannot be
negated by expressly repudiating it in a contract and providing therein that the employee is an independent
contractor when, as in this case, the facts clearly show otherwise. Indeed, the employment status of a
person is defined and prescribed by law and not by what the parties say it should be. 22

Having established that there existed an employer-employee relationship between the respondent company
and the petitioner, the Court shall now determine whether the respondents validly dismissed the petitioner.

As a rule, the employer bears the burden to prove that the dismissal was for a valid and just cause. 23 In this
case, the respondents failed to prove any such cause for the petitioner's dismissal. They insinuated that the
petitioner abandoned his job. To constitute abandonment, these two factors must concur: (1) the failure to
report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-
employee relationship.24 Obviously, the petitioner did not intend to sever his relationship with the
respondent company for at the time that he allegedly abandoned his job, the petitioner just filed a complaint
for regularization, which was forthwith amended to one for illegal dismissal. A charge of abandonment is
totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so when it includes a
prayer for reinstatement.25

Neither can the respondents' claim that the petitioner was guilty of gross negligence in the proper
maintenance of the truck constitute a valid and just cause for his dismissal. Gross negligence implies a want
or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting any effort to avoid them. 26 The negligence, to
warrant removal from service, should not merely be gross but also habitual.27 The single and isolated act of
the petitioner's negligence in the proper maintenance of the truck alleged by the respondents does not
amount to "gross and habitual neglect" warranting his dismissal.

The Court agrees with the following findings and conclusion of the Labor Arbiter:

'As against the gratuitous allegation of the respondent that complainant was not dismissed from the service
but due to complainant's breach of their contractual relation, i.e., his violation of the terms and conditions of
the contract, we are very much inclined to believe complainant's story that his dismissal from the service
was anchored on his insistent demand that he be considered a regular employee. Because complainant in
his right senses will not just abandon for that reason alone his work especially so that it is only his job
where he depends chiefly his existence and support for his family if he was not aggrieved by the respondent
when he was told that his services as driver will be terminated on February 23, 1995. 28

Thus, the lack of a valid and just cause in terminating the services of the petitioner renders his dismissal
illegal. Under Article 279 of the Labor Code, an employee who is unjustly dismissed is entitled to
reinstatement, without loss of seniority rights and other privileges, and to the payment of full backwages,
inclusive of allowances, and other benefits or their monetary equivalent, computed from the time his
compensation was withheld from him up to the time of his actual reinstatement. 29 However, as found by the
Labor Arbiter, the circumstances obtaining in this case do not warrant the petitioner's reinstatement. A more
equitable disposition, as held by the Labor Arbiter, would be an award of separation pay equivalent to one
month for every year of service from the time of his illegal dismissal up to the finality of this judgment in
addition to his full backwages, allowances and other benefits.

WHEREFORE, the instant petition is GRANTED. The Resolution dated December 15, 2000 of the Court of
Appeals reversing its Decision dated April 28, 2000 in CA-G.R. SP No. 52485 is REVERSED and SET ASIDE.
The Decision dated February 3, 1997 of the Labor Arbiter in NLRC Case No. RAB-III-02-6181-5, finding the
respondents guilty of illegally terminating the employment of petitioner Pedro Chavez, is REINSTATED.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

Endnotes:

1
Penned by Associate Justice Oswaldo D. Agcaoili (retired), with Associate Justices Renato C. Dacudao and
Andres B. Reyes, Jr., concurring.

2
Rollo, pp. 113-114.

3
Id. at 151.

4
Penned by Commissioner Rogelio I. Rayala, with Presiding Commissioner Raul T. Aquino and Commissioner
Victoriano R. Calaycay, concurring; Id. at 177-184.

5
Rollo, pp. 183-184.

6
Penned by Commissioner Angelita A. Gacutan, with Presiding Commissioner Raul T. Aquino and
Commissioner Victoriano R. Calaycay, concurring; Id. at 60-73.

7
181 SCRA 702 (1990).

8
295 SCRA 494 (1998).

9
Rollo, pp. 42-43.

10
Id. at 13-14.

11
Sy v. Court of Appeals, 398 SCRA 301 (2003).

12
Id. at 307-308.

13
LABOR CODE, ART. 97(f).

14
Tan v. Lagrama, 387 SCRA 393 (2002).

15
Book III, Rule X, Sec. 6(a).

16
Tan v. Lagrama, supra.

17
Id. at 399.

18
Id.
19
Annex C of Respondents' Position Paper; Rollo, p. 117.

20
Ibid.

21
Annexes A to C of Petitioner's Reply to Respondents' Position Paper.

22
AZUCENA, I THE LABOR CODE (1999 ed.) 127.

23
Hacienda Fatima v. National Federation of Sugarcane Workers-Food and General Trade,396 SCRA 518
(2003).

Article 282 of the Labor Code provides: An employer may terminate an employment for any of the following
causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative;

(d) Commission of a crime or offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative;

(e) Other causes analogous to the foregoing.

24
Buenviaje v. Court of Appeals, 391 SCRA 440 (2002).

25
Globe Telecom, Inc. v. Florendo-Flores, 390 SCRA 201 (2002)

26
Philippine Aeolus Automotive United Corporation v. NLRC, 331 SCRA 237 (2000).

27
Id. at 247.

28
Rollo, pp. 149-150.

29
Cebu Marine Beach Resort v. NLRC, 414 SCRA 173 (2003).