MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET AL., Respondents. G.R. No.
Neither should authority be made to prevail over liberty because then the individual
47800. December 2, 1940
1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF COMMONWEALTH ACT No. 648;
DELEGATION OF LEGISLATIVE POWER; AUTHORITY OF DIRECTOR OF PUBLIC WORKS
AND SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS TO PROMULGATE
RULES AND REGULATIONS. — The provisions of section 1 of Commonwealth Act No.
648 do not confer legislative power upon the Director of Public Works and the
Secretary of Public Works and Communications. The authority therein conferred
upon them and under which they promulgated the rules and regulations now
complained of is not to determine what public policy demands but merely to carry
out the legislative policy laid down by the National Assembly in said Act, to wit, "to
promote safe transit upon, and avoid obstructions on, roads and streets designated
as national roads by acts of the National Assembly or by executive orders of the
President of the Philippines" and to close them temporarily to any or all classes of
traffic "whenever the condition of the road or the traffic thereon makes such action
necessary or advisable in the public convenience and interest." The delegated
power, if at all, therefore, is not the determination of what the law shall be, but
merely the ascertainment of the facts and circumstances upon which the
application of said law is to be predicated. To promulgate rules and regulations on
the use of national roads and to determine when and how long a national road
should be closed to traffic, in view of the condition of the road or the traffic thereon
and the requirements of public convenience and interest, is an administrative
function which cannot be directly discharged by the National Assembly. It must
depend on the discretion of some other government official to whom is confided
the duty of determining whether the proper occasion exists for executing the law.
But it cannot be said that the exercise of such discretion is the making of the law.
2. ID.; ID.; POLICE POWER; PERSONAL LIBERTY; GOVERNMENTAL AUTHORITY. —
Commonwealth Act No. 548 was passed by the National Assembly in the exercise of
the paramount police power of the state. Said Act, by virtue of which the rules and
regulations complained of were promulgated, aims to promote safe transit upon
and avoid obstructions on national roads, in the interest and convenience of the
public. In enacting said law, therefore, the National Assembly was prompted by
considerations of public convenience and welfare. It was inspired by a desire to
relieve congestion of traffic, which is, to say the least, a menace to public safety.
Public welfare, then, lies at the bottom of the enactment of said law, and the state
in order to promote the general welfare may interfere with personal liberty, with
property, and with business and occupations. Persons and property may be
subjected to all kinds of restraints and burdens, in order to secure the general
comfort, health, and prosperity of the state (U.S. v. Gomer Jesus, 31 Phil., 218). To
this fundamental aim of our Government the rights of the individual are
subordinated. Liberty is a blessing without which life is a misery, but liberty should
not be made to prevail over authority because then society will fall into anarchy.
will fall into slavery. The citizen should achieve the required balance of liberty and
authority in his mind through education and, personal discipline, so that there may
be established the resultant equilibrium, which means peace and order and
happiness for all. The moment greater authority is conferred upon the government,
logically so much is withdrawn from the residuum of liberty which resides in the
people. The paradox lies in the fact that the apparent curtailment of liberty is
precisely the very means of insuring its preservation.
3. ID.; ID.; SOCIAL JUSTICE. — Social justice is "neither communism, nor despotism,
nor atomism, nor anarchy," but the humanization of laws and the equalization of
social and economic forces by the State so that justice in its rational and objectively
secular conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the competent elements of
society, through the maintenance of a proper economic and social equilibrium in
the interrelations of the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-constitutionally, through the
exercise of powers underlying the existence of all governments on the time-
honored principle of salus populi est suprema lex. Social justice, therefore, must be
founded on the recognition of the necessity of interdependence among divers and
diverse units of a society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and economic life,
consistent with the fundamental and paramount objective of the state of
promoting the health, comfort, and quiet of all persons, and of bringing about "the
greatest good to the greatest number."
LAUREL, J.:
Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila,
brought before this court this petition for a writ of prohibition against the
respondents, A. D. Williams, as Chairman of the National Traffic Commission;
Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of
Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of
Manila; and Juan Dominguez, as Acting Chief of Police of Manila.
It is alleged in the petition that the National Traffic Commission, in its resolution of
July 17, 1940, resolved to recommend to the Director of Public Works and to the
Secretary of Public Works and Communications that animal-drawn vehicles be
prohibited from passing along Rosario Street extending from Plaza Calderon de la
Barca to Dasmariñas Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to
5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo
Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the
date of the opening of the Colgante Bridge to traffic; that the Chairman of the
National Traffic Commission, on July 18, 1940 recommended to the Director of
Public Works the adoption of the measure proposed in the resolution
aforementioned, in pursuance of the provisions of Commonwealth Act No. 548
which authorizes said Director of Public Works, with the approval of the Secretary
of Public Works and Communications, to promulgate rules and regulations to
regulate and control the use of and traffic on national roads; that on August 2,
1940, the Director of Public Works, in his first indorsement to the Secretary of
Public Works and Communications, recommended to the latter the approval of the
recommendation made by the Chairman of the National Traffic Commission as
aforesaid, with the modification that the closing of Rizal Avenue to traffic to animal-
drawn vehicles be limited to the portion thereof extending from the railroad
crossing at Antipolo Street to Azcarraga Street; that on August 10, 1940, the
Secretary of Public Works and Communications, in his second indorsement
addressed to the Director of Public Works, approved the recommendation of the
latter that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn
vehicles, between the points and during the hours as above indicated, for a period
of one year from the date of the opening of the Colgante Bridge to traffic; that the
Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused
to be enforced the rules and regulations thus adopted; that as a consequence of
such enforcement, all animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above-mentioned to the detriment not only of their
owners but of the riding public as well.
It is contended by the petitioner that Commonwealth Act No. 548 by which the
Director of Public Works, with the approval of the Secretary of Public Works and
Communications, is authorized to promulgate rules and regulations for the
regulation and control of the use of and traffic on national roads and streets is
unconstitutional because it constitutes an undue delegation of legislative power.
This contention is untenable. As was observed by this court in Rubi v. Provincial
Board of Mindoro (39 Phil, 660, 700), "The rule has nowhere been better stated
than in the early Ohio case decided by Judge Ranney, and since followed in a
multitude of cases, namely: ’The true distinction therefore is between the
delegation of power to make the law, which necessarily involves a discretion as to
what it shall be, and conferring an authority or discretion as to its execution, to be
exercised under and in pursuance of the law. The first cannot be done; to the latter
no valid objection can be made.’ (Cincinnati, W. & Z. R. Co. v. Comm’rs. Clinton
County, 1 Ohio St., 88.) Discretion, as held by Chief Justice Marshall in Wayman v.
Southard (10 Wheat., 1) may be committed by the Legislature to an executive
department or official. The Legislature may make decisions of executive
departments or subordinate officials thereof, to whom it has committed the
execution of certain acts, final on questions of fact. (U.S. v. Kinkead, 248 Fed., 141.)
The growing tendency in the decisions is to give prominence to the ’necessity’ of
the case."cralaw virtua1aw library
Section 1 of Commonwealth Act No. 548 reads as follows:jgc:chanrobles.com.ph
"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and
streets designated as national roads by acts of the National Assembly or by
executive orders of the President of the Philippines, the Director of Public Works,
with the approval of the Secretary of Public Works and Communications, shall
promulgate the necessary rules and regulations to regulate and control the use of
and traffic on such roads and streets. Such rules and regulations, with the approval
of the President, may contain provisions controlling or regulating the construction
of buildings or other structures within a reasonable distance from along the
national roads. Such roads may be temporarily closed to any or all classes of traffic
by the Director of Public Works and his duly authorized representatives whenever
the condition of the road or the traffic thereon makes such action necessary or
advisable in the public convenience and interest, or for a specified period, with the
approval of the Secretary of Public Works and Communications."cralaw virtua1aw
library
The above provisions of law do not confer legislative power upon the Director of
Public Works and the Secretary of Public Works and Communications. The authority
therein conferred upon them and under which they promulgated the rules and
regulations now complained of is not to determine what public policy demands but
merely to carry out the legislative policy laid down by the National Assembly in said
Act, to wit, "to promote safe transit upon and avoid obstructions on, roads and
streets designated as national roads by acts of the National Assembly or by
executive orders of the President of the Philippines" and to close them temporarily
to any or all classes of traffic "whenever the condition of the road or the traffic
makes such action necessary or advisable in the public convenience and interest."
The delegated power, if at all, therefore, is not the determination of what the law
shall be, but merely the ascertainment of the facts and circumstances upon which
the application of said law is to be predicated. To promulgate rules and regulations
on the use of national roads and to determine when and how long a national road
should be closed to traffic, in view of the condition of the road or the traffic thereon
and the requirements of public convenience and interest, is an administrative
function which cannot be directly discharged by the National Assembly. It must
depend on the discretion of some other government official to whom is confided
the duty of determining whether the proper occasion exists for executing the law.
But it cannot be said that the exercise of such discretion is the making of the law. As
was said in Locke’s Appeal (72 Pa. 491): "To assert that a law is less than a law,
because it is made to depend on a future event or act, is to rob the Legislature of
the power to act wisely for the public welfare whenever a law is passed relating to a
state of affairs not yet developed, or to things future and impossible to fully know."
The proper distinction the court said was this: "The Legislature cannot delegate its
power to make the law; but it can make a law to delegate a power to determine
some fact or state of things upon which the law makes, or intends to make, its own
action depend. To deny this would be to stop the wheels of government. There are
many things upon which wise and useful legislation must depend which cannot be
known to the law-making power, and, must, therefore, be a subject of inquiry and
determination outside of the halls of legislation." (Field v. Clark, 143 U. S. 649, 694;
36 L. Ed. 294.)
In the case of People v. Rosenthal and Osmeña, G.R. Nos. 46076 and 46077,
promulgated June 12, 1939, and in Pangasinan Transportation v. The Public Service
Commission, G.R. No. 47065, promulgated June 26, 1940, this Court had occasion to
observe that the principle of separation of powers has been made to adapt itself to
the complexities of modern governments, giving rise to the adoption, within certain
limits, of the principle of "subordinate legislation," not only in the United States and
England but in practically all modern governments. Accordingly, with the growing
complexity of modern life, the multiplication of the subjects of governmental
regulations, and the increased difficulty of administering the laws, the rigidity of the
theory of separation of governmental powers has, to a large extent, been relaxed
by permitting the delegation of greater powers by the legislative and vesting a
larger amount of discretion in administrative and executive officials, not only in the
execution of the laws, but also in the promulgation of certain rules and regulations
calculated to promote public interest.
The petitioner further contends that the rules and regulations promulgated by the
respondents pursuant to the provisions of Commonwealth Act No. 548 constitute
an unlawful interference with legitimate business or trade and abridge the right to
personal liberty and freedom of locomotion. Commonwealth Act No. 548 was
passed by the National Assembly in the exercise of the paramount police power of
the state.
Said Act, by virtue of which the rules and regulations complained of were
promulgated, aims to promote safe transit upon and avoid obstructions on national
roads, in the interest and convenience of the public. In enacting said law, therefore,
the National Assembly was prompted by considerations of public convenience and
welfare. It was inspired by a desire to relieve congestion of traffic. which is, to say
the least, a menace to public safety. Public welfare, then, lies at the bottom of the
enactment of said law, and the state in order to promote the general welfare may
interfere with personal liberty, with property, and with business and occupations.
Persons and property may be subjected to all kinds of restraints and burdens, in
order to secure the general comfort, health, and prosperity of the state (U.S. v.
Gomez Jesus, 31 Phil., 218). To this fundamental aim of our Government the rights
of the individual are subordinated. Liberty is a blessing without which life is a
misery, but liberty should not be made to prevail over authority because then
society will fall into anarchy. Neither should authority be made to prevail over
liberty because then the individual will fall into slavery. The citizen should achieve
the required balance of liberty and authority in his mind through education and
personal discipline, so that there may be established the resultant equilibrium,
which means peace and order and happiness for all. The moment greater authority
is conferred upon the government, logically so much is withdrawn from the
residuum of liberty which resides in the people. The paradox lies in the fact that the
apparent curtailment of liberty is precisely the very means of insuring its
preservation.
The scope of police power keeps expanding as civilization advances. As was said in
the case of Dobbins v. Los Angeles (195 U.S. 223, 238; 49 L. ed. 169), "the right to
exercise the police power is a continuing one, and a business lawful today may in
the future, because of the changed situation, the growth of population or other
causes, become a menace to the public health and welfare, and be required to yield
to the public good." And in People v. Pomar (46 Phil., 440), it was observed that
"advancing civilization is bringing within the police power of the state today things
which were not thought of as being within such power yesterday. The development
of civilization, the rapidly increasing population, the growth of public opinion, with
an increasing desire on the part of the masses and of the government to look after
and care for the interests of the individuals of the state, have brought within the
police power many questions for regulation which formerly were not so
considered."cralaw virtua1aw library
The petitioner finally avers that the rules and regulations complained of infringe
upon the constitutional precept regarding the promotion of social justice to insure
the well-being and economic security of all the people. The promotion of social
justice, however, is to be achieved not through a mistaken sympathy towards any
given group. Social justice is "neither communism, nor despotism, nor atomism, nor
anarchy," but the humanization of laws and the equalization of social and economic
forces by the State so that justice in its rational and objectively secular conception
may at least be approximated. Social justice means the promotion of the welfare of
all the people, the adoption by the Government of measures calculated to insure
economic stability of all the competent elements of society, through the
maintenance of a proper economic and social equilibrium in the interrelations of
the members of the community, constitutionally, through the adoption of measures
legally justifiable, or extra-constitutionally, through the exercise of powers
underlying the existence of all governments on the time-honored principle of salus
populi est suprema lex.
Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection
that should be equally and evenly extended to all groups as a combined force in our
social and economic life, consistent with the fundamental and paramount objective
of the state of promoting the health, comfort, and quiet of all persons, and of
bringing about "the greatest good to the greatest number."cralaw virtua1aw library
In view of the foregoing, the writ of prohibition prayed for is hereby denied, with
costs against the petitioner. So ordered.
PEOPLE OF THE PHILIPPINES, APPELLEE, VS. MELISSA CHUA, APPELLANT. G.R. No.
184058 : March 10, 2010
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. MACARANAS- P83,000.00
NAPOLEON H. YU, JR.- P23,000.00
HARRY JAMES P. KING- P23,000.00
ROBERTO C. ANGELES- P23,000.00
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 the first,
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.
PEOPLE OF THE PHILIPPINES, PETITIONER, VS. RODOLFO GALLO Y GADOT,
ACCUSED-APPELLANT, FIDES PACARDO Y JUNGCO AND PILAR MANTA Y DUNGO,
ACCUSED. G.R. No. 187730 : June 29, 2010
VELASCO JR., J.:
The Case
This is an appeal from the Decision[1] dated December 24, 2008 of the Court of
Appeals (CA) in CA-G.R. CR-H.C. No. 02764 entitled People of the Philippines v.
Rodolfo Gallo y Gadot (accused-appellant), Fides Pacardo y Jungco and Pilar Manta
y Dungo (accused), which affirmed the Decision[2] dated March 15, 2007 of the
Regional Trial Court (RTC), Branch 30 in Manila which convicted the accused-
appellant Rodolfo Gallo y Gadot ("accused-appellant") of syndicated illegal
recruitment in Criminal Case No. 02-206293 and estafa in Criminal Case No. 02-
206297.
The Facts
Originally, accused-appellant Gallo and accused Fides Pacardo ("Pacardo") and Pilar
Manta ("Manta"), together with Mardeolyn Martir ("Mardeolyn") and nine (9)
others, were charged with syndicated illegal recruitment and eighteen (18) counts
of estafa committed against eighteen complainants, including Edgardo V. Dela Caza
("Dela Caza"), Sandy Guantero ("Guantero") and Danilo Sare ("Sare"). The cases
were respectively docketed as Criminal Case Nos. 02-2062936 to 02-206311.
However, records reveal that only Criminal Case No. 02-206293, which was filed
against accused-appellant Gallo, Pacardo and Manta for syndicated illegal
recruitment, and Criminal Case Nos. 02-206297, 02-206300 and 02-206308, which
were filed against accused-appellant Gallo, Pacardo and Manta for estafa,
proceeded to trial due to the fact that the rest of the accused remained at large.
Further, the other cases, Criminal Case Nos. 02-206294 to 02-206296, 02-206298 to
02-206299, 02-206301 to 02-206307 and 02-206309 to 02-206311 were likewise
provisionally dismissed upon motion of Pacardo, Manta and accused-appellant for
failure of the respective complainants in said cases to appear and testify during
trial.
It should also be noted that after trial, Pacardo and Manta were acquitted in
Criminal Case Nos. 02-206293, 02-206297, 02-206300 and 02-206308 for
insufficiency of evidence. Likewise, accused-appellant Gallo was similarly acquitted
in Criminal Case Nos. 02-206300, the case filed by Guantero, and 02-206308, the
case filed by Sare. However, accused-appellant was found guilty beyond reasonable
doubt in Criminal Case Nos. 02-206293 and 02-206297, both filed by Dela Caza, for
syndicated illegal recruitment and estafa, respectively.
Thus, the present appeal concerns solely accused-appellant's conviction for
syndicated illegal recruitment in Criminal Case No. 02-206293 and for estafa in
Criminal Case No. 02-206297.
In Criminal Case No. 02-206293, the information charges the accused-appellant,
together with the others, as follows:
The undersigned accuses MARDEOLYN MARTIR, ISMAEL GALANZA, NELMAR
MARTIR, MARCELINO MARTIR, NORMAN MARTIR, NELSON MARTIR, MA. CECILIA M.
RAMOS, LULU MENDANES, FIDES PACARDO y JUNGCO, RODOLFO GALLO y GADOT,
PILAR MANTA y DUNGO, ELEONOR PANUNCIO and YEO SIN UNG of a violation of
Section 6(a), (l) and (m) of Republic Act 8042, otherwise known as the Migrant
Workers and Overseas Filipino Workers Act of 1995, committed by a syndicate and
in large scale, as follows:
That in or about and during the period comprised between November 2000 and
December, 2001, inclusive, in the City of Manila, Philippines, the said accused
conspiring and confederating together and helping with one another, representing
themselves to have the capacity to contract, enlist and transport Filipino workers
for employment abroad, did then and there willfully and unlawfully, for a fee,
recruit and promise employment/job placement abroad to FERDINAND ASISTIN,
ENTICE BRENDO, REYMOND G. CENA, EDGARDO V. DELA CAZA, RAYMUND EDAYA,
SANDY O. GUANTENO, RENATO V. HUFALAR, ELENA JUBICO, LUPO A. MANALO,
ALMA V. MENOR, ROGELIO S. MORON, FEDILA G. NAIPA, OSCAR RAMIREZ,
MARISOL L. SABALDAN, DANILO SARE, MARY BETH SARDON, JOHNNY SOLATORIO
and JOEL TINIO in Korea as factory workers and charge or accept directly or
indirectly from said FERDINAND ASISTIN the amount of P45,000.00; ENTICE
BRENDO - P35,000.00; REYMOND G. CENA - P30,000.00; EDGARDO V. DELA CAZA -
P45,000.00; RAYMUND EDAYA - P100,000.00; SANDY O. GUANTENO - P35,000.00;
RENATO V. HUFALAR - P70,000.00; ELENA JUBICO - P30,000.00; LUPO A. MANALO -
P75,000.00; ALMA V. MENOR - P45,000.00; ROGELIO S. MORON - P70,000.00;
FEDILA G. NAIPA - P45,000.00; OSCAR RAMIREZ - P45,000.00; MARISOL L.
SABALDAN - P75,000.00; DANILO SARE - P100,000.00; MARY BETH SARDON -
P25,000.00; JOHNNY SOLATORIO - P35,000.00; and JOEL TINIO - P120,000.00 as
placement fees in connection with their overseas employment, which amounts are
in excess of or greater than those specified in the schedule of allowable fees
prescribed by the POEA Board Resolution No. 02, Series 1998, and without valid
reasons and without the fault of the said complainants failed to actually deploy
them and failed to reimburse the expenses incurred by the said complainants in
connection with their documentation and processing for purposes of their
deployment.[3] (Emphasis supplied)
In Criminal Case No. 02-206297, the information reads:
That on or about May 28, 2001, in the City of Manila, Philippines, the said accused
conspiring and confederating together and helping with [sic] one another, did then
and there willfully, unlawfully and feloniously defraud EDGARDO V. DELA CAZA, in
the following manner, to wit: the said accused by means of false manifestations and
fraudulent representations which they made to the latter, prior to and even
simultaneous with the commission of the fraud, to the effect that they had the
power and capacity to recruit and employ said EDGARDO V. DELA CAZA in Korea as
factory worker and could facilitate the processing of the pertinent papers if given
the necessary amount to meet the requirements thereof; induced and succeeded in
inducing said EDGARDO V. DELA CAZA to give and deliver, as in fact, he gave and
delivered to said accused the amount of P45,000.00 on the strength of said
manifestations and representations, said accused well knowing that the same were
false and untrue and were made [solely] for the purpose of obtaining, as in fact they
did obtain the said amount of P45,000.00 which amount once in their possession,
with intent to defraud said [EDGARDO] V. DELA CAZA, they willfully, unlawfully and
feloniously misappropriated, misapplied and converted the said amount of
P45,000.00 to their own personal use and benefit, to the damage and prejudice of
the said EDGARDO V. DELA CAZA in the aforesaid amount of P45,000.00, Philippine
currency.
CONTRARY TO LAW.[4]
When arraigned on January 19, 2004, accused-appellant Gallo entered a plea of not
guilty to all charges.
On March 3, 2004, the pre-trial was terminated and trial ensued, thereafter.
During the trial, the prosecution presented as their witnesses, Armando Albines
Roa, the Philippine Overseas Employment Administration (POEA) representative
and private complainants Dela Caza, Guanteno and Sare. On the other hand, the
defense presented as its witnesses, accused-appellant Gallo, Pacardo and Manta.
Version of the Prosecution
On May 22, 2001, Dela Caza was introduced by Eleanor Panuncio to accused-
appellant Gallo, Pacardo, Manta, Mardeolyn, Lulu Mendanes, Yeo Sin Ung and
another Korean national at the office of MPM International Recruitment and
Promotion Agency ("MPM Agency") located in Malate, Manila.
Dela Caza was told that Mardeolyn was the President of MPM Agency, while
Nelmar Martir was one of the incorporators. Also, that Marcelino Martir, Norman
Martir, Nelson Martir and Ma. Cecilia Ramos were its board members. Lulu
Mendanes acted as the cashier and accountant, while Pacardo acted as the agency's
employee who was in charge of the records of the applicants. Manta, on the other
hand, was also an employee who was tasked to deliver documents to the Korean
embassy.
Accused-appellant Gallo then introduced himself as a relative of Mardeolyn and
informed Dela Caza that the agency was able to send many workers abroad.
Together with Pacardo and Manta, he also told Dela Caza about the placement fee
of One Hundred Fifty Thousand Pesos (PhP 150,000) with a down payment of Forty-
Five Thousand Pesos (PhP 45,000) and the balance to be paid through salary
deduction.
Dela Caza, together with the other applicants, were briefed by Mardeolyn about the
processing of their application papers for job placement in Korea as a factory
worker and their possible salary. Accused Yeo Sin Ung also gave a briefing about the
business and what to expect from the company and the salary.
With accused-appellant's assurance that many workers have been sent abroad, as
well as the presence of the two (2) Korean nationals and upon being shown the
visas procured for the deployed workers, Dela Caza was convinced to part with his
money. Thus, on May 29, 2001, he paid Forty-Five Thousand Pesos (PhP 45,000) to
MPM Agency through accused-appellant Gallo who, while in the presence of
Pacardo, Manta and Mardeolyn, issued and signed Official Receipt No. 401.
Two (2) weeks after paying MPM Agency, Dela Caza went back to the agency's
office in Malate, Manila only to discover that the office had moved to a new
location at Batangas Street, Brgy. San Isidro, Makati. He proceeded to the new
address and found out that the agency was renamed to New Filipino Manpower
Development & Services, Inc. ("New Filipino"). At the new office, he talked to
Pacardo, Manta, Mardeolyn, Lulu Mendanes and accused-appellant Gallo. He was
informed that the transfer was done for easy accessibility to clients and for the
purpose of changing the name of the agency.
Dela Caza decided to withdraw his application and recover the amount he paid but
Mardeolyn, Pacardo, Manta and Lulu Mendanes talked him out from pursuing his
decision. On the other hand, accused-appellant Gallo even denied any knowledge
about the money.
After two (2) more months of waiting in vain to be deployed, Dela Caza and the
other applicants decided to take action. The first attempt was unsuccessful because
the agency again moved to another place. However, with the help of the Office of
Ambassador Señeres and the Western Police District, they were able to locate the
new address at 500 Prudential Building, Carriedo, Manila. The agency explained
that it had to move in order to separate those who are applying as entertainers
from those applying as factory workers. Accused-appellant Gallo, together with
Pacardo and Manta, were then arrested.
The testimony of prosecution witness Armando Albines Roa, a POEA employee, was
dispensed with after the prosecution and defense stipulated and admitted to the
existence of the following documents:
Certification issued by Felicitas Q. Bay, Director II, Licensing Branch of the POEA to
the effect that "New Filipino Manpower Development & Services, Inc., with office
address at 1256 Batangas St., Brgy. San Isidro, Makati City, was a licensed landbased
agency whose license expired on December 10, 2001 and was delisted from the
roster of licensed agencies on December 14, 2001." It further certified that "Fides J.
Pacardo was the agency's Recruitment Officer";
Certification issued by Felicitas Q. Bay of the POEA to the effect that MPM
International Recruitment and Promotion is not licensed by the POEA to recruit
workers for overseas employment;
Certified copy of POEA Memorandum Circular No. 14, Series of 1999 regarding
placement fee ceiling for landbased workers.
Certified copy of POEA Memorandum Circular No. 09, Series of 1998 on the
placement fee ceiling for Taiwan and Korean markets, and
Certified copy of POEA Governing Board Resolution No. 02, series of 1998.
Version of the Defense
For his defense, accused-appellant denied having any part in the recruitment of
Dela Caza. In fact, he testified that he also applied with MPM Agency for
deployment to Korea as a factory worker. According to him, he gave his application
directly with Mardeolyn because she was his town mate and he was allowed to pay
only Ten Thousand Pesos (PhP 10,000) as processing fee. Further, in order to
facilitate the processing of his papers, he agreed to perform some tasks for the
agency, such as taking photographs of the visa and passport of applicants, running
errands and performing such other tasks assigned to him, without salary except for
some allowance. He said that he only saw Dela Caza one or twice at the agency's
office when he applied for work abroad. Lastly, that he was also promised
deployment abroad but it never materialized.
Ruling of the Trial Court
On March 15, 2007, the RTC rendered its Decision convicting the accused of
syndicated illegal recruitment and estafa . The dispositive portion reads:
WHEREFORE, judgment is hereby rendered as follows:
Accused FIDES PACARDO y JUNGO and PILAR MANTA y DUNGO are hereby
ACQUITTED of the crimes charged in Criminal Cases Nos. 02-206293, 02-206297, 02-
206300 and 02-206308;
Accused RODOLFO GALLO y GADOT is found guilty beyond reasonable doubt in
Criminal Case No. 02-206293 of the crime of Illegal Recruitment committed by a
syndicate and is hereby sentenced to suffer the penalty of life imprisonment and to
pay a fine of ONE MILLION (Php1,000,000.00) PESOS. He is also ordered to
indemnify EDGARDO DELA CAZA of the sum of FORTY-FIVE THOUSAND
(Php45,000.00) PESOS with legal interest from the filing of the information on
September 18, 2002 until fully paid.
Accused RODOLFO GALLO y GADOT in Criminal Case No. 02-206297 is likewise
found guilty and is hereby sentenced to suffer the indeterminate penalty of FOUR
(4) years of prision correccional as minimum to NINE (9) years of prision mayor as
maximum.
Accused RODOLFO GALLO y GADOT is hereby ACQUITTED of the crime charged in
Criminal Cases Nos. 02-206300 and 02-206308.
Let alias warrants for the arrest of the other accused be issued anew in all the
criminal cases. Pending their arrest, the cases are sent to the archives.
The immediate release of accused Fides Pacardo and Pilar Manta is hereby ordered
unless detained for other lawful cause or charge.
SO ORDERED.[5]
Ruling of the Appellate Court
On appeal, the CA, in its Decision dated December 24, 2008, disposed of the case as
follows:
WHEREFORE, the appealed Decision of the Regional Trial Court of Manila, Branch
30, in Criminal Cases Nos. 02-206293 and 02-206297, dated March 15, 2007, is
AFFIRMED with the MODIFICATION that in Criminal Case No. 02-206297, for estafa,
appellant is sentenced to four (4) years of prision correccional to ten (10) years of
prision mayor.
SO ORDERED.[6]
The CA held the totality of the prosecution's evidence showed that the accused-
appellant, together with others, engaged in the recruitment of Dela Caza. His
actions and representations to Dela Caza can hardly be construed as the actions of a
mere errand boy.
As determined by the appellate court, the offense is considered economic sabotage
having been committed by more than three (3) persons, namely, accused-appellant
Gallo, Mardeolyn, Eleonor Panuncio and Yeo Sin Ung. More importantly, a personal
found guilty of illegal recruitment may also be convicted of estafa.[7] The same
evidence proving accused-appellant's commission of the crime of illegal recruitment
in large scale also establishes his liability for estafa under paragragh 2(a) of Article
315 of the Revised Penal Code (RPC).
On January 15, 2009, the accused-appellant filed a timely appeal before this Court.
The Issues
Accused-appellant interposes in the present appeal the following assignment of
errors:
I
The court a quo gravely erred in finding the accused-appellant guilty of illegal
recruitment committed by a syndicate despite the failure of the prosecution to
prove the same beyond reasonable doubt.
II
The court a quo gravely erred in finding the accused-appellant guilty of estafa
despite the failure of the prosecution to prove the same beyond reasonable doubt.
Our Ruling
The appeal has no merit.
Evidence supports conviction of
the crime of Syndicated Illegal
Recruitment
Accused-appellant avers that he cannot be held criminally liable for illegal
recruitment because he was neither an officer nor an employee of the recruitment
agency. He alleges that the trial court erred in adopting the asseveration of the
private complainant that he was indeed an employee because such was not duly
supported by competent evidence. According to him, even assuming that he was an
employee, such cannot warrant his outright conviction sans evidence that he acted
in conspiracy with the officers of the agency.
We disagree.
To commit syndicated illegal recruitment, three elements must be established: (1)
the offender undertakes either any activity within the meaning of "recruitment and
placement" defined under Article 13(b), or any of the prohibited practices
enumerated under Art. 34 of the Labor Code; (2) he has no valid license or authority
required by law to enable one to lawfully engage in recruitment and placement of
workers;[8] and (3) the illegal recruitment is committed by a group of three (3) or
more persons conspiring or confederating with one another.[9] When illegal
recruitment is committed by a syndicate or in large scale, i.e., if it is committed
against three (3) or more persons individually or as a group, it is considered an
offense involving economic sabotage.[10]
Under Art. 13(b) of the Labor Code, "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".
After a thorough review of the records, we believe that the prosecution was able to
establish the elements of the offense sufficiently. The evidence readily reveals that
MPM Agency was never licensed by the POEA to recruit workers for overseas
employment.
Even with a license, however, illegal recruitment could still be committed under
Section 6 of Republic Act No. 8042 ("R.A. 8042"), otherwise known as the Migrants
and Overseas Filipinos Act of 1995, viz:
Sec. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any act
of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers and includes referring, contract services, promising or advertising for
employment abroad, whether for profit or not, when undertaken by a non-licensee
or non-holder of authority contemplated under Article 13(f) of Presidential Decree
No. 442, as amended, otherwise known as the Labor Code of the Philippines:
Provided, That any such non-licensee or non-holder who, in any manner, offers or
promises for a fee employment abroad to two or more persons shall be deemed so
engaged. It shall, likewise, include the following act, whether committed by any
person, whether a non-licensee, non-holder, 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 and
Employment, or to make a worker pay any amount greater than that actually
received by him as a loan or advance;
xxxx
(l) Failure to actually deploy without valid reason as determined by the Department
of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment and processing for
purposes of deployment, in cases where the deployment does not actually take
place without the worker's fault. Illegal recruitment when committed by a syndicate
or in large scale shall be considered an offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring or confederating with one another. It is
deemed committed in large scale if committed against three (3) or more persons
individually or as a group.
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.
In the instant case, accused-appellant committed the acts enumerated in Sec. 6 of
R.A. 8042. Testimonial evidence presented by the prosecution clearly shows that, in
consideration of a promise of foreign employment, accused-appellant received the
amount of Php 45,000.00 from Dela Caza. When accused-appellant made
misrepresentations concerning the agency's purported power and authority to
recruit for overseas employment, and in the process, collected money in the guise
of placement fees, the former clearly committed acts constitutive of illegal
recruitment.[11] Such acts were accurately described in the testimony of
prosecution witness, Dela Caza, to wit:
PROS. MAGABLIN
Q: How about this Rodolfo Gallo?
A: He was the one who received my money.
Q: Aside from receiving your money, was there any other representations or acts
made by Rodolfo Gallo?
A: He introduced himself to me as relative of Mardeolyn Martir and he even
intimated to me that their agency has sent so many workers abroad.
/td>
xxxx
PROS. MAGABLIN
Q: Mr. Witness, as you claimed you tried to withdraw your application at the
agency. Was there any instance that you were able to talk to Fides Pacardo, Rodolfo
Gallo and Pilar Manta?
A: Yes, ma'am.
Q: What was the conversation that transpired among you before you demanded
the return of your money and documents?
A: When I tried to withdraw my application as well as my money, Mr. Gallo told me
"I know nothing about your money" while Pilar Manta and Fides Pacardo told me,
why should I withdraw my application and my money when I was about to be
[deployed] or I was about to leave.
xxxx
Q: And what transpired at that office after this Panuncio introduced you to those
persons whom you just mentioned?
A: The three of them including Rodolfo Gallo told me that the placement fee in that
agency is Php 150,000.00 and then I should deposit the amount of Php 45,000.00.
After I have deposited said amount, I would just wait for few days...
xxxx
Q: They were the one (sic) who told you that you have to pay Php 45,000.00 for
deposit only?
A: Yes, ma'am, I was told by them to deposit Php 45,000.00 and then I would pay
the remaining balance of Php105,000.00, payment of it would be through salary
deduction.
Q: That is for what Mr. Witness again?
A: For placement fee.
Q: Now did you believe to (sic) them?
A: Yes, ma'am.
Q: Why, why did you believe?
A: Because of the presence of the two Korean nationals and they keep on telling me
that they have sent abroad several workers and they even showed visas of the
records that they have already deployed abroad.
Q: Aside from that, was there any other representations which have been made
upon you or make you believe that they can deploy you?
A: At first I was adamant but they told me "If you do not want to believe us, then
we could do nothing." But once they showed me the [visas] of the people whom
they have deployed abroad, that was the time I believe them.
Q: So after believing on the representations, what did you do next Mr. Witness?
A: That was the time that I decided to give the money.
xxxx

PROS. MAGABLIN
Q: Do you have proof that you gave the money?
A: Yes, ma'am.
Q: Where is your proof that you gave the money?
A: I have it here.
PROS. MAGABLIN:
Witness is producing to this court a Receipt dated May 28, 2001 in the amount of
Php45,000.00 which for purposes of record Your Honor, may I request that the
same be marked in the evidence as our Exhibit "F".
xxxx
PROS. MAGABLIN
Q: There appears a signature appearing at the left bottom portion of this receipt.
Do you know whose signature is this?
A: Yes, ma'am, signature of Rodolfo Gallo.
PROS. MAGABLIN
Q: Why do you say that that is his signature?
A: Rodolfo Gallo's signature Your Honor because he was the one who received the
money and he was the one who filled up this O.R. and while he was doing it, he was
flanked by Fides Pacardo, Pilar Manta and Mardeolyn Martir.
xxxx
Q: So it was Gallo who received your money?
A: Yes, ma'am.
PROS. MAGABLIN
Q: And after that, what did this Gallo do after he received your money?
A: They told me ma'am just to call up and make a follow up with our agency.
xxxx
Q: Now Mr. Witness, after you gave your money to the accused, what happened
with the application, with the promise of employment that he promised?
A: Two (2) weeks after giving them the money, they moved to a new office in
Makati, Brgy. San Isidro.
xxxx
Q: And were they able to deploy you as promised by them?
A: No, ma'am, they were not able to send us abroad.[12]
Essentially, Dela Caza appeared very firm and consistent in positively identifying
accused-appellant as one of those who induced him and the other applicants to
part with their money. His testimony showed that accused-appellant made false
misrepresentations and promises in assuring them that after they paid the
placement fee, jobs in Korea as factory workers were waiting for them and that
they would be deployed soon. In fact, Dela Caza personally talked to accused-
appellant and gave him the money and saw him sign and issue an official receipt as
proof of his payment. Without a doubt, accused-appellants' actions constituted
illegal recruitment.
Additionally, accused-appellant cannot argue that the trial court erred in finding
that he was indeed an employee of the recruitment agency. On the contrary, his
active participation in the illegal recruitment is unmistakable. The fact that he was
the one who issued and signed the official receipt belies his profession of
innocence.
This Court likewise finds the existence of a conspiracy between the accused-
appellant and the other persons in the agency who are currently at large, resulting
in the commission of the crime of syndicated illegal recruitment.
In this case, it cannot be denied that the accused-appellent together with
Mardeolyn and the rest of the officers and employees of MPM Agency participated
in a network of deception. Verily, the active involvement of each in the recruitment
scam was directed at one single purpose - to divest complainants with their money
on the pretext of guaranteed employment abroad. The prosecution evidence shows
that complainants were briefed by Mardeolyn about the processing of their papers
for a possible job opportunity in Korea, as well as their possible salary. Likewise, Yeo
Sin Ung, a Korean national, gave a briefing about the business and what to expect
from the company. Then, here comes accused-appellant who introduced himself as
Mardeolyn's relative and specifically told Dela Caza of the fact that the agency was
able to send many workers abroad. Dela Caza was even showed several workers
visas who were already allegedly deployed abroad. Later on, accused-appellant
signed and issued an official receipt acknowledging the down payment of Dela Caza.
Without a doubt, the nature and extent of the actions of accused-appellant, as well
as with the other persons in MPM Agency clearly show unity of action towards a
common undertaking. Hence, conspiracy is evidently present.
In People v. Gamboa,[13] this Court discussed the nature of conspiracy in the
context of illegal recruitment, viz:
Conspiracy to defraud aspiring overseas contract workers was evident from the acts
of the malefactors whose conduct before, during and after the commission of the
crime clearly indicated that they were one in purpose and united in its execution.
Direct proof of previous agreement to commit a crime is not necessary as it may be
deduced from the mode and manner in which the offense was perpetrated or
inferred from the acts of the accused pointing to a joint purpose and design,
concerted action and community of interest. As such, all the accused, including
accused-appellant, are equally guilty of the crime of illegal recruitment since in a
conspiracy the act of one is the act of all.
To reiterate, in establishing conspiracy, it is not essential that there be actual proof
that all the conspirators took a direct part in every act. It is sufficient that they
acted in concert pursuant to the same objective.[14]
Estafa
The prosecution likewise established that accused-appellant is guilty of the crime of
estafa as defined under Article 315 paragraph 2(a) of the Revised Penal Code, viz:
Art. 315. Swindling (estafa). - Any person who shall defraud another by any means
mentioned hereinbelow...
xxxx
2. By means of any of the following false pretenses or fraudulent acts executed
prior to or simultaneously with the commission of the fraud:
(a) By using fictitious name, or falsely pretending to possess power, influence,
qualifications, property, credit, agency, business or imaginary transactions; or by
means of other similar deceits.
The elements of estafa in general are: (1) that the accused defrauded another (a) by
abuse of confidence, or (b) by means of deceit; and (2) that damage or prejudice
capable of pecuniary estimation is caused to the offended party or third person.[15]
Deceit is the false representation of a matter of fact, whether by words or conduct,
by false or misleading allegations, or by concealment of that which should have
been disclosed; and which deceives or is intended to deceive another so that he
shall act upon it, to his legal injury.
All these elements are present in the instant case: the accused-appellant, together
with the other accused at large, deceived the complainants into believing that the
agency had the power and capability to send them abroad for employment; that
there were available jobs for them in Korea as factory workers; that by reason or on
the strength of such assurance, the complainants parted with their money in
payment of the placement fees; that after receiving the money, accused-appellant
and his co-accused went into hiding by changing their office locations without
informing complainants; and that complainants were never deployed abroad. As all
these representations of the accused-appellant proved false, paragraph 2(a), Article
315 of the Revised Penal Code is thus applicable.
Defense of Denial Cannot Prevail
over Positive Identification
Indubitably, accused-appellant's denial of the crimes charged crumbles in the face
of the positive identification made by Dela Caza and his co-complainants as one of
the perpetrators of the crimes charged. As enunciated by this Court in People v.
Abolidor,[16] "[p]ositive identification where categorical and consistent and not
attended by any showing of ill motive on the part of the eyewitnesses on the
matter prevails over alibi and denial."
The defense has miserably failed to show any evidence of ill motive on the part of
the prosecution witnesses as to falsely testify against him.
Therefore, between the categorical statements of the prosecution witnesses, on
the one hand, and bare denials of the accused, on the other hand, the former must
prevail.[17]
Moreover, this Court accords the trial court's findings with the probative weight it
deserves in the absence of any compelling reason to discredit the same. It is a
fundamental judicial dictum that the findings of fact of the trial court are not
disturbed on appeal except when it overlooked, misunderstood or misapplied some
facts or circumstances of weight and substance that would have materially affected
the outcome of the case. We find that the trial court did not err in convicting the
accused-appellant.
WHEREFORE, the appeal is DENIED for failure to sufficiently show reversible error in
the assailed decision. The Decision dated December 24, 2008 of the CA in CA-G.R.
CR-H.C. No. 02764 is AFFIRMED. No costs. SO ORDERED.
CLAUDIO S. YAP, PETITIONER, VS. THENAMARIS SHIP'S MANAGEMENT AND
INTERMARE MARITIME AGENCIES, INC., RESPONDENTS. G.R. No. 179532, May 30,
2011
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules
of Civil Procedure, seeking the reversal of the Court of Appeals (CA) Decision[2]
dated February 28, 2007, which affirmed with modification the National Labor
Relations Commission (NLRC) resolution[3] dated April 20, 2005.
The undisputed facts, as found by the CA, are as follows:
[Petitioner] Claudio S. Yap was employed as electrician of the vessel, M/T
SEASCOUT on 14 August 2001 by Intermare Maritime Agencies, Inc. in behalf of its
principal, Vulture Shipping Limited. The contract of employment entered into by
Yap and Capt. Francisco B. Adviento, the General Manager of Intermare, was for a
duration of 12 months. On 23 August 2001, Yap boarded M/T SEASCOUT and
commenced his job as electrician. However, on or about 08 November 2001, the
vessel was sold. The Philippine Overseas Employment Administration (POEA) was
informed about the sale on 06 December 2001 in a letter signed by Capt. Adviento.
Yap, along with the other crewmembers, was informed by the Master of their
vessel that the same was sold and will be scrapped. They were also informed about
the Advisory sent by Capt. Constatinou, which states, among others:
" ...PLEASE ASK YR OFFICERS AND RATINGS IF THEY WISH TO BE TRANSFERRED TO
OTHER VESSELS AFTER VESSEL S DELIVERY (GREEK VIA ATHENS-PHILIPINOS VIA
MANILA...
...FOR CREW NOT WISH TRANSFER TO DECLARE THEIR PROSPECTED TIME FOR
REEMBARKATION IN ORDER TO SCHEDULE THEM ACCLY..."
Yap received his seniority bonus, vacation bonus, extra bonus along with the
scrapping bonus. However, with respect to the payment of his wage, he refused to
accept the payment of one-month basic wage. He insisted that he was entitled to
the payment of the unexpired portion of his contract since he was illegally
dismissed from employment. He alleged that he opted for immediate transfer but
none was made.
[Respondents], for their part, contended that Yap was not illegally dismissed. They
alleged that following the sale of the M/T SEASCOUT, Yap signed off from the vessel
on 10 November 2001 and was paid his wages corresponding to the months he
worked or until 10 November 2001 plus his seniority bonus, vacation bonus and
extra bonus. They further alleged that Yap's employment contract was validly
terminated due to the sale of the vessel and no arrangement was made for Yap's
transfer to Thenamaris' other vessels.[4]
Thus, Claudio S. Yap (petitioner) filed a complaint for Illegal Dismissal with Damages
and Attorney's Fees before the Labor Arbiter (LA). Petitioner claimed that he was
entitled to the salaries corresponding to the unexpired portion of his contract.
Subsequently, he filed an amended complaint, impleading Captain Francisco
Adviento of respondents Intermare Maritime Agencies, Inc. (Intermare) and
Thenamaris Ship's Management (respondents), together with C.J. Martionos,
Interseas Trading and Financing Corporation, and Vulture Shipping Limited/Stejo
Shipping Limited.
On July 26, 2004, the LA rendered a decision[5] in favor of petitioner, finding the
latter to have been constructively and illegally dismissed by respondents.
Moreover, the LA found that respondents acted in bad faith when they assured
petitioner of re-embarkation and required him to produce an electrician certificate
during the period of his contract, but actually he was not able to board one despite
of respondents' numerous vessels. Petitioner made several follow-ups for his re-
embarkation but respondents failed to heed his plea; thus, petitioner was forced to
litigate in order to vindicate his rights. Lastly, the LA opined that since the unexpired
portion of petitioner's contract was less than one year, petitioner was entitled to
his salaries for the unexpired portion of his contract for a period of nine months.
The LA disposed, as follows:
WHEREFORE, in view of the foregoing, a decision is hereby rendered declaring
complainant to have been constructively dismissed. Accordingly, respondents
Intermare Maritime Agency Incorporated, Thenamaris Ship's Mgt., and Vulture
Shipping Limited are ordered to pay jointly and severally complainant Claudio S. Yap
the sum of $12,870.00 or its peso equivalent at the time of payment. In addition,
moral damages of ONE HUNDRED THOUSAND PESOS (P100,000.00) and exemplary
damages of FIFTY THOUSAND PESOS (P50,000.00) are awarded plus ten percent
(10%) of the total award as attorney's fees.
Other money claims are DISMISSED for lack of merit. SO ORDERED.
Aggrieved, respondents sought recourse from the NLRC.
In its decision[7] dated January 14, 2005, the NLRC affirmed the LA's findings that
petitioner was indeed constructively and illegally dismissed; that respondents' bad
faith was evident on their wilful failure to transfer petitioner to another vessel; and
that the award of attorney's fees was warranted. However, the NLRC held that
instead of an award of salaries corresponding to nine months, petitioner was only
entitled to salaries for three months as provided under Section 10[8] of Republic
Act (R.A.) No. 8042,[9] as enunciated in our ruling in Marsaman Manning Agency,
Inc. v. National Labor Relations Commission.[10] Hence, the NLRC ruled in this wise:
WHEREFORE, premises considered, the decision of the Labor Arbiter finding the
termination of complainant illegal is hereby AFFIRMED with a MODIFICATION.
Complainant['s] salary for the unexpired portion of his contract should only be
limited to three (3) months basic salary.
Respondents Intermare Maritime Agency, Inc.[,] Vulture Shipping Limited and
Thenamaris Ship Management are hereby ordered to jointly and severally pay
complainant, the following:
1. Three (3) months basic salary - US$4,290.00 or its peso equivalent at the time of
actual payment.
2. Moral damages - P100,000.00
3. Exemplary damages - P50,000.00
4. Attorney's fees equivalent to 10% of the total monetary award.
SO ORDERED.
Respondents filed a Motion for Partial Reconsideration,[12] praying for the reversal
and setting aside of the NLRC decision, and that a new one be rendered dismissing
the complaint. Petitioner, on the other hand, filed his own Motion for Partial
Reconsideration,[13] praying that he be paid the nine (9)-month basic salary, as
awarded by the LA.
On April 20, 2005, a resolution[14] was rendered by the NLRC, affirming the findings
of Illegal Dismissal and respondents' failure to transfer petitioner to another vessel.
However, finding merit in petitioner's arguments, the NLRC reversed its earlier
Decision, holding that "there can be no choice to grant only three (3) months salary
for every year of the unexpired term because there is no full year of unexpired term
which this can be applied." Hence -
WHEREFORE, premises considered, complainant's Motion for Partial
Reconsideration is hereby granted. The award of three (3) months basic salary in
the sum of US$4,290.00 is hereby modified in that complainant is entitled to his
salary for the unexpired portion of employment contract in the sum of
US$12,870.00 or its peso equivalent at the time of actual payment.
All aspect of our January 14, 2005 Decision STANDS.
SO ORDERED.
Respondents filed a Motion for Reconsideration, which the NLRC denied.
Undaunted, respondents filed a petition for certiorari[16] under Rule 65 of the
Rules of Civil Procedure before the CA. On February 28, 2007, the CA affirmed the
findings and ruling of the LA and the NLRC that petitioner was constructively and
illegally dismissed. The CA held that respondents failed to show that the NLRC acted
without statutory authority and that its findings were not supported by law,
jurisprudence, and evidence on record. Likewise, the CA affirmed the lower
agencies' findings that the advisory of Captain Constantinou, taken together with
the other documents and additional requirements imposed on petitioner, only
meant that the latter should have been re-embarked. In the same token, the CA
upheld the lower agencies' unanimous finding of bad faith, warranting the
imposition of moral and exemplary damages and attorney's fees. However, the CA
ruled that the NLRC erred in sustaining the LA's interpretation of Section 10 of R.A.
No. 8042. In this regard, the CA relied on the clause "or for three months for every
year of the unexpired term, whichever is less" provided in the 5th paragraph of
Section 10 of R.A. No. 8042 and held:
In the present case, the employment contract concerned has a term of one year or
12 months which commenced on August 14, 2001. However, it was preterminated
without a valid cause. [Petitioner] was paid his wages for the corresponding months
he worked until the 10th of November. Pursuant to the provisions of Sec. 10, [R.A.
No.] 8042, therefore, the option of "three months for every year of the unexpired
term" is applicable.[17]
Thus, the CA provided, to wit:
WHEREFORE, premises considered, this Petition for Certiorari is DENIED. The
Decision dated January 14, 2005, and Resolutions, dated April 20, 2005 and July 29,
2005, respectively, of public respondent National Labor Relations Commission-
Fourth Division, Cebu City, in NLRC No. V-000038-04 (RAB VIII (OFW)-04-01-0006)
are hereby AFFIRMED with the MODIFICATION that private respondent is entitled
to three (3) months of basic salary computed at US$4,290.00 or its peso equivalent
at the time of actual payment.
Costs against Petitioners.[18]
Both parties filed their respective motions for reconsideration, which the CA,
however, denied in its Resolution[19] dated August 30, 2007.
Unyielding, petitioner filed this petition, raising the following issues:
1) Whether or not Section 10 of R.A. [No.] 8042, to the extent that it affords an
illegally dismissed migrant worker the lesser benefit of - "salaries for [the]
unexpired portion of his employment contract or for three (3) months for every
year of the unexpired term, whichever is less" - is constitutional; and
2) Assuming that it is, whether or not the Court of Appeals gravely erred in granting
petitioner only three (3) months backwages when his unexpired term of 9 months is
far short of the "every year of the unexpired term" threshold.[20]
In the meantime, while this case was pending before this Court, we declared as
unconstitutional the clause "or for three months for every year of the unexpired
term, whichever is less" provided in the 5th paragraph of Section 10 of R.A. No.
8042 in the case of Serrano v. Gallant Maritime Services, Inc.[21] on March 24,
2009.
Apparently, unaware of our ruling in Serrano, petitioner claims that the 5th
paragraph of Section 10, R.A. No. 8042, is violative of Section 1,[22] Article III and
Section 3,[23] Article XIII of the Constitution to the extent that it gives an erring
employer the option to pay an illegally dismissed migrant worker only three months
for every year of the unexpired term of his contract; that said provision of law has
long been a source of abuse by callous employers against migrant workers; and that
said provision violates the equal protection clause under the Constitution because,
while illegally dismissed local workers are guaranteed under the Labor Code of
reinstatement with full backwages computed from the time compensation was
withheld from them up to their actual reinstatement, migrant workers, by virtue of
Section 10 of R.A. No. 8042, have to waive nine months of their collectible
backwages every time they have a year of unexpired term of contract to reckon
with. Finally, petitioner posits that, assuming said provision of law is constitutional,
the CA gravely abused its discretion when it reduced petitioner's backwages from
nine months to three months as his nine-month unexpired term cannot
accommodate the lesser relief of three months for every year of the unexpired
term.[24]
On the other hand, respondents, aware of our ruling in Serrano, aver that our
pronouncement of unconstitutionality of the clause "or for three months for every
year of the unexpired term, whichever is less" provided in the 5th paragraph of
Section 10 of R.A. No. 8042 in Serrano should not apply in this case because Section
10 of R.A. No. 8042 is a substantive law that deals with the rights and obligations of
the parties in case of Illegal Dismissal of a migrant worker and is not merely
procedural in character. Thus, pursuant to the Civil Code, there should be no
retroactive application of the law in this case. Moreover, respondents asseverate
that petitioner's tanker allowance of US$130.00 should not be included in the
computation of the award as petitioner's basic salary, as provided under his
contract, was only US$1,300.00. Respondents submit that the CA erred in its
computation since it included the said tanker allowance. Respondents opine that
petitioner should be entitled only to US$3,900.00 and not to US$4,290.00, as
granted by the CA. Invoking Serrano, respondents claim that the tanker allowance
should be excluded from the definition of the term "salary." Also, respondents
manifest that the full sum of P878,914.47 in Intermare's bank account was
garnished and subsequently withdrawn and deposited with the NLRC Cashier of
Tacloban City on February 14, 2007. On February 16, 2007, while this case was
pending before the CA, the LA issued an Order releasing the amount of P781,870.03
to petitioner as his award, together with the sum of P86,744.44 to petitioner's
former lawyer as attorney's fees, and the amount of P3,570.00 as execution and
deposit fees. Thus, respondents pray that the instant petition be denied and that
petitioner be directed to return to Intermare the sum of US$8,970.00 or its peso
equivalent.[25]
On this note, petitioner counters that this new issue as to the inclusion of the
tanker allowance in the computation of the award was not raised by respondents
before the LA, the NLRC and the CA, nor was it raised in respondents' pleadings
other than in their Memorandum before this Court, which should not be allowed
under the circumstances.[26]
The petition is impressed with merit.
Prefatorily, it bears emphasis that the unanimous finding of the LA, the NLRC and
the CA that the dismissal of petitioner was illegal is not disputed. Likewise not
disputed is the tribunals' unanimous finding of bad faith on the part of respondents,
thus, warranting the award of moral and exemplary damages and attorney's fees.
What remains in issue, therefore, is the constitutionality of the 5th paragraph of
Section 10 of R.A. No. 8042 and, necessarily, the proper computation of the lump-
sum salary to be awarded to petitioner by reason of his illegal dismissal.
Verily, we have already declared in Serrano that the clause "or for three months for
every year of the unexpired term, whichever is less" provided in the 5th paragraph
of Section 10 of R.A. No. 8042 is unconstitutional for being violative of the rights of
Overseas Filipino Workers (OFWs) to equal protection of the laws. In an exhaustive
discussion of the intricacies and ramifications of the said clause, this Court, in
Serrano, pertinently held:
The Court concludes that the subject clause contains a suspect classification in that,
in the computation of the monetary benefits of fixed-term employees who are
illegally discharged, it imposes a 3-month cap on the claim of OFWs with an
unexpired portion of one year or more in their contracts, but none on the claims of
other OFWs or local workers with fixed-term employment. The subject clause
singles out one classification of OFWs and burdens it with a peculiar
disadvantage.[27]
Moreover, this Court held therein that the subject clause does not state or imply
any definitive governmental purpose; hence, the same violates not just therein
petitioner's right to equal protection, but also his right to substantive due process
under Section 1, Article III of the Constitution.[28] Consequently, petitioner therein
was accorded his salaries for the entire unexpired period of nine months and 23
days of his employment contract, pursuant to law and jurisprudence prior to the
enactment of R.A. No. 8042.
We have already spoken. Thus, this case should not be different from Serrano.
As a general rule, an unconstitutional act is not a law; it confers no rights; it imposes
no duties; it affords no protection; it creates no office; it is inoperative as if it has
not been passed at all. The general rule is supported by Article 7 of the Civil Code,
which provides:
Art. 7. Laws are repealed only by subsequent ones, and their violation or non-
observance shall not be excused by disuse or custom or practice to the contrary.
The doctrine of operative fact serves as an exception to the aforementioned
general rule. In Planters Products, Inc. v. Fertiphil Corporation,[29] we held:
The doctrine of operative fact, as an exception to the general rule, only applies as a
matter of equity and fair play. It nullifies the effects of an unconstitutional law by
recognizing that the existence of a statute prior to a determination of
unconstitutionality is an operative fact and may have consequences which cannot
always be ignored. The past cannot always be erased by a new judicial declaration.
The doctrine is applicable when a declaration of unconstitutionality will impose an
undue burden on those who have relied on the invalid law. Thus, it was applied to a
criminal case when a declaration of unconstitutionality would put the accused in
double jeopardy or would put in limbo the acts done by a municipality in reliance
upon a law creating it.[30]
Following Serrano, we hold that this case should not be included in the
aforementioned exception. After all, it was not the fault of petitioner that he lost
his job due to an act of illegal dismissal committed by respondents. To rule
otherwise would be iniquitous to petitioner and other OFWs, and would, in effect,
send a wrong signal that principals/employers and recruitment/manning agencies
may violate an OFW's security of tenure which an employment contract embodies
and actually profit from such violation based on an unconstitutional provision of
law.
In the same vein, we cannot subscribe to respondents' postulation that the tanker
allowance of US$130.00 should not be included in the computation of the lump-
sum salary to be awarded to petitioner.
First. It is only at this late stage, more particularly in their Memorandum, that
respondents are raising this issue. It was not raised before the LA, the NLRC, and
the CA. They did not even assail the award accorded by the CA, which computed
the lump-sum salary of petitioner at the basic salary of US$1,430.00, and which
clearly included the US$130.00 tanker allowance. Hence, fair play, justice, and due
process dictate that this Court cannot now, for the first time on appeal, pass upon
this question. Matters not taken up below cannot be raised for the first time on
appeal. They must be raised seasonably in the proceedings before the lower
tribunals. Questions raised on appeal must be within the issues framed by the
parties; consequently, issues not raised before the lower tribunals cannot be raised
for the first time on appeal.[31]
Second. Respondents' invocation of Serrano is unavailing. Indeed, we made the
following pronouncements in Serrano, to wit:
The word salaries in Section 10(5) does not include overtime and leave pay. For
seafarers like petitioner, DOLE Department Order No. 33, series 1996, provides a
Standard Employment Contract of Seafarers, in which salary is understood as the
basic wage, exclusive of overtime, leave pay and other bonuses; whereas overtime
pay is compensation for all work "performed" in excess of the regular eight hours,
and holiday pay is compensation for any work "performed" on designated rest days
and holidays.[32]
A close perusal of the contract reveals that the tanker allowance of US$130.00 was
not categorized as a bonus but was rather encapsulated in the basic salary clause,
hence, forming part of the basic salary of petitioner. Respondents themselves in
their petition for certiorari before the CA averred that petitioner's basic salary,
pursuant to the contract, was "US$1,300.00 + US$130.00 tanker allowance."[33] If
respondents intended it differently, the contract per se should have indicated that
said allowance does not form part of the basic salary or, simply, the contract should
have separated it from the basic salary clause.
A final note.
We ought to be reminded of the plight and sacrifices of our OFWs. In Olarte v.
Nayona,[34] this Court held that:
Our overseas workers belong to a disadvantaged class. Most of them come from
the poorest sector of our society. Their profile shows they live in suffocating slums,
trapped in an environment of crimes. Hardly literate and in ill health, their only
hope lies in jobs they find with difficulty in our country. Their unfortunate
circumstance makes them easy prey to avaricious employers. They will climb
mountains, cross the seas, endure slave treatment in foreign lands just to survive.
Out of despondence, they will work under sub-human conditions and accept
salaries below the minimum. The least we can do is to protect them with our laws.

WHEREFORE, the Petition is GRANTED. The Court of Appeals Decision dated

February 28, 2007 and Resolution dated August 30, 2007 are hereby MODIFIED to
the effect that petitioner is AWARDED his salaries for the entire unexpired portion
of his employment contract consisting of nine months computed at the rate of
US$1,430.00 per month. All other awards are hereby AFFIRMED. No costs. SO
ORDERED.
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. G.R. Nos. L-58674-77 July 11, 1990
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 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
m•re 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. "
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 be prima 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.
TRANS ACTION OVERSEAS CORPORATION, Petitioner, v. THE HONORABLE On April 5, 1991, then Labor Undersecretary Nieves R. Confesor rendered the
SECRETARY OF LABOR, ROSELLE CASTIGADOR, JOSEFINA MAMON, JENELYN CASA, assailed order, the dispositive portion of which reads:jgc:chanrobles.com.ph
PEACHY LANIOG, VERDELINA BELGIRA, ELMA FLORES, RAMONA LITURCO, GRACE
SABANDO, GLORIA PALMA, AVELYN ALVAREZ, CANDELARIA NONO, NITA "WHEREFORE, respondents are hereby ordered to pay, jointly and severally, the
BUSTAMANTE, CYNTHIA ARANDILLO, SANDIE AGUILAR, DIGNA PANAGUITON, following claims:
VERONICA BAYOGOS, JULIANITA ARANADOR, LEONORA CABALLERO, NANCY
BOLIVAR, NIMFA BUCOL, ZITA GALINDO, ESTELITA BIOCOS, MARJORIE MACATE, 1. Rosele Castigador P14,000.00
RUBY SEPULVIDA, ROSALIE SONDIA, NORA MAQUILING, PAULINA CORDERO, 2. Josefina Mamon 3,000.00
LENIROSE ABANGAN, SELFA PALMA, ANTONIA NAVARRO, ELSIE PENARUBIA, 3. Jenelyn Casa 3,000.00
IRMA SOBREQUIL, SONY JAMUAT, CLETA MAYO, Respondents. 4. Peachy Laniog 13,500.00
5. Verdelina Belgira 2,000.00
ROMERO, J.: 6. Elma Flores 2,500.00
7. Ramona Liturco 2,500.00
The issue presented in the case at bar is whether or not the Secretary of Labor and 8. Grace Sabando 3,500.00
Employment has jurisdiction to cancel or revoke the license of a private fee- 9. Gloria Palma 1,500.00
charging employment agency. 10. Avelyn Alvarez 1,500.00
11. Candelaria Nono 1,000.00
From July 24 to September 9, 1987, petitioner Trans Action Overseas Corporation, a 12. Nita Bustamante 5,000.00
private fee-charging employment agency, scoured Iloilo City for possible recruits for 13. Cynthia Arandillo 1,000.00
alleged job vacancies in Hongkong. Private respondents sought employment as 14. Sandie Aguilar 3,000.00
domestic helpers through petitioner’s employees, Luzviminda Aragon, Ben Hur 15. Digna Panaguiton 2,500.00
Domincil and his wife Cecille. The applicants paid placement fees ranging from 16. Veronica Bayogos 2,000.00
P1,000.00 to P14,000.00 but petitioner failed to deploy them. Their demands for 17. Sony Jamuat 4,500.00
refund proved unavailing; thus, they were constrained to institute complaints 18. Irma Sobrequil 2,000.00
against petitioner for violation of Articles 32 and 34(a) 1 of the Labor Code, as 19. Elsie Penarubia 2,000.00
amended. 20. Antonia Navarro 2,000.00
21. Selfa Palma 3,000.00
Petitioner denied having received the amounts allegedly collected from 22. Lenirose Abangan 13,300.00
respondents, and averred that Aragon, whose only duty was to pre-screen and 23. Paulina Cordero 1,400.00
interview applicants, and the spouses Domincil were not authorized to collect fees 24. Nora Maquiling 2,000.00
from the applicants. Accordingly, it cannot be held liable for the money claimed by 25. Rosalie Sondia 2,000.00
respondents. Petitioner maintains that it even warned respondents not to give any 26. Ruby Sepulvida 3,500.00
money to unauthorized individuals. 27. Marjorie Macate 1,500.00
28. Estelita Biocos 3,000.00
POEA Regional Extension Unit Coordinator Edgar Somes testified that although he 29. Zita Galindo 3,500.00
was aware that petitioner collected fees from respondents, the latter insisted that 30. Nimfa Bucol 1,000.00
they be allowed to make the payments on the assumption that it could hasten their 31. Nancy Bolivar 2,000.00
deployment abroad. He added that Mrs. Honorata Manliclic, a representative of 32. Leonora Caballero 13,900.00
petitioner tasked to oversee the conduct of the interviews, told him that she was 33. Julianita Aranador 14,000.00
leaving behind presigned receipts to Aragon as she cannot stay in Iloilo City for the
screening of the applicants. Manliclic, however, denied this version and argued that The complaints of Ma. Luz Alingasa, Nimfa Perez, and Cleta Mayo are hereby
it was Somes who instructed her to leave the receipts behind as it was perfectly dismissed in view of their desistance.
alright to collect fees.
The following complaints are hereby dismissed for failure to jurisdiction to hear and decide illegal recruitment cases, including the authority to
appear/prosecute:chanrob1es virtual 1aw library cancel recruitment licenses, or (2) the cancellation order based on the 1987 POEA
Schedule of Penalties is not valid for non-compliance with the Revised
1. Jiyasmin Bantillo 6. Edna Salvante Administrative Code of 1987 regarding its registration with the U.P. Law Center.
2. Rosa de Luna Senail 7. Thelma Beltiar
3. Elnor Bandojo 8. Cynthia Cepe Under Executive Order No. 797 3 (E.O. No. 797) and Executive Order No. 247 (E.O.
4. Teresa Caldeo 9. Rosie Pavillon No. 247), 4 the POEA was established and mandated to assume the functions of the
5. Virginia Castroverde Overseas Employment Development Board (OEDB), the National Seamen Board
(NSB), and the overseas employment function of the Bureau of Employment
The complaints filed by the following are hereby dismissed for lack of Services (BES). Petitioner theorizes that when POEA absorbed the powers of these
evidence:chanrob1es virtual 1aw library agencies, Article 35 of the Labor Code, as amended, was rendered ineffective.

1. Aleth Palomaria 5. Mary Ann Beboso
2. Emely Padrones 6. Josefina Tejero
3. Marybeth Aparri 7. Bernadita Aprong
4. Lenia Biona 8. Joji Lull
Respondent agency is liable for twenty eight (28) counts of violation of Article 32
and five (5) counts of Article 34 (a) with a corresponding suspension in the
aggregate period of sixty six (66) months. Considering however, that under the
schedule of penalties, any suspension amounting to a period of 12 months merits
the imposition of the penalty of cancellation, the license of respondent TRANS
ACTION OVERSEAS CORPORATION to participate in the overseas placement and
recruitment of workers is hereby ordered CANCELLED, effective immediately.
SO ORDERED." 2 (Emphasis supplied)
On April 29, 1991, petitioner filed its Motion for Temporary Lifting of Order of
Cancellation alleging, among other things, that to deny it the authority to engage in
placement and recruitment activities would jeopardize not only its contractual
relations with its foreign principals, but also the welfare, interests, and livelihood of
recruited workers scheduled to leave for their respective assignments. Finally, it
manifested its willingness to post a bond to insure payment of the claims to be
awarded, should its appeal or motion be denied.
Finding the motion to be well taken, Undersecretary Confesor provisionally lifted
the cancellation of petitioner’s license pending resolution of its Motion for
Reconsideration filed on May 6, 1991. On January 30, 1992, however, petitioner’s
motion for reconsideration was eventually denied for lack of merit, and the April 5,
1991 order revoking its license was reinstated.
The power to suspend or cancel any license or authority to recruit employees for
overseas employment is vested upon the Secretary of Labor and Employment.
Article 35 of the Labor Code, as amended, which provides:
"ART. 35. Suspension and/or Cancellation of License or Authority. — The
Minister of Labor shall have the power to suspend or cancel any license or authority
to recruit employees for overseas employment for violation of rules and regulations
issued by the Ministry of Labor, the Overseas Employment Development Board, and
the National Seamen Board, or for violation of the provisions of this and other
applicable laws, General Orders and Letters of Instructions."
In the case of Eastern Assurance and Surety Corp. v. Secretary of Labor, 5 we held
that:
"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 those 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, 6 ‘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

Petitioner contends that Secretary Confesor acted with grave abuse of discretion in 2) any other violation of pertinent provisions of the Labor Code and other
rendering the assailed orders on alternative grounds, viz.: (1) it is the Philippine relevant laws, rules and regulations.
Overseas Employment Administration (POEA) which has the exclusive and original
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.’" 8 (Emphasis supplied)

This power conferred upon the Secretary of Labor and Employment was echoed in
People v. Diaz, 9 viz.:

"A non-licensee or non-holder of authority means any person, corporation or entity

which has not been issued a valid license or authority to engage in recruitment and
placement by the Secretary of Labor, or whose license or authority has been
suspended, revoked or cancelled by the POEA or the Secretary." (Emphasis
supplied)

In view of the Court’s disposition on the matter, we rule that the power to suspend
or cancel any license or authority to recruit employees for overseas employment is
concurrently vested with the POEA and the Secretary of Labor.

As regards petitioner’s alternative argument that the non-filing of the 1987 POEA
Schedule of Penalties with the UP Law Center rendered it ineffective and, hence,
cannot be utilized as basis for penalizing them, we agree with Secretary Confesor’s
explanation, to wit:

"On the other hand, the POEA Revised Rules on the Schedule of Penalties was
issued pursuant to Article 34 of the Labor Code, as amended. The same merely
amplified and particularized the various violations of the rules and regulations of
the POEA and clarified and specified the penalties therefore (sic). Indeed, the
questioned schedule of penalties contains only a listing of offenses. It does not
prescribe additional rules and regulations governing overseas employment but only
detailed the administrative sanctions imposable by this Office for some enumerated
prohibited acts.

Under the circumstances, the license of the respondent agency was cancelled on
the authority of Article 35 of the Labor Code, as amended, and not pursuant to the
1987 POEA Revised Rules on Schedule of Penalties." 10

WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED.

Accordingly, the decision of the Secretary of Labor dated April 5, 1991, is
AFFIRMED. No costs. SO ORDERED.
REPUBLIC OF THE PHILIPPINES, represented by the ADMINISTRATOR OF THE
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), Petitioner, v.
PRINCIPALIA MANAGEMENT AND PERSONNEL CONSULTANTS, INCORPORATED,
Respondent.
YNARES-SANTIAGO, J.:
Petitioner assails the September 20, 2004 Resolution1 of the Court of Appeals in
CA-G.R. SP No. 86170, dismissing outright the petition for certiorari for failure to
attach copies of all relevant pleadings and transcripts of the hearings, as well as the
March 29, 2005 Resolution2 denying the motion for reconsideration.
This case stemmed from two separate complaints filed before the Philippine
Overseas Employment Administration (POEA) against Principalia Management and
Personnel Consultants, Incorporated (Principalia) for violation of the 2002 POEA
Rules and Regulations. The first complaint dated July 16, 2003 filed by Ruth Yasmin
Concha (Concha) was docketed as POEA Case No. RV 03-07-1497. The second
complaint dated October 14, 2003 filed by Rafael E. Baldoza (Baldoza) was docketed
as POEA Case No. RV 03-07-1453.
In the first complaint, Concha alleged that in August 2002, she applied with
Principalia for placement and employment as caregiver or physical therapist in the
USA or Canada. Despite paying P20,000.00 out of the P150,000.00 fee required by
Principalia which was not properly receipted, Principalia failed to deploy Concha for
employment abroad.3
In its March 15, 2004 Order,4 the Adjudication Office of the POEA found Principalia
liable for violations of the 2002 POEA Rules and Regulations, particularly for
collecting a fee from the applicant before employment was obtained; for non-
issuance of official receipt; and for misrepresenting that it was able to secure
employment for Concha. For these infractions, Principalia's license was ordered
suspended for 12 months or in lieu thereof, Pricipalia is ordered to pay a fine of
P120,000.00 and to refund Concha's placement fee of P20,000.00.
Baldoza initiated the second complaint on October 14, 20035 alleging that
Principalia assured him of employment in Doha, Qatar as a machine operator with a
monthly salary of $450.00. After paying P20,000.00 as placement fee, he departed
for Doha, Qatar on May 31, 2003 but when he arrived at the jobsite, he was made
to work as welder, a job which he had no skills. He insisted that he was hired as
machine operator but the alternative position offered to him was that of helper,
which he refused. Thus, he was repatriated on July 5, 2003.
On November 12, 2003, Baldoza and Principalia entered into a compromise
agreement with quitclaim and release whereby the latter agreed to redeploy
Baldoza for employment abroad. Principalia, however, failed to deploy Baldoza as
agreed hence, in an Order dated April 29, 2004,6 the POEA suspended Principalia's
documentary processing.
Principalia moved for reconsideration which the POEA granted on June 25, 2004.7
The latter lifted its order suspending the documentary processing by Principalia
after noting that it exerted efforts to obtain overseas employment for Baldoza
within the period stipulated in the settlement agreement but due to Baldoza's lack
of qualification, his application was declined by its foreign principal.
Meanwhile, on June 14, 2004, or before the promulgation of POEA's order lifting
the suspension, Principalia filed a Complaint8 (Complaint) against Rosalinda D.
Baldoz in her capacity as Administrator of POEA and Atty. Jovencio R. Abara in his
capacity as POEA Conciliator, before the Regional Trial Court (RTC) of Mandaluyong
City for "Annulment of Order for Suspension of Documentation Processing with
Damages and Application for Issuance of a Temporary Restraining Order and/or
Writ of Preliminary Injunction, and a Writ of Preliminary Mandatory Injunction."
Principalia claimed that the suspension of its documentary processing would ruin its
reputation and goodwill and would cause the loss of its applicants, employers and
principals. Thus, a writ of preliminary injunction and a writ of mandatory injunction
must be issued to prevent serious and irreparable damage to it.
On June 14, 2004,9 Judge Paulita B. Acosta-Villarante of the RTC of Mandaluyong
City, Branch 211, granted a 72-hour restraining order enjoining Administrator
Baldoz and Atty. Abara to refrain from imposing the suspension orders before the
matter can be heard in full. On June 17, 2004,10 Judge Rizalina T. Capco-Umali, RTC
of Mandaluyong City, Branch 212, held thus:
WHEREFORE, in order to preserve status quo ANTE, the prayer for a Temporary
Restraining Order is hereby GRANTED enjoining the defendant[s] ROSALINDA D.
BALDOZ and ATTY. JOVENCIO ABARA, other officers of Philippine Overseas
Employment Administration, their subordinates, agents, representatives and all
other persons acting for and in their behalf, for (sic) implementing the Orders of
Suspension under VC No. LRD 03-100-95 and POEA Case No. RV-03-07-1497.
Let the hearing on Preliminary Injunction and Preliminary Mandatory Injunction be
set on June 22, 2004 at 1:30 o'clock in the afternoon.ςηαñrοblεš νιr†υαl
lαω lιbrαrÿ
SO ORDERED.
After the hearing on the preliminary injunction, Administrator Baldoz and Atty.
Abara submitted their Memorandum (Memorandum).12 In an Order dated July 2,
2004,13 the trial court held that the issue on the application for preliminary
mandatory injunction has become moot because POEA had already released the
renewal of license of Principalia. However, on the issue against the implementation
of the order of suspension, the trial court resolved, to wit:
Accordingly, the only issue left for the resolution of this Court is whether or not a
Writ of Preliminary Prohibitory Injunction will lie against the immediate
implementation of the Order of Suspension of License of the Plaintiff dated March
15, 2004 under POEA case No. RV-03-07-1497, issued by the POEA Administrator
Rosalinda D. Baldoz.
In support of its Application for a Writ of Preliminary Prohibitory Injunction, Plaintiff
presented evidence to prove the following:
(1) that it has a license,
(2) that the said license was renewed,
(3) the existence of the two (2) suspension orders subject of this case;
(4) the irreparable damages to the Plaintiff.
The defendants on the other hand did not present evidence to controvert the
evidence of the plaintiff. Instead, defendants submitted a Memorandum.
Upon a careful evaluation and assessment of the evidence by the plaintiff and their
respective memoranda of the parties, this Court finds the need to issue the Writ of
Preliminary Prohibitory Injunction prayed for by the plaintiff.
It bears stressing that the Order of Suspension dated March 15, 2004 is still pending
appeal before the Office of the Secretary of Labor and Employment.
It is likewise significant to point out that the said Order dated March 15, 2004 does
not categorically state that the suspension of Plaintiff's License is immediately
executory contrary to the contention of the defendants.
Counsel for POEA argued that the basis for the immediate implementation thereof
is Section 5, Rule V, Part VI of the 2002 POEA Rules and Regulation, which is quoted
hereunder, as follows:
"Section 5. Stay of Execution. The decision of the Administration shall be stayed
during the pendency of the appeal; Provided that where the penalty imposed
carried the maximum penalty of twelve (12) months suspension o[r] cancellation of
license, the decision shall be immediately executory despite pendency of the
appeal."
The Order dated March 15, 2004 decreed Plaintiff as having violated Section 2 (a)
(d) and (e) of Rule I, Part VI of the POEA Rules and Regulations and the Plaintiffs was
imposed the penalty of twelve (12) months suspension of license (or in lieu, to pay
fine of P120,000, it being it[s] first offense).
Violation of Section 2 (a) (d) and (e) Rule I, Part VI of POEA Rules and Regulations
imposes a penalty of two (2) months to six (6) months suspension of license for the
FIRST offender (sic). And in the absence of mitigating or aggravating circumstance,
the medium range of the imposable penalty which is four (4) months shall be meted
out. Being a first offender, the plaintiff was imposed suspension of license for four
(4) months for each violation or an aggregate period of suspension for twelve (12)
months for the three (3) violations.
It was not however made clear in the Order of Suspension dated March 15, 2004
that the Plaintiff's case falls under the EXCEPTION under Section 5 Rule V, Part VI of
the 2002 POEA Rules and Regulation, warranting the immediate implementation
thereof even if an appeal is pending with the POEA.
The Plaintiff had established that even if it has been granted a renewal license, but
if the same is suspended under the March 15, 2004 Order in POEA case No. RV-03-
07-1497, it could not use the license to do business. As earlier mentioned, the said
Order is still pending appeal.
In the meantime that the appeal has not been resolved, Plaintiff's clients/principals
will have to look for other agencies here and abroad, to supply their needs for
employees and workers. The end result would be a tremendous loss and even
closure of its business. More importantly, Plaintiff's reputation would be tarnished
and it would be difficult, if not impossible for it to regain its existing clientele if the
immediate implementation of the suspension of its license continues.
The defendants and even the POEA, upon the other hand, will not suffer any
damage, if the immediate implementation of the suspension of plaintiff's license as
decreed in the March 15, 2004 Order, is enjoined.
WHEREFORE, as prayed for by the Plaintiff, the application for the issuance of the
Writ of Preliminary Prohibitory Injunction is hereby GRANTED, upon posting of a
bond in the amount of FIVE HUNDRED THOUSAND PESOS (Php 500,000.00),
enjoining and restraining the Defendants ROSALINDA D. BALDOZ and Atty. Jovencio
Abarra (sic), other officers of the POEA, their subordinates, agents, representative,
and all other persons acting for and in their behalf, from immediately implementing
the Order of Suspension dated March 15, 2004 under POEA Case No. RV-03-07-
1497.
The Writ of Preliminary Prohibitory Injunction shall be in full force and effect
immediately upon receipt thereof and to be carried out on subsequent days
thereafter pending the termination of this case and/or unless a contrary Order is
issued by this court.14 (Emphasis supplied)ςrαlαωlιbrαrÿ
The trial court stressed that it issued the injunctive writ because the order of
suspension dated March 15, 2004 is still pending appeal before the Office of the
Secretary of Labor and Employment; that there is a possibility that Principalia will
suffer tremendous losses and even closure of business pending appeal; that POEA
will not suffer any damage if the immediate implementation of the suspension of
Principalia is enjoined; that the order does not categorically state that the
suspension of the license is immediately executory.
POEA appealed to the Court of Appeals which was dismissed15 outright for failure
of POEA to attach copies of its Memorandum dated June 30, 2004, as well as the
transcripts of the hearings conducted on June 22, 2004 and June 29, 2004 as
required under Section 3 of Rule 46 of the Rules of Court. POEA's motion for
reconsideration was denied16 hence, this petition on the following grounds:
I
SECTION 1, RULE 65 OF THE REVISED RULES OF COURT REQUIRES ONLY THAT THE
PETITION SHOULD BE ACCOMPANIED BY CERTIFIED TRUE COPIES OF THE
JUDGMENT, ORDER OR RESOLUTION SUBJECT THEREOF AND OTHER DOCUMENTS
RELEVANT AND PERTINENT THERETO. PETITIONER ATTACHED ALL THE DOCUMENTS
PERTINENT TO THE PETITION FILED WITH THE COURT OF APPEALS.
II
THE REGIONAL TRIAL COURT GRAVELY ABUSED ITS DISCRETION WHEN IT GRANTED
RESPONDENT PRICIPALIA'S APPLICATION FOR A WRIT OF PRELIMINARY INJUNCTION
DESPITE THE ABSENCE OF A CLEAR AND CONVINCING RIGHT TO THE RELIEF
DEMANDED.
III
THE REGIONAL TRIAL COURT COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT
GRANTED RESPONDENT PRINCIPALIA'S APPLICATION DESPITE THE ABSENCE OF
PROOF OF IRREPARABLE DAMAGE AS REQUIRED UNDER THE RULES OF COURT.
IV
THE INJUNCTIVE WRIT ISSUED BY THE REGIONAL TRIAL COURT DOES NOT LIE TO
ENJOIN AN ACCOMPLISHED ACT.
V
THE ISSUANCE OF AN INJUNCTIVE WRIT BY THE REGIONAL TRIAL COURT IS
TANTAMOUNT TO THE REVERSAL OF THE PRESUMPTION OF REGULARITY OF AN
OFFICIAL ACT.17
The core issues for resolution are as follows: (1) whether the Court of Appeals erred
in dismissing the Petition for Certiorari based on purely technical grounds; and (2)
whether the trial court erred in issuing the writ of preliminary injunction.
POEA avers that the Court of Appeals' Resolution dismissing outright the petition
for certiorari is not valid because the documents attached to the petition
substantially informed the Court of Appeals that the trial court gravely abused its
discretion in granting the preliminary injunction. Thus, the attached documents
were sufficient to render an independent assessment of its improvident issuance.
We disagree.
The Court of Appeals dismissed the petition for certiorari due to POEA's failure to
comply with Section 3, Rule 46 and Section 1, Rule 65 of the Rules of Court which
read as follows:
RULE 46
SEC. 3. Contents and filing of petition; effect of non-compliance with requirements.
- The petition shall contain the full names and actual addresses of all the petitioners
and respondents, a concise statement of the matters involved, the factual
background of the case, and the grounds relied upon for the relief prayed for.
In actions filed under Rule 65, the petition shall further indicate the material dates
showing when notice of the judgment or final order or resolution subject thereof
was received, when a motion for new trial or reconsideration, if any, was filed and
when notice of the denial thereof was received.
It shall be filed in seven (7) clearly legible copies together with proof of service
thereof on the respondent with the original copy intended for the court indicated
as such by the petitioner, and shall be accompanied by a clearly legible duplicate
original or certified true copy of the judgment, order, resolution, or ruling subject
thereof, such material portions of the record as are referred to therein, and other
documents relevant or pertinent thereto. The certification shall be accomplished by
the proper clerk of court or by his duly authorized representative, or by the proper
officer of the court, tribunal, agency or office involved or by his duly authorized
representative. The other requisite number of copies of the petition shall be
accompanied by clearly legible plain copies of all documents attached to the
original.
xxxx
The failure of the petitioner to comply with any of the foregoing requirements shall
be sufficient ground for the dismissal of the petition. (Emphasis
supplied)ςrαlαωlιbrαrÿ
RULE 65
SECTION. 1. Petition for certiorari. - When any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in
the ordinary course of law, a person aggrieved thereby may file a verified petition in
the proper court, alleging the facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings of such tribunal, board or officer,
and granting such incidental reliefs as law and justice may require.
The petition shall be accompanied by a certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings and documents relevant and
pertinent thereto, and a sworn certification of non-forum shopping as provided in
the third paragraph of Section 3, Rule 46.
In the case at bar, the Court of Appeals dismissed the petition for certiorari due to
POEA's failure to attach the following relevant documents: (1) the Memorandum
filed by POEA in the trial court to oppose the Complaint; and (2) the transcripts of
stenographic notes (TSN) of the hearings conducted by the trial court on June 22,
2004 and June 29, 2004. In its motion for reconsideration dated October 13,
2004,18 POEA only attached the TSN dated June 30, 2004,19 with the explanation
that the trial court did not furnish it with copies of the other hearings. However, we
note that POEA still failed to attach a copy of the Memorandum which the Court of
Appeals deemed essential in its determination of the propriety of the trial court's
issuance of the writ of preliminary prohibitory injunction.
The allowance of the petition on the ground of substantial compliance with the
Rules is not a novel occurrence in our jurisdiction.20 Indeed, if we apply the Rules
strictly, we cannot fault the Court of Appeals for dismissing the petition21 because
the POEA did not demonstrate willingness to comply with the requirements set by
the rules and to submit the necessary documents which the Court of Appeals need
to have a proper perspective of the case.
POEA avers that the trial court gravely abused its discretion in granting the writ of
preliminary prohibitory injunction when the requirements to issue the same have
not been met. It asserts that Principalia had no clear and convincing right to the
relief demanded as it had no proof of irreparable damage as required under the
Rules of Court.
We do not agree.
The trial court did not decree that the POEA, as the granting authority of
Principalia's license to recruit, is not allowed to determine Principalia's compliance
with the conditions for the grant, as POEA would have us believe. For all intents and
purposes, POEA can determine whether the licensee has complied with the
requirements. In this instance, the trial court observed that the Order of Suspension
dated March 15, 2004 was pending appeal with the Secretary of the Department of
Labor and Employment (DOLE). Thus, until such time that the appeal is resolved
with finality by the DOLE, Principalia has a clear and convincing right to operate as a
recruitment agency.
Furthermore, irreparable damage was duly proven by Principalia. Suspension of its
license is not easily quantifiable nor is it susceptible to simple mathematical
computation, as alleged by POEA. The trial court in its Order stated, thus:
In the meantime that the appeal has not been resolved, Plaintiff's clients/principals
will have to look for other agencies here and abroad, to supply their needs for
employees and workers. The end result would be a tremendous loss and even
closure of its business. More importantly, Plaintiff's reputation would be tarnished
and it would be difficult, if not impossible for it to regain its existing clientele if the
immediate implementation of the suspension of its license continues.22
If the injunctive writ was not granted, Principalia would have been labeled as an
untrustworthy recruitment agency before there could be any final adjudication of
its case by the DOLE. It would have lost both its employer-clients and its prospective
Filipino-applicants. Loss of the former due to a tarnished reputation is not
quantifiable.
Moreover, POEA would have no authority to exercise its regulatory functions over
Principalia because the matter had already been brought to the jurisdiction of the
DOLE. Principalia has been granted the license to recruit and process documents for
Filipinos interested to work abroad. Thus, POEA's action of suspending Principalia's
license before final adjudication by the DOLE would be premature and would
amount to a violation of the latter's right to recruit and deploy workers.

Finally, the presumption of regular performance of duty by the POEA under Section
3 (m), Rule 131 of the Rules of Court, finds no application in the case at bar, as it
applies only where a duty is imposed on an official to act in a certain way, and
assumes that the law tells him what his duties are. Therefore the presumption that
an officer will discharge his duties according to law does not apply where his duties
are not specified by law and he is given unlimited discretion.23 The issue threshed
out before the trial court was whether the order of suspension should be
implemented pending appeal. It did not correct a ministerial duty of the POEA. As
such, the presumption on the regularity of performance of duty does not apply.

WHEREFORE, in light of the foregoing, the petition is DENIED for lack of merit. SO
ORDERED.
SANTOSA B. DATUMAN, Petitioner, v. FIRST COSMOPOLITAN MANPOWER AND
PROMOTION SERVICES, INC., Respondent. G.R. NO. 156029, November 14, 2008
LEONARDO-DE CASTRO, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, as amended, assailing the Court of Appeals (CA) Decision dated
August 7, 2002, in CA-G.R. SP No. 59825, setting aside the Decision of the National
Labor Relations Commission (NLRC).
The facts are as follows:
Sometime in 1989, respondent First Cosmopolitan Manpower & Promotion
Services, Inc. recruited petitioner Santosa B. Datuman to work abroad under the
following terms and conditions:
Site of employment - Bahrain
Employees Classification/Position/Grade - Saleslady
Basic Monthly Salary - US$370.00
Duration of Contract - One (1) year
Foreign Employer - Mohammed Sharif Abbas Ghulam Hussain
On April 17, 1989, petitioner was deployed to Bahrain after paying the required
placement fee. However, her employer Mohammed Hussain took her passport
when she arrived there; and instead of working as a saleslady, she was forced to
work as a domestic helper with a salary of Forty Bahrain Dinar (BD40.00),
equivalent only to One Hundred US Dollars (US$100.00). This was contrary to the
agreed salary of US$370.00 indicated in her Contract of Employment signed in the
Philippines and approved by the Philippine Overseas Employment Administration
(POEA).
On September 1, 1989, her employer compelled her to sign another contract,
transferring her to another employer as housemaid with a salary of BD40.00 for the
duration of two (2) years.4 She pleaded with him to give her a release paper and to
return her passport but her pleas were unheeded. Left with no choice, she
continued working against her will. Worse, she even worked without compensation
from September 1991 to April 1993 because of her employer's continued failure
and refusal to pay her salary despite demand. In May 1993, she was able to finally
return to the Philippines through the help of the Bahrain Passport and Immigration
Department.
In May 1995, petitioner filed a complaint before the POEA Adjudication Office
against respondent for underpayment and nonpayment of salary, vacation leave
pay and refund of her plane fare, docketed as Case No. POEA ADJ. (L) 95-05-1586.6
While the case was pending, she filed the instant case before the NLRC for
underpayment of salary for a period of one year and six months, nonpayment of
vacation pay and reimbursement of return airfare.
When the parties failed to arrive at an amicable settlement before the Labor
Arbiter, they were required to file their respective position papers, subsequent
pleadings and documentary exhibits.
In its Position Paper,7 respondent countered that petitioner actually agreed to work
in Bahrain as a housemaid for one (1) year because it was the only position
available then. However, since such position was not yet allowed by the POEA at
that time, they mutually agreed to submit the contract to the POEA indicating
petitioner's position as saleslady. Respondent added that it was actually petitioner
herself who violated the terms of their contract when she allegedly transferred to
another employer without respondent's knowledge and approval. Lastly,
respondent raised the defense of prescription of cause of action since the claim was
filed beyond the three (3)-year period from the time the right accrued, reckoned
from either 1990 or 1991.8
On April 29, 1998, Labor Arbiter Jovencio Mayor, Jr. rendered a Decision finding
respondent liable for violating the terms of the Employment Contract and ordering
it to pay petitioner: (a) the amount of US$4,050.00, or its equivalent rate prevailing
at the time of payment, representing her salary differentials for fifteen (15) months;
and, (b) the amount of BD 180.00 or its equivalent rate prevailing at the time of
payment, representing the refund of plane ticket, thus:
From the foregoing factual backdrop, the only crucial issue for us to resolve in this
case is whether or not complainant is entitled to her monetary claims.
xxx
In the instant case, from the facts and circumstances laid down, it is thus self-
evident that the relationship of the complainant and respondent agency is
governed by the Contract of Employment, the basic terms a covenants of which
provided for the position of saleslady, monthly compensation of US$370.00 and
duration of contract for one (1) year. As it is, when the parties - complainant and
respondent Agency - signed and executed the POEA - approved Contract of
Employment, this agreement is the law that governs them. Thus, when respondent
agency deviated from the terms of the contract by assigning the position of a
housemaid to complainant instead of a saleslady as agreed upon in the POEA-
approved Contract of Employment, respondent Agency committed a breach of said
Employment Contract. Worthy of mention is the fact that respondent agency in
their Position Paper paragraph 2, Brief Statement of the Facts and of the Case -
admitted that it had entered into an illegal contract with complainant by proposing
the position of a housemaid which said position was then not allowed by the POEA,
by making it appear in the Employment Contract that the position being applied for
is the position of a saleslady. As it is, we find indubitably clear that the foreign
employer had took advantage to the herein hopeless complainant and because of
this ordeal, the same obviously rendered complainant's continuous employment
unreasonable if not downright impossible. The facts and surrounding circumstances
of her ordeal was convincingly laid down by the complainant in her Position Paper,
from which we find no flaws material enough to disregard the same. Complainant
had clearly made out her case and no amount of persuasion can convince us to tilt
the scales of justice in favor of respondents whose defense was anchored solely on
the flimsy allegations that for a period of more than five (5) years - from 1989 until
1995 - nothing was heard from her or from her relatives, presuming then that
complainant had no problem with her employment abroad. We also find that the
pleadings and the annexes filed by the parties reveal a total lapse on the part of
respondent First Cosmopolitan Manpower and Promotions - their failure to support
with substantial evidence their contention that complainant transferred from one
employer to another without knowledge and approval of respondent agency in
contravention of the terms of the POEA approved Employment Contract. Obviously,
respondent Agency anchored its disquisition on the alleged "contracts" signed by
the complainant that she agreed with the terms of said contracts - one (1) year
duration only and as a housemaid - to support its contention that complainant
violated the contract agreement by transferring from one employer to another on
her own volition without the knowledge and consent of respondent agency. To us,
this posture of respondent agency is unavailing. These "documents" are self-
serving. We could not but rule that the same were fabricated to tailor-fit their
defense that complainant was guilty of violating the terms of the Employment
Contract. Consequently, we could not avoid the inference of a more logical
conclusion that complainant was forced against her will to continue with her
employment notwithstanding the fact that it was in violation of the original
Employment Contract including the illegal withholding of her passport.
With the foregoing, we find and so rule that respondent Agency failed to discharge
the burden of proving with substantial evidence that complainant violated the
terms of the Employment Contract, thus negating respondent Agency's liability for
complainant's money claims. All the more, the record is bereft of any evidence to
show that complainant Datuman is either not entitled to her wage differentials or
have already received the same from respondent. As such, we are perforce
constrained to grant complainant's prayer for payment of salary differentials
computed as follows:
January 1992 April 1993 (15 months)
US$370.00 agreed salary
US$100.00 actual paid salary
US$270.00 balance
US$270.00 x 15 months = US$4050.00
We are also inclined to grant complainant's entitlement to a refund of her plane
ticket in the amount of BD 180 Bahrain Dinar or the equivalent in Philippine
Currency at the rate of exchange prevailing at the time of payment.
Anent complainant's claim for vacation leave pay and overtime pay, we cannot,
however, grant the same for failure on the part of complainant to prove with
particularity the months that she was not granted vacation leave and the day
wherein she did render overtime work.
Also, we could not grant complainant's prayer for award of damages and attorney's
fees for lack of factual and legal basis.
WHEREFORE, premises considered, judgment is hereby rendered, finding
respondent Agency liable for violating the term of Employment Contract and
respondent First Cosmopolitan Manpower and Promotions is hereby ordered:
To pay complainant the amount of US$ FOUR THOUSAND AND FIFTY (US$4,050.00),
or its equivalent rate prevailing at the time of payment, representing her salary
differentials for fifteen (15) months;
To pay complainant the amount of BD 180.00 or its equivalent rate prevailing at the
time of payment, representing the refund of plane ticket;
All other claims are hereby dismissed for lack of merit.
SO ORDERED.9 (emphasis supplied)
On appeal, the NLRC, Second Division, issued a Decision10 affirming with
modification the Decision of Labor Arbiter Mayor, Jr., by reducing the award of
salary differentials from US$4,050.00 to US$2,970.00 ratiocinating as follows:
Accordingly, we find that the claims for salary differentials accruing earlier than
April of 1993 had indeed prescribed. This is so as complainant had filed her
complaint on May 31, 1995 when she arrived from the jobsite in April 1993. Since
the cause of action for salary differential accrues at the time when it falls due, it is
clear that only the claims for the months of May 1993 to April 1994 have not yet
prescribed. With an approved salary rate of US$370.00 vis - Ã -vis the amount of
salary received which was $100.00, complainant is entitled to the salary differential
for the said period in the amount of $2,970.00.
xxx

WHEREFORE, premises considered, judgment is hereby rendered MODIFYING the
assailed Decision by reducing the award of salary differentials to $2,970.00 to the
complainant.
The rest of the disposition is AFFIRMED.
SO ORDERED.
On July 21, 2000, respondent elevated the matter to the CA through a petition for
certiorari under Rule 65.
On August 2, 2000, the CA dismissed the petition for being insufficient in form
pursuant to the last paragraph of Section 3, Rule 42 of the 1997 Rules of Civil
Procedure, as amended.
On October 20, 2000, however, the CA reinstated the petition upon respondent's
motion for reconsideration.
On August 7, 2002, the CA issued the assailed Decision15 granting the petition and
reversing the NLRC and the Labor Arbiter, thus:
Under Section 1 (f), Rule II, Book II of the 1991 POEA Rules and Regulations, the
local agency shall assume joint and solidary liability with the employer for all claims
and liabilities which may arise in connection with the implementation of the
contract, including but not limited to payment of wages, health and disability
compensation and repatriation.
Respondent Commission was correct in declaring that claims of private respondent
"for salary differentials accruing earlier than April of 1993 had indeed prescribed." It
must be noted that petitioner company is privy only to the first contract. Granting
arguendo that its liability extends to the acts of its foreign principal, the Towering
Recruiting Services, which appears to have a hand in the execution of the second
contract, it is Our considered opinion that the same would, at the most, extend only
up to the expiration of the second contract or until 01 September 1991. Clearly, the
money claims subject of the complaint filed in 1995 had prescribed.
However, this Court declares respondent Commission as not only having abused its
discretion, but as being without jurisdiction at all, in declaring private respondent
entitled to salary differentials. After decreeing the money claims accruing before
April 1993 as having prescribed, it has no more jurisdiction to hold petitioner
company for salary differentials after that period. To reiterate, the local agency
shall assume joint and solidary liability with the employer for all claims and
liabilities which may arise in connection with the implementation of the contract.
Which contract? Upon a judicious consideration, we so hold that it is only in
connection with the first contract. The provisions in number 2, Section 10 (a), Rule
V, Book I of the Omnibus Rules Implementing the Labor Code Section 1 (f), Rule II,
Book II of the 1991 POEA Rules and Regulations were not made to make the local
agency a perpetual insurer against all untoward acts that may be done by the
foreign principal or the direct employer abroad. It is only as regards the principal
contract to which it is privy shall its liability extend. In Catan v. National Labor
Relations Commission, 160 SCRA 691 (1988), it was held that the responsibilities of
the local agent and the foreign principal towards the contracted employees under
the recruitment agreement extends up to and until the expiration of the
employment contracts of the employees recruited and employed pursuant to the
said recruitment agreement.
xxx
Foregoing considered, the assailed Decision dated 24 February 2000 and the
Resolution dated 23 June 2000 of respondent Commission in NLRC NCR CA 016354-
98 are hereby SET ASIDE.
SO ORDERED.
Petitioner's Motion for Reconsideration17 thereon was denied in the assailed
Resolution18 dated November 14, 2002.
Hence, the present petition based on the following grounds:
I.
THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT
ABANDONED THE FACTUAL FINDINGS OF THE LABOR ARBITER AS AFFIRMED BY THE
NATIONAL LABOR RELATIONS COMMISSION.
II.
THE HONORABLE COURT OF APPEALS PATENTLY ERRED IN HOLDING THAT THE
RESPONDENT AGENCY IS ONLY A [sic] PRIVY AND LIABLE TO THE PRINCIPAL
CONTRACT.
III.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE
CAUSE OF ACTION OF THE PETITIONER ALREADY PRESCRIBED.
The respondent counters in its Comment that the CA is correct in ruling that it is not
liable for the monetary claims of petitioner as the claim had already prescribed and
had no factual basis.
Simply put, the issues boil down to whether the CA erred in not holding respondent
liable for petitioner's money claims pursuant to their Contract of Employment.
We grant the petition.
On whether respondent is solidarily liable for petitioner's monetary claims
Section 1 of Rule II of the POEA Rules and Regulations states that:
Section 1. Requirements for Issuance of License. - Every applicant for license to
operate a private employment agency or manning agency shall submit a written
application together with the following requirements:
xxx
f. A verified undertaking stating that the applicant:
xxx
(3) Shall assume joint and solidary liability with the employer for all claims and
liabilities which may arise in connection with the implementation of the contract;
including but not limited to payment of wages, death and disability compensation
and repatriation. (emphasis supplied)
The above provisions are clear that the private employment agency shall assume
joint and solidary liability with the employer.19 This Court has, time and again,
ruled that private employment agencies are held jointly and severally liable with the
foreign-based employer for any violation of the recruitment agreement or contract
of employment.20 This joint and solidary liability imposed by law against
recruitment agencies and foreign employers is meant to assure the aggrieved
worker of immediate and sufficient payment of what is due him.21 This is in line
with the policy of the state to protect and alleviate the plight of the working class.
In the assailed Decision, the CA disregarded the aforecited provision of the law and
the policy of the state when it reversed the findings of the NLRC and the Labor
Arbiter. As the agency which recruited petitioner, respondent is jointly and
solidarily liable with the latter's principal employer abroad for her (petitioner's)
money claims. Respondent cannot, therefore, exempt itself from all the claims and
liabilities arising from the implementation of their POEA-approved Contract of
Employment.
We cannot agree with the view of the CA that the solidary liability of respondent
extends only to the first contract (i.e. the original, POEA-approved contract which
had a term of until April 1990). The signing of the "substitute" contracts with the
foreign employer/principal before the expiration of the POEA-approved contract
and any continuation of petitioner's employment beyond the original one-year
term, against the will of petitioner, are continuing breaches of the original POEA-
approved contract. To accept the CA's reasoning will open the floodgates to even
more abuse of our overseas workers at the hands of their foreign employers and
local recruiters, since the recruitment agency could easily escape its mandated
solidary liability for breaches of the POEA-approved contract by colluding with their
foreign principals in substituting the approved contract with another upon the
worker's arrival in the country of employment. Such outcome is certainly contrary
to the State's policy of extending protection and support to our overseas workers.
To be sure, Republic Act No. 8042 explicitly prohibits the substitution or alteration
to the prejudice of the worker of employment contracts already approved and
verified by the Department of Labor and Employment (DOLE) from the time of
actual signing thereof by the parties up to and including the period of the expiration
of the same without the approval of the DOLE.22
Respondent's contention that it was petitioner herself who violated their Contract
of Employment when she signed another contract in Bahrain deserves scant
consideration. It is the finding of both the Labor Arbiter and the NLRC - which,
significantly, the CA did not disturb - that petitioner was forced to work long after
the term of her original POEA-approved contract, through the illegal acts of the
foreign employer.
In Placewell International Services Corporation v. Camote,23 we held that the
subsequently executed side agreement of an overseas contract worker with her
foreign employer which reduced his salary below the amount approved by the
POEA is void because it is against our existing laws, morals and public policy. The
said side agreement cannot supersede the terms of the standard employment
contract approved by the POEA.
Hence, in the present case, the diminution in the salary of petitioner from
US$370.00 to US$100 (BD 40.00) per month is void for violating the POEA-approved
contract which set the minimum standards, terms, and conditions of her
employment. Consequently, the solidary liability of respondent with petitioner's
foreign employer for petitioner's money claims continues although she was forced
to sign another contract in Bahrain. It is the terms of the original POEA-approved
employment contract that shall govern the relationship of petitioner with the
respondent recruitment agency and the foreign employer. We agree with the Labor
Arbiter and the NLRC that the precepts of justice and fairness dictate that petitioner
must be compensated for all months worked regardless of the supposed
termination of the original contract in April 1990. It is undisputed that petitioner
was compelled to render service until April 1993 and for the entire period that she
worked for the foreign employer or his unilaterally appointed successor, she should
have been paid US$370/month for every month worked in accordance with her
original contract.
Respondent cannot disclaim liability for the acts of the foreign employer which
forced petitioner to remain employed in violation of our laws and under the most
oppressive conditions on the allegation that it purportedly had no knowledge of, or
participation in, the contract unwillingly signed by petitioner abroad. We cannot
give credence to this claim considering that respondent by its own allegations knew
from the outset that the contract submitted to the POEA for approval was not to be
the "real" contract. Respondent blithely admitted to submitting to the POEA a
contract stating that the position to be filled by petitioner is that of "Saleslady"
although she was to be employed as a domestic helper since the latter position was
not approved for deployment by the POEA at that time. Respondent's evident bad
faith and admitted circumvention of the laws and regulations on migrant workers
belie its protestations of innocence and put petitioner in a position where she could
be exploited and taken advantage of overseas, as what indeed happened to her in
this case.
We look upon with great disfavor the unsubstantiated actuations of innocence or
ignorance on the part of local recruitment agencies of acts of their foreign
principals, as if the agencies' responsibility ends with the deployment of the worker.
In the light of the recruitment agency's legally mandated joint and several liability
with the foreign employer for all claims in connection with the implementation of
the contract, it is the recruitment agency's responsibility to ensure that the terms
and conditions of the employment contract, as approved by the POEA, are faithfully
complied with and implemented properly by its foreign client/principal. Indeed, it is
in its best interest to do so to avoid being haled to the courts or labor tribunals and
defend itself from suits for acts of its foreign principal.
On whether petitioner's claims for underpaid salaries have prescribed
It should be recalled that the Labor Arbiter and the NLRC similarly found that
petitioner is entitled to underpaid salaries, albeit they differed in the number of
months for which salary differentials should be paid. The CA, on the other hand,
held that all of petitioner's monetary claims have prescribed pursuant to Article 291
of the Labor Code which provides that:
Art. 291. Money Claims. - All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three years
from the time that cause of action accrued; otherwise, they shall be forever barred.
(emphasis supplied)
We do not agree with the CA when it held that the cause of action of petitioner had
already prescribed as the three-year prescriptive period should be reckoned from
September 1, 1989 when petitioner was forced to sign another contract against her
will. As stated in the complaint, one of petitioner's causes of action was for
underpayment of salaries. The NLRC correctly ruled the right to claim unpaid
salaries (or in this case, unpaid salary differentials) accrue as they fall due.24 Thus,
petitioner's cause of action to claim salary differential for October 1989 only
accrued after she had rendered service for that month (or at the end of October
1989). Her right to claim salary differential for November 1989 only accrued at the
end of November 1989, and so on and so forth.
Both the Labor Arbiter and the NLRC found that petitioner was forced to work until
April 1993. Interestingly, the CA did not disturb this finding but held only that the
extent of respondent's liability was limited to the term under the original contract
or, at most, to the term of the subsequent contract entered into with the
participation of respondent's foreign principal, i.e. 1991. We have discussed
previously the reasons why (a) the CA's theory of limited liability on the part of
respondent is untenable and (b) the petitioner has a right to be compensated for all
months she, in fact, was forced to work. To determine for which months
petitioner's right to claim salary differentials has not prescribed, we must count
three years prior to the filing of the complaint on May 31, 1995. Thus, only claims
accruing prior to May 31, 1992 have prescribed when the complaint was filed on
May 31, 1995. Petitioner is entitled to her claims for salary differentials for the
period May 31, 1992 to April 1993, or approximately eleven (11) months.
We find that the NLRC correctly computed the salary differential due to petitioner
at US$2,970.00 (US$370.00 as approved salary rate - US$100.00 as salary received =
US$290 as underpaid salary per month x 11 months). However, it should be for the
period May 31, 1992 to April 1993 and not May 1993 to April 1994 as erroneously
stated in the NLRC's Decision.
A final note
This Court reminds local recruitment agencies that it is their bounden duty to
guarantee our overseas workers that they are being recruited for bona fide jobs
with bona fide employers. Local agencies should never allow themselves to be
instruments of exploitation or oppression of their compatriots at the hands of
foreign employers. Indeed, being the ones who profit most from the exodus of
Filipino workers to find greener pastures abroad, recruiters should be first to ensure
the welfare of the very people that keep their industry alive.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of
Appeals dated August 7, 2002 and Resolution dated November 14, 2002 in CA-G.R.
SP No. 59825 are REVERSED AND SET ASIDE. The Decision of the National Labor
Relations Commission dated February 24, 2000 is REINSTATED with a qualification
with respect to the award of salary differentials, which should be granted for the
period May 31, 1992 to April 1993 and not May 1993 to April 1994. SO ORDERED.
STOLT-NIELSEN TRANSPORTATION GROUP, INC. AND CHUNG GAI SHIP
MANAGEMENT, PETITIONERS, VS. SULPECIO MEDEQUILLO, JR., RESPONDENT.
G.R. No. 177498 : January 18, 2012
PEREZ, J.:
Before the Court is a Petition for Review on Certiorari[1] of the Decision[2] of the
First Division of the Court of Appeals in CA-G.R. SP No. 91632 dated 31 January
2007, denying the petition for certiorari filed by Stolt-Nielsen Transportation Group,
Inc. and Chung Gai Ship Management (petitioners) and affirming the Resolution of
the National Labor Relations Commission (NLRC). The dispositive portion of the
assailed decision reads:
WHEREFORE, the petition is hereby DENIED. Accordingly, the assailed Decision
promulgated on February 28, 2003 and the Resolution dated July 27, 2005 are
AFFIRMED.[3]
The facts as gathered by this Court follow:
On 6 March 1995, Sulpecio Madequillo (respondent) filed a complaint before the
Adjudication Office of the Philippine Overseas Employment Administration (POEA)
against the petitioners for illegal dismissal under a first contract and for failure to
deploy under a second contract. In his complaint-affidavit,[4] respondent alleged
that:
On 6 November 1991(First Contract), he was hired by Stolt-Nielsen Marine Services,
Inc on behalf of its principal Chung-Gai Ship Management of Panama as Third
Assistant Engineer on board the vessel “Stolt Aspiration” for a period of nine (9)
months;
He would be paid with a monthly basic salary of $808.00 and a fixed overtime pay
of $404.00 or a total of $1,212.00 per month during the employment period
commencing on 6 November 1991;
On 8 November 1991, he joined the vessel MV “Stolt Aspiration”;
On February 1992 or for nearly three (3) months of rendering service and while the
vessel was at Batangas, he was ordered by the ship’s master to disembark the
vessel and repatriated back to Manila for no reason or explanation;
Upon his return to Manila, he immediately proceeded to the petitioner’s office
where he was transferred employment with another vessel named MV “Stolt Pride”
under the same terms and conditions of the First Contract;
On 23 April 1992, the Second Contract was noted and approved by the POEA;
The POEA, without knowledge that he was not deployed with the vessel, certified
the Second Employment Contract on 18 September 1992.
Despite the commencement of the Second Contract on 21 April 1992, petitioners
failed to deploy him with the vessel MV “Stolt Pride”;
He made a follow-up with the petitioner but the same refused to comply with the
Second Employment Contract.
On 22 December 1994, he demanded for his passport, seaman’s book and other
employment documents. However, he was only allowed to claim the said
documents in exchange of his signing a document;
He was constrained to sign the document involuntarily because without these
documents, he could not seek employment from other agencies.
He prayed for actual, moral and exemplary damages as well as attorney’s fees for
his illegal dismissal and in view of the Petitioners’ bad faith in not complying with
the Second Contract.
The case was transferred to the Labor Arbiter of the DOLE upon the effectivity of
the Migrant Workers and Overseas Filipinos Act of 1995.
The parties were required to submit their respective position papers before the
Labor Arbiter. However, petitioners failed to submit their respective pleadings
despite the opportunity given to them.[5]
On 21 July 2000, Labor Arbiter Vicente R. Layawen rendered a judgment[6] finding
that the respondent was constructively dismissed by the petitioners. The dispositive
portion reads:
WHEREFORE, premises considered, judgment is hereby rendered, declaring the
respondents guilty of constructively dismissing the complainant by not honoring the
employment contract. Accordingly, respondents are hereby ordered jointly and
solidarily to pay complainant the following:
$12,537.00 or its peso equivalent at the time of payment.
The Labor Arbiter found the first contract entered into by and between the
complainant and the respondents to have been novated by the execution of the
second contract. In other words, respondents cannot be held liable for the first
contract but are clearly and definitely liable for the breach of the second
contract.[8] However, he ruled that there was no substantial evidence to grant the
prayer for moral and exemplary damages.[9]
The petitioners appealed the adverse decision before the National Labor Relations
Commission assailing that they were denied due process, that the respondent
cannot be considered as dismissed from employment because he was not even
deployed yet and the monetary award in favor of the respondent was exorbitant
and not in accordance with law.[10]
On 28 February 2003, the NLRC affirmed with modification the Decision of the
Labor Arbiter. The dispositive portion reads:
WHEREFORE, premises considered, the decision under review is hereby, MODIFIED
BY DELETING the award of overtime pay in the total amount of Three Thousand Six
Hundred Thirty Six US Dollars (US $3,636.00).
In all other respects, the assailed decision so stands as, AFFIRMED.[11]
Before the NLRC, the petitioners assailed that they were not properly notified of the
hearings that were conducted before the Labor Arbiter. They further alleged that
after the suspension of proceedings before the POEA, the only notice they received
was a copy of the decision of the Labor Arbiter.[12]
The NLRC ruled that records showed that attempts to serve the various notices of
hearing were made on petitioners’ counsel on record but these failed on account of
their failure to furnish the Office of the Labor Arbiter a copy of any notice of change
of address. There was also no evidence that a service of notice of change of address
was served on the POEA.[13]
The NLRC upheld the finding of unjustified termination of contract for failure on the
part of the petitioners to present evidence that would justify their non-deployment
of the respondent.[14] It denied the claim of the petitioners that the monetary
award should be limited only to three (3) months for every year of the unexpired
term of the contract. It ruled that the factual incidents material to the case
transpired within 1991-1992 or before the effectivity of Republic Act No. 8042 or
the Migrant Workers and Overseas Filipinos Act of 1995 which provides for such
limitation.[15]
However, the NLRC upheld the reduction of the monetary award with respect to
the deletion of the overtime pay due to the non-deployment of the respondent.[16]
The Partial Motion for Reconsideration filed by the petitioners was denied by the
NLRC in its Resolution dated 27 July 2005.[17]
The petitioners filed a Petition for Certiorari before the Court of Appeals alleging
grave abuse of discretion on the part of NLRC when it affirmed with modification
the ruling of the Labor Arbiter. They prayed that the Decision and Resolution
promulgated by the NLRC be vacated and another one be issued dismissing the
complaint of the respondent.
Finding no grave abuse of discretion, the Court of Appeals AFFIRMED the Decision
of the labor tribunal.
The Court’s Ruling
The following are the assignment of errors presented before this Court:
I.
THE COURT A QUO ERRED IN FINDING THAT THE SECOND CONTRACT NOVATED THE
FIRST CONTRACT.
THERE WAS NO NOVATION OF THE FIRST CONTRACT BY THE SECOND CONTRACT;
THE ALLEGATION OF ILLEGAL DISMISSAL UNDER THE FIRST CONTRACT MUST BE
RESOLVED SEPARATELY FROM THE ALLEGATION OF FAILURE TO DEPLOY UNDER
THE SECOND CONTRACT.
THE ALLEGED ILLEGAL DISMISSAL UNDER THE FIRST CONTRACT TRANSPIRED MORE
THAN THREE (3) YEARS AFTER THE CASE WAS FILED AND THEREFORE HIS CASE
SHOULD HAVE BEEN DISMISSED FOR BEING BARRED BY PRESCRIPTION.
II.
THE COURT A QUO ERRED IN RULING THAT THERE WAS CONSTRUCTIVE DISMISSAL
UNDER THE SECOND CONTRACT.
IT IS LEGALLY IMPOSSIBLE TO HAVE CONSTRUCTIVE DISMISSAL WHEN THE
EMPLOYMENT HAS NOT YET COMMENCED.
ASSUMING THERE WAS OMISSION UNDER THE SECOND CONTRACT, PETITIONERS
CAN ONLY BE FOUND AS HAVING FAILED IN DEPLOYING PRIVATE RESPONDENT BUT
WITH VALID REASON.
III.
THE COURT A QUO ERRED IN FAILING TO FIND THAT EVEN ASSUMING THERE WAS
BASIS FOR HOLDING PETITIONER LIABLE FOR “FAILURE TO DEPLOY” RESPONDENT,
THE POEA RULES PENALIZES SUCH OMISSION WITH A MERE “REPRIMAND.”[18]
The petitioners contend that the first employment contract between them and the
private respondent is different from and independent of the second contract
subsequently executed upon repatriation of respondent to Manila.
We do not agree.
Novation is the extinguishment of an obligation by the substitution or change of the
obligation by a subsequent one which extinguishes or modifies the first, either by
changing the object or principal conditions, or, by substituting another in place of
the debtor, or by subrogating a third person in the rights of the creditor. In order
for novation to take place, the concurrence of the following requisites is
indispensable:
There must be a previous valid obligation,
There must be an agreement of the parties concerned to a new contract,
There must be the extinguishment of the old contract, and
There must be the validity of the new contract.[19]
In its ruling, the Labor Arbiter clarified that novation had set in between the first
and second contract. To quote:
xxx [T]his office would like to make it clear that the first contract entered into by
and between the complainant and the respondents is deemed to have been
novated by the execution of the second contract. In other words, respondents
cannot be held liable for the first contract but are clearly and definitely liable for the
breach of the second contract.[20]
This ruling was later affirmed by the Court of Appeals in its decision ruling that:
Guided by the foregoing legal precepts, it is evident that novation took place in this
particular case. The parties impliedly extinguished the first contract by agreeing to
enter into the second contract to placate Medequillo, Jr. who was unexpectedly
dismissed and repatriated to Manila. The second contract would not have been
necessary if the petitioners abided by the terms and conditions of Madequillo, Jr.’s
employment under the first contract. The records also reveal that the 2nd contract
extinguished the first contract by changing its object or principal. These contracts
were for overseas employment aboard different vessels. The first contract was for
employment aboard the MV “Stolt Aspiration” while the second contract involved
working in another vessel, the MV “Stolt Pride.” Petitioners and Madequillo, Jr.
accepted the terms and conditions of the second contract. Contrary to petitioners’
assertion, the first contract was a “previous valid contract” since it had not yet been
terminated at the time of Medequillo, Jr.’s repatriation to Manila. The legality of his
dismissal had not yet been resolved with finality. Undoubtedly, he was still
employed under the first contract when he negotiated with petitioners on the
second contract. As such, the NLRC correctly ruled that petitioners could only be
held liable under the second contract.[21]
We concur with the finding that there was a novation of the first employment
contract.
We reiterate once more and emphasize the ruling in Reyes v. National Labor
Relations Commission,[22] to wit:
x x x [F]indings of quasi-judicial bodies like the NLRC, and affirmed by the Court of
Appeals in due course, are conclusive on this Court, which is not a trier of facts.
xxxx
x x x Findings of fact of administrative agencies and quasi-judicial bodies, which
have acquired expertise because their jurisdiction is confined to specific matters,
are generally accorded not only respect, but finality when affirmed by the Court of
Appeals. Such findings deserve full respect and, without justifiable reason, ought
not to be altered, modified or reversed.(Emphasis supplied)[23]
With the finding that respondent “was still employed under the first contract when
he negotiated with petitioners on the second contract”,[24] novation became an
unavoidable conclusion.
Equally settled is the rule that factual findings of labor officials, who are deemed to
have acquired expertise in matters within their jurisdiction, are generally accorded
not only respect but even finality by the courts when supported by substantial
evidence, i.e., the amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion.[25] But these findings are not infallible.
When there is a showing that they were arrived at arbitrarily or in disregard of the
evidence on record, they may be examined by the courts.[26] In this case, there was
no showing of any arbitrariness on the part of the lower courts in their findings of
facts. Hence, we follow the settled rule.
We need not dwell on the issue of prescription. It was settled by the Court of
Appeals with its ruling that recovery of damages under the first contract was
already time-barred. Thus:
Accordingly, the prescriptive period of three (3) years within which Medequillo Jr.
may initiate money claims under the 1st contract commenced on the date of his
repatriation. xxx The start of the three (3) year prescriptive period must therefore
be reckoned on February 1992, which by Medequillo Jr.’s own admission was the
date of his repatriation to Manila. It was at this point in time that Medequillo Jr.’s
cause of action already accrued under the first contract. He had until February 1995
to pursue a case for illegal dismissal and damages arising from the 1st contract.
With the filing of his Complaint-Affidavit on March 6, 1995, which was clearly
beyond the prescriptive period, the cause of action under the 1st contract was
already time-barred.[27]
The issue that proceeds from the fact of novation is the consequence of the non-
deployment of respondent.
The petitioners argue that under the POEA Contract, actual deployment of the
seafarer is a suspensive condition for the commencement of the employment.[28]
We agree with petitioners on such point. However, even without actual
deployment, the perfected contract gives rise to obligations on the part of
petitioners.
A contract is a meeting of minds between two persons whereby one binds himself,
with respect to the other, to give something or to render some service.[29] The
contracting parties may establish such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not contrary to law, morals, good
customs, public order, or public policy.[30]
The POEA Standard Employment Contract provides that employment shall
commence “upon the actual departure of the seafarer from the airport or seaport
in the port of hire.”[31] We adhere to the terms and conditions of the contract so as
to credit the valid prior stipulations of the parties before the controversy started.
Else, the obligatory force of every contract will be useless. Parties are bound not
only to the fulfillment of what has been expressly stipulated but also to all the
consequences which, according to their nature, may be in keeping with good faith,
usage and law.[32]
Thus, even if by the standard contract employment commences only “upon actual
departure of the seafarer”, this does not mean that the seafarer has no remedy in
case of non-deployment without any valid reason. Parenthetically, the contention
of the petitioners of the alleged poor performance of respondent while on board
the first ship MV “Stolt Aspiration” cannot be sustained to justify the non-
deployment, for no evidence to prove the same was presented.[33]
We rule that distinction must be made between the perfection of the employment
contract and the commencement of the employer-employee relationship. The
perfection of the contract, which in this case coincided with the date of execution
thereof, occurred when petitioner and respondent agreed on the object and the
cause, as well as the rest of the terms and conditions therein. The commencement
of the employer-employee relationship, as earlier discussed, would have taken
place had petitioner been actually deployed from the point of hire. Thus, even
before the start of any employer-employee relationship, contemporaneous with the
perfection of the employment contract was the birth of certain rights and
obligations, the breach of which may give rise to a cause of action against the erring
party. Thus, if the reverse had happened, that is the seafarer failed or refused to be
deployed as agreed upon, he would be liable for damages.[34]
Further, we do not agree with the contention of the petitioners that the penalty is a
mere reprimand.
The POEA Rules and Regulations Governing Overseas Employment[35] dated 31
May 1991 provides for the consequence and penalty against in case of non-
deployment of the seafarer without any valid reason. It reads:
Section 4. Worker’s Deployment. — An agency shall deploy its recruits within the
deployment period as indicated below:
xxx
b. Thirty (30) calendar days from the date of processing by the administration of the
employment contracts of seafarers.
Failure of the agency to deploy a worker within the prescribed period without valid
reasons shall be a cause for suspension or cancellation of license or fine. In
addition, the agency shall return all documents at no cost to the worker.(Emphasis
and underscoring supplied)
The appellate court correctly ruled that the penalty of reprimand[36] provided
under Rule IV, Part VI of the POEA Rules and Regulations Governing the
Recruitment and Employment of Land-based Overseas Workers is not applicable in
this case. The breach of contract happened on February 1992 and the law
applicable at that time was the 1991 POEA Rules and Regulations Governing
Overseas Employment. The penalty for non-deployment as discussed is suspension
or cancellation of license or fine.
Now, the question to be dealt with is how will the seafarer be compensated by
reason of the unreasonable non-deployment of the petitioners?
The POEA Rules Governing the Recruitment and Employment of Seafarers do not
provide for the award of damages to be given in favor of the employees. The claim
provided by the same law refers to a valid contractual claim for compensation or
benefits arising from employer-employee relationship or for any personal injury,
illness or death at levels provided for within the terms and conditions of
employment of seafarers. However, the absence of the POEA Rules with regard to
the payment of damages to the affected seafarer does not mean that the seafarer is
precluded from claiming the same. The sanctions provided for non-deployment do
not end with the suspension or cancellation of license or fine and the return of all
documents at no cost to the worker. As earlier discussed, they do not forfend a
seafarer from instituting an action for damages against the employer or agency
which has failed to deploy him.[37]
We thus decree the application of Section 10 of Republic Act No. 8042 (Migrant
Workers Act) which provides for money claims by reason of a contract involving
Filipino workers for overseas deployment. The law provides:
Sec. 10. Money Claims. – Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after the filing of the complaint, the claims arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers
for overseas deployment including claims for actual, moral, exemplary and other
forms of damages. x x x (Underscoring supplied)

Following the law, the claim is still cognizable by the labor arbiters of the NLRC
under the second phrase of the provision.

Applying the rules on actual damages, Article 2199 of the New Civil Code provides
that one is entitled to an adequate compensation only for such pecuniary loss
suffered by him as he has duly proved. Respondent is thus liable to pay petitioner
actual damages in the form of the loss of nine (9) months’ worth of salary as
provided in the contract.[38] This is but proper because of the non-deployment of
respondent without just cause.

WHEREFORE, the appeal is DENIED. The 31 January 2007 Decision of the Court of
Appeals in CA-G.R. SP. No. 91632 is hereby AFFIRMED. The Petitioners are hereby
ordered to pay Sulpecio Medequillo, Jr., the award of actual damages equivalent to
his salary for nine (9) months as provided by the Second Employment Contract.

SO ORDERED.
THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. CAROL M. DELA PIEDRA,
Accused-Appellant. G.R. No. 121777. January 24, 2001
KAPUNAN, J.:
Accused-appellant Carol M. dela Piedra questions her conviction for illegal
recruitment in large scale and assails, as well, the constitutionality of the law
defining and penalizing said crime.
The Court affirms the constitutionality of the law and the conviction of the accused,
but reduces the penalty imposed upon her. The accused was charged before the
Regional Trial Court of Zamboanga City in an information alleging:
That on or about January 30, 1994, in the City of Zamboanga, Philippines, and
within the jurisdiction of this Honorable Court; the above-named accused, without
having previously obtained from the Philippine Overseas Employment
Administration, a license or authority to engage in recruitment and overseas
placement of workers, did then and there, wilfully, unlawfully and feloniously, offer
and promise for a fee employment abroad particularly in Singapore thus causing
Maria Lourdes Modesto [y] Gadrino, Nancy Araneta y Aliwanag and Jennelyn Baez y
Timbol, all qualified to apply, in fact said Maria Lourdes Modesto had already
advanced the amount of P2,000.00 to the accused for and in consideration of the
promised employment which did not materialized [sic] thus causing damage and
prejudice to the latter in the said sum; furthermore, the acts complained of herein
tantamount [sic] to economic sabotage in that the same were committed in large
scale. 1
Arraigned on June 20, 1994, the accused pleaded not guilty 2 to these charges.
At the trial, the prosecution presented five (5) witnesses, namely, Erlie Ramos, SPO2
Erwin Manalopilar, Eileen Fermindoza, Nancy Araneta and Lourdes Modesto. The
succeeding narration is gathered from their testimonies:
On January 30, 1994, at exactly 10:00 in the morning, Erlie Ramos, Attorney II of the
Philippine Overseas Employment Agency (POEA), received a telephone call from an
unidentified woman inquiring about the legitimacy of the recruitment conducted by
a certain Mrs. Carol Figueroa. Ramos, whose duties include the surveillance of
suspected illegal recruiters, immediately contacted a friend, a certain Mayeth
Bellotindos, so they could both go to No. 26-D, Tetuan Highway, Sta. Cruz,
Zamboanga City, where the recruitment was reportedly being undertaken. Upon
arriving at the reported area at around 4:00 p.m., Bellotindos entered the house
and pretended to be an applicant. Ramos remained outside and stood on the
pavement, from where he was able to see around six (6) persons in the house’s
sala. Ramos even heard a woman, identified as Carol Fegueroa, talk about the
possible employment she has to provide in Singapore and the documents that the
applicants have to comply with. Fifteen (15) minutes later, Bellotindos came out
with a bio-data form in hand.
On February 1, 1994, Ramos conferred with a certain Capt. Mendoza of the Criminal
Investigation Service (CIS) to organize the arrest of the alleged illegal recruiter. Also
present were other members of the CIS, including Col. Rodolfo Almonte, Regional
Director of the PNP-CIS for Region IX, Eileen Fermindoza, and a certain SPO3 Santos.
The group planned to entrap the illegal recruiter the next day by having Fermindoza
pose as an applicant.
On February 2, 1994, at around 8:00 p.m., Col. Almonte directed the case to SPO2
Erwin Manalopilar, a member of the Philippine National Police who was assigned as
an investigator of the CIS, to conduct a surveillance of the area to confirm the
report of illegal recruitment. Accordingly, he, along with Eileen Fermindoza,
immediately proceeded to Tetuan Highway. The two did not enter the house where
the recruitment was supposedly being conducted, but Fermindoza interviewed two
people who informed them that some people do go inside the house. Upon
returning to their office at around 8:30 a.m., the two reported to Capt. Mendoza
who organized a team to conduct the raid.
The raiding team, which included Capt. Mendoza, SPO2 Manalopilar, Fermindoza
and a certain Oscar Bucol, quickly set off and arrived at the reported scene at 9:30
that morning. There they met up with Erlie Ramos of the POEA. Fermindoza then
proceeded to enter the house while the rest of the team posted themselves outside
to secure the area Fermindoza was instructed to come out after she was given a
bio-data form, which will serve as the team’s cue to enter the house.
Fermindoza introduced herself as a job applicant to a man and a woman,
apparently the owners of the house, and went inside. There, she saw another
woman, later identified as Jasmine, coming out of the bathroom. The man to whom
Fermindoza earlier introduced herself told Jasmine that Fermindoza was applying
for a position. Jasmine, who was then only wearing a towel, told her that she would
just get dressed. Jasmine then came back and asked Fermindoza what position she
was applying for. Fermindoza replied that she was applying to be a baby-sitter or
any other work so long as she could go abroad. Jasmine then gave her an
application form.
A few minutes later, a certain Carol arrived. Jasmine informed Carol that
Fermindoza was an applicant. Fermindoza asked Carol what the requirements were
and whether she (Fermindoza) was qualified. Carol told Fermindoza that if she had
a passport, she could fill up the application papers. Fermindoza replied that she had
no passport yet. Carol said she need not worry since Jasmine will prepare the
passport for her. While filling up the application form, three women who appeared
to be friends of Jasmine arrived to follow up the result of their applications and to
give their advance payment. Jasmine got their papers and put them on top of a
small table. Fermindoza then proceeded to the door and signaled to the raiding
party by raising her hand.
Capt. Mendoza asked the owners of the house, a married couple, for permission to
enter the same. The owners granted permission after the raiding party introduced
themselves as members of the CIS. Inside the house, the raiding party saw some
supposed applicants. Application forms, already filled up, were in the hands of one
Mrs. Carol Figueroa. The CIS asked Figueroa if she had a permit to recruit. Figueroa
retorted that she was not engaged in recruitment. Capt. Mendoza nevertheless
proceeded to arrest Figueroa. He took the application forms she was holding as the
raiding party seized the other papers 5 on the table. 6
The CIS team then brought Figueroa, a certain Jasmine Alejandro, and the three
women suspected to be applicants, to the office for investigation. 7
In the course of their investigation, the CIS discovered that Carol Figueroa had many
aliases, among them, Carol Llena and Carol dela Piedra The accused was not able to
present any authority to recruit when asked by the investigators. 8 A check by
Ramos with the POEA revealed that the accused was not licensed or authorized to
conduct recruitment. 9 A certification 10 dated February 2, 1994 stating thus was
executed by Renegold M. Macarulay, Officer-in-Charge of the POEA.
The CIS likewise interviewed the supposed applicants, Lourdes Modesto, Nancy
Araneta and Jennelyn Baez, all registered nurses working at the Cabato Medical
Hospital, who executed their respective written statements.
At the trial, Nancy Araneta, 23, recounted that she was at Jasmine Alejandro’s
house in the afternoon of January 30, 1994. Araneta had learned from Sandra
Aquino, also a nurse at the Cabato Medical Hospital, that a woman was there to
recruit job applicants for Singapore.
Araneta and her friends, Jennelyn Baez and Sandra Aquino, arrived at Jasmine’s
house at around 4:30 p.m. Jasmine welcomed them and told them to sit down.
They listened to the "recruiter" who was then talking to a number of people. The
recruiter said that she was "recruiting" nurses for Singapore. Araneta and her
friends then filled up bio-data forms and were required to submit pictures and a
transcript of records. They were also told to pay P2,000, and "the rest will be salary
deduction." Araneta submitted her bio-data form to Carol that same afternoon, but
did not give any money because she was "not yet sure."
On the day of the raid on February 2, 1994, Araneta was again at the Alejandro
residence to submit her transcript of records and her picture. She arrived at the
house 30 minutes before the raid but did not witness the arrest since she was at the
porch when it happened.
Maria Lourdes Modesto, 26, was also in Jasmine Alejandro’s house on January 30,
1994. A friend of Jasmine had informed her that there was someone recruiting in
Jasmine’s house. Upon arriving at the Alejandro residence, Lourdes was welcomed
by Jasmine.
Lourdes recalled that Carol Figueroa was already briefing some people when she
arrived. Carol Figueroa asked if they would like a "good opportunity" since a
hospital was hiring nurses. She gave a breakdown of the fees involved: P30,000 for
the visa and the round trip ticket, and P5,000 as placement fee and for the
processing of papers. The initial payment was P2,000, while P30,000 will be by
salary deduction.
Lourdes filled up the application form and submitted it to Jasmine. After the
interview, she gave the initial payment of P2,000 to Jasmine, who assured Lourdes
that she was authorized to receive the money. On February 2, 1994, however,
Lourdes went back to the house to get back the money. Jasmine gave back the
money to Lourdes after the raid. 13
Denial comprised the accused’s defense.
Carol dela Piedra, 37, is a housewife and a resident of Cebu City. Her husband is a
businessman from Cebu, the manager of the Region 7 Branch of the Grollier
International Encyclopedia. They own an apartment in Cebu City, providing lodging
to the students.
The accused claimed that she goes to Singapore to visit her relatives. She first
traveled to Singapore on August 21, 1993 as a tourist, and came back to the
Philippines on October 20 of the same year. Thereafter, she returned to Singapore
on December 10, 1993.
On December 21, 1993, while in Singapore, the accused was invited to a Christmas
party sponsored by the Zamboanga City Club Association. On that occasion, she met
a certain Laleen Malicay, who sought her help. A midwife, Malicay had been
working in Singapore for six (6) years. Her employer is a certain Mr. Tan, a close
friend of Carol.
According to the accused, Malicay sent P15,000 home for her father who was then
seriously ill. Malicay was not sure, however, whether her father received the money
so she requested the accused to verify from her relatives receipt thereof. She
informed the accused that she had a cousin by the name of Jasmine Alejandro.
Malicay gave the accused Jasmine’s telephone number, address and a sketch of
how to get there.
The accused returned to the country on January 21, 1994. From Cebu City, the
accused flew to Zamboanga City on January 23, 1994 to give some presents to her
friends.
On January 30, 1994, the accused called up Jasmine Alejandro, Laleen Malicay’s
cousin, to inform her that she would be going to her house. At around noon that
day, the accused, accompanied by her friend Hilda Falcasantos, arrived at the house
where she found Jasmine entertaining some friends. Jasmine came down with two
of her friends whom she introduced as her classmates. Jasmine told them that the
accused was a friend of Laleen Malicay.
The accused relayed to Jasmine Malicay’s message regarding the money the latter
had sent. Jasmine assured her that they received the money, and asked Carol to tell
Malicay to send more money for medicine for Malicay’s mother. Jasmine also told
her that she would send something for Malicay when the accused goes back to
Singapore. The accused replied that she just needed to confirm her flight back to
Cebu City, and will return to Jasmine’s house. After the meeting with Jasmine, the
accused went shopping with Hilda Falcasantos. The accused was in the house for
only fifteen (15) minutes.
On February 2, 1994, the accused went to the Philippine Airlines office at 7:30 in
the morning to confirm her 5:30 p.m. flight to Cebu City. She then proceeded to
Jasmine’s residence, arriving there at past 8 am.
Inside the house, she met a woman who asked her, "Are you Carol from
Singapore?" The accused, in turn, asked the woman if she could do anything for her.
The woman inquired from Carol if she was recruiting. Carol replied in the negative,
explaining that she was there just to say goodbye to Jasmine. The woman further
asked Carol what the requirements were if she (the woman) were to go to
Singapore. Carol replied that she would need a passport.
Two (2) minutes later, three (3) girls entered the house looking for Jasmine. The
woman Carol was talking with then stood up and went out. A minute after, three (3)
members of the CIS and a POEA official arrived. A big man identified himself as a
member of the CIS and informed her that they received a call that she was
recruiting. They told her she had just interviewed a woman from the CIS. She
denied this, and said that she came only to say goodbye to the occupants of the
house, and to get whatever Jasmine would be sending for Laleen Malicay. She even
showed them her ticket for Cebu City.
Erlie Ramos then went up to Jasmine’s room and returned with some papers. The
accused said that those were the papers that Laleen Malicay requested Jasmine to
give to her (the accused). The accused surmised that because Laleen Malicay
wanted to go home but could not find a replacement, one of the applicants in the
forms was to be her (Malicay’s) substitute. Ramos told the accused to explain in
their office.
The accused denied in court that she went to Jasmine’s residence to engage in
recruitment. She claimed she came to Zamboanga City to visit her friends, to whom
she could confide since she and her husband were having some problems. She
denied she knew Nancy Araneta or that she brought information sheets for job
placement. She also denied instructing Jasmine to collect P2,000 from alleged
applicants as processing fee.
The accused presented two witnesses to corroborate her defense.
The first, Jasmine Alejandro, 23, testified that she met the accused for the first time
only on January 30, 1994 when the latter visited them to deliver Laleen Malicay’s
message regarding the money she sent. Carol, who was accompanied by a certain
Hilda Falcasantos, stayed in their house for 10 to 15 minutes only. Carol came back
to the house a few days later on February 2 at around 8:00 in the morning to "get
the envelope for the candidacy of her daughter." Jasmine did not elaborate.
Jasmine denied that she knew Nancy Araneta or Lourdes Modesto. She denied that
the accused conducted recruitment. She claimed she did not see Carol distribute
bio-data or application forms to job applicants. She disclaimed any knowledge
regarding the P2,000 application fee. 15
The other defense witness, Ernesto Morales, a policeman, merely testified that the
accused stayed in their house in No. 270 Tugbungan, Zamboanga City, for four (4)
days before her arrest, although she would sometimes go downtown alone. He said
he did not notice that she conducted any recruitment. 16
On May 5, 1995, the trial court rendered a decision convicting the accused,
thus:chanrob1es virtual 1aw library
WHEREFORE, in view of all the foregoing consideration[s][,] this Court finds the
accused Carol dela Piedra alias Carol Llena and Carol Figueroa guilty beyond
reasonable doubt of Illegal Recruitment committed in a large scale and hereby
sentences her to suffer the penalty of LIFE IMPRISONMENT and to pay a fine of
P100,000.00, and also to pay the costs.
Being a detention prisoner, the said accused is entitled to the full time of the period
of her detention during the pendency of this case under the condition set forth in
Article 29 of the Revised Penal Code.
SO ORDERED.
The accused, in this appeal, ascribes to the trial court the following
errors:chanrob1es virtual 1aw library
I APPELLANT WAS CHARGED WITH LARGE SCALE ILLEGAL RECRUITMENT ON
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING SEC. 13 (B) OF P.D.
442[,] AS AMENDED[,] OTHERWISE KNOWN AS [THE] ILLEGAL RECRUITMENT LAW
UNCONSTITUTIONAL.
II
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT HOLDING THAT THE
APPREHENDING TEAM COMPOSED OF POEA AND CIS REPRESENTATIVES ENTERED
INTO [sic] THE RESIDENCE OF JASMIN[E] ALEJANDRO WITHOUT ANY SEARCH
WARRANT IN VIOLATION OF ARTICLE III, SECTION 2 OF THE PHILIPPINE
CONSTITUTION, AND ANY EVIDENCE OBTAINED IN VIOLATION THEREOF, SHALL BE
INADMISSIBLE FOR ANY PURPOSE IN ANY PROCEEDING AS PROVIDED UNDER
ARTICLE III, SECTION 3, (2) OF THE SAME CONSTITUTION;
III
WITH DUE RESPECT, THE LOWER COURT ERRED IN IGNORING THAT WHEN SPO2
[sic] EILE[E]N FERMINDOZA ENTERED THE RESIDENCE OF JASMIN[E] ALEJANDRO,
THERE WAS NO CRIME COMMITTED WHATSOEVER, HENCE THE ARREST OF THE
ACCUSED-APPELLANT WAS ILLEGAL;
[IV]
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT DISCOVERING THAT SPO2
[sic] EILE[E]N FERMINDOZA WAS NOT ILLEGALLY RECRUITED BY THE ACCUSED-
APPELLANT, HENCE, ACCUSED-APPELLANT SHOULD BE ACQUITTED;
V and placement" violates due process. Appellant also avers, as part of her sixth
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT DETECTING THAT NANCY
ARANETA WAS NOT ILLEGALLY RECRUITED BY THE ACCUSED-APPELLANT, HENCE,
ACCUSED SHOULD BE EXONERATED;
VI
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT REALIZING THAT MARIA
LOURDES MODESTO WAS NOT ILLEGALLY RECRUITED BY THE ACCUSED-APPELLANT,
HENCE, ACCUSED-APPELLANT SHOULD BE EXCULPATED;
VII
WITH DUE RESPECT, THE LOWER COURT ERRED IN FINDING THAT THE ACCUSED-
JANUARY 30, 1994, THE DATE STATED IN THE INFORMATION AS THE DATE OF THE
CRIME, BUT ACCUSED WAS ARRESTED ON FEB. 2, 1994 AND ALL THE EVIDENCES
[sic] INDICATED [sic] THAT THE ALLEGED CRIME WERE [sic] COMMITTED ON FEB. 2,
1994, HENCE, THE INFORMATION IS FATALLY DEFECTIVE;
VIII
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING THAT THE
ALLEGED CRIME OF ILLEGAL RECRUITMENT WAS COMMITTED NOT ON [sic] LARGE
SCALE, HENCE, THE PENALTY SHOULD NOT BE LIFE IMPRISONMENT;
IX
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING THAT THOSE
EVIDENCES [sic] SEIZED AT THE HOUSE OF JASMIN[E] ALEJANDRO AND PRESENTED
TO THE COURT WERE PLANTED BY A BOGUS ATTORNEY[,] ERLIE S. RAMOS OF THE
POEA;
X
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT DISCOVERING THAT
ACCUSED-APPELLANT DID NOT RECEIVE ANY PAYMENT EVEN A SINGLE CENTAVO
FROM THE ALLEGED VICTIMS WHO DID NOT SUFFER DAMAGE IN ANY MANNER,
YET SHE WAS CONVICTED TO SERVE HER ENTIRE LIFE BEHIND PRISON BARS. SUCH
PUNISHMENT WAS CRUEL AND UNUSUAL, HENCE, A WANTON VIOLATION OF THE
CONSTITUTION.
In the first assigned error, appellant maintains that the law defining "recruitment
assigned error, that she was denied the equal protection of the laws.
We shall address the issues jointly.
Appellant submits that Article 13 (b) of the Labor Code defining "recruitment and
placement" is void for vagueness and, thus, violates the due process clause.
Due process requires that the terms of a penal statute must be sufficiently explicit
to inform those who are subject to it what conduct on their part will render them
liable to its penalties. 20 A criminal statute that "fails to give a person of ordinary
intelligence fair notice that his contemplated conduct is forbidden by the statute,"
or is so indefinite that "it encourages arbitrary and erratic arrests and convictions,"
is void for vagueness. 21 The constitutional vice in a vague or indefinite statute is
the injustice to the accused in placing him on trial for an offense, the nature of
which he is given no fair warning.
We reiterated these principles in People v. Nazario:
As a rule, a statute or act may be said to be vague when it lacks comprehensible
standards that men "of common intelligence must necessarily guess at its meaning
and differ as to its application." It is repugnant to the Constitution in two respects:
(1) it violates due process for failure to accord persons, especially the parties
targeted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers
unbridled discretion in carrying out its provisions and become an arbitrary flexing of
the Government muscle.
We added, however, that:
. . . the act must be utterly vague on its face, that is to say, it cannot be clarified by
either a saving clause or by construction. Thus, in Coates v. City of Cincinnati, the
U.S. Supreme Court struck down an ordinance that had made it illegal for "three or
more persons to assemble on any sidewalk and there conduct themselves in a
manner annoying to persons passing by." Clearly, the ordinance imposed no
standard at all "because one may never know in advance what ‘annoys some
people but does not annoy others.’"
Coates highlights what has been referred to as a "perfectly vague" act whose
obscurity is evident on its face. It is to be distinguished, however, from legislation
couched in imprecise language — but which nonetheless specifies a standard
though defectively phrased — in which case, it may be "saved" by proper
construction.
Here, the provision in question reads:
ARTICLE 13. Definitions. — (a) . . . .
(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.
x x x
When undertaken by non-licensees or non-holders of authority, recruitment
activities are punishable as follows:
ARTICLE 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.
x x x
ARTICLE 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:chanrob1es virtual 1aw library
(b) Any licensee or holder of authority found violating or causing another to
violate any provision of this Title or its implementing rules and regulations, shall
upon conviction thereof, suffer the penalty of imprisonment of not less than five
years or a fine of not less than P10,000 nor more than P50,000 or both such
imprisonment and fine, at the discretion of the court;
(c) Any person who is neither a licensee nor a holder of authority under this
Title found violating any provision thereof or its implementing rules and regulations
shall, upon conviction thereof, suffer the penalty of imprisonment of not less than
four years nor more than eight years or a fine of not less than P20,000 nor more
than P100,000 or both such imprisonment and fine, at the discretion of the court;
x x x be deemed to be engaged in the act of recruitment and placement. The words
In support of her submission that Article 13 (b) is void for vagueness, appellant
invokes People v. Panis, 24 where this Court, to use appellant’s term, "criticized"
the definition of "recruitment and placement" as follows:
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 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.
If the Court in Panis "had to speculate on the meaning of the questioned provision,"
appellant asks, what more "the ordinary citizen" who does not possess the
"necessary [legal] knowledge?"
Appellant further argues that the acts that constitute "recruitment and placement"
suffer from overbreadth since by merely "referring" a person for employment, a
person may be convicted of illegal recruitment.
These contentions cannot be sustained.
Appellant’s reliance on People v. Panis is misplaced. The issue in Panis was whether,
under the proviso of Article 13 (b), the crime of illegal recruitment could be
committed only "whenever two or more persons are in any manner promised or
offered any employment for a fee." The Court held in the negative, explaining:
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."
The number of persons dealt with is not an essential ingredient of the act of
recruitment and placement of workers. Any of the acts mentioned in the basic rule
in Article 13(b) will constitute recruitment and placement even if only one
prospective worker is involved. The proviso merely lays down a rule of evidence
that where a fee is collected in consideration of a promise or offer of employment
to two or more prospective workers, the individual or entity dealing with them shall
"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 be prima 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.
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 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 their own countrymen.
Evidently, therefore, appellant has taken the penultimate paragraph in the excerpt
quoted above out of context. The Court, in Panis, merely bemoaned the lack of
records that would help shed light on the meaning of the proviso. The absence of
such records notwithstanding, the Court was able to arrive at a reasonable
interpretation of the proviso by applying principles in criminal law and drawing
from the language and intent of the law itself. Section 13 (b), therefore, is not a
"perfectly vague act" whose obscurity is evident on its face. If at all, the proviso
therein is merely couched in imprecise language that was salvaged by proper
construction. It is not void for vagueness.
An act will be declared void and inoperative on the ground of vagueness and
uncertainty, only upon a showing that the defect is such that the courts are unable
to determine, with any reasonable degree of certainty, what the legislature
intended. . . . . In this connection we cannot pretermit reference to the rule that
"legislation should not be held invalid on the ground of uncertainty if susceptible of
any reasonable construction that will support and give it effect. An Act will not be
declared inoperative and ineffectual on the ground that it furnishes no adequate
means to secure the purpose for which it is passed, if men of common sense and
reason can devise and provide the means, and all the instrumentalities necessary
for its execution are within the reach of those intrusted therewith."
That Section 13 (b) encompasses what appellant apparently considers as customary
and harmless acts such as "labor or employment referral" ("referring" an applicant,
according to appellant, for employment to a prospective employer) does not render
the law overbroad. Evidently, appellant misapprehends concept of overbreadth.
A statute may be said to be overbroad where it operates to inhibit the exercise of
individual freedoms affirmatively guaranteed by the Constitution, such as the
freedom of speech or religion. A generally worded statute, when construed to
punish conduct which cannot be constitutionally punished is unconstitutionally
vague to the extent that it fails to give adequate warning of the boundary between
the constitutionally permissible and the constitutionally impermissible applications
of the statute. 26
In Blo Umpar Adiong v. Commission on Elections, 27 for instance, we struck down
as void for overbreadth provisions prohibiting the posting of election propaganda in
any place — including private vehicles — other than in the common poster areas
sanctioned by the COMELEC. We held that the challenged provisions not only
deprived the owner of the vehicle the use of his property but also deprived the
citizen of his right to free speech and information. The prohibition in Adiong,
therefore, was so broad that it covered even constitutionally guaranteed rights and,
hence, void for overbreadth. In the present case, however, appellant did not even
specify what constitutionally protected freedoms are embraced by the definition of
"recruitment and placement" that would render the same constitutionally
overbroad.
Appellant also invokes the equal protection clause 28 in her defense. She points out
that although the evidence purportedly shows that Jasmine Alejandro handed out
application forms and even received Lourdes Modesto’s payment, appellant was
the only one criminally charged. Alejandro, on the other hand, remained scot-free.
From this, appellant concludes that the prosecution discriminated against her on
grounds of regional origins. Appellant is a Cebuana while Alejandro is a
Zamboangueña, and the alleged crime took place in Zamboanga City.
The argument has no merit.
At the outset, it may be stressed that courts are not confined to the language of the
statute under challenge in determining whether that statute has any discriminatory
effect. A statute nondiscriminatory on its face may be grossly discriminatory in its
operation. 29 Though the law itself be fair on its face and impartial in appearance,
yet, if it is applied and administered by public authority with an evil eye and
unequal hand, so as practically to make unjust and illegal discriminations between
persons in similar circumstances, material to their rights, the denial of equal justice
is still within the prohibition of the Constitution.
The prosecution of one guilty person while others equally guilty are not prosecuted,
however, is not, by itself, a denial of the equal protection of the laws. 31 Where the
official action purports to be in conformity to the statutory classification, an
erroneous or mistaken performance of the statutory duty, although a violation of
the statute, is not without more a denial of the equal protection of the laws. 32 The
unlawful administration by officers of a statute fair on its face, resulting in its
unequal application to those who are entitled to be treated alike, is not a denial of
equal protection unless there is shown to be present in it an element of intentional
or purposeful discrimination. This may appear on the face of the action taken with
respect to a particular class or person, or it may only be shown by extrinsic evidence
showing a discriminatory design over another not to be inferred from the action
itself. But a discriminatory purpose is not presumed, there must be a showing of
"clear and intentional discrimination." 33 Appellant has failed to show that, in
charging appellant in court, that there was a "clear and intentional discrimination"
on the part of the prosecuting officials.
The discretion of who to prosecute depends on the prosecution’s sound assessment
whether the evidence before it can justify a reasonable belief that a person has
committed an offense. 34 The presumption is that the prosecuting officers regularly
performed their duties, 35 and this presumption can be overcome only by proof to
the contrary, not by mere speculation. Indeed, appellant has not presented any
evidence to overcome this presumption. The mere allegation that appellant, a
Cebuana, was charged with the commission of a crime, while a Zamboangueña, the
guilty party in appellant’s eyes, was not, is insufficient to support a conclusion that
the prosecution officers denied appellant equal protection of the laws.
There is also common sense practicality in sustaining appellant’s prosecution.
While all persons accused of crime are to be treated on a basis of equality before
the law, it does not follow that they are to be protected in the commission of crime.
It would be unconscionable, for instance, to excuse a defendant guilty of murder
because others have murdered with impunity. The remedy for unequal
enforcement of the law in such instances does not lie in the exoneration of the
guilty at the expense of society . . . . Protection of the law will be extended to all
persons equally in the pursuit of their lawful occupations, but no person has the
right to demand protection of the law in the commission of a crime.
Likewise,
[i]f the failure of prosecutors to enforce the criminal laws as to some persons
should be converted into a defense for others charged with crime, the result would
be that the trial of the district attorney for nonfeasance would become an issue in
the trial of many persons charged with heinous crimes and the enforcement of law
would suffer a complete breakdown.
We now come to the third, fourth and fifth assigned errors, all of which involve the
finding of guilt by the trial court.
Illegal recruitment is committed when two elements concur. First, the offender has
no valid license or authority required by law to enable one to lawfully engage in
recruitment and placement of workers. Second, he or she undertakes either any
activity within the meaning of ‘ "recruitment and placement" defined under Article
13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code.
38 In case of illegal recruitment in large scale, a third element is added: that the
accused commits said acts against three or more persons, individually or as a group.
39
In this case, the first element is present. The certification of POEA Officer-in-Charge
Macarulay states that appellant is not licensed or authorized to engage in
recruitment and placement.
The second element is also present. Appellant is presumed engaged in recruitment
and placement under Article 13 (b) of the Labor Code. Both Nancy Araneta and
Lourdes Modesto testified that appellant promised them employment for a fee.
Their testimonies corroborate each other on material points: the briefing
conducted by appellant, the time and place thereof, the fees involved. Appellant
has not shown that these witnesses were incited by any motive to testify falsely
against her. The absence of evidence as to an improper motive actuating the
principal witnesses of the prosecution strongly tends to sustain that no improper
motive existed and that their testimony is worthy of full faith and credence.
Appellant’s denials cannot prevail over the positive declaration of the prosecution
witnesses. Affirmative testimony of persons who are eyewitnesses of the fact
asserted easily overrides negative testimony.
That appellant did not receive any payment for the promised or offered
employment is of no moment. From the language of the statute, the act of
recruitment may be "for profit or not;" it suffices that the accused "promises or
offers for a fee employment" to warrant conviction for illegal recruitment.
The testimonies of Araneta and Modesto, coming as they do from credible
witnesses, meet the standard of proof beyond reasonable doubt that appellant
committed recruitment and placement. We therefore do not deem it necessary to
delve into the second and third assigned errors assailing the legality of appellant’s
arrest and the seizure of the application forms. A warrantless arrest, when
unlawful, has the effect of invalidating the search incidental thereto and the articles
so seized are rendered inadmissible in evidence. 42 Here, even if the documents
seized were deemed inadmissible, her conviction would stand in view of Araneta
and Modesto’s testimonies.
Appellant attempts to cast doubt on the prosecution’s case by claiming in her ninth
assigned error that Erlie Ramos of the POEA supposedly "planted" the application
forms. She also assails his character, alleging that he passed himself off as a lawyer,
although this was denied by Ramos.
The claim of "frame-up," like alibi, is a defense that has been invariably viewed by
the Court with disfavor for it can easily be concocted but difficult to prove. 43 Apart
from her self-serving testimony, appellant has not offered any evidence that she
was indeed framed by Ramos. She has not even hinted at any motive for Ramos to
frame her. Law enforcers are presumed to have performed their duties regularly in
the absence of evidence to the contrary. 44
Considering that the two elements of lack of license or authority and the
undertaking of an activity constituting recruitment and placement are present,
appellant, at the very least, is liable for "simple" illegal recruitment. But is she guilty
of illegal recruitment in large scale? We find that she is not.
A conviction for large scale illegal recruitment must be based on a finding in each
case of illegal recruitment of three or more persons whether individually or as a
group. 45 In this case, only two persons, Araneta and Modesto, were proven to
have been recruited by appellant. The third person named in the complaint as
having been promised employment for a fee, Jennelyn Baez, was not presented in
court to testify.
It is true that law does not require that at least three victims testify at the trial;
nevertheless, it is necessary that there is sufficient evidence proving that the
offense was committed against three or more persons. 46 In this case, evidence
that appellant likewise promised her employment for a fee is sketchy. The only
evidence that tends to prove this fact is the testimony of Nancy Araneta, who said
that she and her friends, Baez and Sandra Aquino, came to the briefing and that
they (she and her "friends") filled up application forms.
The affidavit 47 Baez executed jointly with Araneta cannot support Araneta’s
testimony. The affidavit was neither identified, nor its contents affirmed, by Baez.
Insofar as it purports to prove that appellant recruited Baez, therefore, the affidavit
is hearsay and inadmissible. 48 In any case, hearsay evidence, such as the said
affidavit, has little probative value. 49
Neither can appellant be convicted for recruiting CIS agent Eileen Fermindoza or
even the other persons present in the briefing of January 30, 1994. Appellant is
accused of recruiting only the three persons named in the information — Araneta,
Modesto and Baez. The information does not include Fermindoza or the other
persons present in the briefing as among those promised or offered employment
for a fee. To convict appellant for the recruitment and placement of persons other
than those alleged to have been offered or promised employment for a fee would
violate her right to be informed of the nature and cause of the accusation against
her. 50
In any event, the purpose of the offer of the testimonies of Araneta, Morales and
Fermindoza, respectively, was limited as follows:
FISCAL BELDUA: Your Honor please, we are offering the oral testimony of the
witness, as one of those recruited by the accused, and also to identify some exhibits
for the prosecution and as well as to identify the accused. 51
x x x The penalty of life imprisonment imposed upon appellant must be reduced.
FISCAL BELDUA: We are offering the oral testimony of the witness, Your Honor, to
testify on the fact about her recruitment by the accused and immediately before
the recruitment, as well as to identify some exhibits for the prosecution, and also
the accused in this case, Your Honor.
x x x pay a fine of P30,000.00. This renders immaterial the tenth assigned error, which
FISCAL BELDUA: This witness is going to testify that at around that date Your Honor,
she was connected with the CIS, that she was instructed together with a companion
to conduct a surveillance on the place where the illegal recruitment was supposed
to be going on, that she acted as an applicant, Your Honor, to ascertain the
truthfulness of the illegal recruitment going on, to identify the accused, as well as to
identify some exhibits for the prosecution. 53
x x x
Courts may consider a piece of evidence only for the purpose for which it was
offered, 54 and the purpose of the offer of their testimonies did not include the
proving of the purported recruitment of other supposed applicants by Appellant.
Appellant claims in her seventh assigned error that the information is fatally
defective since it charges her with committing illegal recruitment in large scale on
January 30, 1994 while the prosecution evidence supposedly indicates that she
committed the crime on February 2, 1994.
We find that the evidence for the prosecution regarding the date of the commission
of the crime does not vary from that charged in the information. Both Nancy
Araneta and Lourdes Modesto testified that on January 30, 1994, while in the
Alejandro residence, appellant offered them employment for a fee. Thus, while the
arrest was effected only on February 2, 1994, the crime had already been
committed three (3) days earlier on January 30, 1994.
The eighth and tenth assigned errors, respectively, pertain to the penalty of life
imprisonment imposed by the trial court as well as the constitutionality of the law
prescribing the same, appellant arguing that it is unconstitutional for being unduly
harsh. 55
Because the prosecution was able to prove that appellant committed recruitment
and placement against two persons only, she cannot be convicted of illegal
recruitment in large scale, which requires that recruitment be committed against
three or more persons. Appellant can only be convicted of two counts of "simple"
illegal recruitment, one for that committed against Nancy Araneta, and another
count for that committed against Lourdes Modesto. Appellant is sentenced, for
each count, to suffer the penalty of four (4) to six (6) years of imprisonment and to
assumes that the proper imposable penalty upon appellant is life imprisonment.
WHEREFORE, the decision of the regional trial court is MODIFIED. Appellant is
hereby declared guilty of illegal recruitment on two (2) counts and is sentenced, for
each count, to suffer the penalty of four (4) to six (6) years of imprisonment and to
pay a fine P30,000.00.
SO ORDERED.
ESTATE OF NELSON R. DULAY, represented by his wife MERRIDY JANE P. DULAY,
Petitioner, vs. ABOITIZ JEBSEN MARITIME, INC. and GENERAL CHARTERERS, INC.,
Respondents. G.R. No. 172642, June 13, 2012
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of
Court seeking to reverse and set aside the Decision1 and Resolution2 dated July 11,
2005 and April 18, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 76489.
The factual and procedural antecedents of the case, as summarized by the CA, are
as follows:
Nelson R. Dulay (Nelson, for brevity) was employed by [herein respondent] General
Charterers Inc. (GCI), a subsidiary of co-petitioner [herein co-respondent] Aboitiz
Jebsen Maritime Inc. since 1986. He initially worked as an ordinary seaman and
later as bosun on a contractual basis. From September 3, 1999 up to July 19, 2000,
Nelson was detailed in petitioners’ vessel, the MV Kickapoo Belle.
On August 13, 2000, or 25 days after the completion of his employment contract,
Nelson died due to acute renal failure secondary to septicemia. At the time of his
death, Nelson was a bona fide member of the Associated Marine Officers and
Seaman’s Union of the Philippines (AMOSUP), GCI’s collective bargaining agent.
Nelson’s widow, Merridy Jane, thereafter claimed for death benefits through the
grievance procedure of the Collective Bargaining Agreement (CBA) between
AMOSUP and GCI. However, on January 29, 2001, the grievance procedure was
"declared deadlocked" as petitioners refused to grant the benefits sought by the
widow.
On March 5, 2001, Merridy Jane filed a complaint with the NLRC Sub-Regional
Arbitration Board in General Santos City against GCI for death and medical benefits
and damages.
On March 8, 2001, Joven Mar, Nelson’s brother, received ₱20,000.00 from
[respondents] pursuant to article 20(A)2 of the CBA and signed a "Certification"
acknowledging receipt of the amount and releasing AMOSUP from further liability.
Merridy Jane contended that she is entitled to the aggregate sum of Ninety
Thousand Dollars ($90,000.00) pursuant to [A]rticle 20 (A)1 of the CBA x x x
xxxx
Merridy Jane averred that the P20,000.00 already received by Joven Mar should be
considered advance payment of the total claim of US$90,000.[00].
[Herein respondents], on the other hand, asserted that the NLRC had no jurisdiction
over the action on account of the absence of employer-employee relationship
between GCI and Nelson at the time of the latter’s death. Nelson also had no claims
against petitioners for sick leave allowance/medical benefit by reason of the
completion of his contract with GCI. They further alleged that private respondent is
not entitled to death benefits because petitioners are only liable for such "in case of
death of the seafarer during the term of his contract pursuant to the POEA
contract" and the cause of his death is not work-related. Petitioners admitted
liability only with respect to article 20(A)2 [of the CBA]. x x x
xxxx
However, as petitioners stressed, the same was already discharged.
The Labor Arbiter ruled in favor of private respondent. It took cognizance of the
case by virtue of Article 217 (a), paragraph 6 of the Labor Code and the existence of
a reasonable causal connection between the employer-employee relationship and
the claim asserted. It ordered the petitioner to pay ₱4,621,300.00, the equivalent of
US$90,000.00 less ₱20,000.00, at the time of judgment x x x
xxxx
The Labor Arbiter also ruled that the proximate cause of Nelson’s death was not
work-related.
On appeal, [the NLRC] affirmed the Labor Arbiter’s decision as to the grant of death
benefits under the CBA but reversed the latter’s ruling as to the proximate cause of
Nelson’s death.3
Herein respondents then filed a special civil action for certiorari with the CA
contending that the NLRC committed grave abuse of discretion in affirming the
jurisdiction of the NLRC over the case; in ruling that a different provision of the CBA
covers the death claim; in reversing the findings of the Labor Arbiter that the cause
of death is not work-related; and, in setting aside the release and quitclaim
executed by the attorney-in-fact and not considering the P20,000.00 already
received by Merridy Jane through her attorney-in-fact.
On July 11, 2005, the CA promulgated its assailed Decision, the dispositive portion
of which reads as follows:
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED and the case
is REFERRED to the National Conciliation and Mediation Board for the designation
of the Voluntary Arbitrator or the constitution of a panel of Voluntary Arbitrators
for the appropriate resolution of the issue on the matter of the applicable CBA
provision.
SO ORDERED.
The CA ruled that while the suit filed by Merridy Jane is a money claim, the same
basically involves the interpretation and application of the provisions in the subject
CBA. As such, jurisdiction belongs to the voluntary arbitrator and not the labor
arbiter.
Petitioner filed a Motion for Reconsideration but the CA denied it in its Resolution
of April 18, 2006.
Hence, the instant petition raising the sole issue of whether or not the CA
committed error in ruling that the Labor Arbiter has no jurisdiction over the case.
Petitioner contends that Section 10 of Republic Act (R.A.) 8042, otherwise known as
the Migrant Workers and Overseas Filipinos Act of 1995, vests jurisdiction on the
appropriate branches of the NLRC to entertain disputes regarding the interpretation
of a collective bargaining agreement involving migrant or overseas Filipino workers.
Petitioner argues that the abovementioned Section amended Article 217 (c) of the
Labor Code which, in turn, confers jurisdiction upon voluntary arbitrators over
interpretation or implementation of collective bargaining agreements and
interpretation or enforcement of company personnel policies.
The pertinent provisions of Section 10 of R.A. 8042 provide as follows:
SEC. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual, moral, exemplary and other forms
of damages.
Article 217(c) of the Labor Code, on the other hand, states that:
xxxx
(c) Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company
personnel policies shall be disposed by the Labor Arbiter by referring the same to
the grievance machinery and voluntary arbitration as may be provided in said
agreements.
On their part, respondents insist that in the present case, Article 217, paragraph (c)
as well as Article 261 of the Labor Code remain to be the governing provisions of
law with respect to unresolved grievances arising from the interpretation and
implementation of collective bargaining agreements. Under these provisions of law,
jurisdiction remains with voluntary arbitrators.
Article 261 of the Labor Code reads, thus:
ARTICLE 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators.
– The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and
exclusive jurisdiction to hear and decide all unresolved grievances arising from the
interpretation or implementation of the Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company personnel policies
referred to in the immediately preceding article. Accordingly, violations of a
Collective Bargaining Agreement, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved as grievances under
the Collective Bargaining Agreement. For purposes of this article, gross violations of
Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to
comply with the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors of the Department
of Labor and Employment shall not entertain disputes, grievances or matters under
the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of
Voluntary Arbitrators and shall immediately dispose and refer the same to the
Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining
Agreement.
The petition is without merit.
It is true that R.A. 8042 is a special law governing overseas Filipino workers.
However, a careful reading of this special law would readily show that there is no
specific provision thereunder which provides for jurisdiction over disputes or
unresolved grievances regarding the interpretation or implementation of a CBA.
Section 10 of R.A. 8042, which is cited by petitioner, simply speaks, in general, of
"claims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for
actual, moral, exemplary and other forms of damages." On the other hand, Articles
217(c) and 261 of the Labor Code are very specific in stating that voluntary
arbitrators have jurisdiction over cases arising from the interpretation or
implementation of collective bargaining agreements. Stated differently, the instant
case involves a situation where the special statute (R.A. 8042) refers to a subject in
general, which the general statute (Labor Code) treats in particular.5 In the present
case, the basic issue raised by Merridy Jane in her complaint filed with the NLRC is:
which provision of the subject CBA applies insofar as death benefits due to the heirs
of Nelson are concerned. The Court agrees with the CA in holding that this issue
clearly involves the interpretation or implementation of the said CBA. Thus, the
specific or special provisions of the Labor Code govern.
In any case, the Court agrees with petitioner's contention that the CBA is the law or
contract between the parties. Article 13.1 of the CBA entered into by and between
respondent GCI and AMOSUP, the union to which petitioner belongs, provides as
follows:
The Company and the Union agree that in case of dispute or conflict in the
interpretation or application of any of the provisions of this Agreement, or
enforcement of Company policies, the same shall be settled through negotiation,
conciliation or voluntary arbitration. The Company and the Union further agree that
they will use their best endeavor to ensure that any dispute will be discussed,
resolved and settled amicably by the parties hereof within ninety (90) days from the
date of filing of the dispute or conflict and in case of failure to settle thereof any of
the parties retain their freedom to take appropriate action.6 (Emphasis supplied)
From the foregoing, it is clear that the parties, in the first place, really intended to
bring to conciliation or voluntary arbitration any dispute or conflict in the
interpretation or application of the provisions of their CBA. It is settled that when
the parties have validly agreed on a procedure for resolving grievances and to
submit a dispute to voluntary arbitration then that procedure should be strictly
observed.7
It may not be amiss to point out that the abovequoted provisions of the CBA are in
consonance with Rule VII, Section 7 of the present Omnibus Rules and Regulations
Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as amended
by Republic Act No. 10022, which states that "[f]or OFWs with collective bargaining
agreements, the case shall be submitted for voluntary arbitration in accordance
with Articles 261 and 262 of the Labor Code." The Court notes that the said
Omnibus Rules and Regulations were promulgated by the Department of Labor and
Employment (DOLE) and the Department of Foreign Affairs (DFA) and that these
departments were mandated to consult with the Senate Committee on Labor and
Employment and the House of Representatives Committee on Overseas Workers
Affairs.
In the same manner, Section 29 of the prevailing Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on Board Ocean Going Vessels,
promulgated by the Philippine Overseas Employment Administration (POEA),
provides as follows:
Section 29. Dispute Settlement Procedures. − In cases of claims and disputes arising
from this employment, the parties covered by a collective bargaining agreement
shall submit the claim or dispute to the original and exclusive jurisdiction of the
voluntary arbitrator or panel of arbitrators. If the parties are not covered by a
collective bargaining agreement, the parties may at their option submit the claim or
dispute to either the original and exclusive jurisdiction of the National Labor
Relations Commission (NLRC), pursuant to Republic Act (RA) 8042, otherwise known
as the Migrant Workers and Overseas Filipinos Act of 1995 or to the original and
exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators. If there is no
provision as to the voluntary arbitrators to be appointed by the parties, the same
shall be appointed from the accredited voluntary arbitrators of the National
Conciliation and Mediation Board of the Department of Labor and Employment.
The Philippine Overseas Employment Administration (POEA) shall exercise original
and exclusive jurisdiction to hear and decide disciplinary action on cases, which are
administrative in character, involving or arising out of violations of recruitment
laws, rules and regulations involving employers, principals, contracting partners and
Filipino seafarers. (Emphasis supplied)
It is clear from the above that the interpretation of the DOLE, in consultation with
their counterparts in the respective committees of the Senate and the House of
Representatives, as well as the DFA and the POEA is that with respect to disputes
involving claims of Filipino seafarers wherein the parties are covered by a collective
bargaining agreement, the dispute or claim should be submitted to the jurisdiction
of a voluntary arbitrator or panel of arbitrators. It is only in the absence of a
collective bargaining agreement that parties may opt to submit the dispute to
either the NLRC or to voluntary arbitration. It is elementary that rules and
regulations issued by administrative bodies to interpret the law which they are
entrusted to enforce, have the force of law, and are entitled to great respect.8 Such
rules and regulations partake of the nature of a statute and are just as binding as if
they have been written in the statute itself.9 In the instant case, the Court finds no
cogent reason to depart from this rule.
The above interpretation of the DOLE, DFA and POEA is also in consonance with the
policy of the state to promote voluntary arbitration as a mode of settling labor
disputes.
No less than the Philippine Constitution provides, under the third paragraph,
Section 3, Article XIII, thereof that "[t]he State shall promote the principle of shared
responsibility between workers and employers and the preferential use of
voluntary modes in settling disputes, including conciliation, and shall enforce their
mutual compliance therewith to foster industrial peace."
Consistent with this constitutional provision, Article 211 of the Labor Code provides
the declared policy of the State "[t]o promote and emphasize the primacy of free
collective bargaining and negotiations, including voluntary arbitration, mediation
and conciliation, as modes of settling labor or industrial disputes."

On the basis of the foregoing, the Court finds no error in the ruling of the CA that
the voluntary arbitrator has jurisdiction over the instant case.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 76489 dated July 11, 2005 and April 18, 2006,
respectively, are AFFIRMED. SO ORDERED.
PAUL V. SANTIAGO, petitioner, vs. CF SHARP CREW MANAGEMENT, INC.,
respondent. G.R. No. 162419, July 10, 2007
TINGA, J.:
At the heart of this case involving a contract between a seafarer, on one hand, and
the manning agent and the foreign principal, on the other, is this erstwhile
unsettled legal quandary: whether the seafarer, who was prevented from leaving
the port of Manila and refused deployment without valid reason but whose POEA-
approved employment contract provides that the employer-employee relationship
shall commence only upon the seafarer’s actual departure from the port in the
point of hire, is entitled to relief?
This treats of the petition for review filed by Paul V. Santiago (petitioner) assailing
the Decision and Resolution of the Court of Appeals dated 16 October 2003 and 19
February 2004, respectively, in CA-G.R. SP No. 68404.1
Petitioner had been working as a seafarer for Smith Bell Management, Inc.
(respondent) for about five (5) years.2 On 3 February 1998, petitioner signed a new
contract of employment with respondent, with the duration of nine (9) months. He
was assured of a monthly salary of US$515.00, overtime pay and other benefits.
The following day or on 4 February 1998, the contract was approved by the
Philippine Overseas Employment Administration (POEA). Petitioner was to be
deployed on board the "MSV Seaspread" which was scheduled to leave the port of
Manila for Canada on 13 February 1998.
A week before the scheduled date of departure, Capt. Pacifico Fernandez,
respondent’s Vice President, sent a facsimile message to the captain of "MSV
Seaspread," which reads:
I received a phone call today from the wife of Paul Santiago in Masbate asking me
not to send her husband to MSV Seaspread anymore. Other callers who did not
reveal their identity gave me some feedbacks that Paul Santiago this time if allowed
to depart will jump ship in Canada like his brother Christopher Santiago, O/S who
jumped ship from the C.S. Nexus in Kita-kyushu, Japan last December, 1997.
We do not want this to happen again and have the vessel penalized like the C.S.
Nexus in Japan.
Forewarned is forearmed like his brother when his brother when he was applying
he behaved like a Saint but in his heart he was a serpent. If you agree with me then
we will send his replacement.
Kindly advise.
To this message the captain of "MSV Seaspread" replied:
Many thanks for your advice concerning P. Santiago, A/B. Please cancel plans for
him to return to Seaspread.
On 9 February 1998, petitioner was thus told that he would not be leaving for
Canada anymore, but he was reassured that he might be considered for
deployment at some future date.
Petitioner filed a complaint for illegal dismissal, damages, and attorney's fees
against respondent and its foreign principal, Cable and Wireless (Marine) Ltd.5 The
case was raffled to Labor Arbiter Teresita Castillon-Lora, who ruled that the
employment contract remained valid but had not commenced since petitioner was
not deployed. According to her, respondent violated the rules and regulations
governing overseas employment when it did not deploy petitioner, causing
petitioner to suffer actual damages representing lost salary income for nine (9)
months and fixed overtime fee, all amounting to US$7, 209.00.
The labor arbiter held respondent liable. The dispositive portion of her Decision
dated 29 January 1999 reads:
WHEREFORE, premises considered, respondent is hereby Ordered to pay
complainant actual damages in the amount of US$7,209.00 plus 10% attorney's
fees, payable in Philippine peso at the rate of exchange prevailing at the time of
payment.
All the other claims are hereby DISMISSED for lack of merit.
SO ORDERED.6
On appeal by respondent, the National Labor Relations Commission (NLRC) ruled
that there is no employer-employee relationship between petitioner and
respondent because under the Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean Going Vessels (POEA Standard
Contract), the employment contract shall commence upon actual departure of the
seafarer from the airport or seaport at the point of hire and with a POEA-approved
contract. In the absence of an employer-employee relationship between the
parties, the claims for illegal dismissal, actual damages, and attorney’s fees should
be dismissed.7 On the other hand, the NLRC found respondent’s decision not to
deploy petitioner to be a valid exercise of its management prerogative.8 The NLRC
disposed of the appeal in this wise:
WHEREFORE, in the light of the foregoing, the assailed Decision dated January 29,
1999 is hereby AFFIRMED in so far as other claims are concerned and with
MODIFICATION by VACATING the award of actual damages and attorney’s fees as
well as excluding Pacifico Fernandez as party respondent.
SO ORDERED.
Petitioner moved for the reconsideration of the NLRC’s Decision but his motion was
denied for lack of merit. He elevated the case to the Court of Appeals through a
petition for certiorari.
In its Decision11 dated 16 October 2003, the Court of Appeals noted that there is an
ambiguity in the NLRC’s Decision when it affirmed with modification the labor
arbiter’s Decision, because by the very modification introduced by the Commission
(vacating the award of actual damages and attorney’s fees), there is nothing more
left in the labor arbiter’s Decision to affirm.
According to the appellate court, petitioner is not entitled to actual damages
because damages are not recoverable by a worker who was not deployed by his
agency within the period prescribed in
the POEA Rules. It agreed with the NLRC’s finding that petitioner’s non-deployment
was a valid exercise of respondent’s management prerogative.14 It added that
since petitioner had not departed from the Port of Manila, no employer-employee
relationship between the parties arose and any claim for damages against the so-
called employer could have no leg to stand on.
Petitioner’s subsequent motion for reconsideration was denied on 19 February
2004.
The present petition is anchored on two grounds, to wit:
A. The Honorable Court of Appeals committed a serious error of law when it
ignored [S]ection 10 of Republic Act [R.A.] No. 8042 otherwise known as the
Migrant Worker’s Act of 1995 as well as Section 29 of the Standard Terms and
Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going
Vessels (which is deemed incorporated under the petitioner’s POEA approved
Employment Contract) that the claims or disputes of the Overseas Filipino Worker
by virtue of a contract fall within the jurisdiction of the Labor Arbiter of the NLRC.
B. The Honorable Court of Appeals committed a serious error when it disregarded
the required quantum of proof in labor cases, which is substantial evidence, thus a
total departure from established jurisprudence on the matter.17
Petitioner maintains that respondent violated the Migrant Workers Act and the
POEA Rules when it failed to deploy him within thirty (30) calendar days without a
valid reason. In doing so, it had unilaterally and arbitrarily prevented the
consummation of the POEA- approved contract. Since it prevented his deployment
without valid basis, said deployment being a condition to the consummation of the
POEA contract, the contract is deemed consummated, and therefore he should be
awarded actual damages, consisting of the stipulated salary and fixed overtime
pay.18 Petitioner adds that since the contract is deemed consummated, he should
be considered an employee for all intents and purposes, and thus the labor arbiter
and/or the NLRC has jurisdiction to take cognizance of his claims.19
Petitioner additionally claims that he should be considered a regular employee,
having worked for five (5) years on board the same vessel owned by the same
principal and manned by the same local agent. He argues that respondent’s act of
not deploying him was a scheme designed to prevent him from attaining the status
of a regular employee.
Petitioner submits that respondent had no valid and sufficient cause to abandon
the employment contract, as it merely relied upon alleged phone calls from his wife
and other unnamed callers in arriving at the conclusion that he would jump ship like
his brother. He points out that his wife had executed an affidavit21 strongly denying
having called respondent, and that the other alleged callers did not even disclose
their identities to respondent. Thus, it was error for the Court of Appeals to adopt
the unfounded conclusion of the NLRC, as the same was not based on substantial
evidence.
On the other hand, respondent argues that the Labor Arbiter has no jurisdiction to
award petitioner’s monetary claims. His employment with respondent did not
commence because his deployment was withheld for a valid reason. Consequently,
the labor arbiter and/or the NLRC cannot entertain adjudication of petitioner’s case
much less award damages to him. The controversy involves a breach of contractual
obligations and as such is cognizable by civil courts.24 On another matter,
respondent claims that the second issue posed by petitioner involves a recalibration
of facts which is outside the jurisdiction of this Court.25
There is some merit in the petition.
There is no question that the parties entered into an employment contract on 3
February 1998, whereby petitioner was contracted by respondent to render
services on board "MSV Seaspread" for the consideration of US$515.00 per month
for nine (9) months, plus overtime pay. However, respondent failed to deploy
petitioner from the port of Manila to Canada. Considering that petitioner was not
able to depart from the airport or seaport in the point of hire, the employment
contract did not commence, and no employer-employee relationship was created
between the parties.26
However, a distinction must be made between the perfection of the employment
contract and the commencement of the employer-employee relationship. The
perfection of the contract, which in this case coincided with the date of execution
thereof, occurred when petitioner and respondent agreed on the object and the
cause, as well as the rest of the terms and conditions therein. The commencement
of the employer-employee relationship, as earlier discussed, would have taken
place had petitioner been actually deployed from the point of hire. Thus, even
before the start of any employer-employee relationship, contemporaneous with the
perfection of the employment contract was the birth of certain rights and
obligations, the breach of which may give rise to a cause of action against the erring
party. Thus, if the reverse had happened, that is the seafarer failed or refused to be
deployed as agreed upon, he would be liable for damages.
Moreover, while the POEA Standard Contract must be recognized and respected,
neither the manning agent nor the employer can simply prevent a seafarer from
being deployed without a valid reason.
Respondent’s act of preventing petitioner from departing the port of Manila and
boarding "MSV Seaspread" constitutes a breach of contract, giving rise to
petitioner’s cause of action. Respondent unilaterally and unreasonably reneged on
its obligation to deploy petitioner and must therefore answer for the actual
damages he suffered.
We take exception to the Court of Appeals’ conclusion that damages are not
recoverable by a worker who was not deployed by his agency. The fact that the
POEA Rules27 are silent as to the payment of damages to the affected seafarer does
not mean that the seafarer is precluded from claiming the same. The sanctions
provided for non-deployment do not end with the suspension or cancellation of
license or fine and the return of all documents at no cost to the worker. They do not
forfend a seafarer from instituting an action for damages against the employer or
agency which has failed to deploy him.
The POEA Rules only provide sanctions which the POEA can impose on erring
agencies. It does not provide for damages and money claims recoverable by
aggrieved employees because it is not the POEA, but the NLRC, which has
jurisdiction over such matters.
Despite the absence of an employer-employee relationship between petitioner and
respondent, the Court rules that the NLRC has jurisdiction over petitioner’s
complaint. The jurisdiction of labor arbiters is not limited to claims arising from
employer-employee relationships. Section 10 of R.A. No. 8042 (Migrant Workers
Act), provides that:
Sec. 10. Money Claims. – Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after the filing of the complaint, the claims arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers
for overseas deployment including claims for actual, moral, exemplary and other
forms of damages. x x x [Emphasis supplied]
Since the present petition involves the employment contract entered into by
petitioner for overseas employment, his claims are cognizable by the labor arbiters
of the NLRC.
Article 2199 of the Civil Code provides that one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly proved.
Respondent is thus liable to pay petitioner actual damages in the form of the loss of
nine (9) months’ worth of salary as provided in the contract. He is not, however,
entitled to overtime pay. While the contract indicated a fixed overtime pay, it is not
a guarantee that he would receive said amount regardless of whether or not he
rendered overtime work. Even though petitioner was "prevented without valid
reason from rendering regular much less overtime service,"28 the fact remains that
there is no certainty that petitioner will perform overtime work had he been
allowed to board the vessel. The amount of US$286.00 stipulated in the contract
will be paid only if and when the employee rendered overtime work. This has been
the tenor of our rulings in the case of Stolt-Nielsen Marine Services (Phils.), Inc. v.
National Labor Relations Commission29 where we discussed the matter in this light:
The contract provision means that the fixed overtime pay of 30% would be the basis
for computing the overtime pay if and when overtime work would be rendered.
Simply stated, the rendition of overtime work and the submission of sufficient proof
that said work was actually performed are conditions to be satisfied before a
seaman could be entitled to overtime pay which should be computed on the basis
of 30% of the basic monthly salary. In short, the contract provision guarantees the
right to overtime pay but the entitlement to such benefit must first be established.
Realistically speaking, a seaman, by the very nature of his job, stays on board a ship
or vessel beyond the regular eight-hour work schedule. For the employer to give
him overtime pay for the extra hours when he might be sleeping or attending to his
personal chores or even just lulling away his time would be extremely unfair and
unreasonable.30
The Court also holds that petitioner is entitled to attorney’s fees in the concept of
damages and expenses of litigation. Attorney's fees are recoverable when the
defendant's act or omission has compelled the plaintiff to incur expenses to protect
his interest.31 We note that respondent’s basis for not deploying petitioner is the
belief that he will jump ship just like his brother, a mere suspicion that is based on
alleged phone calls of several persons whose identities were not even confirmed.
Time and again, this Court has upheld management prerogatives so long as they are
exercised in good faith for the advancement of the employer’s interest and not for
the purpose of defeating or circumventing the rights of the employees under
special laws or under valid agreements.32 Respondent’s failure to deploy petitioner
is unfounded and unreasonable, forcing petitioner to institute the suit below. The
award of attorney’s fees is thus warranted.

However, moral damages cannot be awarded in this case. While respondent’s

failure to deploy petitioner seems baseless and unreasonable, we cannot qualify
such action as being tainted with bad faith, or done deliberately to defeat
petitioner’s rights, as to justify the award of moral damages. At most, respondent
was being overzealous in protecting its interest when it became too hasty in making
its conclusion that petitioner will jump ship like his brother.

We likewise do not see respondent’s failure to deploy petitioner as an act designed

to prevent the latter from attaining the status of a regular employee. Even if
petitioner was able to depart the port of Manila, he still cannot be considered a
regular employee, regardless of his previous contracts of employment with
respondent. In Millares v. National Labor Relations Commission,33 the Court ruled
that seafarers are considered contractual employees and cannot be considered as
regular employees under 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. The exigencies of their work necessitates that they be
employed on a contractual basis.34

WHEREFORE, petition is GRANTED IN PART. The Decision dated 16 October 2003

and the Resolution dated 19 February 2004 of the Court of Appeals are REVERSED
and SET ASIDE. The Decision of Labor Arbiter Teresita D. Castillon-Lora dated 29
January 1999 is REINSTATED with the MODIFICATION that respondent CF Sharp
Crew Management, Inc. is ordered to pay actual or compensatory damages in the
amount of US$4,635.00 representing salary for nine (9) months as stated in the
contract, and attorney’s fees at the reasonable rate of 10% of the recoverable
amount. SO ORDERED.
SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner, v. JOY C. CABILES,
Respondent. G.R. No. 170139, August 05, 2014
LEONEN, J.:
This case involves an overseas Filipino worker with shattered dreams. It is our duty,
given the facts and the law, to approximate justice for her.
We are asked to decide a petition for review1 on certiorari assailing the Court of
Appeals’ decision2 dated June 27, 2005. This decision partially affirmed the National
Labor Relations Commission’s resolution dated March 31, 2004,3 declaring
respondent’s dismissal illegal, directing petitioner to pay respondent’s three-month
salary equivalent to New Taiwan Dollar (NT$) 46,080.00, and ordering it to
reimburse the NT$3,000.00 withheld from respondent, and pay her NT$300.00
attorney’s fees.
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and
placement agency.5 Responding to an ad it published, respondent, Joy C. Cabiles,
submitted her application for a quality control job in Taiwan.
Joy’s application was accepted.7 Joy was later asked to sign a one-year employment
contract for a monthly salary of NT$15,360.00.8 She alleged that Sameer Overseas
Agency required her to pay a placement fee of P70,000.00 when she signed the
employment contract.
Joy was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal) on June 26, 1997.10
She alleged that in her employment contract, she agreed to work as quality control
for one year.11 In Taiwan, she was asked to work as a cutter.
Sameer Overseas Placement Agency claims that on July 14, 1997, a certain Mr.
Huwang from Wacoal informed Joy, without prior notice, that she was terminated
and that “she should immediately report to their office to get her salary and
passport.”13 She was asked to “prepare for immediate repatriation.”
Joy claims that she was told that from June 26 to July 14, 1997, she only earned a
total of NT$9,000.15 According to her, Wacoal deducted NT$3,000 to cover her
plane ticket to Manila.
On October 15, 1997, Joy filed a complaint17 with the National Labor Relations
Commission against petitioner and Wacoal. She claimed that she was illegally
dismissed.18 She asked for the return of her placement fee, the withheld amount
for repatriation costs, payment of her salary for 23 months as well as moral and
exemplary damages.19 She identified Wacoal as Sameer Overseas Placement
Agency’s foreign principal.
Sameer Overseas Placement Agency alleged that respondent's termination was due
to her inefficiency, negligence in her duties, and her “failure to comply with the
work requirements [of] her foreign [employer].”21 The agency also claimed that it
did not ask for a placement fee of ?70,000.00.22 As evidence, it showed Official
Receipt No. 14860 dated June 10, 1997, bearing the amount of ?20,360.00.23
Petitioner added that Wacoal's accreditation with petitioner had already been
transferred to the Pacific Manpower & Management Services, Inc. (Pacific) as of
August 6, 1997.24 Thus, petitioner asserts that it was already substituted by Pacific
Manpower.
Pacific Manpower moved for the dismissal of petitioner’s claims against it.26 It
alleged that there was no employer-employee relationship between them.27
Therefore, the claims against it were outside the jurisdiction of the Labor Arbiter.28
Pacific Manpower argued that the employment contract should first be presented
so that the employer’s contractual obligations might be identified.29 It further
denied that it assumed liability for petitioner’s illegal acts.
On July 29, 1998, the Labor Arbiter dismissed Joy’s complaint.31 Acting Executive
Labor Arbiter Pedro C. Ramos ruled that her complaint was based on mere
allegations.32 The Labor Arbiter found that there was no excess payment of
placement fees, based on the official receipt presented by petitioner.33 The Labor
Arbiter found unnecessary a discussion on petitioner’s transfer of obligations to
Pacific34 and considered the matter immaterial in view of the dismissal of
respondent’s complaint.
Joy appealed36 to the National Labor Relations Commission.
In a resolution37 dated March 31, 2004, the National Labor Relations Commission
declared that Joy was illegally dismissed.38 It reiterated the doctrine that the
burden of proof to show that the dismissal was based on a just or valid cause
belongs to the employer.39 It found that Sameer Overseas Placement Agency failed
to prove that there were just causes for termination.40 There was no sufficient
proof to show that respondent was inefficient in her work and that she failed to
comply with company requirements.41 Furthermore, procedural due process was
not observed in terminating respondent.42cralawred
The National Labor Relations Commission did not rule on the issue of
reimbursement of placement fees for lack of jurisdiction.43 It refused to entertain
the issue of the alleged transfer of obligations to Pacific.44 It did not acquire
jurisdiction over that issue because Sameer Overseas Placement Agency failed to
appeal the Labor Arbiter’s decision not to rule on the matter.45cralawred
The National Labor Relations Commission awarded respondent only three (3)
months worth of salary in the amount of NT$46,080, the reimbursement of the
NT$3,000 withheld from her, and attorney’s fees of NT$300.46cralawred
The Commission denied the agency’s motion for reconsideration47 dated May 12,
2004 through a resolution48 dated July 2, 2004.
Aggrieved by the ruling, Sameer Overseas Placement Agency caused the filing of a
petition49 for certiorari with the Court of Appeals assailing the National Labor
Relations Commission’s resolutions dated March 31, 2004 and July 2, 2004.
The Court of Appeals50 affirmed the decision of the National Labor Relations
Commission with respect to the finding of illegal dismissal, Joy’s entitlement to the
equivalent of three months worth of salary, reimbursement of withheld
repatriation expense, and attorney’s fees.51 The Court of Appeals remanded the
case to the National Labor Relations Commission to address the validity of
petitioner's allegations against Pacific.52 The Court of Appeals held,
thus:chanRoblesvirtualLawlibrary
Although the public respondent found the dismissal of the complainant-respondent
illegal, we should point out that the NLRC merely awarded her three (3) months
backwages or the amount of NT$46,080.00, which was based upon its finding that
she was dismissed without due process, a finding that we uphold, given petitioner’s
lack of worthwhile discussion upon the same in the proceedings below or before us.
Likewise we sustain NLRC’s finding in regard to the reimbursement of her fare,
which is squarely based on the law; as well as the award of attorney’s fees.
But we do find it necessary to remand the instant case to the public respondent for
further proceedings, for the purpose of addressing the validity or propriety of
petitioner’s third-party complaint against the transferee agent or the Pacific
Manpower & Management Services, Inc. and Lea G. Manabat. We should
emphasize that as far as the decision of the NLRC on the claims of Joy Cabiles, is
concerned, the same is hereby affirmed with finality, and we hold petitioner liable
thereon, but without prejudice to further hearings on its third party complaint
against Pacific for reimbursement.
WHEREFORE, premises considered, the assailed Resolutions are hereby partly
AFFIRMED in accordance with the foregoing discussion, but subject to the caveat
embodied in the last sentence. No costs.
SO ORDERED.
Dissatisfied, Sameer Overseas Placement Agency filed this petition.
We are asked to determine whether the Court of Appeals erred when it affirmed
the ruling of the National Labor Relations Commission finding respondent illegally
dismissed and awarding her three months’ worth of salary, the reimbursement of
the cost of her repatriation, and attorney’s fees despite the alleged existence of just
causes of termination.
Petitioner reiterates that there was just cause for termination because there was a
finding of Wacoal that respondent was inefficient in her work.55 Therefore, it
claims that respondent’s dismissal was valid.
Petitioner also reiterates that since Wacoal’s accreditation was validly transferred
to Pacific at the time respondent filed her complaint, it should be Pacific that should
now assume responsibility for Wacoal’s contractual obligations to the workers
originally recruited by petitioner.57cralawred
Sameer Overseas Placement Agency’s petition is without merit. We find for
respondent.
I
Sameer Overseas Placement Agency failed to show that there was just cause for
causing Joy’s dismissal. The employer, Wacoal, also failed to accord her due process
of law.
Indeed, employers have the prerogative to impose productivity and quality
standards at work.58 They may also impose reasonable rules to ensure that the
employees comply with these standards.59 Failure to comply may be a just cause
for their dismissal.60 Certainly, employers cannot be compelled to retain the
services of an employee who is guilty of acts that are inimical to the interest of the
employer.61 While the law acknowledges the plight and vulnerability of workers, it
does not “authorize the oppression or self-destruction of the employer.”62
Management prerogative is recognized in law and in our jurisprudence.
This prerogative, however, should not be abused. It is “tempered with the
employee’s right to security of tenure.”63 Workers are entitled to substantive and
procedural due process before termination. They may not be removed from
employment without a valid or just cause as determined by law and without going
through the proper procedure.
Security of tenure for labor is guaranteed by our Constitution.64cralawred
Employees are not stripped of their security of tenure when they move to work in a
different jurisdiction. With respect to the rights of overseas Filipino workers, we
follow the principle of lex loci contractus.

Thus, in Triple Eight Integrated Services, Inc. v. NLRC,65 this court noted:
Petitioner likewise attempts to sidestep the medical certificate requirement by
contending that since Osdana was working in Saudi Arabia, her employment was
subject to the laws of the host country. Apparently, petitioner hopes to make it
appear that the labor laws of Saudi Arabia do not require any certification by a
competent public health authority in the dismissal of employees due to illness.
Again, petitioner’s argument is without merit.
First, established is the rule that lex loci contractus (the law of the place where the
contract is made) governs in this jurisdiction. There is no question that the contract
of employment in this case was perfected here in the Philippines. Therefore, the
Labor Code, its implementing rules and regulations, and other laws affecting labor
apply in this case. Furthermore, settled is the rule that the courts of the forum will
not enforce any foreign claim obnoxious to the forum’s public policy. Here in the
Philippines, employment agreements are more than contractual in nature. The
Constitution itself, in Article XIII, Section 3, guarantees the special protection of
workers, to wit:
The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining
and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by
law.
....
This public policy should be borne in mind in this case because to allow foreign
employers to determine for and by themselves whether an overseas contract
worker may be dismissed on the ground of illness would encourage illegal or
arbitrary pre-termination of employment contracts.66 (Emphasis supplied, citation
omitted)
Even with respect to fundamental procedural rights, this court emphasized in PCL
Shipping Philippines, Inc. v. NLRC,67 to wit:
Petitioners admit that they did not inform private respondent in writing of the
charges against him and that they failed to conduct a formal investigation to give
him opportunity to air his side. However, petitioners contend that the twin
requirements of notice and hearing applies strictly only when the employment is
within the Philippines and that these need not be strictly observed in cases of
international maritime or overseas employment.
The Court does not agree. The provisions of the Constitution as well as the Labor
Code which afford protection to labor apply to Filipino employees whether working
within the Philippines or abroad. Moreover, the principle of lex loci contractus (the
law of the place where the contract is made) governs in this jurisdiction. In the
present case, it is not disputed that the Contract of Employment entered into by
and between petitioners and private respondent was executed here in the
Philippines with the approval of the Philippine Overseas Employment
Administration (POEA). Hence, the Labor Code together with its implementing rules
and regulations and other laws affecting labor apply in this case.68 (Emphasis
supplied, citations omitted)
By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or
authorized cause and after compliance with procedural due process requirements.
Article 282 of the Labor Code enumerates the just causes of termination by the
employer. Thus:
Art. 282. Termination by employer. An employer may terminate an employment for
any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders
of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and
(e) Other causes analogous to the foregoing.
Petitioner’s allegation that respondent was inefficient in her work and negligent in
her duties69 may, therefore, constitute a just cause for termination under Article
282(b), but only if petitioner was able to prove it.
The burden of proving that there is just cause for termination is on the employer.
“The employer must affirmatively show rationally adequate evidence that the
dismissal was for a justifiable cause.”70 Failure to show that there was valid or just
cause for termination would necessarily mean that the dismissal was
illegal.71cralawred
To show that dismissal resulting from inefficiency in work is valid, it must be shown
that: 1) the employer has set standards of conduct and workmanship against which
the employee will be judged; 2) the standards of conduct and workmanship must
have been communicated to the employee; and 3) the communication was made at
a reasonable time prior to the employee’s performance assessment.
This is similar to the law and jurisprudence on probationary employees, which allow
termination of the employee only when there is “just cause or when [the
probationary employee] fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of
his [or her] engagement.”72cralawred
However, we do not see why the application of that ruling should be limited to
probationary employment. That rule is basic to the idea of security of tenure and
due process, which are guaranteed to all employees, whether their employment is
probationary or regular.
The pre-determined standards that the employer sets are the bases for determining
the probationary employee’s fitness, propriety, efficiency, and qualifications as a
regular employee. Due process requires that the probationary employee be
informed of such standards at the time of his or her engagement so he or she can
adjust his or her character or workmanship accordingly. Proper adjustment to fit
the standards upon which the employee’s qualifications will be evaluated will
increase one’s chances of being positively assessed for regularization by his or her
employer.
Assessing an employee’s work performance does not stop after regularization. The
employer, on a regular basis, determines if an employee is still qualified and
efficient, based on work standards. Based on that determination, and after
complying with the due process requirements of notice and hearing, the employer
may exercise its management prerogative of terminating the employee found
unqualified.
The regular employee must constantly attempt to prove to his or her employer that
he or she meets all the standards for employment. This time, however, the
standards to be met are set for the purpose of retaining employment or promotion.
The employee cannot be expected to meet any standard of character or
workmanship if such standards were not communicated to him or her. Courts
should remain vigilant on allegations of the employer’s failure to communicate
work standards that would govern one’s employment “if [these are] to discharge in
good faith [their] duty to adjudicate.”
In this case, petitioner merely alleged that respondent failed to comply with her
foreign employer’s work requirements and was inefficient in her work.74No
evidence was shown to support such allegations. Petitioner did not even bother to
specify what requirements were not met, what efficiency standards were violated,
or what particular acts of respondent constituted inefficiency.
There was also no showing that respondent was sufficiently informed of the
standards against which her work efficiency and performance were judged. The
parties’ conflict as to the position held by respondent showed that even the matter
as basic as the job title was not clear.
The bare allegations of petitioner are not sufficient to support a claim that there is
just cause for termination. There is no proof that respondent was legally
terminated.
Petitioner failed to comply with the due process requirements
Respondent’s dismissal less than one year from hiring and her repatriation on the
same day show not only failure on the part of petitioner to comply with the
requirement of the existence of just cause for termination. They patently show that
the employers did not comply with the due process requirement.
A valid dismissal requires both a valid cause and adherence to the valid procedure
of dismissal.75 The employer is required to give the charged employee at least two
written notices before termination.76 One of the written notices must inform the
employee of the particular acts that may cause his or her dismissal.77 The other
notice must “[inform] the employee of the employer’s decision.”78 Aside from the
notice requirement, the employee must also be given “an opportunity to be
heard.”79cralawred
Petitioner failed to comply with the twin notices and hearing requirements.
Respondent started working on June 26, 1997. She was told that she was
terminated on July 14, 1997 effective on the same day and barely a month from her
first workday. She was also repatriated on the same day that she was informed of
her termination. The abruptness of the termination negated any finding that she
was properly notified and given the opportunity to be heard. Her constitutional
right to due process of law was violated.
II
Respondent Joy Cabiles, having been illegally dismissed, is entitled to her salary for
the unexpired portion of the employment contract that was violated together with
attorney’s fees and reimbursement of amounts withheld from her salary.
Section 10 of Republic Act No. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, states that overseas workers who were terminated
without just, valid, or authorized cause “shall be entitled to the full reimbursement
of his placement fee with interest of twelve (12%) per annum, plus his salaries for
the unexpired portion of his employment contract or for three (3) months for every
year of the unexpired term, whichever is less.”
Sec. 10. MONEY CLAIMS. – Notwithstanding any provision of law to the contrary,
the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual, moral, exemplary and other forms
of damages.
The liability of the principal/employer and the recruitment/placement agency for
any and all claims under this section shall be joint and several. This provisions [sic]
shall be incorporated in the contract for overseas employment and shall be a
condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and solidarily
liable with the corporation or partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution, amendment or
modification made locally or in a foreign country of the said contract.
Any compromise/amicable settlement or voluntary agreement on money claims
inclusive of damages under this section shall be paid within four (4) months from
the approval of the settlement by the appropriate authority.
In case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, the workers shall be entitled to the full
reimbursement of his placement fee with interest of twelve (12%) per annum, plus
his salaries for the unexpired portion of his employment contract or for three (3)
months for every year of the unexpired term, whichever is less.
....
(Emphasis supplied)
Section 15 of Republic Act No. 8042 states that “repatriation of the worker and the
transport of his [or her] personal belongings shall be the primary responsibility of
the agency which recruited or deployed the worker overseas.” The exception is
when “termination of employment is due solely to the fault of the worker,”80
which as we have established, is not the case. It reads:
SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND. – The
repatriation of the worker and the transport of his personal belongings shall be the
primary responsibility of the agency which recruited or deployed the worker
overseas. All costs attendant to repatriation shall be borne by or charged to the
agency concerned and/or its principal. Likewise, the repatriation of remains and
transport of the personal belongings of a deceased worker and all costs attendant
thereto shall be borne by the principal and/or local agency. However, in cases
where the termination of employment is due solely to the fault of the worker, the
principal/employer or agency shall not in any manner be responsible for the
repatriation of the former and/or his belongings.
....
The Labor Code81 also entitles the employee to 10% of the amount of withheld
wages as attorney’s fees when the withholding is unlawful.
The Court of Appeals affirmed the National Labor Relations Commission’s decision
to award respondent NT$46,080.00 or the three-month equivalent of her salary,
attorney’s fees of NT$300.00, and the reimbursement of the withheld NT$3,000.00
salary, which answered for her repatriation.
We uphold the finding that respondent is entitled to all of these awards. The award
of the three-month equivalent of respondent’s salary should, however, be
increased to the amount equivalent to the unexpired term of the employment
contract.
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc.,82 this
court ruled that the clause “or for three (3) months for every year of the unexpired
term, whichever is less”83 is unconstitutional for violating the equal protection
clause and substantive due process.84cralawred
A statute or provision which was declared unconstitutional is not a law. It “confers
no rights; it imposes no duties; it affords no protection; it creates no office; it is
inoperative as if it has not been passed at all.”85cralawred
We are aware that the clause “or for three (3) months for every year of the
unexpired term, whichever is less” was reinstated in Republic Act No. 8042 upon
promulgation of Republic Act No. 10022 in 2010. Section 7 of Republic Act No.
10022 provides:
Section 7. Section 10 of Republic Act No. 8042, as amended, is hereby amended to
read as follows:
SEC. 10. Money Claims. – Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after the filing of the complaint, the claims arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers
for overseas deployment including claims for actual, moral, exemplary and other
forms of damage. Consistent with this mandate, the NLRC shall endeavor to update
and keep abreast with the developments in the global services industry.
The liability of the principal/employer and the recruitment/placement agency for
any and all claims under this section shall be joint and several. This provision shall
be incorporated in the contract for overseas employment and shall be a condition
precedent for its approval. The performance bond to de [sic] filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and solidarily
liable with the corporation or partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution, amendment or
modification made locally or in a foreign country of the said contract.
Any compromise/amicable settlement or voluntary agreement on money claims
inclusive of damages under this section shall be paid within thirty (30) days from
approval of the settlement by the appropriate authority.
In case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, or any unauthorized deductions from the
migrant worker’s salary, the worker shall be entitled to the full reimbursement if
[sic] his placement fee and the deductions made with interest at twelve percent
(12%) per annum, plus his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is
less.
In case of a final and executory judgement against a foreign employer/principal, it
shall be automatically disqualified, without further proceedings, from participating
in the Philippine Overseas Employment Program and from recruiting and hiring
Filipino workers until and unless it fully satisfies the judgement award.
Noncompliance with the mandatory periods for resolutions of case provided under
this section shall subject the responsible officials to any or all of the following
penalties:
(a) The salary of any such official who fails to render his decision or resolution
within the prescribed period shall be, or caused to be, withheld until the said official
complies therewith;
(b) Suspension for not more than ninety (90) days; or
(c) Dismissal from the service with disqualification to hold any appointive public
office for five (5) years.
Provided, however, That the penalties herein provided shall be without prejudice to
any liability which any such official may have incured [sic] under other existing laws
or rules and regulations as a consequence of violating the provisions of this
paragraph. (Emphasis supplied)
Republic Act No. 10022 was promulgated on March 8, 2010. This means that the
reinstatement of the clause in Republic Act No. 8042 was not yet in effect at the
time of respondent’s termination from work in 1997.86 Republic Act No. 8042
before it was amended by Republic Act No. 10022 governs this case.
When a law is passed, this court awaits an actual case that clearly raises adversarial
positions in their proper context before considering a prayer to declare it as
unconstitutional.
However, we are confronted with a unique situation. The law passed incorporates
the exact clause already declared as unconstitutional, without any perceived
substantial change in the circumstances.
This may cause confusion on the part of the National Labor Relations Commission
and the Court of Appeals. At minimum, the existence of Republic Act No. 10022
may delay the execution of the judgment in this case, further frustrating remedies
to assuage the wrong done to petitioner. Hence, there is a necessity to decide this
constitutional issue.
Moreover, this court is possessed with the constitutional duty to “[p]romulgate
rules concerning the protection and enforcement of constitutional rights.”87 When
cases become moot and academic, we do not hesitate to provide for guidance to
bench and bar in situations where the same violations are capable of repetition but
will evade review. This is analogous to cases where there are millions of Filipinos
working abroad who are bound to suffer from the lack of protection because of the
restoration of an identical clause in a provision previously declared as
unconstitutional.
In the hierarchy of laws, the Constitution is supreme. No branch or office of the
government may exercise its powers in any manner inconsistent with the
Constitution, regardless of the existence of any law that supports such exercise. The
Constitution cannot be trumped by any other law. All laws must be read in light of
the Constitution. Any law that is inconsistent with it is a nullity.
Thus, when a law or a provision of law is null because it is inconsistent with the
Constitution, the nullity cannot be cured by reincorporation or reenactment of the
same or a similar law or provision. A law or provision of law that was already
declared unconstitutional remains as such unless circumstances have so changed as
to warrant a reverse conclusion.
We are not convinced by the pleadings submitted by the parties that the situation
has so changed so as to cause us to reverse binding precedent.
Likewise, there are special reasons of judicial efficiency and economy that attend to
these cases.
The new law puts our overseas workers in the same vulnerable position as they
were prior to Serrano. Failure to reiterate the very ratio decidendi of that case will
result in the same untold economic hardships that our reading of the Constitution
intended to avoid. Obviously, we cannot countenance added expenses for further
litigation that will reduce their hard-earned wages as well as add to the indignity of
having been deprived of the protection of our laws simply because our precedents
have not been followed. There is no constitutional doctrine that causes injustice in
the face of empty procedural niceties. Constitutional interpretation is complex, but
it is never unreasonable.
Thus, in a resolution88 dated October 22, 2013, we ordered the parties and the
Office of the Solicitor General to comment on the constitutionality of the reinstated
clause in Republic Act No. 10022.
In its comment, petitioner argued that the clause was constitutional.90 The
legislators intended a balance between the employers’ and the employees’ rights
by not unduly burdening the local recruitment agency.91 Petitioner is also of the
view that the clause was already declared as constitutional in Serrano.92cralawred
The Office of the Solicitor General also argued that the clause was valid and
constitutional.93 However, since the parties never raised the issue of the
constitutionality of the clause as reinstated in Republic Act No. 10022, its
contention is that it is beyond judicial review.
On the other hand, respondent argued that the clause was unconstitutional
because it infringed on workers’ right to contract.95cralawred
We observe that the reinstated clause, this time as provided in Republic Act. No.
10022, violates the constitutional rights to equal protection and due process.96
Petitioner as well as the Solicitor General have failed to show any compelling
change in the circumstances that would warrant us to revisit the precedent.
We reiterate our finding in Serrano v. Gallant Maritime that limiting wages that
should be recovered by an illegally dismissed overseas worker to three months is
both a violation of due process and the equal protection clauses of the Constitution.
Equal protection of the law is a guarantee that persons under like circumstances
and falling within the same class are treated alike, in terms of “privileges conferred
and liabilities enforced.”97 It is a guarantee against “undue favor and individual or
class privilege, as well as hostile discrimination or the oppression of
inequality.”98cralawred
In creating laws, the legislature has the power “to make distinctions and
classifications.”99 In exercising such power, it has a wide discretion.100cralawred
The equal protection clause does not infringe on this legislative power.101 A law is
void on this basis, only if classifications are made arbitrarily.102 There is no
violation of the equal protection clause if the law applies equally to persons within
the same class and if there are reasonable grounds for distinguishing between
those falling within the class and those who do not fall within the class.103 A law
that does not violate the equal protection clause prescribes a reasonable
classification.104cralawred
A reasonable classification “(1) must rest on substantial distinctions; (2) must be
germane to the purposes of the law; (3) must not be limited to existing conditions
only; and (4) must apply equally to all members of the same class.”
The reinstated clause does not satisfy the requirement of reasonable classification.
In Serrano, we identified the classifications made by the reinstated clause. It
distinguished between fixed-period overseas workers and fixed-period local
workers.106 It also distinguished between overseas workers with employment
contracts of less than one year and overseas workers with employment contracts of
at least one year.107 Within the class of overseas workers with at least one-year
employment contracts, there was a distinction between those with at least a year
left in their contracts and those with less than a year left in their contracts when
they were illegally dismissed.108cralawred
The Congress’ classification may be subjected to judicial review. In Serrano, there is
a “legislative classification which impermissibly interferes with the exercise of a
fundamental right or operates to the peculiar disadvantage of a suspect class.”

Under the Constitution, labor is afforded special protection.110 Thus, this court in
Serrano, “[i]mbued with the same sense of ‘obligation to afford protection to labor,’
. . . employ[ed] the standard of strict judicial scrutiny, for it perceive[d] in the
subject clause a suspect classification prejudicial to OFWs.”
We also noted in Serrano that before the passage of Republic Act No. 8042, the
money claims of illegally terminated overseas and local workers with fixed-term
employment were computed in the same manner.112 Their money claims were
computed based on the “unexpired portions of their contracts.”113 The adoption of
the reinstated clause in Republic Act No. 8042 subjected the money claims of
illegally dismissed overseas workers with an unexpired term of at least a year to a
cap of three months worth of their salary.114 There was no such limitation on the
money claims of illegally terminated local workers with fixed-term employment.
We observed that illegally dismissed overseas workers whose employment
contracts had a term of less than one year were granted the amount equivalent to
the unexpired portion of their employment contracts.116 Meanwhile, illegally
dismissed overseas workers with employment terms of at least a year were granted
a cap equivalent to three months of their salary for the unexpired portions of their
contracts.
Observing the terminologies used in the clause, we also found that “the subject
clause creates a sub-layer of discrimination among OFWs whose contract periods
are for more than one year: those who are illegally dismissed with less than one
year left in their contracts shall be entitled to their salaries for the entire unexpired
portion thereof, while those who are illegally dismissed with one year or more
remaining in their contracts shall be covered by the reinstated clause, and their
monetary benefits limited to their salaries for three months only.”
We do not need strict scrutiny to conclude that these classifications do not rest on
any real or substantial distinctions that would justify different treatments in terms
of the computation of money claims resulting from illegal termination.
Overseas workers regardless of their classifications are entitled to security of
tenure, at least for the period agreed upon in their contracts. This means that they
cannot be dismissed before the end of their contract terms without due process. If
they were illegally dismissed, the workers’ right to security of tenure is violated.
The rights violated when, say, a fixed-period local worker is illegally terminated are
neither greater than nor less than the rights violated when a fixed-period overseas
worker is illegally terminated. It is state policy to protect the rights of workers
without qualification as to the place of employment.119 In both cases, the workers
are deprived of their expected salary, which they could have earned had they not
been illegally dismissed. For both workers, this deprivation translates to economic
insecurity and disparity.120 The same is true for the distinctions between overseas
workers with an employment contract of less than one year and overseas workers
with at least one year of employment contract, and between overseas workers with
at least a year left in their contracts and overseas workers with less than a year left
in their contracts when they were illegally dismissed.
For this reason, we cannot subscribe to the argument that “[overseas workers] are
contractual employees who can never acquire regular employment status, unlike
local workers”121 because it already justifies differentiated treatment in terms of
the computation of money claims.122cralawred
Likewise, the jurisdictional and enforcement issues on overseas workers’ money
claims do not justify a differentiated treatment in the computation of their money
claims.123 If anything, these issues justify an equal, if not greater protection and
assistance to overseas workers who generally are more prone to exploitation given
their physical distance from our government.
We also find that the classifications are not relevant to the purpose of the law,
which is to “establish a higher standard of protection and promotion of the welfare
of migrant workers, their families and overseas Filipinos in distress, and for other
purposes.”124 Further, we find specious the argument that reducing the liability of
placement agencies “redounds to the benefit of the [overseas]
workers.”125cralawred
Putting a cap on the money claims of certain overseas workers does not increase
the standard of protection afforded to them. On the other hand, foreign employers
are more incentivized by the reinstated clause to enter into contracts of at least a
year because it gives them more flexibility to violate our overseas workers’ rights.
Their liability for arbitrarily terminating overseas workers is decreased at the
expense of the workers whose rights they violated. Meanwhile, these overseas
workers who are impressed with an expectation of a stable job overseas for the
longer contract period disregard other opportunities only to be terminated earlier.
They are left with claims that are less than what others in the same situation would
receive. The reinstated clause, therefore, creates a situation where the law meant
to protect them makes violation of rights easier and simply benign to the violator.
As Justice Brion said in his concurring opinion in Serrano:
Section 10 of R.A. No. 8042 affects these well-laid rules and measures, and in fact
provides a hidden twist affecting the principal/employer’s liability. While intended
as an incentive accruing to recruitment/manning agencies, the law, as worded,
simply limits the OFWs’ recovery in wrongful dismissal situations. Thus, it redounds
to the benefit of whoever may be liable, including the principal/employer – the
direct employer primarily liable for the wrongful dismissal. In this sense, Section 10
– read as a grant of incentives to recruitment/manning agencies – oversteps what it
aims to do by effectively limiting what is otherwise the full liability of the foreign
principals/employers. Section 10, in short, really operates to benefit the wrong
party and allows that party, without justifiable reason, to mitigate its liability for
wrongful dismissals. Because of this hidden twist, the limitation of liability under
Section 10 cannot be an “appropriate” incentive, to borrow the term that R.A. No.
8042 itself uses to describe the incentive it envisions under its purpose clause.
What worsens the situation is the chosen mode of granting the incentive: instead of
a grant that, to encourage greater efforts at recruitment, is directly related to extra
efforts undertaken, the law simply limits their liability for the wrongful dismissals of
already deployed OFWs. This is effectively a legally-imposed partial condonation of
their liability to OFWs, justified solely by the law’s intent to encourage greater
deployment efforts. Thus, the incentive, from a more practical and realistic view, is
really part of a scheme to sell Filipino overseas labor at a bargain for purposes
solely of attracting the market. . . .
The so-called incentive is rendered particularly odious by its effect on the OFWs —
the benefits accruing to the recruitment/manning agencies and their principals are
taken from the pockets of the OFWs to whom the full salaries for the unexpired
portion of the contract rightfully belong. Thus, the principals/employers and the
recruitment/manning agencies even profit from their violation of the security of
tenure that an employment contract embodies. Conversely, lesser protection is
afforded the OFW, not only because of the lessened recovery afforded him or her
by operation of law, but also because this same lessened recovery renders a
wrongful dismissal easier and less onerous to undertake; the lesser cost of
dismissing a Filipino will always be a consideration a foreign employer will take into
account in termination of employment decisions. . . .126
Further, “[t]here can never be a justification for any form of government action that
alleviates the burden of one sector, but imposes the same burden on another
sector, especially when the favored sector is composed of private businesses such
as placement agencies, while the disadvantaged sector is composed of OFWs whose
protection no less than the Constitution commands. The idea that private business
interest can be elevated to the level of a compelling state interest is
odious.”127cralawred
Along the same line, we held that the reinstated clause violates due process rights.
It is arbitrary as it deprives overseas workers of their monetary claims without any
discernable valid purpose.128cralawred
Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her
contract, in accordance with Section 10 of Republic Act No. 8042. The award of the
three-month equivalence of respondent’s salary must be modified accordingly.
Since she started working on June 26, 1997 and was terminated on July 14, 1997,
respondent is entitled to her salary from July 15, 1997 to June 25, 1998. “To rule
otherwise would be iniquitous to petitioner and other OFWs, and would, in effect,
send a wrong signal that principals/employers and recruitment/manning agencies
may violate an OFW’s security of tenure which an employment contract embodies
and actually profit from such violation based on an unconstitutional provision of
law.”129cralawred
III
On the interest rate, the Bangko Sentral ng Pilipinas Circular No. 799 of June 21,
2013, which revised the interest rate for loan or forbearance from 12% to 6% in the
absence of stipulation, applies in this case. The pertinent portions of Circular No.
799, Series of 2013, read:chanRoblesvirtualLawlibrary
The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the
following revisions governing the rate of interest in the absence of stipulation in
loan contracts, thereby amending Section 2 of Circular No. 905, Series of
1982:cralawlawlibrary
Section 1. The rate of interest for the loan or forbearance of any money, goods or
credits and the rate allowed in judgments, in the absence of an express contract as
to such rate of interest, shall be six percent (6%) per annum.
Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations for
Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for
Non-Bank Financial Institutions are hereby amended accordingly.
This Circular shall take effect on 1 July 2013.
Through the able ponencia of Justice Diosdado Peralta, we laid down the guidelines
in computing legal interest in Nacar v. Gallery Frames:
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:
When the obligation is breached, and it consists in the payment of a sum of money,
i.e., a loan or forbearance of money, the interest due should be that which may
have been stipulated in writing. Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In the absence of stipulation, the
rate of interest shall be 6% per annum to be computed from default, i.e., from
judicial or extrajudicial demand under and subject to the provisions of Article 1169
of the Civil Code.
When an obligation, not constituting a loan or forbearance of money, is breached,
an interest on the amount of damages awarded may be imposed at the discretion
of the court at the rate of 6% per annum. No interest, however, shall be adjudged
on unliquidated claims or damages, except when or until the demand can be
established with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin to run from the time
the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such
certainty cannot be so reasonably established at the time the demand is made, the
interest shall begin to run only from the date the judgment of the court is made (at
which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case,
be on the amount finally adjudged.
When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 6% per annum from such finality until its satisfaction,
this interim period being deemed to be by then an equivalent to a forbearance of
credit.
And, in addition to the above, judgments that have become final and executory
prior to July 1, 2013, shall not be disturbed and shall continue to be implemented
applying the rate of interest fixed therein.131
Circular No. 799 is applicable only in loans and forbearance of money, goods, or
credits, and in judgments when there is no stipulation on the applicable interest
rate. Further, it is only applicable if the judgment did not become final and
executory before July 1, 2013.
We add that Circular No. 799 is not applicable when there is a law that states
otherwise. While the Bangko Sentral ng Pilipinas has the power to set or limit
interest rates,133 these interest rates do not apply when the law provides that a
different interest rate shall be applied. “[A] Central Bank Circular cannot repeal a
law. Only a law can repeal another law.”
For example, Section 10 of Republic Act No. 8042 provides that unlawfully
terminated overseas workers are entitled to the reimbursement of his or her
placement fee with an interest of 12% per annum. Since Bangko Sentral ng Pilipinas
circulars cannot repeal Republic Act No. 8042, the issuance of Circular No. 799 does
not have the effect of changing the interest on awards for reimbursement of
placement fees from 12% to 6%. This is despite Section 1 of Circular No. 799, which
provides that the 6% interest rate applies even to judgments.
Moreover, laws are deemed incorporated in contracts. “The contracting parties
need not repeat them. They do not even have to be referred to. Every contract,
thus, contains not only what has been explicitly stipulated, but the statutory
provisions that have any bearing on the matter.”135 There is, therefore, an implied
stipulation in contracts between the placement agency and the overseas worker
that in case the overseas worker is adjudged as entitled to reimbursement of his or
her placement fees, the amount shall be subject to a 12% interest per annum. This
implied stipulation has the effect of removing awards for reimbursement of
placement fees from Circular No. 799’s coverage.
The same cannot be said for awards of salary for the unexpired portion of the
employment contract under Republic Act No. 8042. These awards are covered by
Circular No. 799 because the law does not provide for a specific interest rate that
should apply.
In sum, if judgment did not become final and executory before July 1, 2013 and
there was no stipulation in the contract providing for a different interest rate, other
money claims under Section 10 of Republic Act No. 8042 shall be subject to the 6%
interest per annum in accordance with Circular No. 799.
This means that respondent is also entitled to an interest of 6% per annum on her
money claims from the finality of this judgment.
IV
Finally, we clarify the liabilities of Wacoal as principal and petitioner as the
employment agency that facilitated respondent’s overseas employment.
Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 provides that
the foreign employer and the local employment agency are jointly and severally
liable for money claims including claims arising out of an employer-employee
relationship and/or damages. This section also provides that the performance bond
filed by the local agency shall be answerable for such money claims or damages if
they were awarded to the employee.
This provision is in line with the state’s policy of affording protection to labor and
alleviating workers’ plight.
In overseas employment, the filing of money claims against the foreign employer is
attended by practical and legal complications. The distance of the foreign employer
alone makes it difficult for an overseas worker to reach it and make it liable for
violations of the Labor Code. There are also possible conflict of laws, jurisdictional
issues, and procedural rules that may be raised to frustrate an overseas worker’s
attempt to advance his or her claims.
It may be argued, for instance, that the foreign employer must be impleaded in the
complaint as an indispensable party without which no final determination can be
had of an action.137cralawred
The provision on joint and several liability in the Migrant Workers and Overseas
Filipinos Act of 1995 assures overseas workers that their rights will not be frustrated
with these complications.
The fundamental effect of joint and several liability is that “each of the debtors is
liable for the entire obligation.”138 A final determination may, therefore, be
achieved even if only one of the joint and several debtors are impleaded in an
action. Hence, in the case of overseas employment, either the local agency or the
foreign employer may be sued for all claims arising from the foreign employer’s
labor law violations. This way, the overseas workers are assured that someone —
the foreign employer’s local agent — may be made to answer for violations that the
foreign employer may have committed.
The Migrant Workers and Overseas Filipinos Act of 1995 ensures that overseas
workers have recourse in law despite the circumstances of their employment. By
providing that the liability of the foreign employer may be “enforced to the full
extent”139 against the local agent, the overseas worker is assured of immediate
and sufficient payment of what is due them.
Corollary to the assurance of immediate recourse in law, the provision on joint and
several liability in the Migrant Workers and Overseas Filipinos Act of 1995 shifts the
burden of going after the foreign employer from the overseas worker to the local
employment agency. However, it must be emphasized that the local agency that is
held to answer for the overseas worker’s money claims is not left without remedy.
The law does not preclude it from going after the foreign employer for
reimbursement of whatever payment it has made to the employee to answer for
the money claims against the foreign employer.
A further implication of making local agencies jointly and severally liable with the
foreign employer is that an additional layer of protection is afforded to overseas
workers. Local agencies, which are businesses by nature, are inoculated with
interest in being always on the lookout against foreign employers that tend to
violate labor law. Lest they risk their reputation or finances, local agencies must
already have mechanisms for guarding against unscrupulous foreign employers
even at the level prior to overseas employment applications.
With the present state of the pleadings, it is not possible to determine whether
there was indeed a transfer of obligations from petitioner to Pacific. This should not
be an obstacle for the respondent overseas worker to proceed with the
enforcement of this judgment. Petitioner is possessed with the resources to
determine the proper legal remedies to enforce its rights against Pacific, if any.
V
Many times, this court has spoken on what Filipinos may encounter as they travel
into the farthest and most difficult reaches of our planet to provide for their
families. In Prieto v. NLRC:
The Court is not unaware of the many abuses suffered by our overseas workers in
the foreign land where they have ventured, usually with heavy hearts, in pursuit of
a more fulfilling future. Breach of contract, maltreatment, rape, insufficient
nourishment, sub-human lodgings, insults and other forms of debasement, are only
a few of the inhumane acts to which they are subjected by their foreign employers,
who probably feel they can do as they please in their own country. While these
workers may indeed have relatively little defense against exploitation while they
are abroad, that disadvantage must not continue to burden them when they return
to their own territory to voice their muted complaint. There is no reason why, in
their very own land, the protection of our own laws cannot be extended to them in
full measure for the redress of their grievances.
But it seems that we have not said enough.
We face a diaspora of Filipinos. Their travails and their heroism can be told a million
times over; each of their stories as real as any other. Overseas Filipino workers
brave alien cultures and the heartbreak of families left behind daily. They would
count the minutes, hours, days, months, and years yearning to see their sons and
daughters. We all know of the joy and sadness when they come home to see them
all grown up and, being so, they remember what their work has cost them. Twitter
accounts, Facetime, and many other gadgets and online applications will never
substitute for their lost physical presence.
Unknown to them, they keep our economy afloat through the ebb and flow of
political and economic crises. They are our true diplomats, they who show the
world the resilience, patience, and creativity of our people. Indeed, we are a people
who contribute much to the provision of material creations of this world.
This government loses its soul if we fail to ensure decent treatment for all Filipinos.
We default by limiting the contractual wages that should be paid to our workers
when their contracts are breached by the foreign employers. While we sit, this
court will ensure that our laws will reward our overseas workers with what they
deserve: their dignity.

Inevitably, their dignity is ours as well.

WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is

AFFIRMED with modification. Petitioner Sameer Overseas Placement Agency is
ORDERED to pay respondent Joy C. Cabiles the amount equivalent to her salary for
the unexpired portion of her employment contract at an interest of 6% per annum
from the finality of this judgment. Petitioner is also ORDERED to reimburse
respondent the withheld NT$3,000.00 salary and pay respondent attorney’s fees of
NT$300.00 at an interest of 6% per annum from the finality of this judgment.

The clause, “or for three (3) months for every year of the unexpired term,
whichever is less” in Section 7 of Republic Act No. 10022 amending Section 10 of
Republic Act No. 8042 is declared unconstitutional and, therefore, null and void. SO
ORDERED.
INDUSTRIAL PERSONNEL & MANAGEMENT SERVICES, INC. (IPAMS), SNC LAVALIN
ENGINEERS & CONTRACTORS, INC. AND ANGELITO C. HERNANDEZ, Petitioners, v.
JOSE G. DE VERA AND ALBERTO B. ARRIOLA, Respondents. G.R. No. 205703,
March 07, 2016
MENDOZA, J.:
When can a foreign law govern an overseas employment contract? This is the
fervent question that the Court shall resolve, once and for all.
This petition for review on certiorari seeks to reverse and set aside the January 24,
2013 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 118869, which
modified the November 30, 2010 Decision2 of the National Labor Relations
Commission (NLRC) and its February 2, 2011 Resolution,3 in NLRC LAC Case No. 08-
000572-10/NLRC Case No. NCR 09-13563-09, a case for illegal termination of an
Overseas Filipino Worker (OFW).
The Facts
Petitioner Industrial Personnel & Management Services, Inc. (IPAMS) is a local
placement agency duly organized and existing under Philippine laws, with petitioner
Angelito C. Hernandez as its president and managing director. Petitioner SNC
Lavalin Engineers & Contractors, Inc. (SNC-Lavalin) is the principal of IPAMS, a
Canadian company with business interests in several countries. On the other hand,
respondent Alberto Arriola (Arriola) is a licensed general surgeon in the
Philippines.4
Employee's Position
Arriola was offered by SNC-Lavalin, through its letter,5 dated May 1, 2008, the
position of Safety Officer in its Ambatovy Project site in Madagascar. The position
offered had a rate of CA$32.00 per hour for forty (40) hours a week with overtime
pay in excess of forty (40) hours. It was for a period of nineteen (19) months
starting from June 9, 2008 to December 31, 2009.
Arriola was then hired by SNC-Lavalin, through its local manning agency, IPAMS,
and his overseas employment contract was processed with the Philippine Overseas
Employment Agency (POEA)6 In a letter of understanding,7 dated June 5, 2008,
SNC-Lavalin confirmed Arriola's assignment in the Ambatovy Project. According to
Arriola, he signed the contract of employment in the Philippines.8 On June 9, 2008,
Arriola started working in Madagascar.
After three months, Arriola received a notice of pre-termination of employment,9
dated September 9, 2009, from SNC-Lavalin. It stated that his employment would
be pre-terminated effective September 11, 2009 due to diminishing workload in the
area of his expertise and the unavailability of alternative assignments.
Consequently, on September 15, 2009, Arriola was repatriated. SNC-Lavalin
deposited in Arriola's bank account his pay amounting to Two Thousand Six
Hundred Thirty Six Dollars and Eight Centavos (CA$2,636.80), based on Canadian
labor law.
Aggrieved, Arriola filed a complaint against the petitioners for illegal dismissal and
non-payment of overtime pay, vacation leave and sick leave pay before the Labor
Arbiter (LA). He claimed that SNC-Lavalin still owed him unpaid salaries equivalent
to the three-month unexpired portion of his contract, amounting to, more or less,
One Million Sixty-Two Thousand Nine Hundred Thirty-Six Pesos (P1,062,936.00). He
asserted that SNC-Lavalin never offered any valid reason for his early termination
and that he was not given sufficient notice regarding the same. Arriola also insisted
that the petitioners must prove the applicability of Canadian law before the same
could be applied to his employment contract.
Employer's Position
The petitioners denied the charge of illegal dismissal against them. They claimed
that SNC-Lavalin was greatly affected by the global financial crises during the latter
part of 2008. The economy of Madagascar, where SNC-Lavalin had business sites,
also slowed down. As proof of its looming financial standing, SNC-Lavalin presented
a copy of a news item in the Financial Post,10 dated March 5, 2009, showing the
decline of the value of its stocks. Thus, it had no choice but to minimize its
expenditures and operational expenses. It re-organized its Health and Safety
Department at the Ambatovy Project site and Arriola was one of those affected.11
The petitioners also invoked EDI-Staffbuilders International, Inc. v. NLRC12 (EDI-
Staffbuilders), pointing out that particular labor laws of a foreign country
incorporated in a contract freely entered into between an OFW and a foreign
employer through the latter's agent was valid. In the present case, as all of Arriola's
employment documents were processed in Canada, not to mention that SNC-
Lavalin's office was in Ontario, the principle of lex loci celebrationis was applicable.
Thus, the petitioners insisted that Canadian laws governed the contract.
The petitioners continued that the pre-termination of Arriola's contract was valid
for being consistent with the provisions of both the Expatriate Policy and laws of
Canada. The said foreign law did not require any ground for early termination of
employment, and the only requirement was the written notice of termination. Even
assuming that Philippine laws should apply, Arriola would still be validly dismissed
because domestic law recognized retrenchment and redundancy as legal grounds
for termination.
In their Rejoinder,13 the petitioners presented a copy of the Employment Standards
Act (ESA) of Ontario, which was duly authenticated by the Canadian authorities and
certified by the Philippine Embassy.
The LA Ruling
In a Decision,14 dated May 31, 2010, the LA dismissed Arriola's complaint for lack of
merit. The LA ruled that the rights and obligations among and between the OFW,
the local recruiter/agent, and the foreign employer/principal were governed by the
employment contract pursuant to the EDI-Staffbuilders case. Thus, the provisions
on termination of employment found in the ESA, a foreign law which governed
Arriola's employment contract, were applied. Given that SNC-Lavalin was able to
produce the duly authenticated ESA, the LA opined that there was no other
conclusion but to uphold the validity of Arriola's dismissal based on Canadian law.
The fallo of the LA decision reads:
WHEREFORE, all the foregoing premises being considered, judgment is hereby
rendered dismissing the complaint for lack of merit.
SO ORDERED.
Aggrieved, Arriola elevated the LA decision before the NLRC.
The NLRC Ruling
In its decision, dated November 30, 2010, the NLRC reversed the LA decision and
ruled that Arriola was illegally dismissed by the petitioners. Citing PNB v.
Cabansag,16 the NLRC stated that whether employed locally or overseas, all Filipino
workers enjoyed the protective mantle of Philippine labor and social legislation,
contract stipulations to the contrary notwithstanding. Thus, the Labor Code of the
Philippines and Republic Act (R.A.) No. 8042, or the Migrant Workers Act, as
amended, should be applied. Moreover, the NLRC added that the overseas
employment contract of Arriola was processed in the POEA.
Applying the Philippine laws, the NLRC found that there was no substantial
evidence presented by the petitioners to show any just or authorized cause to
terminate Arriola. The ground of financial losses by SNC-Lavalin was not supported
by sufficient and credible evidence. The NLRC concluded that, for being illegally
dismissed, Arriola should be awarded CA$81,920.00 representing sixteen (16)
months of Arriola's purported unpaid salary, pursuant to the Serrano v. Gallant17
doctrine. The decretal portion of the NLRC decision states:
WHEREFORE, premises considered, judgment is hereby rendered finding
complainant-appellant to have been illegally dismissed. Respondents-appellees are
hereby ordered to pay complainant-appellant the amount of CA$81,920.00, or its
Philippine Peso equivalent prevailing at the time of payment. Accordingly, the
decision of the Labor Arbiter dated May 31, 2010 is hereby VACATED and SET
ASIDE.
SO ORDERED.
The petitioners moved for reconsideration, but their motion was denied by the
NLRC in its resolution, dated February 2, 2011.
Undaunted, the petitioners filed a petition for certiorari before the CA arguing that
it should be the ESA, or the Ontario labor law, that should be applied in Arriola's
employment contract. No temporary restraining order, however, was issued by the
CA.
The Execution Proceedings
In the meantime, execution proceedings were commenced before the LA by Arriola.
The LA granted the motion for execution in the Order,19 dated August 8, 2011.
The petitioners appealed the execution order to the NLRC. In its Decision,20 dated
May 31, 2012, the NLRC corrected the decretal portion of its November 30, 2010
decision. It decreased the award of backpay in the amount of CA$26,880.00 or
equivalent only to three (3) months and three (3) weeks pay based on 70-hours per
week workload. The NLRC found that when Arriola was dismissed on September 9,
2009, he only had three (3) months and three (3) weeks or until December 31, 2009
remaining under his employment contract.
Still not satisfied with the decreased award, IPAMS filed a separate petition for
certiorari before the CA. In its decision, dated July 25, 2013, the CA affirmed the
decrease in Arriola's backpay because the unpaid period in his contract was just
three (3) months and three (3) weeks.
Unperturbed, IPAMS appealed before the Court and the case was docketed as G.R.
No. 212031. The appeal, however, was dismissed outright by the Court in its
resolution, dated August 8, 2014, because it was belatedly filed and it did not
comply with Sections 4 and 5 of Rule 7 of the Rules of Court. Hence, it was settled in
the execution proceedings that the award of backpay to Arriola should only amount
to three (3) months and three (3) weeks of his pay.
The CA Ruling
Returning to the principal case of illegal dismissal, in its assailed January 24, 2013
decision, the CA affirmed that Arriola was illegally dismissed by the petitioners. The
CA explained that even though an authenticated copy of the ESA was submitted, it
did not mean that the said foreign law automatically applied in this case. Although
parties were free to establish stipulations in their contracts, the same must remain
consistent with law, morals, good custom, public order or public policy. The
appellate court wrote that the ESA allowed an employer to disregard the required
notice of termination by simply giving the employee a severance pay. The ESA could
not be made to apply in this case for being contrary to our Constitution, specifically
on the right of due process. Thus, the CA opined that our labor laws should find
application.
As the petitioners neither complied with the twin notice-rule nor offered any just or
authorized cause for his termination under the Labor Code, the CA held that
Arriola's dismissal was illegal. Accordingly, it pronounced that Arriola was entitled
to his salary for the unexpired portion of his contract which is three (3) months and
three (3) weeks salary. It, however, decreased the award of backpay to Arriola
because the NLRC made a wrong calculation. Based on his employment contract,
the backpay of Arriola should only be computed on a 40-hour per week workload,
or in the amount of CA$19,200.00. The CA disposed the case in this wise:
WHEREFORE, in view of the foregoing premises, the petition is PARTIALLY
GRANTED. The assailed Order of the National Labor Relations Commission in NLRC
LAC No. 08-000572-10/NLRC Case No. NCR 09-13563-09 is MODIFIED in that private
respondent is only entitled to a monetary judgment equivalent to his unpaid
salaries in the amount of CA$19,200.00 or its Philippine Peso equivalent.
SO ORDERED.
Hence, this petition, anchored on the following
ISSUES
I employment.
WHETHER OR NOT RESPONDENT ARRIOLA WAS VALIDLY DISMISSED PURSUANT TO
THE EMPLOYMENT CONTRACT.
II
GRANTING THAT THERE WAS ILLEGAL DISMISSAL IN THE CASE AT BAR, WHETHER
OR NOT THE SIX-WEEK ON, TWO-WEEK OFF SCHEDULE SHOULD BE USED IN THE
COMPUTATION OF ANY MONETARY AWARD.
III
GRANTING THAT THERE WAS ILLEGAL DISMISSAL, WHETHER OR NOT THE AMOUNT
BEING CLAIMED BY RESPONDENTS HAD ALREADY BEEN SATISFIED, OR AT THE VERY
LEAST, WHETHER OR NOT THE AMOUNT OF CA$2,636.80 SHOULD BE DEDUCTED
FROM THE MONETARY AWARD.22ChanRoblesVirtualawlibrary
The petitioners argue that the rights and obligations of the OFW, the local recruiter,
and the foreign employer are governed by the employment contract, citing EDI-
Staffbuilders; that the terms and conditions of Arriola's employment are embodied
in the Expatriate Policy, Ambatovy Project - Site, Long Term, hence, the laws of
Canada must be applied; that the ESA, or the Ontario labor law, does not require
any ground for the early termination of employment and it permits the termination
without any notice provided that a severance pay is given; that the ESA was duly
authenticated by the Canadian authorities and certified by the Philippine Embassy;
that the NLRC Sixth Division exhibited bias and bad faith when it made a wrong
computation on the award of backpay; and that, assuming there was illegal
dismissal, the CA$2,636.80, earlier paid to Arriola, and his home leaves should be
deducted from the award of backpay.
In his Comment,23 Arriola countered that foreign laws could not apply to
employment contracts if they were contrary to law, morals, good customs, public
order or public policy, invoking Pakistan International Airlines Corporation v. Ople
(Pakistan International);24 that the ESA was not applicable because it was contrary
to his constitutional right to due process; that the petitioners failed to substantiate
an authorized cause to justify his dismissal under Philippine labor law; and that the
petitioners could not anymore claim a deduction of CA$2,636.80 from the award of
backpay because it was raised for the first time on appeal.
In their Reply,25 the petitioners asserted that R.A. No. 8042 recognized the
applicability of foreign laws on labor contracts; that the Pakistan International case
was superseded by EDI-Staffbuilders and other subsequent cases; and that SNC-
Lavalin suffering financial losses was an authorized cause to terminate Arriola's
In his Memorandum,26 Arriola asserted that his employment contract was
executed in the Philippines and that the alleged authorized cause of financial losses
by the petitioners was not substantiated by evidence.
In their Consolidated Memorandum,27 the petitioners reiterated that the ESA was
applicable in the present case and that recent jurisprudence recognized that the
parties could agree on the applicability of foreign laws in their labor contracts.
The Court's Ruling
The petition lacks merit.
Application of foreign laws with labor contracts
At present, Filipino laborers, whether skilled or professional, are enticed to depart
from the motherland in search of greener pastures. There is a distressing reality
that the offers of employment abroad are more lucrative than those found in our
own soils. To reap the promises of the foreign dream, our unsung heroes must
endure homesickness, solitude, discrimination, mental and emotional struggle, at
times, physical turmoil, and, worse, death. On the other side of the table is the
growing number of foreign employers attracted in hiring Filipino workers because
of their reasonable compensations and globally-competitive skills and
qualifications. Between the dominant foreign employers and the vulnerable and
desperate OFWs, however, there is an inescapable truth that the latter are in need
of greater safeguard and protection.
In order to afford the full protection of labor to our OFWs, the State has vigorously
enacted laws, adopted regulations and policies, and established agencies to ensure
that their needs are satisfied and that they continue to work in a humane living
environment outside of the country. Despite these efforts, there are still issues left
unsolved in the realm of overseas employment. One existing question is posed
before the Court -when should an overseas labor contract be governed by a foreign
law? To answer this burning query, a review of the relevant laws and jurisprudence
is warranted.
R.A. No. 8042, or the Migrant Workers Act, was enacted to institute the policies on
overseas employment and to establish a higher standard of protection and
promotion of the welfare of migrant workers.28 It emphasized that while
recognizing the significant contribution of Filipino migrant workers to the national
economy through their foreign exchange remittances, the State does not promote
overseas employment as a means to sustain economic growth and achieve national
development.29 Although it acknowledged claims arising out of law or contract
involving Filipino workers,30 it does not categorically provide that foreign laws are
absolutely and automatically applicable in overseas employment contracts.
The issue of applying foreign laws to labor contracts was initially raised before the
Court in Pakistan International. It was stated in the labor contract therein (1) that it
would be governed by the laws of Pakistan, (2) that the employer have the right to
terminate the employee at any time, and (3) that the one-month advance notice in
terminating the employment could be dispensed with by paying the employee an
equivalent one-month salary. Therein, the Court elaborated on the parties' right to
stipulate in labor contracts, to wit:
A contract freely entered into should, of course, be respected, as PIA argues, since a
contract is the law between the parties. The principle of party autonomy in
contracts is not, however, an absolute principle. The rule in Article 1306, of our Civil
Code is that the contracting parties may establish such stipulations as they may
deem convenient, "provided they are not contrary to law, morals, good customs,
public order or public policy." Thus, counter-balancing the principle of autonomy of
contracting parties is the equally general rule that provisions of applicable law,
especially provisions relating to matters affected with public policy, are deemed
written into the contract. Put a little differently, the governing principle is that
parties may not contract away applicable provisions of law especially peremptory
provisions dealing with matters heavily impressed with public interest. The law
relating to labor and employment is clearly such an area and parties are not at
liberty to insulate themselves and their relationships from the impact of labor laws
and regulations by simply contracting with each other. x x x31
[Emphases Supplied]
In that case, the Court held that the labor relationship between OFW and the
foreign employer is "much affected with public interest and that the otherwise
applicable Philippine laws and regulations cannot be rendered illusory by the
parties agreeing upon some other law to govern their relationship."32 Thus, the
Court applied the Philippine laws, instead of the Pakistan laws. It was also held that
the provision in the employment contract, where the employer could terminate the
employee at any time for any ground and it could even disregard the notice of
termination, violates the employee's right to security of tenure under Articles 280
and 281 of the Labor Code.
In EDI-Staffbuilders, the case heavily relied on by the petitioners, it was reiterated
that, "[i]n formulating the contract, the parties may establish such stipulations,
clauses, terms and conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order, or public policy."33 In that
case, the overseas contract specifically stated that Saudi Labor Laws would govern
matters not provided for in the contract. The employer, however, failed to prove
the said foreign law, hence, the doctrine of processual presumption came into play
and the Philippine labor laws were applied. Consequently, the Court did not discuss
any longer whether the Saudi labor laws were contrary to Philippine labor laws.
The case of Becmen Service Exporter and Promotion, Inc. v. Spouses Cuaresma,34
though not an illegal termination case, elucidated on the effect of foreign laws on
employment. It involved a complaint for insurance benefits and damages arising
from the death of a Filipina nurse from Saudi Arabia. It was initially found therein
that there was no law in Saudi Arabia that provided for insurance arising from labor
accidents. Nevertheless, the Court concluded that the employer and the recruiter in
that case abandoned their legal, moral and social obligation to assist the victim's
family in obtaining justice for her death, and so her family was awarded
P5,000,000.00 for moral and exemplary damages.
In ATCI Overseas Corporation v. Echin35 (ATCI Overseas), the private recruitment
agency invoked the defense that the foreign employer was immune from suit and
that it did not sign any document agreeing to be held jointly and solidarily liable.
Such defense, however, was rejected because R.A. No. 8042 precisely afforded the
OFWs with a recourse against the local agency and the foreign employer to assure
them of an immediate and sufficient payment of what was due. Similar to EDI-
Staffbuilders, the local agency therein failed to prove the Kuwaiti law specified in
the labor contract, pursuant to Sections 24 and 25 of Rule 132 of the Revised Rules
of Court.
Also, in the recent case of Sameer Overseas Placement Agency, Inc. v. Cabiles36
(Sameer Overseas), it was declared that the security of tenure for labor was
guaranteed by our Constitution and employees were not stripped of the same when
they moved to work in other jurisdictions. Citing PCL Shipping Phils., Inc. v. NLRC37
(PCL Shipping), the Court held that the principle of lex loci contractus (the law of the
place where the contract is made) governed in this jurisdiction. As it was
established therein that the overseas labor contract was executed in the
Philippines, the Labor Code and the fundamental procedural rights were observed.
It must be noted that no foreign law was specified in the employment contracts in
both cases.
Lastly, in Saudi Arabian Airlines (Saudia) v. Rebesencio38, the employer therein
asserted the doctrine of forum non conveniens because the overseas employment
contracts required the application of the laws of Saudi Arabia, and so, the Philippine
courts were not in a position to hear the case. In striking down such argument, the
Court held that while a Philippine tribunal was called upon to respect the parties'
choice of governing law, such respect must not be so permissive as to lose sight of
considerations of law, morals, good customs, public order, or public policy that
underlie the contract central to the controversy. As the dispute in that case related
to the illegal termination of the employees due to their pregnancy, then it involved
a matter of public interest and public policy. Thus, it was ruled that Philippine laws
properly found application and that Philippine tribunals could assume jurisdiction.
Based on the foregoing, the general rule is that Philippine laws apply even to
overseas employment contracts. This rule is rooted in the constitutional provision
of Section 3, Article XIII that the State shall afford full protection to labor, whether
local or overseas. Hence, even if the OFW has his employment abroad, it does not
strip him of his rights to security of tenure, humane conditions of work and a living
wage under our Constitution.39
As an exception, the parties may agree that a foreign law shall govern the
employment contract. A synthesis of the existing laws and jurisprudence reveals
that this exception is subject to the following requisites:
chanRoblesvirtualLawlibrary
That it is expressly stipulated in the overseas employment contract that a specific
foreign law shall govern;
That the foreign law invoked must be proven before the courts pursuant to the
Philippine rules on evidence;
That the foreign law stipulated in the overseas employment contract must not be
contrary to law, morals, good customs, public order, or public policy of the
Philippines; and
That the overseas employment contract must be processed through the POEA.
The Court is of the view that these four (4) requisites must be complied with before
the employer could invoke the applicability of a foreign law to an overseas
employment contract. With these requisites, the State would be able to abide by its
constitutional obligation to ensure that the rights and well-being of our OFWs are
fully protected. These conditions would also invigorate the policy under R.A. No.
8042 that the State shall, at all times, uphold the dignity of its citizens whether in
country or overseas, in general, and the Filipino migrant workers, in particular.40
Further, these strict terms are pursuant to the jurisprudential doctrine that "parties
may not contract away applicable provisions of law especially peremptory
provisions dealing with matters heavily impressed with public interest,"41 such as
laws relating to labor. At the same time, foreign employers are not at all helpless to
apply their own laws to overseas employment contracts provided that they
faithfully comply with these requisites.
If the first requisite is absent, or that no foreign law was expressly stipulated in the
employment contract which was executed in the Philippines, then the domestic
labor laws shall apply in accordance with the principle of lex loci contractus. This is
based on the cases of Sameer Overseas and PCL Shipping.
If the second requisite is lacking, or that the foreign law was not proven pursuant to
Sections 24 and 25 of Rule 132 of the Revised Rules of Court, then the international
law doctrine of processual presumption operates. The said doctrine declares that
"[w]here a foreign law is not pleaded or, even if pleaded, is not proved, the
presumption is that foreign law is the same as ours."42 This was observed in the
cases of EDI-Staffbuilders and ATCI Overseas.
If the third requisite is not met, or that the foreign law stipulated is contrary to law,
morals, good customs, public order or public policy, then Philippine laws govern.
This finds legal bases in the Civil Code, specifically: (1) Article 17, which provides
that laws which have, for their object, public order, public policy and good customs
shall not be rendered ineffective by laws of a foreign country; and (2) Article 1306,
which states that the stipulations, clauses, terms and conditions in a contract must
not be contrary to law, morals, good customs, public order, or public policy. The
said doctrine was applied in the case of Pakistan International.
Finally, if the fourth requisite is missing, or that the overseas employment contract
was not processed through the POEA, then Article 18 of the Labor Code is violated.
Article 18 provides that no employer may hire a Filipino worker for overseas
employment except through the boards and entities authorized by the Secretary of
Labor. In relation thereto, Section 4 of R.A. No. 8042, as amended, declares that the
State shall only allow the deployment of overseas Filipino workers in countries
where the rights of Filipino migrant workers are protected. Thus, the POEA, through
the assistance of the Department of Foreign Affairs, reviews and checks whether
the countries have existing labor and social laws protecting the rights of workers,
including migrant workers.43 Unless processed through the POEA, the State has no
effective means of assessing the suitability of the foreign laws to our migrant
workers. Thus, an overseas employment contract that was not scrutinized by the
POEA definitely cannot be invoked as it is an unexamined foreign law.
In other words, lacking any one of the four requisites would invalidate the
application of the foreign law, and the Philippine law shall govern the overseas
employment contract.
As the requisites of the applicability of foreign laws in overseas labor contract have
been settled, the Court can now discuss the merits of the case at bench.
A judicious scrutiny of the records of the case demonstrates that the petitioners
were able to observe the second requisite, or that the foreign law must be proven
before the court pursuant to the Philippine rules on evidence. The petitioners were
able to present the ESA, duly authenticated by the Canadian authorities and
certified by the Philippine Embassy, before the LA. The fourth requisite was also
followed because Arriola's employment contract was processed through the
POEA.44
Unfortunately for the petitioners, those were the only requisites that they complied
with. As correctly held by the CA, even though an authenticated copy of the ESA
was submitted, it did not mean that said foreign law could be automatically applied
to this case. The petitioners miserably failed to adhere to the two other requisites,
which shall be discussed in seratim.
The foreign law was not expressly specified in the employment contract
The petitioners failed to comply with the first requisite because no foreign law was
expressly stipulated in the overseas employment contract with Arriola. In its
pleadings, the petitioners did not directly cite any specific provision or stipulation in
the said labor contract which indicated the applicability of the Canadian labor laws
or the ESA. They failed to show on the face of the contract that a foreign law was
agreed upon by the parties. Rather, they simply asserted that the terms and
conditions of Arriola's employment were embodied in the Expatriate Policy,
Ambatovy Project - Site, Long Term.45 Then, they emphasized provision 8.20
therein, regarding interpretation of the contract, which provides that said policy
would be governed and construed with the laws of the country where the
applicable SNC-Lavalin, Inc. office was located.46 Because of this provision, the
petitioners insisted that the laws of Canada, not of Madagascar or the Philippines,
should apply. Then, they finally referred to the ESA.
It is apparent that the petitioners were simply attempting to stretch the overseas
employment contract of Arriola, by implication, in order that the alleged foreign law
would apply. To sustain such argument would allow any foreign employer to
improperly invoke a foreign law even if it is not anymore reasonably contemplated
by the parties to control the overseas employment. The OFW, who is susceptible by
his desire and desperation to work abroad, would blindly sign the labor contract
even though it is not clearly established on its face which state law shall apply.
Thus, a better rule would be to obligate the foreign employer to expressly declare
at the onset of the labor contract that a foreign law shall govern it. In that manner,
the OFW would be informed of the applicable law before signing the contract.
Further, it was shown that the overseas labor contract was executed by Arriola at
his residence in Batangas and it was processed at the POEA on May 26, 2008.47
Considering that no foreign law was specified in the contract and the same was
executed in the Philippines, the doctrine of lex loci celebrationis applies and the
Philippine laws shall govern the overseas employment of Arriola.
The foreign law invoked is contrary to the Constitution and the Labor Code
Granting arguendo that the labor contract expressly stipulated the applicability of
Canadian law, still, Arriola's employment cannot be governed by such foreign law
because the third requisite is not satisfied. A perusal of the ESA will show that some
of its provisions are contrary to the Constitution and the labor laws of the
Philippines.
First, the ESA does not require any ground for the early termination of
employment.48 Article 54 thereof only provides that no employer should terminate
the employment of an employee unless a written notice had been given in
advance.49 Necessarily, the employer can dismiss any employee for any ground it
so desired. At its own pleasure, the foreign employer is endowed with the absolute
power to end the employment of an employee even on the most whimsical
grounds.
Second, the ESA allows the employer to dispense with the prior notice of
termination to an employee. Article 65(4) thereof indicated that the employer could
terminate the employment without notice by simply paying the employee a
severance pay computed on the basis of the period within which the notice should
have been given.50 The employee under the ESA could be immediately dismissed
without giving him the opportunity to explain and defend himself.
The provisions of the ESA are patently inconsistent with the right to security of
tenure. Both the Constitution51 and the Labor Code52 provide that this right is
available to any employee. In a host of cases, the Court has upheld the employee's
right to security of tenure in the face of oppressive management behavior and
management prerogative. Security of tenure is a right which cannot be denied on
mere speculation of any unclear and nebulous basis.53
Not only do these provisions collide with the right to security of tenure, but they
also deprive the employee of his constitutional right to due process by denying him
of any notice of termination and the opportunity to be heard.54 Glaringly, these
disadvantageous provisions under the ESA produce the same evils which the Court
vigorously sought to prevent in the cases of Pakistan International and Sameer
Overseas. Thus, the Court concurs with the CA that the ESA is not applicable in this
case as it is against our fundamental and statutory laws.
In fine, as the petitioners failed to meet all the four (4) requisites on the
applicability of a foreign law, then the Philippine labor laws must govern the
overseas employment contract of Arriola.
No authorized cause for dismissal was proven
Article 279 of our Labor Code has construed security of tenure to mean that the
employer shall not terminate the services of an employee except for a just cause or
when authorized by law.55 Concomitant to the employer's right to freely select and
engage an employee is the employer's right to discharge the employee for just
and/or authorized causes. To validly effect terminations of employment, the
discharge must be for a valid cause in the manner required by law. The purpose of
these two-pronged qualifications is to protect the working class from the
employer's arbitrary and unreasonable exercise of its right to dismiss.56
Some of the authorized causes to terminate employment under the Labor Code
would be installation of labor-saving devices, redundancy, retrenchment to prevent
losses and the closing or cessation of operation of the establishment or
undertaking.57 Each authorized cause has specific requisites that must be proven
by the employer with substantial evidence before a dismissal may be considered
valid.
Here, the petitioners assert that the economy of Madagascar weakened due to the
global financial crisis. Consequently, SNC-Lavalin's business also slowed down. To
prove its sagging financial standing, SNC-Lavalin presented a copy of a news item in
the Financial Post, dated March 5, 2009. They insist that SNC-Lavalin had no choice
but to minimize its expenditures and operational expenses.58 In addition, the
petitioners argued that the government of Madagascar prioritized the employment
of its citizens, and not foreigners. Thus, Arriola was terminated because there was
no more job available for him.59
The Court finds that Arriola was not validly dismissed. The petitioners simply argued
that they were suffering from financial losses and Arriola had to be dismissed. It
was not even clear what specific authorized cause, whether retrenchment or
redundancy, was used to justify Arriola's dismissal. Worse, the petitioners did not
even present a single credible evidence to support their claim of financial loss. They
simply offered an unreliable news article which deserves scant consideration as it is
undoubtedly hearsay. Time and again the Court has ruled that in illegal dismissal
cases like the present one, the onus of proving that the employee was dismissed
and that the dismissal was not illegal rests on the employer, and failure to discharge
the same would mean that the dismissal is not justified and, therefore, illegal.60
As to the amount of backpay awarded, the Court finds that the computation of the
CA was valid and proper based on the employment contract of Arriola. Also, the
issue of whether the petitioners had made partial payments on the backpay is a
matter best addressed during the execution process.
WHEREFORE, the petition is DENIED. The January 24, 2013 Decision of the Court of
Appeals in CA-G.R. SP No. 118869 is AFFIRMED in toto.
SO ORDERED.
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. Petitioner, v. NATIONAL
LABOR RELATIONS COMMISSION, Second Division; HON. ERNESTO S. DINOPOL, in
his capacity as Labor Arbiter, NLRC; NCR, Arbitration Branch, Quezon City and
DIVINA A. MONTEHERMOZO, Respondents. G.R. NO. 161757 - January 25, 2006
CARPIO MORALES, J.:
Petitioner, Sunace International Management Services (Sunace), a corporation duly
organized and existing under the laws of the Philippines, deployed to Taiwan Divina
A. Montehermozo (Divina) as a domestic helper under a 12-month contract
effective February 1, 1997.1 The deployment was with the assistance of a
Taiwanese broker, Edmund Wang, President of Jet Crown International Co., Ltd.
After her 12-month contract expired on February 1, 1998, Divina continued working
for her Taiwanese employer, Hang Rui Xiong, for two more years, after which she
returned to the Philippines on February 4, 2000.
Shortly after her return or on February 14, 2000, Divina filed a complaint2 before
the National Labor Relations Commission (NLRC) against Sunace, one Adelaide
Perez, the Taiwanese broker, and the employer-foreign principal alleging that she
was jailed for three months and that she was underpaid.
The following day or on February 15, 2000, Labor Arbitration Associate Regina T.
Gavin issued Summons3 to the Manager of Sunace, furnishing it with a copy of
Divina's complaint and directing it to appear for mandatory conference on February
28, 2000.
The scheduled mandatory conference was reset. It appears to have been
concluded, however.
On April 6, 2000, Divina filed her Position Paper4 claiming that under her original
one-year contract and the 2-year extended contract which was with the knowledge
and consent of Sunace, the following amounts representing income tax and savings
were deducted:
Year Deduction for Income Tax Deduction for Savings
1997 NT10,450.00 NT23,100.00
1998 NT9,500.00 NT36,000.00
1999 NT13,300.00 NT36,000.00;5
and while the amounts deducted in 1997 were refunded to her, those deducted in
1998 and 1999 were not. On even date, Sunace, by its Proprietor/General Manager
Maria Luisa Olarte, filed its Verified Answer and Position Paper,6 claiming as
follows, quoted verbatim:
COMPLAINANT IS NOT ENTITLED FOR THE REFUND OF HER 24 MONTHS SAVINGS
3. Complainant could not anymore claim nor entitled for the refund of her 24
months savings as she already took back her saving already last year and the
employer did not deduct any money from her salary, in accordance with a Fascimile
Message from the respondent SUNACE's employer, Jet Crown International Co. Ltd.,
a xerographic copy of which is herewith attached as ANNEX "2" hereof;
COMPLAINANT IS NOT ENTITLED TO REFUND OF HER 14 MONTHS TAX AND
PAYMENT OF ATTORNEY'S FEES
4. There is no basis for the grant of tax refund to the complainant as the she
finished her one year contract and hence, was not illegally dismissed by her
employer. She could only lay claim over the tax refund or much more be awarded of
damages such as attorney's fees as said reliefs are available only when the dismissal
of a migrant worker is without just valid or lawful cause as defined by law or
contract.
The rationales behind the award of tax refund and payment of attorney's fees is not
to enrich the complainant but to compensate him for actual injury suffered.
Complainant did not suffer injury, hence, does not deserve to be compensated for
whatever kind of damages.
Hence, the complainant has NO cause of action against respondent SUNACE for
monetary claims, considering that she has been totally paid of all the monetary
benefits due her under her Employment Contract to her full satisfaction.
6. Furthermore, the tax deducted from her salary is in compliance with the
Taiwanese law, which respondent SUNACE has no control and complainant has to
obey and this Honorable Office has no authority/jurisdiction to intervene because
the power to tax is a sovereign power which the Taiwanese Government is supreme
in its own territory. The sovereign power of taxation of a state is recognized under
international law and among sovereign states.
7. That respondent SUNACE respectfully reserves the right to file supplemental
Verified Answer and/or Position Paper to substantiate its prayer for the dismissal of
the above case against the herein respondent. AND BY WAY OF -
x x x x (Emphasis and underscoring supplied)
Reacting to Divina's Position Paper, Sunace filed on April 25, 2000 an ". . . answer to
complainant's position paper"7 alleging that Divina's 2-year extension of her
contract was without its knowledge and consent, hence, it had no liability attaching
to any claim arising therefrom, and Divina in fact executed a Waiver/Quitclaim and
Release of Responsibility and an Affidavit of Desistance, copy of each document was
annexed to said ". . . answer to complainant's position paper."
To Sunace's ". . . answer to complainant's position paper," Divina filed a 2-page
reply,8 without, however, refuting Sunace's disclaimer of knowledge of the
extension of her contract and without saying anything about the Release, Waiver
and Quitclaim and Affidavit of Desistance.
The Labor Arbiter, rejected Sunace's claim that the extension of Divina's contract
for two more years was without its knowledge and consent in this wise:
We reject Sunace's submission that it should not be held responsible for the
amount withheld because her contract was extended for 2 more years without its
knowledge and consent because as Annex "B"9 shows, Sunace and Edmund Wang
have not stopped communicating with each other and yet the matter of the
contract's extension and Sunace's alleged non-consent thereto has not been
categorically established.
What Sunace should have done was to write to POEA about the extension and its
objection thereto, copy furnished the complainant herself, her foreign employer,
Hang Rui Xiong and the Taiwanese broker, Edmund Wang.
And because it did not, it is presumed to have consented to the extension and
should be liable for anything that resulted thereform (sic).10 (Underscoring
supplied)
The Labor Arbiter rejected too Sunace's argument that it is not liable on account of
Divina's execution of a Waiver and Quitclaim and an Affidavit of Desistance.
Observed the Labor Arbiter:
Should the parties arrive at any agreement as to the whole or any part of the
dispute, the same shall be reduced to writing and signed by the parties and their
respective counsel (sic), if any, before the Labor Arbiter.
The settlement shall be approved by the Labor Arbiter after being satisfied that it
was voluntarily entered into by the parties and after having explained to them the
terms and consequences thereof.
A compromise agreement entered into by the parties not in the presence of the
Labor Arbiter before whom the case is pending shall be approved by him, if after
confronting the parties, particularly the complainants, he is satisfied that they
understand the terms and conditions of the settlement and that it was entered into
freely voluntarily (sic) by them and the agreement is not contrary to law, morals,
and public policy.
And because no consideration is indicated in the documents, we strike them down
as contrary to law, morals, and public policy.11
He accordingly decided in favor of Divina, by decision of October 9, 2000,12 the
dispositive portion of which reads:
Wherefore, judgment is hereby rendered ordering respondents SUNACE
INTERNATIONAL SERVICES and its owner ADELAIDA PERGE, both in their personal
capacities and as agent of Hang Rui Xiong/Edmund Wang to jointly and severally
pay complainant DIVINA A. MONTEHERMOZO the sum of NT91,950.00 in its peso
equivalent at the date of payment, as refund for the amounts which she is hereby
adjudged entitled to as earlier discussed plus 10% thereof as attorney's fees since
compelled to litigate, complainant had to engage the services of counsel.
SO ORDERED.13 (Underescoring supplied)
On appeal of Sunace, the NLRC, by Resolution of April 30, 2002,14 affirmed the
Labor Arbiter's decision.
Via petition for certiorari, 15 Sunace elevated the case to the Court of Appeals
which dismissed it outright by Resolution of November 12, 2002,16 the full text of
which reads:
The petition for certiorari faces outright dismissal.
The petition failed to allege facts constitutive of grave abuse of discretion on the
part of the public respondent amounting to lack of jurisdiction when the NLRC
affirmed the Labor Arbiter's finding that petitioner Sunace International
Management Services impliedly consented to the extension of the contract of
private respondent Divina A. Montehermozo. It is undisputed that petitioner was
continually communicating with private respondent's foreign employer (sic). As
agent of the foreign principal, "petitioner cannot profess ignorance of such
extension as obviously, the act of the principal extending complainant (sic)
employment contract necessarily bound it." Grave abuse of discretion is not
present in the case at bar.
ACCORDINGLY, the petition is hereby DENIED DUE COURSE and DISMISSED.17
SO ORDERED.
(Emphasis on words in capital letters in the original; emphasis on words in small
letters and underscoring supplied)
Its Motion for Reconsideration having been denied by the appellate court by
Resolution of January 14, 2004,18 Sunace filed the present Petition for Review on
Certiorari .
The Court of Appeals affirmed the Labor Arbiter and NLRC's finding that Sunace
knew of and impliedly consented to the extension of Divina's 2-year contract. It
went on to state that "It is undisputed that [Sunace] was continually communicating
with [Divina's] foreign employer." It thus concluded that "[a]s agent of the foreign
principal, 'petitioner cannot profess ignorance of such extension as obviously, the
act of the principal extending complainant (sic) employment contract necessarily
bound it.' "
Contrary to the Court of Appeals finding, the alleged continuous communication
was with the Taiwanese broker Wang, not with the foreign employer Xiong.
The February 21, 2000 telefax message from the Taiwanese broker to Sunace, the
only basis of a finding of continuous communication, reads verbatim:
xxxx
Regarding to Divina, she did not say anything about her saving in police station. As
we contact with her employer, she took back her saving already last years. And they
did not deduct any money from her salary. Or she will call back her employer to
check it again. If her employer said yes! we will get it back for her.
Thank you and best regards.
(Sgd.)
Edmund Wang
President19
The finding of the Court of Appeals solely on the basis of the above-quoted telefax
message, that Sunace continually communicated with the foreign "principal"
(sic)and therefore was aware of and had consented to the execution of the
extension of the contract is misplaced. The message does not provide evidence that
Sunace was privy to the new contract executed after the expiration on February 1,
1998 of the original contract. That Sunace and the Taiwanese broker communicated
regarding Divina's allegedly withheld savings does not necessarily mean that Sunace
ratified the extension of the contract. As Sunace points out in its Reply20 filed
before the Court of Appeals,
As can be seen from that letter communication, it was just an information given to
the petitioner that the private respondent had t[aken] already her savings from her
foreign employer and that no deduction was made on her salary. It contains nothing
about the extension or the petitioner's consent thereto.21
Parenthetically, since the telefax message is dated February 21, 2000, it is safe to
assume that it was sent to enlighten Sunace who had been directed, by Summons
issued on February 15, 2000, to appear on February 28, 2000 for a mandatory
conference following Divina's filing of the complaint on February 14, 2000.
Respecting the Court of Appeals following dictum:
As agent of its foreign principal, [Sunace] cannot profess ignorance of such an
extension as obviously, the act of its principal extending [Divina's] employment
contract necessarily bound it,22
it too is a misapplication, a misapplication of the theory of imputed knowledge.
The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to
the principal, employer Xiong, not the other way around.23 The knowledge of the
principal-foreign employer cannot, therefore, be imputed to its agent Sunace.
There being no substantial proof that Sunace knew of and consented to be bound
under the 2-year employment contract extension, it cannot be said to be privy
thereto. As such, it and its "owner" cannot be held solidarily liable for any of
Divina's claims arising from the 2-year employment extension. As the New Civil
Code provides,
Contracts take effect only between the parties, their assigns, and heirs, except in
case where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of law.24
Furthermore, as Sunace correctly points out, there was an implied revocation of its
agency relationship with its foreign principal when, after the termination of the
original employment contract, the foreign principal directly negotiated with Divina
and entered into a new and separate employment contract in Taiwan. Article 1924
of the New Civil Code reading
The agency is revoked if the principal directly manages the business entrusted to
the agent, dealing directly with third persons.
thus applies.
In light of the foregoing discussions, consideration of the validity of the Waiver and
Affidavit of Desistance which Divina executed in favor of Sunace is rendered
unnecessary.
WHEREFORE, the petition is GRANTED. The challenged resolutions of the Court of
Appeals are hereby REVERSED and SET ASIDE. The complaint of respondent Divina
A. Montehermozo against petitioner is DISMISSED.

SO ORDERED.
MAERSK-FILIPINAS CREWING, INC., A.P. MOLLER SINGAPORE PTE. LIMITED, AND
JESUS AGBAYANI, Petitioners, v. TORIBIO C. AVESTRUZ,*Respondent. G.R. No.
207010, February 18, 2015
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated January 4,
2013 and the Resolution3 dated April 16, 2013 rendered by the Court of Appeals
(CA) in CA-G.R. SP No. 125773 which reversed and set aside the Decision4 dated
April 26, 2012 and the Resolution5 dated June 18, 2012 of the National Labor
Relations Commission (NLRC) in NLRC NCR Case No. (M) 07-10704-11 [NLRC LAC No.
(OFW-M)-01-000123-12] dismissing the illegal dismissal complaint filed by
respondent Toribio C. Avestruz (Avestruz) and awarding him nominal damages.
The Facts
On April 28, 2011, petitioner Maersk-Filipinas Crewing, Inc. (Maersk), on behalf of
its foreign principal, petitioner A.P. Moller Singapore Pte. Ltd. (A.P. Moller), hired
Avestruz as Chief Cook on board the vessel M/V Nedlloyd Drake for a period of six
(6) months, with a basic monthly salary of US$698.00.6 Avestruz boarded the vessel
on May 4, 2011.
On June 22, 2011, in the course of the weekly inspection of the vessel’s galley,
Captain Charles C. Woodward (Captain Woodward) noticed that the cover of the
garbage bin in the kitchen near the washing area was oily. As part of Avestruz’s job
was to ensure the cleanliness of the galley, Captain Woodward called Avestruz and
asked him to stand near the garbage bin where the former took the latter’s right
hand and swiped it on the oily cover of the garbage bin, telling Avestruz to feel it.
Shocked, Avestruz remarked, “Sir if you are looking for [dirt], you can find it[;] the
ship is big. Tell us if you want to clean and we will clean it.” Captain Woodward
replied by shoving Avestruz’s chest, to which the latter complained and said, “Don’t
touch me,” causing an argument to ensue between them.8cralawred
Later that afternoon, Captain Woodward summoned and required9 Avestruz to
state in writing what transpired in the galley that morning. Avestruz complied and
submitted his written statement10 on that same day. Captain Woodward likewise
asked Messman Jomilyn P. Kong (Kong) to submit his own written statement
regarding the incident, to which the latter immediately complied.11 On the very
same day, Captain Woodward informed Avestruz that he would be dismissed from
service and be disembarked in India. On July 3, 2011, Avestruz was disembarked in
Colombo, Sri Lanka and arrived in the Philippines on July 4, 2011.12cralawred
Subsequently, he filed a complaint13 for illegal dismissal, payment for the
unexpired portion of his contract, damages, and attorney’s fees against Maersk,
A.P. Moller, and Jesus Agbayani (Agbayani), an officer14 of Maersk.15 He alleged
that no investigation or hearing was conducted nor was he given the chance to
defend himself before he was dismissed, and that Captain Woodward failed to
observe the provisions under Section 17 of the Philippine Overseas Employment
Administration (POEA) Standard Employment Contract (POEA-SEC) on disciplinary
procedures. Also, he averred that he was not given any notice stating the ground
for his dismissal.16 Additionally, he claimed that the cost of his airfare in the
amount of US$606.15 was deducted from his wages.17 Furthermore, Avestruz
prayed for the award of the following amounts: (a) US$5,372.00 representing his
basic wages, guaranteed overtime, and vacation leave; (b) on board allowance of
US$1,936.00; (c) ship maintenance bonus of US$292.00; (d) hardship allowance of
US$8,760.00; (e) P300,000.00 as moral damages, (f) P200,000.00 as exemplary
damages; and (g) attorney’s fees of ten percent (10%) of the total monetary award.
In their defense,19 Maersk, A.P. Moller, and Agbayani (petitioners) claimed that
during his stint on the vessel, Avestruz failed to attend to his tasks, specifically to
maintain the cleanliness of the galley, which prompted Captain Woodward to issue
weekly reminders.20 Unfortunately, despite the reminders, Avestruz still failed to
perform his duties properly.21 On June 22, 2011, when again asked to comply with
the aforesaid duty, Avestruz became angry and snapped, retorting that he did not
have time to do all the tasks required of him. As a result, Captain Woodward
initiated disciplinary proceedings and informed Avestruz during the hearing of the
offenses he committed, i.e., his repeated failure to follow directives pertaining to
his duty to maintain the cleanliness of the galley, as well as his act of insulting an
officer.22 Thereafter, he was informed of his dismissal from service due to
insubordination.23 Relative thereto, Captain Woodward sent two (2) electronic mail
messages24 (e-mails) to Maersk explaining the decision to terminate Avestruz’s
employment and requesting for Avestruz’s replacement. Avestruz was discharged
from the vessel and arrived in the Philippines on July 4, 2011.
Petitioners maintained that Avestruz was dismissed for a just and valid cause and is,
therefore, not entitled to recover his salary for the unexpired portion of his
contract.26 They likewise claimed that they were justified in deducting his airfare
from his salary, and that the latter was not entitled to moral and exemplary
damages and attorney’s fees.27 Hence, they prayed that the complaint be
dismissed for lack of merit.
The LA Ruling
In a Decision29 dated November 29, 2011, the Labor Arbiter (LA) dismissed
Avestruz’s complaint for lack of merit. The LA found that he failed to perform his
duty of maintaining cleanliness in the galley, and that he also repeatedly failed to
obey the directives of his superior, which was tantamount to insubordination.30 In
support of its finding, the LA cited the Collective Bargaining Agreement31 (CBA)
between the parties which considers the act of insulting a superior officer by words
or deed as an act of insubordination.
Aggrieved, Avestruz appealed33 to the NLRC.
The NLRC Ruling
In a Decision34 dated April 26, 2012, the NLRC sustained the validity of Avestruz’s
dismissal but found that petitioners failed to observe the procedures laid down in
Section 17 of the POEA-SEC,35 which states:
SECTION 17. DISCIPLINARY PROCEDURES.
The Master shall comply with the following disciplinary procedures against an erring
seafarer:
The Master shall furnish the seafarer with a written notice containing the following:
Grounds for the charges as listed in Section 33 of this Contract or analogous act
constituting the same.
Date, time and place for a formal investigation of the charges against the seafarer
concerned.
The Master or his authorized representative shall conduct the investigation or
hearing, giving the seafarer the opportunity to explain or defend himself against the
charges. These procedures must be duly documented and entered into the ship’s
logbook.
If after the investigation or hearing, the Master is convinced that imposition of a
penalty is justified, the Master shall issue a written notice of penalty and the
reasons for it to the seafarer, with copies furnished to the Philippine agent.
Dismissal for just cause may be effected by the Master without furnishing the
seafarer with a notice of dismissal if there is a clear and existing danger to the
safety of the crew or the vessel. The Master shall send a complete report to the
manning agency substantiated by witnesses, testimonies and any other documents
in support thereof. (Emphases supplied)
As the records are bereft of evidence showing compliance with the foregoing rules,
the NLRC held petitioners jointly and severally liable to pay Avestruz the amount of
P30,000.00 by way of nominal damages.
Avestruz moved for reconsideration37 of the aforesaid Decision, which was denied
in the Resolution38 dated June 18, 2012. Dissatisfied, he elevated the matter to the
CA via petition for certiorari.
The CA Ruling
In a Decision40 dated January 4, 2013, the CA reversed and set aside the rulings of
the NLRC and instead, found Avestruz to have been illegally dismissed.
Consequently, it directed petitioners to pay him, jointly and severally, the full
amount of his placement fee and deductions made, with interest at twelve percent
(12%) per annum, as well as his salaries for the unexpired portion of his contract,
and attorney’s fees of ten percent (10%) of the total award. All other money claims
were denied for lack of merit.41cralawred
In so ruling, the CA found that the conclusion of the NLRC, which affirmed that of
the LA, that Avestruz was lawfully dismissed, was not supported by substantial
evidence, there being no factual basis for the charge of insubordination which
petitioners claimed was the ground for Avestruz’s dismissal. It found that
petitioners, as employers, were unable to discharge the burden of proof required of
them to establish that Avestruz was guilty of insubordination, which necessitates
the occurrence of two (2) conditions as a just cause for dismissal: (1) the
employee’s assailed conduct must have been willful, that is, characterized by a
wrongful and perverse attitude; and (2) the order violated must have been
reasonable, lawful, made known to the employee, and must pertain to the duties
which he had been engaged to discharge. The CA found that, contrary to the rulings
of the labor tribunals, there was no evidence on record to bolster petitioners’
claims that Avestruz willfully failed to comply with his duties as Chief Cook and that
he displayed a perverse and wrongful attitude.
Moreover, it gave more credence to Avestruz’s account of the incident in the galley
on June 22, 2011, being supported in part by the statement43 of Kong, who
witnessed the incident. On the other hand, the e-mails sent by Captain Woodward
to Maersk were uncorroborated. On this score, the CA observed the absence of any
logbook entries to support petitioners’ stance.
Similarly, the CA found that petitioners failed to accord procedural due process to
Avestruz, there being no compliance with the requirements of Section 17 of the
POEA-SEC as above-quoted, or the “two-notice rule.” It held that the statement45
Captain Woodward issued to Avestruz neither contained the grounds for which he
was being charged nor the date, time, and place for the conduct of a formal
investigation. Likewise, Captain Woodward failed to give Avestruz any notice of
penalty and the reasons for its imposition, with copies thereof furnished to the
Philippine Agent.
In arriving at the monetary awards given to Avestruz, the CA considered the
provisions of Section 7 of Republic Act No. (RA) 10022,47 amending RA 8042,48
which grants upon the illegally dismissed overseas worker “the full reimbursement
[of] his placement fee and the deductions made with interest at twelve percent
(12%) per annum, plus his salaries for the unexpired portion of his employment
contract.” However, with respect to Avestruz’s claims for overtime and leave pay,
the same were denied for failure to show entitlement thereto. All other monetary
claims were likewise denied in the absence of substantial evidence to prove the
same. Finally, the CA awarded attorney’s fees of ten percent (10%) of the total
monetary award in accordance with Article 11149 of the Labor Code.
Petitioners moved for reconsideration,51 which the CA denied in its Resolution52
dated April 16, 2013, hence, this petition.
The Issue Before the Court
The sole issue advanced for the Court’s resolution is whether or not the CA erred
when it reversed and set aside the ruling of the NLRC finding that Avestruz was
legally dismissed and accordingly, dismissing the complaint, albeit with payment of
nominal damages for violation of procedural due process.
The Court’s Ruling
The petition is devoid of merit.
Generally, a re-examination of factual findings cannot be done by the Court acting
on a petition for review on certiorari because the Court is not a trier of facts but
reviews only questions of law.53 Thus, in petitions for review on certiorari, only
questions of law may generally be put into issue. This rule, however, admits of
certain exceptions.54 In this case, considering that the factual findings of the LA
and the NLRC, on the one hand, and the CA, on the other hand, are contradictory,
the general rule that only legal issues may be raised in a petition for review on
certiorari under Rule 45 of the Rules of Court does not apply,55 and the Court
retains the authority to pass upon the evidence presented and draw conclusions
therefrom.
It is well-settled that the burden of proving that the termination of an employee
was for a just or authorized cause lies with the employer. If the employer fails to
meet this burden, the conclusion would be that the dismissal was unjustified and,
therefore, illegal.57 In order to discharge this burden, the employer must present
substantial evidence, which is defined as that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion,58 and not based
on mere surmises or conjectures.
After a punctilious examination of the evidence on record, the Court finds that the
CA did not err in reversing and setting aside the factual conclusions of the labor
tribunals that Avestruz’s dismissal was lawful. Instead, the Court finds that there
was no just or valid cause for his dismissal, hence, he was illegally dismissed.
Petitioners maintain that Avestruz was dismissed on the ground of insubordination,
consisting of his “repeated failure to obey his superior’s order to maintain
cleanliness in the galley of the vessel” as well as his act of “insulting a superior
officer by words or deeds.”60 In support of this contention, petitioners presented
as evidence the e-mails sent by Captain Woodward, both dated June 22, 2011, and
time-stamped 10:07 a.m. and 11:40 a.m., respectively, which they claim chronicled
the relevant circumstances that eventually led to Avestruz’s dismissal.
The Court, however, finds these e-mails to be uncorroborated and self-serving, and
therefore, do not satisfy the requirement of substantial evidence as would
sufficiently discharge the burden of proving that Avestruz was legally dismissed. On
the contrary, petitioners failed to prove that he committed acts of insubordination
which would warrant his dismissal.
Insubordination, as a just cause for the dismissal of an employee, necessitates the
concurrence of at least two requisites: (1) the employee’s assailed conduct must
have been willful, that is, characterized by a wrongful and perverse attitude; and (2)
the order violated must have been reasonable, lawful, made known to the
employee, and must pertain to the duties which he had been engaged to discharge.
In this case, the contents of Captain Woodward’s e-mails do not establish that
Avestruz’s conduct had been willful, or characterized by a wrongful and perverse
attitude. The Court concurs with the CA’s observation that Avestruz’s statement62
regarding the incident in the galley deserves more credence, being corroborated63
by Kong, a messman who witnessed the same.
Conversely, apart from Captain Woodward’s e-mails, no other evidence was
presented by the petitioners to support their claims. While rules of evidence are not
strictly observed in proceedings before administrative bodies,64 petitioners should
have offered additional proof to corroborate the statements65 described therein.
Thus, in Ranises v. NLRC66 which involved a seafarer who was repatriated to the
Philippines for allegedly committing illegal acts amounting to a breach of trust, as
based on a telex dispatch by the Master of the vessel, the Court impugned and
eventually vetoed the credence given by the NLRC upon the telex, to wit:
Unfortunately, the veracity of the allegations contained in the aforecited telex was
never proven by respondent employer. Neither was it shown that respondent
employer exerted any effort to even verify the truthfulness of Capt. Sonoda’s report
and establish petitioner’s culpability for his alleged illegal acts. Worse, no other
evidence was submitted to corroborate the charges against
petitioner.67cralawlawlibrary
Likewise, in Skippers United Pacific, Inc. v. NLRC,68 the Court ruled that the lone
evidence offered by the employer to justify the seafarer’s dismissal, i.e., the telexed
Chief Engineer’s Report which contained the causes for said dismissal, did not
suffice to discharge the onus required of the employer to show that the termination
of an employee’s service was valid.69 The same doctrine was enunciated in Pacific
Maritime Services, Inc. v. Ranay,70 where the Court held that the telefax
transmission purportedly executed and signed by a person on board the vessel is
insufficient evidence to prove the commission of the acts constituting the grounds
for the dismissal of two seafarers, being uncorroborated evidence.71cralawred
As in this case, it was incumbent upon the petitioners to present other substantial
evidence to bolster their claim that Avestruz committed acts that constitute
insubordination as would warrant his dismissal. At the least, they could have
offered in evidence entries in the ship’s official logbook showing the infractions or
acts of insubordination purportedly committed by Avestruz, the ship’s logbook
being the official repository of the day-to-day transactions and occurrences on
board the vessel.72 Having failed to do so, their position that Avestruz was lawfully
dismissed cannot be sustained.
Similarly, the Court affirms the finding of the CA that Avestruz was not accorded
procedural due process, there being no compliance with the provisions of Section
17 of the POEA-SEC as above-cited, which requires the “two-notice rule.” As
explained in Skippers Pacific, Inc. v. Mira:
An erring seaman is given a written notice of the charge against him and is afforded
an opportunity to explain or defend himself. Should sanctions be imposed, then a
written notice of penalty and the reasons for it shall be furnished the erring
seafarer. It is only in the exceptional case of clear and existing danger to the safety
of the crew or vessel that the required notices are dispensed with; but just the
same, a complete report should be sent to the manning agency, supported by
substantial evidence of the findings.74cralawlawlibrary
In this case, there is dearth of evidence to show that Avestruz had been given a
written notice of the charge against him, or that he was given the opportunity to
explain or defend himself. The statement75 given by Captain Woodward requiring
him to explain in writing the events that transpired at the galley in the morning of
June 22, 2011 hardly qualifies as a written notice of the charge against him, nor was
it an opportunity for Avestruz to explain or defend himself. While Captain
Woodward claimed in his e-mail76 that he conducted a “disciplinary hearing”
informing Avestruz of his inefficiency, no evidence was presented to support the
same.
Neither was Avestruz given a written notice of penalty and the reasons for its
imposition. Instead, Captain Woodward verbally informed him that he was
dismissed from service and would be disembarked from the vessel. It bears
stressing that only in the exceptional case of clear and existing danger to the safety
of the crew or vessel that the required notices may be dispensed with, and, once
again, records are bereft of evidence showing that such was the situation when
Avestruz was dismissed.
Finally, with respect to the monetary awards given to Avestruz, the Court finds the
same to be in consonance with Section 10 of RA 8042, as amended by RA 10022,
which reads:
Section 10. Money claims. – x x x
xxxx
In case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, or any unauthorized deductions from the
migrant worker’s salary, the worker shall be entitled to the full reimbursement of
his placement fee and the deductions made with interest at twelve percent (12%)
per annum, plus his salaries for the unexpired portion of his employment contract
or for three (3) months for every year of the unexpired term, whichever is
less.77cralawred
xxxx
Similarly, the Court affirms the grant of attorney’s fees of ten percent (10%) of the
total award. All other monetary awards are denied for lack of merit.
WHEREFORE, the petition is DENIED. The Decision dated January 4, 2013 and the
Resolution dated April 16, 2013 rendered by the Court of Appeals in CA-G.R. SP No.
125773 are hereby AFFIRMED.
SO ORDERED.
ELIZABETH M. GAGUI, Petitioners, v. SIMEON DEJERO AND TEODORO R. PERMEJO,
Respondent. G.R. No. 196036, October 23, 2013
SERENO, C.J.:
This is a Rule 45 Petition1 dated 30 March 2011 assailing the Decision2 and
Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 104292, which affirmed
the Decision4 of the National Labor Relations Commission (NLRC) in NLRC Case No.
OCW-RAB-IV-4-392-96-RI, finding petitioner Elizabeth M. Gagui solidarily liable with
the placement agency, PRO Agency Manila, Inc., to pay respondents all the money
claims awarded by virtue of their illegal dismissal.
The antecedent facts are as follows:
On 14 December 1993, respondents Simeon Dejero and Teodoro Permejo filed
separate Complaints5 for illegal dismissal, nonpayment of salaries and overtime
pay, refund of transportation expenses, damages, and attorney’s fees against PRO
Agency Manila, Inc., and Abdul Rahman Al Mahwes.
After due proceedings, on 7 May 1997, Labor Arbiter Pedro Ramos rendered a
Decision,6 the dispositive portion of which reads:
WHEREFORE, ALL FOREGOING CONSIDERED, judgment is hereby rendered ordering
respondents Pro Agency Manila, Inc., and Abdul Rahman Al Mahwes to jointly and
severally pay complainants, as follows:
a) US$4,130.00 each complainant or a total of US$8,260.00, their unpaid salaries
from July 31, 1992 up to September 1993, less cash advances of total of
SR11,000.00, or its Peso equivalent at the time of payment;
b) US$1,032.00 each complainant for two (2) hours overtime pay for fourteen (14)
months of services rendered or a total of US$2,065.00 or its Peso equivalent at the
time of payment;
c) US$2,950.00 each complainant or a total of US$5,900.00 or its Peso equivalent at
the time of payment, representing the unexpired portion of their contract;
d) Refund of plane ticket of complainants Teodoro Parejo and Simeon Dejero from
Saudi Arabia to the Philippines, in the amount of P15,642.90 and P16,932.00
respectively;
e) Refund of excessive collection of placement fees in the amount of P4,000.00
each complainant, or a total of P8,000.00;
f)Moral and exemplary damages in the amount of P10,000.00 each complainant, or
a total of P20,000.00;
g) Attorney’s fees in the amount of P48,750.00.
SO ORDERED.
Pursuant to this Decision, Labor Arbiter Ramos issued a Writ of Execution7 on 10
October 1997. When the writ was returned unsatisfied,8 an Alias Writ of Execution
was issued, but was also returned unsatisfied.9
On 30 October 2002, respondents filed a Motion to Implead Respondent Pro
Agency Manila, Inc.’s Corporate Officers and Directors as Judgment Debtors.10 It
included petitioner as the Vice-President/Stockholder/Director of PRO Agency,
Manila, Inc.
After due hearing, Executive Labor Arbiter Voltaire A. Balitaan issued an Order11 on
25 April 2003 granting respondents’ motion, to wit:
WHEREFORE, the motion to implead is hereby granted insofar as Merlita G. Lapuz
and Elizabeth M. Gagui as parties-respondents and accordingly held liable to
complainant jointly and solidarily with the original party-respondent adjudged liable
under the Decision of May 7, 1998. Let 2nd Alias Writ of Execution be issued for the
enforcement of the Decision consistent with the foregoing tenor.
SO ORDERED.
On 10 June 2003, a 2nd Alias Writ of Execution was issued,12 which resulted in the
garnishment of petitioner’s bank deposit in the amount of P85,430.48.13 However,
since the judgment remained unsatisfied, respondents sought the issuance of a
third alias writ of execution on 26 February 2004.14
On 15 December 2004, Executive Labor Arbiter Lita V. Aglibut issued an Order15
granting respondents’ motion for a third alias writ. Accordingly, the 3rd Alias Writ of
Execution16 was issued on 6 June 2005, resulting in the levying of two parcels of lot
owned by petitioner located in San Fernando, Pampanga.17
On 14 September 2005, petitioner filed a Motion to Quash 3rd Alias Writ of
Execution;18 and on 29 June 2006, a Supplemental Motion to Quash Alias Writ of
Execution.19 In these motions, petitioner alleged that apart from not being made
aware that she was impleaded as one of the parties to the case,20 the dispositive
portion of the 7 May 1997 Decision (1997 Decision) did not hold her liable in any
form whatsoever.21 More importantly, impleading her for the purpose of execution
was tantamount to modifying a decision that had long become final and
executory.22
On 26 June 2006, Executive Labor Arbiter Lita V. Aglibut issued an Order23 denying
petitioner’s motions on the following grounds: (1) records disclosed that despite
having been given sufficient notices to be able to register an opposition, petitioner
refused to do so, effectively waiving her right to be heard;24 and (2) under Section
10 of Republic Act No. 8042 (R.A. 8042) or the Migrant Workers and Overseas
Filipinos Act of 1995, corporate officers may be held jointly and severally liable with
the placement agency for the judgment award.25
Aggrieved, petitioner appealed to the NLRC, which rendered a Decision26 in the
following wise:
WHEREFORE, premises considered, the appeal of the respondent Elizabeth M.
Gagui is hereby DENIED for lack of merit. Accordingly, the Order of Labor Arbiter
Lita V. Aglibut dated June 26, 2006 is AFFIRMED.
SO ORDERED.
The NLRC ruled that “in so far as overseas migrant workers are concerned, it is R.A.
8042 itself that describes the nature of the liability of the corporation and its
officers and directors. x x x [I]t is not essential that the individual officers and
directors be impleaded as party respondents to the case instituted by the worker. A
finding of liability on the part of the corporation will necessarily mean the liability of
the corporate officers or directors.”27
Upon appellate review, the CA affirmed the NLRC in a Decision28 promulgated on
15 November 2010:
From the foregoing, the Court finds no reason to hold the NLRC guilty of grave
abuse of discretion amounting to lack or excess of jurisdiction in affirming the Order
of Executive Labor Arbiter Aglibut which held petitioner solidarily liable with PRO
Agency Manila, Inc. and Abdul Rahman Al Mahwes as adjudged in the May 7, 1997
Decision of Labor Arbiter Pedro Ramos.
WHEREFORE, the Petition is DENIED.
SO ORDERED. (Emphasis in the original)
The CA stated that there was “no need for petitioner to be impleaded x x x because
by express provision of the law, she is made solidarily liable with PRO Agency
Manila, Inc., for any and all money claims filed by private respondents.”29 The CA
further said that this is not a case in which the liability of the corporate officer must
be established because an allegation of malice must be proven. The general rule is
that corporate officers, directors and stockholders are not liable, except when they
are made liable for their corporate act by a specific provision of law, such as R.A.
8042.30
On 8 and 15 December 2010, petitioner filed two Motions for Reconsideration, but
both were denied in a Resolution31 issued by the CA on 25 February 2011.
Hence, this Petition for Review filed on 30 March 2011.
On 1 August 2011, respondents filed their Comment,32 alleging that the petition
had been filed 15 days after the prescriptive period of appeal under Section 2, Rule
45 of the Rules of Court.
On 14 February 2012, petitioner filed a Reply,33 countering that she has a fresh
period of 15 days from 16 March 2011 (the date she received the Resolution of the
CA) or up to 31 March 2011 to file the Petition.
ISSUES
From the foregoing, we reduce the issues to the following:
Whether or not this petition was filed on time; and
Whether or not petitioner may be held jointly and severally liable with PRO Agency
Manila, Inc. in accordance with Section 10 of R.A. 8042, despite not having been
impleaded in the Complaint and named in the Decision.
THE COURT’S RULING
Petitioner has a fresh period of 15 days within
which to file this petition, in accordance with
the Neypes rule.
We first address the procedural issue of this case.
In a misleading attempt to discredit this petition, respondents insist that by opting
to file a Motion for Reconsideration instead of directly appealing the CA Decision,
petitioner effectively lost her right to appeal. Hence, she should have sought an
extension of time to file her appeal from the denial of her motion.
This contention, however, deserves scant consideration. We agree with petitioner
that starting from the date she received the Resolution denying her Motion for
Reconsideration, she had a “fresh period” of 15 days within which to appeal to this
Court. The matter has already been settled in Neypes v. Court of Appeals,34 as
follows:
To standardize the appeal periods provided in the Rules and to afford litigants fair
opportunity to appeal their cases, the Court deems it practical to allow a fresh
period of 15 days within which to file the notice of appeal in the Regional Trial
Court, counted from receipt of the order dismissing a motion for a new trial or
motion for reconsideration.
Henceforth, this “fresh period rule” shall also apply to Rule 40 governing appeals
from the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for
review from the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals
from quasi-judicial agencies to the Court of Appeals and Rule 45 governing appeals
by certiorari to the Supreme Court. The new rule aims to regiment or make the
appeal period uniform, to be counted from receipt of the order denying the motion
for new trial, motion for reconsideration (whether full or partial) or any final order
or resolution.
Since petitioner received the CA Resolution denying her two Motions for
Reconsideration only on 16 March 2011, she had another 15 days within which to
file her Petition, or until 31 March 2011. This Petition, filed on 30 March 2011, fell
within the prescribed 15-day period.
Petitioner may not be held jointly and severally liable, absent a finding that she was
remiss in directing the affairs of the agency.
As to the merits of the case, petitioner argues that while it is true that R.A. 8042
and the Corporation Code provide for solidary liability, this liability must be so
stated in the decision sought to be implemented.35 Absent this express statement,
a corporate officer may not be impleaded and made to personally answer for the
liability of the corporation.36 Moreover, the 1997 Decision had already been final
and executory for five years and, as such, can no longer be modified.37 If at all,
respondents are clearly guilty of laches for waiting for five years before taking
action against petitioner.38
In disposing the issue, the CA cited Section 10 of R.A. 8042, stating that there was
“no need for petitioner to be impleaded x x x because by express provision of the
law, she is made solidarily liable with PRO Agency Manila, Inc., for any and all
money claims filed by private respondents.”
We reverse the CA.
At the outset, we have declared that “R.A. 8042 is a police power measure intended
to regulate the recruitment and deployment of OFWs. It aims to curb, if not
eliminate, the injustices and abuses suffered by numerous OFWs seeking to work
abroad.”40
The pertinent portion of Section 10, R.A. 8042 reads as follows:
SEC. 10. MONEY CLAIMS. - Notwithstanding any provision of law to the contrary,
the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual, moral, exemplary and other forms
of damages.
The liability of the principal/employer and the recruitment/placement agency for
any and all claims under this section shall be joint and several. This provision shall
be incorporated in the contract for overseas employment and shall be a condition
precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and solidarily
liable with the corporation or partnership for the aforesaid claims and damages.
(Emphasis supplied)
In Sto. Tomas v. Salac,41 we had the opportunity to pass upon the constitutionality
of this provision. We have thus maintained:
The key issue that Gumabay, et al. present is whether or not the 2nd paragraph of
Section 10, R.A. 8042, which holds the corporate directors, officers, and partners of
recruitment and placement agencies jointly and solidarily liable for money claims
and damages that may be adjudged against the latter agencies, is unconstitutional.
xxx
But the Court has already held, pending adjudication of this case, that the liability of
corporate directors and officers is not automatic. To make them jointly and
solidarily liable with their company, there must be a finding that they were remiss
in directing the affairs of that company, such as sponsoring or tolerating the
conduct of illegal activities. In the case of Becmen and White Falcon, while there is
evidence that these companies were at fault in not investigating the cause of
Jasmin’s death, there is no mention of any evidence in the case against them that
intervenors Gumabay, et al., Becmen’s corporate officers and directors, were
personally involved in their company’s particular actions or omissions in Jasmin’s
case. (Emphasis supplied)
Hence, for petitioner to be found jointly and solidarily liable, there must be a
separate finding that she was remiss in directing the affairs of the agency, resulting
in the illegal dismissal of respondents. Examination of the records would reveal that
there was no finding of neglect on the part of the petitioner in directing the affairs
of the agency. In fact, respondents made no mention of any instance when the judgment via a motion impleading petitioner and filed only in 2002 runs
petitioner allegedly failed to manage the agency in accordance with law, thereby contrary to settled jurisprudence, rendering such action a nullity.
contributing to their illegal dismissal.
WHEREFORE, the Petition for Review on Certiorari is hereby GRANTED. The assailed
Moreover, petitioner is correct in saying that impleading her for the purpose of Decision dated 15 November 2010 and Resolution dated 25 February 2011 of the
execution is tantamount to modifying a decision that had long become final and Court of Appeals in CA-G.R. SP No. 104292 are hereby REVERSED.
executory.42 The fallo of the 1997 Decision by the NLRC only held “respondents Pro
Agency Manila Inc., and Abdul Rahman Al Mahwes to jointly and severally pay SO ORDERED.
complainants x x x.”43 By holding her liable despite not being ordained as such by
the decision, both the CA and NLRC violated the doctrine on immutability of
judgments.

In PH Credit Corporation v. Court of Appeals,44 we stressed that “respondent’s

[petitioner’s] obligation is based on the judgment rendered by the trial court. The
dispositive portion or the fallo is its decisive resolution and is thus the subject of
execution. x x x. Hence the execution must conform with that which is ordained or
decreed in the dispositive portion of the decision.”

In INIMACO v. NLRC,45 we also held thus:

None of the parties in the case before the Labor Arbiter appealed the Decision
dated March 10, 1987, hence the same became final and executory. It was,
therefore, removed from the jurisdiction of the Labor Arbiter or the NLRC to further
alter or amend it. Thus, the proceedings held for the purpose of amending or
altering the dispositive portion of the said decision are null and void for lack of
jurisdiction. Also, the Alias Writ of Execution is null and void because it varied the
tenor of the judgment in that it sought to enforce the final judgment against
“Antonio Gonzales/Industrial Management Development Corp. (INIMACO) and/or
Filipinas Carbon and Mining Corp. and Gerardo Sicat,” which makes the liability
solidary.

In other words, “[o]nce a decision or order becomes final and executory, it is

removed from the power or jurisdiction of the court which rendered it to further
alter or amend it. It thereby becomes immutable and unalterable and any
amendment or alteration which substantially affects a final and executory judgment
is null and void for lack of jurisdiction, including the entire proceedings held for that
purpose. An order of execution which varies the tenor of the judgment or exceeds
the terms thereof is a nullity.”46

While labor laws should be construed liberally in favor of labor, we must be able to
balance this with the equally important right of petitioner to due process. Because
the 1997 Decision of Labor Arbiter Ramos was not appealed, it became final and
executory and was therefore removed from his jurisdiction. Modifying the tenor of
ASSOCIATION OF MEDICAL CLINICS FOR OVERSEAS WORKERS, INC., (AMCOW),
REPRESENTED HEREIN BY ITS PRESIDENT, DR. ROLANDO VILLOTE, Petitioner, v.
GCC APPROVED MEDICAL CENTERS ASSOCIATION, INC. AND CHRISTIAN CANGCO,
Respondents. G.R. No. 207132, December 06, 2016
G.R. No. 207205
HON. ENRIQUE T. ONA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF
HEALTH, Petitioner, v. GCC APPROVED MEDICAL CENTERS ASSOCIATION, INC. AND
CHRISTIAN E. CANGCO, Respondents.
DECISION
BRION, J.:
In these consolidated petitions for review on certiorari1 filed under Rule 45 of the
Rules of Court, by the Association of Medical Clinics for Overseas Workers, Inc.
(AMCOW) in GR No. 207132, and by Secretary Enrique T. Ona (Secretary Ona) of the
Department of Health (DOH) in GR No. 207205, we resolve the challenge to the
August 10, 2012 decision2 and the April 12, 2013 order3 of the Regional Trial Court
(RTC) of Pasay City, Branch 108, in Sp. Civil Action No. R-PSY-10-04391-CV.4
The August 10, 2012 decision and April 12, 2013 order declared null and void ab
initio the August 23, 2010 and November 2, 2010 orders issued by the DOH
directing respondent GCC Approved Medical Centers Association, Inc. (GAMCA) to
cease and desist from implementing the referral decking system (these orders shall
be alternately referred to as DOH CDO letters).
I. The Antecedents
On March 8, 2001, the DOH issued Administrative Order No. 5, Series of 20015(AO
5-01) which directed the decking or equal distribution of migrant workers among
the several clinics who are members of GAMCA.
AO 5-01 was issued to comply with the Gulf Cooperative Countries (GCC) States'
requirement that only GCC-accredited medical clinics/hospitals' examination results
will be honored by the GCC States' respective embassies. It required an OFW
applicant to first go to a GAMCA Center which, in turn, will refer the applicant to a
GAMCA clinic or hospital.
Subsequently, the DOH issued AO No. 106, Series of 20026holding in abeyance the
implementation of the referral decking system. The DOH reiterated its directive
suspending the referral decking system in AO No. 159, Series of 2004.7
In 2004, the DOH issued AO No. 167, Series of 20048repealing AO 5-01, reasoning
that the referral decking system did not guarantee the migrant workers' right to
safe and quality health service. AO 167-04 pertinently reads:
WHEREAS, after a meticulous and deliberate study, examination, and consultation
about the GAMCA referral decking system, the DOH believes that its mandate is to
protect and promote the health of the Filipino people by ensuring the rights to safe
and quality health service and reliable medical examination results through the
stricter regulation of medical clinics and other health facilities, which the referral
decking system neither assures nor guarantees.
NOW, THEREFORE, for and in consideration of the foregoing, the DOH hereby
withdraws, repeals and/or revokes Administrative Order No. 5, series of 2001,
concerning the referral decking system. Hence, all other administrative issuances,
bureau circulars and memoranda related to A.O. No. 5, series of 2001, are hereby
withdrawn, repealed and/revoked accordingly.
In Department Memorandum No. 2008-0210,9 dated September 26, 2008, then
DOH Secretary Francisco T. Duque III expressed his concern about the continued
implementation of the referral decking system despite the DOH's prior suspension
directives. The DOH directed the "OFW clinics, duly accredited/licensed by the DOH
and/or by the Philippine Health Insurance Corporation (PHILHEALTH) belonging to
and identified with GAMCA x x x to forthwith stop, terminate, withdraw or
otherwise end the x x x 'referral decking system.'"10
GAMCA questioned the DOH's Memorandum No. 2008-0210 before the Office of
the President (OP). In a decision11 dated January 14, 2010, the OP nullified
Memorandum No. 2008-0210.
On March 8, 2010, Republic Act (RA) No. 1002212lapsed into law without the
President's signature. Section 16 of RA No. 10022 amended Section 23 of RA No.
8042, adding two new paragraphs - paragraphs (c) and (d). The pertinent portions
of the amendatory provisions read:
Section 16. Under Section 23 of Republic Act No. 8042, as amended, add new
paragraphs (c) and (d) with their corresponding subparagraphs to read as follows:
(c) Department of Health. - The Department of Health (DOH) shall regulate the
activities and operations of all clinics which conduct medical, physical, optical,
dental, psychological and other similar examinations, hereinafter referred to as
health examinations, on Filipino migrant workers as requirement for their overseas
employment. Pursuant to this, the DOH shall ensure that:
(c.1) The fees for the health examinations are regulated, regularly monitored and
duly published to ensure that the said fees are reasonable and not exorbitant;
(c.2) The Filipino migrant worker shall only be required to undergo health
examinations when there is reasonable certainty that he or she will be hired and
deployed to the jobsite and only those health examinations which are absolutely
necessary for the type of job applied for or those specifically required by the foreign
employer shall be conducted;
(c.3) No group or groups of medical clinics shall have a monopoly of exclusively
conducting health examinations on migrant workers for certain receiving countries;
(c.4) Every Filipino migrant worker shall have the freedom to choose any of the
DOH-accredited or DOH-operated clinics that will conduct his/her health
examinations and that his or her rights as a patient are respected. The decking
practice, which requires an overseas Filipino worker to go first to an office for
registration and then farmed out to a medical clinic located elsewhere, shall not be
allowed;
(c.5) Within a period of three (3) years from the effectivity of this Act, all DOH
regional and/or provincial hospitals shall establish and operate clinics that can serve
the health examination requirements of Filipino migrant workers to provide them
easy access to such clinics all over the country and lessen their transportation and
lodging expenses; and
(c.6) All DOH-accredited medical clinics, including the DOH- operated clinics,
conducting health examinations for Filipino migrant workers shall observe the same
standard operating procedures and shall comply with internationally accepted
standards in their operations to conform with the requirements of receiving
countries or of foreign employers/principals.
Any Foreign employer who does not honor the results of valid health examinations
conducted by a DOH-accredited or DOH-operated clinic shall be temporarily
disqualified from participating in the overseas employment program, pursuant to
POEA rules and regulations.
In case an overseas Filipino worker is found to be not medically fit upon his/her
immediate arrival in the country of destination, the medical clinic that conducted
the health examinations of such overseas Filipino worker shall pay for his or her
repatriation back to the Philippines and the cost of deployment of such worker.
Any government official or employee who violates any provision of this subsection
shall be removed or dismissed from service with disqualification to hold any
appointive public office for five (5) years. Such penalty is without prejudice to any
other liability which he or she may have incurred under existing laws, rules or
regulations. [emphases and underscoring supplied]
On August 13, 2010, the Implementing Rules and Regulations13 (IRR) of RA No.
8042, as amended by RA No. 10022, took effect.
Pursuant to Section 16 of RA No. 10022, the DOH, through its August 23, 2010
letter-order,14 directed GAMCA to cease and desist from implementing the referral
decking system and to wrap up their operations within three (3) days from receipt
thereof. GAMCA received its copy of the August 23, 2010 letter-order on August 25,
2010.
On August 26, 2010, GAMCA filed with the RTC of Pasig City a petition for certiorari
and prohibition with prayer for a writ of preliminary injunction and/or temporary
restraining order (GAMCA's petition).15 It assailed: (1) the DOH's August 23, 2010
letter-order on the ground of grave abuse of discretion; and (2) paragraphs c.3 and
c.4, Section 16 of RA No. 10022, as well as Section 1 (c) and (d), Rule XI of the IRR, as
unconstitutional.
Meanwhile, the DOH reiterated - through its November 2, 2010 order - its directive
that GAMCA cease and desist from implementing the referral decking system.16
On November 23, 2010, AMCOW filed an urgent motion for leave to intervene and
to file an opposition-in-intervention, attaching its opposition--in-intervention to its
motion.17 In the hearing conducted the following day, November 24, 2010, the RTC
granted AMCOW's intervention; DOH and GAMCA did not oppose AMCOW's
motion.18 AMCOW subsequently paid the docket fees and submitted its
memorandum.19
In an order20 dated August 1, 2011, the RTC issued a writ of preliminary
injunction21 directing the DOH to cease and desist from implementing its August
23, 2010 and November 2, 2010 orders. The RTC likewise issued an order denying
the motion for inhibition/disqualification filed by AMCOW.
On August 18, 2011, the DOH sought reconsideration of the RTC's August 1, 2011
order.
The assailed RTC rulings
In its August 10, 2012 decision,22 the RTC granted GAMCA's certiorari petition and
declared null and void ab initio the DOH CDO letters. It also issued a writ of
prohibition directing "the DOH Secretary and all persons acting on his behalf to
cease and desist from implementing the assailed Orders against the [GAMCA]."
The RTC upheld the constitutionality of Section 16 of RA No. 10022, amending
Section 23 of RA No. 8042, but ruled that Section 16 of RA No. 10022 does not apply
to GAMCA.

The RTC reasoned out that the prohibition against the referral decking system
under Section 16 of RA No. 10022 must be interpreted as applying only to clinics
that conduct health examination on migrant workers bound for countries that do
not require the referral decking system for the issuance of visas to job applicants.
It noted that the referral decking system is part of the application procedure in
obtaining visas to enter the GCC States, a procedure made in the exercise of the
sovereign power of the GCC States to protect their nationals from health hazards,
and of their diplomatic power to regulate and screen entrants to their territories.
Under the principle of sovereign equality and independence of States, the
Philippines cannot interfere with this system and, in fact, must respect the visa-
granting procedures of foreign states in the same way that they respect our
immigration procedures.
Moreover, to restrain GAMCA which is a mere adjunct of HMC, the agent of GCC
States, is to restrain the GCC States themselves. To the RTC, the Congress was
aware of this limitation, pursuant to the generally accepted principles of
international law under Article II, Section 2 of the 1987 Constitution, when it
enacted Section 16 of RA No. 10022.
The DOH and AMCOW separately sought reconsideration of the RTC's August 10,
2012 decision, which motions the RTC denied.23 The DOH and AMCOW separately
filed the present Rule 45 petitions.
On August 24, 2013, AMCOW filed a motion for consolidation24 of the two
petitions; the Court granted this motion and ordered the consolidation of the two
petitions in a resolution dated September 17, 2013.25cralawred
In the resolution26 of April 14, 2015, the Court denied: (1) GAMCA's most urgent
motion for issuance of temporary restraining order/writ of preliminary
injunction/status quo ante order (with request for immediate inclusion in the
Honorable Court's agenda of March 3, 2015, its motion dated March 2, 2015);27
and (2) the most urgent reiterating motion for issuance of temporary restraining
order/writ of preliminary injunction/status quo ante order dated March 11, 2015.28
The Court also suspended the implementation of the permanent injunction issued
by the RTC of Pasay City, Branch 108 in its August 10, 2012 decision.
II. The Issues
The consolidated cases before us present the following issues:
First, whether the Regional Trial Court legally erred in giving due course to the
petition for certiorari and prohibition against the DOH CDO letters;
Second, whether the DOH CDO letters prohibiting GAMCA from implementing the
referral decking system embodied under Section 16 of Republic Act No. 10022
violates Section 3, Article II of the 1987 Constitution for being an undue taking of
property;
Third, whether the application of Section 16 of Republic Act No.10022 to the
GAMCA violates the international customary principles of sovereign independence
and equality.
III. Our Ruling
A. The RTC legally erred when it gave due course to GAMCA's petition for certiorari
and prohibition.
The present case reached us through an appeal by certiorari (pursuant to Rule 45)
of an RTC ruling, assailing the decision based solely on questions of law. The RTC
decision, on the other hand, involves the grant of the petitions for certiorari and
prohibition (pursuant to Rule 65) assailing the DOH CDO letters for grave abuse of
discretion.
The question before us asks whether the RTC made a reversible error of law when it
issued writs of certiorari and prohibition against the DOH CDO letters.
AMCOW questions the means by which GAMCA raised the issue of the legality of RA
No. 10022 before the RTC. AMCOW posits that GAMCA availed of an improper
remedy, as certiorari and prohibition lie only against quasi-judicial acts, and quasi-
judicial and ministerial acts, respectively. Since the disputed cease and desist order
is neither, the RTC should have dismissed the petition outright for being an
improper remedy.
We agree with the petitioners' assertion that the RTC erred when it gave due course
to GAMCA's petition for certiorari and prohibition, but we do so for different
reasons.
1. Certiorari under Rules of Court and under the courts' expanded jurisdiction under
Art VIII, Section 1 of the Constitution, as recognized by jurisprudence.
A.1.a. The Current Certiorari Situation
The use of petitions for certiorari and prohibition under Rule 65 is a remedy that
judiciaries have used long before our Rules of Court existed.29 As footnoted below,
these writs - now recognized and regulated as remedies under Rule 65 of our Rules
of Court - have been characterized a "supervisory writs" used by superior courts to
keep lower courts within the confines of their granted jurisdictions, thereby
ensuring orderliness in lower courts' rulings.
We confirmed this characterization in Madrigal Transport v. Lapanday Holdings
Corporation,30 when we held that a writ is founded on the supervisory jurisdiction
of appellate courts over inferior courts, and is issued to keep the latter within the
bounds of their jurisdiction. Thus, the writ corrects only errors of jurisdiction of
judicial and quasi-judicial bodies, and cannot be used to correct errors of law or
fact. For these mistakes of judgment, the appropriate remedy is an appeal.31
This situation changed after 1987 when the new Constitution "expanded" the scope
of judicial power by providing that -
Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and to
determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government. (italics supplied)32
In Francisco v. The House of Representatives,33 we recognized that this expanded
jurisdiction was meant "to ensure the potency of the power of judicial review to
curb grave abuse of discretion by 'any branch or instrumentalities of government.'"
Thus, the second paragraph of Article VIII, Section 1 engraves, for the first time in its
history, into black letter law the "expanded certiorari jurisdiction" of this Court,
whose nature and purpose had been provided in the sponsorship speech of its
proponent, former Chief Justice Constitutional Commissioner Roberto Concepcion:
xxxx
The first section starts with a sentence copied from former
Constitutions. It says:
The judicial power shall be vested in one Supreme Court and in such lower courts as
may be established by law.
I suppose nobody can question it.
The next provision is new in our constitutional law. I will read it first and explain.
Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and to
determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the
government.
Fellow Members of this Commission, this is actually a product of our experience
during martial law. As a matter of fact, it has some antecedents in the past, but the
role of the judiciary during the deposed regime was marred considerably by the
circumstance that in a number of cases against the government, which then had no
legal defense at all, the solicitor general set up the defense of political question and
got away with it. As a consequence, certain principles concerning particularly the
writ of habeas corpus, that is, the authority of courts to order the release of
political detainees, and other matters related to the operation and effect of martial
law failed because the government set up the defense of political question. And the
Supreme Court said: "Well, since it is political, we have no authority to pass upon
it." The Committee on the Judiciary feels that this was not a proper solution of the
questions involved. It did not merely request an encroachment upon the rights of
the people, but it, in effect, encouraged further violations thereof during the
martial law regime. x x x
xxxx
Briefly stated, courts of justice determine the limits of power of the agencies and
offices of the government as well as those of its officers. In other words, the
judiciary is the final arbiter on the question whether or not a branch of government
or any of its officials has acted without jurisdiction or in excess of jurisdiction, or so
capriciously as to constitute an abuse of discretion amounting to excess of
jurisdiction or lack of jurisdiction. This is not only a judicial power but a duty to pass
judgment on matters of this nature.
This is the background of paragraph 2 of Section 1, which means that the courts
cannot hereafter evade the duty to settle matters of this nature, by claiming that
such matters constitute a political question.34 (italics in the original; emphasis and
underscoring supplied)
Meanwhile that no specific procedural rule has been promulgated to enforce this
"expanded" constitutional definition of judicial power and because of the
commonality of "grave abuse of discretion" as a ground for review under Rule 65
and the courts expanded jurisdiction, the Supreme Court based on its power to
relax its rules35 allowed Rule 65 to be used as the medium for petitions invoking
the courts' expanded jurisdiction based on its power to relax its Rules.36 This is
however an ad hoc approach that does not fully consider the accompanying
implications, among them, that Rule 65 is an essentially distinct remedy that cannot
simply be bodily lifted for application under the judicial power's expanded mode.
The terms of Rule 65, too, are not fully aligned with what the Court's expanded
jurisdiction signifies and requires.37
On the basis of almost thirty years' experience with the courts' expanded
jurisdiction, the Court should now fully recognize the attendant distinctions and
should be aware that the continued use of Rule 65 on an ad hoc basis as the
operational remedy in implementing its expanded jurisdiction may, in the longer
term, result in problems of uneven, misguided, or even incorrect application of the
courts' expanded mandate.
The present case is a prime example of the misguided reading that may take place
in constitutional litigation: the procedural issues raised apparently spring from the
lack of proper understanding of what a petition for certiorari assails under the
traditional and expanded modes, and the impact of these distinctions in complying
with the procedural requirements for a valid petition.
2. The Basic Distinctions
A.2.a. Actual Case or Controversy
Basic in the exercise of judicial power whether under the traditional or in the
expanded setting - is the presence of an actual case or controversy. For a dispute to
be justiciable, a legally demandable and enforceable right must exist as basis, and
must be shown to have been violated.38
Whether a case actually exists depends on the pleaded allegations, as affected by
the elements of standing (translated in civil actions as the status of being a "real-
party-in-interest," in criminal actions as "offended party" and in special proceedings
as "interested party"),39ripeness,40prematurity, and the moot and academic
principle that likewise interact with one another. These elements and their
interactions are discussed m greater detail below.
The Court's expanded jurisdiction - itself an exercise of judicial power - does not do
away with the actual case or controversy requirement in presenting a constitutional
issue, but effectively simplifies this requirement by merely requiring a prima facie
showing of grave abuse of discretion in the assailed governmental act.
A.2.b. Actions Correctable by Certiorari
A basic feature of the expanded jurisdiction under the constitutional definition of
judicial power, is the authority and command for the courts to act on petitions
involving the commission by any branch or instrumentality of government of grave
abuse of discretion amounting to lack or excess of jurisdiction.
This command distinctly contrasts with the terms of Rule 65 which confines court
certiorari action solely to the review of judicial and quasi--judicial acts.41 These
differing features create very basic distinctions that must necessarily result in
differences in the application of remedies.
While actions by lower courts do not pose a significant problem because they are
necessarily acting judicially when they adjudicate, a critical question comes up for
the court acting on certiorari petitions when governmental agencies are involved -
under what capacity does the agency act?
This is a critical question as the circumstances of the present case show. When the
government entity acts quasi-judicially, the petition for certiorari challenging the
action falls under Rule 65; in other instances, the petition must be filed based on
the courts' expanded jurisdiction.
A.2.c. Grave Abuse of Discretion
Another distinction, a seeming one as explained below, relates to the cited ground
of a certiorari petition under Rule 65 which speaks of lack or excess of jurisdiction
or grave abuse of discretion amounting to lack or excess of jurisdiction, as against
the remedy under the courts' expanded jurisdiction which expressly only mentions
grave abuse of discretion amounting to lack or excess of jurisdiction.
This distinction is apparently not legally significant when it is considered that action
outside of or in excess of the granted authority necessarily involves action with
grave abuse of discretion: no discretion is allowed in areas outside of an agency's
granted authority so that any such action would be a gravely abusive exercise of
power. The constitutional grant of power, too, pointedly addresses grave abuse of
discretion when it amounts to lack or excess of jurisdiction,42 thus establishing that
the presence of jurisdiction is the critical element; failure to comply with this
requirement necessarily leads to the certiorari petition's immediate dismissal.43
As an added observation on a point that our jurisprudence has not fully explored,
the result of the action by a governmental entity (e.g., a law or an executive order)
can be distinguished from the perspective of its legality as tested against the terms
of the Constitution or of another law (where subordinate action like an executive
order is involved), vis-a-vis the legality of the resulting action where grave abuse of
discretion attended the governmental action or the exercise of the governmental
function.
In the former, the conclusion may be plain illegality or legal error that characterized
the law or exec order (as tested, for example, under the established rules of
interpretation); no consideration is made of how the governmental entity exercised
its function. In the latter case, on the other hand, it is the governmental entity's
exercise of its function that is examined and adjudged independently of the result,
with impact on the legality of the result of the gravely abusive action.
Where the dispute in a case relates to plain legal error, ordinary court action and
traditional mode are called for and this must be filed in the lower courts based on
rules of jurisdiction while observing the hierarchy of courts.
Where grave abuse of discretion is alleged to be involved, the expanded jurisdiction
is brought into play based on the express wording of the Constitution and
constitutional implications may be involved (such as grave abuse of discretion
because of plain oppression or discrimination), but this must likewise be filed with
the lowest court of concurrent jurisdiction, unless the court highest in the hierarchy
grants exemption. Note that in the absence of express rules, it is only the highest
court, the Supreme Court, that can only grant exemptions.
From these perspectives, the use of grave abuse of discretion can spell the
difference in deciding whether a case filed directly with the Supreme Court has
been properly filed.
A.2.d. Exhaustion of Available Remedies
A basic requirement under Rule 65 is that there be "no other plain, speedy and
adequate remedy found in law,"44 which requirement the expanded jurisdiction
provision does not expressly carry. Nevertheless, this requirement is not a
significant distinction in using the remedy of certiorari under the traditional and the
expanded modes. The doctrine of exhaustion of administrative remedies applies to
a petition for certiorari, regardless of the act of the administrative agency
concerned, i.e., whether the act concerns a quasi-judicial, or quasi-legislative
function, or is purely regulatory.45
Consider in this regard that once an administrative agency has been empowered by
Congress to undertake a sovereign function, the agency should be allowed to
perform its function to the full extent that the law grants. This full extent covers the
authority of superior officers in the administrative agencies to correct the actions of
subordinates, or for collegial bodies to reconsider their own decisions on a motion
for reconsideration. Premature judicial intervention would interfere with this
administrative mandate, leaving administrative action incomplete; if allowed, such
premature judicial action through a writ of certiorari, would be a usurpation that
violates the separation of powers principle that underlies our Constitution.46
In every case, remedies within the agency's administrative process must be
exhausted before external remedies can be applied. Thus, even if a governmental
entity may have committed a grave abuse of discretion, litigants should, as a rule,
first ask reconsideration from the body itself, or a review thereof before the agency
concerned. This step ensures that by the time the grave abuse of discretion issue
reaches the court, the administrative agency concerned would have fully exercised
its jurisdiction and the court can focus its attention on the questions of law
presented before it.
Additionally, the failure to exhaust administrative remedies affects the ripeness to
adjudicate the constitutionality of a governmental act, which in turn affects the
existence of the need for an actual case or controversy for the courts to exercise
their power of judicial review.47 The need for ripeness - an aspect of the timing of a
case or controversy does not change regardless of whether the issue of
constitutionality reaches the Court through the traditional means, or through the
Court's expanded jurisdiction. In fact, separately from ripeness, one other concept
pertaining to judicial review is intrinsically connected to it; the concept of a case
being moot and academic.48
Both these concepts relate to the timing of the presentation of a controversy
before the Court ripeness relates to its prematurity, while mootness relates to a
belated or unnecessary judgment on the issues. The Court cannot preempt the
actions of the parties, and neither should it (as a rule) render judgment after the
issue has already been resolved by or through external developments.
The importance of timing in the exercise of judicial review highlights and reinforces
the need for an actual case or controversy an act that may violate a party's right.
Without any completed action or a concrete threat of injury to the petitioning
party, the act is not yet ripe for adjudication. It is merely a hypothetical problem.
The challenged act must have been accomplished or performed by either branch or
instrumentality of government before a court may come into the picture, and the
petitioner must allege the existence of an immediate or threatened injury to itself
as a result of the challenged action.
In these lights, a constitutional challenge, whether presented through the
traditional route or through the Court's expanded jurisdiction, requires compliance
with the ripeness requirement. In the case of administrative acts, ripeness
manifests itself through compliance with the doctrine of exhaustion of
administrative remedies.
In like manner, an issue that was once ripe for resolution but whose resolution,
since then, has been rendered unnecessary, needs no resolution from the Court, as
it presents no actual case or controversy and likewise merely presents a
hypothetical problem. In simpler terms, a case is moot and academic when an event
supervenes to render a judgment over the issues unnecessary and superfluous.
Without the element of ripeness or a showing that the presented issue is moot and
academic, petitions challenging the constitutionality of a law or governmental act
are vulnerable to dismissal.
Not to be forgotten is that jurisprudence also prohibits litigants from immediately
seeking judicial relief without first exhausting the available administrative remedies
for practical reasons.49
From the perspective of practicality, immediate resort to the courts on issues that
are within the competence of administrative agencies to resolve, would
unnecessarily clog the courts' dockets. These issues, too, usually involve technical
considerations that are within the agency's specific competence and which, for the
courts, would require additional time and resources to study and consider.50 Of
course, the Supreme Court cannot really avoid the issues that a petition for
certiorari, filed with the lower courts may present; the case may be bound
ultimately to reach the Court, albeit as an appeal from the rulings of the lower
courts.
3. Situations Where a Petition for Certiorari May Be Used
There are two distinct situations where a writ of certiorari or prohibition may be
sought. Each situation carries requirements, peculiar to the nature of each
situation, that lead to distinctions that should be recognized in the use of certiorari
under Rule 65 and under the courts' expanded jurisdiction.
The two situations differ in the type of questions raised. The first is the
constitutional situation where the constitutionality of acts are questioned. The
second is the non-constitutional situation where acts amounting to grave abuse of
discretion are challenged without raising constitutional questions or violations.
The process of questioning the constitutionality of a governmental action provides
a notable area of comparison between the use of certiorari in the traditional and
the expanded modes.
Under the traditional mode, plaintiffs question the constitutionality of a
governmental action through the cases they file before the lower courts; the
defendants may likewise do so when they interpose the defense of
unconstitutionality of the law under which they are being sued. A petition for
declaratory relief may also be used to question the constitutionality or application
of a legislative (or quasi-legislative) act before the court.51
For quasi-judicial actions, on the other hand, certiorari is an available remedy, as
acts or exercise of functions that violate the Constitution are necessarily committed
with grave abuse of discretion for being acts undertaken outside the contemplation
of the Constitution. Under both remedies, the petitioners should comply with the
traditional requirements of judicial review, discussed below.52 In both cases, the
decisions of these courts reach the Court through an appeal by certiorari under Rule
45.
In contrast, existing Court rulings in the exercise of its expanded jurisdiction have
allowed the direct filing of petitions for certiorari and prohibition with the Court to
question, for grave abuse of discretion, actions or the exercise of a function that
violate the Constitution.53 The governmental action may be questioned regardless
of whether it is quasi--judicial, quasi-legislative, or administrative in nature. The
Court's expanded jurisdiction does not do away with the actual case or controversy
requirement for presenting a constitutional issue, but effectively simplifies this
requirement by merely requiring a prima facie showing of grave abuse of discretion
in the exercise of the governmental act.54
To return to judicial review heretofore mentioned, in constitutional cases where the
question of constitutionality of a governmental action is raised, the judicial power
the courts exercise is likewise identified as the power of judicial review - the power
to review the constitutionality of the actions of other branches of government.55
As a rule, as required by the hierarchy of courts principle, these cases are filed with
the lowest court with jurisdiction over the matter. The judicial review that the
courts undertake requires:
1)
there be an actual case or controversy calling for the exercise of judicial power;
(2)
the person challenging the act must have "Standing" to challenge; he must have a
personal and substantial interest in the case such that he has sustained, or will
sustain, direct injury as a result of its enforcement;
(3)
the question of constitutionality must be raised at the earliest possible opportunity;
and
(4)
the issue of constitutionality must be the very lis mota of the case.56
The lower court's decision under the constitutional situation reaches the Supreme
Court through the appeal process, interestingly, through a petition for review on
certiorari under Rule 45 of the Rules of Court.
In the non-constitutional situation, the same requirements essentially apply, less
the requirements specific to the constitutional issues. In particular, there must be
an actual case or controversy and the compliance with requirements of standing, as
affected by the hierarchy of courts, exhaustion of remedies, ripeness, prematurity,
and the moot and academic principles.
A.3.a. The "Standing" Requirement
Under both situations, the party bringing suit must have the necessary "standing."
This means that this party has, in its favor, the demandable and enforceable right or
interest giving rise to a justiciable controversy after the right is violated by the
offending party.
The necessity of a person's standing to sue derives from the very definition of
judicial power. Judicial power includes the duty of the courts to settle actual
controversies involving rights which are legally demandable and enforceable.
Necessarily, the person availing of a judicial remedy must show that he possesses a
legal interest or right to it, otherwise, the issue presented would be purely
hypothetical and academic. This concept has been translated into the requirement
to have "standing" in judicial review,57 or to be considered as a "real-party-in-
interest" in civil actions,58 as the "offended party" in criminal actions59 and the
"interested party" in special proceedings.60
While the Court follows these terms closely in both non-constitutional cases and
constitutional cases under the traditional mode, it has relaxed the rule in
constitutional cases harrdled under the expanded jurisdiction mode. in the latter
case, a prima facie showing that the questioned governmental act violated the
Constitution, effectively disputably shows an injury to the sovereign Filipino nation
who approved the Constitution and endowed it with authority, such that the
challenged act may be questioned by any Philippine citizen before the Supreme
Court.61 In this manner, the "standing" requirement is relaxed compared with the
standard of personal stake or injury that the traditional petition requires.
The relaxation of the standing requirement has likewise been achieved through the
application of the "transcendental importance doctrine" under the traditional mode
for constitutional cases.62 (Under the traditional mode, "transcendental
importance" not only relaxes the standing requirement, but also allows immediate
access to this Court, thus exempting the petitioner from complying with the
hierarchy of courts requirement.)63
More importantly perhaps, the prima facie showing of grave abuse of discretion in
constitutional cases also implies that the injury alleged is actual or imminent, and
not merely hypothetical.
Through this approach, the Court's attention is directed towards the existence of an
actual case or controversy - that is, whether the government indeed violated the
Constitution to the detriment of the Filipino people without the distractions of
determining the existence of transcendental importance indicators unrelated to the
dispute and which do not at all determine whether the Court properly exercises its
power of judicial review.
Parenthetically, in the traditional mode, the determination of the transcendental
importance of the issue presented,64 aside from simply relaxing the standing
requirement, may result in the dilution of the actual case or controversy element
because of the inextricable link between standing and the existence of an actual
case or controversy.
Consider, in this regard, that an actual case or controversy that calls for the exercise
of judicial power necessarily requires that the party presenting it possesses the
standing to mount a challenge to a governmental act. A case or controversy exists
when there is an actual dispute between parties over their legal rights, which
remains in conflict at the time the dispute is presented before the court.65
Standing, on the other hand, involves a personal and substantial interest in the case
because the petitioner has sustained, or will sustain, direct injury as a result of the
violation of its right.66
With the element of "standing" (or the petitioner's personal or substantial stake or
interest in the case) relaxed, the practical effect is to dilute the need to show that
an immediate actual dispute over legal rights did indeed take place and is now the
subject of the action before the court.67
In both the traditional and the expanded modes, this relaxation carries a ripple
effect under established jurisprudential rulings,68 affecting not only the actual case
or controversy requirement, but compliance with the doctrine of hierarchy of
courts, discussed in greater detail below.
A.3.b. The Hierarchy of Courts Principle
Another requirement that a certiorari petition carries, springs from the principle of
"hierarchy of courts" which recognizes the various levels of courts in the country as
they are established under the Constitution and by law, their ranking and effect of
their rulings in relation with one another, and how these different levels of court
interact with one another.69 Since courts are established and given their defined
jurisdictions by law, the hierarchy of the different levels of courts should leave very
little opening for flexibility (and potential legal questions), but for the fact that the
law creates courts at different and defined levels but with concurrent jurisdictions.
The Constitution itself has partially determined the judicial hierarchy in the
Philippine legal system by designating the Supreme Court as the highest court with
irreducible powers; its rulings serve as precedents that other courts must follow70
because they form part of the law of the land.71 As a rule, the Supreme Court is not
a trial court and rules only on questions of law, in contrast with the Court of
Appeals and other intermediate courts72 which rule on both questions of law and
of fact. At the lowest level of courts are the municipal and the regional trial courts
which handle questions of fact and law at the first instance according to the
jurisdiction granted to them by law.
Petitions for certiorari and prohibition fall under the concurrent jurisdiction of the
regional trial courts and the higher courts, all the way up to the Supreme Court. As
a general rule, under the hierarchy of courts principle, the petition must be brought
to the lowest court with jurisdiction;73 the petition brought to the higher courts
may be dismissed based on the hierarchy principle. Cases, of course, may ultimately
reach the Supreme Court through the medium of an appeal.
The recognition of exceptions to the general rule is provided by the Supreme Court
through jurisprudence, i.e., through the cases that recognized the propriety of filing
cases directly with the Supreme Court. This is possible as the Supreme Court has the
authority to relax the application of its own rules.74
As observed above, this relaxation waters down other principles affecting the
remedy of certiorari. While the relaxation may result in greater and closer
supervision by the Court over the lower courts and quasi-judicial bodies under Rule
65, the effect may not always be salutary in the long term when it is considered that
this may affect the constitutional standards for the exercise of judicial power,
particularly the existence of an actual case or controversy.
The "transcendental importance" standard, in particular, is vague, open-ended and
value-laden, and should be limited in its use to exemptions from the application of
the hierarchy of courts principle. It should not carry any ripple effect on the
constitutional requirement for the presence of an actual case or controversy.
4. The petition for certiorari and prohibition against the DOH Letter was filed before
the wrong court.
In the present case, the act alleged to be unconstitutional refers to the cease and
desist order that the DOH issued against GAMCA's referral decking system. Its
constitutionality was questioned through a petition for certiorari and prohibition
before the RTC. The case reached this Court through a Rule 45 appeal by certiorari
under the traditional route.
In using a petition for certiorari and prohibition to assail the DOH-CDO letters,
GAMCA committed several procedural lapses that rendered its petition readily
dismissible by the RTC. Not only did the petitioner present a premature challenge
against an administrative act; it also committed the grave jurisdictional error of
filing the petition before the wrong court.
A.4.a. The DOH CDO letters were issued in the exercise of the DOH's quasi--judicial
functions, and could be assailed through Rule 65 on certiorari and prohibition.
A cease and desist order is quasi-judicial in nature, as it applies a legislative policy to
an individual or group within the coverage of the law containing the policy.
The Court, in Municipal Council of Lemery, Batangas v. Provincial Board of
Batangas,75 recognized the difficulty of d fining the precise demarcation line
between what are judicial and what are administrative or ministerial functions, as
the exercise of judicial functions may involve the performance of legislative or
administrative duties, and the performance of administrative or ministerial duties
may, to some extent, involve the exercise of functions judicial in character. Thus,
the Court held that the nature of the act to be performed, rather than of the office,
board, or body which performs it, should determine whether or not an action is in
the discharge of a judicial or a quasi-judicial function.76
Generally, the exercise of judicial functions involves the determination of what the
law is, and what the legal rights of parties are under this law with respect to a
matter in controversy. Whenever an officer is clothed with this authority and
undertakes to determine those questions, he acts judicially.77
In the administrative realm, a government officer or body exercises a quasi-judicial
function when it hears and determines questions of fact to which the legislative
policy is to apply, and decide, based on the law's standards, matters relating to the
enforcement and administration of the law.78
The DOH CDO letter directed GAMCA to cease and desist from engaging in the
referral decking system practice within three days from receipt of the letter. By
issuing this CDO letter implementing Section 16 of RA No. 10022, the DOH (1) made
the finding of fact that GAMCA implements the referral decking system, and (2)
applied Section 16 of RA No. 10022, to conclude that GAMCA's practice is
prohibited by law and should be stopped.
From this perspective, the DOH acted in a quasi-judicial capacity: its CDO letter
determined a question of fact, and applied the legislative policy prohibiting the
referral decking system practice.
Notably, cease and desist orders have been described and treated as quasi-judicial
acts in past cases, and had even been described as similar to the remedy of
injunction granted by the courts.79
A.4.b. The petitions for certiorari and prohibition against the DOH CDO letters fall
within the jurisdiction of the Court of Appeals.
Since the CDO Letter was a quasi-judicial act, the manner by which GAMCA assailed
it before the courts of law had been erroneous; the RTC should not have
entertained GAMCA's petition.
First, acts or omissions by quasi-judicial agencies, regardless of whether the remedy
involves a Rule 43 appeal or a Rule 65 petition for certiorari, is cognizable by the
Court of Appeals. In particular, Section 4, Rule 65 of the Rules of Court provides:
Section 4. When and where petition filed. The petition shall be filed not later than
sixty (60) days from notice of the judgment, order or resolution. In case a motion
for reconsideration or new trial is timely filed, whether such motion is required or
not, the sixty (60) day period shall be counted from notice of the denial of said
motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or
omissions of a lower court or of a corporation, board, officer or person, in the
Regional Trial Court exercising jurisdiction over the territorial area as defined by the
Supreme Court. It may also be filed in the Court of Appeals whether or not the
same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its
appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial agency,
unless otherwise provided by law or these Rules, the petition shall be filed in and
cognizable only by the Court of Appeals. (emphasis, italics, and underscoring
supplied)
Since the DOH is part of the Executive Department and has acted in its quasi-judicial
capacity, the petition challenging its CDO letter should have been filed before the
Court of Appeals. The RTC thus did not have jurisdiction over the subject matter of
the petitions and erred in giving due course to the petition for certiorari and
prohibition against the DOH CDO letters. In procedural terms, petitions for
certiorari and prohibition against a government agency are remedies avaiJable to
assail its quasi-judicial acts, and should thus have been filed before the CA.
The provision in Section 4, Rule 65 requiring that certiorari petitions challenging
quasi-judicial acts to be filed with the CA is in full accord with Section 9 of Batas
Pambansa Blg. 12980 on the same point. Section 9 provides:
Section 9. Jurisdiction.- The Court of Appeals shall exercise:
1. Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas
corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of
its appellate jurisdiction;
xxxx
3. Exclusive appellate jurisdiction over all final judgments, resolutions, orders or
awards of Regional Trial Courts and quasi--judicial agencies, instrumentalities,
boards or commission, including the Securities and Exchange Commission, the
Social Security Commission, the Employees Compensation Commission and the Civil
Service Commission, except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, the provisions of this
Act, and of subparagraph (1) of the third paragraph and subparagraph 4 of the
fourth paragraph of Section 17 of the Judiciary Act of 1948.
xxxx
(emphases, italics, and underscoring supplied)
Thus, by law and by Supreme Court Rules, the CA is the court with the exclusive
original jurisdiction to entertain petitions for certiorari and prohibition against
quasi-judicial agencies. In short, GAMCA filed its remedy with the wrong court.
A.4.c The petitions for certiorari and prohibition against the DOH CDO letters were
premature challenges - they failed to comply with the requirement that there be
"no other plain, speedy and adequate remedy" and with the doctrine of exhaustion
of administrative remedies.
Second, the Regional Trial Court of Pasay City unduly disregarded the requirements
that there be "no other plain, speedy and adequate remedy at law" and the
doctrine of exhaustion of administrative remedies, when it gave due course to the
certiorari and prohibition petition against the DOH's CDO.
Under Chapter 8, Book IV of Executive Order (EO) No. 292,81 series of 1987, the
DOH Secretary "shall have supervision and control over the bureaus, offices, and
agencies under him"82 and "shall have authority over and responsibility for x x x
operation" of the Department.
Section 1, Chapter 1, Title I, Book III of EO No. 292 in relation with Article VII,
Sections 1 and 17 of the Constitution,83 on the other hand, provides that the
"President shall have control of all the executive departments, bureaus, and
offices."
These provisions both signify that remedies internal to the Executive Branch exist
before resorting to judicial remedies: GAMCA could ask the DOH Secretary to
reconsider or clarify its letter-order, after which it could appeal, should the ruling be
unfavorable, to the Office of the President.
Significantly, this was what GAMCA did in the past when the DOH issued
Memorandum Order No. 2008-0210 that prohibited the referral decking system.
GAMCA then asked for the DOH Secretary's reconsideration, and subsequently
appealed the DOH's unfavorable decision with the Office of the President. The OP
then reversed Memorandum Order No. 2008-0210 and allowed the referral decking
system to continue.
That GAMCA had earlier taken this course indicates that it was not unaware of the
administrative remedies available to it; it simply opted to disregard the doctrine of
exhaustion of administrative remedies and the requirement that there be no other
plain, speedy, and adequate remedy in law when it immediately filed its petition for
certiorari with the RTC.
This blatant disregard of the Rule 65 requirements clearly places GAMCA's petition
outside the exceptions that we recognized in the past in relaxing strict compliance
with the exhaustion of administrative remedies requirement.
Jurisprudence84 shows that this Court never hesitated in the past in relaxing the
application of the rules of procedure to accommodate exceptional circumstances
when their strict application would result in injustice. These instances, founded as
they are on equitable considerations, do not include the undue disreiard of
administrative remedies, particularly when they are readily available.85
A.4.d. The petitions for certiorari and prohibition against the DOH CDO letters
should have been dismissed outright, as Rule 65 Petitions for Certiorari and
Prohibition are extraordinary remedies given due course only upon compliance with
the formal and substantive requirements.
Note, at this point, that Rule 65 petitions for certiorari and prohibition are
discretionary writs, and that the handling court possesses the authority to dismiss
them outright for failure to comply with the form and substance requirements.
Section 6, Rule 65 of the Rules of Court in this regard provides:
Section 6. Order to comment. - If the petition is sufficient in form and substance to
justify suclr process, the court shall issue an order requiring the respondent or
respondents to comment on the petition within ten (10) days from receipt of a copy
thereof. Such order shall be served on the respondents in such manner as the court
may direct together with a copy of the petition and any annexes thereto.
(emphasis, italics, and underscoring supplied)
Thus, even before requiring the DOH to comment, the RTC could have assessed the
petition for certiorari and prohibition for its compliance with the Rule 65
requirements. At that point, the petition for certiorari and prohibition should have
been dismissed outright, for failing to comply with Section 1 and Section 4 of Rule
65. When the court instead took cognizance of the petition, it acted on a matter
outside its jurisdiction.
Consequently, the RTC's resulting judgment is void and carries no legal effect. The
decision exempting GAMCA from the application of the referral decking system
should equally have no legal effect.
Noncompliance with the Section 1, Rule 65 requirement that there be no other
plain, speedy, and adequate remedy in law, on the other hand, is more than just a
pro-forma requirement in the present case. Since the petitions for certiorari and
prohibition challenge a governmental act - i.e. action under the DOH CDO letters, as
well as the validity of the instruments under which these letters were issued -
compliance with Section 1, Rule 65 and the doctrine of exhaustion of administrative
remedies that judicial review requires is also mandatory. To recall a previous
discussion, the exhaustion of administrative remedies is also an aspect of ripeness
in deciding a constitutional issue.
Thus, GAMCA's disregard of the Rules of Court not only renders the petition
dismissible for failure to first exhaust administrative remedies; the constitutional
issues GAMCA posed before the RTC were not also ripe for adjudication.
5. The Regional Trial Court erred in finding grave abuse of discretion on the part of
the DOH's issuance of the DOH CDO letters.
On the merits, we find that the RTC of Pasay reversibly erred in law when it held
that the DOH acted with grave abuse of discretion m prohibiting GAMCA from
implementing the referral decking system.
In exempting GAMCA from the referral decking system that RA No. 10022 prohibits,
the RTC of Pasay City noted that the regulation per se was not unconstitutional, but
its application to GAMCA would violate the principle of sovereign equality and
independence.
While we agree with the RTC's ultimate conclusion upholding the constitutionality
of the prohibition against the referral decking system under RA No. 10022, our
agreement proceeds from another reason; we disagree that the prohibition does
not apply to GAMCA and with the consequent ruling nullifying the DOH's CDO
Letter.
A.5.a. The prohibition against the referral decking system under Section 16, RA No.
10022, is a valid exercise of police power.
In its comment, GAMCA asserts that implementing the prohibition against the
referral decking system would amount to an undue taking of property that violates
Article II, Section 2 of the 1987 Constitution.
It submits that the Securities and Exchange Commission had in fact approved its
Articles of Incorporation and Bylaws that embody the referral decking system; thus,
the DOH cannot validly prohibit the implementation of this system.
GAMCA further claims that its members made substantial investments to upgrade
their facilities and equipment. From this perspective, the August 23, 2010 order
constitutes taking of property without due process of law as its implementation
would deprive GAMCA members of their property.
AMCOW responded to these claims with the argument that the DOH CDO letters
implementing RA No. 10022 are consistent with the State's exercise of the police
power to prescribe regulations to promote the health, safety, and general welfare
of the people. Public interest justifies the State's interference in health matters,
since the welfare of migrant workers is a legitimate public concern. The DOH thus
merely performed its duty of upholding the migrant workers' freedom to consult
their chosen clinics for the conduct of health examinations.
We agree with AMCOW.
The State's police power86 is vast and plenary87 and the operation of a business,88
especially one that is imbued with public interest (such as healthcare services),89
falls within the scope of governmental exercise of police power through regulation.
As defined, police power includes (1) the imposition of restraint on liberty or
property, (2) in order to foster the common good.90 The exercise of police power
involves the "state authority to enact legislation that may interfere with personal
liberty or property in order to promote the general welfare."91
By its very nature, the exercise of the State's police power limits individual rights
and liberties, and subjects them to the "far more overriding demands and
requirements of the greater number."92 Though vast and plenary, this State power
also carries limitations, specifically, it may not be exercised arbitrarily or
unreasonably. Otherwise, it defeats the purpose for which it is exercised, that is,
the advancement of the public good.93
To be considered reasonable, the government's exercise of police power must
satisfy the "valid object and valid means" method of analysis: first, the interest of
the public generally, as distinguished from those of a particular class, requires
interference; and second, the means employed are reasonably necessary to attain
the objective sought and not unduly oppressive upon individuals.94
These two elements of reasonableness are undeniably present in Section 16 of RA
No. 10022. The prohibition against the referral decking system is consistent with
the State's exercise of the police power to prescribe regulations to promote the
health, safety, and general welfare of the people. Public interest demands State
interference on health matters, since the welfare of migrant workers is a legitimate
public concern.
We note that RA No. 10022 expressly reflects the declared State policies to "uphold
the dignity of its citizens whether in the country or overseas, in general, and Filipino
migrant workers," and to "afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all. Towards this end, the State shall provide
adequate and timely social, economic and legal services to Filipino migrant
workers." The prohibition against the referral decking system in Section 16 of RA
No. 10022 is an expression and implementation of these state policies.
The guarantee under Section 16 for OFWs to be given the option to choose a quality
healthcare service provider as expressed in Section 16 (c)95 of RA No. 10022 is
guaranteed by the prohibition against the decking practice and against monopoly
practices in OFW health examinations.96
Section 16 likewise requires employers to accept health examinations from any
DOH-accredited health facility; a refusal could lead to their temporary
disqualification under pertinent rules to be formulated by the Philippine Overseas
Employment Authority (POEA).97
These rules are part of the larger legal framework to ensure the Overseas Filipino
Workers' (OFW) access to quality healthcare services, and to curb existing practices
that limit their choices to specific clinics and facilities.
Separately from the Section 16 prohibition against the referral decking system, RA
No. 10022 also prohibits and penalizes the imposition of a compulsory exclusive
arrangement requiring OFWs to undergo health examinations only from specifically
designated medical clinics, institutions, entities or persons. Section 5, in relation to
Section 6 of RA No. 10022, penalizes compulsory, exclusive arrangements98 by
imprisonment and fine and by the automatic revocation of the participating medical
clinic's license.
The DOH's role under this framework is to regulate the activities and operations of
all clinics conducting health examinations on Filipino migrant workers as a
requirement for their overseas employment. The DOH is tasked to ensure that:
(c.3) No group or groups of medical clinics shall have a monopoly of exclusively
conducting health examinations on migrant workers for certain receiving countries;
(c.4) Every Filipino migrant worker shall have the freedom to choose any of the
DOH-accredited or DOH-operated clinics that will conduct his/her health
examinations and that his or her rights as a patient are respected. The decking
practice, which requires an overseas Filipino worker to go first to an office for
registration and then farmed out to a medical clinic located elsewhere, shall not be
allowed;99
While Section 16 of RA No. 10022 does not specifically define the consequences of
violating the prohibition against the referral decking system, Republic Act No. 4226
(Hospital Licensure Act), which governs the licensure and regulation of hospitals
and health facilities, authorizes the DOH to suspend, revoke, or refuse to renew the
license of hospitals and clinics violating the law.100
These consequences cannot but apply to the violation of the prohibition against the
referral decking system under RA No. 10022. If, under the law, the DOH can
suspend, revoke, or refuse to renew the license of these hospitals upon the finding
that they violated any provision of law (whether those found in RA No. 4226 or in
RA No. 10022), it follows- as a necessarily included lesser power - that the DOH can
likewise order these clinics and their association to cease and desist from practices
that the law deems to be undesirable.
A.5.b. The DOH did not gravely abuse its discretion in issuing the assailed DOH CDO
letters.
As discussed above, the letter-order implementing the prohibition against the
referral decking system is quasi-judicial in nature. This characteristic requires that
procedural due process be observed - that is, that the clinics concerned be given
the opportunity to be heard before the standard found in the law can be applied to
them.
Thus, prior to the issuance of the disputed CDO letter, the DOH should have given
GAMCA the opportunity to be heard on whether the prohibition applies to it. Lest
this opportunity to be heard be misunderstood, this DOH obligation raises an issue
different from the question of whether Congress can, under the exercise of police
power, prohibit the referral decking system; this latter issue lies outside the scope
of the DOH to pass upon. The required hearing before the DOH relates solely to
whether it properly implemented, based on the given standards under the law, the
prohibition that Congress decreed under RA No. 10022.
Under normal circumstances, the issuance of a CDO without a prior hearing would
violate GAMCA's procedural due process rights, and would amount to more than a
legal error, i.e., an error equivalent to action without jurisdiction. Rendering a
decision quasi-judicial in nature without providing the opportunity to be heard
amounts to a grave abuse of discretion that divests a quasi-judicial agency of its
jurisdiction.
Factual circumstances unique to the present case, however, lead us to conclude
that while it was an error of law for the DOH to issue a CDO without complying with
the requirements of procedural due process, its action did not amount to a grave
abuse of discretion.
Grave abuse of discretion amounts to more than an error of law; it refers to an act
that is so capricious, arbitrary, and whimsical that it amounts to a clear evasion of a
positive duty or a virtual refusal to perform a duty enjoined by law, as where the
power is exercised in an arbitrary and despotic manner because of passion or
hostility.101
Prior to the issuance of its CDO Letter, the DOH had more than sufficient basis to
determine that GAMCA practices the prohibited referral decking system under RA
No. 10022. Notably, the DOH had earlier allowed and recognized the referral
decking system that GAMCA practiced through AO 5-01. This recognition was made
with GAMCA's practice in mind. The subsequent administrative orders and
department memorandum suspending and terminating the referral decking system,
respectively, all pertain to the practice that the DOH had authorized under AO 5-01.
Even the subject matter of these issuances do not just pertain to any other referral
decking system, but to the "GAMCA referral decking system."
GAMCA likewise had more than several opportunities to contest the suspension
and eventual revocation of the referral decking system initially pe1mitted under AO
5-01. Its appeal even reached the Office of the President, which overturned the
DOH Memorandum Order terminating the referral decking system.
That the referral decking system had been subsequently prohibited by law shows
the intent of Congress to prevent and prohibit the practice that GAMCA initiated
and which the President had allowed. The President's duty under our political
system is to implement the law; hence, when Congress subsequently prohibited the
practice that GAMCA initiated, the Executive - including the President -has no
choice but to implement it.
Based on these circumstances, while the DOH erred when it issued its CDO letters
without first giving GAMCA the opportunity to prove whether the practice
conducted by GAMCA is the same practice prohibited under RA No. 10022, the DOH
conclusion to so act, in our view, did not constitute grave abuse of discretion that
would have divested it of jurisdiction.
We note that the DOH had sufficient basis when it determined that the referral
decking system prohibited under RA No. 10022 was the same decking system
practiced by GAMCA. To reiterate, the referral decking system was not something
new; it was an old system that GAMCA practiced and was known to all in its scope
and operating details. That GAMCA had previously questioned the DOH prohibition
and had been given ample opportunity to be heard when it filed an appeal before
the OP, negate the conclusion that GAMCA had been aggrieved by precipitate and
unfair DOH action.
To be sure, these factual circumstances do not make the CDO letter compliant with
procedural due process. They mitigate, however, the error committed and render it
less than the capricious, arbitrary, and patent refusal to comply with a positive legal
duty that characterizes an act committed with grave abuse of discretion.
The Court furthermore, in several instances,102 has recognized that an
administrative agency may issue an ex parte cease and desist order, where vital
public interests outweigh the need for procedural due process." In these instances,
the Court noted that the affected establishment may contest the ex parte order,
upon which the administrative agency concerned must conduct a hearing and allow
the establishment to be heard. While jurisprudence has so far used the "vital public
interests" standard to pollution cases, it had not been a grave abuse of discretion
on the part of the DOH to consider that GAMCA's referral decking practice falls
within this category. The DOH has long made the factual finding that the referral
decking system hinders our Filipino seafarers' access to quality and affordable
healthcare in its A.O. No. 106, series of 2002.
These circumstances further mitigate whatever legal error the DOH has committed
and render the conclusion that grave abuse of discretion had taken place
misplaced.
Since the writs of certiorari and prohibition do not issue against legal errors, but to
acts of grave abuse of discretion, the RTC erred in issuing these writs against the
DOH CDO letters.
6. The prohibition against the referral decking system against GAMCA does not
violate the principle of sovereign equality and independence.
The RTC based its decision to grant the writs of certiorari and prohibition against
the DOH letter-order on the principle of sovereign equality and independence;
applying the referral decking system prohibition against GAMCA violates this
principle.
The RTC reasoned out that the prohibition against the referral decking system
under Section 16 of RA No. 10022 must be interpreted to apply only to clinics
conducting health examinations on migrant workers bound for countries that do
not require the referral decking system for the issuance of visas to job applicants.
The RTC observed, too, that the refer al decking system is part of the application
procedure in obtaining visas to enter the GCC States, a procedure made in the
exercise of the sovereign power of the GCC States to protect their nationals from
health hazards, and of their diplomatic power to regulate and screen entrants to
their territories.
It also reasoned out that under the principle of sovereign equality and
independence of States, the Philippines cannot interfere with this system and in
fact must respect the visa-granting procedures of foreign states in the same way
that they respect our immigration procedures. Moreover, to restrain GAMCA which
is a mere adjunct of HMC (an agent of GCC States) is to restrain the GCC States
themselves.
AMCOW contests the RTC's conclusion, arguing that the principles of sovereign
equality and independence of States do not apply to the present case. According to
AMCOW, the subject matter of this case pertains to a domestic concern as the law
and the regulations that GAMCA assails relate to the operation of medical clinics in
the Philippines.
It points out that the Philippines gave GAMCA and its members the privilege of
conducting their businesses domestically; hence, their operations are governed by
Philippine laws, specifically by RA No. 10022 which serves as one of the limitations
on the privilege granted to them. GAMCA's right to engage in business should yield
to the State's exercise of police power. In legal contemplation, therefore, the DOH
CDO letters did not prejudice GAMCA's right to engage in business; nor did they
hamper the GAMCA members' business operations.
AMCOW further insists that the August 23, 2010 and November 2, 2010 orders are
consistent with the State's exercise of the police power to prescribe regulations to
promote the health, safety, and general welfare of the people. Public interest
demands State interference on health matters, since the welfare of migrant
workers is a legitimate public concern. The DOH thus merely performed its duty of
upholding the migrant workers' freedom to choose any of its accredited or
operated clinics that will conduct health examinations.
The DOH, for its part, adds that the implementation of RA No. 10022 cannot be
defeated by agreements entered into by GAMCA with the GCC States. The GCC
States, the DOH points out, are not empowered to determine the Philippines'
courses of action with respect to the operation, within Philippine territory, of
medical clinics; the conduct of health examinations; and the freedom of choice of
Filipino migrant workers.
GAMCA responds to these arguments by asserting that the referral decking system
is a part of the application procedure for obtaining visas to enter the GCC States.
Hence, it is an exercise of the sovereign power of the GCC States to protect their
nationals from health hazards, and their diplomatic power to regulate and screen
entrants to their territories. To restrain an agent of the GCC States under the
control and acting in accordance with the direction of these GCC States, restrains
the GCC States.
GAMCA also points out that the OFWs would suffer grave and irreparable damage
and injury if the DOH CDO letters would be implemented as the GCC States would
not issue working visas without the GAMCA seal attesting that the OFWs had been
medically examined by GAMCA member clinics.
After considering all these arguments, we find that the RTC's decision misapplied
the principle of sovereign independence and equality to the present case. While the
principles of sovereign independence and equality have been recognized in
Philippine jurisprudence, our recogmtmn of this principle does not extend to the
exemption of States and their affiliates from compliance with Philippine regulatory
laws.
A.6. The principle of sovereign equality and independence of states does not
exempt GAMCAfrom the referral decking system prohibition under RA No. 10022.
In Republic of Indonesia v. Vinzon,103 we recognized the principle of sovereign
independence and equality as part of the law of the land. We used this principle to
justify the recognition of the principle of sovereign immunity which exempts the
State - both our Government and foreign governments - from suit. We held:
International law is founded largely upon the principles of reciprocity, comity,
independence, and equality of States which were adopted as part of the law of our
land under Article II, Section 2 of the 1987 Constitution. The rule that a State may
not be sued without its consent is a necessary consequence of the principles of
independence and equality of States. As enunciated in Sanders v. Veridiano II, the
practical justification for the doctrine of sovereign immunity is that there can be no
legal right against the authority that makes the law on which the right depends. In
the case of foreign States, the rule is derived from the principle of the sovereign
equality of States, as expressed in the maxim par in parem non habet imperium. All
states are sovereign equals and cannot assert jurisdiction over one another. A
contrary attitude would "unduly vex the peace of nations."
Our recognition of sovereign immunity, however, has never been unqualified. While
we recognized the principles of independence and equality of States to justify a
State's sovereign immunity from suit, we also restricted state immunity to acts jus
imperii, or public acts. We said that once a State enters into commercial
transactions (jus gestionis), then it descends to the level of a private individual, and
is thus not immune from the resulting liability and consequences of its actions.104
By this recognition, we acknowledge that a foreign government acting in its jus
imperii function cannot be held liable in a Philippine court. Philippine courts, as part
of the Philippine government, cannot and should not take jurisdiction over cases
involving the public acts of a foreign government. Taking jurisdiction would amount
to authority over a foreign government, and would thus violate the principle of
sovereign independence and equality.105
This recognition is altogether different from exempting governments whose agents
are in the Philippines from complying with our domestic laws.106 We have yet to
declare in a case that the principle of sovereign independence and equality exempts
agents of foreign governments from compliance with the application of Philippine
domestic law.
In the present case, GAMCA has not adduced any evidence in the court below, nor
has it presented any argument before us showing that the principle of sovereign
equality and independence has developed into an international custom shielding
state agents from compliance with another state's domestic laws. Under this
situation, the Court is in no position to determine whether the practice that GAMCA
alleges has indeed crystallized into an international custom.
GAMCA has never proven in this case, too, that the GCC has extended its sovereign
immunity to GAMCA. Sovereign immunity belongs to the State, and it must first be
extended to its agents before the latter may be considered to possess sovereign
immunity.
Significantly, the Court has even adopted a restrictive approach in recognizing state
immunity, by distinguishing between a State's jus imperii and jus gestionis. It is only
when a State acts in its jus imperii function that we recognize state immunity.107
We point out furthermore that the prohibition against the referral decking system
applies to hospitals and clinics, as well as to OFW employers, and does not seek to
interfere with the GCC's visa requirement processes. RA 10022 prohibits hospitals
and clinics in the Philippines from practicing the referral decking system, and
employers from requiring OFWs to procure their medical examinations from
hospitals and clinics practicing the referral decking system.
The regulation applies to Philippine hospitals and clinics, as well as to employers of
OFWs. It does not apply to the GCCs and their visa processes. That the regulation
could affect the OFWs' compliance with the visa requirements imposed by GCCs
does not place it outside the regulatory powers of the Philippine government.
In the same manner, GCC states continue to possess the prerogative to apply their
visa requirements to any foreign national, including our OFWs, who seeks to enter
their territory; they may refuse to grant them entry for failure to comply with the
referral decking system, or they may adjust to the prohibition against the referral
decking system that we have imposed. These prerogatives lie with the GCC
member-states and do not affect at all the legality of the prohibition against the
referral decking system.
Lastly, the effect of the prohibition against the referral decking system is beyond
the authority of this Court to consider. The wisdom of this prohibition has been
decided by Congress, through the enactment of RA No. 10022. Our role in this case
is merely to determine whether our government has the authority to enact the
law's prohibition against the referral decking system, and whether this prohibition
is being implemented legally. Beyond these lies the realm of policy that, under our
Constitution's separation of powers, this Court cannot cross.
WHEREFORE, in the light of these considerations, we hereby GRANT the petitions.
Accordingly, we REVERSE and SET ASIDE the orders dated August 10, 2012 and April
12, 2013 of the Regional Trial Court of Pasay City, Branch 108, in Sp. Civil Action No.
R-PSY-10-04391-CV. Costs against respondent GAMCA. SO ORDERED.
JAKERSON G. GARGALLO, Petitioner, v. DOHLE SEAFRONT CREWING (MANILA),
INC., DOHLE MANNING AGENCIES, INC., AND MR. MAYRONILO B. PADIZ,
Respondent. G.R. No. 215551, August 17, 2016
PERLAS-BERNABE, J.:
For the Court's resolution are the Motion for Reconsideration1 and Motion for
Partial Reconsideration2 filed by petitioner Jakerson G. Gargallo (petitioner), and
respondents Dohle Seafront Crewing (Manila), Inc. (Dohle Seafront), Dohle Manning
Agencies, Inc. (Dohle Manning), and Mr. Mayronilo B. Padiz (Padiz; collectively,
respondents), respectively, of the Court's Decision3 dated September 16, 2015,
which affirmed the Decision4 dated June 10, 2014 and the Resolution5 dated
November 21, 2014 of the Court of Appeals (CA) in CA-G.R. SP No. 130266,
dismissing petitioner's claim for permanent total disability benefits, but ordered
respondents Dohle Seafront and Dohle Manning, jointly and severally, to pay
petitioner his income benefit for one hundred ninety-four (194) days, plus 10% of
the total amount of the income benefit as attorney's fees.
The Facts
On July 20, 2012, petitioner filed a complaint for permanent total disability benefits
against respondents before the National Labor Relations Commission (NLRC).6 The
complaint stemmed from his claim that: (a) he accidentally fell on deck while lifting
heavy loads of lube oil drum, with his left arm hitting the floor first, bearing his full
body weight;7 (b) he has remained permanently unfit for further sea service despite
major surgery and further treatment by the company-designated physicians;8 and
(c) his permanent total unfitness to work was duly certified by his chosen physician
whose certification must prevail over the palpably self-serving and biased
assessment of the company-designated physicians.9chanrobleslaw
For their part, respondents countered that the fit-to-work findings of the company-
designated physicians must prevail over that of petitioner's independent doctor,
considering that: (a) they were the ones who continuously treated and monitored
petitioner's medical condition; and (b) petitioner failed to comply with the conflict-
resolution procedure under the Philippine Overseas Employment Administration-
Standard Employment Contract (POEA-SEC). Respondents further averred that the
filing of the disability claim was premature since petitioner was still undergoing
medical treatment within the allowable 240-day period at the time the complaint
was filed.10chanrobleslaw
The Labor Arbiter (LA)11 and the NLRC12 gave more credence to the medical report
of petitioner's independent doctor and, thus, granted petitioner's disability claim,
and ordered respondents to jointly and severally pay petitioner his permanent total
disability benefits, albeit at different amounts.13chanrobleslaw
However, the CA disagreed with the conclusions of the LA and the NLRC, and
dismissed petitioner's complaint.14 It ruled that the claim was premature because
at the time the complaint was filed: (a) petitioner was still under medical treatment
by the company-designated physicians; (b) no medical assessment has yet been
issued by the company-designated physicians as to his fitness or disability since the
allowable 240-day treatment period during which he is considered under temporary
total disability has not yet lapsed; and (c) petitioner has not yet consulted his own
doctor, hence, had no sufficient basis to prove his incapacity.15 The CA likewise
gave more credence to the fit to work assessment of the company-designated
physician who treated and closely monitored petitioner's condition, over the
contrary declaration of petitioner's doctor who attended to him only once, two (2)
months after the filing of the complaint.16chanrobleslaw
In its September 16, 2015 Decision, the Court upheld the CA's dismissal of
petitioner's claim for permanent total disability benefits, but ordered Dohle
Seafront and Dohle Manning, jointly and severally, to pay petitioner the income
benefit arising from his temporary total disability which lasted for 194 days from his
repatriation on March 11, 2012 until his last visit to the company-designated
physician on September 21, 201217 (the date when he was declared fit to work)18
plus 10% of the total amount of the income benefit as attorney's fees.19
Meanwhile, the Court found no basis hold Padiz solidarity liable with Dohle Seafront
and Dohle Manning for payment of the monetary awards to petitioner, absent any
showing that acted beyond the scope of his authority or with
malice.20chanrobleslaw
Dissatisfied, both parties filed their respective motions for reconsideration of the
Court's September 16, 2015 Decision.21chanrobleslaw
I. Petitioner's Motion for Reconsideration
At the outset, the Court notes that, except as to the issue of respondents' liability
for the payment of income benefit, the arguments propounded in petitioner's
Motion for Reconsideration had been adequately passed upon in its September 16,
2015 Decision. In essence, petitioner argues that: (a) the lapse of the 120-day
period from the onset of disability rendered him permanently and totally disabled
because the extension of the medical treatment was unjustified;22 and (b) resort to
a third doctor is am directory, not a mandatory requirement.23chanrobleslaw
Such arguments remain untenable.
The Court had already disposed of the foregoing matters in its September 16, 2015
Decision, dismissing the complaint on the grounds of: (a) premature filing; and (b)
failure to comply with the mandated conflict-resolution procedure under the POEA-
SEC, viz.:
It is undisputed that petitioner was repatriated on March 11, 2012 and immediately
subjected to medical treatment. Despite the lapse of the initial 120-day period on
July 9, 2012, such treatment continued due to persistent pain complained of by
petitioner, which was observed until his 180th day of treatment on September 7,
2012. In this relation, the CA correctly ruled that the tiling of the complaint for
permanent total disability benefits on July 20, 2012 was premature, and should
have been dismissed for lack of cause of action, considering that at that time: (a)
petitioner was still under the medical treatment of the company-designated
physicians within the allowable 240-day period; (b) the latter had not yet issued any
assessment as to his fitness or disability; and (c) petitioner had not yet secured any
assessment from his chosen physician, whom he consulted only more than two (2)
months thereafter, or on October 2, 2012.
Moreover, petitioner failed to comply with the prescribed procedure under the
afore-quoted Section 20 (A) (3) of the 2010 POEA-SEC on the joint appointment by
the parties of a third doctor, in case the seafarer's personal doctor disagrees with
the company-designated physician's fit-to-work assessment. The [2008-2011 ver.di.
IMEC IBF CBA (IBF CBA)] similarly outlined the procedure,
viz.:ChanRoblesVirtualawlibrary
25.2
The disability suffered by the seafarer shall be determined by a doctor appointed by
the Company. If a doctor appointed by or on behalf of the seafarer disagrees with
the assessment, a third doctor may be nominated jointly between the Company
and the Union and the decision of this doctor shall be final and binding on both
parties.
xxxx
25.4.
A seafarer whose disability, in accordance with 25.2 above is assessed at 50% or
more shall, for the purpose of this paragraph, be regarded as permanently unfit for
further sea service in any capacity and be entitled to 100% compensation.
Furthermore, any seafarer assessed at less than 50% disability but certified as
permanently unfit for further sea service in any capacity by the Company-
nominated doctor, shall also be entitled to 100% compensation. Any disagreement
as to the assessment or entitlement shall be resolved in accordance with clause
25.2 above.
In the recent case of Veritas Maritime Corporation v. Gepanaga, Jr. [(see G.R. No.
206285, February 4, 2015, 750 SCRA 104, 117-118)], involving an almost identical
provision of the CBA, the Court reiterated the well-settled rule that the seafarer's
non-compliance with the mandated conflict-resolution procedure under the POEA-
SEC and the CBA militates against his claims, and results in the affirmance of the fit-
to-work certification of the company-designated physician, thus:
The [POEA-SEC] and the CBA clearly provide that when a seafarer sustains a work-
related illness or injury while on board the vessel, his fitness or unfitness for work
shall be determined by the company-designated physician.
If the physician appointed by the seafarer disagrees with the company-designated
physician's assessment, the opinion of a third doctor may be agreed jointly between
the employer and the seafarer to be the decision final and binding on them.
Thus, while petitioner had the right to seek a second and even a third opinion, the
final determination of whose decision must prevail must be done in accordance
with an agreed procedure. Unfortunately, the petitioner did not avail of this
procedure; hence, we have no option but to declare that the company-designated
doctor's certification is the final determination that must prevail.
xxx24chanroblesvirtuallawlibrary
There being no cogent reason to depart from the aforementioned ruling, the Court
denies petitioner's Motion for Reconsideration insofar as it seeks to reinstate the
NLRC's ruling finding petitioner entitled to permanent total disability benefits.
Nonetheless, the Court concurs with petitioner's asseveration that it was erroneous
to absolve Padiz from joint and several liability with Dchle Seafront and Dohle
Manning for the payment of the income benefit arising from his temporary total
disability,25cralawred in view of Section 10 of Republic Act No. (RA) 8042,26
otherwise known as the "Migrant Workers and Overseas Filipinos Act of 1995," as
amended by RA 1002227 (RA 8042, as amended), which pertinently
reads:ChanRoblesVirtualawlibrary
SECTION. 10. Money Claims. - xxx
The liability of the principal/employer and the recruitment/placement agency for
any and all claims under this section shall be joint and several. This provision shall
be incorporated in the contract for overseas employment and shall be a condition
precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and solidarity
liable with the corporation or partnership for the aforesaid claims and damages.28
(Emphasis and underscoring supplied)
Section 10 of RA 8042, as amended, expressly provides for joint and solidary liability
of corporate directors and officers with the recruitment/placement agency for all
money claims or damages that may be awarded to Overseas Filipino Workers
(OFWs). While a corporate director, trustee, or officer who entered into contracts in
behalf of the corporation generally. cannot be held personally liable for the
liabilities of the latter, in deference to the separate and distinct legal personality of
a corporation from the persons composing it, personal liability of such corporate
director, trustee, or officer, along (although not necessarily) with the corporation,
may validly attach when he is made by a specific provision of law personally
answerable for his corporate action,29 as in this case. Thus, in the recent case of
Sealanes Marine Services, Inc. v. Dela Torre,30 the Court had sustained the joint
and solidary liability of the manning agency, its foreign principal and the manning
agency's President in accordance with Section 10 of RA 8042, as amended.
In addition, Dohle Seafront is presumed to have submitted a verified undertaking by
its officers and directors that they will be jointly and severally liable with the
company over claims arising from an employer-employee relationship when it
applied for a license to operate a seafarer's manning agency, as required under the
2003 POEA Rules and Regulations Governing the Recruitment and Employment of
Seafarers (POEA Rules).31chanrobleslaw
"Applicable laws form part of, and are read into, contracts without need for any
express reference thereto; more so, when it pertains to a labor contract which is
imbued with public interest. Each contract thus contains not only what was
explicitly stipulated therein, but also the statutory provisions that have any bearing
on the matter."32 As applied herein, Section 10 of RA 8042, as amended, and the
pertinent POEA Rules are deemed incorporated in petitioner's employment
contract with respondents. These provisions are in line with the State's policy of
affording protection to labor and alleviating the workers' plight,33 and are meant to
assure OFWs immediate and sufficient payment of what is due them.34 Thus, as the
law provides, corporate directors and officers are themselves solidarily liable with
the recruitment/placement agency for all money claims or damages that may be
awarded to OFWs.
Based on the foregoing premises, the Court, therefore, finds Padiz jointly and
solidarily liable with Dohle Seafront and Dohle Manning for the payment of the
income benefit arising from petitioner's temporary total disability, and, to such
extent, grants petitioner's motion for reconsideration, and, in consequence,
modifies the September 16, 2015 Decision accordingly.
II. Respondents' Motion for Partial Reconsideration
Petitioner's entitlement to income benefit was clearly shown in this case, in light of
the undisputed fact that he needed continuous medical treatment for 194 days
from his repatriation on March 11, 2012, until his last visit with the company-
designated physician on September 21, 2012,35 when he was declared fit to work.
In this relation, the Court cannot subscribe to respondents' contention that
entitlement to income benefit is applicable only to land-based employees
compulsorily registered with the Social Security System (SSS),37 considering that
the 2010 POEA-SEC accords upon the manning agency/foreign principal the duty to
cover Filipino seafarers under the SSS and other social protection government
agencies.38 Neither is the Court persuaded by respondents' argument that the
obligation to pay the same falls on the SSS in view of their compliance with the
above duty,39 because the income benefit arising from a covered employee's
temporary total disability is to be advanced by the employer, subject to
reimbursement by the SSS40 upon compliance with the conditions set forth under
Section 1,41 Rule X of the Rules Implementing Title II, Book IV of the Labor Code.
Consequently, the Court finds no reason to reverse or modify the directive for
respondents to jointly and severally pay petitioner his income benefit for 194 days,
save for the inclusion of Padiz as a solidary debtor.
However, after surveying existing jurisprudence on the matter, the Court finds
merit in respondents' supplication42 that the award of attorney's fees must be
deleted. As a rule, the mere fact of having been forced to litigate to protect one's
interest does not amount to a compelling legal reason to justify an award of
attorney's fees in the claimant's favor.43 Verily, jurisprudence is replete with cases
holding that attorney's fees may be awarded to a claimant who is compelled to
litigate with third persons or incur expenses to protect his interest by reason of an
unjustified act or omission on the part of the party from whom it is sought only
when there is sufficient showing of bad faith on the part of the latter in refusing to
pay.44chanrobleslaw
However, in the case of Montierro v. Rickmers Marine Agency Phils., Inc.
(Montierro),45 similarly involving a claim for permanent total disability benefits
filed by a seafarer, the Court had pronounced that in labor cases, the withholding of
wages and benefits need not be coupled with malice or bad faith to warrant the
grant of attorney's fees since all that is required is that the refusal to pay was
without justification, thus, compelling the employee to litigate.46 Nonetheless,
since the complaint in Montierro was filed: (a) when the petitioner therein was still
under treatment; (b) prior to the assessment of the company-designated physician
within the allowable 240-day period; and (c) without complying with the prescribed
conflict-resolution procedure, the Court declared that there was no unlawful
withholding of benefits, rendering the award of attorney's fees to be improper.
Thus, considering that similar circumstances obtain in the present case, the Court
finds it proper to rule in the same way.
WHEREFORE, the Court hereby RESOLVES to:
chanRoblesvirtualLawlibrary1. PARTLY GRANT petitioner Jakerson G. Gargallo's
(petitioner) Motion for Reconsideration and, hereby, DECLARE respondent Mr.
Mayronilo B. Padiz (Padiz) jointly and severally liable with respondents Dohle
Seafront Crewing (Manila), Inc. (Dohle Seafront) and Dohle Manning Agencies, Inc.
(Dohle Manning), to pay petitioner his income benefit for one hundred ninety-four
(194) days; and cralawlawlibrary

2. PARTLY GRANT the Motion for Partial Reconsideration fi ed by respondents Dohle

Seafront, Dohle Manning, and Padiz, thereby, deleting the award of attorney's fees
equivalent to 10% of the adjudged income benefit in favor of petitioner.

The rest of the Court's September 16, 2015 Decision stands.

SO ORDERED.
PRINCESS TALENT CENTER PRODUCTION, INC., AND/OR LUCHI SINGH MOLDES,
Petitioners, v. DESIREE T. MASAGCA, Respondent.
G.R. No. 191310, April 11, 2018
LEONARDO-DE CASTRO,**J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised
Rules of Court filed by petitioners Princess Talent Center Production, Inc. (PTCPI)
and Luchi Singh Moldes (Moldes) assailing: (1) the Decision1 dated November 27,
2009 of the Court of Appeals in CA-G.R. SP No. 110277, which annulled and set
aside the Resolutions dated November 11, 20082 and January 30, 20093 of the
National Labor Relations Commission (NLRC) in NLRC NCR CA No. 049990-06, and
ordered petitioners and their foreign principal, Saem Entertainment Company, Ltd.
(SAENCO), to jointly and severally pay respondent Desiree T. Masagca her unpaid
salaries for one year, plus attorney's fees; and (2) the Resolution4 dated February
16, 2010 of the appellate court in the same case, which denied the Motion for
Reconsideration of petitioners and SAENCO.
I Philippine Agent and Talent Manager, respectively. Deductions of $200/month is
FACTUAL ANTECEDENTS
Sometime in November 2002, respondent auditioned for a singing contest at ABC-
Channel 5 in Novaliches, Quezon City when a talent manager approached her to
discuss her show business potential. Enticed by thoughts of a future in the
entertainment industry, respondent went to the office of petitioner PTCPI, a
domestic corporation engaged in the business of training and development of
actors, singers, dancers, and musicians in the movie and entertainment industry.5
At the office, respondent met petitioner Moldes, President of petitioner PTCPI, who
persuaded respondent to apply for a job as a singer/entertainer in South Korea.
A Model Employment Contract for Filipino Overseas Performing Artists (OPAS) To
Korea6 (Employment Contract) was executed on February 3, 2003 between
respondent and petitioner PTCPI as the Philippine agent of SAENCO, the Korean
principal/promoter. Important provisions of the Employment Contract are
reproduced below:
1. DURATION AND PERIOD OF EFFECTIVITY OF THE CONTRACT
1.1Duration: This contract shall be enforced for the period of six months, Extendible
by another six months by mutual agreement of the parties.
Affectivity (sic): The contract shall commence upon the Talent's departure from The
Philippines (Date 6) and shall remain in force as Stipulated in the duration, unless
sooner terminated by the mutual consent of The parties or due to circumstances
beyond their control. Booking of Talent Shall be effected within three (3) days upon
arrival in Korea, But only after Undergoing Mandatory Post-Arrival Briefing at the
Philippine Embassy Overseas Labor Office (POLO), Philippine Embassy in Seoul.
2. NAME OF PERFORMANCE VENUE:
Siheung Tourist Hotel Night Club
NAME OF OWNER:
Cho Kang Hyung
ADDRESS:
1622-6 (B2) Jung Wang Dons Siheung Kyung Ki Do
xxxx
(Subject to ocular inspection, Verification, and approval by the POLO)
3. COMPENSATION: The Talent shall receive a monthly compensation of a Minimum
of U.S.D. $600, (Ranging from U.S.D. 500 to 800 based on The categories of the ARB,
skill and experience of the Talent, and of the Performance Venue) which shall
accrue beginning on the day of the Talent's Departure from the Philippines and shall
be paid every end of the month directly To The Talent. By the Employer, minus the
authorized fees of the Philippine Agent and The Talent Manager, which shall be
deducted at a maximum monthly Rates of U.S. $100 and U.S. $100 for the
good for three (3) months only.
4. HOURS OF WORK, RESTDAY AND OVERTIME PAY
4.1 Hours of work: Maximum of Five (5) hours per day.
4.2 Rest day: One (1) day a week
4.3 Overtime Rate: (100) percent of regular rate or the prevailing rate in Korea as
Required by the Labor Standard Act.
xxxx
9. The services of the Talents as provided in this contract shall only be rendered at
the Performance Venue identified in this contract. Should there be a need and
mutual agreement of the parties for the talent to transfer to another Performance
Venue There shall be executed a new contract. The new contract shall be subject of
Verification requirement of the Philippine Overseas Labor Office, Philippine
Embassy.
xxxx
12. TERMINATION:
A. Termination by the Employer: The Employer may terminate the Contract of
Employment for any of the following just causes: serious misconduct or Willful
disobedience of the lawful orders of the employer, gross or habitual Neglect of
duties, violation of the laws of the host country. When the Termination of the
contract is due to the foregoing causes, the Talent shall Bear the cost of
repatriation. In addition, the Talent may be liable to Blacklisting and/or other
penalties in case of serious offense.
B. Termination by the Talent: The Talent may terminate the contract for any of The
following just causes: when the Talent is maltreated by the Employer or Any of
his/her associates, or when the employer commits of (sic) the following — Non-
payment of Talent salary, underpayment of salary in violation of this Contract, non-
booking of the Talent, physical molestation, assault or Subjecting the talent to
inhumane treatment or shame. Inhumane treatment Shall be understood to include
forcing or letting the talent to be used in Indecent performance or in prostitution. In
any of the foregoing case, the Employer shall pay the cost of repatriation and be
liable to garnishment of The escrow deposit, aside from other penalties that may
arise from a case.
C. Termination due to illness: Any of the parties may terminate the contract on The
ground of illness, disease, or injury suffered by the Talent, where the Latter's
continuing employment is prohibited by law or prejudicial to his/her Health, or to
the health of the employer, or to others. The cost of the Repatriation of the Talent
for any of the foregoing reasons shall be for the Account of the employer.7
Respondent left for South Korea on September 6, 2003 and worked there as a
singer for nine months, until her repatriation to the Philippines sometime in June
2004. Believing that the termination of her contract was unlawful and premature,
respondent filed a complaint against petitioners and SAENCO with the NLRC.
Respondent's Allegations
Respondent alleged that she was made to sign two Employment Contracts but she
was not given the chance to read any of them despite her requests. Respondent
had to rely on petitioner Moldes's representations that: (a) her visa was valid for
one year with an option to renew; (b) SAENCO would be her employer; (c) she
would be singing in a group with four other Filipinas8 at Seaman's Seven Pub at 82-
8 Okkyo-Dong, Jung-Gu, Ulsan, South Korea; (d) her Employment Contract had a
minimum term of one year, which was extendible for two years; and (e) she would
be paid a monthly salary of US$400.00, less US$100.00 as monthly commission of
petitioners. Petitioner Moldes also made respondent sign several spurious loan
documents by threatening the latter that she would not be deployed if she refused
to do so.
For nine months, respondent worked at Seaman's Seven Pub in Ulsan, South Korea -
not at Siheung Tourist Hotel Night Club in Siheung, South Korea as stated in her
Employment Contract - without receiving any salary from SAENCO. Respondent
subsisted on the 20% commission that she received for every lady's drink the
customers purchased for her. Worse, respondent had to remit half of her
commission to petitioner Moldes for the payment of the fictitious loan. When
respondent failed to remit any amount to petitioner Moldes in May 2004,
petitioner Moldes demanded that respondent pay the balance of the loan
supposedly amounting to US$10,600.00. To dispute the loan, respondent engaged
the legal services of Fortun, Narvasa & Salazar, a Philippine law firm, which
managed to obtain copies of respondent's Employment Contract and Overseas
Filipino Worker Information Sheet. It was only then when respondent discovered
that her employment was just for six months and that her monthly compensation
was US$600.00, not just US$400.00.
Respondent further narrated that on June 13, 2004, petitioner Moldes went to
South Korea and paid the salaries of all the performers, except respondent.
Petitioner Moldes personally handed respondent a copy of the loan document for
US$10,600.00 and demanded that respondent terminate the services of her legal
counsel in the Philippines. When respondent refused to do as petitioner Moldes
directed, petitioner Moldes withheld respondent's salary. On June 24, 2004, Park
Sun Na (Park), President of SAENCO,9 went to the club where respondent worked,
dragged respondent outside, and brought respondent to his office in Seoul where
he tried to intimidate respondent into apologizing to petitioner Moldes and
dismissing her counsel in the Philippines. However, respondent did not relent.
Subsequently, Park turned respondent over to the South Korean immigration
authorities for deportation on the ground of overstaying in South Korea with an
expired visa. It was only at that moment when respondent found out that petitioner
Moldes did not renew her visa.
Respondent filed the complaint against petitioners and SAENCO praying that a
decision be rendered declaring them guilty of illegal dismissal and ordering them to
pay her unpaid salaries for one year, inclusive of her salaries for the unexpired
portion of her Employment Contract, backwages, moral and exemplary damages,
and attorney's fees.
Petitioners' Allegations
Petitioners countered that respondent signed only one Employment Contract, and
that respondent read its contents before affixing her signature on the same.
Respondent understood that her Employment Contract was only for six months
since she underwent the mandatory post-arrival briefing before the Philippine
Labor Office in South Korea, during which, the details of her Employment Contract
were explained to her. Respondent eventually completed the full term of her
Employment Contract, which negated her claim that she was illegally dismissed.
Petitioners additionally contended that respondent, on her own, extended her
Employment Contract with SAENCO, and so petitioners' liability should not extend
beyond the original six-month term of the Employment Contract because the
extension was made without their participation or consent.
Petitioners likewise averred that they received complaints that respondent violated
the club policies of SAENCO against wearing skimpy and revealing dresses, dancing
in a provocative and immoral manner, and going out with customers after working
hours. Respondent was repatriated to the Philippines on account of her illegal or
immoral activities. Petitioners also insisted that respondent's salaries were paid in
full as evidenced by the nine cash vouchers10 dated October 5, 2003 to June 5,
2004. Petitioners submitted the Magkasamang Sinumpaang Salaysay11 of
respondent's co-workers, Sheila Marie V. Tiatco (Tiatco) and Carolina Flores
(Flores), who confirmed that respondent violated the club policies of SAENCO and
that respondent received her salaries.
Petitioners submitted as well the Sworn Statement12 dated November 9, 2004 of
Baltazar D. Fuentes (Baltazar), respondent's husband, to prove that respondent
obtained a loan from petitioner PTCPI. Baltazar affirmed that petitioner PTCPI lent
them some money which respondent used for her job application, training, and
processing of documents so that she could work abroad. A portion of the loan
proceeds was also used to pay for their land in Lagrimas Village, Tiaong, Quezon,
and respondent's other personal expenses.
Petitioner Moldes, for her part, disavowed personal liability, stating that she merely
acted in her capacity as a corporate officer of petitioner PTCPI.
Petitioners thus prayed that the complaint against them be dismissed and that
respondent be ordered to pay them moral and exemplary damages for their
besmirched reputation, and attorney's fees for they were compelled to litigate and
defend their interests against respondent's baseless suit.
Labor Arbiter's Ruling
On May 4, 2006, Labor Arbiter Antonio R. Macam rendered a Decision13 dismissing
respondent's complaint, based on the following findings:
The facts of the case and the documentary evidence submitted by both parties
would show that herein [respondent] was not illegally dismissed. This Office has
noted that the POEA approved contract declares that the duration of [respondent's]
employment was for six (6) months only. The fact that the duration of
[respondent's] employment was for six (6) months only is substantiated by the
documentary evidence submitted by both parties. Attached is [respondent's]
Position Paper as Annex "D" is a Model Employment Contract for Filipino Overseas
Performing Artist to Korea signed by the parties and approved by the POEA. Also
attached to the Position Paper of the [petitioners] as Annex "1" is a copy of the
Employment Contract signed by the parties and approved by POEA. We readily
noted that the common evidence submitted by the parties would prove that
[respondent's] employment was for six (6) months only. The deploying agency,
Princess. Talent Center Production, Inc. processed the [respondent] for a six-month
contract only and there is no showing that the deploying agency participated in the
extension of the contract made by the [respondent] herself. There is likewise no
evidence on record which would show that the POEA approved such an extension.
As matters now stand, this Office has no choice but to honor the six months
duration of the contract as approved by the POEA. The conclusion therefore is that
the [respondent] was not illegally dismissed since she was able to finish the
duration of the contract as approved by the POEA.
Following the above ruling, the [respondent] is likewise not entitled to the payment
of the unexpired portion of the employment contract. This Office could not exactly
determine what [respondent] means when she refers to the unexpired portion of
the contract. The [respondent] comes to this Office alleging that [petitioners] are
still liable to the new extended contract of the employment without however
presenting the said contract binding the recruitment agency as jointly and solidarily
liable with the principal employer. Such a document is vital as this will prove the
participation of the [petitioners] and the latter's assumption of responsibility.
Without the presentation of the "extended" contract, the "unexpired portion" could
not be determined. [Respondent's] claim therefore for the payment of the
unexpired portion of the contract must also fail.
The crux of the present controversy is whether or not [respondent] was paid her
salaries during the period she worked in Korea. [Respondent] claims that she was
not paid her salaries during the time she worked in Korea. [Petitioners] presented
an Affidavit executed by Filipino workers who worked with [respondent] in Korea
declaring that they, together with the [respondent], were paid by the foreign
employer all their salaries and wages. [Petitioners and SAENCO] likewise presented
vouchers showing that the [respondent] received full payment of her salaries during
the time that she worked in Korea. In the pleading submitted by the [respondent],
she never denied the fact that she indeed signed the vouchers showing full
payment of her salaries.
It becomes clear therefore that [respondent] miserably failed to destroy the
evidentiary value of the vouchers presented by the [petitioners]. This Office will not
dare to declare as void or incompetent the vouchers signed by the [respondent] in
the absence of any evidence showing any irregularity so much so that this Office did
not fail to notice the inconsistencies in the [respondent's] position paper.
[Respondent's] claim for the payment of overtime pay likewise lacks merit. There
was no showing that [respondent] actually rendered overtime work. Mere
allegation is not sufficient to establish [respondent's] entitlement to overtime pay.
It is [respondent's] obligation to prove that she actually rendered overtime work to
entitle her for the payment of overtime pay.14
In the end, the Labor Arbiter dismissed for lack of merit respondent's complaint, as
well as all other claims of the parties.15
Ruling of the NLRC
Respondent appealed the Labor Arbiter's Decision before the NLRC.16 In a
Decision17 dated May 22, 2008, the NLRC ruled in respondent's favor, reasoning
that:
There is sufficient evidence to establish the fact that [respondent] was not paid her
regular salaries. A scrutiny of the vouchers presented shows that it bears the peso
sign when in fact the salaries of [respondent] were to be received in Korea.
Furthermore, it appears that the vouchers were signed in one instance due to
similarities as to how they were
written.
Despite the fact that We find the vouchers questionable, they prove that
[respondent] was allowed to work beyond the effectivity of her visa. [Petitioners],
wanting to prove that they paid [respondent's] salary, presented vouchers for the
period starting October 2003 up to June 2004. It covers nine (9) months which
implies that, despite having a visa good for six months, they consented to
[respondent] working up to nine months. Otherwise, if they were against
[respondent's] overstaying in Korea, they could have asked for her deportation
earlier. Also, if [respondent] was misbehaving and went against their policy, they
could have taken disciplinary action against her earlier.
The "Magkasamang Sinumpaang Salaysay" of Ms. Tiatco and Ms. Flores, which was
presented by [petitioners] to prove the alleged immoral acts of [respondent] and
that they received their salaries on time, is self-serving and deserves scant weight
as the affiants are beholden to [petitioners and SAENCO] from whom they
depended their employment.
We find as more credible [respondent's] allegations that she was made to believe
that her contract was for one year and that her overstaying in Korea was with the
consent of [petitioners and SAENCO], and that when she refused to surrender the
50% of her commission, that was the only time they questioned her stay and
alleged that she committed immoral and illegal acts.
Further, the zealousness of [respondent] in filing a case against [petitioners and
SAENCO] in different government agencies for different causes of action manifests
the intensity of her desire to seek justice for the sufferings she experienced.
There is sufficient evidence to establish that [petitioners and SAENCO]
misrepresented to [respondent] the details of her employment and that she was
not paid her salaries. Hence, she is entitled to be paid her salaries for one year at
the rate of $600 per month as this was what [petitioners and SAENCO] represented
to her.
For lack of proof, however, [respondent] is not entitled to her claim for overtime
pay.18
Based on the foregoing, the NLRC ruled:
WHEREFORE, premises considered, the Decision of Labor Arbiter Antonio R. Macam
dated 4 May 2006 is hereby REVERSED and SET ASIDE and a NEW ONE entered
ordering [petitioners and SAENCO] to jointly and severally pay [respondent] her
salaries for one year at a rate of $600 per month, or a total of US$7,200. The claim
for overtime pay is DENIED for lack of sufficient basis.19
Acting on the Motion for Reconsideration20 of petitioners, however, the NLRC
issued a Resolution21 on November 11, 2008, reversing its previous Decision.
According to the NLRC, respondent's appeal was dismissible for several fatal
procedural defects, to wit:
Perusal of the records show that [respondent's] new counsel filed on May 31, 2006
a Motion for Extension of Time to File a Motion for Reconsideration due to lack of
material time in preparing a Motion for Reconsideration. However, [respondent's]
counsel filed a Memorandum of Appeal through registered mail on June 1, 2006 x x
x and paid the appeal fee on July 17, 2006 x x x.
Rule VI, Section 4 of the 2005 Revised Rules and Procedures of the National Labor
Relations Commission provides that:
Section 4, requisites for Perfection of Appeal. - a) The appeal shall be: 1) filed within
the reglementary period provided in Section 1 of this Rule; 2) verified by the
appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, as
amended; 3) in the form of a memorandum of appeal which shall state the grounds
relied upon and the arguments in support thereof, the relief prayed for, and with a
statement of the date the appellant received the appealed decision, resolution or
order; 4) in three (3) legibly typewritten or printed copies; and 5) accompanied by i)
proof of payment of the required appeal fee, ii) posting of a cash or surety bond as
provided in Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv)
proof of service upon the other parties.
The above-quoted Rules explicitly provides for the requisites for perfecting an
appeal, which [respondent] miserably failed to comply. [Respondent's]
Memorandum of Appeal contains no averments as to the date [respondent] or her
counsel received the Decision of the Labor Arbiter. The appeal is unverified. No
certificate of non-forum shopping was attached to the appeal. The appeal fee was
paid only on July 17, 2006, or after more than forty-six (46) days from the filing of
the Memorandum of Appeal on June 1, 2006. Lacking these mandatory
requirements, [respondent's] appeal is fatally defective, and no appeal was
perfected within the reglementary period. Consequently, the Decision of the Labor
Arbiter had become final and executory. The belated filing of the verification and
certification on non-forum shopping will not cure its defect and it only proves that
indeed [respondent's] appeal was not perfected at all.22
Nonetheless, the NLRC set technicalities aside and still proceeded to resolve the
case on the merits, ultimately finding that respondent failed to present evidence to
prove she had been illegally dismissed:
We cannot subscribe to [respondent's] contention that she was illegally dismissed
from her employment. Records show that the Model Employment Contract
presented as evidence by both [respondent] and [petitioners and SAENCO] would
prove that [respondent's] employment was for a period of six (6) months only.
Aside from [respondent's] allegation that [petitioners and SAENCO] misrepresented
to her that her contract is for a period of one (1) year, there is no other evidence on
record which will corroborate and strengthen such allegation. We took note of the
fact that [respondent's] Model Employment Contract was verified by the Labor
Attache of the Philippine Embassy in Korea and duly approved by the Philippines
Overseas Employment Administration (POEA). There is no showing that her contract
was extended by [petitioners and SAENCO], or that an extension was approved by
the POEA. All the pieces of documentary evidence on record prove otherwise.
We agree with [petitioners and SAENCO's] argument that [respondent] was given a
copy of her employment contract prior to her departure for Korea because
[respondent] was required to submit a copy thereof to the Philippine Labor Office
upon her arrival in Korea. We are also convinced that [respondent] read and
understood the terms and conditions of her Model Employment Contract because
of the following reasons: First, [respondent] was informed thereof when a post
arrival briefing was conducted at the Philippine Embassy Overseas Labor Office. This
procedure is mandatory, and the booking of the talent shall be effective only within
three (3) days after her arrival in Korea. Second, [respondent's] passport shows that
her visa is valid only for six (6) months x x x. Third, the Model Employment Contract
has been signed by [respondent] on the left hand margin on each and every page
and on the bottom of the last page thereof x x x. Fourth, [respondent's] claim that
[petitioners and SAENCO] forced her in signing two (2) employment contracts
appears to be doubtful considering that she avers that she was not able to read the
terms and conditions of her employment contract. It is amazing how she was able
to differentiate the contents of the two (2) contracts she allegedly signed without
first reading it.
On the basis of the foregoing, [respondent's] contention that she did not know the
terms and conditions of her Model Employment Contract, in particular the provision
which states that her contract and her visa is valid only for six (6) months, lacks
credence. Thus, it can be concluded that she was not dismissed at all by [petitioners
and SAENCO] as her employment contract merely expired.
As to [respondent's] allegation that she was not paid her salaries during her stay in
Korea, [petitioners and SAENCO] presented cash vouchers and affidavits of co-
employees showing that [respondent] was paid US$600 per month by her Korean
employer. [Respondent] failed to prove that the vouchers were faked, or her
signatures appearing thereon were falsified. Hence, [respondent] is not entitled to
her claim for unpaid salaries.
On her claim for the payment of her salary for the unexpired portion of her
contract, We agree with the findings of the Labor Arbiter that the same lacks merit
considering that she was able to finish her six (6) month employment contract.23
Consequently, the NLRC granted the Motion for Reconsideration of petitioners and
reinstated the Labor Arbiter's Decision dated May 4, 2006 dismissing respondent's
complaint against petitioners and SAENCO.24
In a subsequent Resolution dated January 30, 2009, the NLRC denied respondent's
Motion for Reconsideration25 as it raised no new matters of substance which
would warrant reconsideration of the NLRC Resolution dated November 11, 2008.
Ruling of the Court of Appeals
Respondent sought remedy from the Court of Appeals by filing a Petition for
Certiorari,26 alleging that the NLRC acted with grave abuse of discretion amounting
to excess or lack of jurisdiction in reinstating the Labor Arbiter's Decision.
The Court of Appeals, in its Decision dated November 27, 2009, took a liberal
approach by excusing the technical lapses of respondent's appeal before the NLRC
for the sake of substantial justice:
The requisites for perfecting an appeal before the NLRC are laid down in Rule VI of
the 2005 Revised Rules of Procedure of the NLRC. Section 4 of the said Rule
requires that the appeal shall be verified by the appellant, accompanied by a
certification of non-forum shopping and with proof of payment of appeal fee. As a
general rule, these requirements are mandatory and non-compliance therewith
would render the appealed judgment final and executory. Be that as it may,
jurisprudence is replete that courts have adopted a relaxed and liberal
interpretation of the rules on perfection of appeal so as to give way to the more
prudent policy of deciding cases on their merits and not on technicality, especially if
there was substantial compliance with the rules.
In the case of Manila Downtown YMCA vs. Remington Steel Corp., the Supreme
Court held that non-compliance with [the] verification does not necessarily render
the pleading fatally defective, hence, the court may order its correction if
verification is lacking, or act on the pleading although it is not verified, if the
attending circumstances are such that strict compliance with the Rules may be
dispensed with in order that the ends of justice may thereby served. Moreover, in
Roadway Express, Inc. vs. CA, the High Court allowed the filing of the certification
against forum shopping fourteen (14) days before the dismissal of the petition. In
Uy v. LandBank, the petition was reinstated on the ground of substantial
compliance even though the verification and certification were submitted only after
the petition had already been originally dismissed.
Here, the records show that [respondent] had no intent to delay, or prolong the
proceedings before the NLRC. In fact, the NLRC, in its Resolution dated November
11, 2008 took note that [respondent] belatedly filed her verification and
certification on non-forum shopping. Such belated filing should be considered as
substantial compliance with the requirements of the law for perfecting her appeal
to the NLRC. Moreover, the appeal fee was eventually paid on July 17, 2006. Clearly,
[respondent] had demonstrated willingness to comply with the requirements set by
the rules. Besides, in its earlier Decision dated May 22, 2008, the First Division of
the NLRC brushed aside these technicalities and gave due course to [respondent's]
appeal.
Verily, We deem it prudent to give a liberal interpretation of the technical rules on
appeal, talcing into account the merits of [respondent's] case. After all, technical
rules of procedure in labor cases are not to be strictly applied in order to serve the
demands of substantial justice.27 (Citations omitted.)
The appellate court then held that respondent was dismissed from employment
without just cause and without procedural due process and that petitioners and
SAENCO were solidarity liable to pay respondent her unpaid salaries for one year
and attorney's fees:
Time and again, it has been ruled that the onus probandi to prove the lawfulness of
the dismissal rests with the employer. In termination cases, the burden of proof
rests upon the employer to show that the dismissal was for just and valid cause.
Failure to do so would necessarily mean that the dismissal was not justified and,
therefore, was illegal. In Royal Crown Internationale vs. National Labor Relations
Commission and Nacionales, the Supreme Court held that where termination cases
involve a Filipino worker recruited and deployed for overseas employment, the
burden to show the validity of the dismissal naturally devolves upon both the
foreign-based employer and the employment agency or recruitment entity which
recruited the worker, for the latter is not only the agent of the former, but is also
solidarity liable with its foreign principal for any claims or liabilities arising from the
dismissal of the worker.
In the case at bar, [petitioners] failed to discharge the burden of proving that
[respondent] was terminated from employment for a just and valid cause.
[Petitioners'] claim that [respondent] was deported because her employment
contract has already expired, was without any basis. Before being deployed to
South Korea, [petitioners] made [respondent] believe that her contract of
employment was for one (1) year. [Respondent] relied on such misrepresentation
and continuously worked from September 11, 2003 up [to] June 24, 2004 or for
more than nine (9) months. [Petitioners] never questioned her stay beyond the six-
month period. If [petitioners] were really against her overstaying in Korea, they
could have easily asked their principal, [SAENCO], to facilitate her immediate
deportation. Even when [petitioner] Moldes sent the demand letter to [respondent]
in May 2004 or when she came to Korea to pay the salaries of the performers in
June 2004, she never mentioned that [respondent's] contract has already expired.
Moreover, in the Model Employment Contract for Filipino Overseas Performing
Artists (OPAS) to Korea filed with the POEA which was entered into between
[respondent] and [petitioners], it was categorically stated therein that the name of
her performance venue was Si Heung Tourist Hotel Night Club, owned by Cho Kang
Hyung and with address at Jung Wang Dong Siheung Kuyng Ki Do. However,
[respondent] was made to work at Seaman's Seven Pub located at Ulsan, South
Korea owned by a certain Lee Young-Gun. [Respondent's] employment contract
also states that she should be receiving a monthly salary of US$600.00 and not
US$400.00 as represented to her by [petitioner] Moldes.
The Court cannot likewise adhere to [petitioners'] claim that [respondent]
committed serious misconduct and willful disobedience to the lawful orders of her
employer when she allegedly danced in an immoral manner, wore skimpy
costumes, and went out with clients. This Court is convinced from the records and
pictures submitted by [respondent] that her Korean employer, Lee Young-Gun,
ordered them to wear provocative skirts while dancing and singing to make the pub
more attractive to their customers. Even the Seaman's Seven Pub poster itself was
advertising its singers and dancers wearing provocative dresses. [Respondent] was
not even hired as a dancer, but only as a singer as shown by her Overseas Filipino
Worker Information. Besides, if [respondent] was misbehaving offensively as early
as September 2003, her employer could have likewise terminated her employment
at the earliest opportunity to protect its interest. Instead, [respondent] was allowed
to work even beyond the period of her contract. Thus, [petitioners'] defenses
appear to be more of an afterthought which could not be given any weight.
Furthermore, [respondent] was not afforded her right to procedural due process of
notice and hearing before she was terminated. In the same case of Royal Crown
Internationale vs. National Labor Relations Commission and Nacionales, the
Supreme Court ruled that all Filipino workers, whether employed locally or
overseas, enjoy the protective mantle of Philippine labor and social legislation,
contract stipulations to the contrary notwithstanding. This pronouncement is in
keeping with the basic policy of the State to afford full protection to labor, promote
full employment, ensure equal work opportunities regardless of sex, race or creed,
and regulate the relations between workers and employers.
In the instant case, the records show that [respondent] was publicly accosted and
humiliated by one Park Sun Na, the President of [SAENCO], and was brought to its
office in Seoul, Korea, which was a six (6) hour drive from the pub. Such acts were
witnessed and narrated by Wolfgang Pelzer, a Professor in the School of English,
University of Ulsan, South Korea and a frequent client of Seaman's Seven Pub, in his
Affidavit dated August 16, 2004. When it became apparent that [respondent] would
not be apologizing to [petitioner] Moldes nor would she dismiss her lawyer in the
Philippines, Park Sun Na turned her over to the local authorities of South Korea.
[Respondent] was then deported to the Philippines allegedly for expiration of her
visa. Worst, she was not allowed to get her personal belongings which she left at
the pub.
It may also be noted that [respondent] went to all the trouble of filing cases against
[petitioners] in different government agencies for different causes of action. Such
zealousness of [respondent] manifests the intensity of her desire to seek justice for
the wrong done to her.28 (Citations omitted.)
The Court of Appeals determined the respective liabilities of petitioners and
SAENCO for respondent's illegal dismissal to be as follows:
For being illegally dismissed, [respondent] is rightfully entitled to her unpaid salaries
for one (1) year at the rate of US$600.00 per month or a total of US$7,200.00. The
US$600.00 per month was based on the rate indicated in her contract [of]
employment filed with the POEA. [Petitioners] also failed to present convincing
evidence that [respondent's] salaries were actually paid. The cash vouchers
presented by [petitioners] were of doubtful character considering that they do not
bear [SAENCO's] name and tax identification numbers. The vouchers also appear to
have been signed in one instance due to the similarities as to how they were
written.
[Petitioner PTCPI and SAENCO] should be held solidarity liable for the payment of
[respondent's] salaries. In Datuman vs. First Cosmopolitan Manpower and
Promotion Services, Inc., the Supreme Court ruled that private employment
agencies are held jointly and severally liable with the foreign-based employer for
any violation of the recruitment agreement or contract of employment. This joint
and solidary liability imposed by law against recruitment agencies and foreign
employers is meant to assure the aggrieved worker of immediate and sufficient
payment of what is due him. This is in line with the policy of the state to protect and
alleviate the plight of the working class.
We likewise rule that [petitioner] Moldes should be held solidarity liable with
[petitioner PTCPI and SAENCO] for [respondent's] unpaid salaries for one year. Well
settled is the rule that officers of the company are solidarity liable with the
corporation for the termination of employees if they acted with malice or bad faith.
Here, [petitioner] Moldes was privy to [respondent's] contract of employment by
taking an active part in the latter's recruitment and deployment abroad. [Petitioner]
Moldes also denied [respondent's] salary for a considerable period of time and
misrepresented to her the duration of her contract of employment.
[Respondent] should also be awarded attorney's fees equivalent to ten percent
(10%) of the total monetary awards. In Asian International Manpower Services, Inc.,
(AIMS) vs. Court of Appeals and Lacerna, the Supreme Court held that in actions for
recovery of wages or where an employee was forced to litigate and thus incurred
expenses to protect his rights and interests, a maximum often percent (10%) of the
total monetary award by way of attorney's fees is justified under Article 111 of the
Labor Code, Section 8, Rule VIII, Book III of its Implementing Rules, and paragraph 7,
Article 2208 of the Civil Code.29 (Citations omitted.)
The dispositive portion of the judgment of the appellate court reads:
WHEREFORE, premises considered, the instant petition for is hereby GRANTED. The
assailed Resolutions of public respondent NLRC, First Division, dated November 11,
2008 and January 30, 2009 are ANNULLED AND SET ASIDE. Accordingly, [petitioner
PTCPI, SAENCO, and petitioner Moldes] are ORDERED to jointly and severally pay
[respondent's] unpaid salaries for one (1) year at a rate of US$600.00 per month or
a total of US$7,200.00. In addition, [petitioners and SAENCO] are ORDERED to
jointly and severally pay [respondent] attorney's fees equivalent to ten percent
(10%) of the total monetary award.30
The Motion for Reconsideration31 of petitioners was denied by the Court of
Appeals in a Resolution dated February 16, 2010 because the issues raised therein
were already judiciously evaluated and passed upon by the appellate court in its
previous Decision, and there was no compelling reason to modify or reverse the
same.
II
THE RULING OF THE COURT
Petitioners filed the instant Petition for Review on Certiorari under Rule 45 of the
Rules of Court assigning a sole error on the part of the Court of Appeals:
The Honorable Court of Appeals erred and abused its action when it ruled that
private respondent is entitled to recover from the petitioners her alleged unpaid
salaries during her employment in South Korea despite of (sic) the abundance of
proof that she was fully paid of (sic) her salaries while working as [an] overseas
contract worker in South Korea.32
Petitioners maintain that respondent initially worked at Siheung Tourist Hotel Night
Club (Siheung Night Club). After completing her six-month employment contract in
Siheung Night Club, respondent decided to continue working at Ulsan Seaman's
Seven Pub without the consent of petitioners. Throughout her employment in
South Korea, respondent's salaries were paid as evidenced by the cash vouchers
and Entertainer Wage Roster,33 which were signed by respondent and attached to
the "Reply"34 dated January 11, 2010 of Park, Chief Executive Officer (CEO) of
SAENCO, duly notarized per the Certificate of Authentication35 dated January 25,
2010 issued by Consul General Sylvia M. Marasigan of the Philippine Embassy in
Seoul, South Korea and the Notarial Certificate of Sang Rock Law and Notary Office,
Inc.36

Petitioners contend that respondent totally failed to discharge the burden of
proving nonpayment of her salaries, yet, the Court of Appeals still ordered
petitioners to pay the same on the basis of respondent's bare allegations.
Petitioners also argue that SAENCO would not risk its status as a reputable
entertainment and promotional entity by violating South Korean labor law.
Petitioners assert that in the absence of any showing that SAENCO was at anytime
charged with nonpayment of its employee's salaries before the Labor Ministry of
South Korea, petitioners could not be deemed to have breached the Employment
Contract with respondent. Petitioners describe respondent's complaint as plain
harassment.
Thus, petitioners pray that the Court nullify the Decision dated November 27, 2009
and Resolution dated February 16, 2010 of the Court of Appeals.
The Petition is partly meritorious.
Questions of Fact
It is apparent from a perusal of the Petition at bar that it essentially raises questions
of fact. Petitioners assail the findings of the Court of Appeals on the ground that the
evidence on record does not support respondent's claims of illegal dismissal and
nonpayment of salaries. In effect, petitioners would have the Court sift through,
calibrate, and re-examine the credibility and probative value of the evidence on
record so as to ultimately decide whether or not there is sufficient basis to hold
petitioners liable for the payment of respondent's salaries for one year, plus
attorney's fees.37
Normally, it is not the task of the Court to re-examine the facts and weigh the
evidence on record, for basic is the rule that the Court is not a trier of facts, and this
rule applies with greater force in labor cases. Questions of fact are for the labor
tribunals to resolve. It is elementary that the scope of this Court's judicial review
under Rule 45 of the Rules of Court is confined only to errors of law and does not
extend to questions of fact. However, the present case falls under one of the
recognized exceptions to the rule, i.e., when the findings of the Labor Arbiter, the
NLRC, and/or the Court of Appeals are in conflict with one another. The conflicting
findings of the Labor Arbiter, the NLRC, and the Court of Appeals pave the way for
this Court to review factual issues even if it is exercising its function of judicial
review under Rule 45.38
As the Court reviews the evidence on record, it notes at the outset that petitioners
are presenting new evidence herein never presented in the previous proceedings,
particularly, Park's notarized "Reply" dated January 11, 2010 and the attached
Entertainer Wage Roster. The Court is precluded from considering and giving weight
to said evidence which are presented for the first time on appeal. Fairness and due
process dictate that evidence and issues not presented below cannot be taken up
for the first time on appeal.39
It is true that the Court had declared in previous cases that strict adherence to the
technical rules of procedure is not required in labor cases. However, the Court also
highlights that in such cases, it had allowed the submission of evidence for the first
time on appeal with the NLRC in the interest of substantial justice, and had further
required for the liberal application of procedural rules that the party should
adequately explain the delay in the submission of evidence and should sufficiently
prove the allegations sought to be proven.40 In the instant case, petitioners did not
submit the evidence during the administrative proceedings before the Labor Arbiter
and NLRC or even during the proceedings before the Court of Appeals, and
petitioners did not offer any explanation at all as to why they are submitting the
evidence only on appeal before this Court. Hence, the Court is not inclined to relax
the rules in the present case in petitioners' favor.
Moreover, in its review of the evidence on record, the Court bears in mind the
settled rule that in administrative and quasi-judicial proceedings, substantial
evidence is considered sufficient. Substantial evidence is more than a mere scintilla
of evidence or relevant evidence as a reasonable mind might accept as adequate to
support a conclusion, even if other minds, equally reasonable, might conceivably
opine otherwise.41 It is also a basic rule in evidence that each party must prove
his/her affirmative allegations. Since the burden of evidence lies with the party who
asserts an affirmative allegation, the plaintiff or complainant has to prove his/her
affirmative allegation in the complaint and the defendant or the respondent has to
prove the affirmative allegations in his/her affirmative defenses and
counterclaim.42
Petitioner's Illegal Dismissal
The Constitutional guarantee of security of tenure extends to Filipino overseas
contract workers as the Court declared in Sameer Overseas Placement Agency, Inc.
v. Cabiles43:
Security of tenure for labor is guaranteed by our Constitution.
Employees are not stripped of their security of tenure when they move to work in a
different jurisdiction. With respect to the rights of overseas Filipino workers, we
follow the principle of lex loci contractus.
Thus, in Triple Eight Integrated Services, Inc. v. NLRC, this court noted:
Petitioner likewise attempts to sidestep the medical certificate requirement by
contending that since Osdana was working in Saudi Arabia, her employment was
subject to the laws of the host country. Apparently, petitioner hopes to make it
appear that the labor laws of Saudi Arabia do not require any certification by a
competent public health authority in the dismissal of employees due to illness.
Again, petitioner's argument is without merit.
First, established is the rule that lex loci contractus (the law of the place where the
contract is made) governs in this jurisdiction. There is no question that the contract
of employment in this case was perfected here in the Philippines. Therefore, the
Labor Code, its implementing rules and regulations, and other laws affecting labor
apply in this case. Furthermore, settled is the rule that the courts of the forum will
not enforce any foreign claim obnoxious to the forum's public policy. Here in the
Philippines, employment agreements are more than contractual in nature. The
Constitution itself, in Article XIII, Section 3, guarantees the special protection of
workers, to wit:
The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining
and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by
law.
xxxx
This public policy should be borne in mind in this case because to allow foreign
employers to determine for and by themselves whether an overseas contract
worker may be dismissed on the ground of illness would encourage illegal or
arbitrary pre-termination of employment contracts, x x x.
Even with respect to fundamental procedural rights, this court emphasized in PCL
Shipping Philippines, Inc. v. NLRC, to wit:
Petitioners admit that they did not inform private respondent in writing of the
charges against him and that they failed to conduct a formal investigation to give
him opportunity to air his side. However, petitioners contend that the twin
requirements of notice and hearing applies strictly only when the employment is
within the Philippines and that these need not be strictly observed in cases of
international maritime or overseas employment.
The Court does not agree. The provisions of the Constitution as well as the Labor
Code which afford protection to labor apply to Filipino employees whether working
within the Philippines or abroad. Moreover, the principle of lex loci contractus (the
law of the place where the contract is made) governs in this jurisdiction. In the
present case, it is not disputed that the Contract of Employment entered into by
and between petitioners and private respondent was executed here in the
Philippines with the approval of the Philippine Overseas Employment
Administration (POEA). Hence, the Labor Code together with its implementing rules
and regulations and other laws affecting labor apply in this case. x x x.
By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or
authorized cause and after compliance with procedural due process requirements.
(Citations omitted.)
Since respondent's Employment Contract was executed in the Philippines on
February 3, 2003, Philippine Constitution and labor laws governed respondent's
employment with petitioners and SAENCO. An employee's right to security of
tenure, protected by the Constitution and statutes, means that no employee shall
be dismissed unless there are just or authorized causes and only after compliance
with procedural and substantive due process. A lawful dismissal by an employer
must meet both substantive and procedural requirements; in fine, the dismissal
must be for a just or authorized cause and must comply with the rudimentary due
process of notice and hearing.44
It is undisputed that when respondent was dismissed from employment and
repatriated to the Philippines in June 2004, her original six-month Employment
Contract with SAENCO had already expired.
Per the plain language of respondent's Employment Contract with SAENCO, her
employment would be enforced for the period of six months commencing on the
date respondent departed from the Philippines, and extendible by another six
months by mutual agreement of the parties. Since respondent left for South Korea
on September 6, 2003, the original six-month period of her Employment Contract
ended on March 5, 2004.
Although respondent's employment with SAENCO was good for six months only
(i.e., September 6, 2003 to March 5, 2004) as stated in the Employment Contract,
the Court is convinced that it was extended under the same terms and conditions
for another six months (i.e., March 6, 2004 to September 5, 2004). Respondent and
petitioners submitted evidence establishing that respondent continued to work for
SAENCO in Ulsan, South Korea even after the original six-month period under
respondent's Employment Contract expired on March 5, 2004. Ideally, the
extension of respondent's employment should have also been reduced into writing
and submitted/reported to the appropriate Philippine labor authorities.
Nonetheless, even in the absence of a written contract evidencing the six-month
extension of respondent's employment, the same is practically admitted by
petitioners, subject only to the defense that there is no proof of their knowledge of
or participation in said extension and so they cannot be held liable for the events
that transpired between respondent and SAENCO during the extension period.
Petitioners presented nine vouchers to prove that respondent received her salaries
from SAENCO for nine months. Petitioners also did not deny that petitioner Moldes,
President of petitioner PTCPI, went to confront respondent about the latter's
outstanding loan at the Seaman's Seven Club in Ulsan, South Korea in June 2004,
thus, revealing that petitioners were aware that respondent was still working for
SAENCO up to that time.
Hence, respondent had been working for SAENCO in Ulsan, South Korea, pursuant
to her Employment Contract, extended for another six-month period or until
September 5, 2004, when she was dismissed and repatriated to the Philippines by
SAENCO in June 2004. With this finding, it is unnecessary for the Court to still
consider and address respondent's allegations that she had been misled into
believing that her Employment Contract and visa was good for one year.
Respondent decries that she was illegally dismissed, while petitioners assert that
respondent was validly dismissed because of her expired work visa and her
provocative and immoral conduct in violation of the club policies.
The Court finds that respondent was illegally dismissed.
Dismissal from employment has two facets: first, the legality of the act of dismissal,
which constitutes substantive due process; and, second, the legality of the manner
of dismissal, which constitutes procedural due process. The burden of proof rests
upon the employer to show that the disciplinary action was made for lawful cause
or that the termination of employment was valid. Unsubstantiated suspicions,
accusations, and conclusions of the employer do not provide legal justification for
dismissing the employee. When in doubt, the case should be resolved in favor of
labor pursuant to the social justice policy of our labor laws and the 1987
Constitution.45
As previously discussed herein, SAENCO extended respondent's Employment
Contract for another six months even after the latter's work visa already expired.
Even though it is true that respondent could not legitimately continue to work in
South Korea without a work visa, petitioners cannot invoke said reason alone to
justify the premature termination of respondent's extended employment. Neither
petitioners nor SAENCO can feign ignorance of the expiration of respondent's work
visa at the same time as her original six-month employment period as they were
the ones who facilitated and processed the requirements for respondent's
employment in South Korea. Petitioners and SAENCO should also have been
responsible for securing respondent's work visa for the extended period of her
employment. Petitioners and SAENCO should not be allowed to escape liability for a
wrong they themselves participated in or were responsible for.
Petitioners additionally charge respondent with serious misconduct and willful
disobedience, contending that respondent violated club policies by engaging in
illegal activities such as wearing skimpy and revealing dresses, dancing in an
immoral or provocative manner, and going out with customers after working hours.
As evidence of respondent's purported club policy violations, petitioners submitted
the joint affidavit of Tiatco and Flores, respondent's co-workers at the club.
The Court, however, is not swayed. Aside from their bare allegations, petitioners
failed to present concrete proof of the club policies allegedly violated by
respondent. The club policies were not written down. There is no allegation, much
less, evidence, that respondent was at least verbally apprised of the said club
policies during her employment.
To refute petitioners' assertions against her, respondent submitted a poster
promoting the club and pictures46 of respondent with her co-workers at the said
club. Based on said poster and pictures, respondent did not appear to be wearing
dresses that were skimpier or more revealing than those of the other women
working at the club. Respondent also presented the Affidavit47 dated August 16,
2004 of Wolfgang Pelzer (Pelzer), a Canadian citizen who was a regular patron of
the club. According to Pelzer, respondent was appropriately dressed for the songs
she sang, and while respondent was employed as a singer, she was also pressured
into dancing onstage and she appeared hesitant and uncomfortable as she danced.
As between the allegations of Pelzer, on one hand, and those of Tiatco and Flores,
on the other hand, as regards respondent's behavior at the club, the Court accords
more weight to the former as Pelzer can be deemed a disinterested witness who
had no apparent gain in executing his Affidavit, as opposed to Tiatco and Flores who
were still employed by SAENCO when they executed their joint affidavit.
Lastly, as the Court of Appeals pertinently observed, if respondent was truly
misbehaving as early as September 2003 as petitioners alleged, SAENCO would
have terminated her employment at the earliest opportunity to protect its interest.
Instead, SAENCO even extended respondent's employment beyond the original six-
month period. The Court likewise points out that there is absolutely no showing
that SAENCO, at any time during the course of respondent's employment, gave
respondent a reminder and/or warning that she was violating club policies.
This leads to another finding of the Court in this case, that petitioners also failed to
afford respondent procedural due process.
Article 277(b) of the Labor Code, as amended, mandates that the employer shall
furnish the worker whose employment is sought to be terminated a written notice
stating the causes for termination and shall afford the latter ample opportunity to
be heard and to defend himself/herself with the assistance of his/her
representative, if he/she so desires. Per said provision, the employer is actually
required to give the employee two notices: the first is the notice which apprises the
employee of the particular acts or omissions for which his/her dismissal is being
sought along with the opportunity for the employee to air his/her side, while the
second is the subsequent notice of the employer's decision to dismiss him/her.48
Again, the Court stresses that the burden of proving compliance with the
requirements of notice and hearing prior to respondent's dismissal from
employment falls on petitioners and SAENCO, but there had been no attempt at all
by petitioners and/or SAENCO to submit such proof. Neither petitioners nor
SAENCO described the circumstances how respondent was informed of the causes
for her dismissal from employment and/or the fact of her dismissal.
In contrast, respondent was able to recount in detail the events which led to her
dismissal from employment and subsequent repatriation to the Philippines,
corroborated in part by Pelzer. It appears that on June 13, 2004, petitioner Moldes
personally went to see respondent in Ulsan, South Korea to demand that
respondent pay the loan and dismiss the counsel respondent hired in the
Philippines to contest the same; respondent, however, refused. On June 24, 2004,
Park confronted respondent while she was working at the club, forcibly took her
away from the club in Ulsan, and brought her to his office in Seoul. Park tried to
intimidate respondent into agreeing to Moldes's demands. When his efforts failed,
Park surrendered respondent to the South Korean authorities and she was
deported back to the Philippines on account of her expired work visa.
To reiterate, respondent could only be dismissed for just and authorized cause, and
after affording her notice and hearing prior to her termination. SAENCO had no
valid cause to terminate respondent's employment. Neither did SAENCO serve two
written notices upon respondent informing her of her alleged club policy violations
and of her dismissal from employment, nor afforded her a hearing to defend
herself. The lack of valid cause, together with the failure of SAENCO to comply with
the twin-notice and hearing requirements, underscored the illegality surrounding
respondent's dismissal.49
The Liabilities of Petitioners and SAENCO
From its findings herein that (1) respondent's Employment Contract had been
extended for another six months, ending on September 5, 2004; and (2) respondent
was illegally dismissed and repatriated to the Philippines in June 2004, the Court
next proceeds to rule on the liabilities of petitioners and SAENCO to respondent.
Respondent's monetary claims against petitioners and SAENCO is governed by
Section 10 of Republic Act No. 8042, otherwise known as The Migrant Workers and
Overseas Filipinos Act of 1995, which provides:
Section 10. Money Claims. — Notwithstanding any provision of law to the contrary,
the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after the filing of the complaint, the claims arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers
for overseas deployment including claims for actual, moral, exemplary and other
forms of damages.
The liability of the principal/employer and the recruitment/placement agency for
any and all claims under this section shall be joint and several. This provision shall
be incorporated in the contract for overseas employment and shall be a condition
precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
monetary claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and solidarity
liable with the corporation or partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution, amendment or
modification made locally or in a foreign country of the said contract.
Any compromise/amicable settlement or voluntary agreement on monetary claims
inclusive of damages under this section shall be paid within four (4) months from
the approval of the settlement by the appropriate authority.
In case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, the worker shall be entitled to the full
reimbursement of his placement fee with interest at twelve percent (12%) per
annum, plus his salaries for the unexpired portion of his employment contract or for
three (3) months for every year of the unexpired term, whichever is less. (Emphases
supplied.)
The Court finds that respondent had been paid her salaries for the nine months she
worked in Ulsan, South Korea, so she is no longer entitled to an award of the same.
It is a settled rule of evidence that the one who pleads payment has the burden of
proving it. Even where the plaintiff must allege nonpayment, the general rule is that
the burden rests on the defendant to prove payment, rather than on the plaintiff to
prove nonpayment.50
In the case at bar, petitioners submitted nine cash vouchers with respondent's
signature. That the nine cash vouchers did not bear the name of SAENCO and its Tax
Identification Number is insignificant as there is no legal basis for requiring such.
The vouchers clearly state that these were "salary full payment" for the months of
October 5, 2003 to June 5, 2004 for US$600.00 to respondent and each of the
vouchers was signed received by respondent. After carefully examining
respondent's signatures on the nine cash vouchers, and even comparing them to
respondent's signatures on all the pages of her Employment Contract, the Court
observes that respondent's signatures on all documents appear to be consistently
the same. The consistency and similarity of respondent's signatures on all the
documents supports the genuineness of said signatures. At this point, the burden of
evidence has shifted to respondent to negate payment of her salaries.
Respondent, though, admits that the signatures on the nine cash vouchers are hers
but asserts that she really had not received her salaries and was only made to sign
said vouchers all in one instance. Respondent further avers that she was made to
believe that her salaries would be deposited to her bank account, and she presents
as proof the passbook of her bank account showing that no amount equivalent to
her salary was ever deposited.
The Court is not persuaded.
Absent any corroborating evidence, the Court is left only with respondent's bare
allegations on the matter. Pelzer's statements in his Affidavit concerning the
nonpayment of respondent's salaries are hearsay, dependent mainly on what
respondent confided to him. It makes no sense to the Court that respondent would
agree to an extension of her Employment Contract for another six months if she
had not been receiving her salaries for the original six-month period. From her own
actuations, respondent does not appear to be totally helpless and gullible.
Respondent, in fact, was quite zealous in protecting her rights, hiring one of the
well-known law firms in the Philippines to represent her against petitioner Moldes
who was demanding payment of a loan which respondent insisted was fictitious.
Respondent also stood up to and refused to given in to the demands of both
petitioner Moldes and Park even during face-to-face confrontations. The Court then
cannot believe that respondent would simply sign the nine cash vouchers even
when she did not receive the corresponding salaries for the same. Respondent
failed to establish that the passbook she submitted was for her bank account for
payroll payments from SAENCO; it could very well just be her personal bank account
to which she had not made any deposit. The Court, unlike the Court of Appeals, is
not ready to jump to the conclusion that the vouchers were all prepared on the
same occasion and disregard their evidentiary value simply based on their physical
appearance and in the total absence of any corroborating evidence.
Nonetheless, pursuant to the fifth paragraph of Section 10 of Republic Act No.
8042, respondent is entitled to an award of her salaries for the unexpired three
months of her extended Employment Contract, i.e., July to September 2004.51
Given that respondent's monthly salary was US$600.00, petitioners and SAENCO
shall pay respondent a total of US$1,800.00 for the remaining three months of her
extended Employment Contract. The said amount, similar to backwages, is subject
to legal interest of 12% per annum from respondent's illegal dismissal in June 2004
to June 30, 2013 and 6% per annum from July 1, 2013 to the date this Decision
becomes final and executory.52 Respondent also has the right to the
reimbursement of her placement fee with interest of 12% per annum from her
illegal dismissal in June 2004 to the date this Decision becomes final and
executory.53
Moreover, the award of attorney's fees to respondent is likewise justified. It is
settled that in actions for recovery of wages or where an employee was forced to
litigate and incur expenses to protect his/her right and interest, he/she is entitled to
an award of attorney's fees equivalent to 10% of the award.54
Finally, all of the foregoing monetary awards in respondent's favor shall earn legal
interest of 6% per annum from the time this Decision becomes final and executory
until fully satisfied.55
In an attempt to escape any liability to respondent, petitioners assert that only
SAENCO should be answerable for respondent's illegal dismissal because petitioners
were not privy to the extension of respondent's Employment Contract beyond the
original six-month period. Petitioner Moldes additionally argues that she should not
be held personally liable as a corporate officer of PTCPI without evidence that she
had acted with malice or bad faith.
Petitioners' arguments are untenable considering the explicit language of the
second paragraph of Section 10 of Republic Act No. 8042, reproduced below for
easier reference:
The liability of the principal/employer and the recruitment/placement agency for
any and all claims under this section shall be joint and several. This provision shall
be incorporated in the contract for overseas employment and shall be a condition
precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and solidarity
liable with the corporation or partnership for the aforesaid claims and damages.
The aforequoted provision is plain and clear, the joint and several liability of the
principal/employer, recruitment/placement agency, and the corporate officers of
the latter, for the money claims and damages of an overseas Filipino worker is
absolute and without qualification. It is intended to give utmost protection to the
overseas Filipino worker, who may not have the resources to pursue her money
claims and damages against the foreign principal/employer in another country. The
overseas Filipino worker is given the right to seek recourse against the only link in
the country to the foreign principal/employer, i.e., the recruitment/placement
agency and its corporate officers. As a result, the liability of SAENCO, as
principal/employer, and petitioner PTCPI, as recruitment/placement agency, for the
monetary awards in favor of respondent, an illegally dismissed employee, is joint
and several. In turn, since petitioner PTCPI is a juridical entity, petitioner Moldes, as
its corporate officer, is herself jointly and solidarity liable with petitioner PTCPI for
respondent's monetary awards, regardless of whether she acted with malice or bad
faith in dealing with respondent.

WHEREFORE, premises considered, the Petition for Review on Certiorari is

PARTIALLY GRANTED. The assailed Decision dated November 27, 2009 of the Court
of Appeals is AFFIRMED with MODIFICATIONS. For the illegal dismissal of
respondent Desiree T. Masagca, petitioners Princess Talent Center Production, Inc.
and Luchi Singh Moldes, together with Saem Entertainment Company, Ltd., are
ORDERED to jointly and severally pay respondent the following: (a) US$1,800.00,
representing respondent's salaries for the unexpired portion of her extended
Employment Contract, subject to legal interest of 12% per annum from June 2004
to June 30, 2013 and 6% per annum from July 1, 2013 to the date that this Decision
becomes final and executory; (b) reimbursement of respondent's placement fees
with 12% interest per annum from June 2004 to the date that this Decision
becomes final and executory; and (c) attorney's fees equivalent to 10% of the total
monetary award. The order for payment of respondent's salaries from September
2003 to May 2004 is DELETED. All the monetary awards herein to respondent shall
earn legal interest of 6% per annum from the date that this Decision becomes final
and executory until full satisfaction thereof.

SO ORDERED.
EILEEN P. DAVID, Petitioner, v. GLENDA S. MARQUEZ, Respondent. G.R. No.
209859, June 05, 2017
TIJAM, J.:
This is a Petition for Review on Certiorari1 under Rule 45, assailing the Decision2
dated May 29, 2013 and Resolution3 dated November 6, 2013 of the Court of
Appears (CA) in CA-G.R. SP No. 124839, reinstating the criminal cases of Illegal
Recruitment and Estafa ag inst Petitioner Eileen David.
The Procedural and Factual Antecedents
In a Sinumpaang Salaysay filed before the Office of the City Prosecutor of Manila,
Respondent Glenda Marquez alleged, among others, that she is a resident of
Sampaloc, Manila and that sometime in March 2005, petitioner approached her in
Kidapawan City and represented that she could recruit her to work abroad.4 It was
further alleged that petitioner demanded payment of placement fees and other
expenses from the respondent for the processing of the latter's application, to
which the respondent heeded.5 Respondent's application was, however, denied
and worse, the money that she put out therefor was never returned.6
In her Counter-Affidavit and Counter Charge, petitioner averred that it was
physically impossible for her to have committed the said acts as she was in Canada
at the alleged time of recruitment as evidenced by the entries in her passport.7
Petitioner further averred that she was never engaged in the recruitment
business.8 The petitioner alleged that the amount deposited in her account was not
for her but was just coursed through her to be given to her friend in Canada who
was the one processing respondent's application, as evidenced by a certification to
that effect issued by the said friend.9 Further, petitioner argued before the
Prosecutor that assuming arguendo that the allegations of recruitment were true,
the case should be filed in Kidapawan City and not in Manila.10
On December 9, 2008, two separate Informations were filed against petitioner for
Illegal Recruitment and Estafa, respectively. The accusatory portions thereof read as
follows:
Criminal Case No. 08-265539
The undersigned accuses EILEEN DAVID of a violation of Article 38 (a), P.D. No.
1412, amending certain provision of Book I, P.D. No. 442, otherwise known as the
New Labor Code of the Philippines, in relation to Article 13 (b) and (c) of said code,
as further amended by P.D. Nos. 1693, 1920, and 2018 and as further amended by
Sec. 6 (a), (1) and (m) of Republic Act 8042, committed as follows:
That sometime in the month of March, 2005, in the City of Manila, Philippines, the
said accused representing herself to have the capacity to contract, enlist and
transport Filipino workers overseas, particularly in Canada, did then and there
willfully, unlawfully, for a fee, recruit and promise employment/job placement to
GLENDA S. MARQUEZ without first having secured the required license from the
Department of Labor and Employment as required by law, and charged or accepted
directly or indirectly from said complainant the amount of Php152,670.00 as
placement/processing fee in consideration for her overseas employment, which
amount is in excess of or greater than that specified in the schedule of allowable
fees prescribed by the POEA, and without valid reasons failed to actually deploy her
and continuously fail to reimburse expenses incurred by her in connection with her
documentation and processing for purposes of her deployment.
Contrary to law.11
Criminal Case No. 08-265540
The undersigned accuses EILEEN P. DAVID of the crime of Estafa, Art. 315 par. 2 (a)
of the Revised Penal Code, committed as follows:
That on or about and during the period comprised between March 8, 2005 and April
20, 2007, inclusive, in the City of Manila, Philippines, the said accused, did then and
there willfully, unlawfully, and feloniously defraud GLENDA S. MARQUEZ in the
following manner, to wit: the said accused, by means of false manifestations and
fraudulent representations which she made to said GLENDA S. MARQUEZ prior to
and even simultaneous with the commission of the fraud, to the effect that she had
the power and capacity to recruit and employ said GLENDA S. MARQUEZ for
overseas employment in Canada as Live-in Caregiver, and could facilitate the
processing of the pertinent papers if given the necessary amount to meet the
requirements thereof, induced and succeeded in inducing the said GLENDA S.
MARQUEZ to give and deliver, as in fact she gave and delivered to said accused the
total amount of Php152,670.00, 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, she did obtain the said amount of
Php152,670.00, which amount once in her possession, with intent to defraud,
misappropriated, misapplied, and converted to her own personal use and benefit,
to the damage and prejudice of said GLENDA S. MARQUEZ in the aforesaid amount
of Php152,670.00, Philippine Currency.
Contrary to law.12

The Ruling of the Regional Trial Court
On December 11, 2008, warrants of arrest were issued against the petitioner.
On April 15, 2009, petitioner filed a Motion to Quash the Information13 in Criminal
Case No. 08-265540, arguing that she was deprived of her right to seek
reconsideration or reinvestigation of the public prosecutor's resolution as she was
not furnished a copy thereof.14 Also, petitioner argued that the. City Prosecutor of
Manila had no jurisdiction over the case as the alleged crime was committed in
Kidapawan City.
In an Order15 dated May 13, 2011 in Criminal Case No. 08-265540, the Regional
Trial Court (RTC) of Manila, Branch 55, denied petitioner's Motion to Quash, ruling
that the ground relied upon by the petitioner in the said motion is not one of those
enumerated under Section 316, Rule 117 of the Rules of Court for quashing a
complaint or information.17 As to the jurisdictional issue, the RTC ruled that it has
jurisdiction to take cognizance of the case, citing Section 9 of Republic Act No.
804218 (RA 8042), which explicitly states that:
A criminal action arising from illegal recruitment as defined herein shall be filed
with the Regional Trial Court of the province or city where the offense was
committed or where the offended party actually resides at the time of the
commission of the offense xxx. (underscoring supplied for emphasis)19
Since complainant is a resident of Manila, the RTC ruled that the second ground
interposed by the petitioner is devoid of merit.20 Thus:
In view of the foregoing, the Motion to Quash is hereby DENIED for lack of merit.
SO ORDERED.
Petitioner filed a Motion for Reconsideration22 of the said Order alleging that she
just found out that there were two Informations filed against her, one for Illegal
Recruitment in Criminal Case No. 08-26553923 and another for Estafa24 in Criminal
Case No. 08-265540. Petitioner maintained that the alleged crimes were committed
in Kidapawan City, not in Manila as alleged in the Informations. Petitioner further
alleged that there is no showing that respondent is an actual resident of Manila but
as per her Reply-Affidavit, Manila is merely her postal address.25 Hence, petitioner
again raised a jurisdictional issue in the said motion.26
In an Order27 dated January 26, 2012, this time in Criminal Cases Nos. 08-265539-
40, the RTC reconsidered its May 13, 2011 Order, finding that it had no jurisdiction
to try the cases since the crimes of Illegal Recruitment and Estafa were not
committed in its territory but in Kidapawan City, thus:
WHEREFORE, in the light of the foregoing, the instant Motion for Reconsideration is
hereby GRANTED. The Order of this Court dated May 13, 2011 is hereby
RECONSIDERED and SET ASIDE.
This case is ordered returned to the Office of the Clerk of Court of the Regional Trial
Court for proper disposition.
SO ORDERED.
On the same date, the RTC also issued an Order29 recalling the warrants of arrest
issued against the petitioner, thus:
Considering that this Court has no territorial jurisdiction over the above-entitled
cases, the Order of this Court dated December 11, 2008, pertaining to the issuance
of Warrants of Arrest against herein accused is hereby cancelled (and) set aside.
WHEREFORE, let the Warrants of Arrest issued in these cases be ordered RECALLED
AND SET ASIDE.
SO ORDERED.30
Respondent, through the public prosecutor, then filed a Motion for
Reconsideration31 of the said Order, averring that while it appears in the Philippine
Overseas Employment Administration (POEA) pro-forma complaint affidavit that
the alleged recruitment activities took place in Kidapawan City, it also appears in
her Reply-Affidavit, that she deposited certain amounts in several banks in Manila
for the name and account of petitioner as payments for employment processing
and placement fees.32 Thus, part of the essential elements of Illegal Recruitment
and Estafa took place in Manila.33 Section 9 of RA 8042, above-quoted, which
states that an illegal recruitment case may also be filed with the RTC of the province
or city where the offended party actually resides at the time of the commission of
the crime, was likewise invoked in the said motion.34 Respondent averred that the
records show that at the time of the incident up to the present, she resides in
Sampaloc, Manila.35
Petitioner filed an Opposition36 to the said motion. Respondent, through the public
prosecutor, filed a Comment37 thereon and a Reply38 was then filed by the
petitioner.
In an Order39 dated March 16, 2012, the RTC denied respondent's motion for
reconsideration, ruling that as stated in respondent's Sinumpaang Salaysay, the
essential elements of Illegal Recruitment and Estafa took place in Kidapawan City
and not in Manila. The allegation that several deposits for the payment of the
placement fees were made in Manila is of no moment, according to the RTC,
considering that the main transaction actually took place in Kidapawan City, which
is the basis for determining the jurisdiction of the court. Thus:
WHEREFORE, premises considered, the instant Motion for Reconsideration filed by
the Prosecution is hereby DENIED for lack of merit. The Orders of the Court both
dated January 26, 2012 still stand.
SO ORDERED.
The Ruling of the Court of Appeals
Undaunted, respondent filed a Petition for Certiorari before the CA.
In its assailed Decision, the CA discussed, first, the issue of respondent's legal
personality to file the said petition and second, the RTC's jurisdiction over the
case.41
On the first issue, the CA ruled that while it is only the Office of the Solicitor General
(OSG) that may represent the People or the State in criminal proceedings before
this Court or the CA, the private offended party retains the right to bring a special
civil action for certiorari in his/her own name in criminal proceedings before the
courts of law.42 The CA cited Section 1, Rule 122, which provides that the right to
appeal from a final judgment or order in a criminal case is granted to any party
except when the accused is placed thereby in double jeopardy.43 It also cited this
Court's ruling that the word party in the said provision must be understood to mean
not only the government and the accused, but also other persons who may be
affected by the judgment rendered in the criminal proceeding.44 The private
complainant, having an interest in the civil aspect of the case, thus, may file such
action in his/her name to question the decision or action of the respondent court
on jurisdictional grounds.45 In line with this, the CA also ruled that there is no
double jeopardy in this case as the charges were dismissed upon motion of the
petitioner-accused.46
As to the issue on jurisdiction, the CA ruled that the RTC has jurisdiction over the
cases of Illegal Recruitment and Estafa, citing Section 9 of RA 8042, which provides
that a criminal action arising from illegal recruitment may be filed in the place
where the offended party actually resides at the time of the commission of the
offense.47 According to the CA, it was established that herein respondent was
residing in Sampaloc, Manila at the time of the commission of the crimes.48
Therefore, the two (2) Informations herein were correctly filed with the RTC of
Manila, pursuant to Section 9 of RA 8042.49 The CA disposed, thus:
WHEREFORE, the petition for certiorari is GRANTED. The assailed Order dated
January 26, 2012 and Resolution dated March 16, 2012 of the RTC, Manila, in
Criminal Case No. 08-265539 for estafa and Criminal Case No. 08-265540 for illegal
recruitment respectively, are NULLIFIED and SET ASIDE. The cases are REINSTATED
and REMANDED to the court of origin for appropriate proceedings.
SO ORDERED.
Petitioner's motion for reconsideration was denied by the CA in its Resolution dated
November 6, 2013, thus:
WHEREFORE, the Motion for Reconsideration is DENIED for lack of merit.
SO ORDERED.
Hence, this Petition.
Petitioner argues that the CA committed a reversible error and grave abuse of
discretion in declaring that the respondent had the legal personality to assail the
dismissal of the criminal cases as respondent is not the proper party to do so.52
Petitioner argues that the OSG is the appellate counsel of the People of the
Philippines in all criminal cases and as such, the appeal in the criminal aspect should
be taken solely by the State and the private complainant is limited only to the
appeal of the civil aspect.53 According to the petitioner, respondent's action before
the CA does not concern the civil aspect of the case but the validity of the RTC's
Orders.54
On the jurisdictional issue, the petitioner maintains that the RTC of Manila has no
jurisdiction over the cases as the alleged acts constituting the crimes charged were
committed in Kidapawan City and not in Manila.55
For her part, respondent argues that the argument as regards her legal personality
in filing the petition for certiorari before the CA reveals that petitioner
misunderstood the difference between an appeal and a special civil action for
certiorari under Rule 65 of the Rules of Court.56 In fact, respondent agrees with the
petitioner that only the State, through the OSG, may file an appeal in a criminal
case.57 As an appeal is not available for a private complainant in a criminal case, an
independent action through a petition for certiorari under Rule 65, therefore, is
available to the said aggrieved party.58
Anent the jurisdictional issue, respondent again invokes Section 9 of RA 8042 which
allows the filing of an action arising from illegal recruitment with the RTC of the
complainant's residence.59 The respondent further argues that as regards the
charge of Estafa, considering that the same arose from the illegal recruitment
activities, the said provision allows the filing thereof with the court of the same
place where the Illegal Recruitment case was filed.60 Besides, according to the
respondent, since one of the essential elements of Estafa, i.e., damage or prejudice
to the offended party, took place in Manila, as the offended party resides in Manila,
the RTC of Manila has jurisdiction over the Estafa case.61
Issues
1) Does the RTC of Manila have jurisdiction over the cases of Illegal Recruitment
and Estafa?
2) Does the respondent, on her own, have legal personality to file the petition for
certiorari before the CA?
The Court's Ruling
The issues shall be discussed ad seriatim.
The RTC of Manila has jurisdiction over the
cases of Illegal Recruitment and Estafa
Indeed, venue in criminal cases is an essential element of jurisdiction.62 As
explained by this Court in the case of Foz, Jr. v. People:
It is a fundamental rule that for jurisdiction to be acquired by courts in criminal
cases, the offense should have been committed or any one of its essential
ingredients took place within the territorial jurisdiction of the court. Territorial
jurisdiction in criminal cases is the territory where the court has jurisdiction to take
cognizance or to try the offense allegedly committed therein by the accused. Thus it
cannot take jurisdiction over a person charged with an offense allegedly committed
outside of that limited territory. Furthermore, the jurisdiction of a court over a
criminal case is determined by the allegations in the complaint or information. And
once it is so shown, the court may validly take cognizance of the case. However, if
the evidence adduced during the trial show that the offense was committed
somewhere else, the court should dismiss the action for want of
jurisdiction.64(emphasis ours)
Section 15(a), Rule 110 of the Rules of Criminal Procedure provides:
SEC. 15. Place where action is to be instituted. - a) Subject to existing laws, the
criminal action shall be instituted and tried in the court of the municipality or
territory where the offense was committed or where any of its essential ingredients
occurred. (emphasis ours)
At the risk of being repetitive, Sec. 9 of RA 8042, however, fixed an alternative
venue from that provided in Section 15(a) of the Rules of Criminal Procedure, i.e., a
criminal action arising from illegal recruitment may also be filed where the offended
party actually resides at the time of the commission of the offense and that the
court where the criminal action is first filed shall acquire jurisdiction to the
exclusion of other courts.65
Despite the clear provision of the law, the RTC of Manila declared that it has no
jurisdiction to try the cases as the illegal Recruitment and Estafa were not
committed in its territory but in Kidapawan City.66
We are, thus, one with the CA in finding that the RTC of Manila committed grave
abuse of discretion and in fact, a palpable error, in ordering the quashal of the
Informations. The express provision of the law is clear that the filing of criminal
actions arising from illegal recruitment before the RTC of the province or city where
the offended party actually resides at the time of the commission of the offense is
allowed. It goes without saying that the dismissal of the case on a wrong ground,
indeed, deprived the prosecution, as well as the respondent as complainant, of
their day in court.
It has been found by both the RTC and the CA that the respondent resides in
Manila; hence, the filing of the case before the RTC of Manila was proper. Thus, the
trial court should have taken cognizance of the case, and if it will eventually be
shown during trial that the offense was committed somewhere else, then the court
should dismiss the action for want of jurisdiction.67 As a matter of fact, the RTC is
not unaware of the above-cited provision which allows the filing of the said case
before the RTC of the city where the offended party resides at the time of the
commission of the offense; hence, it originally denied petitioner's Motion to Quash.
This Court is, thus, baffled by the fact that the RTC reversed itself upon the
petitioner's motion for reconsideration on the same ground that it previously
invalidated.
Likewise, with the case of Estafa arising from such illegal recruitment activities, the
outright dismissal thereof due to lack of jurisdiction was not proper, considering
that as per the allegations in the Information, the same was within the jurisdiction
of Manila. During the preliminary investigation of the cases, respondent even
presented evidence that some of the essential elements of the crime were
committed within Manila, such as the payment of processing and/or placement
fees, considering that these were deposited in certain banks located in Manila.68
Thus, it bears stressing that the trial court should have proceeded to take
cognizance of the case, and if during the trial it was proven that the offense was
committed somewhere else, that is the time that the trial court should dismiss the
case for want of jurisdiction.69
Undoubtedly, such erroneous outright dismissal of the case is a nullity for want of
due process. The prosecution and the respondent as the private offended party
were not given the opportunity to present and prosecute their case. Indeed, the
prosecution and the private offended party are as much entitled to due process as
the accused in a criminal case.70
The respondent has the legal personality
to file a petition for certiorari under Rule 65.
This procedural issue is not novel. There is no question that, generally, the
prosecution cannot appeal or bring error proceedings from a judgment rendered in
favor of the defendant in a criminal case due to the final and executory nature of a
judgment of acquittal and the constitutional prohibition against double jeopardy.71
Despite acquittal, however, the offended party or the accused may appeal, but only
with respect to the civil aspect of the decision.72
This Court has also entertained petitions for certiorari questioning the acquittal of
the accused in, or the dismissal of, criminal cases upon clear showing that the lower
court, in acquitting the accused, committed not merely errors of judgment but also
grave abuse of discretion amounting to lack or excess of jurisdiction or a denial of
due process, thus rendering the assailed judgment void.73 When the order of
dismissal is annulled or set aside by an appellate court in an original special civil
action via certiorari, the right of the accused against double jeopardy is not
violated.74
In as early as the 1989 case of People v. Santiago,75 this Court has ruled that a
private offended party can file a special civil action for certiorari questioning the
trial court's order acquitting the accused or dismissing the case, viz.:
In such special civil action for certiorari filed under Rule 65 of the Rules of Court,
wherein it is alleged that the trial court committed a grave abuse of discretion
amounting to lack of jurisdiction or on other jurisdictional grounds, the rules state
that the petition may be filed by the person aggrieved. In such case, the aggrieved
parties are the State and the private offended party or complainant. The
complainant has an interest in the civil aspect of the case so he/she may file such
special civil action questioning the decision or action of the respondent court on
jurisdictional grounds. In so doing, complainant should not bring the action in the
name of the People of Philippines. The action may be prosecuted in the name of
said complainant. (emphasis supplied)
Moreover, there have been occasions when this Court has allowed the offended
party to pursue the criminal action on his/her own behalf, as when there is a denial
of due process as in this case.76 Indeed, the right of offended parties to appeal or
question an order of the trial court which deprives them of due process has always
been recognized, the only limitation being that they cannot appeal any adverse
ruling if to do so would place the accused in double jeopardy.77
At this juncture, We also uphold the CA's finding that double jeopardy does not
exist in this case. Inasmuch as the dismissal of the charges by the RTC was done
without regard to due process of law, the same is null and void.78 It is as if there
was no acquittal or dismissal of the case at all, and the same cannot constitute a
claim for double jeopardy.79
Also, it is elementary that double jeopardy attaches only when the following
elements concur: (1) the accused is charged under a complaint or information
sufficient in form and substance to sustain their conviction; (2) the court has
jurisdiction; (3) the accused has been arraigned and has pleaded; and (4) he/she is
convicted or acquitted, or the case is dismissed without his/her consent.80 Thus, as
found by the CA, double jeopardy does not attach in this case as the dismissal was
granted upon motion of the petitioner. To be sure, no fundamental right of the
petitioner was violated in the filing of the petition for certiorari before the CA by
the respondent, as well as the grant thereof by the CA.
In fine, the dismissal of the cases below was patently erroneous and as such, invalid
for lack of fundamental requisite, that is, due process81. For this reason, this Court
finds the recourse of the respondent to the CA proper despite it being brought on
her own and not through the OSG.
Besides, such technicality cannot prevail over the more fundamental matter, which
is the violation of the right to due process resulting from the RTC's patent error.
Nothing is more settled than the principle that rules of procedure are meant to be
tools to facilitate a fair and orderly conduct of proceedings.82 Strict adherence
thereto must not get in the way of achieving substantial justice.83 As long as their
purpose is sufficiently met and no violation of due process and fair play takes place,
the rules should be liberally construed.84 Liberal construction of the rules is the
controlling principle to effect substantial justice.85 The relaxation or suspension of
procedural rules, or the exemption of a case from their operation, is warranted
when compelling reasons or when the purpose of justice requires it.86 Thus,
litigations should, as much as possible, be decided on their merits and not on sheer
technicalities.
In all, since it is established that the RTC of Manila has jurisdiction over the Illegal
Recruitment and Estafa cases, and there being no violation of the double jeopardy
doctrine, the prosecution of the case may still resume in the trial court as held by
the CA.

WHEREFORE, premises considered, the instant petition is DENIED. The Decision

dated May 29, 2013 and Resolution dated November 6, 2013 of the Court of
Appeals are hereby AFFIRMED.

SO ORDERED.
POWERHOUSE STAFFBUILDERS INTERNATIONAL, INC., Petitioner, v. ROMELIA REY, accepted payments by way of settlement, with the assistance of Labor Attache
LIZA CABAD, EVANGELINE NICMIC, EVA LAMEYRA, ROSARIO ABORDAJE, LILYBETH Romulo Salud.9
MAGALANG, VENIA BUYAG, JAYNALYN NOLLEDO, IREN NICOLAS, AILEEN
SAMALEA, SUSAN YBAÑEZ; CHERYL ANN ORIA, MA. LIZA SERASPI, KATHERINE During the proceedings before the LA, Powerhouse moved to implead JEJ
ORACION, AND JEJ INTERNATIONAL MANPOWER SERVICES CORPORATION, International Manpower Services (JEJ) as respondent on account of the alleged
Respondents. G.R. No. 190203, November 07, 2016 transfer to the latter of Catcher's accreditation.10 The motion was granted and JEJ
submitted its position paper, arguing that the supposed transfer of accreditation to
JARDELEZA, J.: it did not affect the joint and solidary liability of Powerhouse in favor of respondent
employees. It averred that any contract between JEJ and Powerhouse could not be
Before us is a petition for review on certiorari1 under Rule 45 of the Revised Rules enforced in the case as it involved no employer-employee relationship and is
of Court filed by petitioner Powerhouse Staffbuilders International, Inc. therefore outside the jurisdiction of the labor arbiter.12
(Powerhouse), seeking the review and reversal of the Decision2 dated March 24,
2009 and the Resolution3 dated November 10, 2009 of the Court of Appeals (CA) in The LA, in a Decision13 dated September 27, 2002, ruled in favor of the
CA-G.R. SP No. 100196 which dismissed its petition for certiorari. respondents, finding the respondent employees' dismissal and/or pre-termination
of their employment contracts illegal. The dispositive portion of the LA's Decision
Facts reads:chanRoblesvirtualLawlibrary
WHEREFORE, judgment is hereby rendered ordering [Powerhouse], William Go,
Powerhouse hired respondents Romelia Rey, Liza Cabad, Evangeline Nicmic, Eva [Catcher], Chen Wei, [JEJ] and Benedicto Javier to jointly and severally pay
Lameyra, Rosario Abordaje, Lilybeth Magalang, Venia Buyag, Jaynalyn Nolledo, Iren complainants the following amounts corresponding to the unexpired term of their
Nicolas, Aileen Samalea, Susan Ybañez, Cheryl Ann Oria, Ma. Liza Seraspi and employment contracts or three (3) months salaries whichever is less and refund of
Katherine Oracion (respondent employees) as operators for its foreign principal, illegally deducted amounts in their wages:
Catcher Technical Co. Ltd./Catcher Industrial Co. Ltd. (Catcher), based in Taiwan,
each with a monthly salary of NT$15,840.00 for the duration of two years NAME REFUND OF DEDUCTED UNEXPIRED[ ]TERM/3
commencing upon their arrival at the jobsite. They were deployed on June 2, 2000. AMOUNTS IN WAGES MONTHS WAGES
Sometime in February 2001, Catcher informed respondent employees that they IN NT$ IN NT$
would be reducing their working days due to low orders and financial difficulties. 1. ROMELIA REY NT$80,000.00 NT$47,520.00
The respondent employees were repatriated to the Philippines on March 11, 2001.4 2. LIZA CABAD NT$80,000.00 NT$47,520.00
3. EVANGELINE NICMIC NT$80,000.00 NT$47,520.00
On March 22, 2001, respondent employees filed separate complaints for illegal 4. EVA LAMEYRA NT$80,000.00 NT$47,520.00
dismissal, refund of placement fees, moral and exemplary damages, as well as 5. ROSARIO ABORDAJE NT$80,000.00 NT$47,520.00
attorney's fees, against Powerhouse and Catcher before the Labor Arbiter5 (LA) 6. LILYBETH MAGALANG NT$80,000.00 NT$47,520.00
which were later consolidated upon their motion.6 They alleged that on March 2, 7. VENIA BUYAG NT$80,000.00 NT$47,520.00
2001, Catcher informed them that they would all be repatriated due to low orders
8. JAYNALYN NOLLEDO NT$80,000.00 NT$47,520.00
of Catcher. Initially, they refused to be repatriated but they eventually gave in
9. IREN NICOLAS NT$80,000.00 NT$47,520.00
because Catcher stopped providing them food and they had to live by the
10. AILEEN SAMALEA NT$80,000.00 NT$47,520.00
donations/dole outs from sympathetic friends and the church.7 Furthermore,
11. SUSAN YBA[Ñ]EZ NT$80,000.00 NT$47,520.00
during their employment with Catcher, the amount of NT$10,000.00 was
12. CHERYL ANN ORIA NT$80,000.00 NT$47,520.00
unjustifiably deducted every month for eight to nine months from their individual
salaries.8 13. MA. LIZA SERASPI NT$80,000.00 NT$47,520.00
14. KATHERINE ORACION NT$80,000.00 NT$47,520.00
On the other hand, Powerhouse maintained that respondent employees voluntarily Respondents are further ordered to pay 10% attorney's fees.
gave up their jobs following their rejection of Catcher's proposal to reduce their
working days. It contended that before their repatriation, each of the respondents The complaint for moral damages, exemplary damages and other money claims are
hereby disallowed for lack of merit.

SO ORDERED.14
The LA found that Powerhouse failed to substantiate its allegations that the
respondent employees voluntarily pre-terminated their respective contracts of
employment and received payments in consideration thereof and it was also unable
to rebut respondents' alleged entitlement to refund of the amounts illegally
deducted from their salaries. However, the LA also ruled that in accordance with
Section 10 of Republic Act (R.A.) No. 8042,15 the amount of wages the respondent
employees are entitled to by reason of the illegal dismissal/pre-termination of their
employment contracts is equivalent to the unexpired term thereof or to three
months for every year of service whichever is less.15
All the parties appealed to the National Labor Relations Commission (NLRC).
On appeal, the NLRC, in its Decision16 dated July 31, 2006, affirmed the LA's
Decision with modification. The NLRC absolved JEJ from liability, upon the NLRC's
findings that it was not privy to the respondents' deployment.17 It also held
Powerhouse jointly and severally liable with William Go, Catcher, and Chen Wei to
reimburse to respondents Magalang, Nicolas, Ybañez and Oria their placement fee
of P19,000.00 each and P17,000.00 each to respondents Rey, Cabad, Nicmic,
Lameyra, Abordaje, Buyag, Nolledo, Samalea, Seraspi and Oracion.18
Powerhouse moved for reconsideration but its motion was denied by the NLRC in
its Resolution19 dated May 31, 2007.
Aggrieved, Powerhouse elevated the matter to the CA via a Petition for Certiorari20
imputing grave abuse of discretion on the part of the NLRC in declaring the
repatriation of respondent employees as an act of illegal dismissal, awarding
reimbursement of alleged salary deduction without factual basis or concrete and
direct evidence, ordering the refund of the placement fees which is subject to the
jurisdiction of the POEA, and dropping JEJ as a party respondent in total disregard
of the POEA rules.21
On March 24, 2009, the CA rendered a Decision22 dismissing Powerhouse's
petition. TheCA ruled that Powerhouse failed to comply with the 60-day period
within which to file a petition for certiorari under Rule 65 of the Rules of Court. As
alleged by Powerhouse itself, it received a copy of the May 31, 2007 Order of the
NLRC on June 21, 2007; thus, the Rule 65 petition filed before the CA on August 21,
2007 was filed a day late, warranting its dismissal.23 The CA ruled that
Powerhouse's failure to perfect its appeal is not a mere technicality as it raises a
jurisdictional problem, depriving it of jurisdiction.24 The CA also found that
Powerhouse failed to substantially comply with the requirements of certificate of
forum shopping in its petition and ruled that the belated submission of the
Secretary's Certificate in compliance with the CA's resolution did not cure the
defect of Powerhouse's petition.25cralawred
Even on the merits, the CA found the petition deficient. It ruled that Powerhouse
failed to prove that respondent employees were not illegally dismissed, or that they
voluntarily resigned. The CA found that respondent employees were made to resign
against their will as they were forced to sign resignation letters prepared by Catcher
as an act of self-preservation, since Catcher stopped providing them food for their
subsistence nine days before they were finally repatriated on March 11, 2001.26
Respondent employees' intention to leave their work, as well as their act of
relinquishment, is not present in this case. On the contrary, they vigorously pursued
their complaint against Powerhouse and resignation is inconsistent with the filing of
a complaint for illegal dismissal.27 Furthermore, the photocopy of the undated and
unsigned list supposedly furnished by Catcher to Powerhouse as proof that
respondent employees received the amounts stated therein was not considered by
the CA because these were not authenticated and are devoid of probative value.28
The CA likewise ruled that JEJ's liability for the monetary claims of respondent
employees on account of the alleged transfer of accreditation to it has not been
established absent any substantial evidence to show that such transfer had in fact
been effected. Nothing in the letters attached by Powerhouse in its motion for
reconsideration before the NLRC shows or even remotely suggests that the transfer
pushed through with POEA's imprimatur. Powerhouse presented the Affidavit of
Assumption of Responsibility executed by the president of respondent JEJ to the CA,
but the CA ruled that it could not consider the same without running afoul with the
requirements of due process, as it would deprive the respondents of the
opportunity to examine and controvert the same.29
Powerhouse moved for reconsideration of the CA Decision but the same was
denied in a Resolution30 dated November 10, 2009. Powerhouse's Omnibus Motion
for Leave of Court to Present Additional Evidence and to Set Case for Oral
Arguments was denied in the same resolution.
Hence, Powerhouse filed this petition for review on certiorari, under Rule 45 of the
Revised Rules of Court, challenging the CA Decision. Powerhouse likewise sought
injunctive relief in its petition which was granted by this Court through the issuance
of a Temporary Restraining Order31 on March 3, 2010, enjoining the CA, the NLRC,
the LA and the respondents from enforcing the assailed Decision and
Resolution.chanroblesvirtuallawlibrary
Issues
In assailing the CA Decision, the petition raises three
issues:chanRoblesvirtualLawlibrary
WHETHER OR NOT THERE IS ILLEGAL DISMISSAL IF WORKERS CHOOSE TO LEAVE
THEIR PLACE OF WORK.
WHETHER OR NOT MONETARY AWARDS IN LABOR CASES MAY BE AWARDED BASED
ON MERE ALLEGATIONS.
WHETHER OR NOT THE TRANSFER OF ACCREDITATION TO ANOTHER RECRUITMENT
AND PLACEMENT AGENCY, AS WELL AS THE ASSUMPTION OF ANY LIABILITY AS A
CONSEQUENCE OF THIS TRANSFER, RELIEVED THE ORIGINAL RECRUITMENT AND
PLACEMENT AGENCY FROM ANY LIABILITY.32
Powerhouse, in questioning the appellate court's ruling, also calls the attention of
this Court to their substantial compliance with all the procedural requirements in
filing their Petition for Certiorari before the CA and prays for a liberal interpretation
of the rules in the interest of substantial justice.chanroblesvirtuallawlibrary
The Court's Ruling
Before going into the substantive merits of the case, we shall first resolve the
procedural issues raised by respondents in their respective Comments.
In their Comment,33 respondent employees assert that Powerhouse failed to show
any justifiable reason why it should be excused from the operation of the rules.34
Moreover, the CA actually resolved the petition on the merits but Powerhouse
showed nothing to earn a favorable ruling.35
On the other hand, JEJ, in its Comment,36 avers that Powerhouse failed to raise as
an issue the dismissal of Powerhouse's petition due to its gross and blatant
violations of the requirements of Rule 65. Instead, Powerhouse made assignments
of errors, or what it called "novel questions of law," which is just a ploy to seek the
review of the factual findings of the CA and the NLRC.37
The petition in the CA was timely filed.
Section 4, Rule 65 of the 1997 Rules of Civil Procedure, as amended,38
provides:chanRoblesvirtualLawlibrary
Sec. 4. When and where petition filed. - The petition shall be filed not later than
sixty (60) days from notice of the judgment, order or resolution. In case a motion
for reconsideration or new trial is timely filed, whether such motion is required or
not, the sixty (60) day period shall be counted from notice of the denial of said
motion.
xxx
In this case, Powerhouse received on June 21, 2007, a copy of the May 31, 2007
Order of the NLRC denying its motion for reconsideration.39 Thus, it had 60 days, or
until August 20, 2007, to file a petition for certiorari before the CA. However, since
August 20, 2007 was proclaimed by President Arroyo as a special non-working day
pursuant to Proclamation No. 1353, series of 2007, Powerhouse had until the next
working day, August 21, 2007 to file its petition. The relevant portion of Rule 22,
Section 1 provides: "x x x If the last day of the period, as thus computed, falls on a
Saturday, a Sunday, or a legal holiday in the place where the court sits, the time
shall not run until the next working day." Thus, the petition filed on August 21, 2007
was timely filed.
Powerhouse substantially complied with the requirements of verification and
certification against forum shopping.
In previous cases, we held that the following officials or employees of the company
can sign the verification and certification without need of a board resolution: (1) the
Chairperson of the Board of Directors; (2) the President of a corporation; (3) the
General Manager or Acting General Manager; (4) Personnel Officer; and (5) an
Employment Specialist in a labor case.40 The rationale applied in these cases is to
justify the authority of corporate officers or representatives of the corporation to
sign the verification or certificate against forum shopping, being "in a position to
verify the truthfulness and correctness of the allegations in the
petition."41cralawred
In this case, the verification and certification42 attached to the petition before the
CA was signed by William C. Go, the President and General Manager of
Powerhouse, one of the officers enumerated in the foregoing recognized exception.
While the petition was not accompanied by a Secretary's Certificate, his authority
was ratified by the Board in its Resolution adopted on October 24, 2007.43 Thus,
even if he was not authorized to execute the Verification and Certification at the
time of the filing of the Petition, the ratification by the board of directors
retroactively confirms and affirms his authority and gives us more reason to uphold
that authority.44
Nevertheless, on the merits, the petition must fail.
It bears stressing that in a petition for review on certiorari, the scope of the
Supreme Court's judicial review of decisions of the CA is generally confined only to
errors of law. The Supreme Court is not a trier of facts, and this doctrine applies
with greater force in labor cases. Factual questions are for the labor tribunals to
resolve.45
Respondents maintain that the petition, in the guise of raising novel questions of
law, is in reality seeking a review of the factual findings of the CA and the NLRC.46
We agree with the respondents.

In this case, although the three issues raised in the petition were stated in a manner
in which they would appear to be purely legal issues, they actually assume facts
contrary to the factual findings of the LA, the NLRC, and the CA and thus call for a
re-examination of the evidence, which this Court cannot entertain.47 Thus, the
three issues presented by Powerhouse-the liability of the transferee agency, the
existence of illegal dismissal and the basis for the monetary awards-are factual
issues which have all been ruled upon by the LA, the NLRC, and the CA.
The well-entrenched rule, especially in labor cases, is that findings of fact of quasi-
judicial bodies, like the NLRC, are accorded with respect, even finality, if supported
by substantial evidence. Particularly when passed upon and upheld by the CA, they
are binding and conclusive upon the Supreme Court and will not normally be
disturbed.49
The Court finds no reason in this case to depart from such doctrine.
The evidence on record supports the findings of the CA and the NLRC.
Respondent employees were illegally dismissed.
The onus of proving that an employee was not dismissed or, if dismissed, his
dismissal was not illegal, fully rests on the employer, and the failure to discharge
the onus would mean that the dismissal was not justified and was illegal. The
burden of proving the allegations rests ufon the party alleging and the proof must
be clear, positive, and convincing.50
Here, there is no reason to overturn the factual findings of the Labor Arbiter, the
NLRC and the CA, all of which have unanimously declared that respondent
employees were made to resign against their will after the foreign principal,
Catcher, stopped providing them food for their subsistence as early as March 2,
2001, when they were informed that they would be repatriated, until they were
repatriated on March 11, 2001.
The filing of complaints for illegal dismissal immediately after repatriation belies the
claim that respondent employees voluntarily chose to be separated and
repatriated. Voluntary repatriation, much like resignation, is inconsistent with the
filing of the complaints.51
Respondent employees are entitled to the payment of monetary claims.
We also agree that respondent employees are entitled to money claims and full
reimbursement of their respective placement fees. However, the award of the
three-month equivalent of respondent employees' salaries should be increased to
the amount equivalent to the unexpired term of the employment contract in
accordance with our rulings in Serrano v. Gallant Maritime Services, Inc.52 and
Sameer Overseas Placement Agency, Inc. v. Cabiles.53
In Serrano, we declared unconstitutional the clause in Section 10 of R.A. No. 8042
limiting the wages that could be recovered by an illegally dismissed overseas
worker to three months. We held that the clause "or for three (3) months for every
year of the unexpired term, whichever is less" (subject clause) is both a violation of
the due process and equal protection clauses of the Constitution.53 In 2010, upon
promulgation of Republic Act No. 10022,54 the subject clause was reinstated.55
Presented with the unique situation that the law passed incorporated the exact
clause already declared unconstitutional, without any perceived substantial change
in the circumstances, in Sameer, we, once again, declared the reinstated clause
unconstitutional, this time as provided in Section 7 of R.A. No. 10022.56
We likewise affirm the refund to the respondent employees of the unauthorized
monthly deductions in the amount of NT$10,000.00. Contrary to Powerhouse's
contention that the claim for refund was based merely on allegations, respondent
employees were able to present proof before the NLRC in the form of the two (2)
passbooks given to each of them by their foreign employer. According to
respondent employees, the "First Passbooks," where their salaries, including their
overtime pay were deposited, were in the custody of the employer, while - the
"Second Passbooks" where their allowances were deposited, were in their custody.
They were only able to make withdrawals from their Second Passbooks, however,
their foreign employer made illegal deductions from their First Passbooks.57 The
pertinent pages of these First Passbooks are pmt of the record of this case.58
Considering that Powerhouse failed to dispute this claim, the same is deemed
admitted.59
It must be remembered that the burden of proving monetary claims rests on the
employer. The reason for this rule is that the pertinent personnel files, payrolls,
records, remittances and other similar documents are not in the possession of the
worker but in the custody and absolute control of the employer.60 Thus, in failing
to present evidence to prove that Catcher, with whom it shares joint and several
liability with under Section 10 of R.A. No. 8042, had paid all the monetary claims of
respondent employees, Powerhouse has, once again, failed to discharge the onus
probandi; thus, the LA and the NLRC properly awarded these claims to respondent
employees.
Respondent employees are likewise entitled to the payment of interest over their
monetary claims.
In the matter of the applicable interest rates over the monetary claims awarded to
respondent employees, Section 10 of R.A. No. 8042 provides that "[i]n case of
termination of overseas employment without just, valid or authorized cause as
defined by law or contract, the workers shall be entitled to the full reimbursement
of his placement fee with interest of twelve percent (12%) per annum." However,
this provision does not provide a specific interest rate for the award of salary for
the unexpired portion of the employment contract nor for the other money claims
the respondent employees are entitled to.
In Sameer, we held that Bangko Sentral ng Pilipinas Circular No. 799 issued on June
21, 2013,61 which revised the interest rate for loan or forbearance of money from
twelve percent (12%) to six percent (6%) in the absence of stipulation, is not
applicable when there is a law that states otherwise. Thus, Circular No. 799 does
not have the effect of changing the interest on awards for reimbursement of
placement fees from twelve percent (12%), as provided in Section 10 of R.A. No.
8042, to six percent (6%). However, Circular No. 799 applies to the award of salary
for the unexpired portion of the employment contract and the other money claims
of the employees since the law does not provide a specific interest rate for these
awards.62
Accordingly, the placement fees in the amount of P19,000.00 each which are to be
reimbursed to respondents Magalang, Nicolas, Ybañez and Oria, and the placement
fees in the amount of P17,000.00 each which are to be reimbursed to respondents
Rey, Cabad, Nicmic, Lameyra, Abordaje, Buyag, Nolledo, Samalea, Seraspi and
Oracion, shall earn interest at a rate of twelve percent (12%) per annum from
finality of this decision until full payment thereof.
On the other hand, the other monetary awards, specifically respondent employees'
salaries for the unexpired term of their employment contract, the illegal deductions
which are to be refunded to them, and the award of attorney's fees in their favor,
shall earn interest at the rate of six percent (6%) per annum from finality of this
decision until full payment thereof.64
Powerhouse is liable for the monetary claims.
We likewise agree with the CA and the NLRC that JEJ could not be held liable for the
monetary claims of respondent employees on account of the alleged transfer of
accreditation to it. Nothing in the two letters attached by Powerhouse in its motion
for reconsideration before the NLRC proved that the alleged transfer pushed
through with POEA's imprimatur. At best, these show that Catcher intended to
appoint JEJ as its new agent and Powerhouse had no objection to such transfer.65
Even the Affidavit of Assumption of Responsibility submitted to the CA cannot
absolve Powerhouse of its liability.
The terms of Section 10 of R.A. No. 8042 clearly states the solidary liability of the
principal and the recruitment agency to the employees and this liability shall not be
affected by any substitution, amendment or modification for the entire duration of
the employment contract, to wit:chanRoblesvirtualLawlibrary
Sec. 10. Monetary Claims. - Notwithstanding any provision of law to the contrary,
the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after the filing of the complaint, the claims arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers
for overseas deployment including claims for actual, moral, exemplary and other
forms of damages.
The liability of the principal/employer and the recruitment/placement agency for
any and all claims under this section shall be joint and several. This provision shall
be incorporated in the contract for overseas employment and shall be a condition
precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
monetary claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and solidarity
liable with the corporation or partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution, amendment or
modification made locally or in a foreign country of the said contract. (Emphasis
supplied.)
xxx
In Skippers United Pacific, Inc. v. Maguad,65 we ruled that the provisions of the
POEA Rules and Regulations are clear enough that the manning agreement extends
up to and until the expiration of the employment contracts of the employees
recruited and employed pursuant to the said recruitment agreement.66 In that
case, we held that the Affidavits of Assumption of Responsibility, though valid as
between petitioner Skippers United Pacific Inc. and the other two manning
agencies, were not enforceable against the respondents (the employees) because
the latter were not parties to those agreements.67
In this case, even if there was transfer of accreditation by Catcher from Powerhouse
to JEJ, Powerhouse's liability to respondent employees remained intact because
respondent employees are not privy to such contract, and in their overseas
employment contract approved by POEA, Powerhouse is the recruitment agency of
Catcher. To relieve Powerhouse from liability arising from the approved overseas
employment contract is to change the contract without the consent from the other
contracting party, respondent employees in this case.
To rule otherwise and free Powerhouse of liability against respondent employees
would go against the rationale of R.A. No. 8042 to protect and safeguard the rights
and interests of overseas Filipinos and overseas Filipino workers, in particular, and
run contrary to this law's intention to an additional layer of protection to overseas
workers.68 This ensures that overseas workers have recourse in law despite the
circumstances of their employment. By providing that the liability of the foreign
employer may be "enforced to the full extent" against the local agent, the overseas
worker is assured of immediate and sufficient payment of what is due them.
Corollarily, the provision on joint and several liability in R.A. No. 8042 shifts the
burden of going after the foreign employer from the overseas worker to the local
employment agency. However, the local agency that is held to answer for the
overseas worker's money claims is not left without remedy. The law does not
preclude it from going after the foreign employer for reimbursement of whatever
payment it has made to the employee to answer for the money claims against the
foreign employer.69

WHEREFORE, the petition is DENIED. The Decision dated March 24, 2009 of the
Court of Appeals DISMISSING the petition in CA-G.R. SP No. 100196 is hereby
AFFIRMED with the MODIFICATION that each of the respondent employees are
AWARDED their salaries for the entire unexpired portion of their respective
employment contracts computed at the rate of NT$15,840.00 per month at an
interest of six percent (6%) per annum from the finality of this decision until full
payment thereof.

Further, the award of placement fees in respondent employees' favor shall earn
interest at the rate of twelve percent (12%) per annum from finality of this decision
until full payment thereof.

Furthermore, the illegally deducted amounts which were ordered to be refunded to

respondent employees, as well as the attorney's fees awarded to respondent
employees, shall earn interest at the rate of six percent (6%) per annum from
finality of this decision until full payment thereof.

The temporary restraining order issued on March 3, 2010 is hereby DISSOLVED.

SO ORDERED.