G.R. No. 148492 May 9, 2003
Ordering respondent Coca-Cola Bottlers
BUENAVENTURA C. MAGSALIN & COCA-COLA BOTTLERS
PHILS., INC., petitioners,
vs.
NATIONAL ORGANIZATION OF WORKING MEN (N.O.W.M.),
RODOLFO MELGAR, ARNEL DELOS SANTOS, SILVERIO
MINDAJAO, RUBEN NAVALES, BOBBY AUSTERO, RAYMUNDO
GAUDICOS, CHRISTOPHER PERALTA, GIOVANI DELA CRUZ,
JOSELITO OCCIDENTAL, AMADO BODASAN, FREDERIK
MAGALINO, CHITO OCCIDENTAL, ALEXANDER DELOS
SANTOS, DEONIL MESA, OLIVER VILLAFLOR, ROBERTO
TUMONBA, RODRIGO ANGELES, ROMMEL ABAD, FELIX
AVENIDO, ARMANDO AMOR, FREDERICK DE GUZMAN, CEA
CARMELO, MARIANO CAÑETE, ALBERTO ANTONES, ROMEO
BASQUINAS, ROGELIO MALINIS, EDMUNDO BAYOS, RAMIL
REVADO, JOEL PIATA, OSCAR MALINAY, ROBERT REYES,
JIMMY REYES, RETCHEL HAUTEA, VICTORINO TORRALBA,
NOEL RUBAI, RENATO DE OCAMPO, JESUS NOZON, JOEL
MALINIS, REYNALDO GREGORY, MICHAEL RUBIA, JOSELITO
VILLANUEVA, LEONARDO MONDINA, EDUARDO BELLA,
WILFREDO BELLA, ALBERTO MAGTIBAY, MIGUEL CUESTA,
JOSE MARCOS RODRIGUEZ III, HERMINIO ROFLO, ERNIE
CHAVEZ, NELSON LOGRONIO, LEONILO GALAPIN, REY
PANGILINAN, LARRY JAVIER, MATIAS ARBUES, RONILO
AUSTERO, ADEMAR ESTUITA, EDWIN DE LEON, RANDY DE
CHAVEZ, respondents.
VITUG, J.:
Coca-Cola Bottlers Phils., Inc., herein petitioner, engaged the
services of respondent workers as "sales route helpers" for a limited
period of five months. After five months, respondent workers were
employed by petitioner company on a day-to-day basis. According to
petitioner company, respondent workers were hired to substitute for
regular sales route helpers whenever the latter would be unavailable
or when there would be an unexpected shortage of manpower in
any of its work places or an unusually high volume of work. The
practice was for the workers to wait every morning outside the gates
of the sales office of petitioner company. If thus hired, the workers
would then be paid their wages at the end of the day.
Ultimately, respondent workers asked petitioner company to extend
to them regular appointments. Petitioner company refused. On 07
November 1997, twenty-three (23) of the "temporary" workers
(herein respondents) filed with the National Labor Relations
Commission (NLRC) a complaint for the regularization of their
employment with petitioner company. The complaint was amended
a number of times to include other complainants that ultimately
totaled fifty-eight (58) workers. Claiming that petitioner company
meanwhile terminated their services, respondent workers filed a
notice of strike and a complaint for illegal dismissal and unfair labor
practice with the NLRC.
On 01 April 1998, the parties agreed to submit the controversy,
including the issue raised in the complaint for regularization of
employment, for voluntary arbitration. On 18 May 1998, the
voluntary arbitrator rendered a decision dismissing the complaint on
the thesis that respondents (then complainants) were not regular
employees of petitioner company.
Respondent workers filed with the Court of Appeals a petition for
review under Rule 43 of the Rules of Civil Procedure assailing the
decision of the voluntary arbitrator, therein contending that -
"1. The Voluntary Arbitrator committed errors in finding
that petitioners voluntarily and knowingly agreed to be
employed on a day-to-day basis; and
"2. The Voluntary Arbitrator committed errors in finding
that petitioners' dismissal was valid."1
In its decision of 11 August 2000, the Court of Appeals reversed and
set aside the ruling of the voluntary arbitrator, it concluded -
"WHEREFORE, the assailed decision of the Voluntary
Arbitrator is hereby REVERSED and SET ASIDE and
anew one is entered:
"1. Declaring petitioners as regular employees
of Coca-Cola Bottlers Phils., Inc. and their
dismissal from employment as illegal;
"2.
Phils., Inc. to reinstate petitioners to their former
positions with full backwages, inclusive of
allowances that petitioners had been receiving
during their employment and 13th month pay,
computed from the date of their termination up
to the time of their actual reinstatement
(Paramount Vinyl Product Corp. vs. NLRC, 190
SCRA 526)."2
Petitioner company's motion for reconsideration was denied in a
resolution, dated 21 May 2001, of the appellate court.
The focal issues revolve around the matter of whether or not the
nature of work of respondents in the company is of such nature as to
be deemed necessary and desirable in the usual business or trade
of petitioner that could qualify them to be regular employees.
The basic law on the case is Article 280 of the Labor Code. Its
pertinent provisions read:
"Art. 280. Regular and Casual Employment. – The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform
activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the
employment has been fixed for a specific project or
undertaking the completion or termination of which has
been determined at the time of the engagement of the
employee or where the work or services to be performed
is seasonal in nature and the employment is for the
duration of the season.
"An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity
in which he is employed and his employment shall
continue while such activity exists."
Coca-Cola Bottlers Phils., Inc., is one of the leading and largest
manufacturers of softdrinks in the country. Respondent workers
have long been in the service of petitioner company. Respondent
workers, when hired, would go with route salesmen on board
delivery trucks and undertake the laborious task of loading and
unloading softdrink products of petitioner company to its various
delivery points.
Even while the language of law might have been more definitive, the
clarity of its spirit and intent, i.e., to ensure a "regular" worker's
security of tenure, however, can hardly be doubted. In determining
whether an employment should be considered regular or non-
regular, the applicable test is the reasonable connection between
the particular activity performed by the employee in relation to the
usual business or trade of the employer. The standard, supplied by
the law itself, is whether the work undertaken is necessary or
desirable in the usual business or trade of the employer, a fact that
can be assessed by looking into the nature of the services rendered
and its relation to the general scheme under which the business or
trade is pursued in the usual course. It is distinguished from a
specific undertaking that is divorced from the normal activities
required in carrying on the particular business or trade. But,
although the work to be performed is only for a specific project or
seasonal, where a person thus engaged has been performing the
job for at least one year, even if the performance is not continuous
or is merely intermittent, the law deems the repeated and continuing
need for its performance as being sufficient to indicate the necessity
or desirability of that activity to the business or trade of the
employer. The employment of such person is also then deemed to
be regular with respect to such activity and while such activity
exists.3
The argument of petitioner that its usual business or trade is
softdrink manufacturing and that the work assigned to respondent
workers as sales route helpers so involves merely "postproduction
activities," one which is not indispensable in the manufacture of its
products, scarcely can be persuasive. If, as so argued by petitioner
company, only those whose work are directly involved in the
production of softdrinks may be held performing functions necessary
and desirable in its usual business or trade, there would have then
been no need for it to even maintain regular truck sales route
helpers. The nature of the work performed must be viewed from a
1
perspective of the business or trade in its entirety4 and not on a
confined scope.
The repeated rehiring of respondent workers and the continuing
need for their services clearly attest to the necessity or desirability of
their services in the regular conduct of the business or trade of
petitioner company. The Court of Appeals has found each of
respondents to have worked for at least one year with petitioner
company. While this Court, in Brent School, Inc. vs. Zamora,5 has
upheld the legality of a fixed-term employment, it has done so,
however, with a stern admonition that where from the circumstances
it is apparent that the period has been imposed to preclude the
acquisition of tenurial security by the employee, then it should be
struck down as being contrary to law, morals, good customs, public
order and public policy. The pernicious practice of having
employees, workers and laborers, engaged for a fixed period of few
months, short of the normal six-month probationary period of
employment, and, thereafter, to be hired on a day-to-day basis,
mocks the law. Any obvious circumvention of the law cannot be
countenanced. The fact that respondent workers have agreed to be
employed on such basis and to forego the protection given to them
on their security of tenure, demonstrate nothing more than the
serious problem of impoverishment of so many of our people and
the resulting unevenness between labor and capital. A contract of
employment is impressed with public interest. The provisions of
applicable statutes are deemed written into the contract, and "the
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."6
With respect to the "Release, Waiver and Quitclaim" executed by
thirty-six (36) of the original complainants, namely, Rommel Abad,
Armando Amor, Bobby Austero, Felix Avenido, Amado Badasan,
Edmundo Bayos, Eduardo Bella, Jr., Mariano Cañete, Carmelo Cea,
Ernie Chavez, Randy Dechaves, Frederick De Guzman, Renato De
Ocampo, Ademar Estuita, Leonilo Galapin, Raymund Gaudicos,
Retchel Hautea, Larry Javier, Nelson Logrinio, Alberto Magtibay,
Frederick Magallano, Rogelio Malinis, Rodolfo Melgar, Silverio
Mindajao, Leonardo Mondina, Ruben Navales, Rey Pangilinan,
Christopher Peralta, Jimmy Reyes, Herminio Roflo, Michael Rubia,
Noel Rubia, Roberto Tumomba, Oliver Villaflor, and Joselito
Villanueva, this Court finds the execution of the same to be in order.
During the pendency of the appeal with the Court of Appeals, these
thirty-six (36) complainants individually executed voluntarily a
release, waiver and quitclaim and received from petitioner company
the amount of fifteen thousand (P15,000.00) pesos each. The
amount accords with the disposition of the case by the voluntary
arbitrator thusly:
"WHEREFORE, above premises considered, the herein
complaint is hereby DISMISSED for lack of merit.
"However, we cannot completely negate the fact that
complainants did and do actually render services to the
Company. It is with this in mind and considering the
difficulty the complainants may face in looking for another
job in case they are no longer re-engaged that we direct
the company to pay complainants Fifteen Thousand
Pesos each (P15,000.00) as financial assistance. It is
however understood that the financial assistance
previously extended by the Company to some of the
complainants shall be deducted from the financial
assistance herein awarded."7
The receipt of the amount awarded by the voluntary arbitrator, as
well as the execution of a release, waiver and quitclaim, is, in effect,
an acceptance of said decision. There is nothing on record which
could indicate that the execution thereof by thirty-six (36) of the
respondent workers has been attended by fraud or deceit. While
quitclaims executed by employees are commonly frowned upon as
being contrary to public policy and are ineffective to bar claims for
the full measure of their legal rights, there are, however, legitimate
waivers that represent a voluntary and reasonable settlement of
laborers' claims which should be so respected by the Court as the
law between the parties.8 Where the person making the waiver has
done so voluntarily, with a full understanding thereof, and the
consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as being a valid and binding
undertaking. "Dire necessity" is not an acceptable ground for
annulling the release, when it is not shown that the employee has
been forced to execute it.9
WHEREFORE, the questioned decision of the Court of Appeals, in
CA-G.R. SP No. 47872 is hereby AFFIRMED with MODIFICATION
in that the "Release, Waiver and Quitclaim" executed by the thirty-
six (36) individual respondents are hereby declared VALID and
LEGAL.
SO ORDERED.
G.R. No. 109902 August 2, 1994
ALU-TUCP, Representing Members: ALAN BARINQUE, with 13
others, namely: ENGR. ALAN G. BARINQUE, ENGR. DARRELL
LEE ELTAGONDE, EDUARD H. FOOKSON, JR., ROMEO R.
SARONA, RUSSELL GACUS, JERRY BONTILAO, EUSEBIO
MARIN, JR., LEONIDO ECHAVEZ, BONIFACIO MEJOS, EDGAR
S. BONTUYAN, JOSE G. GARGUENA, JR., OSIAS B.
DANDASAN, and GERRY I. FETALVERO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL
STEEL CORPORATION (NSC), respondents.
Leonard U. Sawal for petitioners.
Saturnino Mejorada for private respondent.
FELICIANO, J.:
In this Petition for Certiorari, petitioners assail the Resolution of the
National Labor Relations Commission ("NLRC") dated 8 January
1993 which declared petitioners to be project employees of private
respondent National Steel Corporation ("NSC"), and the NLRC's
subsequent Resolution of 15 February 1993, denying petitioners'
motion for reconsideration.
Petitioners plead that they had been employed by respondent NSC
in connection with its Five Year Expansion Program (FAYEP I &
II) 1 for varying lengths of time when they were separated from
NSC's service:
Employee Date Nature of Separated
Employed Employment
1. Alan Barinque 5-14-82 Engineer 1 8-31-91
2. Jerry Bontilao 8-05-85 Engineer 2 6-30-92
3. Edgar Bontuyan 11-03-82 Chairman to
present
4. Osias Dandasan 9-21-82 Utilityman 1991
5. Leonido Echavez 6-16-82 Eng. Assistant 6-
30-92
6. Darrell Eltagonde 5-20-85 Engineer 1 8-31-
91
7. Gerry Fetalvero 4-08-85 Mat. Expediter
regularized
8. Eduard Fookson 9-20-84 Eng. Assistant 8-
31-91
9. Russell Gacus 1-30-85 Engineer 1 6-30-92
10. Jose Garguena 3-02-81 Warehouseman to
present
11. Eusebio Mejos 11-17-82 Survey Aide 8-31-
91
12. Bonifacio Mejos 11-17-82 Surv. Party Head
1992
13. Romeo Sarona 2-26-83 Machine Operator
8-31-912
On 5 July 1990, petitioners filed separate complaints for unfair labor
practice, regularization and monetary benefits with the NLRC, Sub-
Regional Arbitration Branch XII, Iligan City.
The complaints were consolidated and after hearing, the Labor
Arbiter in a Decision dated 7 June 1991, declared petitioners
"regular project employees who shall continue their employment as
such for as long as such [project] activity exists," but entitled to the
salary of a regular employee pursuant to the provisions in the
collective bargaining agreement. It also ordered payment of salary
differentials. 3
Both parties appealed to the NLRC from that decision. Petitioners
argued that they were regular, not project, employees. Private
respondent, on the other hand, claimed that petitioners are project
employees as they were employed to undertake a specific project —
NSC's Five Year Expansion Program (FAYEP I & II).
2
The NLRC in its questioned resolutions modified the Labor Arbiter's
decision. It affirmed the Labor Arbiter's holding that petitioners
were project employees since they were hired to perform work in a
specific undertaking — the Five Years Expansion Program, the
completion of which had been determined at the time of their
engagement and which operation was not directly related to the
business of steel manufacturing. The NLRC, however, set aside the
award to petitioners of the same benefits enjoyed
by regular employees for lack of legal and factual basis.
Deliberating on the present Petition for Certiorari, the Court
considers that petitioners have failed to show any grave abuse of
discretion or any act without or in excess of jurisdiction on the part of
the NLRC in rendering its questioned resolutions of 8 January 1993
and 15 February 1993.
The law on the matter is Article 280 of the Labor Code which reads
in full:
Art. 280. Regular and Casual Employment —
The provisions of the written agreement to the
contrary notwithstanding and regardless of the
oral agreement of the parties, and employment
shall be deemed to be regular where the
employee has been engaged to perform
activities which are usually necessary or
desirable in the usual business or trade of the
employer, except where the employment has
been fixed for a specific project or undertaking
the completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or services to be
performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if
it is not covered by the preceding paragraph:
Provided, That, any employee who has
rendered at least one year service, whether
such service is continuous or broken, shall be
considered a regular employee with respect to
the activity in which he is employed and his
employment shall continue while such actually
exists. (Emphasis supplied)
Petitioners argue that they are "regular" employees of NSC
because: (i) their jobs are "necessary, desirable and work-related to
private respondent's main business, steel-making"; and (ii) they
have rendered service for six (6) or more years to private
respondent NSC. 4
The basic issue is thus whether or not petitioners are properly
characterized as "project employees" rather than "regular
employees" of NSC. This issue relates, of course, to an important
consequence: the services of project employees are co-terminous
with the project and may be terminated upon the end or completion
of the project for which they were hired. 5 Regular employees, in
contract, are legally entitled to remain in the service of their
employer until that service is terminated by one or another of the
recognized modes of termination of service under the Labor Code. 6
It is evidently important to become clear about the meaning and
scope of the term "project" in the present context. The "project" for
the carrying out of which "project employees" are hired would
ordinarily have some relationship to the usual business of the
employer. Exceptionally, the "project" undertaking might not have an
ordinary or normal relationship to the usual business of the
employer. In this latter case, the determination of the scope and
parameeters of the "project" becomes fairly easy. It is unusual (but
still conceivable) for a company to undertake a project which has
absolutely no relationship to the usual business of the company;
thus, for instance, it would be an unusual steel-making company
which would undertake the breeding and production of fish or the
cultivation of vegetables. From the viewpoint, however, of the legal
characterization problem here presented to the Court, there should
be no difficulty in designating the employees who are retained or
hired for the purpose of undertaking fish culture or the production of
vegetables as "project employees," as distinguished from ordinary or
"regular employees," so long as the duration and scope of the
project were determined or specified at the time of engagement of
the "project employees." 7 For, as is evident from the provisions of
Article 280 of the Labor Code, quoted earlier, the principal test for
determining whether particular employees are properly
characterized as "project employees" as distinguished from "regular
employees," is whether or not the "project employees" were
assigned to carry out a "specific project or undertaking," the duration
(and scope) of which were specified at the time the employees were
engaged for that project.
In the realm of business and industry, we note that "project" could
refer to one or the other of at least two (2) distinguishable types of
activities. Firstly, a project could refer to a particular job or
undertaking that is within the regular or usual business of the
employer company, but which is distinct and separate, and
identifiable as such, from the other undertakings of the company.
Such job or undertaking begins and ends at determined or
determinable times. The typical example of this first type of project is
a particular construction job or project of a construction company. A
construction company ordinarily carries out two or more discrete
identifiable construction projects: e.g., a twenty-five- storey hotel in
Makati; a residential condominium building in Baguio City; and a
domestic air terminal in Iloilo City. Employees who are hired for the
carrying out of one of these separate projects, the scope and
duration of which has been determined and made known to the
employees at the time of employment, are properly treated as
"project employees," and their services may be lawfully terminated
at completion of the project.
The term "project" could also refer to, secondly, a particular job or
undertaking that is not within the regular business of the corporation.
Such a job or undertaking must also be identifiably separate and
distinct from the ordinary or regular business operations of the
employer. The job or undertaking also begins and ends at
determined or determinable times. The case at bar presents what
appears to our mind as a typical example of this kind of "project."
NSC undertook the ambitious Five Year Expansion Program I and II
with the ultimate end in view of expanding the volume and
increasing the kinds of products that it may offer for sale to the
public. The Five Year Expansion Program had a number of
component projects: e.g., (a) the setting up of a "Cold Rolling Mill
Expansion Project"; (b) the establishment of a "Billet Steel-Making
Plant" (BSP); (c) the acquisition and installation of a "Five Stand
TDM"; and (d) the "Cold Mill Peripherals Project." 8 Instead of
contracting out to an outside or independent contractor the tasks
of constructing the buildings with related civil and electrical works
that would house the new machinery and equipment,
the installation of the newly acquired mill or plant machinery and
equipment and the commissioning of such machinery and
equipment, NSC opted to execute and carry out its Five Yeear
Expansion Projects "in house," as it were, by administration. The
carrying out of the Five Year Expansion Program (or more precisely,
each of its component projects) constitutes a distinct undertaking
identifiable from the ordinary business and activity of NSC. Each
component project, of course, begins and ends at specified times,
which had already been determined by the time petitioners were
engaged. We also note that NSC did the work here involved — the
construction of buildings and civil and electrical works, installation of
machinery and equipment and the commissioning of such
machinery — only for itself. Private respondent NSC was not in the
business of constructing buildings and installing plant machinery for
the general business community, i.e., for unrelated, third party,
corporations. NSC did not hold itself out to the public as a
construction company or as an engineering corporation.
Which ever type of project employment is found in a particular case,
a common basic requisite is that the designation of named
employees as "project employees" and their assignment to a
specific project, are effected and implemented in good faith, and not
merely as a means of evading otherwise applicable requirements of
labor laws.
Thus, the particular component projects embraced in the Five Year
Expansion Program, to which petitioners were assigned, were
distinguishable from the regular or ordinary business of NSC which,
of course, is the production or making and marketing of steel
products. During the time petitioners rendered services to NSC, their
work was limited to one or another of the specific component
projects which made up the FAYEP I and II. There is nothing in the
record to show that petitioners were hired for, or in fact assigned to,
other purposes, e.g., for operating or maintaining the old, or
previously installed and commissioned, steel-making machinery and
equipment, or for selling the finished steel products.
We, therefore, agree with the basic finding of the NLRC (and the
Labor Arbiter) that the petitioners were indeed "project employees:"
It is well established by the facts and evidence
on record that herein 13 complainants were
hired and engaged for specific activities or
undertaking the period of which has been
determined at time of hiring or engagement. It is
of public knowledge and which this Commission
3
 can safely take judicial notice that the
expansion program (FAYEP) of respondent
NSC consist of various phases [of] project
components which are being executed or
implemented independently or simultaneously
from each other . . .
In other words, the employment of each "project
worker" is dependent and co-terminous with the
completion or termination of the specific activity
or undertaking [for which] he was hired which
has been pre-determined at the time of
engagement. Since, there is no showing that
they (13 complainants) were engaged to
perform work-related activities to the business
of respondent which is steel-making, there is no
logical and legal sense of applying to them the
proviso under the second paragraph of Article
280 of the Labor Code, as amended.
xxx xxx xxx
The present case therefore strictly falls under
the definition of "project employees" on
paragraph one of Article 280 of the Labor Code,
as amended. Moreover, it has been held that
the length of service of a project employee is
not the controlling test of employment tenure
but whether or not "the employment has been
fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of the engagement of the
employee". (See Hilario Rada v. NLRC, G.R.
No. 96078, January 9, 1992; and Sandoval
Shipping, Inc. v. NLRC, 136 SCRA 674
(1985). 9
Petitioners next claim that their service to NSC of more than six (6)
years should qualify them as regular employees. We believe this
claim is without legal basis. The simple fact that the employment of
petitioners as project employees had gone beyond one (1) year,
does not detract from, or legally dissolve, their status as project
employees. 10 The second paragraph of Article 280 of the Labor
Code, quoted above, providing that an employee who has served for
at least one (1) year, shall be considered a regular employee,
relates to casual employees, not to project employees.
In the case of Mercado, Sr. vs. National Labor Relations
Commission, 11 this Court ruled that the proviso in the second
paragraph of Article 280 relates only to casual employees and is not
applicable to those who fall within the definition of said Article's first
paragraph, i.e., project employees. The familiar grammatical rule is
that a proviso is to be construed with reference to the immediately
preceding part of the provision to which it is attached, and not to
other sections thereof, unless the clear legislative intent is to restrict
or qualify not only the phrase immediately preceding the proviso but
also earlier provisions of the statute or even the statute itself as a
whole. No such intent is observable in Article 280 of the Labor Code,
which has been quoted earlier.
ACCORDINGLY, in view of the foregoing, the Petition
for Certiorari is hereby DISMISSED for lack of merit. The
Resolutions of the NLRC dated 8 January 1993 and 15 February
1993 are hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.
G.R. No. 170181 June 26, 2008
HANJIN HEAVY INDUSTRIES AND CONSTRUCTION CO. LTD.,
HAK KON KIM and/or JHUNIE ADAJAR,petitioners,
vs.
FELICITO IBAÑEZ, ALIGWAS CAROLINO, ELMER GACULA,
ENRIQUE DAGOTDOT AND RUEL CALDA,respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court, assailing the Decision,1 dated 28 July 2005, rendered by
the Court of Appeals, reversing the Decision,2 promulgated by the
National Labor Relations Commission (NLRC) on 7 May 2004. The
Court of Appeals, in its assailed Decision, declared that respondents
are regular employees who were illegally dismissed by petitioner
Hanjin Heavy Industries and & Construction Company, Limited
(HANJIN).
Petitioner HANJIN is a foreign company duly registered with the
Securities and Exchange Commission to engage in the construction
business in the Philippines. Petitioners Hak Kon Kim and Jhunie
Adajar were employed as Project Director and Supervisor,
respectively, by HANJIN.
On 11 April 2002, respondents Felicito Ibañez, Aligwas Carolino,
Elmer Gacula, Enrique Dagotdot, Ruel Calda, and four other co-
workers filed a complaint before the NLRC, docketed as NLRC Case
No. RAB-IV-04-15515-02-RI, for illegal dismissal with prayer for
reinstatement and full backwages against petitioners. In their
Position Paper dated 29 July 2002, respondents alleged that
HANJIN hired them for various positions on different dates,
hereunder specified:
Position
Felicito Ibañez Tireman
Elmer Gacula Crane Operator
Enrique Dagotdot Welder
Aligwas Carolino Welder
Ruel Calda Warehouseman
Respondents stated that their tasks were usual and necessary or
desirable in the usual business or trade of HANJIN. Respondents
additionally averred that they were employed as members of a work
pool from which HANJIN draws the workers to be dispatched to its
various construction projects; with the exception of Ruel Calda, who
as a warehouseman was required to work in HANJIN's main
office.4 Among the various construction projects to which they were
supposedly assigned, respondents named the North Harbor project
in 1992-1994; Manila International Port in 1994-1996; Batangas Port
in 1996-1998; the Batangas Pier, and La Mesa Dam.5
On 15 April 2002, Hanjin dismissed respondents from employment.
Respondents claimed that at the time of their dismissal, HANJIN had
several construction projects that were still in progress, such as
Metro Rail Transit (MRT) II and MRT III, and continued to hire
employees to fill the positions vacated by the respondents.6
Petitioners denied the respondents' allegations. They maintained
that respondents were hired as project employees for the
construction of the LRT/MRT Line 2 Package 2 and 3 Project.
HANJIN and respondents purportedly executed contracts of
employment, in which it was clearly stipulated that the respondents
were to be hired as project employees for a period of only three
months, but that the contracts may be renewed, to wit:
Article II
TERM OF AGREEMENT
This Agreement takes effect xxx for the duration of three
(3) months and shall be considered automatically renewed
in the absence of any Notice of Termination by the
EMPLOYER to the PROJECT EMPLOYEE.
This AGREEMENT automatically terminates at the
completion of the project or any particular phase
thereof, depending upon the progress of the project.7
However, petitioners failed to furnish the Labor Arbiter a copy of said
contracts of employment.
Petitioners asserted that respondents were duly informed of
HANJIN's policies, rules and regulations, as well as the terms of
their contracts. Copies of the employees' rules and regulations were
posted on the bulletin boards of all HANJIN campsite offices. 8
Petitioners further emphasized that prior to 15 April 2002, Hak Kon
Kim, HANJIN's Project Director, notified respondents of the
company's intention to reduce its manpower due to the completion
of the LRT/MRT Line 2 Package 2 and 3 Project. Respondents were
among the project employees who were thereafter laid off, as shown
in the Establishment Termination Report filed by HANJIN before the
Department of Labor and Employment (DOLE) Regional Office (IV)
in Cainta, Rizal on 11 April 2002.9
4
Finally, petitioners insist that in accordance with the usual practice of
the construction industry, a completion bonus was paid to the
respondents.10 To support this claim, they offered as evidence
payroll records for the period 4 April 2002 to 20 April 2002, with the
words "completion bonus" written at the lower left corner of each
page.11
Petitioners attached copies of the Quitclaims,12 executed by the
respondents, which uniformly stated that the latter received all
wages and benefits that were due them and released HANJIN and
its representatives from any claims in connection with their
employment. These Quitclaims also contained Clearance
Certificates which confirmed that the employees concerned were
cleared of all accountabilities at the close of the working hours on 15
April 2002.
In their Reply13 dated 27 August 2002, respondents vehemently
refuted having signed any written contract stating that they were
project employees.
The Labor Arbiter found merit in the respondents' complaint and
declared that they were regular employees who had been dismissed
without just and valid causes and without due process. It ruled that
HANJIN's allegation that respondents were project employees was
negated by its failure to present proof thereof. It also noted that a
termination report should be presented after the completion of every
project or a phase thereof and not just the completion of one of
these projects. The Labor Arbiter further construed the number of
years that respondents rendered their services for HANJIN as an
indication that respondents were regular, not project,
employees.14 The Labor Arbiter ordered in its Decision, dated 30
April 2003, that:
WHEREFORE, premises considered, judgment is hereby
rendered as follows;
1) Declaring respondent HANJIN HEAVY INDUSTRIES &
CONSTRUCTION CO. LTD. guilty of illegal dismissal
>2) Ordering respondent to reinstate all the complainants
to positions previously occupied by them with full
backwages from the time compensation was withheld
from them up to date of actual reinstatement in the
following amount (as of date of this decision):
1. Felicito Ibañez
2. Elmer A. Gacula
3. Rizalino De Vera
4. Enrique Dagotdot
5. Carolino Aligwas
6. Ruel Calda
7. Roldan Lanojan
8. Pascual Caranguian
9. Carmelito Dalumangcad
Total
3) In lieu of reinstatement, respondent is ordered to pay
complainants their separation pay in the following sum:
Felicito Ibañez
Elmer A. Gacula
Rizaliano De Vera
Enrique Dagotdot
Carolino Aligwas
Ruel Calda
Roldan Lanojan
Pascual Caranguian
Carmelito Dalumangcad
Total
4) Ordering respondent to pay each
complainant P50,000.00 for moral damages
and P30,000.00 as exemplary damages, or the total sum
of P450,000.00 and P270,000.00, respectively; and
5) Ordering respondent to pay complainants litigation
expenses in the sum of P30,000.00
All other claims are DISMISSED for lack of merit.15
Petitioners filed an appeal before the NLRC. In their Notice of
Appeal/Memorandum Appeal16 dated 5 July 2003, petitioners
discarded their earlier claim that respondents signed employment
contracts, unequivocally informing them of their status as project
employees. Nonetheless, they still contended that the absence of
respondents' contracts of employment does not vest the latter with
regular status.
The NLRC reversed the Labor Arbiter's Decision dated 30 April
2003, and pronounced that the respondents were project employees
who were legally terminated from employment.17 The NLRC gave
probative value to the Termination Report submitted by HANJIN to
the DOLE, receipts signed by respondents for their completion
bonus upon phase completion, and the Quitclaims executed by the
respondents in favor of HANJIN. The NLRC also observed that the
records were devoid of any proof to support respondents' allegation
that they were employed before 1997, the time when construction
work on the MRT started. Lastly, it overruled the Labor Arbiter's
award of moral and exemplary damages.18 The dispositive part of
the Decision dated 7 May 2004 of the NLCR states that:
WHEREFORE, in view of the foregoing, the decision
subject of appeal is hereby REVERSED and SET ASIDE
and a new one is entered DISMISSING complainants'
complaint for lack of merit.19
On appeal, the Court of Appeals reversed the NLRC Decision, dated
7 May 2004. The appellate court looked with disfavor at the change
in HANJIN's initial position before the Labor Arbiter-from its initial
argument that respondents executed employment contracts; to its
modified argument during its appeal before the NLRC-that
respondents could still be categorized as project workers despite the
absence of contracts of employment. Additionally, it adjudged the
Termination Report as inconclusive proof that respondents were
project employees. Emphasizing that the employer had the burden
of proving the legality of the dismissal, the appellate court ruled that
respondents were regular employees and upheld the Labor Arbiter's
finding that they were illegally dismissed. The Court of Appeals,
however, adopted the NLRC's deletion of the award of
damages.20 The decretal portion of the Decision of the Court of
Appeals reads:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the
challenged decision and resolution of the NLRC must be,
as they hereby are, REVERSED and SET ASIDE. The
decision of the Labor Arbiter is
hereby REINSTATED relative to the award to petitioners
P 88,020.83
of full backwages, separation pay in lieu of reinstatement,
and88,020.83
litigation expenses, but not with respect to the awards
for88,020.83
moral damages or for exemplary damages, both of
which are hereby DELETED. Without costs in this
88,020.83
21
instance.
88,020.83
88,020.83
Hence, the present Petition, in which the following issues are raised:
88,020.83
88,020.83
88,020.83 I
P792, 187.47
WHETHER OR NOT THE FINDINGS OF THE
HONORABLE COURT OF APPEALS ARE MERE
CONCLUSIONS WITHOUT DELVING INTO THE
RECORDS OF THE CASE AND EXAMINE (sic) FOR
ITSELF THE QUESTIONED FINDINGS OF THE LABOR
P 19,500.00
ARBITER AND THE NATIONAL LABOR RELATIONS
71,500.00 CONTRARY TO THE RULING IN THE
COMMISSION
CASE OF AGABON VS. NLRC, ET. AL. 442 SCRA 573.
19,500.00
52,000.00
58,500.00 II
45,500.00
19,500.00OR NOT THE HONORABLE COURT OF
WHETHER
26,000.00
APPEALS MANIFESTLY OVERLOOKED CERTAIN
RELEVANT
78,000.00 FACTS WHICH, IF PROPERLY
CONSIDERED, WOULD RESULT IN A DIFFERENT
P390,000.00
CONCLUSION.
III
WHETHER OR NOT THE HONORABLE COURT OF
APPEALS ERRED IN NOT APPLYING THE PERTINENT
PROVISIONS OF POLICY INSTRUCTIONS NO. 20, AS
AMENDED BY DEPARTMENT ORDER NO. 19 SERIES
OF 1993 IN RELATION TO ARTICLE 280 OF THE
LABOR CODE IN CONSIDERING WHETHER OR NOT
RESPONDENTS ARE PROJECT EMPLOYEES.
5
 IV
THE HONORABLE COURT OF APPEALS ERRED IN
RULING THAT RESPONDENTS WERE ILLEGALLY
DISMISSED.22
The Petition is without merit.
As a general rule, the factual findings of the Court of Appeals are
binding upon the Supreme Court. One exception to this rule is when
the factual findings of the former are contrary to those of the trial
court or the lower administrative body, as the case may be. The
main question that needs to be settled-whether respondents were
regular or project employees-is factual in nature. Nevertheless, this
Court is obliged to resolve it due to the incongruent findings of the
NLRC and those of the Labor Arbiter and the Court of Appeals. 23
Article 280 of the Labor Code distinguishes a "project employee"
from a "regular employee" thus:
Article 280. Regular and Casual Employment-The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform
activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the
employment has been fixed for a specific project or
undertaking the completion or termination of which has
been determined at the time of the engagement of the
employee or where the work or services to be performed
is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year service,
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity
in which he is employed and his employment shall
continue while such activity exists. (Emphasis supplied.)
From the foregoing provision, the principal test for determining
whether particular employees are properly characterized as "project
employees" as distinguished from "regular employees" is whether or
not the project employees were assigned to carry out a "specific
project or undertaking," the duration and scope of which were
specified at the time the employees were engaged for that project.24
In a number of cases, 25 the Court has held that the length of service
or the re-hiring of construction workers on a project-to-project basis
does not confer upon them regular employment status, since their
re-hiring is only a natural consequence of the fact that experienced
construction workers are preferred. Employees who are hired for
carrying out a separate job, distinct from the other undertakings of
the company, the scope and duration of which has been determined
and made known to the employees at the time of the employment,
are properly treated as project employees and their services may be
lawfully terminated upon the completion of a project.26 Should the
terms of their employment fail to comply with this standard, they
cannot be considered project employees.
In Abesco Construction and Development Corporation v.
Ramirez,27 which also involved a construction company and its
workers, this Court considered it crucial that the employees were
informed of their status as project employees:
The principal test for determining whether employees are
"project employees" or "regular employees" is whether
they are assigned to carry out a specific project or
undertaking, the duration and scope of which are specified
at the time they are engaged for that project. Such
duration, as well as the particular work/service to be
performed, is defined in an employment agreement and is
made clear to the employees at the time of hiring.
In this case, petitioners did not have that kind of
agreement with respondents. Neither did they inform
respondents of the nature of the latters' work at the time of
hiring. Hence, for failure of petitioners to substantiate their
claim that respondents were project employees, we are
constrained to declare them as regular employees.
In Caramol v. National Labor Relations Commission,28 and later
reiterated in Salinas, Jr. v. National Labor Relations
Commission,29 the Court markedly stressed the importance of the
employees' knowing consent to being engaged as project
employees when it clarified that "there is no question that stipulation
on employment contract providing for a fixed period of employment
such as `project-to-project' contract is valid provided the period
was agreed upon knowingly and voluntarily by the parties,
without any force, duress or improper pressure being brought
to bear upon the employee and absent any other circumstances
vitiating his consent x x x."
During the proceedings before the Labor Arbiter, the petitioners'
failure to produce respondents' contracts of employment was
already noted, especially after they alleged in their pleadings the
existence of such contracts stipulating that respondents'
employment would only be for the duration of three months,
automatically renewed in the absence of notice, and terminated at
the completion of the project. Respondents denied having executed
such contracts with HANJIN. In their appeal before the NLRC until
the present, petitioners now claim that due to a lapse in
management procedure, no such employment contracts were
executed; nonetheless, the absence of a written contract does not
remove respondents from the ambit of being project employees.30
While the absence of a written contract does not automatically
confer regular status, it has been construed by this Court as a red
flag in cases involving the question of whether the workers
concerned are regular or project employees. In Grandspan
Development Corporation v. Bernardo31 and Audion Electric Co.,
Inc. v. National Labor Relations Commission,32 this Court took note
of the fact that the employer was unable to present employment
contracts signed by the workers, which stated the duration of the
project. In another case, Raycor v. Aircontrol Systems, Inc. v.
National Labor Relations Commission,33 this Court refused to give
any weight to the employment contracts offered by the employers as
evidence, which contained the signature of the president and
general manager, but not the signatures of the employees. In cases
where this Court ruled that construction workers repeatedly rehired
retained their status as project employees, the employers were able
to produce employment contracts clearly stipulating that the workers'
employment was coterminous with the project to support their claims
that the employees were notified of the scope and duration of the
project.34
Hence, even though the absence of a written contract does not by
itself grant regular status to respondents, such a contract is
evidence that respondents were informed of the duration and scope
of their work and their status as project employees. In this case,
where no other evidence was offered, the absence of an
employment contract puts into serious question whether the
employees were properly informed at the onset of their employment
status as project employees. It is doctrinally entrenched that in
illegal dismissal cases, the employer has the burden of proving with
clear, accurate, consistent and convincing evidence that a dismissal
was valid.35 Absent any other proof that the project employees were
informed of their status as such, it will be presumed that they are
regular employees in accordance with Clause 3.3(a) of Department
Order No. 19, Series of 1993, which states that:
a) Project employees whose aggregate period of
continuous employment in a construction company is
at least one year shall be considered regular
employees, in the absence of a "day certain" agreed
upon by the parties for the termination of their
relationship. Project employees who have become regular
shall be entitled to separation pay.
A "day" as used herein, is understood to be that which
must necessarily come, although it may not be known
exactly when. This means that where the final completion
of a project or phase thereof is in fact determinable and
the expected completion is made known to the employee,
such project employee may not be considered regular,
notwithstanding the one-year duration of employment in
the project or phase thereof or the one-year duration of
two or more employments in the same project or phase of
the project. (Emphasis provided.)
Petitioners call attention to the fact that they complied with two of the
indicators of project employment, as prescribed under Section 2.2(e)
and (f) of Department Order No. 19, Series of 1993, entitled
Guidelines Governing the Employment of Workers in the
Construction Industry, issued by the DOLE:
2.2 Indicators of project employment. - Either one or more
of the following circumstances, among others, may be
6
 considered as indicators that an employee is a project
employee.
(a) The duration of the specific/identified undertaking for
which the worker is engaged is reasonably determinable.
(b) Such duration, as well as the specific work/service to
be performed, is defined in an employment agreement
and is made clear to the employee at the time of hiring.
(c) The work/service performed by the employee is in
connection with the particular project/undertaking for
which he is engaged.
(d) The employee, while not employed and awaiting
engagement, is free to offer his services to any other
employer.
(e) The termination of his employment in the
particular project/undertaking is reported to the
Department of Labor and Employment (DOLE)
Regional Office having jurisdiction over the workplace
within 30 days following the date of his separation
from work, using the prescribed form on employees'
terminations/dismissals/suspensions.
(f) An undertaking in the employment contract by the
employer to pay completion bonus to the project
employee as practiced by most construction
companies. (Emphasis provided.)
Petitioners argue that the Termination Report filed before the DOLE
Regional Office (IV) in Cainta, Rizal on 11 April 2002 signifies that
respondents' services were engaged merely for the LRT/MRT Line 2
Package 2 and 3 Project.
Given the particular facts established in this case, petitioners'
argument fails to persuade this Court. Petitioners were not able to
offer evidence to refute or controvert the respondents' claim that
they were assigned to various construction projects, particularly the
North Harbor Project in 1992-1994; Manila International Port in
1994-1996; Batangas Port in 1996-1998; the Batangas Pier; and La
Mesa Dam.36 Had respondents' allegations been false, petitioners
could simply present as evidence documents and records in their
custody to disprove the same, i.e., payroll for such projects or
termination reports, which do not bear respondents' names.
Petitioners, instead, chose to remain vague as to the circumstances
surrounding the hiring of the respondents. This Court finds it unusual
that petitioners cannot even categorically state the exact year when
HANJIN employed respondents.
It also bears to note that petitioners did not present other
Termination Reports apart from that filed on 11 April 2002. The
failure of an employer to file a Termination Report with the DOLE
every time a project or a phase thereof is completed indicates that
respondents were not project employees.37 Employers cannot
mislead their employees, whose work is necessary and desirable in
the former's line of business, by treating them as though they are
part of a work pool from which workers could be continually drawn
and then assigned to various projects and thereafter denied regular
status at any time by the expedient act of filing a Termination
Report. This would constitute a practice in which an employee is
unjustly precluded from acquiring security of tenure, contrary to
public policy, morals, good customs and public order.38
In this case, only the last and final termination of petitioners was
reported to the DOLE. If respondents were actually project
employees, petitioners should have filed as many Termination
Reports as there were construction projects actually finished and for
which respondents were employed. Thus, a lone Termination Report
filed by petitioners only upon the termination of the respondents'
final project, and after their previous continuous employment for
other projects, is not only unconvincing, but even suspicious.
Petitioners insist that the payment to the respondents of a
completion bonus indicates that respondents were project
employees. To support their claim, petitioners presented payroll
records for the period 4 April 2002 to 20 April 2002, with the words
"completion bonus" written at the lower left corner of each
page.39 The amount paid to each employee was equivalent to his
fifteen-day salary. Respondents, however, deny receiving any such
amount.
Assuming that petitioners actually paid respondents a completion
bonus, petitioners failed to present evidence showing that they
undertook to pay respondents such a bonus upon the completion of
the project, as provided under Section 2.2(f) of Department Order
No. 19, Series of 1993.40 Petitioners did not even allege how the
"completion bonus" was to be computed or the conditions that must
be fulfilled before it was to be given. A completion bonus, if paid as a
mere afterthought, cannot be used to determine whether or not the
employment was regular or merely for a project. Otherwise, an
employer may defeat the workers' security of tenure by paying them
a completion bonus at any time it is inclined to unjustly dismiss
them.
Department Order No. 19, Series of 1993, provides that in the
absence of an undertaking that the completion bonus will be paid to
the employee, as in this case, the employee may be considered a
non-project employee, to wit:
3.4 Completion of the project. Project employees who
are separated from work as a result of the completion of
the project or any phase thereof in which they are
employed are entitled to the pro-rata completion bonus if
there is an undertaking by for the grant of such
bonus. An undertaking by the employer to pay a
completion bonus shall be an indicator that an
employee is a project employee. Where there is no
such undertaking, the employee may be considered a
non-project employee. The pro-rata completion bonus
may be based on the industry practice which is at least
the employee's one-half (1/2) month salary for every 12
months of service and may be put into effect for any
project bid (in case of bid projects) or tender submitted (in
case of negotiated projects) thirty (30) days from the date
of issuances of these Guidelines. (Emphasis supplied.)
Furthermore, after examining the payroll documents submitted by
petitioners, this Court finds that the payments termed as "completion
bonus" are not the completion bonus paid in connection with the
termination of the project. First of all, the period from 4 April 2002 to
20 April 2002, as stated in the payrolls, bears no relevance to a
completion bonus. A completion bonus is paid in connection with the
completion of the project, and is not based on a fifteen-day period.
Secondly, the amount paid to each employee as his completion
bonus was uniformly equivalent to his fifteen-day wages, without
consideration of the number of years of service rendered. Section
3.4 of Department Order No. 19, Series of 1993, provides that based
on industry practice, the completion bonus is at least the employee's
one-half month salary for every twelve months of service.
Finally, the Quitclaims which the respondents signed cannot bar
them from demanding what is legally due them as regular
employees. As a rule, quitclaims and waivers or releases are looked
upon with disfavor and frowned upon as contrary to public policy.
They are thus ineffective to bar claims for the full measure of a
worker's legal rights, particularly when the following conditions are
applicable: 1) where there is clear proof that the waiver was wangled
from an unsuspecting or gullible person, or (2) where the terms of
settlement are unconscionable on their face.41 To determine whether
the Quitclaims signed by respondents are valid, one important factor
that must be taken into account is the consideration accepted by
respondents; the amount must constitute a reasonable settlement
equivalent to the full measure of their legal rights.42 In this case, the
Quitclaims signed by the respondents do not appear to have been
made for valuable consideration. Respondents, who are regular
employees, are entitled to backwages and separation pay and,
therefore, the Quitclaims which they signed cannot prevent them
from seeking claims to which they are entitled.43
Due to petitioners' failure to adduce any evidence showing that
petitioners were project employees who had been informed of the
duration and scope of their employment, they were unable to
discharge the burden of proof required to establish that respondents'
dismissal was legal and valid. Furthermore, it is a well-settled
doctrine that if doubts exist between the evidence presented by the
employer and that by the employee, the scales of justice must be
tilted in favor of the latter.44 For these reasons, respondents are to
be considered regular employees of HANJIN.
Finally, in the instant case, records failed to show that HANJIN
afforded respondents, as regular employees, due process prior to
their dismissal, through the twin requirements of notice and hearing.
Respondents were not served notices informing them of the
particular acts for which their dismissal was sought. Nor were they
required to give their side regarding the charges made against them.
Certainly, the respondents' dismissal was not carried out in
accordance with law and was, therefore, illegal. 45
7
IN VIEW OF THE FOREGOING, the instant Petition is DENIED.
This Court AFFIRMS the assailed Decision of the Court of Appeals
in CA-G.R. SP No. 87474, promulgated on 28 July 2005, declaring
that the respondents are regular employees who have been illegally
dismissed by Hanjin Heavy Industries & Construction Company,
Limited, and are, therefore, entitled to full backwages, separation
pay, and litigation expenses. Costs against the petitioners.
SO ORDERED.
G.R. No. 192514 April 18, 2012
D.M. CONSUNJI, INC. and/or DAVID M. CONSUNJI, Petitioners,
vs.
ESTELITO L. JAMIN, Respondent.
DECISION
BRION, J.:
We resolve the present appeal1 from the decision2 dated February
26, 2010 and the resolution3 dated June 3, 2010 of the Court of
Appeals (CA) in CA-G.R. SP No. 100099.
The Antecedents
On December 17, 1968, petitioner D.M. Consunji, Inc. (DMCI), a
construction company, hired respondent Estelito L. Jamin as a
laborer. Sometime in 1975, Jamin became a helper carpenter. Since
his initial hiring, Jamin’s employment contract had been renewed a
number of times.4 On March 20, 1999, his work at DMCI was
terminated due to the completion of the SM Manila project. This
termination marked the end of his employment with DMCI as he was
not rehired again.
On April 5, 1999, Jamin filed a complaint5 for illegal dismissal, with
several money claims (including attorney’s fees), against DMCI and
its President/General Manager, David M. Consunji. Jamin alleged
that DMCI terminated his employment without a just and authorized
cause at a time when he was already 55 years old and had no
independent source of livelihood. He claimed that he rendered
service to DMCI continuously for almost 31 years. In addition to the
schedule of projects (where he was assigned) submitted by DMCI to
the labor arbiter,6 he alleged that he worked for three other DMCI
projects: Twin Towers, Ritz Towers, from July 29, 1980 to June 12,
1982; New Istana Project, B.S.B. Brunei, from June 23, 1982 to
February 16, 1984; and New Istana Project, B.S.B. Brunei, from
January 24, 1986 to May 25, 1986.
DMCI denied liability. It argued that it hired Jamin on a project-to-
project basis, from the start of his engagement in 1968 until the
completion of its SM Manila project on March 20, 1999 where Jamin
last worked. With the completion of the project, it terminated Jamin’s
employment. It alleged that it submitted a report to the Department
of Labor and Employment (DOLE) everytime it terminated Jamin’s
services.
The Compulsory Arbitration Rulings
In a decision dated May 27, 2002,7 Labor Arbiter Francisco A.
Robles dismissed the complaint for lack of merit. He sustained
DMCI’s position that Jamin was a project employee whose services
had been terminated due to the completion of the project where he
was assigned. The labor arbiter added that everytime DMCI rehired
Jamin, it entered into a contract of employment with him. Moreover,
upon completion of the phase of the project for which Jamin was
hired or upon completion of the project itself, the company served a
notice of termination to him and a termination report to the DOLE
Regional Office. The labor arbiter also noted that Jamin had to file
an application if he wanted to be re-hired.
On appeal by Jamin, the National Labor Relations Commission
(NLRC), in its decision of April 18, 2007,8 dismissed the appeal and
affirmed the labor arbiter’s finding that Jamin was a project
employee. Jamin moved for reconsideration, but the NLRC denied
the motion in a resolution dated May 30, 2007.9 Jamin sought relief
from the CA through a petition for certiorari under Rule 65 of the
Rules of Court.
The CA Decision
On February 26, 2010, the CA Special Fourth Division rendered the
disputed decision10 reversing the compulsory arbitration rulings. It
held that Jamin was a regular employee. It based its conclusion on:
(1) Jamin’s repeated and successive rehiring in DMCI’s various
projects; and (2) the nature of his work in the projects — he was
performing activities necessary or desirable in DMCI’s construction
business. Invoking the Court’s ruling in an earlier case,11 the CA
declared that the pattern of Jamin’s rehiring and the recurring need
for his services are sufficient evidence of the necessity and
indispensability of such services to DMCI’s business or trade, a key
indicator of regular employment. It opined that although Jamin
started as a project employee, the circumstances of his employment
made it regular or, at the very least, has ripened into a regular
employment.
The CA considered the project employment contracts Jamin entered
into with DMCI for almost 31 years not definitive of his actual status
in the company. It stressed that the existence of such contracts is
not always conclusive of a worker’s employment status as this Court
explained in Liganza v. RBL Shipyard Corporation, et al.12It found
added support from Integrated Contractor and Plumbing Works, Inc.
v. NLRC,13 where the Court said that while there were several
employment contracts between the worker and the employer, in all
of them, the worker performed tasks which were usually necessary
or desirable in the usual business or trade of the employer and, a
review of the worker’s assignments showed that he belonged to a
work pool, making his employment regular.
Contrary to DMCI’s submission and the labor arbiter’s findings, the
CA noted that DMCI failed to submit a report to the DOLE Regional
Office everytime Jamin’s employment was terminated, as required
by DOLE Policy Instructions No. 20. The CA opined that DMCI’s
failure to submit the reports to the DOLE is an indication that Jamin
was not a project employee. It further noted that DOLE Department
Order No. 19, Series of 1993, which superseded DOLE Policy
Instructions No. 20, provides that the termination report is one of the
indicators of project employment.14
Having found Jamin to be a regular employee, the CA declared his
dismissal illegal as it was without a valid cause and without due
process. It found that DMCI failed to provide Jamin the required
notice before he was dismissed. Accordingly, the CA ordered
Jamin’s immediate reinstatement with backwages, and without loss
of seniority rights and other benefits.
DMCI moved for reconsideration, but the CA denied the motion in its
resolution of June 3, 2010.15 DMCI is now before the Court through a
petition for review on certiorari under Rule 45 of the Rules of
Court.16
The Petition
DMCI seeks a reversal of the CA rulings on the ground that the
appellate court committed a grave error in annulling the decisions of
the labor arbiter and the NLRC. It presents the following arguments:
1. The CA misapplied the phrase "usually necessary or
desirable in the usual business or trade of the employer"
when it considered Jamin a regular employee. The
definition of a regular employee under Article 280 of the
Labor Code does not apply to project employment or
"employment which has been fixed for a specific project,"
as interpreted by the Supreme Court in Fernandez v.
National Labor Relations Commission17and D.M.
Consunji, Inc. v. NLRC.18 It maintains the same project
employment methodology in its business operations and it
cannot understand why a different ruling or treatment
would be handed down in the present case.
2. There is no work pool in DMCI’s roster of project
employees. The CA erred in insinuating that Jamin
belonged to a work pool when it cited Integrated
Contractor and Plumbing Works, Inc. ruling.19 At any rate,
Jamin presented no evidence to prove his membership in
any work pool at DMCI.
3. The CA misinterpreted the rules requiring the
submission of termination of employment reports to the
DOLE. While the report is an indicator of project
employment, as noted by the CA, it is only one of several
indicators under the rules.20 In any event, the CA
penalized DMCI for a few lapses in its submission of
reports to the DOLE with a "very rigid application of the
rule despite the almost unanimous proofs surrounding the
circumstances of private respondent being a project
8
 employee as shown by petitioner’s documentary
evidence."21
4. The CA erred in holding that Jamin was dismissed
without due process for its failure to serve him notice prior
to the termination of his employment. As Jamin was not
dismissed for cause, there was no need to furnish him a
written notice of the grounds for the dismissal and neither
is there a need for a hearing. When there is no more job
for Jamin because of the completion of the project, DMCI,
under the law, has the right to terminate his employment
without incurring any liability. Pursuant to the rules
implementing the Labor Code,22if the termination is
brought about by the completion of the contract or phase
thereof, no prior notice is required.
Finally, DMCI objects to the CA’s reversal of the findings of the labor
arbiter and the NLRC in the absence of a showing that the labor
authorities committed a grave abuse of discretion or that evidence
had been disregarded or that their rulings had been arrived at
arbitrarily.
The Case for Jamin
In his Comment (to the Petition),23 Jamin prays that the petition be
denied for having been filed out of time and for lack of merit.
He claims, in support of his plea for the petition’s outright dismissal,
that DMCI received a copy of the CA decision (dated February 26,
2010) on March 4, 2010, as stated by DMCI itself in its motion for
reconsideration of the decision.24 Since DMCI filed the motion with
the CA on March 22, 2010, it is obvious, Jamin stresses, that the
motion was filed three days beyond the 15-day reglementary period,
the last day of which fell on March 19, 2010. He maintains that for
this reason, the CA’s February 26, 2010 decision had become final
and executory, as he argued before the CA in his Comment and
Opposition (to DMCI’s Motion for Reconsideration). 25
On the merits of the case, Jamin submits that the CA committed no
error in nullifying the rulings of the labor arbiter and the NLRC. He
contends that DMCI misread this Court’s rulings in Fernandez v.
National Labor Relations Commission, et al.26 and D.M. Consunji,
Inc. v. NLRC,27 cited to support its position that Jamin was a project
employee.
Jamin argues that in Fernandez, the Court explained that the
proviso in the second paragraph of Article 280 of the Labor Code
relates only to casual employees who shall be considered regular
employees if they have rendered at least one year of service,
whether such service is continuous or broken. He further argues that
in Fernandez, the Court held that inasmuch as the documentary
evidence clearly showed gaps of a month or months between the
hiring of Ricardo Fernandez in the numerous projects where he was
assigned, it was the Court’s conclusion that Fernandez had not
continuously worked for the company but only intermittently as he
was hired solely for specific projects.28 Also, in Fernandez, the Court
affirmed its rulings in earlier cases that "the failure of the employer to
report to the [nearest] employment office the termination of workers
everytime a project is completed proves that the employees are not
project employees."29
Jamin further explains that in the D.M. Consunji, Inc. case, the
company deliberately omitted portions of the Court’s ruling stating
that the complainants were not claiming that they were regular
employees; rather, they were questioning the termination of their
employment before the completion of the project at the Cebu Super
Block, without just cause and due process.30
In the matter of termination reports to the DOLE, Jamin disputes
DMCI’s submission that it committed only few lapses in the
reportorial requirement. He maintains that even the NLRC noted that
there were no termination reports with the DOLE Regional Office
after every completion of a phase of work, although the NLRC
considered that the report is required only for statistical purposes.
He, therefore, contends that the CA committed no error in holding
that DMCI’s failure to submit reports to the DOLE was an indication
that he was not a project employee.
Finally, Jamin argues that as a regular employee of DMCI for almost
31 years, the termination of his employment was without just cause
and due process.
The Court’s Ruling
The procedural issue
Was DMCI’s appeal filed out of time, as Jamin claims, and should
have been dismissed outright? The records support Jamin’s
submission on the issue.
DMCI received its copy of the February 26, 2010 CA decision on
March 4, 2010 (a Thursday), as indicated in its motion for
reconsideration of the decision itself,31 not on March 5, 2010 (a
Friday), as stated in the present petition.32The deadline for the filing
of the motion for reconsideration was on March 19, 2010 (15 days
from receipt of copy of the decision), but it was filed only on March
22, 2010 or three days late. Clearly, the motion for reconsideration
was filed out of time, thereby rendering the CA decision final and
executory.
Necessarily, DMCI’s petition for review on certiorari is also late as it
had only fifteen (15) days from notice of the CA decision to file the
petition or the denial of its motion for reconsideration filed in due
time.33 The reckoning date is March 4, 2010, since DMCI’s motion
for reconsideration was not filed in due time. We see no point in
exercising liberality and disregarding the late filing as we did in
Orozco v. Fifth Division of the Court of Appeals,34 where we ruled
that "[t]echnicality should not be allowed to stand in the way of
equitably and completely resolving the rights and obligations of the
parties." The petition lacks merit for its failure to show that the CA
committed any reversible error or grave abuse of discretion when it
reversed the findings of the labor arbiter and the NLRC.
As earlier mentioned, Jamin worked for DMCI for almost 31 years,
initially as a laborer and, for the most part, as a carpenter. Through
all those years, DMCI treated him as a project employee, so that he
never obtained tenure. On the surface and at first glance, DMCI
appears to be correct. Jamin entered into a contract of employment
(actually an appointment paper to which he signified his conformity)
with DMCI either as a field worker, a temporary worker, a casual
employee, or a project employee everytime DMCI needed his
services and a termination of employment paper was served on him
upon completion of every project or phase of the project where he
worked.35 DMCI would then submit termination of employment
reports to the DOLE, containing the names of a number of
employees including Jamin.36 The NLRC and the CA would later on
say, however, that DMCI failed to submit termination reports to the
DOLE.
The CA pierced the cover of Jamin’s project employment contract
and declared him a regular employee who had been dismissed
without cause and without notice. To reiterate, the CA’s findings
were based on: (1) Jamin’s repeated and successive engagements
in DMCI’s construction projects, and (2) Jamin’s performance of
activities necessary or desirable in DMCI’s usual trade or business.
We agree with the CA. In Liganza v. RBL Shipyard
Corporation,37 the Court held that "[a]ssuming, without granting[,]
that [the] petitioner was initially hired for specific projects or
undertakings, the repeated re-hiring and continuing need for his
services for over eight (8) years have undeniably made him a
regular employee." We find the Liganza ruling squarely applicable to
this case, considering that for almost 31 years, DMCI had
repeatedly, continuously and successively engaged Jamin’s
services since he was hired on December 17, 1968 or for a total of
38 times — 35 as shown by the schedule of projects submitted by
DMCI to the labor arbiter38 and three more projects or engagements
added by Jamin, which he claimed DMCI intentionally did not
include in its schedule so as to make it appear that there were wide
gaps in his engagements. One of the three projects was local, the
Ritz Towers,39 from July 29, 1980 to June 12, 1982, while the other
two were overseas — the New Istana Project in Brunei, Darussalam,
from June 23, 1982 to February 16, 1984;40 and again, the New
Istana Project, from January 24, 1986 to May 25, 1986.41
We reviewed Jamin’s employment contracts as the CA did and we
noted that while the contracts indeed show that Jamin had been
engaged as a project employee, there was an almost unbroken
string of Jamin’s rehiring from December 17, 1968 up to the
termination of his employment on March 20, 1999. While the history
of Jamin’s employment (schedule of projects)42 relied upon by DMCI
shows a gap of almost four years in his employment for the period
between July 28, 1980 (the supposed completion date of the
Midtown Plaza project) and June 13, 1984 (the start of the IRRI
Dorm IV project), the gap was caused by the company’s omission of
the three projects above mentioned.
For not disclosing that there had been other projects where DMCI
engaged his services, Jamin accuses the company of suppressing
vital evidence that supports his contention that he rendered service
9
in the company’s construction projects continuously and repeatedly
for more than three decades. The non-disclosure might not have
constituted suppression of evidence — it could just have been
overlooked by the company — but the oversight is unfair to Jamin as
the non-inclusion of the three projects gives the impression that
there were substantial gaps not only of several months but years in
his employment with DMCI.
Thus, as Jamin explains, the Ritz Tower Project (July 29, 1980 to
June 12, 1982) and the New Istana Project (June 23, 1982 to
February 16, 1984) would explain the gap between the Midtown
Plaza project (September 3, 1979 to July 28, 1980) and the IRRI
Dorm IV project (June 13, 1984 to March 12, 1985) and the other
New Istana Project (January 24, 1986 to May 25, 1986) would
explain the gap between P. 516 Hanger (September 13, 1985 to
January 23, 1986) and P. 516 Maint (May 26, 1986 to November 18,
1987).
To reiterate, Jamin’s employment history with DMCI stands out for
his continuous, repeated and successive rehiring in the company’s
construction projects. In all the 38 projects where DMCI engaged
Jamin’s services, the tasks he performed as a carpenter were
indisputably necessary and desirable in DMCI’s construction
business. He might not have been a member of a work pool as
DMCI insisted that it does not maintain a work pool, but his
continuous rehiring and the nature of his work unmistakably made
him a regular employee. In Maraguinot, Jr. v. NLRC,43 the Court held
that once a project or work pool employee has been: (1)
continuously, as opposed to intermittently, rehired by the same
employer for the same tasks or nature of tasks; and (2) these tasks
are vital, necessary and indispensable to the usual business or trade
of the employer, then the employee must be deemed a regular
employee.
Further, as we stressed in Liganza,44 "[r]espondent capitalizes on
our ruling in D.M. Consunji, Inc. v. NLRC which reiterates the rule
that the length of service of a project employee is not the controlling
test of employment tenure but whether or not ‘the employment has
been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee.’"
"Surely, length of time is not the controlling test for project
employment. Nevertheless, it is vital in determining if the employee
was hired for a specific undertaking or tasked to perform functions
vital, necessary and indispensable to the usual business or trade of
the employer. Here, [private] respondent had been a project
employee several times over. His employment ceased to be
coterminous with specific projects when he was repeatedly re-hired
due to the demands of petitioner’s business."45 Without doubt,
Jamin’s case fits squarely into the employment situation just quoted.
The termination reports
With our ruling that Jamin had been a regular employee, the issue of
whether DMCI submitted termination of employment reports,
pursuant to Policy Instructions No. 20 (Undated46 ), as superseded
by DOLE Department Order No. 19 (series of 1993), has become
academic. DOLE Policy Instructions No. 20 provides in part:
Project employees are not entitled to termination pay if they are
terminated as a result of the completion of the project or any phase
thereof in which they are employed, regardless of the number of
projects in which they have been employed by a particular
construction company. Moreover, the company is not required to
obtain a clearance from the Secretary of Labor in connection with
such termination. What is required of the company is a report to the
nearest Public Employment Office for statistical purposes. 47
To set the records straight, DMCI indeed submitted reports to the
DOLE but as pointed out by Jamin, the submissions started only in
1992.48 DMCI explained that it submitted the earlier reports (1982),
but it lost and never recovered the reports. It reconstituted the lost
reports and submitted them to the DOLE in October 1992; thus, the
dates appearing in the reports.49
Is David M. Consunji, DMCI’s
President/General Manager, liable
for Jamin’s dismissal?
While there is no question that the company is liable for Jamin’s
dismissal, we note that the CA made no pronouncement on whether
DMCI’s President/General Manager, a co-petitioner with the
company, is also liable.50Neither had the parties brought the matter
up to the CA nor with this Court. As there is no express finding of
Mr. Consunji’s involvement in Jamin’s dismissal, we deem it proper
to absolve him of liability in this case.
As a final point, it is well to reiterate a cautionary statement we
made in Maraguinot,51 thus:
At this time, we wish to allay any fears that this decision unduly
burdens an employer by imposing a duty to re-hire a project
employee even after completion of the project for which he was
hired. The import of this decision is not to impose a positive and
sweeping obligation upon the employer to re-hire project employees.
What this decision merely accomplishes is a judicial recognition of
the employment status of a project or work pool employee in
accordance with what is fait accompli, i.e., the continuous re-hiring
by the employer of project or work pool employees who perform
tasks necessary or desirable to the employer’s usual business or
trade.
In sum, we deny the present appeal for having been filed late and
for lack of any reversible error.1âwphi1 We see no point in
extending any liberality by disregarding the late filing as the petition
lacks merit.
WHEREFORE, premises considered, the petition is hereby DENIED
for late filing and for lack of merit. The decision dated February 26,
2010 and the resolution dated June 3, 2010 of the Court of Appeals
are AFFIRMED. Petitioner David M. Consunji is absolved of liability
in this case.
SO ORDERED.
G.R. No. 61594 September 28, 1990
PAKISTAN INTERNATIONAL AIRLINES
CORPORATION, petitioner,
vs
HON. BLAS F. OPLE, in his capacity as Minister of Labor; HON.
VICENTE LEOGARDO, JR., in his capacity as Deputy Minister;
ETHELYNNE B. FARRALES and MARIA MOONYEEN
MAMASIG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for
petitioner.
Ledesma, Saludo & Associates for private respondents.
FELICIANO, J.:
On 2 December 1978, petitioner Pakistan International Airlines
Corporation ("PIA"), a foreign corporation licensed to do business in
the Philippines, executed in Manila two (2) separate contracts of
employment, one with private respondent Ethelynne B. Farrales and
the other with private respondent Ma. M.C. Mamasig. 1The
contracts, which became effective on 9 January 1979, provided in
pertinent portion as follows:
5. DURATION OF EMPLOYMENT AND
PENALTY
This agreement is for a period of three (3)
years, but can be extended by the mutual
consent of the parties.
xxx xxx xxx
6. TERMINATION
xxx xxx xxx
Notwithstanding anything to contrary as herein
provided, PIA reserves the right to terminate
this agreement at any time by giving the
EMPLOYEE notice in writing in advance one
month before the intended termination or in lieu
thereof, by paying the EMPLOYEE wages
equivalent to one month's salary.
10
 xxx xxx xxx Art. 278 of the Labor Code, as it then existed, forbade the
termination of the services of employees with at least one (1) year of
service without prior clearance from the Department of Labor and
10. APPLICABLE LAW:
Employment:

This agreement shall be construed and

Art. 278. Miscellaneous Provisions — . . .
governed under and by the laws of Pakistan,
and only the Courts of Karachi, Pakistan shall
have the jurisdiction to consider any matter (b) With or without a collective agreement, no
arising out of or under this agreement. employer may shut down his establishment or
dismiss or terminate the employment of
employees with at least one year of service
Respondents then commenced training in Pakistan. After their
during the last two (2) years, whether such
training period, they began discharging their job functions as flight
service is continuous or broken, without prior
attendants, with base station in Manila and flying assignments to
written authority issued in accordance with such
different parts of the Middle East and Europe.
rules and regulations as the Secretary may
promulgate . . . (emphasis supplied)
On 2 August 1980, roughly one (1) year and four (4) months prior to
the expiration of the contracts of employment, PIA through Mr.
Rule XIV, Book No. 5 of the Rules and Regulations
Oscar Benares, counsel for and official of the local branch of PIA,
Implementing the Labor Code, made clear that in case of
sent separate letters both dated 1 August 1980 to private
a termination without the necessary clearance, the
respondents Farrales and Mamasig advising both that their services
Regional Director was authorized to order the
as flight stewardesses would be terminated "effective 1 September
reinstatement of the employee concerned and the
1980, conformably to clause 6 (b) of the employment agreement
payment of backwages; necessarily, therefore, the
[they had) executed with [PIA]."2
Regional Director must have been given jurisdiction over
such termination cases:
On 9 September 1980, private respondents Farrales and Mamasig
jointly instituted a complaint, docketed as NCR-STF-95151-80, for
Sec. 2. Shutdown or dismissal without
illegal dismissal and non-payment of company benefits and
clearance. — Any shutdown or dismissal
bonuses, against PIA with the then Ministry of Labor and
without prior clearance shall be conclusively
Employment ("MOLE"). After several unfruitful attempts at
presumed to be termination of employment
conciliation, the MOLE hearing officer Atty. Jose M. Pascual ordered
without a just cause. The Regional Director
the parties to submit their position papers and evidence supporting
shall, in such case order the immediate
their respective positions. The PIA submitted its position paper, 3 but
reinstatement of the employee and the payment
no evidence, and there claimed that both private respondents were
of his wages from the time of the shutdown or
habitual absentees; that both were in the habit of bringing in from
dismissal until the time of reinstatement.
abroad sizeable quantities of "personal effects"; and that PIA
(emphasis supplied)
personnel at the Manila International Airport had been discreetly
warned by customs officials to advise private respondents to
discontinue that practice. PIA further claimed that the services of Policy Instruction No. 14 issued by the Secretary of Labor,
both private respondents were terminated pursuant to the provisions dated 23 April 1976, was similarly very explicit about the
of the employment contract. jurisdiction of the Regional Director over termination of
employment cases:
In his Order dated 22 January 1981, Regional Director Francisco L.
Estrella ordered the reinstatement of private respondents with full Under PD 850, termination cases — with or
backwages or, in the alternative, the payment to them of the without CBA — are now placed under the
amounts equivalent to their salaries for the remainder of the fixed original jurisdiction of the Regional Director.
three-year period of their employment contracts; the payment to Preventive suspension cases, now made
private respondent Mamasig of an amount equivalent to the value of cognizable for the first time, are also placed
a round trip ticket Manila-USA Manila; and payment of a bonus to under the Regional Director. Before PD 850,
each of the private respondents equivalent to their one-month termination cases where there was a CBA were
salary. 4 The Order stated that private respondents had attained the under the jurisdiction of the grievance
status of regular employees after they had rendered more than a machinery and voluntary arbitration, while
year of continued service; that the stipulation limiting the period of termination cases where there was no CBA
the employment contract to three (3) years was null and void as were under the jurisdiction of the Conciliation
violative of the provisions of the Labor Code and its implementing Section.
rules and regulations on regular and casual employment; and that
the dismissal, having been carried out without the requisite
In more details, the major innovations
clearance from the MOLE, was illegal and entitled private
introduced by PD 850 and its implementing
respondents to reinstatement with full backwages.
rules and regulations with respect to termination
and preventive suspension cases are:
On appeal, in an Order dated 12 August 1982, Hon. Vicente
Leogardo, Jr., Deputy Minister, MOLE, adopted the findings of fact
1. The Regional Director is now required to rule
and conclusions of the Regional Director and affirmed the latter's
on every application for clearance, whether
award save for the portion thereof giving PIA the option, in lieu of
there is opposition or not, within ten days from
reinstatement, "to pay each of the complainants [private
receipt thereof.
respondents] their salaries corresponding to the unexpired portion of
the contract[s] [of employment] . . .". 5
xxx xxx xxx
In the instant Petition for Certiorari, petitioner PIA assails the award
of the Regional Director and the Order of the Deputy Minister as (Emphasis supplied)
having been rendered without jurisdiction; for having been rendered
without support in the evidence of record since, allegedly, no
hearing was conducted by the hearing officer, Atty. Jose M. Pascual; 2. The second contention of petitioner PIA is that, even if the
Regional Director had jurisdiction, still his order was null and void
and for having been issued in disregard and in violation of
petitioner's rights under the employment contracts with private because it had been issued in violation of petitioner's right to
respondents. procedural due process .6 This claim, however, cannot be given
serious consideration. Petitioner was ordered by the Regional
Director to submit not only its position paper but also such evidence
1. Petitioner's first contention is that the Regional Director, MOLE, in its favor as it might have. Petitioner opted to rely solely upon its
had no jurisdiction over the subject matter of the complaint initiated position paper; we must assume it had no evidence to sustain its
by private respondents for illegal dismissal, jurisdiction over the assertions. Thus, even if no formal or oral hearing was conducted,
same being lodged in the Arbitration Branch of the National Labor petitioner had ample opportunity to explain its side. Moreover,
Relations Commission ("NLRC") It appears to us beyond dispute, petitioner PIA was able to appeal his case to the Ministry of Labor
however, that both at the time the complaint was initiated in and Employment. 7
September 1980 and at the time the Orders assailed were rendered
on January 1981 (by Regional Director Francisco L. Estrella) and
There is another reason why petitioner's claim of denial of due
August 1982 (by Deputy Minister Vicente Leogardo, Jr.), the
Regional Director had jurisdiction over termination cases. process must be rejected. At the time the complaint was filed by

11
private respondents on 21 September 1980 and at the time the An employment shall be deemed to be casual if
Regional Director issued his questioned order on 22 January 1981, it is not covered by the preceding paragraph:
applicable regulation, as noted above, specified that a "dismissal provided, that, any employee who has rendered
without prior clearance shall be conclusively presumed to be at least one year of service, whether such
termination of employment without a cause", and the Regional service is continuous or broken, shall be
Director was required in such case to" order the immediate considered as regular employee with respect to
reinstatement of the employee and the payment of his wages from the activity in which he is employed and his
the time of the shutdown or dismiss until . . . reinstatement." In other employment shall continue while such actually
words, under the then applicable rule, the Regional Director did not exists. (Emphasis supplied)
even have to require submission of position papers by the parties in
view of the conclusive (juris et de jure) character of the presumption
In Brent School, Inc., et al. v. Ronaldo Zamora, etc., et al., 12 the
created by such applicable law and regulation. In Cebu Institute of
Court had occasion to examine in detail the question of whether
Technology v. Minister of Labor and Employment, 8 the Court
employment for a fixed term has been outlawed under the above
pointed out that "under Rule 14, Section 2, of the Implementing
quoted provisions of the Labor Code. After an extensive examination
Rules and Regulations, the termination of [an employee] which was
of the history and development of Articles 280 and 281, the Court
without previous clearance from the Ministry of Labor is conclusively
reached the conclusion that a contract providing for employment
presumed to be without [just] cause . . . [a presumption which]
with a fixed period was not necessarily unlawful:
cannot be overturned by any contrary proof however strong."

There can of course be no quarrel with the

3. In its third contention, petitioner PIA invokes paragraphs 5 and 6
proposition that where from the circumstances it
of its contract of employment with private respondents Farrales and
is apparent that periods have been imposed to
Mamasig, arguing that its relationship with them was governed by
preclude acquisition of tenurial security by the
the provisions of its contract rather than by the general provisions of
employee, they should be struck down or
the Labor Code. 9
disregarded as contrary to public policy, morals,
etc. But where no such intent to circumvent the
Paragraph 5 of that contract set a term of three (3) years for that law is shown, or stated otherwise, where the
relationship, extendible by agreement between the parties; while reason for the law does not exist e.g. where it is
paragraph 6 provided that, notwithstanding any other provision in indeed the employee himself who insists upon a
the Contract, PIA had the right to terminate the employment period or where the nature of the engagement is
agreement at any time by giving one-month's notice to the employee such that, without being seasonal or for a
or, in lieu of such notice, one-months salary. specific project, a definite date of termination is
a sine qua non would an agreement fixing a
period be essentially evil or illicit, therefore
A contract freely entered into should, of course, be respected, as
anathema Would such an agreement come
PIA argues, since a contract is the law between the parties. 10 The
within the scope of Article 280 which admittedly
principle of party autonomy in contracts is not, however, an absolute
was enacted "to prevent the circumvention of
principle. The rule in Article 1306, of our Civil Code is that the
the right of the employee to be secured in . . .
contracting parties may establish such stipulations as they may
(his) employment?"
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 As it is evident from even only the three
equally general rule that provisions of applicable law, especially examples already given that Article 280 of the
provisions relating to matters affected with public policy, are deemed Labor Code, under a narrow and literal
written into the contract. 11 Put a little differently, the governing interpretation, not only fails to exhaust the
principle is that parties may not contract away applicable provisions gamut of employment contracts to which the
of law especially peremptory provisions dealing with matters heavily lack of a fixed period would be an anomaly, but
impressed with public interest. The law relating to labor and would also appear to restrict, without
employment is clearly such an area and parties are not at liberty to reasonable distinctions, the right of an
insulate themselves and their relationships from the impact of labor employee to freely stipulate with his employer
laws and regulations by simply contracting with each other. It is thus the duration of his engagement, it logically
necessary to appraise the contractual provisions invoked by follows that such a literal interpretation should
petitioner PIA in terms of their consistency with applicable Philippine be eschewed or avoided. The law must be
law and regulations. given reasonable interpretation, to preclude
absurdity in its application. Outlawing the whole
concept of term employment and subverting to
As noted earlier, both the Labor Arbiter and the Deputy Minister,
boot the principle of freedom of contract to
MOLE, in effect held that paragraph 5 of that employment contract
remedy the evil of employers" using it as a
was inconsistent with Articles 280 and 281 of the Labor Code as
means to prevent their employees from
they existed at the time the contract of employment was entered
obtaining security of tenure is like cutting off the
into, and hence refused to give effect to said paragraph 5. These
nose to spite the face or, more relevantly, curing
Articles read as follows:
a headache by lopping off the head.

Art. 280. Security of Tenure. — In cases of

regular employment, the employer shall not
terminate the services of an employee except
for a just cause or when authorized by this Title
An employee who is unjustly dismissed from
work shall be entitled to reinstatement without
loss of seniority rights and to his backwages
computed from the time his compensation was
withheld from him up to the time his
reinstatement.
Art. 281. Regular and Casual Employment. The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral
agreements of the parties, an employment shall
be deemed to be regular where the employee
has been engaged to perform activities which
are usually necessary or desirable in the usual
business or trade of the employer, except where
the employment has been fixed for a specific
project or undertaking the completion or
termination of which has been determined at the
time of the engagement of the employee or
where the work or services to be performed is
seasonal in nature and the employment is for
the duration of the season.
xxx xxx xxx
Accordingly, and since the entire purpose
behind the development of legislation
culminating in the present Article 280 of the
Labor Code clearly appears to have been, as
already observed, to prevent circumvention of
the employee's right to be secure in his tenure,
the clause in said article indiscriminately and
completely ruling out all written or oral
agreements conflicting with the concept of
regular employment as defined therein should
be construed to refer to the substantive evil that
the Code itself has singled out: agreements
entered into precisely to circumvent security of
tenure. It should have no application to
instances where a fixed period of employment
was agreed upon knowingly and voluntarily by
the parties, without any force, duress or
improper pressure being brought to bear upon
the employee and absent any other
circumstances vitiating his consent, or where it
satisfactorily appears that the employer and
employee dealt with each other on more or less
equal terms with no moral dominance whatever
being exercised by the former over the
latter. Unless thus limited in its purview, the law
12
 would be made to apply to purposes other than
those explicitly stated by its framers; it thus
becomes pointless and arbitrary, unjust in its
effects and apt to lead to absurd and
unintended consequences. (emphasis supplied)
It is apparent from Brent School that the critical
consideration is the presence or absence of a substantial
indication that the period specified in an employment
agreement was designed to circumvent the security of
tenure of regular employees which is provided for in
Articles 280 and 281 of the Labor Code. This indication
must ordinarily rest upon some aspect of the agreement
other than the mere specification of a fixed term of the
ernployment agreement, or upon evidence aliunde of the
intent to evade.
Examining the provisions of paragraphs 5 and 6 of the employment
agreement between petitioner PIA and private respondents, we
consider that those provisions must be read together and when so
read, the fixed period of three (3) years specified in paragraph 5 will
be seen to have been effectively neutralized by the provisions of
paragraph 6 of that agreement. Paragraph 6 in effect took back from
the employee the fixed three (3)-year period ostensibly granted by
paragraph 5 by rendering such period in effect a facultative one at
the option of the employer PIA. For petitioner PIA claims to be
authorized to shorten that term, at any time and for any cause
satisfactory to itself, to a one-month period, or even less by simply
paying the employee a month's salary. Because the net effect of
paragraphs 5 and 6 of the agreement here involved is to render the
employment of private respondents Farrales and Mamasig basically
employment at the pleasure of petitioner PIA, the Court considers
that paragraphs 5 and 6 were intended to prevent any security of
tenure from accruing in favor of private respondents even during the
limited period of three (3) years,13 and thus to escape completely the
thrust of Articles 280 and 281 of the Labor Code.
Petitioner PIA cannot take refuge in paragraph 10 of its employment
agreement which specifies, firstly, the law of Pakistan as the
applicable law of the agreement and, secondly, lays the venue for
settlement of any dispute arising out of or in connection with the
agreement "only [in] courts of Karachi Pakistan". The first clause of
paragraph 10 cannot be invoked to prevent the application of
Philippine labor laws and regulations to the subject matter of this
case, i.e., the employer-employee relationship between petitioner
PIA and private respondents. We have already pointed out that the
relationship 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. Neither may petitioner invoke the second
clause of paragraph 10, specifying the Karachi courts as the sole
venue for the settlement of dispute; between the contracting parties.
Even a cursory scrutiny of the relevant circumstances of this case
will show the multiple and substantive contacts between Philippine
law and Philippine courts, on the one hand, and the relationship
between the parties, upon the other: the contract was not only
executed in the Philippines, it was also performed here, at least
partially; private respondents are Philippine citizens and
respondents, while petitioner, although a foreign corporation, is
licensed to do business (and actually doing business) and hence
resident in the Philippines; lastly, private respondents were based in
the Philippines in between their assigned flights to the Middle East
and Europe. All the above contacts point to the Philippine courts and
administrative agencies as a proper forum for the resolution of
contractual disputes between the parties. Under these
circumstances, paragraph 10 of the employment agreement cannot
be given effect so as to oust Philippine agencies and courts of the
jurisdiction vested upon them by Philippine law. Finally, and in any
event, the petitioner PIA did not undertake to plead and prove the
contents of Pakistan law on the matter; it must therefore be
presumed that the applicable provisions of the law of Pakistan are
the same as the applicable provisions of Philippine law.14
We conclude that private respondents Farrales and Mamasig were
illegally dismissed and that public respondent Deputy Minister,
MOLE, had not committed any grave abuse of discretion nor any act
without or in excess of jurisdiction in ordering their reinstatement
with backwages. Private respondents are entitled to three (3) years
backwages without qualification or deduction. Should their
reinstatement to their former or other substantially equivalent
positions not be feasible in view of the length of time which has gone
by since their services were unlawfully terminated, petitioner should
be required to pay separation pay to private respondents amounting
to one (1) month's salary for every year of service rendered by them,
including the three (3) years service putatively rendered.
ACCORDINGLY, the Petition for certiorari is hereby DISMISSED for
lack of merit, and the Order dated 12 August 1982 of public
respondent is hereby AFFIRMED, except that (1) private
respondents are entitled to three (3) years backwages, without
deduction or qualification; and (2) should reinstatement of private
respondents to their former positions or to substantially equivalent
positions not be feasible, then petitioner shall, in lieu thereof, pay to
private respondents separation pay amounting to one (1)-month's
salary for every year of service actually rendered by them and for
the three (3) years putative service by private respondents. The
Temporary Restraining Order issued on 13 September 1982 is
hereby LIFTED. Costs against petitioner.
SO ORDERED.
G.R. No. 122653 December 12, 1997
PURE FOODS CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, RODOLFO
CORDOVA, VIOLETA CRUSIS, ET AL., *respondents.
DAVIDE, JR., J.:
The crux of this petition for certiorari is the issue of whether
employees hired for a definite period and whose services are
necessary and desirable in the usual business or trade of the
employer are regular employees.
The private respondents (numbering 906) were hired by petitioner
Pure Foods Corporation to work for a fixed period of five months at
its tuna cannery plant in Tambler, General Santos City. After the
expiration of their respective contracts of employment in June and
July 1991, their services were terminated. They forthwith executed a
"Release and Quitclaim" stating that they had no claim whatsoever
against the petitioner.
On 29 July 1991, the private respondents filed before the National
Labor Relations Commission (NLRC) Sub-Regional Arbitration
Branch No. XI, General Santos City, a complaint for illegal dismissal
against the petitioner and its plant manager, Marciano
Aganon. 1 This case was docketed as RAB-11-08-50284-91.
On 23 December 1992, Labor Arbiter Arturo P. Aponesto handed
down a decision 2 dismissing the complaint on the ground that the
private respondents were mere contractual workers, and not regular
employees; hence, they could not avail of the law on security of
tenure. The termination of their services by reason of the expiration
of their contracts of employment was, therefore, justified. He pointed
out that earlier he had dismissed a case entitled "Lakas ng Anak-
Pawis-NOWM v. Pure Foods Corp." (Case No. RAB-11-02-00088-
88) because the complainants therein were not regular employees
of Pure Foods, as their contracts of employment were for a fixed
period of five months. Moreover, in another case involving the same
contractual workers of Pure Foods (Case No. R-196-ROXI-MED-
UR-55-89), then Secretary of Labor Ruben Torres held, in a
Resolution dated 30 April 1990, that the said contractual workers
were not regular employees.
The Labor Arbiter also observed that an order for private
respondents' reinstatement would result in the reemployment of
more than 10,000 former contractual employees of the petitioner.
Beside, by executing a "Release and Quitclaim," the private
respondents had waived and relinquished whatever right they might
have against the petitioner.
The private respondents appealed from the decision to the National
Labor Relations Commission (NLRC), Fifth Division, in Cagayan de
Oro City, which docketed the case as NLRC CA No. M-001323-93.
On 28 October 1994, the NLRC affirmed the Labor Arbiter's
decision. 3 However, on private respondents' motion for
reconsideration, the NLRC rendered another decision on 30 January
1995 4 vacating and setting aside its decision of 28 October 1994
and holding that the private respondent and their co-complainants
were regular employees. It declared that the contract of employment
for five months was a "clandestine scheme employed by [the
petitioner] to stifle [private respondents'] right to security of tenure"
and should therefore be struck down and disregarded for being
13
contrary to law, public policy, and morals. Hence, their dismissal on An employment shall be deemed to be casual if
account of the expiration of their respective contracts was illegal. it is not covered by the preceding
paragraph; Provided, That, any employee who
has rendered at least one year of service,
Accordingly, the NLRC ordered the petitioner to reinstate the private
whether such service is continuous or broken,
respondents to their former position without loss of seniority rights
shall be considered a regular employee with
and other privileges, with full back wages; and in case their
respect to the activity in which he is employed
reinstatement would no longer be feasible, the petitioner should pay
and his employment shall continue while such
them separation pay equivalent to one-month pay or one-half-month
activity exists.
pay for every year of service, whichever is higher, with back wages
and 10% of the monetary award as attorney's fees.
Thus, the two kinds of regular employees are (1) those who are
engaged to perform activities which are necessary or desirable in
Its motion for reconsideration having been denied, 5 the petitioner
the usual business or trade of the employer; and (2) those casual
came to this Court contending that respondent NLRC committed
employees who have rendered at least one year of service, whether
grave abuse of discretion amounting to lack of jurisdiction in
continuous or broken, with respect to the activity in which they are
reversing the decision of the Labor Arbiter.
employed.6

The petitioner submits that the private respondents are now

In the instant case, the private respondents' activities consisted in
estopped from questioning their separation from petitioner's employ
the receiving, skinning, loining, packing, and casing-up of tuna fish
in view of their express conformity with the five-month duration of
which were then exported by the petitioner. Indisputably, they were
their employment contracts. Besides, they fell within the exception
performing activities which were necessary and desirable in
provided in Article 280 of the Labor Code which reads: "[E]xcept
petitioner's business or trade.
where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of the engagement of the employee." Contrary to petitioner's submission, the private respondents could
Moreover, the first paragraph of the said article must be read and not be regarded as having been hired for a specific project or
interpreted in conjunction with the proviso in the second paragraph, undertaking. The term "specific project or undertaking" under Article
which reads: "Provided that any employee who has rendered at 280 of the Labor Code contemplates an activity which is not
least one year of service, whether such service is continuous or commonly or habitually performed or such type of work which is not
broken, shall be considered a regular employee with respect to the done on a daily basis but only for a specific duration of time or until
activity in which he is employed . . ." In the instant case, the private completion; the services employed are then necessary and
respondents were employed for a period of five months only. In any desirable in the employer's usual business only for the period of time
event, private respondents' prayer for reinstatement is well within the it takes to complete the project.7
purview of the "Release and Quitclaim" they had executed wherein
they unconditionally released the petitioner from any and all other
The fact that the petitioner repeatedly and continuously hired
claims which might have arisen from their past employment with the
workers to do the same kind of work as that performed by those
petitioner.
whose contracts had expired negates petitioner's contention that
those workers were hired for a specific project or undertaking only.
In its Comment, the Office of the Solicitor General (OSG) advances
the argument that the private respondents were regular employees,
Now on the validity of private respondents' five-month contracts of
since they performed activities necessary and desirable in the
employment. In the leading case of Brent School,
business or trade of the petitioner. The period of employment
Inc. v. Zamora, 8 which was reaffirmed in numerous subsequent
stipulated in the contracts of employment was null and void for being
cases, 9 this Court has upheld the legality of fixed-term employment.
contrary to law and public policy, as its purpose was to circumvent
It ruled that the decisive determinant in term employment should not
the law on security of tenure. The expiration of the contract did not,
be the activities that the employee is called upon to perform but the
therefore, justify the termination of their employment.
day certain agreed upon by the parties for the commencement and
termination of their employment relationship. But, this Court went on
The OSG further maintains that the ruling of the then Secretary of to say that where from the circumstances it is apparent that the
Labor and Employment in LAP-NOWM v. Pure Foods Corporation is periods have been imposed to preclude acquisition of tenurial
not binding on this Court; neither is that ruling controlling, as the said security by the employee, they should be struck down or
case involved certification election and not the issue of the nature of disregarded as contrary to public policy and morals.
private respondents' employment. It also considers private
respondents' quitclaim as ineffective to bar the enforcement for the
Brent also laid down the criteria under which term employment
full measure of their legal rights.
cannot be said to be in circumvention of the law on security of
tenure:
The private respondents, on the other hand, argue that contracts
with a specific period of employment may be given legal effect
1) The fixed period of employment was knowingly and voluntarily
provided, however, that they are not intended to circumvent the
agreed upon by the parties without any force, duress, or improper
constitutional guarantee on security of tenure. They submit that the
pressure being brought to bear upon the employee and absent any
practice of the petitioner in hiring workers to work for a fixed duration
other circumstances vitiating his consent; or
of five months only to replace them with other workers of the same
employment duration was apparently to prevent the regularization of
these so-called "casuals," which is a clear circumvention of the law 2) It satisfactorily appears that the employer and the employee dealt
on security of tenure. with each other on more or less equal terms with no moral
dominance exercised by the former over the latter. 10
We find the petition devoid of merit.
None of these criteria had been met in the present case. As pointed
out by the private respondents:
Article 280 of the Labor Code defines regular and casual
employment as follows:
[I]t could not be supposed that private
respondents and all other so-called "casual"
Art. 280. Regular and Casual Employment. —
workers of [the petitioner] KNOWINGLY and
The provisions of written agreement to the
VOLUNTARILY agreed to the 5-month
contrary notwithstanding and regardless of the
employment contract. Cannery workers are
oral argument of the parties, an employment
never on equal terms with their employers.
shall be deemed to be regular where the
Almost always, they agree to any terms of an
employee has been engaged to perform
employment contract just to get employed
activities which are usually necessary or
considering that it is difficult to find work given
desirable in the usual business or trade of the
their ordinary qualifications. Their freedom to
employer, except where the employment has
contract is empty and hollow because theirs is
been fixed for a specific project or undertaking
the freedom to starve if they refuse to work as
the completion or termination of which has been
casual or contractual workers. Indeed, to the
determined at the time of the engagement of the
unemployed, security of tenure has no value. It
employee or where the work or services to be
could not then be said that petitioner and private
performed is seasonal in nature and the
respondents "dealt with each other on more or
employment is for the duration of the season.
less equal terms with no moral dominance

14
 whatever being exercised by the former over
the latter. 10
The petitioner does not deny or rebut private respondents'
averments (1) that the main bulk of its workforce consisted of its so-
called "casual" employees; (2) that as of July 1991, "casual" workers
numbered 1,835; and regular employee, 263; (3) that the company
hired "casual" every month for the duration of five months, after
which their services were terminated and they were replaced by
other "casual" employees on the same five-month duration; and (4)
that these "casual" employees were actually doing work that were
necessary and desirable in petitioner's usual business.
As a matter of fact, the petitioner even stated in its position paper
submitted to the Labor Arbiter that, according to its records, the
previous employees of the company hired on a five-month basis
numbered about 10,000 as of July 1990. This confirms private
respondents' allegation that it was really the practice of the company
to hire workers on a uniformly fixed contract basis and replace them
upon the expiration of their contracts with other workers on the same
employment duration.
This scheme of the petitioner was apparently designed to prevent
the private respondents and the other "casual" employees from
attaining the status of a regular employee. It was a clear
circumvention of the employees' right to security of tenure and to
other benefits like minimum wage, cost-of-living allowance, sick
leave, holiday pay, and 13th month pay. 11 Indeed, the petitioner
succeeded in evading the application of labor laws. Also, it saved
itself from the trouble or burden of establishing a just cause for
terminating employees by the simple expedient of refusing to renew
the employment contracts.
The five-month period specified in private respondents' employment
contracts having been imposed precisely to circumvent the
constitutional guarantee on security of tenure should, therefore, be
struck down or disregarded as contrary to public policy or
morals. 12 To uphold the contractual arrangement between the
petitioner and the private respondents would, in effect, permit the
former to avoid hiring permanent or regular employees by simply
hiring them on a temporary or casual basis, thereby violating the
employees' security of tenure in their jobs. 13
The execution by the private respondents of a "Release and
Quitclaim" did not preclude them from questioning the termination of
their services. Generally, quitclaims by laborers are frowned upon as
contrary to public policy and are held to be ineffective to bar
recovery for the full measure of the workers' rights. 14 The reason for
the rule is that the employer and the employee do not stand on the
same footing. 15
Notably, the private respondents lost not time in filing a complaint for
illegal dismissal. This act is hardly expected from employees who
voluntarily and freely consented to their dismissal. 16
The NLRC was, thus, correct in finding that the private respondents
were regular employees and that they were illegally dismissed from
their jobs. Under Article 279 of the Labor Code and the recent
jurisprudence, 17 the legal consequence of illegal dismissal is
reinstatement without loss of seniority rights and other privileges,
with full back wages computed from the time of dismissal up to the
time of actual reinstatement, without deducting the earnings derived
elsewhere pending the resolution of the case.
However, since reinstatement is no longer possible because the
petitioner's tuna cannery plant had, admittedly, been close in
November 1994, 18 the proper award is separation pay equivalent to
one month pay or one-half month pay for every year of service,
whichever is higher, to be computed from the commencement of
their employment up to the closure of the tuna cannery plant. The
amount of back wages must be computed from the time the private
respondents were dismissed until the time petitioner's cannery plant
ceased operation. 19
WHEREFORE, for lack of merit, the instant petition is DISMISSED
and the challenged decision of 30 January 1995 of the National
Labor Relations Commission in NLRC CA No. N-001323-93 is
hereby AFFIRMED subject to the above modification on the
computation of the separation pay and back wages.
SO ORDERED.
G.R. No. 181974 February 1, 2012
LYNVIL FISHING ENTERPRISES, INC. and/or ROSENDO S. DE
BORJA, Petitioners,
vs.
ANDRES G. ARIOLA, JESSIE D. ALCOVENDAS, JIMMY B.
CALINAO AND LEOPOLDO G. SEBULLEN,Respondents.
DECISION
PEREZ, J.:
Before the Court is a Petition for Review on Certiorari1 of the
Decision2 of the Fourteenth Division of the Court of Appeals in CA-
G.R. SP No. 95094 dated 10 September 2007, granting the Writ of
Certiorari prayed for under Rule 65 of the 1997 Revised Rules of
Civil Procedure by herein respondents Andres G. Ariola, Jessie D.
Alcovendas, Jimmy B. Calinao and Leopoldo Sebullen thereby
reversing the Resolution of the National Labor Relations
Commission (NLRC). The dispositive portion of the assailed
decision reads:
WHEREFORE, premises considered, the Decision dated March 31,
2004 rendered by the National Labor Relations Commission is
hereby REVERSED and SET ASIDE. In lieu thereof, the Decision of
the Labor Arbiter is hereby REINSTATED, except as to the award of
attorney’s fees, which is ordered DELETED.3
The version of the petitioners follows:
1. Lynvil Fishing Enterprises, Inc. (Lynvil) is a company
engaged in deep-sea fishing, operating along the shores
of Palawan and other outlying islands of the Philippines.4 It
is operated and managed by Rosendo S. de Borja.
2. On 1 August 1998, Lynvil received a report from
Romanito Clarido, one of its employees, that on 31 July
1998, he witnessed that while on board the company
vessel Analyn VIII, Lynvil employees, namely: Andres G.
Ariola (Ariola), the captain; Jessie D. Alcovendas
(Alcovendas), Chief Mate; Jimmy B. Calinao (Calinao),
Chief Engineer; Ismael G. Nubla (Nubla), cook; Elorde
Bañez (Bañez), oiler; and Leopoldo D. Sebullen
(Sebullen), bodegero, conspired with one another and
stole eight (8) tubs of "pampano" and "tangigue" fish and
delivered them to another vessel, to the prejudice of
Lynvil.5
3. The said employees were engaged on a per trip basis
or "por viaje" which terminates at the end of each trip.
Ariola, Alcovendas and Calinao were managerial field
personnel while the rest of the crew were field personnel. 6
4. By reason of the report and after initial investigation,
Lynvil’s General Manager Rosendo S. De Borja (De Borja)
summoned respondents to explain within five (5) days
why they should not be dismissed from service. However,
except for Alcovendas and Bañez,7 the respondents
refused to sign the receipt of the notice.
5. Failing to explain as required, respondents’
employment was terminated.
6. Lynvil, through De Borja, filed a criminal complaint
against the dismissed employees for violation of P.D. 532,
or the Anti-Piracy and Anti-Highway Robbery Law of 1974
before the Office of the City Prosecutor of Malabon City. 8
7. On 12 November 1998, First Assistant City Prosecutor
Rosauro Silverio found probable cause for the indictment
of the dismissed employees for the crime of qualified
theft9 under the Revised Penal Code.
On the other hand, the story of the defense is:
1. The private respondents were crew members of Lynvil’s
vessel named Analyn VIII.10
2. On 31 July 1998, they arrived at the Navotas Fishport
on board Analyn VIII loaded with 1,241 bañeras of
different kinds of fishes. These bañeras were delivered to
a consignee named SAS and Royale.11
15
 The following day, the private respondents reported back
Separation Pay – P58,149.00
to Lynvil office to inquire about their new job assignment
but were told to wait for further advice. They were not
13th Month Pay – 2,473.12
allowed to board any vessel.12
Salary Differential – P5,538.00
3. On 5 August 1998, only Alcovendas and Bañez
received a memorandum from De Borja ordering them to P265, 28.12
explain the incident that happened on 31 July 1998. Upon
being informed about this, Ariola, Calinao, Nubla and
Sebullen went to the Lynvil office. However, they were told TOTAL P 1, 341, 650.76
that their employments were already terminated.13

All other claims are dismissed for lack of merit."17

Aggrieved, the employees filed with the Arbitration Branch of the
National Labor Relations Commission-National Capital Region on 25
August 1998 a complaint for illegal dismissal with claims for
backwages, salary differential reinstatement, service incentive leave,
holiday pay and its premium and 13th month pay from 1996 to1998.
They also claimed for moral, exemplary damages and attorney’s
fees for their dismissal with bad faith.14
The Labor Arbiter found that there was no evidence showing that the
private respondents received the 41 bañeras of "pampano" as
alleged by De Borja in his reply-affidavit; and that no proof was
presented that the 8 bañeras of pampano [and tangigue] were
missing at the place of destination.18

They added that the unwarranted accusation of theft stemmed from The Labor Arbiter disregarded the Resolution of Assistant City
their oral demand of increase of salaries three months earlier and Prosecutor Rosauro Silverio on the theft case. He reasoned out that
their request that they should not be required to sign a blank payroll the Labor Office is governed by different rules for the determination
and vouchers.15 of the validity of the dismissal of employees.19

On 5 June 2002, Labor Arbiter Ramon Valentin C. Reyes found
merit in complainants’ charge of illegal dismissal.16The dispositive
portion reads:
WHEREFORE, premises considered, judgment is hereby rendered
finding that complainants were illegally dismissed, ordering
respondents to jointly and severally pay complainants (a) separation
pay at one half month pay for every year of service; (b) backwages;
(c) salary differential; (d) 13th month pay; and (e) attorney’s fees, as
follows:
The Labor Arbiter also ruled that the contractual provision that the
employment terminates upon the end of each trip does not make the
respondents’ dismissal legal. He pointed out that respondents and
Lynvil did not negotiate on equal terms because of the moral
dominance of the employer.20
The Labor Arbiter found that the procedural due process was not
complied with and that the mere notice given to the private
respondents fell short of the requirement of "ample opportunity" to
present the employees’ side.21

On appeal before the National Labor Relations Commission,

"1) Andres Ariola petitioners asserted that private respondents were only contractual
Backwages P234,000.00 employees; that they were not illegally dismissed but were accorded
procedural due process and that De Borja did not commit bad faith
(P6,500.00 x 36 = P234,000.00)
in dismissing the employees so as to warrant his joint liability with
Lynvil.22
Separation Pay – P74,650.00

13th Month Pay – P6,500.00 On 31 March 2004, the NLRC reversed and set aside the Decision
of the Labor Arbiter. The dispositive portion reads:
P325,250.00
WHEREFORE, judgment is hereby rendered REVERSING AND
"2) Jessie Alcovendas
SETTING ASIDE the Decision of the Labor Arbiter a quo and a new
Backwages P195,328.00
one entered DISMISSING the present complaints for utter lack of
(P5,148.00 x 36 = P195,328.00) merit;

Separation Pay – P44,304.00 However as above discussed, an administrative fine of PhP5,000.00

for each complainant, Andres Ariola, Jessie Alcovendas, Jimmy
13th Month Pay – 5,538.00 Canilao, Leopoldo Sebullen and Ismael Nobla or a total of
PhP25,000.00 is hereby awarded.23
Salary Differential – 1,547.52

P246,717.52 The private respondents except Elorde Bañez filed a Petition for
Certiorari24 before the Court of Appeals alleging grave abuse of
"3) Jimmy Calinao discretion on the part of NLRC.
Backwages P234,000.00
The Court of Appeals found merit in the petition and reinstated the
(P6,500.00 x 36 = P234,000.00) Decision of the Labor Arbiter except as to the award of attorney’s
fees. The appellate court held that the allegation of theft did not
Separation Pay – 55,250.00 warrant the dismissal of the employees since there was no evidence
to prove the actual quantities of the missing kinds of fish loaded to
13th Month Pay – P6,500.00 Analyn VIII.25 It also reversed the finding of the NLRC that the
dismissed employees were merely contractual employees and
P295,700.00 added that they were regular ones performing activities which are
usually necessary or desirable in the business and trade of Lynvil.
"4) Leopoldo Sebullen Finally, it ruled that the two-notice rule provided by law and
jurisprudence is mandatory and non-compliance therewith rendered
Backwages P154,440.00 the dismissal of the employees illegal.
(P4, 290.00 x 36 = P154,440.00)
The following are the assignment of errors presented before this
Separation Pay – P44,073.00 Court by Lynvil:

13th Month Pay – 2,473.12

I
Salary Differential – 4,472.00
THE HONORABLE COURT OF APPEALS ERRED IN
P208,455.12 FAILING TO CONSIDER THE ESTABLISHED
DOCTRINE LAID DOWN IN NASIPIT LUMBER
"5) Ismael Nubla COMPANY V. NLRC HOLDING THAT THE FILING OF A
Backwages P199,640.12 CRIMINAL CASE BEFORE THE PROSECUTOR’S

16
 OFFICE CONSTITUTES SUFFICIENT BASIS FOR A
VALID TERMINATION OF EMPLOYMENT ON THE
GROUNDS OF SERIOUS MISCONDUCT AND/OR LOSS
OF TRUST AND CONFIDENCE.
II
THE HONORABLE COURT OF APPEALS ERRED IN
RULING THAT THE TERMINATION OF
RESPONDENTS’ EMPLOYMENT WAS NOT
SUPPORTED BY SUBSTANTIAL EVIDENCE.
III
THE HONORABLE COURT OF APPEALS ERRED IN
FAILING TO CONSIDER THAT THE RESPONDENTS’
EMPLOYMENT, IN ANY EVENT, WERE CONTRACTUAL
IN NATURE BEING ON A PER VOYAGE BASIS. THUS,
THEIR RESPECTIVE EMPLOYMENT TERMINATED
AFTER THE END OF EACH VOYAGE
IV
THE HONORABLE COURT OF APPEALS ERRED IN
RULING THAT THE RESPONDENTS WERE NOT
ACCORDED PROCEDURAL DUE PROCESS.
V not binding upon a labor tribunal.31
THE HONORABLE COURT OF APPEALS ERRED IN
RULING THAT THE RESPONDENTS ARE ENTITLED
TO THE PAYMENT OF THEIR MONEY CLAIMS.
VI
THE HONORABLE COURT OF APPEALS ERRED IN
FAILING TO CONSIDER THAT PETITIONER ROSENDO
S. DE BORJA IS NOT JOINTLY AND SEVERALLY
LIABLE FOR THE JUDGMENT WHEN THERE WAS NO
FINDING OF BAD FAITH.26
The Court’s Ruling
The Supreme Court is not a trier of facts. Under Rule 45, 27 parties
may raise only questions of law. We are not duty-bound to analyze
again and weigh the evidence introduced in and considered by the
tribunals below. Generally when supported by substantial evidence,
the findings of fact of the CA are conclusive and binding on the
parties and are not reviewable by this Court, unless the case falls
under any of the following recognized exceptions:
(1) When the conclusion is a finding grounded entirely on
speculation, surmises and conjectures;
(2) When the inference made is manifestly mistaken,
absurd or impossible;
(3) Where there is a grave abuse of discretion;
(4) When the judgment is based on a misapprehension of
facts;
(5) When the findings of fact are conflicting;
(6) When the Court of Appeals, in making its findings,
went beyond the issues of the case and the same is
contrary to the admissions of both appellant and appellee;
(7) When the findings are contrary to those of the trial
court;
(8) When the findings of fact are conclusions without
citation of specific evidence on which they are based;
(9) When the facts set forth in the petition as well as in the
petitioners' main and reply briefs are not disputed by the
respondents; and
(10) When the findings of fact of the Court of Appeals are
premised on the supposed absence of evidence and
contradicted by the evidence on record. (Emphasis
supplied)28
The contrariety of the findings of the Labor Arbiter and the NLRC
prevents reliance on the principle of special administrative expertise
and provides the reason for judicial review, at first instance by the
appellate court, and on final study through the present petition.
In the first assignment of error, Lynvil contends that the filing of a
criminal case before the Office of the Prosecutor is sufficient basis
for a valid termination of employment based on serious misconduct
and/or loss of trust and confidence relying on Nasipit Lumber
Company v. NLRC.29
Nasipit is about a security guard who was charged with qualified
theft which charge was dismissed by the Office of the Prosecutor.
However, despite the dismissal of the complaint, he was still
terminated from his employment on the ground of loss of
confidence. We ruled that proof beyond reasonable doubt of an
employee's misconduct is not required when loss of confidence is
the ground for dismissal. It is sufficient if the employer has "some
basis" to lose confidence or that the employer has reasonable
ground to believe or to entertain the moral conviction that the
employee concerned is responsible for the misconduct and that the
nature of his participation therein rendered him absolutely unworthy
of the trust and confidence demanded by his position.30 It added that
the dropping of the qualified theft charges against the respondent is
In Nicolas v. National Labor Relations Commission,32 we held that a
criminal conviction is not necessary to find just cause for
employment termination. Otherwise stated, an employee’s acquittal
in a criminal case, especially one that is grounded on the existence
of reasonable doubt, will not preclude a determination in a labor
case that he is guilty of acts inimical to the employer’s interests.33 In
the reverse, the finding of probable cause is not followed by
automatic adoption of such finding by the labor tribunals.
In other words, whichever way the public prosecutor disposes of a
complaint, the finding does not bind the labor tribunal.
Thus, Lynvil cannot argue that since the Office of the Prosecutor
found probable cause for theft the Labor Arbiter must follow the
finding as a valid reason for the termination of respondents’
employment. The proof required for purposes that differ from one
and the other are likewise different.
Nonetheless, even without reliance on the prosecutor’s finding, we
find that there was valid cause for respondents’ dismissal.
In illegal dismissal cases, the employer bears the burden of proving
that the termination was for a valid or authorized cause. 34
Just cause is required for a valid dismissal. The Labor
Code35 provides that an employer may terminate an employment
based on fraud or willful breach of the trust reposed on the
employee. Such breach is considered willful if it is done intentionally,
knowingly, and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly
or inadvertently. It must also be based on substantial evidence and
not on the employer’s whims or caprices or suspicions otherwise,
the employee would eternally remain at the mercy of the employer.
Loss of confidence must not be indiscriminately used as a shield by
the employer against a claim that the dismissal of an employee was
arbitrary. And, in order to constitute a just cause for dismissal, the
act complained of must be work-related and shows that the
employee concerned is unfit to continue working for the employer. In
addition, loss of confidence as a just cause for termination of
employment is premised on the fact that the employee concerned
holds a position of responsibility, trust and confidence or that the
employee concerned is entrusted with confidence with respect to
delicate matters, such as the handling or care and protection of the
property and assets of the employer. The betrayal of this trust is the
essence of the offense for which an employee is penalized. 36
Breach of trust is present in this case.
We agree with the ruling of the Labor Arbiter and Court of Appeals
that the quantity of tubs expected to be received was the same as
that which was loaded. However, what is material is the kind of fish
loaded and then unloaded. Sameness is likewise needed.
17
We cannot close our eyes to the positive and clear narration of facts
of the three witnesses to the commission of qualified theft. Jonathan
Distajo, a crew member of the Analyn VIII, stated in his letter
addressed to De Borja37 dated 8 August 1998, that while the vessel
was traversing San Nicolas, Cavite, he saw a small boat approach
them. When the boat was next to their vessel, Alcovendas went
inside the stockroom while Sebullen pushed an estimated four tubs
of fish away from it. Ariola, on the other hand, served as the lookout
and negotiator of the transaction. Finally, Bañez and Calinao helped
in putting the tubs in the small boat. He further added that he
received ₱800.00 as his share for the transaction. Romanito Clarido,
who was also on board the vessel, corroborated the narration of
Distajo on all accounts in his 25 August 1998 affidavit.38 He added
that Alcovendas told him to keep silent about what happened on that
day. Sealing tight the credibility of the narration of theft is the
affidavit39 executed by Elorde Bañez dated 3 May 1999. Bañez was
one of the dismissed employees who actively participated in the
taking of the tubs. He clarified in the affidavit that the four tubs taken
out of the stockroom in fact contained fish taken from the eight tubs.
He further stated that Ariola told everyone in the vessel not to say
anything and instead file a labor case against the management.
Clearly, we cannot fault Lynvil and De Borja when it dismissed the
employees.
The second to the fifth assignment of errors interconnect.
The nature of employment is defined in the Labor Code, thus:
Art. 280. Regular and casual employment. The provisions of
written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: Provided, That any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists.
Lynvil contends that it cannot be guilty of illegal dismissal because
the private respondents were employed under a fixed-term contract
which expired at the end of the voyage. The pertinent provisions of
the contract are:
xxxx
1. NA ako ay sumasang-ayon na maglingkod at gumawa ng mga
gawain sang-ayon sa patakarang "por viaje" na magmumula sa
pagalis sa Navotas papunta sa pangisdaan at pagbabalik sa
pondohan ng lantsa sa Navotas, Metro Manila;
xxxx
1. NA ako ay nakipagkasundo na babayaran ang aking paglilingkod
sa paraang "por viaje" sa halagang P__________ isang biyahe ng
kabuuang araw xxxx.40
Lynvil insists on the applicability of the case of Brent School, 41 to wit:
Accordingly, and since the entire purpose behind the development
of legislation culminating in the present Article 280 of the Labor
Code clearly appears to have been, as already observed, to prevent
circumvention of the employee's right to be secure in his tenure, the
clause in said article indiscriminately and completely ruling out all
written or oral agreements conflicting with the concept of regular
employment as defined therein should be construed to refer to the
substantive evil that the Code itself has singled out: agreements
entered into precisely to circumvent security of tenure. It should
have no application to instances where a fixed period of employment
was agreed upon knowingly and voluntarily by the parties, without
any force, duress or improper pressure being brought to bear upon
the employee and absent any other circumstances vitiating his
consent, or where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former over the
latter. Unless thus limited in its purview, the law would be made to
apply to purposes other than those explicitly stated by its framers; it
thus becomes pointless and arbitrary, unjust in its effects and apt to
lead to absurd and unintended consequences.
Contrarily, the private respondents contend that they became
regular employees by reason of their continuous hiring and
performance of tasks necessary and desirable in the usual trade and
business of Lynvil.
Jurisprudence,42 laid two conditions for the validity of a fixed-contract
agreement between the employer and employee:
First, the fixed period of employment was knowingly and voluntarily
agreed upon by the parties without any force, duress, or improper
pressure being brought to bear upon the employee and absent any
other circumstances vitiating his consent; or
Second, it satisfactorily appears that the employer and the employee
dealt with each other on more or less equal terms with no moral
dominance exercised by the former or the latter.43
Textually, the provision that: "NA ako ay sumasang-ayon na
maglingkod at gumawa ng mga gawain sang-ayon sa patakarang
"por viaje" na magmumula sa pagalis sa Navotas papunta sa
pangisdaan at pagbabalik sa pondohan ng lantsa sa Navotas, Metro
Manila" is for a fixed period of employment. In the context, however,
of the facts that: (1) the respondents were doing tasks necessarily to
Lynvil’s fishing business with positions ranging from captain of the
vessel to bodegero; (2) after the end of a trip, they will again be
hired for another trip with new contracts; and (3) this arrangement
continued for more than ten years, the clear intention is to go around
the security of tenure of the respondents as regular employees. And
respondents are so by the express provisions of the second
paragraph of Article 280, thus:
xxx Provided, That any employee who has rendered at least one
year of service, whether such service is continuous or broken, shall
be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such
activity exists.
The same set of circumstances indicate clearly enough that it was
the need for a continued source of income that forced the
employees’ acceptance of the "por viaje" provision.
Having found that respondents are regular employees who may be,
however, dismissed for cause as we have so found in this case,
there is a need to look into the procedural requirement of due
process in Section 2, Rule XXIII, Book V of the Rules Implementing
the Labor Code. It is required that the employer furnish the
employee with two written notices: (1) a written notice served on the
employee specifying the ground or grounds for termination, and
giving to said employee reasonable opportunity within which to
explain his side; and (2) a written notice of termination served on the
employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his
termination.
From the records, there was only one written notice which required
respondents to explain within five (5) days why they should not be
dismissed from the service. Alcovendas was the only one who
signed the receipt of the notice. The others, as claimed by Lynvil,
refused to sign. The other employees argue that no notice was given
to them. Despite the inconsistencies, what is clear is that no final
written notice or notices of termination were sent to the employees.
The twin requirements of notice and hearing constitute the elements
of [due] process in cases of employee's dismissal. The requirement
of notice is intended to inform the employee concerned of the
employer's intent to dismiss and the reason for the proposed
dismissal. Upon the other hand, the requirement of hearing affords
the employee an opportunity to answer his employer's charges
against him and accordingly, to defend himself therefrom before
dismissal is effected.44 Obviously, the second written notice, as
indispensable as the first, is intended to ensure the observance of
due process.
Applying the rule to the facts at hand, we grant a monetary award of
₱50,000.00 as nominal damages, this, pursuant to the fresh ruling of
this Court in Culili v. Eastern Communication Philippines, Inc.45 Due
to the failure of Lynvil to follow the procedural requirement of two-
notice rule, nominal damages are due to respondents despite their
dismissal for just cause.
18
Given the fact that their dismissal was for just cause, we cannot
grant backwages and separation pay to respondents. However,
following the findings of the Labor Arbiter who with the expertise
presided over the proceedings below, which findings were affirmed
by the Court of Appeals, we grant the 13th month pay and salary
differential of the dismissed employees.
Whether De Borja is jointly and severally liable with Lynvil
As to the last issue, this Court has ruled that in labor cases, the
corporate directors and officers are solidarily liable with the
corporation for the termination of employment of employees done
with malice or in bad faith.46 Indeed, moral damages are recoverable
when the dismissal of an employee is attended by bad faith or fraud
or constitutes an act oppressive to labor, or is done in a manner
contrary to good morals, good customs or public policy.
It has also been discussed in MAM Realty Development Corporation
v. NLRC47 that:
encoding and data conversion business. It employed encoders,
indexers, formatters, programmers, quality/quantity staff, and others,
to maintain its business and accomplish the job orders of its clients.
Respondent Leo Rabang was its Human Resources and
Development (HRAD) Manager, while respondent Jane Navarette
was its Project Manager. INNODATA had since ceased operations
due to business losses in June 2002.
Petitioners Cherry J. Price, Stephanie G. Domingo, and Lolita
Arbilera were employed as formatters by INNODATA. The parties
executed an employment contract denominated as a "Contract of
Employment for a Fixed Period," stipulating that the contract shall be
for a period of one year,3 to wit:
CONTRACT OF EMPLOYMENT FOR A FIXED PERIOD
xxxx
WITNESSETH: That

x x x A corporation being a juridical entity, may act only through its

WHEREAS, the EMPLOYEE has applied for the position of
directors, officers and employees. Obligations incurred by them,
FORMATTER and in the course thereof and represented
acting as such corporate agents, are not theirs but the direct
himself/herself to be fully qualified and skilled for the said position;
accountabilities of the corporation they represent. True, solidary
liabilities may at times be incurred but only when exceptional
circumstances warrant such as, generally, in the following cases: WHEREAS, the EMPLOYER, by reason of the aforesaid
representations, is desirous of engaging that the (sic) services of the
EMPLOYEE for a fixed period;
1. When directors and trustees or, in appropriate cases, the officers
of a corporation:
NOW, THEREFORE, for and in consideration of the foregoing
premises, the parties have mutually agreed as follows:
xxx

TERM/DURATION
(b) act in bad faith or with gross negligence in directing the corporate
affairs;
The EMPLOYER hereby employs, engages and hires the
EMPLOYEE and the EMPLOYEE hereby accepts such appointment
x x x 48
as FORMATTER effective FEB. 16, 1999 to FEB. 16, 2000 a period
of ONE YEAR.
The term "bad faith" contemplates a "state of mind affirmatively
operating with furtive design or with some motive of self-interest or
xxxx
will or for ulterior purpose."49 1âwphi1

We agree with the ruling of both the NLRC and the Court of Appeals
when they pronounced that there was no evidence on record that
indicates commission of bad faith on the part of De Borja. He is the
general manager of Lynvil, the one tasked with the supervision by
the employees and the operation of the business. However, there is
no proof that he imposed on the respondents the "por viaje"
provision for purpose of effecting their summary dismissal.
WHEREFORE, the petition is partially GRANTED. The 10
September 2007 Decision of the Court of Appeals in CA-G.R. SP
No. 95094 reversing the Resolution dated 31 March 2004 of the
National Labor Relations Commission is hereby MODIFIED. The
Court hereby rules that the employees were dismissed for just cause
by Lynvil Fishing Enterprises, Inc. and Rosendo S. De Borja, hence,
the reversal of the award for backwages and separation pay.
However, we affirm the award for 13th month pay, salary differential
and grant an additional ₱50,000.00 in favor of the employees
representing nominal damages for petitioners’ non-compliance with
statutory due process. No cost.
TERMINATION
6.1 In the event that EMPLOYER shall discontinue operating its
business, this CONTRACT shall also ipso facto terminate on the last
day of the month on which the EMPLOYER ceases operations with
the same force and effect as is such last day of the month were
originally set as the termination date of this Contract. Further should
the Company have no more need for the EMPLOYEE’s services on
account of completion of the project, lack of work (sic) business
losses, introduction of new production processes and techniques,
which will negate the need for personnel, and/or overstaffing, this
contract maybe pre-terminated by the EMPLOYER upon giving of
three (3) days notice to the employee.
6.2 In the event period stipulated in item 1.2 occurs first vis-à-vis the
completion of the project, this contract shall automatically terminate.
6.3 COMPANY’s Policy on monthly productivity shall also apply to
the EMPLOYEE.

SO ORDERED.
6.4 The EMPLOYEE or the EMPLOYER may pre-terminate this
CONTRACT, with or without cause, by giving at least Fifteen – (15)
CHERRY J. PRICE vs. INNODATA PHILS. INC. notice to that effect. Provided, that such pre-termination shall be
effective only upon issuance of the appropriate clearance in favor of
the said EMPLOYEE.
G.R. No. 178505 September 30, 2008

CHICO-NAZARIO, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of
Court assails the Decision1 dated 25 September 2006 and
Resolution2 dated 15 June 2007 of the Court of Appeals in CA-G.R.
SP No. 72795, which affirmed the Decision dated 14 December
2001 of the National Labor Relations Commission (NLRC) in NLRC
NCR Case No. 30-03-01274-2000 finding that petitioners were not
illegally dismissed by respondents.
The factual antecedents of the case are as follows:
Respondent Innodata Philippines, Inc./Innodata Corporation
(INNODATA) was a domestic corporation engaged in the data
6.5 Either of the parties may terminate this Contract by reason of the
breach or violation of the terms and conditions hereof by giving at
least Fifteen (15) days written notice. Termination with cause under
this paragraph shall be effective without need of judicial action or
approval.4
During their employment as formatters, petitioners were assigned to
handle jobs for various clients of INNODATA, among which were
CAS, Retro, Meridian, Adobe, Netlib, PSM, and Earthweb. Once
they finished the job for one client, they were immediately assigned
to do a new job for another client.
On 16 February 2000, the HRAD Manager of INNODATA wrote
petitioners informing them of their last day of work. The letter reads:

19
RE: End of Contract
Date: February 16, 2000
Please be informed that your employment ceases effective at the
end of the close of business hours on February 16, 2000.5
According to INNODATA, petitioners’ employment already ceased
due to the end of their contract.
On 22 May 2000, petitioners filed a Complaint6 for illegal dismissal
and damages against respondents. Petitioners claimed that they
should be considered regular employees since their positions as
formatters were necessary and desirable to the usual business of
INNODATA as an encoding, conversion and data processing
company. Petitioners also averred that the decisions in Villanueva v.
National Labor Relations Commission7 and Servidad v. National
Labor Relations Commission,8 in which the Court already
purportedly ruled "that the nature of employment at Innodata Phils.,
Inc. is regular,"9 constituted stare decisis to the present case.
Petitioners finally argued that they could not be considered project
employees considering that their employment was not coterminous
with any project or undertaking, the termination of which was
predetermined.
On the other hand, respondents explained that INNODATA was
engaged in the business of data processing, typesetting, indexing,
and abstracting for its foreign clients. The bulk of the work was data
processing, which involved data encoding. Data encoding, or the
typing of data into the computer, included pre-encoding, encoding 1
and 2, editing, proofreading, and scanning. Almost half of the
employees of INNODATA did data encoding work, while the other
half monitored quality control. Due to the wide range of services
rendered to its clients, INNODATA was constrained to hire new
employees for a fixed period of not more than one year.
Respondents asserted that petitioners were not illegally dismissed,
for their employment was terminated due to the expiration of their
terms of employment. Petitioners’ contracts of employment with
INNODATA were for a limited period only, commencing on 6
September 1999 and ending on 16 February 2000.10 Respondents
further argued that petitioners were estopped from asserting a
position contrary to the contracts which they had knowingly,
voluntarily, and willfully agreed to or entered into. There being no
illegal dismissal, respondents likewise maintained that petitioners
were not entitled to reinstatement and backwages.
On 17 October 2000, the Labor Arbiter11 issued its Decision12 finding
petitioners’ complaint for illegal dismissal and damages meritorious.
The Labor Arbiter held that as formatters, petitioners occupied jobs
that were necessary, desirable, and indispensable to the data
processing and encoding business of INNODATA. By the very
nature of their work as formatters, petitioners should be considered
regular employees of INNODATA, who were entitled to security of
tenure. Thus, their termination for no just or authorized cause was
illegal. In the end, the Labor Arbiter decreed:
FOREGOING PREMISES CONSIDERED, judgment is hereby
rendered declaring complainants’ dismissal illegal and ordering
respondent INNODATA PHILS. INC./INNODATA CORPORATION
to reinstate them to their former or equivalent position without loss of
seniority rights and benefits. Respondent company is further ordered
to pay complainants their full backwages plus ten percent (10%) of
the totality thereof as attorney’s fees. The monetary awards due the
complainants as of the date of this decision are as follows:
A. Backwages
1. Cherry J. Price
2/17/2000 – 10/17/2000 at
223.50/day
P5,811.00/mo/ x 8 mos. P46,488.00
2. Stephanie Domingo 46,488.00
(same computation)
3. Lolita Arbilera 46,488.00
(same computation)
Total Backwages P139,464.00
B. Attorney’s fees (10% of total award)
13,946.40
Total Award P153,410.40
Respondent INNODATA appealed the Labor Arbiter’s Decision to
the NLRC. The NLRC, in its Decision dated 14 December 2001,
reversed the Labor Arbiter’s Decision dated 17 October 2000, and
absolved INNODATA of the charge of illegal dismissal.
The NLRC found that petitioners were not regular employees, but
were fixed-term employees as stipulated in their respective contracts
of employment. The NLRC applied Brent School, Inc. v.
Zamora13 and St. Theresa’s School of Novaliches Foundation v.
National Labor Relations Commission,14 in which this Court upheld
the validity of fixed-term contracts. The determining factor of such
contracts is not the duty of the employee but the day certain agreed
upon by the parties for the commencement and termination of the
employment relationship. The NLRC observed that the petitioners
freely and voluntarily entered into the fixed-term employment
contracts with INNODATA. Hence, INNODATA was not guilty of
illegal dismissal when it terminated petitioners’ employment upon
the expiration of their contracts on 16 February 2000.
The dispositive portion of the NLRC Decision thus reads:
WHEREFORE, premises considered, the decision appealed from is
hereby REVERSED and SET ASIDE and a new one entered
DISMISSING the instant complaint for lack of merit.15
The NLRC denied petitioners’ Motion for Reconsideration in a
Resolution dated 28 June 2002.16
In a Petition for Certiorari under Rule 65 of the Rules of Court filed
before the Court of Appeals, petitioners prayed for the annulment,
reversal, modification, or setting aside of the Decision dated 14
December 2001 and Resolution dated 28 June 2002 of the
NLRC.lawphil.net
On 25 September 2006, the Court of Appeals promulgated its
Decision sustaining the ruling of the NLRC that petitioners were not
illegally dismissed.
The Court of Appeals ratiocinated that although this Court declared
in Villanueva and Servidad that the employees of INNODATA
working as data encoders and abstractors were regular, and not
contractual, petitioners admitted entering into contracts of
employment with INNODATA for a term of only one year and for a
project called Earthweb. According to the Court of Appeals, there
was no showing that petitioners entered into the fixed-term contracts
unknowingly and involuntarily, or because INNODATA applied force,
duress or improper pressure on them. The appellate court also
observed that INNODATA and petitioners dealt with each other on
more or less equal terms, with no moral dominance exercised by the
former on latter. Petitioners were therefore bound by the stipulations
in their contracts terminating their employment after the lapse of the
fixed term.
The Court of Appeals further expounded that in fixed-term contracts,
the stipulated period of employment is governing and not the nature
thereof. Consequently, even though petitioners were performing
functions that are necessary or desirable in the usual business or
trade of the employer, petitioners did not become regular employees
because their employment was for a fixed term, which began on 16
February 1999 and was predetermined to end on 16 February 2000.
The appellate court concluded that the periods in petitioners’
contracts of employment were not imposed to preclude petitioners
from acquiring security of tenure; and, applying the ruling of this
Court in Brent, declared that petitioners’ fixed-term employment
contracts were valid. INNODATA did not commit illegal dismissal for
terminating petitioners’ employment upon the expiration of their
contracts.
The Court of Appeals adjudged:
WHEREFORE, the instant petition is hereby DENIED and the
Resolution dated December 14, 2001 of the National Labor
Relations Commission declaring petitioners were not illegally
dismissed is AFFIRMED.17
20
The petitioners filed a Motion for Reconsideration of the afore-
mentioned Decision of the Court of Appeals, which was denied by
the same court in a Resolution dated 15 June 2007.
Petitioners are now before this Court via the present Petition for
Review on Certiorari, based on the following assignment of errors:
I.
THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERROR OF LAW AND GRAVE ABUSE OF
DISCRETION WHEN IT DID NOT APPLY THE
SUPREME COURT RULING IN THE CASE OF
NATIVIDAD & QUEJADA THAT THE NATURE OF
EMPLOYMENT OF RESPONDENTS IS REGULAR NOT
FIXED, AND AS SO RULED IN AT LEAST TWO OTHER
CASES AGAINST INNODATA PHILS. INC.
II.
THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERROR OF LAW IN RULING THAT THE
STIPULATION OF CONTRACT IS GOVERNING AND
NOT THE NATURE OF EMPLOYMENT AS DEFINED BY
LAW.
III.
THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION WHEN IT DID NOT
CONSIDER THE EVIDENCE ON RECORD SHOWING
THAT THERE IS CLEAR CIRCUMVENTION OF THE
LAW ON SECURITY OF TENURE THROUGH
CONTRACT MANIPULATION.18
The issue of whether petitioners were illegally dismissed by
respondents is ultimately dependent on the question of whether
petitioners were hired by INNODATA under valid fixed-term
employment contracts.
After a painstaking review of the arguments and evidences of the
parties, the Court finds merit in the present Petition. There were no
valid fixed-term contracts and petitioners were regular employees of
the INNODATA who could not be dismissed except for just or
authorized cause.
The employment status of a person is defined and prescribed by law
and not by what the parties say it should be.19 Equally important to
consider is that a contract of employment is impressed with public
interest such that labor contracts must yield to the common
good.20 Thus, provisions of applicable statutes are deemed written
into the contract, and the 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.21
Regular employment has been defined by Article 280 of the Labor
Code, as amended, which reads:
Art. 280. Regular and Casual Employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed
for a specific project or undertaking the completion or termination of
which has been determined at the time of engagement of the
employee or where the work or services to be performed is seasonal
in nature and employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by
the preceding paragraph. Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists. (Underscoring ours).
Based on the afore-quoted provision, the following employees are
accorded regular status: (1) those who are engaged to perform
activities which are necessary or desirable in the usual business or
trade of the employer, regardless of the length of their employment;
and (2) those who were initially hired as casual employees, but have
rendered at least one year of service, whether continuous or broken,
with respect to the activity in which they are employed.
Undoubtedly, petitioners belong to the first type of regular
employees.
Under Article 280 of the Labor Code, the applicable test to
determine whether an employment should be considered regular or
non-regular is the reasonable connection between the particular
activity performed by the employee in relation to the usual business
or trade of the employer.22
In the case at bar, petitioners were employed by INNODATA on 17
February 1999 as formatters. The primary business of INNODATA is
data encoding, and the formatting of the data entered into the
computers is an essential part of the process of data encoding.
Formatting organizes the data encoded, making it easier to
understand for the clients and/or the intended end users thereof.
Undeniably, the work performed by petitioners was necessary or
desirable in the business or trade of INNODATA.
However, it is also true that while certain forms of employment
require the performance of usual or desirable functions and exceed
one year, these do not necessarily result in regular employment
under Article 280 of the Labor Code.23 Under the Civil Code, fixed-
term employment contracts are not limited, as they are under the
present Labor Code, to those by nature seasonal or for specific
projects with predetermined dates of completion; they also include
those to which the parties by free choice have assigned a specific
date of termination.24
The decisive determinant in term employment is the day certain
agreed upon by the parties for the commencement and termination
of their employment relationship, a day certain being understood to
be that which must necessarily come, although it may not be known
when. Seasonal employment and employment for a particular
project are instances of employment in which a period, where not
expressly set down, is necessarily implied.25
Respondents maintain that the contracts of employment entered into
by petitioners with INNDOATA were valid fixed-term employment
contracts which were automatically terminated at the expiry of the
period stipulated therein, i.e., 16 February 2000.
The Court disagrees.
While this Court has recognized the validity of fixed-term
employment contracts, it has consistently held that this is the
exception rather than the general rule. More importantly, a fixed-
term employment is valid only under certain circumstances. In Brent,
the very same case invoked by respondents, the Court identified
several circumstances wherein a fixed-term is anessential and
natural appurtenance, to wit:
Some familiar examples may be cited of employment contracts
which may be neither for seasonal work nor for specific projects, but
to which a fixed term is an essential and natural appurtenance:
overseas employment contracts, for one, to which, whatever the
nature of the engagement, the concept of regular employment with
all that it implies does not appear ever to have been applied, Article
280 of the Labor Code notwithstanding; also appointments to the
positions of dean, assistant dean, college secretary, principal, and
other administrative offices in educational institutions, which are by
practice or tradition rotated among the faculty members, and where
fixed terms are a necessity without which no reasonable rotation
would be possible. Similarly, despite the provisions of Article 280,
Policy Instructions No. 8 of the Minister of Labor implicitly recognize
that certain company officials may be elected for what would amount
to fixed periods, at the expiration of which they would have to stand
down, in providing that these officials, "x x may lose their jobs as
president, executive vice-president or vice president, etc. because
the stockholders or the board of directors for one reason or another
did not reelect them."26
As a matter of fact, the Court, in its oft-quoted decision in Brent, also
issued a stern admonition that where, from the circumstances, it is
apparent that the period was imposed to preclude the acquisition of
tenurial security by the employee, then it should be struck down as
being contrary to law, morals, good customs, public order and public
policy.27
After considering petitioners’ contracts in their entirety, as well as
the circumstances surrounding petitioners’ employment at
INNODATA, the Court is convinced that the terms fixed therein were
21
meant only to circumvent petitioners’ right to security of tenure and
are, therefore, invalid.
The contracts of employment submitted by respondents are highly
suspect for not only being ambiguous, but also for appearing to be
tampered with.
completion of a project. More importantly, there is also a dearth of
evidence that such project or undertaking had already been
completed or terminated to justify the dismissal of petitioners. In fact,
petitioners alleged - and respondents failed to dispute that
petitioners did not work on just one project, but continuously worked
for a series of projects for various clients of INNODATA.

In Magcalas v. National Labor Relations Commission,30 the Court

Petitioners alleged that their employment contracts with INNODATA
struck down a similar claim by the employer therein that the
became effective 16 February 1999, and the first day they reported
dismissed employees were fixed-term and project employees. The
for work was on 17 February 1999. The Certificate of Employment
Court here reiterates the rule that all doubts, uncertainties,
issued by the HRAD Manager of INNODATA also indicated that
ambiguities and insufficiencies should be resolved in favor of labor.
petitioners Price and Domingo were employed by INNODATA on 17
It is a well-entrenched doctrine that in illegal dismissal cases, the
February 1999.
employer has the burden of proof. This burden was not discharged
in the present case.
However, respondents asserted before the Labor Arbiter that
petitioners’ employment contracts were effective only on 6
As a final observation, the Court also takes note of several other
September 1999. They later on admitted in their Memorandum filed
provisions in petitioners’ employment contracts that display utter
with this Court that petitioners were originally hired on 16 February
disregard for their security of tenure. Despite fixing a period or term
1999 but the project for which they were employed was completed
of employment, i.e., one year, INNODATA reserved the right to pre-
before the expiration of one year. Petitioners were merely rehired on
terminate petitioners’ employment under the following
6 September 1999 for a new project. While respondents submitted
circumstances:
employment contracts with 6 September 1999 as beginning date of
effectivity, it is obvious that in one of them, the original beginning
date of effectivity, 16 February 1999, was merely crossed out and 6.1 x x x Further should the Company have no more need for the
replaced with 6 September 1999. The copies of the employment EMPLOYEE’s services on account of completion of the project, lack
contracts submitted by petitioners bore similar alterations. of work (sic) business losses, introduction of new production
processes and techniques, which will negate the need for personnel,
and/or overstaffing, this contract maybe pre-terminated by the
The Court notes that the attempt to change the beginning date of
EMPLOYER upon giving of three (3) days notice to the employee.
effectivity of petitioners’ contracts was very crudely done. The
alterations are very obvious, and they have not been initialed by the
petitioners to indicate their assent to the same. If the contracts were xxxx
truly fixed-term contracts, then a change in the term or period
agreed upon is material and would already constitute a novation of
6.4 The EMPLOYEE or the EMPLOYER may pre-terminate this
the original contract.
CONTRACT, with or without cause, by giving at least Fifteen – (15)
[day] notice to that effect. Provided, that such pre-termination shall
Such modification and denial by respondents as to the real be effective only upon issuance of the appropriate clearance in favor
beginning date of petitioners’ employment contracts render the said of the said EMPLOYEE. (Emphasis ours.)
contracts ambiguous. The contracts themselves state that they
would be effective until 16 February 2000 for a period of one year. If
Pursuant to the afore-quoted provisions, petitioners have no right at
the contracts took effect only on 6 September 1999, then its period
all to expect security of tenure, even for the supposedly one-year
of effectivity would obviously be less than one year, or for a period of
period of employment provided in their contracts, because they can
only about five months.
still be pre-terminated (1) upon the completion of an unspecified
project; or (2) with or without cause, for as long as they are given a
Obviously, respondents wanted to make it appear that petitioners three-day notice. Such contract provisions are repugnant to the
worked for INNODATA for a period of less than one year. The only basic tenet in labor law that no employee may be terminated except
reason the Court can discern from such a move on respondents’ for just or authorized cause.
part is so that they can preclude petitioners from acquiring regular
status based on their employment for one year. Nonetheless, the
Under Section 3, Article XVI of the Constitution, it is the policy of the
Court emphasizes that it has already found that petitioners should
State to assure the workers of security of tenure and free them from
be considered regular employees of INNODATA by the nature of the
the bondage of uncertainty of tenure woven by some employers into
work they performed as formatters, which was necessary in the
their contracts of employment. This was exactly the purpose of the
business or trade of INNODATA. Hence, the total period of their
legislators in drafting Article 280 of the Labor Code – to prevent the
employment becomes irrelevant.
circumvention by unscrupulous employers of the employee’s right to
be secure in his tenure by indiscriminately and completely ruling out
Even assuming that petitioners’ length of employment is material, all written and oral agreements inconsistent with the concept of
given respondents’ muddled assertions, this Court adheres to its regular employment.
pronouncement in Villanueva v. National Labor Relations
Commission,28 to the effect that where a contract of employment,
In all, respondents’ insistence that it can legally dismiss petitioners
being a contract of adhesion, is ambiguous, any ambiguity therein
on the ground that their term of employment has expired is
should be construed strictly against the party who prepared it. The
untenable. To reiterate, petitioners, being regular employees of
Court is, thus, compelled to conclude that petitioners’ contracts of
INNODATA, are entitled to security of tenure. In the words of Article
employment became effective on 16 February 1999, and that they
279 of the Labor Code:
were already working continuously for INNODATA for a year.

ART. 279. Security of Tenure. – In cases of regular employment, the

Further attempting to exonerate itself from any liability for illegal
employer shall not terminate the services of an employee except for
dismissal, INNODATA contends that petitioners were project
a just cause or when authorized by this Title. An employee who is
employees whose employment ceased at the end of a specific
unjustly dismissed from work shall be entitled to reinstatement
project or undertaking. This contention is specious and devoid of
without loss of seniority rights and other privileges and to his full
merit.
backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was
In Philex Mining Corp. v. National Labor Relations withheld from him up to the time of his actual reinstatement.
Commission,29 the Court defined "project employees" as those
workers hired (1) for a specific project or undertaking, and wherein
By virtue of the foregoing, an illegally dismissed employee is entitled
(2) the completion or termination of such project has been
to reinstatement without loss of seniority rights and other privileges,
determined at the time of the engagement of the employee.
with full back wages computed from the time of dismissal up to the
time of actual reinstatement.
Scrutinizing petitioners’ employment contracts with INNODATA,
however, failed to reveal any mention therein of what specific project
Considering that reinstatement is no longer possible on the ground
or undertaking petitioners were hired for. Although the contracts
that INNODATA had ceased its operations in June 2002 due to
made general references to a "project," such project was neither
business losses, the proper award is separation pay equivalent to
named nor described at all therein. The conclusion by the Court of
one month pay31 for every year of service, to be computed from the
Appeals that petitioners were hired for the Earthweb project is not
commencement of their employment up to the closure of
supported by any evidence on record. The one-year period for which
INNODATA.
petitioners were hired was simply fixed in the employment contracts
without reference or connection to the period required for the

22
The amount of back wages awarded to petitioners must be
computed from the time petitioners were illegally dismissed until the
time INNODATA ceased its operations in June 2002.32
Petitioners are further entitled to attorney’s fees equivalent to 10% of
the total monetary award herein, for having been forced to litigate
and incur expenses to protect their rights and interests herein.
Finally, unless they have exceeded their authority, corporate officers
are, as a general rule, not personally liable for their official acts,
because a corporation, by legal fiction, has a personality separate
and distinct from its officers, stockholders and members. Although
as an exception, corporate directors and officers are solidarily held
liable with the corporation, where terminations of employment are
done with malice or in bad faith,33 in the absence of evidence that
they acted with malice or bad faith herein, the Court exempts the
individual respondents, Leo Rabang and Jane Navarette, from any
personal liability for the illegal dismissal of petitioners.
WHEREFORE, the Petition for Review on Certiorari is GRANTED.
The Decision dated 25 September 2006 and Resolution dated 15
June 2007 of the Court of Appeals in CA-G.R. SP No. 72795are
hereby REVERSED and SET ASIDE. RespondentInnodata
Philippines, Inc./Innodata Corporation is ORDERED to pay
petitioners Cherry J. Price, Stephanie G. Domingo, and Lolita
Arbilera: (a) separation pay, in lieu of reinstatement, equivalent to
one month pay for every year of service, to be computed from the
commencement of their employment up to the date respondent
Innodata Philippines, Inc./Innodata Corporation ceased operations;
(b) full backwages, computed from the time petitioners’
compensation was withheld from them up to the time respondent
Innodata Philippines, Inc./Innodata Corporation ceased operations;
and (3) 10% of the total monetary award as attorney’s fees. Costs
against respondent Innodata Philippines, Inc./Innodata Corporation.
SO ORDERED.
G.R. No. 149329 July 12, 2004
ROSITA PANGILINAN, YOLANDA LAYOLA, SALLY GOLDE,
AIDA QUITE, FERDINAND CALE, RAUL ARUITA, MANUEL
ERIFUL, ARNEL PAULO, ROSEMARIE GEOTINA, SAMUELA
KUMAR, REBECCA PEREZ, EDGAR BELLO, JOSEPH
SORIANO, DANILO AMPULLER, TOLENTINO CALLAO,
MANOLITA MANALANG, TORIBIO LETIM, NANCY BELGICA,
ALFREDO ARELLANO, JOSEFA CEBUJANO, JUN DEL
ROSARIO, AVELINO AGUILAR, MILAROSA TIAMSON, EDNA
DICHOSO, JASMIN BOLISAY, JULIETA DIDAL, GERARDO
BARISO, ANGELITO PEÑAFLOR, NERISSA LETIM,
ALEXANDER BARBOSA, ELIZABETH SAENS, NYMPHA LUGTU,
MYRNA MORALES, LIZA CRUZ, ELENA FANG, EDNA CRUZA,
GORGONIO PALMA, JOSE VERGARA, ALDRIN REMORQUE,
RUDY BLANCO, MARIO BUENVIAJE, MA. CRISTY CEA,
REYNALDO GUELAS VILLASENOR, RHOY TADO, LYDIA
SALIPOT, ANGELITO PEREZ VERGARA, RODOLFO GACHO,
JESSIE SAN PEDRO, MARINAO ORCA, JR., PEBELITO
LERONA, PEPE CONGRESO, NIMFA NAPAO, WILHELMINA
BAGUISA, OLIVIA CAINCAY, JERRY MANUEL NICOLAS,
CARLOS ABRATIQUE, JESUS LIM, JR., AND GERRY
ROXAS, petitioners,
vs.
GENERAL MILLING CORPORATION, respondent.
DECISION
CALLEJO, SR., J.:
Before this Court is a petition for review on certiorari of the
Decision1 of the Court of Appeals in CA-G.R. SP No. 51678 and its
Resolution denying the motion for reconsideration thereon.
The Antecedents
The respondent General Milling Corporation is a domestic
corporation engaged in the production and sale of livestock and
poultry.2 It is, likewise, the distributor of dressed chicken to various
restaurants and establishments nationwide.3 As such, it employs
hundreds of employees, some on a regular basis and others on a
casual basis, as "emergency workers."
The petitioners4 were employed by the respondent on different dates
as emergency workers at its poultry plant in Cainta, Rizal, under
separate "temporary/casual contracts of employment" for a period
of five months.5 Most of them worked as chicken dressers, while
the others served as packers or helpers.6 Upon the expiration of their
respective contracts, their services were terminated. They later filed
separate complaints for illegal dismissal and non-payment of holiday
pay, 13th month pay, night-shift differential and service incentive
leave pay against the respondent before the Arbitration Branch of
the National Labor Relations Commission, docketed as NLRC Case
No. RAB-IV-9-4519-92-RI; NLRC Case No. RAB-IV-9-4520-92-RI;
NLRC Case No. RAB-IV-9-4521-92-RI; NLRC Case No. RAB-IV-9-
4541-92-RI; NLRC Case No. RAB-IV-10-4552-92-RI; NLRC Case
No. RAB-IV-10-4595-92-RI and NLRC Case No. RAB-IV-11-4599-
92-RI. 7
The petitioners alleged that their work as chicken dressers was
necessary and desirable in the usual business of the respondent,
and added that although they worked from 10:00 p.m. to 6:00 a.m.,
they were not paid night-shift differential.8 They stressed that based
on the nature of their work, they were regular employees of the
respondent; hence, could not be dismissed from their employment
unless for just cause and after due notice. In support thereof, the
petitioners cited the decision of the Honorable Labor Arbiter Perlita
B. Velasco in NLRC Case No. NCR-6-2168-86, entitled Estelita
Jayme, et al. vs. General Milling Corporation; and NLRC Case No.
NCR-9-3726-86, entitled Marilou Carino, et al. vs. General Milling
Corporation.9 They asserted that the respondent GMC terminated
their contract of employment without just cause and due notice.
They further argued that the respondent could not rely on the
nomenclature of their employment as "temporary or casual."
On August 18, 1997, Labor Arbiter (LA) Voltaire A. Balitaan
rendered a decision in favor of the petitioners declaring that they
were regular employees. Finding that the termination of their
employment was not based on any of the just causes provided for in
the Labor Code, the LA declared that they were allegedly illegally
dismissed. The decretal portion of the decision reads:
WHEREFORE, judgment is hereby rendered in these
cases, as follows:
1. Declaring respondent corporation guilty of illegally
dismissing complainants, except Rosalina Basan and
Filomena Lanting whose complaints are hereby dismissed
on ground of prescription, and as a consequence therefor
ordering the said respondent corporation to reinstate them
to their former positions without loss of seniority rights and
other privileges and with full backwages from the time
they were illegally dismissed in the aggregate amount
of P15,328,594.04;
2. Ordering respondent corporation to pay the said
complainants their 13th month pay, holiday pay and
service incentive leave pay in the aggregate amount
of P1,979,148.23;
3. Ordering respondent corporation to pay said
complainants the amount of P1,730,744.22 by way of
attorney's fees, representing ten (10%) percentum of the
total judgment awards.
The case against individual respondent Medardo
Quiambao is hereby dismissed.10
A copy of the decision was sent by registered mail to the respondent
on October 23, 1997 under Registered Mail No. 004567 addressed
to Atty. Emmanuel O. Pacsi, counsel for GMC, 6th Floor, Corinthian
Plaza Bldg., 121 Paseo de Roxas, Makati City.11 However, Beth
Cacal, a clerk of the respondent GMC received the said decision on
October 28, 1997.12 Contending that a copy thereof was received
only on November 3, 1997, the respondent filed an appeal on
November 12, 1997, before the National Labor Relations
Commission (NLRC), docketed as NLRC NCR CA No. 014462-98.
The petitioners filed a Motion to Dismiss Respondents' Notice of
Appeal/Appeal Memorandum on the ground that the appeal was
filed five days late, considering that the August 18, 1997 Decision
was received by the respondent through its employee, Beth Cacal,
on October 28, 1997.13
The respondent opposed the motion, contending that Cacal was a
mere clerk, and was not a member of the staff of its Legal
23
Department. It further contended that the Legal Department was
located at the sixth (6th) floor of Corinthian Plaza and had its own
staff, including the legal secretary who served as the Legal
Department's receiving clerk.14Invoking Section 10, Rule 13 of the
Rules of Court, in relation to Section 2 thereof, the respondent
alleged that Cacal's receipt of the mail and/or decision was not
equivalent to receipt by its counsel. In support thereof, the
respondent cited the cases of Adamson University v. Adamson
University Faculty and Employees Association,15 and PLDT vs.
NLRC.16
On May 25, 1998, the NLRC rendered a decision reversing that of
the Labor Arbiter, the dispositive portion of which is herein quoted:
WHEREFORE, except for its award of "13th month pay,
holiday pay and service incentive leave pay in the
aggregate amount of P1,979,148.23" which is hereby
affirmed, the appealed decision is set aside for being
contrary to settled jurisprudence.17
The NLRC ruled that the respondent GMC filed its appeal within the
reglementary period. Citing the case of Cañete v. NLRC18 which, in
turn, cited Adamson v. Adamson19 and United Placement
International v. NLRC,20 the NLRC held that service by registered
mail is completed only "upon actual receipt thereof by the
addressee." Since the addressee of the mail is the respondent's
counsel and the person who received it was a non-member of the
Legal Staff, the decision cannot be said to have been validly served
on the respondent's counsel on October 28, 1997.
The NLRC also held that the petitioners, who were temporary or
contractual employees of the respondent, were legally terminated
upon the expiration of their respective contracts. Citing the case
of Brent School, Inc. vs. Zamora,21 the NLRC explained that while
the petitioners' work was necessary and desirable in the usual
business of GMC, they cannot be considered as regular employees
since they agreed to a fixed term.
The petitioners' motion for reconsideration of the decision having
been denied by the NLRC on October 12, 1998,22they filed a petition
for certiorari before the Court of Appeals and assigned the following
errors:
I THE DATE WHEN THE DECISION WAS DELIVERED BY
THE RESPONDENT COMMISSION SERIOUSLY ERRED
AND ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK AND/OR IN EXCESS OF ITS
JURISDICTION IN ENTERTAINING AND GIVING DUE
COURSE TO RESPONDENT COMPANY'S APPEAL
WHICH WAS UNDENIABLY FILED OUT OF TIME AND
CONSEQUENTLY SETTING ASIDE THE FINAL
DECISION OF THE LABOR ARBITER.
II
THE RESPONDENT COMMISSION SERIOUSLY ERRED
AND ACTED WITH GRAVE ABUSE OF DISCRETION IN
HOLDING THAT PETITIONERS' DISMISSAL WAS
LEGAL ON THE GROUND OF EXPIRATION OF
EMPLOYMENT CONTRACT WHICH IS NOT A
STATUTORY CAUSE UNDER THE LABOR CODE.
III
THE RESPONDENT COMMISSION [S]ERIOUSLY
ERRED AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN NOT FINDING THAT PETITIONERS,
AS REGULAR EMPLOYEES, CANNOT BE DISMISSED
WITHOUT JUST CAUSE AND THE REQUIRED DUE
PROCESS.23
On September 29, 2000, the CA rendered a decision affirming with
modification the decision of the NLRC, the decretal portion of which
reads:
WHEREFORE, the appealed decision of the NLRC is
hereby AFFIRMED, with the MODIFICATION that the
award of 13th month pay, holiday pay, and service
incentive leave pay shall cover only the year or years
when petitioners were actually employed with herein
respondent General Milling Corporation.24
The CA ruled that no grave abuse of discretion could be imputed to
the NLRC, considering that the ten-day period to appeal began to
run only from the date the decision of the LA was validly served on
the respondent's counsel. The appellate court also ruled that even
assuming arguendo that the respondent GMC's appeal was filed
late, in view of the substantial amount involved, giving due course to
the appeal did not amount to grave abuse of discretion.
On the merits of the petition, the CA ruled that where the duties of
the employee consist of activities usually necessary or desirable in
the usual business of the employer, it does not necessarily follow
that the parties are forbidden from agreeing on a period of time for
the performance of such activities, and cited the case of St.
Theresa's School of Novaliches Foundation v. NLRC.25 The CA
affirmed the entitlement of the petitioners to a proportionate
thirteenth (13th) month pay for the particular year/s the petitioners
were employed. As to the awards of holiday pay and service
incentive leave pay, the CA ruled that they should be limited to the
year/s of actual service.26
The petitioners filed a motion for reconsideration of the said
decision, which was denied on July 24, 2001.27
The Present Petition
The petitioners filed the instant petition, ascribing the following
errors to the appellate court:
I
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED AND ACTED WITHOUT JURISDICTION WHEN
IT MODIFIED THE LABOR ARBITER'S JUDGMENT
THAT HAS BECOME FINAL AND EXECUTORY FOR
FAILURE OF THE RESPONDENT TO APPEAL WITHIN
THE REGLEMENTARY PERIOD.
II
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN HOLDING THAT THE DECISION OF THE
LABOR ARBITER WAS DEEMED SERVED NOT ON
THE POSTMASTER TO THE OFFICE OF THE
RESPONDENT'S LAWYER, BUT ON THE DATE WHEN
THE RECEIVING CLERK GAVE THE DECISION TO THE
LAWYER.
III
THE RESPONDENT'S PRACTICE OF HIRING CHICKEN
DRESSERS ON A 5-MONTH CONTRACT AND
REPLACING THEM WITH ANOTHER SET OF 5-MONTH
CONTRACT WORKERS, OBVIOUSLY TO PREVENT
THEM FROM ATTAINING REGULAR STATUS, IS
VIOLATIVE OF THE CONSTITUTION AND ARTICLES
279 AND 280 OF THE LABOR CODE.28
The issues for resolution are (a) whether or not the respondent's
appeal from the Labor Arbiter's decision was filed within the
reglementary period therefor; and, (b) whether or not the petitioners
were regular employees of the respondent GMC when their
employment was terminated.
In petitions for review on certiorari of the decision of the CA, only
errors of law are generally reviewed.29 Normally, the Supreme Court
is not a trier of facts.30 In the absence of any showing that the NLRC
committed grave abuse of discretion, or otherwise acted without or
in excess of jurisdiction, the Court is bound by its findings.31 Such
findings are not infallible, however, particularly when there is a
showing that they were arrived at arbitrarily or in disregard of the
evidence on record. In such case, they may be re-examined by the
Court.
Hence, when the factual findings of the NLRC are contrary to those
of the Labor Arbiter, the evidentiary facts may be reviewed by the
appellate court.32 Considering that the NLRC's findings clash with
those of the Labor Arbiter's, this Court is compelled to go over the
records of the case as well as the submissions of the parties. 33
The Ruling of the Court
The petition is bereft of merit.
24
Anent the first issue, we agree with the CA that the NLRC did not act
with grave abuse of discretion when it gave due course to the
appeal of the respondent. Decisions of the Labor Arbiter are final
and executory, unless appealed to the Commission, within ten (10)
calendar days from receipt thereof.34 Copies of decisions or final
awards are served on both parties and their counsel by registered
mail,35 and such service by registered mail is completed upon actual
receipt by the addressee or five (5) days from receipt of the first
notice of the postmaster, whichever is earlier.36
The records show that the August 18, 1997 Decision of the Labor
Arbiter was served via registered mail, addressed to the respondent
GMC's counsel, Atty. Emmanuel O. Pacsi, at the sixth (6th) Floor,
Corinthian Plaza Bldg., 121 Paseo de Roxas, Makati City. 37 It was
received by Beth Cacal, a clerk of the respondent, on October 28,
1997. The petitioners insist that Cacal is a person with authority to
receive legal and judicial correspondence for the respondent's Legal
Department. They point out that such authority to receive mail for
and in behalf of the respondent's Legal Department is bolstered by
the certification from the Makati Post Office that she received the
copy of their motion to dismiss the appeal, addressed to the said
department.
The respondent GMC counters that the service of the LA's decision
to a person not connected to its Legal Department is not a valid
service, and that it is only when a copy of such decision is actually
given to such department that a valid service of the decision is
deemed to have been made. Stressing that factual issues are not
proper in a petition for certiorari under Rule 45, the respondent no
longer discussed Cacal's authority to receive legal and judicial
communications for the respondent.
A review of the records reveal that Cacal was a clerk at the
respondent's office and was assigned at the sixth floor of the
Corinthian Plaza Bldg. She was not assigned at the respondent's
Legal Department, which has its own office staff, including a
secretary who serves as the department's receiving clerk. 38 The
Court has ruled that a service of a copy of a decision on a person
who is neither a clerk nor one in charge of the attorney's office is
invalid.39 Thus, there was no grave abuse of discretion on the part of
the NLRC in giving due course to the respondent's appeal.
On the second issue, we agree that the petitioners were employees
with a fixed period, and, as such, were not regular employees.
Article 280 of the Labor Code comprehends three kinds of
employees: (a) regular employees or those whose work is
necessary or desirable to the usual business of the employer; (b)
project employees or those whose employment has been fixed for a
specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the
employee or where the work or services to be performed is seasonal
in nature and the employment is for the duration of the season; and,
(c) casual employees or those who are neither regular nor project
employees.40
A regular employee is one who is engaged to perform activities
which are necessary and desirable in the usual business or trade of
the employer as against those which are undertaken for a specific
project or are seasonal.41There are two separate instances whereby
it can be determined that an employment is regular: (1) if the
particular activity performed by the employee is necessary or
desirable in the usual business or trade of the employer; and, (2) if
the employee has been performing the job for at least a year. 42
In the case of St. Theresa's School of Novaliches Foundation vs.
NLRC,43 we held that Article 280 of the Labor Code does not
proscribe or prohibit an employment contract with a fixed period. We
furthered that it does not necessarily follow that where the duties of
the employee consist of activities usually necessary or desirable in
the usual business of the employer, the parties are forbidden from
agreeing on a period of time for the performance of such activities.
There is thus nothing essentially contradictory between a definite
period of employment and the nature of the employee's duties.
Indeed, in the leading case of Brent School Inc. v. Zamora,44 we laid
down the guideline before a contract of employment may be held as
valid, to wit:
…[S]tipulations in employment contracts providing
for term employment or fixed period employment are
valid when the period were agreed upon knowingly
and voluntarily by the parties without force, duress or
improper pressure, being brought to bear upon the
employee and absent any other circumstances
vitiating his consent, or where it satisfactorily appears
that the employer and employee dealt with each other
on more or less equal terms with no moral dominance
whatever being exercised by the former over the
latter.45
An examination of the contracts entered into by the petitioners
showed that their employment was limited to a fixed period, usually
five or six months, and did not go beyond such period.
TEMPORARY/CASUAL CONTRACT OF EMPLOYMENT
KNOW ALL MEN BY THESE PRESENTS:
That the GENERAL MILLING CORPORATION, hereby
temporarily hires ________________ as Emergency
worker for a period beginning from ____________ to
_____________, inclusive, at the rate of _____________
per day, payable every 15th [day] and end of each month.
________________ hereby binds and obligates
himself/herself to perform his/her assigned work diligently
and to the best of his/her ability, and promise to obey all
lawful orders of his/ her superior and/or representatives
made in connection with the work for which he/she is
employed.
IT IS CLEARLY STIPULATED THAT THE CONDITION
OF THIS EMPLOYMENT SHALL BE AS FOLLOWS:
1. This employment contract shall be on a DAY-TO-DAY
BASIS and shall not extend beyond the period specified
above;
2. The employee aforementioned may be laid off or
separated from the Firm, EVEN BEFORE THE EXPIRY
DATE OF THIS CONTRACT, if his/her services are no
longer needed, or if such services are found to be
unsatisfactory, or if she/he has violated any of the
established rules and regulations of the Company;
3. In any case, the period of employment shall not go
beyond the duration of the work or purpose for which the
aforementioned employee has been engaged;
4. That the employee hereby agrees to work in any work
shift schedule that may be assigned to him by the Firm
during the period of this contract; and
This Temporary/Casual Employment contract, unless
sooner terminated for any of the causes above-cited, shall
then automatically cease on its expiry date, without the
necessity of any prior notice to the employee concerned.46
The records reveal that the stipulations in the employment contracts
were knowingly and voluntarily agreed to by the petitioners without
force, duress or improper pressure, or any circumstances that
vitiated their consent. Similarly, nothing therein shows that these
contracts were used as a subterfuge by the respondent GMC to
evade the provisions of Articles 279 and 280 of the Labor Code.
The petitioners were hired as "emergency workers" and assigned as
chicken dressers, packers and helpers at the Cainta Processing
Plant. The respondent GMC is a domestic corporation engaged in
the production and sale of livestock and poultry, and is a distributor
of dressed chicken. While the petitioners' employment as chicken
dressers is necessary and desirable in the usual business of the
respondent, they were employed on a mere temporary basis, since
their employment was limited to a fixed period. As such, they cannot
be said to be regular employees, but are merely "contractual
employees." Consequently, there was no illegal dismissal when the
petitioners' services were terminated by reason of the expiration of
their contracts.47 Lack of notice of termination is of no consequence,
because when the contract specifies the period of its duration, it
terminates on the expiration of such period. A contract for
employment for a definite period terminates by its own term at the
end of such period.48
In sum, we rule that the appeal was filed within the ten (10)-day
reglementary period. Although the petitioners who mainly worked as
chicken dressers performed work necessary and desirable in the
usual business of the respondent, they were not regular employees
therein. Consequently, the termination of their employment upon the
expiry of their respective contracts was valid.
25
IN LIGHT OF ALL THE FOREGOING, the petition is hereby
DENIED DUE COURSE. The Decision of the Court of Appeals in
CA-G.R. SP No. 51678 is AFFIRMED. No costs.
SO ORDERED.
[ G.R. No. 193857, November 28, 2012 ]
MA. MERCEDES L. BARBA, PETITIONER, VS. LICEO DE
CAGAYAN UNIVERSITY, RESPONDENT.
DECISION
VILLARAMA, JR., J.:
Before the Court is a petition for review on certiorari assailing the
March 29, 2010 Amended Decision[1] and September 14, 2010
Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 02508-
MIN. The CA had reconsidered its earlier Decision[3] dated October
22, 2009 and set aside the September 25, 2007 and June 30, 2008
Resolutions[4] of the National Labor Relations Commission (NLRC)
as well as the September 29, 2006 Decision[5] of the Labor Arbiter.
The CA held that the Labor Arbiter and NLRC had no jurisdiction
over the illegal dismissal case filed by petitioner against respondent
because petitioner's position as Dean of the College of Physical
Therapy of respondent is a corporate office.
The facts follow.
Petitioner Dr. Ma. Mercedes L. Barba was the Dean of the College of
Physical Therapy of respondent Liceo de Cagayan University, Inc., a
private educational institution with school campus located at
Carmen, Cagayan de Oro City.
Petitioner started working for respondent on July 8, 1993 as medical
officer/school physician for a period of one school year or until
March 31, 1994. In July 1994, she was chosen by respondent to be
the recipient of a scholarship grant to pursue a three-year residency
training in Rehabilitation Medicine at the Veterans Memorial
Medical Center (VMMC). The Scholarship Contract[6] provides:
5. That the SCHOLAR after the duration of her study and training
shall serve the SCHOOL in whatever position the SCHOOL desires
related to the SCHOLAR's studies for a period of not less than ten
(10) years;
After completing her residency training with VMMC in June 1997,
petitioner returned to continue working for respondent. She was
appointed as Acting Dean of the College of Physical Therapy and at
the same time designated as Doctor-In-Charge of the Rehabilitation
Clinic of the Rodolfo N. Pelaez Hall, City Memorial Hospital.
On June 19, 2002, petitioner's appointment as Doctor-In-Charge of
the Rehabilitation Clinic was renewed and she was appointed as
Dean of the College of Physical Therapy by respondent's President,
Dr. Jose Ma. R. Golez. The appointment letter[7] reads:
xxxx
Dear Dr. Barba:
You are hereby re-appointed Dean of the College of Physical Therapy
and Doctor-In-Charge of the Rehabilitation Clinic at Rodolfo N.
Pelaez Hall, City Memorial Hospital and other rehabilitation clinics
under the management of Liceo de Cagayan University for a period
of three years effective July 1, 2002 unless sooner revoked for valid
cause or causes.
Your position is one of trust and confidence and the appointment is
subject to the pertinent provisions of the University Administrative
Personnel and Faculty Manuals, and Labor Code.
xxxx
Petitioner accepted her appointment and assumed the position of
Dean of the College of Physical Therapy. In the school year 2003 to
2004, the College of Physical Therapy suffered a dramatic decline in
the number of enrollees from a total of 1,121 students in the school
year 1995 to 1996 to only 29 students in the first semester of school
year 2003 to 2004. This worsened in the next year or in school year
2004 to 2005 where a total of only 20 students enrolled.[8]
Due to the low number of enrollees, respondent decided to freeze the
operation of the College of Physical Therapy indefinitely.
Respondent's President Dr. Rafaelita Pelaez-Golez wrote petitioner a
letter[9] dated March 16, 2005 informing her that her services as
dean of the said college will end at the close of the school year.
Thereafter, the College of Physical Therapy ceased operations on
March 31, 2005, and petitioner went on leave without pay starting
on April 9, 2005. Subsequently, respondent's Executive Vice
President, Dr. Mariano M. Lerin, through Dr. Glory S. Magdale,
respondent's Vice President for Academic Affairs, sent petitioner a
letter[10] dated April 27, 2005 instructing petitioner to return to work
on June 1, 2005 and report to Ma. Chona Palomares, the Acting
Dean of the College of Nursing, to receive her teaching load and
assignment as a full-time faculty member in that department for the
school year 2005-2006.
In reply, petitioner informed Dr. Lerin that she had not committed
to teach in the College of Nursing and that as far as she can recall,
her employment is not dependent on any teaching load. She then
requested for the processing of her separation benefits in view of the
closure of the College of Physical Therapy.[11] She did not report to
Palomares on June 1, 2005.
On June 8, 2005, petitioner followed up her request for separation
pay and other benefits but Dr. Lerin insisted that she report to
Palomares; otherwise, sanctions will be imposed on her. Thus,
petitioner through counsel wrote Dr. Golez directly, asking for her
separation pay and other benefits.
On June 21, 2005, Dr. Magdale wrote petitioner a letter[12] directing
her to report for work and to teach her assigned subjects on or
before June 23, 2005. Otherwise, she will be dismissed from
employment on the ground of abandonment. Petitioner, through
counsel, replied that teaching in the College of Nursing is in no way
related to her scholarship and training in the field of rehabilitation
medicine. Petitioner added that coercing her to become a faculty
member from her position as College Dean is a great demotion
which amounts to constructive dismissal.[13]
Dr. Magdale sent another letter[14] to petitioner on June 24, 2005
ordering her to report for work as she was still bound by the
Scholarship Contract to serve respondent for two more years. But
petitioner did not do so. Hence, on June 28, 2005, Dr. Magdale sent
petitioner a notice terminating her services on the ground of
abandonment.
Meanwhile, on June 22, 2005, prior to the termination of her
services, petitioner filed a complaint before the Labor Arbiter for
illegal dismissal, payment of separation pay and retirement benefits
against respondent, Dr. Magdale and Dr. Golez. She alleged that her
transfer to the College of Nursing as a faculty member is a demotion
amounting to constructive dismissal.
Respondent claimed that petitioner was not terminated and that it
was only petitioner's appointment as College Dean in the College of
Physical Therapy that expired as a necessary consequence of the
eventual closure of the said college. Respondent further averred that
petitioner's transfer as full-time professor in the College of Nursing
does not amount to constructive dismissal since the transfer was
without loss of seniority rights and without diminution of pay. Also,
respondent added that pursuant to the Scholarship Contract,
petitioner was still duty bound to serve respondent until 2007 in
whatever position related to her studies the school desires.
Labor Arbiter's Ruling
In a Decision[15] dated September 29, 2006, the Labor Arbiter found
that respondent did not constructively dismiss petitioner; therefore,
she was not entitled to separation pay. The Labor Arbiter held that
petitioner's assignment as full-time professor in the College of
Nursing was not a demotion tantamount to constructive dismissal.
The dispositive portion of the Labor Arbiter's decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered dismissing the complaint for illegal dismissal for utter lack
of merit, but ordering the respondent Liceo de Cagayan University to
reinstate complainant to an equivalent position without loss of
seniority rights, but without back wages.
However, if reinstatement is no longer feasible or if there is no
equivalent position to which complainant may be reinstated,
respondent may opt to pay complainant her separation pay
equivalent to one-half (1/2) month pay for every year of service or in
the sum of P195,000.00, subject to deduction for advances or
accountabilities which complainant may have had.
Other claims are ordered dismissed for lack of merit.
SO ORDERED.[16]
NLRC's Ruling
Petitioner appealed the above decision to the NLRC. On September
26
25, 2007, the NLRC issued a Resolution[17] reversing the Labor
Arbiter's decision and holding that petitioner was constructively
dismissed. The NLRC held that petitioner was demoted when she
was assigned as a professor in the College of Nursing because there
are functions and obligations and certain allowances and benefits
given to a College Dean but not to an ordinary professor. The NLRC
ruled:
WHEREFORE, in view of the foregoing, the assailed decision is
hereby MODIFIED in that complainant is hereby considered as
constructively dismissed and thus entitled to backwages and
separation pay of one (1) month salary for every year of service, plus
attorney's fees, which shall be computed at the execution stage
before the Arbitration Branch of origin.
SO ORDERED.[18]
The NLRC denied respondent's motion for reconsideration in a
Resolution[19] dated June 30, 2008.
Ruling of the Court of Appeals
Respondent went to the CA on a petition for certiorari alleging that
the NLRC committed grave abuse of discretion when it declared that
petitioner's transfer to the College of Nursing as full-time professor
but without diminution of salaries and without loss of seniority
rights amounted to constructive dismissal because there was a
demotion involved in the transfer and because petitioner was
compelled to accept her new assignment.
Respondent also filed a Supplemental Petition[20] raising for the first
time the issue of lack of jurisdiction of the Labor Arbiter and the
NLRC over the case. Respondent claimed that a College Dean is a
corporate officer under its by-laws and petitioner was a corporate
officer of respondent since her appointment was approved by the
board of directors. Respondent posited that petitioner was a
corporate officer since her office was created by the by-laws and her
appointment, compensation, duties and functions were approved by
the board of directors. Thus, respondent maintained that the
jurisdiction over the case is with the regular courts and not with the
labor tribunals.
In its original Decision[21] dated October 22, 2009, the CA reversed
and set aside the NLRC resolutions and reinstated the decision of
the Labor Arbiter. The CA did not find merit in respondent's
assertion in its Supplemental Petition that the position of petitioner
as College Dean was a corporate office. Instead, the appellate court
held that petitioner was respondent's employee, explaining thus:
Corporate officers in the context of PD 902-A are those officers of a
corporation who are given that character either by the Corporation
Code or by the corporation's By-Laws. Under Section 25 of the
Corporation Code, the "corporate officers" are the president,
secretary, treasurer and such other officers as may be provided for in
the By-Laws.
True, the By-Laws of LDCU provides that there shall be a College
Director. This means a College Director is a corporate officer.
However, contrary to the allegation of petitioner, the position of
Dean does not appear to be the same as that of a College Director.
Aside from the obvious disparity in name, the By-Laws of LDCU
provides for only one College Director. But as shown by LDCU itself,
numerous persons have been appointed as Deans. They could not be
the College Director contemplated by the By-Laws inasmuch as the
By-Laws authorize only the appointment of one not many. If it is
indeed the intention of LDCU to give its many Deans the
rank of College Director, then it exceeded the authority
given to it by its By-Laws because only one College Director
is authorized to be appointed. It must amend its By-Laws. Prior
to such an amendment, the office of College Dean is not a corporate
office.
Another telling sign that a College Director is not the same as a Dean
is the manner of appointment. A College Director is directly
appointed by the Board of Directors. However, a College
Dean is appointed by the President upon the recommendation
of the Vice President for Academic Affairs and the Executive Vice
President and approval of the Board of Directors. There is a clear
distinction on the manner of appointment indicating that the offices
are not one and the same.
xxxx
This shows that it was not the intention of LDCU to make
Dr. Barba a corporate officer as it was stated in her letter of
appointment that the same shall be subject to the provisions of the
Labor Code. Otherwise, the appointment letter should have stated
that her appointment is governed by the Corporation Code. Thus,
We find the arguments in the Supplemental Petition on the matter of
lack of jurisdiction of the Labor Arbiter and the NLRC to be without
merit. Dr. Barba, being a College Dean, was not a corporate
officer.[22] (Emphasis not ours)
The CA further found that no constructive dismissal occurred nor
has petitioner abandoned her work. According to the CA, a transfer
amounts to constructive dismissal when the transfer is
unreasonable, unlikely, inconvenient, impossible, or prejudicial to
the employee or it involves a demotion in rank or a diminution of
salary and other benefits. In the case of petitioner, the CA held that
she was never demoted and her transfer, being a consequence of the
closure of the College of Physical Therapy, was valid.
The CA also noted that petitioner's appointment as Dean of the
College of Physical Therapy was for a term of three years. Hence,
when her appointment as College Dean was no longer renewed on
June 1, 2005 or after her three-year term had expired, it cannot be
said that there was a demotion or that she was dismissed. Her term
as Dean had expired and she can no longer claim to be entitled to the
benefits emanating from such office.
On the issue of alleged lack of jurisdiction, the CA observed that
respondent never raised the issue of jurisdiction before the Labor
Arbiter and the NLRC and respondent even actively participated in
the proceedings below. Hence, respondent is estopped from
questioning the jurisdiction of the labor tribunals.
Unsatisfied, both petitioner and respondent sought reconsideration
of the CA decision. Petitioner prayed for the reversal of the ruling
that there was no constructive dismissal. Respondent meanwhile
maintained that the labor tribunals have no jurisdiction over the
case, petitioner being a corporate officer.
On March 29, 2010, the CA issued the assailed Amended
Decision[23] setting aside its earlier ruling. This time the CA held that
the position of a College Dean is a corporate office and therefore the
labor tribunals had no jurisdiction over the complaint for
constructive dismissal. The CA noted that petitioner's appointment
as Dean of the College of Physical Therapy was approved by the
respondent's board of directors thereby concluding that the position
of a College Dean is a corporate office. Also, the CA held that the
College Director mentioned in respondent's by-laws is the same as a
College Dean and no one has ever been appointed as College
Director. The CA added that in the Administrative Manual the words
"college" and "department" were used in the same context in the
section on the Duties and Responsibilities of the College Dean, and
that there could not have been any other "head of department" being
alluded to in the by-laws but the college dean.
The dispositive portion of the Amended Decision reads:
WHEREFORE, in view of the foregoing, We reconsider Our
Decision on October [22], 2009, and declare that the position of
College Dean is a corporate office of Petitioner [Liceo de Cagayan
University], thereby divesting the Labor Arbiter and the National
Labor Relations Commission of jurisdiction over the instant case.
Hence, the Resolutions of the Public Respondent dated September
25, 2007 and June 30, 2008 as well as that of the Regional Labor
Arbiter dated 29 September 2006 are VACATED and SET
ASIDEas they were rendered by tribunals that had no jurisdiction
over the case.
SO ORDERED.[24]
Petitioner filed a motion for reconsideration from the above
decision, but her motion was denied by the CA in its
Resolution[25] dated September 14, 2010. Hence, petitioner filed the
present petition.
Petitioner argues that the CA erred in ruling that she was a corporate
officer and asserts that the CA's previous finding that she was
respondent's employee is more in accord with law and
jurisprudence. Petitioner adds that the appellate court erred when it
ruled that the labor tribunals had no jurisdiction over her complaint
for illegal dismissal against respondent. She faults the CA for
allowing respondent to raise the issue of jurisdiction in a
Supplemental Petition after respondent has actively participated in
the proceedings before the labor tribunals. Petitioner also asserts
that the CA erred in denying her motion for reconsideration from its
Amended Decision on the ground that it is a second motion for
reconsideration which is a prohibited pleading. Lastly, petitioner
claims that respondent violated the rule against forum shopping
when it failed to inform the CA of the pendency of the complaint for
breach of contract which it filed against petitioner before the
Regional Trial Court of Misamis Oriental, Branch 23.
Respondent, for its part, counters that the petition was filed out of
time and petitioner's motion for reconsideration from the Amended
Decision was a prohibited pleading since petitioner has already filed
a motion for reconsideration from the original decision of the CA. It
27
is respondent's posture that an Amended Decision is not really a new
decision but the appellate court's own modification of its prior
decision. More importantly, respondent points out that the
arguments raised by petitioner do not justify a reversal of the
Amended Decision of the appellate court. Respondent insists on the
correctness of the Amended Decision and quotes the assailed
decision in its entirety.
Issue
The decisive issue in the present petition is whether petitioner was
an employee or a corporate officer of respondent university.
Resolution of this issue resolves the question of whether the
appellate court was correct in ruling that the Labor Arbiter and the
NLRC had no jurisdiction over petitioner's complaint for
constructive dismissal against respondent.
Our Ruling
We grant the petition.
Prefatorily, we first discuss the procedural matter raised by
respondent that the present petition is filed out of time. Respondent
claims that petitioner's motion for reconsideration from the
Amended Decision is a second motion for reconsideration which is a
prohibited pleading. Respondent's assertion, however, is misplaced
for it should be noted that the CA's Amended Decision totally
reversed and set aside its previous ruling. Section 2, Rule 52 of
the 1997 Rules of Civil Procedure, as amended, provides that no
second motion for reconsideration of a judgment or final resolution
by the same party shall be entertained. This contemplates a situation
where a second motion for reconsideration is filed by the same party
assailing the same judgment or final resolution. Here, the motion for
reconsideration of petitioner was filed after the appellate court
rendered an Amended Decision totally reversing and setting aside its
previous ruling. Hence, petitioner is not precluded from filing
another motion for reconsideration from the Amended Decision
which held that the labor tribunals lacked jurisdiction over
petitioner's complaint for constructive dismissal. The period to file
an appeal should be reckoned not from the denial of her motion for
reconsideration of the original decision, but from the date of
petitioner's receipt of the notice of denial of her motion for
reconsideration from the Amended Decision. And as petitioner
received notice of the denial of her motion for reconsideration from
the Amended Decision on September 23, 2010 and filed her petition
on November 8, 2010, or within the extension period granted by the
Court to file the petition, her petition was filed on time.
Now on the main issue.
As a general rule, only questions of law may be allowed in a petition
for review on certiorari.[26] Considering, however, that the CA
reversed its earlier decision and made a complete turnaround from
its previous ruling, and consequently set aside both the findings of
the Labor Arbiter and the NLRC for allegedly having been issued
without jurisdiction, it is necessary for the Court to reexamine the
records and resolve the conflicting rulings.
After a careful review and examination of the records, we find that
the CA's previous ruling that petitioner was respondent's employee
and not a corporate officer is supported by the totality of the
evidence and more in accord with law and prevailing jurisprudence.
Corporate officers are elected or appointed by the directors or
stockholders, and are those who are given that character either by
the Corporation Code or by the corporation's by-laws.[27] Section
25[28] of the Corporation Code enumerates corporate officers as the
president, the secretary, the treasurer and such other officers as may
be provided for in the by-laws. In Matling Industrial and
Commercial Corporation v. Coros,[29] the phrase "such other officers
as may be provided for in the by-laws" has been clarified, thus:
Conformably with Section 25, a position must be expressly
mentioned in the By-Laws in order to be considered as a
corporate office. Thus, the creation of an office pursuant to or
under a By-Law enabling provision is not enough to make a position
a corporate office. Guerrea v. Lezama, the first ruling on the matter,
held that the only officers of a corporation were those given that
character either by the Corporation Code or by the By-Laws; the
rest of the corporate officers could be considered only as
employees of subordinate officials. Thus, it was held
in Easycall Communications Phils., Inc. v. King:
An "office" is created by the charter of the corporation and
the officer is elected by the directors or stockholders. On the other
hand, an employee occupies no office and generally is
employed not by the action of the directors or stockholders but by
the managing officer of the corporation who also
determines the compensation to be paid to such
employee. (Emphasis supplied)
In declaring petitioner a corporate officer, the CA considered
respondent's by-laws and gave weight to the certifications of
respondent's secretary attesting to the resolutions of the board of
directors appointing the various academic deans for the School
Years 1991-2002 and 2002-2005, including petitioner. However, an
assiduous perusal of these documents does not convince us that
petitioner occupies a corporate office position in respondent
university.
The relevant portions of respondent's by-laws[30] are hereby quoted
as follows:
Article III
The Board of Directors
Sec. 3. The Board of Directors shall appoint a College Director,
define his powers and duties, and determine his compensation;
approve or disapprove recommendations for appointment or
dismissal of teachers and employees submitted to it by the College
Director; and exercise other powers and perform such duties as may
be required of it hereafter for the proper functioning of the school.
xxxx
Article IV
Officers
Sec. 1. The officers of the corporation shall consist of a President, a
Vice President, and a Secretary-Treasurer, who shall be
chosen from the directors and by the directors themselves. They
shall be elected annually at the first meeting of the directors
immediately after their election, and shall hold office for one (1) year
and until their successors are elected and qualified.
xxxx
Article V
Other Appointive Officials
Sec. 1. The Liceo de Cagayan shall have a College Director and
such heads of departments as may exist in the said college whose
appointments, compensations, powers and duties shall be
determined by the Board of Directors.[31] (Emphasis supplied)
On the other hand, the pertinent portions of the two board
resolutions appointing the various academic deans in the university
including petitioner, read as follows:
xxxx
RESOLVE, as it is hereby resolved, that pursuant to Section 3[,]
Article III and Section 1[,] Article V of the Corporation's By-laws, the
various academic deans for the school years 1999-2002 of the
University, as recommended by the President of the Corporation, are
hereby appointed, whose names are enumerated hereunder and
their respective colleges and their honoraria are indicated opposite
their names, all of them having a three (3) year term, to wit:
Name and College
Honorarium
Ma. Mercedes Vivares
2,660.00
Physical Therapy
xxxx
RESOLVE, as it is hereby resolved, that pursuant to Section 3[,]
Article III and Section 1[,] Article V of the Corporation's By-laws, the
various academic deans for the school years 2002-2005 of the
University, as recommended by the President of the Corporation, are
hereby appointed, whose names are enumerated hereunder and
their respective colleges and their honoraria are indicated opposite
their names, all of them having a three (3) year term, to wit:
Name and College
Honorarium
Ma. Mercedes Vivares
2,450.00
Physical Therapy
x x x x[32]
28

In respondent's by-laws, there are four officers specifically
mentioned, namely, a president, a vice president, a secretary and a
treasurer. In addition, it is provided that there shall be other
appointive officials, a College Director and heads of departments
whose appointments, compensations, powers and duties shall be
determined by the board of directors. It is worthy to note that a
College Dean is not among the corporate officers mentioned in
respondent's by-laws. Petitioner, being an academic dean, also held
an administrative post in the university but not a corporate office as
contemplated by law. Petitioner was not directly elected nor
appointed by the board of directors to any corporate office but her
appointment was merely approved by the board together with the
other academic deans of respondent university in accordance with
the procedure prescribed in respondent's Administrative
Manual.[33] The act of the board of directors in approving the
appointment of petitioner as Dean of the College of Therapy did not
make her a corporate officer of the corporation.
Moreover, the CA, in its amended decision erroneously equated the
position of a College Director to that of a College Dean thereby
concluding that petitioner is an officer of respondent.
It bears stressing that the appointive officials mentioned in Article V
of respondent's by-laws are not corporate officers under the
contemplation of the law. Though the board of directors may create
appointive positions other than the positions of corporate officers,
the persons occupying such positions cannot be deemed as corporate
officers as contemplated by Section 25 of the Corporation Code. On
this point, the SEC Opinion dated November 25, 1993 quoted in the
case of Matling Industrial and Commercial Corporation v.
Coros,[34] is instructive:
Thus, pursuant to the above provision (Section 25 of the Corporation
Code), whoever are the corporate officers enumerated in the by-laws
are the exclusive Officers of the corporation and the Board has no
power to create other Offices without amending first the corporate
By-laws. However, the Board may create appointive
positions other than the positions of corporate Officers,
but the persons occupying such positions are not
considered as corporate officers within the meaning of
Section 25 of the Corporation Code and are not
empowered to exercise the functions of the corporate
Officers, except those functions lawfully delegated to them. Their
functions and duties are to be determined by the Board of
Directors/Trustees.
But even assuming that a College Director may be considered a
corporate officer of respondent, a review of the records as well as the
other documents submitted by the parties fails to persuade that
petitioner was the "College Director" mentioned in the by-laws of
respondent. Nowhere in petitioner's appointment letter was it stated
that petitioner was designated as the College Director or that
petitioner was to assume the functions and duties of a College
Director. Neither can it be inferred in respondent's by-laws that a
dean of a college is the same as a College Director of respondent.
Respondent's lone surviving incorporating director Yolanda Rollo
even admitted that no College Director has ever been appointed by
respondent. In her affidavit, Yolanda also explained the reason for
the creation of the position of a College Director, to wit:
4. At the time we signed the By-Laws of the Corporation, we, as
directors, did envision to form only a college of law as that was the
main thrust of our president, the late Atty. Rodolfo N. Pelaez. The
original plan then was to have a "College Director" as the head of the
college of law and below him within the college were heads of
departments. The appointments, remuneration, duties and functions
of the "College Director" and the heads of departments were to be
approved by the Board of Directors. x x x[35]
Notably, the CA has sufficiently explained why petitioner could not
be considered a College Director in its previous decision. The
appellate court explained:
True, the By-Laws of [Liceo de Cagayan University] provides that
there shall be a College Director. This means a College Director is a
corporate officer. However, contrary to the allegation of petitioner,
the position of Dean does not appear to be the same as that of a
College Director.
Aside from the obvious disparity in name, the By-Laws of [Liceo de
Cagayan University] provides for only one College Director. But as
shown by [Liceo de Cagayan University] itself, numerous persons
have been appointed as Deans. They could not be the College
Director contemplated by the By-Laws inasmuch as the By-Laws
authorize only the appointment of one not many. If it is indeed
the intention of [Liceo de Cagayan University] to give its
many Deans the rank of College Director, then
it exceededthe authority given to it by its By-Laws because
only one College Director is authorized to be appointed. It
must amend its By-Laws. Prior to such amendment, the office of
[the] College Dean is not a corporate office.
Another telling sign that a College Director is not the same as a Dean
is the manner of appointment. A College Director is directly
appointed by the Board of Directors. However, a College
Dean is appointed by the President upon the recommendation
of the Vice President for Academic Affairs and the Executive Vice
President and approval of the Board of Directors. There is a clear
distinction on the manner of appointment indicating that the offices
are not one and the same.[36](Additional emphasis supplied)
Undoubtedly, petitioner is not a College Director and she is not a
corporate officer but an employee of respondent. Applying the four-
fold test concerning (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; (4)
the employer's power to control the employee with respect to the
means and methods by which the work is to be accomplished, it is
clear that there exists an employer-employee relationship between
petitioner and respondent. Records show that petitioner was
appointed to her position as Dean by Dr. Golez, the university
president and was paid a salary of P32,500 plus transportation
allowance. It was evident that respondent had the power of control
over petitioner as one of its deans. It was also the university
president who informed petitioner that her services as Dean of the
College of Physical Therapy was terminated effective March 31, 2005
and she was subsequently directed to report to the Acting Dean of
the College of Nursing for assignment of teaching load.
Thus, petitioner, being an employee of respondent, her complaint
for illegal/constructive dismissal against respondent was properly
within the jurisdiction of the Labor Arbiter and the NLRC. Article
217 of the Labor Code provides:
ART. 217. Jurisdiction of Labor Arbiters and the
Commission. (a) Except as otherwise provided under this Code,
the Arbiters shall have original and exclusive jurisdiction to hear and
decide xxx the following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that
workers may file involving wage, rates of pay, hours of work and
other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and lockouts;
and
6. Except claims for Employees Compensation, Social Security,
Medicare and maternity benefits, all other claims arising from
employer-employee relations, including those of persons in domestic
or household service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied with a claim
for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over
all cases decided by Labor Arbiters.
xxxx
Moreover, we agree with the CA's earlier pronouncement that since
respondent actively participated in the proceedings before the Labor
Arbiter and the NLRC, it is already estopped from belatedly raising
the issue of lack of jurisdiction. In this case, respondent filed
position papers and other supporting documents to bolster its
defense before the labor tribunals but in all these pleadings, the
issue of lack of jurisdiction was never raised. It was only in its
Supplemental Petition filed before the CA that respondent first
brought the issue of lack of jurisdiction. We have consistently held
that while jurisdiction may be assailed at any stage, a party's active
participation in the proceedings will estop such party from assailing
its jurisdiction. It is an undesirable practice of a party participating
in the proceedings and submitting his case for decision and then
accepting the judgment, only if favorable, and attacking it for lack of
jurisdiction, when adverse.[37]
Under Section 6, Rule 10 of the 1997 Rules of Civil Procedure, as
amended, governing supplemental pleadings, the court "may" admit
supplemental pleadings, such as the supplemental petition filed by
respondent before the appellate court, but the admission of these
pleadings remains in the sound discretion of the court. Nevertheless,
we have already found no credence in respondent's claim that
petitioner is a corporate officer, consequently, the alleged lack of
29
jurisdiction asserted by respondent in the supplemental petition is
bereft of merit.
On the issue of constructive dismissal, we agree with the Labor
Arbiter and the appellate court's earlier ruling that petitioner was
not constructively dismissed. Petitioner's letter of appointment
specifically appointed her as Dean of the College of Physical Therapy
and Doctor-in-Charge of the Rehabilitation Clinic "for a period of
three years effective July 1, 2002 unless sooner revoked for valid
cause or causes." Evidently, petitioner's appointment as College
Dean was for a fixed term, subject to reappointment and revocation
or termination for a valid cause. When respondent decided to close
its College of Physical Therapy due to drastic decrease in enrollees,
petitioner's appointment as its College Dean was validly revoked and
her subsequent assignment to teach in the College of Nursing was
justified as it is still related to her scholarship studies in Physical
Therapy.
As we observed in Brent School, Inc. v. Zamora,[38] also cited by the
CA, it is common practice in educational institutions to have fixed-
term contracts in administrative positions, thus:
Some familiar examples may be cited of employment contracts
which may be neither for seasonal work nor for specific projects, but
to which a fixed term is an essential and natural appurtenance:
overseas employment contracts, for one, to which, whatever the
nature of the engagement, the concept of regular employment with
all that it implies does not appear ever to have been applied, Article
280 of the Labor Code notwithstanding; also appointments to the
positions of dean, assistant dean, college secretary, principal, and
other administrative offices in educational institutions, which are by
practice or tradition rotated among the faculty members, and where
fixed terms are a necessity without which no reasonable rotation
would be possible. x x x (Emphasis supplied)
In constructive dismissal cases, the employer has the burden of
proving that its conduct and action or the transfer of an employee
are for valid and legitimate grounds such as genuine business
necessity.[39] Particularly, for a transfer not to be considered a
constructive dismissal, the employer must be able to show that such
transfer is not unreasonable, inconvenient, or prejudicial to the
employee. In this case, petitioner's transfer was not unreasonable,
inconvenient or prejudicial to her. On the contrary, the assignment
of a teaching load in the College of Nursing was undertaken by
respondent to accommodate petitioner following the closure of the
College of Physical Therapy. Respondent further considered the fact
that petitioner still has two years to serve the university under the
Scholarship Contract.
Petitioner's subsequent transfer to another department or college is
not tantamount to demotion as it was a valid transfer. There is
therefore no constructive dismissal to speak of. That petitioner
ceased to enjoy the compensation, privileges and benefits as College
Dean was but a logical consequence of the valid revocation or
termination of such fixed-term position. Indeed, it would be absurd
and unjust for respondent to maintain a deanship position in a
college or department that has ceased to exist. Under the
circumstances, giving petitioner a teaching load in another
College/Department that is related to Physical Therapy -- thus
enabling her to serve and complete her remaining two years under
the Scholarship Contract -- is a valid exercise of management
prerogative on the part of respondent.
Lastly, as to whether respondent was guilty of forum shopping when
it failed to inform the appellate court of the pendency of Civil Case
No. 2009-320, a complaint for breach of contract filed by
respondent against petitioner, we rule in the negative. Forum
shopping exists when the elements of litis pendentia are present or
where a final judgment in one case will amount to res judicata in
another. Litis pendentia requires the concurrence of the following
requisites: (1) identity of parties, or at least such parties as those
representing the same interests in both actions; (2) identity of rights
asserted and reliefs prayed for, the reliefs being founded on the same
facts; and (3) identity with respect to the two preceding particulars
in the two cases, such that any judgment that may be rendered in the
pending case, regardless of which party is successful, would amount
to res judicata in the other case.[40]
While there is identity of parties in the two cases, the causes of
action and the reliefs sought are different. The issue raised in the
present case is whether there was constructive dismissal committed
by respondent. On the other hand, the issue in the civil case pending
before the RTC is whether petitioner was guilty of breach of contract.
Hence, respondent is not guilty of forum shopping.
WHEREFORE, the petition for review on certiorari
is GRANTED. The Amended Decision dated March 29, 2010 and
Resolution dated September 14, 2010 of the Court of Appeals in CA-
G.R. SP No. 02508-MIN are hereby SET ASIDE. The earlier
Decision dated October 22, 2009 of the Court of Appeals in said case
is REINSTATED and UPHELD.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 149440 January 28, 2003
HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO
VILLEGAS and CRISTINE SEGURA, petitioners,
vs.
NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD
AND GENERAL TRADE, respondents.
PANGANIBAN, J.:
Although the employers have shown that respondents performed
work that was seasonal in nature, they failed to prove that the latter
worked only for the duration of one particular season. In fact,
petitioners do not deny that these workers have served them for
several years already. Hence, they are regular — not seasonal —
employees.
The Case
Before the Court is a Petition for Review under Rule 45 of the Rules
of Court, seeking to set aside the February 20, 2001 Decision of the
Court of Appeals 1 (CA) in CA-GR SP No. 51033. The dispositive
part of the Decision reads:
"WHEREFORE, premises considered, the instant special
civil action for certiorari is hereby DENIED." 2
On the other hand, the National Labor Relations
Commission (NLRC) Decision, 3 upheld by the CA,
disposed in this wise:
"WHEREFORE, premises considered, the decision of the
Labor Arbiter is hereby SET ASIDE and VACATED and a
new one entered declaring complainants to have been
illegally dismissed. Respondents are hereby ORDERED
to reinstate complainants except Luisa Rombo, Ramona
Rombo, Bobong Abriga and Boboy Silva to their previous
position and to pay full backwages from September 1991
until reinstated. Respondents being guilty of unfair labor
practice are further ordered to pay complainant union the
sum of P10,000.00 as moral damages and P5,000.00 as
exemplary damages." 4
The Facts
The facts are summarized in the NLRC Decision as follows:
"Contrary to the findings of the Labor Arbiter that
complainants [herein respondents] refused to work and/or
were choosy in the kind of jobs they wanted to perform,
the records is replete with complainants' persistence and
dogged determination in going back to work.
"Indeed, it would appear that respondents did not look
with favor workers' having organized themselves into a
union. Thus, when complainant union was certified as the
collective bargaining representative in the certification
elections, respondents under the pretext that the result
was on appeal, refused to sit down with the union for the
purpose of entering into a collective bargaining
agreement. Moreover, the workers including complainants
herein were not given work for more than one month. In
protest, complainants staged a strike which was however
settled upon the signing of a Memorandum of Agreement
which stipulated among others that:
'a) The parties will initially meet for CBA
negotiations on the 11th day of January 1991
and will endeavor to conclude the same within
thirty (30) days.
'b) The management will give priority to the
women workers who are members of the union
30
 in case work relative . . . or amount[ing] to gahit
and [dipol] arises.
'c) Ariston Eruela Jr. will be given back his
normal work load which is six (6) days in a
week.
'd) The management will provide fifteen (15)
wagons for the workers and that existing
workforce prior to the actual strike will be given
priority. However, in case the said workforce
would not be enough, the management can hire
additional workers to supplement them.
'e) The management will not anymore allow the
scabs, numbering about eighteen (18)
workers[,] to work in the hacienda; and
'f) The union will immediately lift the picket upon
signing of this agreement.'
"However, alleging that complainants failed to load the
fifteen wagons, respondents reneged on its commitment
to sit down and bargain collectively. Instead, respondent
employed all means including the use of private armed
guards to prevent the organizers from entering the
premises.
"Moreover, starting September 1991, respondents did not
any more give work assignments to the complainants
forcing the union to stage a strike on January 2, 1992. But
due to the conciliation efforts by the DOLE, another
Memorandum of Agreement was signed by the
complainants and respondents which provides:
'Whereas the union staged a strike against management
on January 2, 1992 grounded on the dismissal of the
union officials and members;
'Whereas parties to the present dispute agree to settle the
case amicably once and for all;
'Now therefore, in the interest of both labor and
management, parties herein agree as follows:
'1. That the list of the names of affected union
members hereto attached and made part of this
agreement shall be referred to the Hacienda
payroll of 1990 and determine whether or not
this concerned Union members are hacienda
workers;
'2. That in addition to the payroll of 1990 as
reference, herein parties will use as guide the
subjects of a Memorandum of Agreement
entered into by and between the parties last
January 4, 1990;
'3. That herein parties can use other
employment references in support of their
respective claims whether or not any or all of
the listed 36 union members are employees or
hacienda workers or not as the case may be;
'4. That in case conflict or disagreement arises
in the determination of the status of the
particular hacienda workers subject of this
agreement herein parties further agree to
submit the same to voluntary arbitration;
'5. To effect the above, a Committee to be
chaired by Rose Mengaling is hereby created to
be composed of three representatives each and
is given five working days starting Jan. 23, 1992
to resolve the status of the subject 36 hacienda
workers. (Union representatives: Bernardo
Torres, Martin Alas-as, Ariston Arulea Jr.)"
"Pursuant thereto, the parties subsequently met and the
Minutes of the Conciliation Meeting showed as follows:
'The meeting started at 10:00 A.M. A list of
employees was submitted by Atty. Tayko based
on who received their 13th month pay. The
following are deemed not considered
employees:
1. Luisa Rombo
2. Ramona Rombo
3. Bobong Abrega
4. Boboy Silva
'The name Orencio Rombo shall be verified in
the 1990 payroll.
'The following employees shall be reinstated
immediately upon availability of work:
1. Jose Dagle 7. Alejandro Teja
2. Rico Dagle 8. Gaudioso Rom
3. Ricardo Dagle 9. Martin Alas-as
4. Jesus Silva 10. Cresensio Ab
5. Fernando Silva 11. Ariston Eruel
6. Ernesto Tejares 12. Ariston Eruel
"When respondents again reneged on its commitment;
complainants filed the present complaint.
"But for all their persistence, the risk they had to undergo
in conducting a strike in the face of overwhelming odds,
complainants in an ironic twist of fate now find themselves
being accused of 'refusing to work and being choosy in
the kind of work they have to perform'." 5 (Citations
omitted)
Ruling of the Court of Appeals
The CA affirmed that while the work of respondents was seasonal in
nature, they were considered to be merely on leave during the off-
season and were therefore still employed by petitioners. Moreover,
the workers enjoyed security of tenure. Any infringement upon this
right was deemed by the CA to be tantamount to illegal dismissal.
The appellate court found neither "rhyme nor reason in petitioner's
argument that it was the workers themselves who refused to or were
choosy in their work." As found by the NLRC, the record of this case
is "replete with complainants' persistence and dogged determination
in going back to work." 6
The CA likewise concurred with the NLRC's finding that petitioners
were guilty of unfair labor practice.
Hence this Petition. 7
Issues
Petitioners raise the following issues for the Court's consideration:
"A. Whether or not the Court of Appeals erred in holding
that respondents, admittedly seasonal workers, were
regular employees, contrary to the clear provisions of
Article 280 of the Labor Code, which categorically state
that seasonal employees are not covered by the definition
of regular employees under paragraph 1, nor covered
under paragraph 2 which refers exclusively to casual
employees who have served for at least one year.
"B. Whether or not the Court of Appeals erred in rejecting
the ruling in Mercado, . . . and relying instead on rulings
which are not directly applicable to the case at bench, viz,
Philippine Tobacco, Bacolod-Murcia, and Gaco, . . .
"C Whether or not the Court of Appeals committed grave
abuse of discretion in upholding the NLRC's conclusion
that private respondents were illegally dismissed, that
petitioner[s were] guilty of unfair labor practice, and that
the union be awarded moral and exemplary damages." 8
31
Consistent with the discussion in petitioners' Memorandum, we shall
take up Items A and B as the first issue and Item C as the second.
The Court's Ruling
The Petition has no merit.
First Issue:
Regular Employment
At the outset, we must stress that only errors of law are generally
reviewed by this Court in petitions for review on certiorari of CA
decisions. 9 Questions of fact are not entertained. 10 The Court is not
a trier of facts and, in labor cases, this doctrine applies with greater
force. 11 Factual questions are for labor tribunals to resolve. 12 In the
present case, these have already been threshed out by the NLRC.
Its findings were affirmed by the appellate court.
Contrary to petitioners' contention, the CA did not err when it held
that respondents were regular employees.
Article 280 of the Labor Code, as amended, states:
"Art. 280. Regular and Casual Employment. — The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform
activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the
employment has been fixed for a specific project or
undertaking the completion or termination of which has
been determined at the time of the engagement of the
employee or where the work or services to be performed
is seasonal in nature and the employment is for the
duration of the season.
"An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity
in which he is employed and his employment shall
continue while such activity exist." (Italics supplied)
For respondents to be excluded from those classified as regular
employees, it is not enough that they perform work or services that
are seasonal in nature. They must have also been employed only for
the duration of one season. The evidence proves the existence of
the first, but not of the second, condition. The fact that respondents
— with the exception of Luisa Rombo, Ramona Rombo, Bobong
Abriga and Boboy Silva — repeatedly worked as sugarcane workers
for petitioners for several years is not denied by the latter. Evidently,
petitioners employed respondents for more than one season.
Therefore, the general rule of regular employment is applicable.
13
In Abasolo v. National Labor Relations Commission, the Court
issued this clarification:
"[T]he test of whether or not an employee is a regular
employee has been laid down in De Leon v. NLRC, in
which this Court held:
"The primary standard, therefore, of determining regular
employment is the reasonable connection between the
particular activity performed by the employee in relation to
the usual trade or business of the employer. The test is
whether the former is usually necessary or desirable in the
usual trade or business of the employer. The connection
can be determined by considering the nature of the work
performed and its relation to the scheme of the particular
business or trade in its entirety. Also if the employee has
been performing the job for at least a year, even if the
performance is not continuous and merely intermittent, the
law deems repeated and continuing need for its
performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to
such activity and while such activity exists.
xxx xxx xxx
". . . [T]he fact that [respondents] do not work continuously
for one whole year but only for the duration of the . . .
season does not detract from considering them in regular
employment since in a litany of cases this Court has
already settled that seasonal workers who are called to
work from time to time and are temporarily laid off during
off-season are not separated from service in said period,
but merely considered on leave until re-employed." 14
The CA did not err when it ruled that Mercado v. NLRC 15 was not
applicable to the case at bar. In the earlier case, the workers were
required to perform phases of agricultural work for a definite period
of time, after which their services would be available to any other
farm owner. They were not hired regularly and repeatedly for the
same phase/s of agricultural work, but on and off for any single
phase thereof. On the other hand, herein respondents, having
performed the same tasks for petitioners every season for several
years, are considered the latter's regular employees for their
respective tasks. Petitioners' eventual refusal to use their services
— even if they were ready, able and willing to perform their usual
duties whenever these were available — and hiring of other workers
to perform the tasks originally assigned to respondents amounted to
illegal dismissal of the latter.
The Court finds no reason to disturb the CA's dismissal of what
petitioners claim was their valid exercise of a management
prerogative. The sudden changes in work assignments reeked of
bad faith. These changes were implemented immediately after
respondents had organized themselves into a union and started
demanding collective bargaining. Those who were union members
were effectively deprived of their jobs. Petitioners' move actually
amounted to unjustified dismissal of respondents, in violation of the
Labor Code.
"Where there is no showing of clear, valid and legal cause for the
termination of employment, the law considers the matter a case of
illegal dismissal and the burden is on the employer to prove that the
termination was for a valid and authorized cause." 16 In the case at
bar, petitioners failed to prove any such cause for the dismissal of
respondents who, as discussed above, are regular employees.
Second Issue:
Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor
practice. It ruled as follows:
"Indeed, from respondents' refusal to bargain, to their acts
of economic inducements resulting in the promotion of
those who withdrew from the union, the use of armed
guards to prevent the organizers to come in, and the
dismissal of union officials and members, one cannot but
conclude that respondents did not want a union in their
hacienda—a clear interference in the right of the workers
to self-organization." 17
We uphold the CA's affirmation of the above findings. Indeed,
factual findings of labor officials, who are deemed to have acquired
expertise in matters within their respective jurisdictions, are
generally accorded not only respect but even finality. Their findings
are binding on the Supreme Court. 18 Verily, their conclusions are
accorded great weight upon appeal, especially when supported by
substantial evidence. 19 Consequently, the Court is not duty-bound
to delve into the accuracy of their factual findings, in the absence of
a clear showing that these were arbitrary and bereft of any rational
basis." 20
The finding of unfair labor practice done in bad faith carries with it
the sanction of moral and exemplary damages." 21
WHEREFORE, the Petition is hereby DENIED and the assailed
Decision AFFIRMED. Costs against petitioners.
SO ORDERED.
G.R. No. 79869 September 5, 1991
FORTUNATO MERCADO, SR., ROSA MERCADO, FORTUNATO
MERCADO, JR., ANTONIO MERCADO, JOSE CABRAL, LUCIA
MERCADO, ASUNCION GUEVARA, ANITA MERCADO, MARINA
32
MERCADO, JULIANA CABRAL, GUADALUPE PAGUIO,
BRIGIDA ALCANTARA, EMERLITA MERCADO, ROMEO
GUEVARA, ROMEO MERCADO and LEON
SANTILLAN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), THIRD
DIVISION; LABOR ARBITER LUCIANO AQUINO, RAB-III;
AURORA L. CRUZ; SPOUSES FRANCISCO DE BORJA and
LETICIA DE BORJA; and STO. NIÑO REALTY,
INCORPORATED, respondents.
Servillano S. Santillan for petitioners.
Luis R. Mauricio for private respondents.
PADILLA, J.:
Assailed in this petition for certiorari is the decision * of the
respondent national Labor Relations Commission (NLRC) dated 8
August 1984 which affirmed the decision of respondent Labor
Arbiter Luciano P. Aquino with the slight modification of deleting the
award of financial assistance to petitioners, and the resolution of the
respondent NLRC dated 17 August 1987, denying petitioners'
motion for reconsideration.
This petition originated from a complaint for illegal dismissal,
underpayment of wages, non-payment of overtime pay, holiday pay,
service incentive leave benefits, emergency cost of living allowances
and 13th month pay, filed by above-named petitioners against
private respondents Aurora L. Cruz, Francisco Borja, Leticia C.
Borja and Sto. Niño Realty Incorporated, with Regional Arbitration
Branch No. III, National Labor Relations Commission in San
Fernando, Pampanga.1
Petitioners alleged in their complaint that they were agricultural
workers utilized by private respondents in all the agricultural phases
of work on the 7 1/2 hectares of ace land and 10 hectares of sugar
land owned by the latter; that Fortunato Mercado, Sr. and Leon
Santillan worked in the farm of private respondents since 1949,
Fortunato Mercado, Jr. and Antonio Mercado since 1972 and the
rest of the petitioners since 1960 up to April 1979, when they were
all allegedly dismissed from their employment; and that, during the
period of their employment, petitioners received the following daily
wages:
From 1962-1963 — P1.50
1963-1965 — P2.00
1965-1967 — P3.00
1967-1970 — P4.00
1970-1973 — P5.00
1973-1975 — P5.00
1975-1978 — P6.00
1978-1979 — P7.00
Private respondent Aurora Cruz in her answer to petitioners'
complaint denied that said petitioners were her regular employees
and instead averred that she engaged their services, through
Spouses Fortunato Mercado, Sr. and Rosa Mercado, their
"mandarols", that is, persons who take charge in supplying the
number of workers needed by owners of various farms, but only to
do a particular phase of agricultural work necessary in rice
production and/or sugar cane production, after which they would be
free to render services to other farm owners who need their
services.2
The other private respondents denied having any relationship
whatsoever with the petitioners and state that they were merely
registered owners of the land in question included as corespondents
in this case.3
The dispute in this case revolves around the issue of whether or not
petitioners are regular and permanent farm workers and therefore
entitled to the benefits which they pray for. And corollary to this,
whether or not said petitioners were illegally dismissed by private
respondents.
Respondent Labor Arbiter Luciano P. Aquino ruled in favor of private
respondents and held that petitioners were not regular and
permanent workers of the private respondents, for the nature of the
terms and conditions of their hiring reveal that they were required to
perform phases of agricultural work for a definite period of time after
which their services would be available to any other farm
owner.4 Respondent Labor Arbiter deemed petitioners' contention of
working twelve (12) hours a day the whole year round in the farm,
an exaggeration, for the reason that the planting of lice and sugar
cane does not entail a whole year as reported in the findings of the
Chief of the NLRC Special Task Force.5 Even the sworn statement
of one of the petitioners, Fortunato Mercado, Jr., the son of spouses
Fortunato Mercado, Sr. and Rosa Mercado, indubitably show that
said petitioners were hired only as casuals, on an "on and off" basis,
thus, it was within the prerogative of private respondent Aurora Cruz
either to take in the petitioners to do further work or not after any
single phase of agricultural work had been completed by them. 6
Respondent Labor Arbiter was also of the opinion that the real
cause which triggered the filing of the complaint by the petitioners
who are related to one another, either by consanguinity or affinity,
was the filing of a criminal complaint for theft against Reynaldo
Mercado, son of spouses Fortunate Mercado, Sr. and Rosa
Mercado, for they even asked the help of Jesus David, Zone
Chairman of the locality to talk to private respondent, Aurora Cruz
regarding said criminal case.7 In his affidavit, Jesus David stated
under oath that petitioners were never regularly employed by private
respondent Aurora Cruz but were, on-and-off hired to work and
render services when needed, thus adding further support to the
conclusion that petitioners were not regular and permanent
employees of private respondent Aurora Cruz.8
Respondent Labor Arbiter further held that only money claims from
years 1976-1977, 1977-1978 and 1978-1979 may be properly
considered since all the other money claims have prescribed for
having accrued beyond the three (3) year period prescribed by
law.9 On grounds of equity, however, respondent Labor Arbiter
awarded petitioners financial assistance by private respondent
Aurora Cruz, in the amount of Ten Thousand Pesos (P10,000.00) to
be equitably divided among an the petitioners except petitioner
Fortunato Mercado, Jr. who had manifested his disinterest in the
further prosecution of his complaint against private respondent.10
Both parties filed their appeal with the National Labor Relations
Commissions (NLRC). Petitioners questioned respondent Labor
Arbiter's finding that they were not regular and permanent
employees of private respondent Aurora Cruz while private
respondents questioned the award of financial assistance granted
by respondent Labor Arbiter.
The NLRC ruled in favor of private respondents affirming the
decision of the respondent Labor Arbiter, with the modification of the
deletion of the award for financial assistance to petitioners. The
dispositive portion of the decision of the NLRC reads:
WHEREFORE, the Decision of Labor Arbiter Luciano P.
Aquino dated March 3, 1983 is hereby modified in that the
award of P10,000.00 financial assistance should be
deleted. The said Decision is affirmed in all other aspects.
SO ORDERED.11
Petitioners filed a motion for reconsideration of the Decision of the
Third Division of the NLRC dated 8 August 1984; however, the
NLRC denied tills motion in a resolution dated 17 August 1987. 12
In the present Petition for certiorari, petitioners seek the reversal of
the above-mentioned rulings. Petitioners contend that respondent
Labor Arbiter and respondent NLRC erred when both ruled that
petitioners are not regular and permanent employees of private
respondents based on the terms and conditions of their hiring, for
said findings are contrary to the provisions of Article 280 of the
Labor Code.13 They submit that petitioners' employment, even
assuming said employment were seasonal, continued for so many
years such that, by express provision of Article 280 of the Labor
Code as amended, petitioners have become regular and permanent
employees.14
Moreover, they argue that Policy Instruction No. 1215 of the
Department of Labor and Employment clearly lends support to this
contention, when it states:
PD 830 has defined the concept of regular and casual
employment. What determines regularity or casualness is
not the employment contract, written or otherwise, but the
nature of the job. If the job is usually necessary or
desirable to the main business of the employer, then
employment is regular. If not, then the employment is
casual. Employment for a definite period which exceeds
one (1) year shall be considered re for the duration of the
definite period.
33
 This concept of re and casual employment is designed to
put an end to casual employment in regular jobs which
has been abused by many employers to prevent so-called
casuals from enjoying the benefits of regular employees
or to prevent casuals from joining unions.
This new concept should be strictly enforced to give
meaning to the constitutional guarantee of employment
tenure.16
Tested under the laws invoked, petitioners submit that it would be
unjust, if not unlawful, to consider them as casual workers since they
have been doing all phases of agricultural work for so many years,
activities which are undeniably necessary, desirable and
indispensable in the rice and sugar cane production business of the
private respondents.17
In the Comment filed by private respondents, they submit that the
decision of the Labor Arbiter, as aimed by respondent NLRC, that
petitioners were only hired as casuals, is based on solid evidence
presented by the parties and also by the Chief of the Special Task
Force of the NLRC Regional Office and, therefore, in accordance
with the rule on findings of fact of administrative agencies, the
decision should be given great weight.18 Furthermore, they contend
that the arguments used by petitioners in questioning the decision of
the Labor Arbiter were based on matters which were not offered as
evidence in the case heard before the regional office of the then
Ministry of Labor but rather in the case before the Social Security
Commission, also between the same parties.19
Public respondent NLRC filed a separate comment prepared by the
Solicitor General. It submits that it has long been settled that
findings of fact of administrative agencies if supported by substantial
evidence are entitled to great weight.20 Moreover, it argues that
petitioners cannot be deemed to be permanent and regular
employees since they fall under the exception stated in Article 280
of the Labor Code, which reads:
The provisions of written agreements to the contrary
notwithstanding and regardless of the oral agreements of
the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform
activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the
employment has been fixed for a specific project or
undertaking the completion or termination of which has
been determined at the time of the engagement of the
employee or where the work or services to be performed
is seasonal in nature and the employment is for the
duration of the season.21(emphasis supplied)
The Court resolved to give due course to the petition and required
the parties to submit their respective memoranda after which the
case was deemed submitted for decision.
The petition is not impressed with merit.
The invariable rule set by the Court in reviewing administrative
decisions of the Executive Branch of the Government is that the
findings of fact made therein are respected, so long as they are
supported by substantial evidence, even if not overwhelming or
preponderant;22 that it is not for the reviewing court to weigh the
conflicting evidence, determine the credibility of the witnesses or
otherwise substitute its own judgment for that of the administrative
agency on the sufficiency of the evidence;23 that the administrative
decision in matters within the executive's jurisdiction can only be set
aside upon proof of gross abuse of discretion, fraud, or error of
law.24
The questioned decision of the Labor Arbiter reads:
Focusing the spotlight of judicious scrutiny on the
evidence on record and the arguments of both parties, it is
our well-discerned opinion that the petitioners are not
regular and permanent workers of the respondents. The
very nature of the terms and conditions of their hiring
reveal that the petitioners were required to perform p of
cultural work for a definite period, after which their
services are available to any farm owner. We cannot
share the arguments of the petitioners that they worked
continuously the whole year round for twelve hours a day.
This, we feel, is an exaggeration which does not deserve
any serious consideration inasmuch as the plan of rice
and sugar cane does not entail a whole year operation,
the area in question being comparatively small. It is
noteworthy that the findings of the Chief of the Special
Task Force of the Regional Office are similar to this.
In fact, the sworn statement of one of the petitioners
Fortunato Mercado, Jr., the son of spouses Fortunato
Mercado, Sr. and Rosa Mercado, indubitably shows that
said petitioners were only hired as casuals, on-and-off
basis. With this kind of relationship between the
petitioners and the respondent Aurora Cruz, we feel that
there is no basis in law upon which the claims of the
petitioners should be sustained, more specially their
complaint for illegal dismissal. It is within the prerogative
of respondent Aurora Cruz either to take in the petitioners
to do further work or not after any single phase of
agricultural work has been completed by them. We are of
the opinion that the real cause which triggered the filing of
this complaint by the petitioners who are related to one
another, either by consanguinity or affinity was due to the
filing of a criminal complaint by the respondent Aurora
Cruz against Reynaldo Mercado, son of spouses
Fortunato Mercado, Sr. and Rosa Mercado. In April 1979,
according to Jesus David, Zone Chairman of the locality
where the petitioners and respondent reside, petitioner
Fortunato Mercado, Sr. asked for help regarding the case
of his son, Reynaldo, to talk with respondent Aurora Cruz
and the said Zone Chairman also stated under oath that
the petitioners were never regularly employed by
respondent Aurora Cruz but were on-and-off hired to work
to render services when needed.25
A careful examination of the foregoing statements reveals that the
findings of the Labor Arbiter in the case are ably supported by
evidence. There is, therefore, no circumstance that would warrant a
reversal of the questioned decision of the Labor Arbiter as affirmed
by the National Labor Relations Commission.
The contention of petitioners that the second paragraph of Article
280 of the Labor Code should have been applied in their case
presents an opportunity to clarify the afore-mentioned provision of
law.
Article 280 of the Labor Code reads in full:
Article 280. Regular and Casual Employment. — The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform
activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the
employment has been fixed for a specific project or
undertaking the completion or termination of which has
been determined at the time of the engagement of the
employee or where the work or services to be performed
is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity
in which he is employed and his employment shall
continue while such actually exists.
The first paragraph answers the question of who are employees. It
states that, regardless of any written or oral agreement to the
contrary, an employee is deemed regular where he is engaged in
necessary or desirable activities in the usual business or trade of the
employer, except for project employees.
A project employee has been defined to be one whose employment
has been fixed for a specific project or undertaking, the completion
or termination of which has been determined at the time of the
engagement of the employee, or where the work or service to be
performed is seasonal in nature and the employment is for the
duration of the season26 as in the present case.
The second paragraph of Art. 280 demarcates as "casual"
employees, all other employees who do not fan under the definition
of the preceding paragraph. The proviso, in said second paragraph,
deems as regular employees those "casual" employees who have
rendered at least one year of service regardless of the fact that such
service may be continuous or broken.
34
Petitioners, in effect, contend that the proviso in the second
paragraph of Art. 280 is applicable to their case and that the Labor
Arbiter should have considered them regular by virtue of said
proviso. The contention is without merit.
The general rule is that the office of a proviso is to qualify or modify
only the phrase immediately preceding it or restrain or limit the
generality of the clause that it immediately follows.27 Thus, it has
been held that a proviso is to be construed with reference to the
immediately preceding part of the provision to which it is attached,
and not to the statute itself or to other sections thereof. 28 The only
exception to this rule is where the clear legislative intent is to
restrain or qualify not only the phrase immediately preceding it (the
proviso) but also earlier provisions of the statute or even the statute
itself as a whole.29
Policy Instruction No. 12 of the Department of Labor and
Employment discloses that the concept of regular and casual
employees was designed to put an end to casual employment in
regular jobs, which has been abused by many employers to prevent
called casuals from enjoying the benefits of regular employees or to
prevent casuals from joining unions. The same instructions show
that the proviso in the second paragraph of Art. 280 was not
designed to stifle small-scale businesses nor to oppress agricultural
land owners to further the interests of laborers, whether agricultural
or industrial. What it seeks to eliminate are abuses of employers
against their employees and not, as petitioners would have us
believe, to prevent small-scale businesses from engaging in
legitimate methods to realize profit. Hence, the proviso is applicable
only to the employees who are deemed "casuals" but not to the
"project" employees nor the regular employees treated in paragraph
one of Art. 280.
Clearly, therefore, petitioners being project employees, or, to use the
correct term, seasonal employees, their employment legally ends
upon completion of the project or the season. The termination of
their employment cannot and should not constitute an illegal
dismissal.30
WHEREFORE, the petition is DISMISSED. The decision of the
National Labor Relations Commission affirming that of the Labor
Arbiter, under review, is AFFIRMED. No pronouncement as to costs.
SO ORDERED.
G.R. No. 193493 June 13, 2013
JAIME N. GAPAYAO, Petitioner,
vs.
ROSARIO FULO, SOCIAL SECURITY SYSTEM and SOCIAL
SECURITY COMMISSION, Respondents.
DECISION
SERENO, CJ.:
This is a Rule 45 Petition1 assailing the Decision2 and Resolution3 of
the Court of Appeals (CA) in CA-G.R. SP. No. 101688, affirming the
Resolution4 of the Social Security Commission (SSC). The SSC held
petitioner Jaime N. Gapayao liable to pay the unpaid social security
contributions due to the deceased Jaime Fulo, and the Social
Security System (SSS) to pay private respondent Rosario L. Fulo,
the widow of the deceased, the appropriate death benefits pursuant
to the Social Security Law.
The antecedent facts are as follows:
On 4 November 1997, Jaime Fulo (deceased) died of "acute renal
failure secondary to 1st degree burn 70% secondary
electrocution"5 while doing repairs at the residence and business
establishment of petitioner located at San Julian, Irosin, Sorsogon.
Allegedly moved by his Christian faith, petitioner extended some
financial assistance to private respondent. On 16 November 1997,
the latter executed an Affidavit of Desistance6 stating that she was
not holding them liable for the death of her late husband, Jaime
Fulo, and was thereby waiving her right and desisting from filing any
criminal or civil action against petitioner.
On 14 January 1998, both parties executed a Compromise
Agreement,7 the relevant portion of which is quoted below:
We, the undersigned unto this Honorable Regional Office/District
Office/Provincial Agency Office respectfully state:
1. The undersigned employer, hereby agrees to pay the
sum of FORTY THOUSAND PESOS (₱40,000.00) to the
surviving spouse of JAIME POLO, an employee who died
of an accident, as a complete and full payment for all
claims due the victim.
2. On the other hand, the undersigned surviving spouse of
the victim having received the said amount do [sic] hereby
release and discharge the employer from any and all
claims that maybe due the victim in connection with the
victim’s employment thereat.
Thereafter, private respondent filed a claim for social security
benefits with the Social Security System (SSS)–Sorosogon
Branch.8 However, upon verification and evaluation, it was
discovered that the deceased was not a registered member of the
SSS.9
Upon the insistence of private respondent that her late husband had
been employed by petitioner from January 1983 up to his untimely
death on 4 November 1997, the SSS conducted a field investigation
to clarify his status of employment. In its field investigation report,10 it
enumerated its findings as follows:
In connection with the complaint filed by Mrs. Rosario Fulo,
hereunder are the findings per interview with Mr. Leonor Delgra,
Santiago Bolanos and Amado Gacelo:
1. That Mr. Jaime Fulo was an employee of Jaime
Gapayao as farm laborer from 1983 to 1997.
2. Mr. Leonor Delgra and Santiago Bolanos are co-
employees of Jaime Fulo.
3. Mr. Jaime Fulo receives compensation on a daily basis
ranging from ₱5.00 to ₱60.00 from 1983 to 1997.
Per interview from Mrs. Estela Gapayao, please be informed that:
1. Jaime Fulo is an employee of Mr. & Mrs. Jaime
Gapayao on an extra basis.
2. Sometimes Jaime Fulo is allowed to work in the farm as
abaca harvester and earn 1/3 share of its harvest as his
income.
3. Mr. & Mrs. Gapayao hired the services of Jaime Fulo
not only in the farm as well as in doing house repairs
whenever it is available. Mr. Fulo receives his
remuneration usually in the afternoon after doing his job.
4. Mr. & Mrs. Gapayao hires 50-100 persons when
necessary to work in their farm as laborer and Jaime Fulo
is one of them. Jaime Fulo receives more or less ₱50.00 a
day. (Emphases in the original)
Consequently, the SSS demanded that petitioner remit the social
security contributions of the deceased. When petitioner denied that
the deceased was his employee, the SSS required private
respondent to present documentary and testimonial evidence to
refute petitioner’s allegations.11
Instead of presenting evidence, private respondent filed a
Petition12 before the SSC on 17 February 2003. In her Petition, she
sought social security coverage and payment of contributions in
order to avail herself of the benefits accruing from the death of her
husband.
On 6 May 2003, petitioner filed an Answer13 disclaiming any liability
on the premise that the deceased was not the former’s employee,
but was rather an independent contractor whose tasks were not
subject to petitioner’s control and supervision.14 Assuming arguendo
that the deceased was petitioner’s employee, he was still not entitled
to be paid his SSS premiums for the intervening period when he was
not at work, as he was an "intermittent worker who was only
summoned every now and then as the need arose."15 Hence,
petitioner insisted that he was under no obligation to report the
former’s demise to the SSS for social security coverage.
35
Subsequently, on 30 June 2003, the SSS filed a Petition-in-
Intervention16 before the SSC, outlining the factual circumstances of
the case and praying that judgment be rendered based on the
evidence adduced by the parties.
On 14 March 2007, the SSC rendered a Resolution,17 the dispositive
portion of which provides:
WHEREFORE, PREMISES CONSIDERED, this Commission finds,
and so holds, that Jaime Fulo, the late husband of petitioner, was
employed by respondent Jaime N. Gapayao from January 1983 to
November 4, 1997, working for nine (9) months a year receiving the
minimum wage then prevailing.
Accordingly, the respondent is hereby ordered to pay ₱45,315.95
representing the unpaid SS contributions due on behalf of deceased
Jaime Fulo, the amount of ₱217,710.33 as 3% per month penalty for
late remittance thereof, computed as of March 30, 2006, without
prejudice to the collection of additional penalty accruing thereafter,
and the sum of ₱230,542.20 (SSS) and ₱166,000.00 (EC) as
damages for the failure of the respondent to report the deceased
Jaime Fulo for SS coverage prior to his death pursuant to Section
24(a) of the SS Law, as amended.
The SSS is hereby directed to pay petitioner Rosario Fulo the
appropriate death benefit, pursuant to Section 13 of the SS Law, as
amended, as well as its prevailing rules and regulations, and to
inform this Commission of its compliance herewith.
SO ORDERED.
On 18 May 2007, petitioner filed a Motion for
Reconsideration,18 which was denied in an Order19 dated 16 August
2007.
Aggrieved, petitioner appealed to the CA on 19 December
2007.20 On 17 March 2010, the CA rendered a Decision21 in favor of
private respondent, as follows:
In fine, public respondent SSC had sufficient basis in concluding that
private respondent’s husband was an employee of petitioner and
should, therefore, be entitled to compulsory coverage under the
Social Security Law.
Having ruled in favor of the existence of employer-employee
relationship between petitioner and the late Jaime Fulo, it is no
longer necessary to dwell on the other issues raised.
Resultantly, for his failure to report Jaime Fulo for compulsory social
security coverage, petitioner should bear the consequences thereof.
Under the law, an employer who fails to report his employee for
social security coverage is liable to [1] pay the benefits of those who
die, become disabled, get sick or reach retirement age; [2] pay all
unpaid contributions plus a penalty of three percent per month; and
[3] be held liable for a criminal offense punishable by fine and/or
imprisonment. But an employee is still entitled to social security
benefits even is (sic) his employer fails or refuses to remit his
contribution to the SSS.
WHEREFORE, premises considered, the Resolution appealed from
is AFFIRMED in toto.
SO ORDERED.
In holding thus, the CA gave credence to the findings of the SSC.
The appellate court held that it "does not follow that a person who
does not observe normal hours of work cannot be deemed an
employee."22 For one, it is not essential for the employer to actually
supervise the performance of duties of the employee; it is sufficient
that the former has a right to wield the power. In this case, petitioner
exercised his control through an overseer in the person of Amado
Gacelo, the tenant on petitioner’s land.23 Most important, petitioner
entered into a Compromise Agreement with private respondent and
expressly admitted therein that he was the employer of the
deceased.24The CA interpreted this admission as a declaration
against interest, pursuant to Section 26, Rule 130 of the Rules of
Court.25
Hence, this petition.
Public respondents SSS26 and SSC27 filed their Comments on 31
January 2011 and 28 February 2011, respectively, while private
respondent filed her Comment on 14 March 2011.28 On 6 March
2012, petitioner filed a "Consolidated Reply to the Comments of the
Public Respondents SSS and SSC and Private Respondent Rosario
Fulo."29
ISSUE
The sole issue presented before us is whether or not there exists
between the deceased Jaime Fulo and petitioner an employer-
employee relationship that would merit an award of benefits in favor
of private respondent under social security laws.
THE COURT’S RULING
In asserting the existence of an employer-employee relationship,
private respondent alleges that her late husband had been in the
employ of petitioner for 14 years, from 1983 to 1997.30 During that
period, he was made to work as a laborer in the agricultural
landholdings, a harvester in the abaca plantation, and a
repairman/utility worker in several business establishments owned
by petitioner.31 To private respondent, the "considerable length of
time during which [the deceased] was given diverse tasks by
petitioner was a clear indication of the necessity and indispensability
of her late husband’s services to petitioner’s business."32 This view
is bolstered by the admission of petitioner himself in the
Compromise Agreement that he was the deceased’s employer. 33
Private respondent’s position is similarly espoused by the SSC,
which contends that its findings are duly supported by evidence on
record.34 It insists that pakyaw workers are considered employees,
as long as the employer exercises control over them. In this case,
the exercise of control by the employer was delegated to the
caretaker of his farm, Amado Gacelo. The SSC further asserts that
the deceased rendered services essential for the petitioner’s
harvest. While these services were not rendered continuously (in the
sense that they were not rendered every day throughout the year),
still, the deceased had never stopped working for petitioner from
year to year until the day the former died.35 In fact, the deceased
was required to work in the other business ventures of petitioner,
such as the latter’s bakery and grocery store.36 The Compromise
Agreement entered into by petitioner with private respondent should
not be a bar to an employee demanding what is legally due the
latter.37
The SSS, while clarifying that it is "neither adversarial nor favoring
any of the private parties x x x as it is only tasked to carry out the
purposes of the Social Security Law,"38 agrees with both private
respondent and SSC. It stresses that factual findings of the lower
courts, when affirmed by the appellate court, are generally
conclusive and binding upon the Court.39
Petitioner, on the other hand, insists that the deceased was not his
employee. Supposedly, the latter, during the performance of his
function, was not under petitioner’s control. Control is not
necessarily present even if the worker works inside the premises of
the person who has engaged his services.40 Granting without
admitting that petitioner gave rules or guidelines to the deceased in
the process of the latter’s performing his work, the situation cannot
be interpreted as control, because it was only intended to promote
mutually desired results.41
Alternatively, petitioner insists that the deceased was hired by
Adolfo Gamba, the contractor whom he had hired to construct their
building;42 and by Amado Gacelo, the tenant whom petitioner
instructed to manage the latter’s farm.43 For this reason, petitioner
believes that a tenant is not beholden to the landlord and is not
under the latter’s control and supervision. So if a worker is hired to
work on the land of a tenant – such as petitioner – the former cannot
be the worker of the landlord, but of the tenant’s.44
Anent the Compromise Agreement, petitioner clarifies that it was
executed to buy peace, because "respondent kept on pestering
them by asking for money."45 Petitioner allegedly received threats
that if the matter was not settled, private respondent would refer the
matter to the New Peoples’ Army.46 Allegedly, the Compromise
Agreement was "extortion camouflaged as an
agreement."47 Likewise, petitioner maintains that he shouldered the
hospitalization and burial expenses of the deceased to express his
"compassion and sympathy to a distressed person and his family,"
and not to admit liability.48
Lastly, petitioner alleges that the deceased is a freelance worker.
Since he was engaged on a pakyaw basis and worked for a short
period of time, in the nature of a farm worker every season, he was
not precluded from working with other persons and in fact worked for
them. Under Article 280 of the Labor Code,49 seasonal employees
36
are not covered by the definitions of regular and casual
employees.50 Petitioner cites Mercado, Sr. v. NLRC,51 in which the
Court held that seasonal workers do not become regular employees
by the mere fact that they have rendered at least one year of
service, whether continuous or broken.52
We see no cogent reason to reverse the CA.
I business. Hence, the employment is also considered regular, but
Findings of fact of the SSC are given weight and credence.
At the outset, it is settled that the Court is not a trier of facts and will
not weigh evidence all over again. 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
CA.53 For as long as these findings are supported by substantial
evidence, they must be upheld.54
II
Farm workers may be considered regular seasonal employees.
Article 280 of the Labor Code states:
Article 280. Regular and Casual Employment. — The provisions of
written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such actually exists.
Jurisprudence has identified the three types of employees
mentioned in the provision: (1) regular employees or those who
have been engaged to perform activities that are usually necessary
or desirable in the usual business or trade of the employer; (2)
project employees or those whose employment has been fixed for a
specific project or undertaking, the completion or termination of
which has been determined at the time of their engagement, or
those whose work or service is seasonal in nature and is performed
for the duration of the season; and (3) casual employees or those
who are neither regular nor project employees.55
Farm workers generally fall under the definition of seasonal
employees. We have consistently held that seasonal employees
may be considered as regular employees.56 Regular seasonal
employees are those called to work from time to time. The nature of
their relationship with the employer is such that during the off
season, they are temporarily laid off; but reemployed during the
summer season or when their services may be needed.57 They are
in regular employment because of the nature of their job,and not
because of the length of time they have worked.58
The rule, however, is not absolute. In Hacienda Fatima v. National
Federation of Sugarcane Workers-Food & General Trade,59 the
Court held that seasonal workers who have worked for one season
only may not be considered regular employees. Similarly, in
Mercado, Sr. v. NLRC,60 it was held that when seasonal employees
are free to contract their services with other farm owners, then the
former are not regular employees.
For regular employees to be considered as such, the primary
standard used is the reasonable connection between the particular
activity they perform and the usual trade or business of the
employer.61 This test has been explained thoroughly in De Leon v.
NLRC,62 viz:
The primary standard, therefore, of determining a regular
employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual business
or trade of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the
employer. The connection can be determined by considering the
nature of the work performed and its relation to the scheme of the
particular business or trade in its entirety. Also if the employee has
been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems
the repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the
only with respect to such activity and while such activity exists.
A reading of the records reveals that the deceased was indeed a
farm worker who was in the regular employ of petitioner. From year
to year, starting January 1983 up until his death, the deceased had
been working on petitioner’s land by harvesting abaca and coconut,
processing copra, and clearing weeds. His employment was
continuous in the sense that it was done for more than one
harvesting season. Moreover, no amount of reasoning could detract
from the fact that these tasks were necessary or desirable in the
usual business of petitioner.
The other tasks allegedly done by the deceased outside his usual
farm work only bolster the existence of an employer-employee
relationship. As found by the SSC, the deceased was a construction
worker in the building and a helper in the bakery, grocery, hardware,
and piggery – all owned by petitioner.63 This fact only proves that
even during the off season, the deceased was still in the employ of
petitioner.
The most telling indicia of this relationship is the Compromise
Agreement executed by petitioner and private respondent. It is a
valid agreement as long as the consideration is reasonable and the
employee signed the waiver voluntarily, with a full understanding of
what he or she was entering into.64 All that is required for the
compromise to be deemed voluntarily entered into is personal and
specific individual consent.65 Once executed by the workers or
employees and their employers to settle their differences, and done
in good faith, a Compromise Agreement is deemed valid and binding
among the parties.66
Petitioner entered into the agreement with full knowledge that he
was described as the employer of the deceased.67This knowledge
cannot simply be denied by a statement that petitioner was merely
forced or threatened into such an agreement.1âwphi1 His belated
attempt to circumvent the agreement should not be given any
consideration or weight by this Court.
III
Pakyaw workers are regular employees,
provided they are subject to the control of petitioner.
Pakyaw workers are considered employees for as long as their
employers exercise control over them. In Legend Hotel Manila v.
Realuyo,68 the Court held that "the power of the employer to control
the work of the employee is considered the most significant
determinant of the existence of an employer-employee relationship.
This is the so-called control test and is premised on whether the
person for whom the services are performed reserves the right to
control both the end achieved and the manner and means used to
achieve that end." It should be remembered that the control test
merely calls for the existence of the right to control, and not
necessarily the exercise thereof.69 It is not essential that the
employer actually supervises the performance of duties by the
employee. It is enough that the former has a right to wield the
power.70
In this case, we agree with the CA that petitioner wielded control
over the deceased in the discharge of his functions. Being the owner
of the farm on which the latter worked, petitioner – on his own or
through his overseer – necessarily had the right to review the quality
of work produced by his laborers. It matters not whether the
deceased conducted his work inside petitioner’s farm or not because
petitioner retained the right to control him in his work, and in fact
exercised it through his farm manager Amado Gacelo. The latter
himself testified that petitioner had hired the deceased as one of the
pakyaw workers whose salaries were derived from the gross
proceeds of the harvest.71
We do not give credence to the allegation that the deceased was an
independent contractor hired by a certain Adolfo Gamba, the
contractor whom petitioner himself had hired to build a building. The
allegation was based on the self-serving testimony of Joyce Gapay
37
Demate,72 the daughter of petitioner. The latter has not offered any
other proof apart from her testimony to prove the contention.
The right of an employee to be covered by the Social Security Act is
premised on the existence of an employer-employee
relationship.73 That having been established, the Court hereby rules
in h1vor of private respondent.
WHEREFORE, the Petition for Review on Certiorari is hereby
DENIED. The assailed Decision and resolution of the Court of
Appeals in CA-G.R. SP. No. 101688 dated 17 March 2010 and 13
August 2010, respectively, are hereby AFFIRMED.
SO ORDERED.
G.R.No. 159343 September 28, 2007
PEDY CASERES and ANDITO PAEL, Petitioners,
vs.
UNIVERSAL ROBINA SUGAR MILLING CORPORATION
(URSUMCO) and/or RESIDENT MANAGER RENE
CABATE, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Universal Robina Sugar Milling Corporation (respondent) is a
corporation engaged in the cane sugar milling business. Pedy
Caseres (petitioner Caseres) started working for respondent in
1989, while Andito Pael (petitioner Pael) in 1993. At the start of their
respective employments, they were made to sign a Contract of
Employment for Specific Project or Undertaking. Petitioners'
contracts were renewed from time to time, until May 1999 when they
were informed that their contracts will not be renewed anymore.
Petitioners filed a complaint for illegal dismissal, regularization,
incentive leave pay, 13th month pay, damages and attorney’s fees.
In a Decision1 dated August 24, 1999, the Labor Arbiter (LA)
dismissed the complaint "for not being substantiated with clear and
convincing evidence."
The National Labor Relations Commission (NLRC) affirmed the LA's
dismissal,2 and the Court of Appeals (CA)3dismissed the petition
filed before it.4
Hence, herein Petition for Review on Certiorari under Rule 45 of the
Rules of Court with the issues set forth as follows:
I. WHETHER OR NOT THE PETITIONERS ARE
SEASONAL/PROJECT/TERM EMPLOYEES NOT
REGULAR EMPLOYEES OF RESPONDENTS;
II. WHETHER OR NOT THE PETITIONERS WERE
ILLEGALLY DISMISSED AND ARE ENTITLED TO
BACKWAGES AND OTHER MONETARY BENEFITS
PRAYED FOR IN THE COMPLAINT.5
The petition is without merit.
The rule is clear that a petition for review on certiorari under Rule 45
of the Rules of Court should raise only questions of law, subject to
certain exceptions.6 Whether or not respondents were project
employees or regular employees is a question of fact. 7
The LA, the NLRC and the CA are one in ruling that petitioners were
not illegally dismissed as they were not regular, but contractual or
project employees. Consequently, the finding of the LA, the NLRC,
and the CA that petitioners were project employees binds this
Court.8
The Court finds no cogent reason to depart from their ruling.
Article 280 of the Labor Code provides:
ART. 280. Regular and Casual Employees. – The provision of
written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such actually exists.
The foregoing provision provides for three kinds of employees:
(a) regular employees or those who have been "engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer"; (b) project employees or those
"whose employment has been fixed for a specific project or
undertaking, the completion or termination of which has been
determined at the time of the engagement of the employee or where
the work or services to be performed is seasonal in nature and the
employment is for the duration of the season"; and (c) casual
employees or those who are neither regular nor project employees.9
The principal test for determining whether an employee is a project
employee or a regular employee is whether the employment has
been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of the
engagement of the employee.10 A project employee is one whose
employment has been fixed for a specific project or undertaking, the
completion or termination of which has been determined at the time
of the engagement of the employee or where the work or service to
be performed is seasonal in nature and the employment is for the
duration of the season.11 A true project employee should be
assigned to a project which begins and ends at determined or
determinable times, and be informed thereof at the time of hiring.12
Petitioners contend that respondent's repeated hiring of their
services qualifies them to the status of regular employees. On this
score, the LA ruled:
This is further buttress[ed] by the fact that the relationship between
complainants and the respondent URSUMCO, would clearly reveal
that the very nature of the terms and conditions of their hiring would
show that complainants were required to perform phases of special
projects which are not related to the main operation of the
respondent for a definite period, after which their services are
available to any farm owner.13
The NLRC, agreeing with the LA, further ruled that:
In the case at bar, We note that complainants never bothered to
deny that they voluntarily, knowingly and willfully executed the
contracts of employment. Neither was there any showing that
respondents exercised moral dominance on the complainants, x x x
it is clear that the contracts of employment are valid and binding on
the complainants.
The execution of these contracts in the case at bar is necessitated
by the peculiar nature of the work in the sugar industry which has an
off milling season. The very nature of the terms and conditions of
complainants' hiring reveals that they were required to perform
phases of special projects for a definite period after, their services
are available to other farm owners. This is so because the planting
of sugar does not entail a whole year operation, and utility works are
comparatively small during the off-milling season. x x x14
Finally, the CA noted:
Petitioner Pedy Caseres first applied with private respondent
URSUMCO on January 9, 1989 as a worker assisting the crane
operator at the transloading station. Upon application, Caseres was
interviewed and made to understand that his employment would be
co-terminus with the phase of work to which he would be then
assigned, that is until February 5, 1989 and thereafter he would be
free to seek employment elsewhere. Caseres agreed and signed the
contract of employment for specific project or undertaking. After an
absence of more than five (5) months, Caseres re-applied with
respondent as a seasonal project worker assisting in the general
underchassis reconditioning to transport units on July 17, 1989. Like
his first assignment, Caseres was made to understand that his
38
services would be co-terminus with the work to which he would be
then assigned that is from July 17, 1989 to July 20, 1989 and that
thereafter he is free to seek employment elsewhere to which
Caseres agreed and readily signed the contract of employment for
specific project or undertaking issued to him. Thereafter Caseres
voluntarily signed several other employment contracts for various
undertakings with a determinable period. As in the first contract,
Caseres' services were co-terminus with the work to which he was
assigned, and that thereafter, he was free to seek employment with
other sugar millers or elsewhere.
The nature and terms and conditions of employment of petitioner
Andito Pael were the same as that of his co-petitioner Caseres.
xxx
It must be noted that there were intervals in petitioners' respective
employment contracts, and that their work depended on the
availability of such contracts or projects. Consequently, the
employment of URSUMCO's work force was not permanent but co-
terminous with the projects to which the employees were assigned
and from whose payrolls they were paid (Palomares vs. NLRC, 277
SCRA 439).
Petitioners' repeated and successive re-employment on the basis of
a contract of employment for more than one year cannot and does
not make them regular employees. Length of service is not the
controlling determinant of the employment tenure of a project
employee (Rada vs. NLRC, 205 SCRA 69). x x x15
It should be stressed that contracts for project employment are valid
under the law. In Villa v. National Labor Relations Commission,16 the
Court stated that:
x x x by entering into such contract, an employee is deemed to
understand that his employment is coterminous with the project. He
may not expect to be employed continuously beyond the completion
of the project. It is of judicial notice that project employees engaged
for manual services or those for special skills like those of
carpenters or masons, are, as a rule, unschooled. However, this fact
alone is not a valid reason for bestowing special treatment on them
or for invalidating a contract of employment. Project employment
contracts are not lopsided agreements in favor of only one party
thereto. The employer’s interest is equally important as that of the
employee’s for theirs is the interest that propels economic activity.
While it may be true that it is the employer who drafts project
employment contracts with its business interest as overriding
consideration, such contracts do not, of necessity, prejudice the
employee. Neither is the employee left helpless by a prejudicial
employment contract. After all, under the law, the interest of the
worker is paramount.171âwphi1
The fact that petitioners were constantly re-hired does not ipso
facto establish that they became regular employees. Their
respective contracts with respondent show that there were intervals
in their employment. In petitioner Caseres's case, while his
employment lasted from August 1989 to May 1999, the duration of
his employment ranged from one day to several months at a time,
and such successive employments were not continuous. With
regard to petitioner Pael, his employment never lasted for more than
a month at a time. These support the conclusion that they were
indeed project employees, and since their work depended on the
availability of such contracts or projects, necessarily the employment
of respondent’s work force was not permanent but co-terminous with
the projects to which they were assigned and from whose payrolls
they were paid. As ruled in Palomares v. National Labor Relations
Commission,18 it would be extremely burdensome for their employer
to retain them as permanent employees and pay them wages even if
there were no projects to work on.
Moreover, even if petitioners were repeatedly and successively re-
hired, still it did not qualify them as regular employees, as length of
service is not the controlling determinant of the employment tenure
of a project employee,19but whether the employment has been fixed
for a specific project or undertaking, its completion has been
determined at the time of the engagement of the
employee.20 Further, the proviso in Article 280, stating that an
employee who has rendered service for at least one (1) year shall
be considered a regular employee, pertains to casual employees
and not to project employees.21
Accordingly, petitioners cannot complain of illegal dismissal
inasmuch as the completion of the contract or phase thereof for
which they have been engaged automatically terminates their
employment.
WHEREFORE, the petition is DENIED.
SO ORDERED.
G.R. No. 114733 January 2, 1997
AURORA LAND PROJECTS CORP. Doing business under the
name "AURORA PLAZA" and TERESITA T.
QUAZON, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and HONORIO
DAGUI, respondents.
HERMOSISIMA, JR., J.:
The question as to whether an employer-employee relationship
exists in a certain situation continues to bedevil the courts. Some
businessmen try to avoid the bringing about of an employer-
employee relationship in their enterprises because that judicial
relation spawns obligations connected with workmen's
compensation, social security, medicare, minimum wage,
termination pay, and unionism.1 In light of this observation, it
behooves this Court to be ever vigilant in Checking the
unscrupulous efforts of some of our entrepreneurs, primarily aimed
at maximizing their return on investments at the expense of the lowly
workingman.
This petition for certiorari seeks the reversal of the Resolution2 of
public respondent National Labor Relations Commission dated
March 16, 1994 affirming with modification the decision of the Labor
Arbiter, dated May 25, 1992, finding petitioners liable to pay private
respondent the total amount of P195,624.00 as separation pay and
attorney's fees.
The relevant antecedents:
Private respondent Honorio Dagui was hired by Doña Aurora Suntay
Tanjangco in 1953 to take charge of the maintenance and repair of
the Tanjangco apartments and residential buildings. He was to
perform carpentry, plumbing, electrical and masonry work. Upon the
death of Doña Aurora Tanjangco in 1982, her daughter, petitioner
Teresita Tanjangco Quazon, took over the administration of all the
Tanjangco properties. On June 8, 1991, private respondent Dagui
received the shock of his life when Mrs. Quazon suddenly told him:
"Wala ka nang trabaho mula ngayon,"3 on the alleged ground that
his work was unsatisfactory. On August 29, 1991, private
respondent, who was then already sixty-two (62) years old, filed a
complaint for illegal dismissal with the Labor Arbiter.
On May 25, 1992, Labor Arbiter Ricardo C. Nora rendered
judgment, the decretal portion of which reads:
IN VIEW OF ALL THE FOREGOING, respondents Aurora
Plaza and/or Teresita Tanjangco Quazon are hereby
ordered to pay the complainant the total amount of ONE
HUNDRED NINETY FIVE THOUSAND SIX HUNDRED
TWENTY FOUR PESOS (P195,624.00) representing
complainant's separation pay and the ten (10%) percent
attorney's fees within ten (10) days from receipt of this
Decision.
All other issues are dismissed for lack of merit.4
Aggrieved, petitioners Aurora Land Projects Corporation and
Teresita T. Quazon appealed to the National Labor Relations
Commission. The Commission affirmed, with modification, the Labor
Arbiter's decision in a Resolution promulgated on March 16, 1994, in
the following manner:
WHEREFORE, in view of the above considerations, let
the appealed decision be as it is hereby AFFIRMED with
(the) MODIFICATION that complainant must be paid
separation pay in the amount of P88,920.00 instead of
P177,840.00. The award of attorney's fees is hereby
deleted.5
As a last recourse, petitioners filed the instant petition based on
grounds not otherwise succinctly and distinctly ascribed, viz:
39
 I The bare allegation of petitioners, without more, that private
RESPONDENT NLRC COMMITTED A GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION IN AFFIRMING THE LABOR
ARBITER'S DECISION SOLELY ON THE BASIS OF ITS
STATEMENT THAT "WE FAIL TO FIND ANY REASON
OR JUSTIFICATION TO DISAGREE WITH THE LABOR
ARBITER IN HIS FINDING THAT HONORIO DAGUI
WAS DISMISSED BY THE RESPONDENT" (p. 7,
RESOLUTION), DESPITE — AND WITHOUT EVEN
BOTHERING TO CONSIDER — THE GROUNDS
STATED IN PETITIONERS' APPEAL MEMORANDUM
WHICH ARE PLAINLY MERITORIOUS.
II
RESPONDENT NLRC COMMITTED A GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION IN FINDING THAT COMPLAINANT
WAS EMPLOYED BY THE RESPONDENTS MORE SO
"FROM 1953 TO 1991" (p. 3, RESOLUTION).
III
RESPONDENT NLRC COMMITTED A GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION IN AWARDING SEPARATION PAY
IN FAVOR OF PRIVATE RESPONDENT MORE SO FOR
THE EQUIVALENT OF 38 YEARS OF ALLEGED
SERVICE.
IV
RESPONDENT NLRC COMMITTED A GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION IN HOLDING BOTH PETITIONERS
LIABLE FOR SEPARATION PAY.6
It is our impression that the crux of this petition rests on two
elemental issues: (1) Whether or not private respondent Honorio
Dagui was an employee of petitioners; and (2) If he were, whether or
not he was illegally dismissed.
Petitioners insist that private respondent had never been their
employee. Since the establishment of Aurora Plaza, Dagui served
therein only as a job contractor. Dagui had control and supervision
of whoever he would take to perform a contracted job. On occasion,
Dagui was hired only as a "tubero" or plumber as the need arises in
order to unclog sewerage pipes. Every time his services were
needed, he was paid accordingly. It was understood that his job was
limited to the specific undertaking of unclogging the pipes. In effect,
petitioners would like us to believe that private respondent Dagui
was an independent contractor, particularly a job contractor, and not
an employee of Aurora Plaza.
We are not persuaded.
Section 8, Rule VIII, Book III of the Implementing Rules and
Regulations of the Labor Code provides in part:
There is job contracting permissible under the Code if the
following conditions are met:
xxx xxx xxx
(2) The contractor has substantial capital or investment in
the form of tools, equipment, machineries, work premises,
and other materials which are necessary in the conduct of
his business.
Honorio Dagui earns a measly sum of P180.00 a day (latest
salary).7 Ostensibly, and by no stretch of the imagination can Dagui
qualify as a job contractor. No proof was adduced by the petitioners
to show that Dagui was merely a job contractor, and it is absurd to
expect that private respondent, with such humble resources, would
have substantial capital or investment in the form of tools,
equipment, and machineries, with which to conduct the business of
supplying Aurora Plaza with manpower and services for the
exclusive purpose of maintaining the apartment houses owned by
the petitioners herein.
respondent Dagui is a job contractor has been disbelieved by the
Labor Arbiter and the public respondent NLRC. Dagui, by the
findings of both tribunals, was an employee of the petitioners. We
are not inclined to set aside these findings. The issue whether or not
an employer-employee relationship exists in a given case is
essentially a question of fact.8 As a rule, repetitious though it has
become to state, this Court does not review supposed errors in the
decision of the NLRC which raise factual issues, because factual
findings of agencies exercising quasi-judicial functions [like public
respondent NLRC] are accorded not only respect but even finality,
aside from the consideration that this Court is essentially not a trier
of facts.9
However, we deem it wise to discuss this issue full-length if only to
bolster the conclusions reached by the labor tribunals, to which we
fully concur.
Jurisprudence is firmly settled that whenever the existence of an
employment relationship is in dispute, four elements constitute the
reliable yardstick: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and
(d) the employer's power to control the employee's conduct. 10 It is
the so-called "control test," and that is, whether the employer
controls or has reserved the right to control the employee not only
as to the result of the work to be done but also as to the means and
methods by which the same is to be accomplished,11 which
constitute the most important index of the existence of the employer-
employee relationship. Stated otherwise, an employer-employee
relationship exists where the person for whom the services are
performed reserves the right to control not only the end to be
achieved but also the means to be used in reaching such end. 12
All these elements are present in the case at bar. Private
respondent was hired in 1953 by Doña Aurora Suntay Tanjangco
(mother of Teresita Tanjangco-Quazon), who was then the one in
charge of the administration of the Tanjangco's various apartments
and other properties. He was employed as a stay-in worker
performing carpentry, plumbing, electrical and necessary work (sic)
needed in the repairs of Tanjangco's properties.13 Upon the demise
of Doña Aurora in 1982, petitioner Teresita Tanjangco-Quazon took
over the administration of these properties and continued to employ
the private respondent, until his unceremonious dismissal on June 8,
1991.14
Dagui was not compensated in terms of profits for his labor or
services like an independent contractor. Rather, he was paid on a
daily wage basis at the rate of P180.00.15 Employees are those who
are compensated for their labor or services by wages rather than by
profits.16 Clearly, Dagui fits under this classification.
Doña Aurora and later her daughter petitioner Teresita Quazon
evidently had the power of dismissal for cause over the private
respondent.17
Finally, the records unmistakably show that the most important
requisite of control is likewise extant in this case. It should be borne
in mind that the power of control refers merely to the existence of
the power and not to the actual exercise thereof. It is not essential
for the employer to actually supervise the performance of duties of
the employee; it is enough that the former has a right to wield the
power.18 The establishment of petitioners is engaged in the leasing
of residential and apartment buildings. Naturally, private
respondent's work therein as a maintenance man had to be
performed within the premises of herein petitioners. In fact,
petitioners do not dispute the fact that Dagui reports for work from
7:00 o'clock in the morning until 4:00 o'clock in the afternoon. It is
not far-fetched to expect, therefore, that Dagui had to observe the
instructions and specifications given by then Doña Aurora and later
by Mrs. Teresita Quazon as to how his work had to be performed.
Parenthetically, since the job of a maintenance crew is necessarily
done within company premises, it can be inferred that both Doña
Aurora and Mrs. Quazon could easily exercise control on private
respondent whenever they please.
The employment relationship established, the next question would
have to be: What kind of an employee is the private respondent —
regular, casual or probationary?
We find private respondent to be a regular employee, for Article 280
of the Labor Code provides:
Regular and Casual employment. — The provisions of
written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the
40
 employee has been engaged to perform activities which
are usually necessary or desirable in the usual business
or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the
completion or termination of which has been determined
at the time of the engagement of the employee or where
the work or services to be performed is seasonal in nature
and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity
in which he is employed and his employment shall
continue while such actually exists.
As can be gleaned from this provision, there are two kinds of regular
employees, namely: (1) those who are engaged to perform activities
which are usually necessary or desirable in the usual business or
trade of the employer; and (2) those who have rendered at least one
year of service, whether continuous or broken, with respect to the
activity in which they are employed.19
Whichever standard is applied, private respondent qualifies as a
regular employee. As aptly ruled by the Labor Arbiter:
. . . As owner of many residential and apartment buildings
in Metro Manila, the necessity of maintaining and
employing a permanent stay-in worker to perform
carpentry, plumbing, electrical and necessary work
needed in the repairs of Tanjangco's properties is readily
apparent and is in fact needed. So much so that upon the
demise of Doña Aurora Tanjangco, respondent's daughter
Teresita Tanjangco-Quazon apparently took over the
administration of the properties and continued to employ
complainant until his outright dismissal on June 8, 1991. .
. . 20
The jobs assigned to private respondent as maintenance man,
carpenter, plumber, electrician and mason were directly related to
the business of petitioners as lessors of residential and apartment
buildings. Moreover, such a continuing need for his services by
herein petitioners is sufficient evidence of the necessity and
indispensability of his services to petitioners' business or trade.
Private respondent Dagui should likewise be considered a regular
employee by the mere fact that he rendered service for the
Tanjangcos for more than one year, that is, beginning 1953 until
1982, under Doña Aurora; and then from 1982 up to June 8, 1991
under the petitioners, for a total of twenty-nine (29) and nine (9)
years respectively. Owing to private respondent's length of service,
he became a regular employee, by operation of law, one year after
he was employed in 1953 and subsequently in 1982. In Baguio
Country Club Corp., v. NLRC,21 we decided that it is more in
consonance with the intent and spirit of the law to rule that the status
of regular employment attaches to the casual employee on the day
immediately after the end of his first year of service. To rule
otherwise is to impose a burden on the employee which is not
sanctioned by law. Thus, the law does not provide the qualification
that the employee must first be issued a regular appointment or
must first be formally declared as such before he can acquire a
regular status.
Petitioners argue, however, that even assuming arguendo that
private respondent can be considered an employee, he cannot be
classified as a regular employee. He was merely a project employee
whose services were hired only with respect to a specific job and
only while the same exists,22 thus falling under the exception of
Article 280, paragraph 1 of the Labor Code. Hence, it is claimed that
he is not entitled to the benefits prayed for and subsequently
awarded by the Labor Arbiter as modified by public respondent
NLRC.
The circumstances of this case in light of settled case law do not, at
all, support this averment. Consonant with a string of cases
beginning with Ochoco v. NLRC,23 followed by Philippine National
Construction Corporation v. NLRC,24 Magante
v. NLRC,25 and Capitol Industrial Construction Corporation
v. NLRC,26 if truly, private respondent was employed as a "project
employee," petitioners should have submitted a report of termination
to the nearest public employment office everytime his employment is
terminated due to completion of each project, as required by Policy
Instruction No. 20, which provides:
Project employees are not entitled to termination pay if
they are terminated as a result of the completion of the
project or any phase thereof in which they are employed,
regardless of the number of project in which they have
been employed by a particular construction company.
Moreover, the company is not required to obtain a
clearance from the Secretary of Labor in connection with
such termination. What is required of the company is a
report to the nearest Public Employment Office for
statistical purposes.
Throughout the duration of private respondent's employment as
maintenance man, there should have been filed as many reports of
termination as there were projects actually finished, if it were true
that private respondent was only a project worker. Failure of the
petitioners to comply with this simple, but nonetheless compulsory,
requirement is proof that Dagui is not a project employee.27
Coming now to the second issue as to whether or not private
respondent Dagui was illegally dismissed, we rule in the affirmative.
Jurisprudence abound as to the rule that the twin requirements of
due process, substantive and procedural, must be complied with,
before a valid dismissal exists.28 Without which the dismissal
becomes void.29
The twin requirements of notice and hearing constitute the essential
elements of due process. This simply means that the employer shall
afford the worker ample opportunity to be beard and to defend
himself with the assistance of his representative, if he so
desires.30 As held in the case of Pepsi Cola Bottling Co. v. NLRC:31
The law requires that the employer must furnish the
worker sought to be dismissed with two written
noticesbefore termination of employee can be legally
effected: (1) notice which apprises the employee of the
particular acts or omissions for which his dismissal is
sought; and (2) the subsequent notice which informs the
employee of the employer's decision to dismiss him
(Section 13, BP 130; Sections, 2-6, Rule XIV, Book V
Rules and Regulations Implementing the Labor Code as
amended), Failure to comply with the requirements taints
the dismissal with illegality. This procedure is mandatory;
in the absence of which, any judgment reached by
management is void and inexistent. (Tingson, Jr. v. NLRC,
185 SCRA 498 [1990]; National Service Corporation v.
NLRC, 168 SCRA 122 [1988]; Ruffy v. NLRC, 182 SCRA
365 [1990].
These mandatory requirements were undeniably absent in the case
at bar. Petitioner Quazon dismissed private respondent on June 8,
1991, without giving him any written notice informing the worker
herein of the cause for his termination. Neither was there any
hearing conducted in order to give Dagui the opportunity to be heard
and defend himself. He was simply told: "Wala ka nang trabaho
mula ngayon," allegedly because of poor workmanship on a
previous job.32 The undignified manner by which private
respondent's services were terminated smacks of absolute denial of
the employee's right to due process and betrays petitioner Quazon's
utter lack of respect for labor. Such an attitude indeed deserves
condemnation.
The Court, however, is bewildered why only an award for separation
pay in lieu of reinstatement was made by both the Labor Arbiter and
the NLRC. No backwages were awarded. It must be remembered
that backwages and reinstatement are two reliefs that should be
given to an illegally dismissed employee. They are separate and
distinct from each other. In the event that reinstatement is no longer
possible, as in this case,33 separation pay is awarded to the
employee. The award of separation pay is in lieu of reinstatement
and not of backwages. In other words, an illegally dismissed
employee is entitled to (1) either reinstatement, if viable, or
separation pay if reinstatement is no longer viable, and (2)
backwages.34 Payment of backwages is specifically designed to
restore an employee's income that was lost because of his unjust
dismissal.35 On the other hand, payment of separation pay is
intended to provide the employee money during the period in which
he will be looking for another employment.36
Considering, however, that the termination of private respondent
Dagui was made on June 8, 1991 or after the effectivity of the
amendatory provision of Republic Act No. 6715 on March 21, 1989,
private respondent's backwages should be computed on the basis of
said law.
41
It is true that private respondent did not appeal the award of the
Labor Arbiter awarding separation pay sans backwages. While as a
general rule, a party who has not appealed is not entitled to
affirmative relief other than the ones granted in the decision of the
court below,37 law and jurisprudence authorize a tribunal to consider
errors, although unassigned, if they involve (1) errors affecting the
lower court's jurisdiction over the subject matter, (2) plain errors not
specified, and (3) clerical errors.38 In this case, the failure of the
Labor Arbiter and the public respondent NLRC to award backwages
to the private respondent, who is legally entitled thereto having been
illegally dismissed, amounts to a "plain error" which we may rectify
in this petition, although private respondent Dagui did not bring any
appeal regarding the matter, in the interest of substantial justice.
The Supreme Court is clothed with ample authority to review
matters, even if they are not assigned as errors on appeal, if it finds
that their consideration is necessary in arriving at a just decision of
the case.39 Rules of procedure are mere tools designed to facilitate
the attainment of justice. Their strict and rigid application, which
would result in technicalities that tend to frustrate rather than
promote substantial justice, must always be avoided.40 Thus,
substantive rights like the award of backwages resulting from illegal
dismissal must not be prejudiced by a rigid and technical application
of the rules.41
Petitioner Quazon argues that, granting the petitioner corporation
should be held liable for the claims of private respondent, she
cannot be made jointly and severally liable with the corporation,
notwithstanding the fact that she is the highest ranking officer of the
company, since Aurora Plaza has a separate juridical personality.
We disagree.
In the cases of Maglutac v. National Labor Relations
Commission,42 Chua v. National Labor Relations
Commission,43 and A.C. Ransom Labor Union-CCLU v. National
Labor Relations Commission 44 we were consistent in holding that
the highest and most ranking officer of the corporation, which in this
case is petitioner Teresita Quazon as manager of Aurora Land
Projects Corporation, can be held jointly and severally liable with the
corporation for the payment of the unpaid money claims of its
employees who were illegally dismissed. In this case, not only was
Teresita Quazon the most ranking officer of Aurora Plaza at the time
of the termination of the private respondent, but worse, she had a
direct hand in the private respondent's illegal dismissal. A corporate
officer is not personally liable for the money claims of discharged
corporate employees unless he acted with evident malice and bad
faith in terminating their employment.45 Here, the failure of petitioner
Quazon to observe the mandatory requirements of due process in
terminating the services of Dagui evinced malice and bad faith on
her part, thus making her liable.
Finally, we must address one last point. Petitioners aver that,
assuming that private respondent can be considered an employee of
Aurora Plaza, petitioners cannot be held liable for separation pay for
the duration of his employment with Doña Aurora Tanjangco from
1953 up to 1982. If petitioners should be held liable as employers,
their liability for separation pay should only be counted from the time
Dagui was rehired by the petitioners in 1982 as a maintenance man.
We agree.
Petitioners' liability for separation pay ought to be reckoned from
1982 when petitioner Teresita Quazon, as manager of Aurora Plaza,
continued to employ private respondent. From 1953 up to the death
of Doña Aurora sometime in 1982, private respondent's claim for
separation pay should have been filed in the testate or intestate
proceedings of Doña Aurora. This is because the demand for
separation pay covered by the years 1953-1982 is actually a money
claim against the estate of Doña Aurora, which claim did not survive
the death of the old woman. Thus, it must be filed against her estate
in accordance with Section 5, Rule 86 of the Revised Rules of Court,
to wit:
Sec. 5. Claims which must be filed under tire notice. If not
filed, barred; exceptions. — All claims for money against
the decedent, arising from contract, express or implied,
whether the same be due, not due, or contingent, all
claims for funeral expenses for the last sickness of the
decedent, and judgment for money against the decedent,
must be filed within the time limited in the notice;
otherwise they are barred forever, except that they may
be set forth as counterclaims in any action that the
executor or administrator may bring against the claimants.
...
WHEREFORE, the instant petition is partly GRANTED and the
Resolution of the public respondent National Labor Relations
Commission dated March 16, 1994 is hereby MODIFIED in that the
award of separation pay against the petitioners shall be reckoned
from the date private respondent was re-employed by the petitioners
in 1982, until June 8, 1991. In addition to separation pay, full
backwages are likewise awarded to private respondent, inclusive of
allowances, and other benefits or their monetary equivalent pursuant
to Article 27946 of the Labor Code, as amended by Section 34 of
Republic Act No. 6715, computed from the time he was dismissed
on June 8, 1991 up to the finality of this decision, without deducting
therefrom the earnings derived by private respondent elsewhere
during the period of his illegal dismissal, pursuant to our ruling
in Osmalik Bustamante, et al. v. National Labor Relations
Commission.47
No costs.
SO ORDERED.
G.R. No. 186169 August 1, 2012
MYLENE CARVAJAL, Petitioner,
vs.
LUZON DEVELOPMENT BANK AND/OR OSCAR Z.
RAMIREZ, Respondents.
DECISION
PEREZ, J.:
In this Petition for Review on Certiorari, petitioner Mylene Carvajal
assails the Decision1 of the Court of Appeals, Second Division, dated
20 August 2008 which dismissed her complaint for illegal dismissal.
The Court or Appeals reversed and set aside the Resolution2 of the
National Labor Relations Commission (NLRC) affirming with
modification the Labor Arbiter’s Decision3 finding petitioner’s
dismissal as illegal and ordering reinstatement or payment of
backwages and attorney’s fees.
The facts are as follows:
Petitioner Mylene Carvajal was employed as a trainee-teller by
respondent Luzon Development Bank (Bank) on 28 October 2003
under a six-month probationary employment contract, with a monthly
salary of P5,175.00. Respondent Oscar Ramirez is the President
and Chief Executive Officer of the Bank.
On 10 December 2003, the Bank sent petitioner a
Memorandum4 directing her to explain in writing why she should not
be subjected to disciplinary action for "chronic tardiness" on
November 3, 5, 6, 14, 18, 20, 21 and 28 2003 or for a total of eight
(8) times. Petitioner apologized in writing and explained that she
was in the process of making adjustments regarding her work and
house chores.5 She was thus reprimanded in writing and reminded
of her status as a probationary employee.6 Still, on 6 January 2004,
a second Memorandum was sent to petitioner directing her to
explain why she should not be suspended for "chronic tardiness" on
13 occasions or on December 2, 3, 4, 5, 8, 10, 11, 12, 15, 16, 18,
22, and 23 2003. On 7 January 2004, petitioner submitted her
written explanation and manifested her acceptance of the
consequences of her actions.7 On 12 January 2004, petitioner was
informed, through a Memorandum,8 of her suspension for three (3)
working days without pay effective 21 January 2004. Finally, in a
Memorandum dated 22 January 2004, petitioner’s suspension was
lifted but in the same breath, her employment was terminated
effective 23 January 2004.9
Hence, petitioner’s filing of the Complaint for illegal dismissal before
the Labor Arbiter. Petitioner alleged, in her position paper, that the
following were the reasons for her termination: 1) she is not an
effective frontliner; 2) she has mistakenly cleared a check; 3)
tardiness; 4) absenteeism; and 5) shortage.10
In their position paper, respondents averred that petitioner was
terminated as a probationary employee on three grounds, namely:
1) chronic tardiness; 2) unauthorized absence; and 3) failure to
perform satisfactorily as a probationary employee. Respondents
explained that petitioner was a chronic violator of the bank’s rules
42
and regulations on tardiness and absenteeism. Aside from her
numerous tardiness, petitioner was absent without leave for 2 days.
She also cleared a check which later turned out to be a bounced
check. Finally, petitioner garnered only a rating of 2.17, with 4 being
the highest and 1 the lowest, in her performance evaluation.
On 9 June 2005, the Labor Arbiter ruled that petitioner was illegally
dismissed. Respondents were held solidarily liable for payment of
money claims. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, judgment is rendered
declaring that complainant as probationary employee was illegally
dismissed. Respondents are ordered to immediately reinstate
complainant to her former position, without loss of any seniority
rights and other monetary benefits. However, if reinstatement is no
longer feasible due to strained relationship between the parties,
respondents are further ordered to pay complainant, jointly and
severally the amount of P20,070.38, representing full backwages of
complainant from the time of her illegal dismissal up to the end of
her probationary contract of employment with respondent bank.
Plus, 10% of the monetary award as attorney’s fee.11
The Labor Arbiter found that petitioner was dismissed without due
process because "she was not afforded the notice in writing
informing her of what respondent (the Bank) would like to bring out
to her for the latter to answer in writing." The Labor Arbiter also did
not consider "unsatisfactory performance" as a valid ground to
shorten the six-month contract of petitioner with the Bank.12
The decision of the Labor Arbiter was partially appealed to the
NLRC by petitioner. Petitioner contended that she should be
considered a regular employee and that the computation by the
Labor Arbiter of backwages up to the end of her probationary
contract is without basis. In its Comment, respondent argued against
the illegality of petitioner’s dismissal and their joint and solidary
liability to pay complainant’s monetary claims. On 31 May 2006, the
NLRC affirmed with modification the Labor Arbiter’s Decision and
ordered for petitioner’s reinstatement, to wit:
WHEREFORE, premises considered, the assailed decision is
hereby affirmed with MODIFICATION ordering the respondents to
reinstate the complainant to her former position, without loss of any
seniority rights and other monetary benefits and to pay her full
backwages from the date of her dismissal to the date of her
reinstatement, actual or in payroll.
All other aspects of the assailed decision stands. 13
Respondents filed a motion for reconsideration but the NLRC denied
the same in a Resolution14 dated 20 July 2006.
In a petition for certiorari filed by respondents, the Court of Appeals
rendered the 20 August 2008 Decision reversing the NLRC ruling,
thus:
IN VIEW OF ALL THE FOREGOING, the instant petition is
GRANTED. The assailed NLRC Resolution in NLRC CA No.
046866-05 dated May 31, 2006 which affirmed with modification the
Decision of the Labor Arbiter in NLRC Case No. RAB IV-2-18910-
04-L dated June 9, 2005 is hereby REVERSED and SET ASIDE. All
monetary liabilities decreed in the Labor Arbiter’s Decision against
petitioners are hereby SET ASIDE. The Complaint for illegal
dismissal, money claims and damages is ORDERED DISMISSED.15
The Court of Appeals found that petitioner is not entitled to
backwages because she was rightfully dismissed for failure to meet
the employment standards.
The motion for reconsideration filed by petitioner was likewise
dismissed.
Petitioner elevated the case to this Court via petition for review
on certiorari, raising the following errors allegedly committed by the
Court of Appeals:
THE HON. COURT OF APPEALS COMMITTED ERRORS IN LAW
IN DECIDING THE ISSUE ON PETITIONER’S VALIDITY OF
DISMISSAL DESPITE SUCH ISSUE HAD LONG BECOME FINAL
AND EXECUTORY FOR FAILURE OF PRIVATE RESPONDENT
LUZON DEVELOPMENT BANK TO APPEAL THE DECISION OF
THE LABOR ARBITER FINDING PETITIONER’S DISMISSAL
ILLEGAL.
THE HON. COURT OF APPEALS COMMITTED ERROR IN LAW IN
DECIDING ISSUES WHICH WERE NOT RAISED BEFORE THE
NLRC ON APPEAL.16
Petitioner harps on the finality of the Labor Arbiter’s ruling on illegal
dismissal and questions the judgment of the Court of Appeals in
discussing and upholding the validity of her dismissal.
Indeed, respondents did not assail the ruling of the Labor Arbiter. It
was in fact petitioner who partially appealed the Labor Arbiter’s
computation of backwages. Provided with the opportunity,
respondents assailed the Labor Arbiter’s Decision in their Comment
to the Partial
Appeal. Upon affirmance of the Labor Arbiter’s Decision by the
NLRC, respondent filed a petition for certiorari with the Court of
Appeals insisting on the validity of the dismissal.
Petitioner seeks to limit the issues to her employment status and
backwages, her basis being that the illegality of her dismissal has
already been finally determined by the Labor Arbiter.
We disagree. As We noted, the facts show that the illegality of
petitioner’s dismissal was an issue that was squarely before the
NLRC. When the NLRC decision was reversed by the Court of
Appeals, from which the issue was elevated to us, we had a
situation where "the findings of facts are conflicting." Thus, we find
applicable the rule that while generally, only questions of law can be
raised in a petition for review on certiorari under Rule 45 of the
Rules of Court, the rule admits of certain exceptions, namely: (1)
when the findings are grounded entirely on speculations, surmises,
or conjectures; (2) when the inference made is manifestly mistaken,
absurd, or impossible; (3) when there is a grave abuse of discretion;
(4) when the judgment is based on misappreciation of facts; (5)
when the findings of fact are conflicting; (6) when in making its
findings, the same are contrary to the admissions of both appellant
and appellee; (7) when the findings are contrary to those of the trial
court; (8) when the findings are conclusions without citation of
specific evidence on which they are based; (9) when the facts set
forth in the petition as well as in the petitioner’s main and reply briefs
are not disputed by the respondent; and (10) when the findings of
fact are premised on the supposed absence of evidence and
contradicted by the evidence on record.17
The petition comes within the purview of exception (5) and by
analogy, exception (7). Hence, the Court resolves to scour the
records of this case.
Truly, it is axiomatic that an appeal, once accepted by this Court,
throws the entire case open to review, and that this Court has the
authority to review matters not specifically raised or assigned as
error by the parties, if their consideration is necessary in arriving at a
just resolution of the case.18
Petitioner premised her appeal on Article 279 of the Labor Code
which provides:
Art. 279. Security of Tenure — In cases of regular employment, the
employer shall not terminate the services of an employee except for
a just cause or when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or
other monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement.
Petitioner maintained that she became a regular employee by virtue
of Book VI, Rule 1, Section 6(d) of the Implementing Rules of the
Labor Code which states:
(d) In all cases of probationary employment, the employer shall
make known to the employee the standards under which he will
qualify as a regular employee at the time of his engagement. Where
no standards are made known to the employee at that time, he shall
be deemed a regular employee.
It is beyond dispute that petitioner was hired as a probationary
employee. Whether her employment status ripened into a regular
one is the point of contention.
Under the very provision cited by petitioner, we cannot, by any
hermeneutics, see petitioner’s employment status as regular. At the
time of her engagement and as mandated by law, petitioner was
43
informed in writing of the standards necessary to qualify her as a
regular employee. Her appointment letter19 reads:
Dear Ms. Carvajal:
We are pleased to confirm your appointment as
follows:
Position : Trainee- Teller
Assignment : Main Branch
Status : Probationary (6 months)
Effectivity : October 28, 2003
Remuneration : P5,175.00 (262)
Possible extension of this contract will depend on the job
requirements of the Bank and your overall performance.
Performance review will be conducted before possible
renewal can take effect.
The Bank reserves the right to immediately terminate this
contract in the event of a below satisfactory performance,
serious disregard of company rules and policies and other
reasons critical to its interests.
Kindly sign below if the above conditions are acceptable.
We look forward to a performance commensurate to your
presented capabilities.
Very truly yours,
[sgd]
Oscar S. Ramirez
Vice President
CONFORME:
[sgd]
Mylene T. Carvajal [Emphasis Supplied]
Petitioner knew, at the time of her engagement, that she must
comply with the standards set forth by respondent and perform
satisfactorily in order to attain regular status. She was apprised of
her functions and duties as a trainee-teller. Respondent released to
petitioner its evaluation20 of her performance. Petitioner was found
wanting. Even the NLRC upheld petitioner’s probationary status,
thus:
During the time that the complainant was dismissed by respondents,
she was holding the position of a trainee-teller on probationary
status. Thus, with the Labor Arbiter’s finding of illegal dismissal,
which the respondent left unchallenged, the complainant is entitled
to be reinstated to resume the functions of a trainee-teller, no more
no less. Reinstatement is not synonymous with regularization. The
determination of whether the complainant can qualify to become one
of respondent bank’s regular employees is still within the well
recognized management’s prerogative.21 [Emphasis Supplied]
A probationary employee, like a regular employee, enjoys security of
tenure. However, in cases of probationary employment, aside from
just or authorized causes of termination, an additional ground is
provided under Article 281 of the Labor Code, i.e., the probationary
employee may also be terminated for failure to qualify as a regular
employee in accordance with reasonable standards made known by
the employer to the employee at the time of the engagement. Thus,
the services of an employee who has been engaged on probationary
basis may be terminated for any of the following: (1) a just or (2) an
authorized cause and (3) when he fails to qualify as a regular
employee in accordance with reasonable standards prescribed by
the employer.22
It is evident that the primary cause of respondent’s dismissal from
her probationary employment was her "chronic tardiness." At the
very start of her employment, petitioner already exhibited poor
working habits. Even during her first month on the job, she already
incurred eight (8) tardiness. In a Memorandum dated 11 December
2003, petitioner was warned that her tardiness might affect her
opportunity to become a permanent or regular employee. And
petitioner did not provide a satisfactory explanation for the cause of
her tardiness.
Punctuality is a reasonable standard imposed on every employee,
whether in government or private sector. As a matter of fact, habitual
tardiness is a serious offense that may very well constitute gross or
habitual neglect of duty, a just cause to dismiss a regular employee.
Assuming that petitioner was not apprised of the standards
concomitant to her job, it is but common sense that she must abide
by the work hours imposed by the bank. As we have aptly stated in
Aberdeen Court, Inc. v. Agustin, Jr.,23 the rule on reasonable
standards made known to the employee prior to engagement should
not be used to exculpate a probationary employee who acts in a
manner contrary to basic knowledge and common sense, in regard
to which there is no need to spell out a policy or standard to be met.
Respondent also cited other infractions such as unauthorized leaves
of absence, mistake in clearing of a check, and underperformance.
All of these infractions were not refuted by petitioner. The Labor
Arbiter failed to discuss the veracity of these grounds. It focused on
unsatisfactory performance and concluded that such is not a
sufficient ground to terminate the probationary employment. The
Labor Arbiter relied on its own misappreciation of facts for a finding
that, resultingly, is contradicted by the evidence on record.
More importantly, satisfactory performance is and should be one of
the basic standards for regularization. Naturally, before an employer
hires an employee, the former can require the employee, upon his
engagement, to undergo a trial period during which the employer
determines his fitness to qualify for regular employment based on
reasonable standards made known to him at the time of
engagement. This is the concept of probationary employment which
is intended to afford the employer an opportunity to observe the
fitness of a probationary employee while at work, and to ascertain
whether he will become an efficient and productive employee. While
the employer observes the fitness, propriety and efficiency of a
probationer to ascertain whether he is qualified for permanent
employment, the probationer, on the other hand, seeks to prove to
the satisfaction of the employer that he has the qualifications to
meet the reasonable standards for permanent employment.24
Moreover, in the letter of appointment, respondents reserved the
right to "immediately terminate this contract in the event of a below
satisfactory performance, serious disregard of company rules and
policies and other reasons critical to its interests."
In finding for illegal dismissal, the Labor Arbiter held that the
dismissal was without due process. We hold otherwise.1âwphi1 As
elucidated by this Court in Philippine Daily Inquirer, Inc. v. Magtibay,
Jr.:25
Unlike under the first ground for the valid termination of probationary
employment which is for just cause, the second ground failure to
qualify in accordance with the standards prescribed by employer
does not require notice and hearing. Due process of law for this
second ground consists of making the reasonable standards
expected of the employee during his probationary period known to
him at the time of his probationary employment. By the very nature
of a probationary employment, the employee knows from the very
start that he will be under close observation and his performance of
his assigned duties and functions would be under continuous
scrutiny by his superiors. It is in apprising him of the standards
against which his performance shall be continuously assessed
where due process regarding the second ground lies, and not in
notice and hearing as in the case of the first ground.26
As we have underscored, respondent complied with the basic
requirements of due process as defined in Magtibay, Jr. Petitioner
had more than sufficient knowledge of the standards her job entails.
Respondent had not been remiss in reminding petitioner, through
memoranda, of the standards that should be observed in aspiring for
regularization.
Petitioner was even notified in two (2) memoranda regarding the
bank’s displeasure over her chronic tardiness. Every memorandum
directed petitioner to explain in writing why she should not be
subjected to disciplinary action. Each time, petitioner acknowledged
her fault and assured the bank that she would, in her daily
schedules, make adjustments to make amends. This certainly is
compliance with due process. Taken together with her low
performance rating and other infractions, petitioner was called by the
head of Human Resources who discussed with her the reasons for
the discontinuance of her probationary appointment before she was
formally served the termination letter on that very same day. There
was, in this case, full accordance to petitioner of the opportunity to
be heard.
In sum, petitioner was validly dismissed from probationary
employment before the expiration of her 6-montb probationary
employment contract. If the termination is for cause, it may be done
anytime during the probation; the employer docs not have to wait
until the probation period is over.27
44
With a valid reason for petitioner's dismissal coupled with the proper
observance of due process, the claim for back wages must
necessarily fail.
In view of the foregoing, we find no reason to disturb the findings
and conclusions of the Court of Appeals.
WHEREFORE, the petition is DENIED.
SO ORDERED.
G.R. No. 192571 July 23, 2013
ABBOTT LABORATORIES, PHILIPPINES, CECILLE A.
TERRIBLE, EDWIN D. FEIST, MARIA OLIVIA T. YABUTMISA,
TERESITA C. BERNARDO, AND ALLAN G.
ALMAZAR, Petitioners,
vs.
PEARLIE ANN F. ALCARAZ, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the
Decision2 dated December 10,2009 and Resolution3 dated June 9,
2010 of the Court of Appeals (CA) in CA-G.R. SP No. 101045 which
pronounced that the National Labor Relations Commission (NLRC)
did not gravely abuse its discretion when it ruled that respondent
Pearlie Ann F. Alcaraz (Alcaraz) was illegally dismissed from her
employment.
The Facts
On June 27, 2004, petitioner Abbott Laboratories, Philippines
(Abbott) caused the publication in a major broadsheet newspaper of
its need for a Medical and Regulatory Affairs Manager (Regulatory
Affairs Manager) who would: (a) be responsible for drug safety
surveillance operations, staffing, and budget; (b) lead the
development and implementation of standard operating
procedures/policies for drug safety surveillance and vigilance; and
(c) act as the primary interface with internal and external customers
regarding safety operations and queries.4 Alcaraz - who was then a
Regulatory Affairs and Information Manager at Aventis Pasteur
Philippines, Incorporated (another pharmaceutical company like
Abbott) – showed interest and submitted her application on October
4, 2004.5
On December 7, 2004, Abbott formally offered Alcaraz the
abovementioned position which was an item under the company’s
Hospira Affiliate Local Surveillance Unit (ALSU) department. 6 In
Abbott’s offer sheet.7 it was stated that Alcaraz was to be employed
on a probationary basis.8 Later that day, she accepted the said offer
and received an electronic mail (e-mail) from Abbott’s Recruitment
Officer, petitioner Teresita C. Bernardo (Bernardo), confirming the
same. Attached to Bernardo’s e-mail were Abbott’s organizational
chart and a job description of Alcaraz’s work.9
On February 12, 2005, Alcaraz signed an employment contract
which stated, inter alia, that she was to be placed on probation for a
period of six (6) months beginning February 15, 2005 to August 14,
2005. The said contract was also signed by Abbott’s General
Manager, petitioner Edwin Feist (Feist):10
PROBATIONARY EMPLOYMENT
Dear Pearl,
After having successfully passed the pre-employment requirements,
you are hereby appointed as follows:
Position Title : Regulatory Affairs Manager
Department : Hospira
The terms of your employment are:
Nature of Employment : Probationary
Effectivity : February 15, 2005 to August 14, 2005
Basic Salary : ₱110,000.00/ month
It is understood that you agree to abide by all existing policies, rules
and regulations of the company, as well as those, which may be
hereinafter promulgated.
Unless renewed, probationary appointment expires on the date
indicated subject to earlier termination by the Company for any
justifiable reason.
If you agree to the terms and conditions of your employment, please
signify your conformity below and return a copy to HRD.
Welcome to Abbott!
Very truly yours,
Sgd.
EDWIN D. FEIST
General Manager
CONFORME:
Sgd.
PEARLIE ANN FERRER-ALCARAZ
During Alcaraz’s pre-employment orientation, petitioner Allan G.
Almazar (Almazar), Hospira’s Country Transition Manager, briefed
her on her duties and responsibilities as Regulatory Affairs Manager,
stating that: (a) she will handle the staff of Hospira ALSU and will
directly report to Almazar on matters regarding Hopira’s local
operations, operational budget, and performance evaluation of the
Hospira ALSU Staff who are on probationary status; (b) she must
implement Abbott’s Code of Good Corporate Conduct (Code of
Conduct), office policies on human resources and finance, and
ensure that Abbott will hire people who are fit in the organizational
discipline; (c) petitioner Kelly Walsh (Walsh), Manager of the
Literature Drug Surveillance Drug Safety of Hospira, will be her
immediate supervisor; (d) she should always coordinate with
Abbott’s human resource officers in the management and discipline
of the staff; (e) Hospira ALSU will spin off from Abbott in early 2006
and will be officially incorporated and known as Hospira, Philippines.
In the interim, Hospira ALSU operations will still be under Abbott’s
management, excluding the technical aspects of the operations
which is under the control and supervision of Walsh; and (f) the
processing of information and/or raw material data subject of
Hospira ALSU operations will be strictly confined and controlled
under the computer system and network being maintained and
operated from the United States. For this purpose, all those involved
in Hospira ALSU are required to use two identification cards: one, to
identify them as Abbott’s employees and another, to identify them as
Hospira employees.11
On March 3, 2005, petitioner Maria Olivia T. Yabut-Misa (Misa),
Abbott’s Human Resources (HR) Director, sent Alcaraz an e-mail
which contained an explanation of the procedure for evaluating the
performance of probationary employees and further indicated that
Abbott had only one evaluation system for all of its employees.
Alcaraz was also given copies of Abbott’s Code of Conduct and
Probationary Performance Standards and Evaluation (PPSE) and
Performance Excellence Orientation Modules (Performance
Modules) which she had to apply in line with her task of evaluating
the Hospira ALSU staff.12
Abbott’s PPSE procedure mandates that the job performance of a
probationary employee should be formally reviewed and discussed
with the employee at least twice: first on the third month and second
on the fifth month from the date of employment. The necessary
Performance Improvement Plan should also be made during the
third-month review in case of a gap between the employee’s
performance and the standards set. These performance standards
should be discussed in detail with the employee within the first two
(2) weeks on the job. It was equally required that a signed copy of
the PPSE form must be submitted to Abbott’s Human Resources
Department (HRD) and shall serve as documentation of the
employee’s performance during his/her probationary period. This
shall form the basis for recommending the confirmation or
termination of the probationary employment.13
During the course of her employment, Alcaraz noticed that some of
the staff had disciplinary problems. Thus, she would reprimand them
for their unprofessional behavior such as non-observance of the
45
dress code, moonlighting, and disrespect of Abbott officers.
However, Alcaraz’s method of management was considered by
Walsh to be "too strict."14 Alcaraz approached Misa to discuss these
concerns and was told to "lie low" and let Walsh handle the matter.
Misa even assured her that Abbott’s HRD would support her in all
her management decisions.15
On April 12, 2005, Alcaraz received an e-mail from Misa requesting
immediate action on the staff’s performance evaluation as their
probationary periods were about to end. This Alcaraz eventually
submitted.16
On April 20, 2005, Alcaraz had a meeting with petitioner Cecille
Terrible (Terrible), Abbott’s former HR Director, to discuss certain
issues regarding staff performance standards. In the course thereof,
Alcaraz accidentally saw a printed copy of an e-mail sent by Walsh
to some staff members which essentially contained queries
regarding the former’s job performance. Alcaraz asked if Walsh’s
action was the normal process of evaluation. Terrible said that it was
not.17
On May 16, 2005, Alcaraz was called to a meeting with Walsh and
Terrible where she was informed that she failed to meet the
regularization standards for the position of Regulatory Affairs
Manager.18 Thereafter, Walsh and Terrible requested Alcaraz to
tender her resignation, else they be forced to terminate her services.
She was also told that, regardless of her choice, she should no
longer report for work and was asked to surrender her office
identification cards. She requested to be given one week to decide
on the same, but to no avail.19
On May 17, 2005, Alcaraz told her administrative assistant, Claude
Gonzales (Gonzales), that she would be on leave for that day.
However, Gonzales told her that Walsh and Terrible already
announced to the whole Hospira ALSU staff that Alcaraz already
resigned due to health reasons.20
On May 23, 2005, Walsh, Almazar, and Bernardo personally handed
to Alcaraz a letter stating that her services had been terminated
effective May 19, 2005.21 The letter detailed the reasons for
Alcaraz’s termination – particularly, that Alcaraz: (a) did not manage
her time effectively; (b) failed to gain the trust of her staff and to
build an effective rapport with them; (c) failed to train her staff
effectively; and (d) was not able to obtain the knowledge and ability
to make sound judgments on case processing and article review
which were necessary for the proper performance of her
duties.22 On May 27, 2005, Alcaraz received another copy of the
said termination letter via registered mail.23
Alcaraz felt that she was unjustly terminated from her employment
and thus, filed a complaint for illegal dismissal and damages against
Abbott and its officers, namely, Misa, Bernardo, Almazar, Walsh,
Terrible, and Feist.24 She claimed that she should have already
been considered as a regular and not a probationary employee
given Abbott’s failure to inform her of the reasonable standards for
her regularization upon her engagement as required under Article
29525 of the Labor Code. In this relation, she contended that while
her employment contract stated that she was to be engaged on a
probationary status, the same did not indicate the standards on
which her regularization would be based.26 She further averred that
the individual petitioners maliciously connived to illegally dismiss her
when: (a) they threatened her with termination; (b) she was ordered
not to enter company premises even if she was still an employee
thereof; and (c) they publicly announced that she already resigned in
order to humiliate her.27
On the contrary, petitioners maintained that Alcaraz was validly
terminated from her probationary employment given her failure to
satisfy the prescribed standards for her regularization which were
made known to her at the time of her engagement.28
The LA Ruling
In a Decision dated March 30, 2006,29 the LA dismissed Alcaraz’s
complaint for lack of merit.
The LA rejected Alcaraz’s argument that she was not informed of
the reasonable standards to qualify as a regular employee
considering her admissions that she was briefed by Almazar on her
work during her pre-employment orientation meeting30 and that she
received copies of Abbott’s Code of Conduct and Performance
Modules which were used for evaluating all types of Abbott
employees.31 As Alcaraz was unable to meet the standards set by
Abbott as per her performance evaluation, the LA ruled that the
termination of her probationary employment was justified.32 Lastly,
the LA found that there was no evidence to conclude that Abbott’s
officers and employees acted in bad faith in terminating Alcaraz’s
employment.33
Displeased with the LA’s ruling, Alcaraz filed an appeal with the
National Labor Relations Commission (NLRC).
The NLRC Ruling
On September 15, 2006, the NLRC rendered a Decision,34 annulling
and setting aside the LA’s ruling, the dispositive portion of which
reads:
WHEREFORE, the Decision of the Labor Arbiter dated 31 March
2006 [sic] is hereby reversed, annulled and set aside and judgment
is hereby rendered:
1. Finding respondents Abbot [sic] and individual
respondents to have committed illegal dismissal;
2. Respondents are ordered to immediately reinstate
complainant to her former position without loss of seniority
rights immediately upon receipt hereof;
3. To jointly and severally pay complainant backwages
computed from 16 May 2005 until finality of this decision.
As of the date hereof the backwages is computed at
a. Backwages for 15 PhP
months - 1,650,000.00
b. 13th month pay - 110,000.00
PhP
TOTAL
1,760,000.00
4. Respondents are ordered to pay complainant moral
damages of ₱50,000.00 and exemplary damages of
₱50,000.00.
5. Respondents are also ordered to pay attorney’s fees of
10% of the total award.
6. All other claims are dismissed for lack of merit.
SO ORDERED.35
The NLRC reversed the findings of the LA and ruled that there was
no evidence showing that Alcaraz had been apprised of her
probationary status and the requirements which she should have
complied with in order to be a regular employee.36 It held that
Alcaraz’s receipt of her job description and Abbott’s Code of
Conduct and Performance Modules was not equivalent to her being
actually informed of the performance standards upon which she
should have been evaluated on.37 It further observed that Abbott did
not comply with its own standard operating procedure in evaluating
probationary employees.38 The NLRC was also not convinced that
Alcaraz was terminated for a valid cause given that petitioners’
allegation of Alcaraz’s "poor performance" remained
unsubstantiated.39
Petitioners filed a motion for reconsideration which was denied by
the NLRC in a Resolution dated July 31, 2007.40
Aggrieved, petitioners filed with the CA a Petition for Certiorari with
Prayer for Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction, docketed as CA G.R. SP No. 101045 (First
CA Petition), alleging grave abuse of discretion on the part of NLRC
when it ruled that Alcaraz was illegally dismissed.41
Pending resolution of the First CA Petition, Alcaraz moved for the
execution of the NLRC’s Decision before the LA, which petitioners
strongly opposed. The LA denied the said motion in an Order dated
July 8, 2008 which was, however, eventually reversed on appeal by
the NLRC.42 Due to the foregoing, petitioners filed another Petition
for Certiorari with the CA, docketed as CA G.R. SP No. 111318
(Second CA Petition), assailing the propriety of the execution of the
NLRC decision.43
The CA Ruling
46
With regard to the First CA Petition, the CA, in a Decision44 dated
December 10, 2009, affirmed the ruling of the NLRC and held that
the latter did not commit any grave abuse of discretion in finding that
Alcaraz was illegally dismissed.
It observed that Alcaraz was not apprised at the start of her
employment of the reasonable standards under which she could
qualify as a regular employee.45 This was based on its examination
of the employment contract which showed that the same did not
contain any standard of performance or any stipulation that Alcaraz
shall undergo a performance evaluation before she could qualify as
a regular employee.46 It also found that Abbott was unable to prove
that there was any reasonable ground to terminate Alcaraz’s
employment.47 Abbott moved for the reconsideration of the
aforementioned ruling which was, however, denied by the CA in a
Resolution48 dated June 9, 2010.
The CA likewise denied the Second CA Petition in a Resolution
dated May 18, 2010 (May 18, 2010 Resolution) and ruled that the
NLRC was correct in upholding the execution of the NLRC
Decision.49 Thus, petitioners filed a motion for reconsideration.
While the petitioners’ motion for reconsideration of the CA’s May 18,
2010 Resolution was pending, Alcaraz again moved for the issuance
of a writ of execution before the LA. On June 7, 2010, petitioners
received the LA’s order granting Alcaraz’s motion for execution
which they in turn appealed to the NLRC – through a Memorandum
of Appeal dated June 16, 2010 (June 16, 2010 Memorandum of
Appeal ) – on the ground that the implementation of the LA’s order
would render its motion for reconsideration moot and academic. 50
Meanwhile, petitioners’ motion for reconsideration of the CA’s May
18, 2010 Resolution in the Second CA Petition was denied via a
Resolution dated October 4, 2010.51 This attained finality on January
10, 2011 for petitioners’ failure to timely appeal the same. 52 Hence,
as it stands, only the issues in the First CA petition are left to be
resolved.
Incidentally, in her Comment dated November 15, 2010, Alcaraz
also alleges that petitioners were guilty of forum shopping when they
filed the Second CA Petition pending the resolution of their motion
for reconsideration of the CA’s December 10, 2009 Decision i.e., the
decision in the First CA Petition.53 She also contends that petitioners
have not complied with the certification requirement under Section 5,
Rule 7 of the Rules of Court when they failed to disclose in the
instant petition the filing of the June 16, 2010 Memorandum of
Appeal filed before the NLRC.54
The Issues Before the Court
The following issues have been raised for the Court’s resolution: (a)
whether or not petitioners are guilty of forum shopping and have
violated the certification requirement under Section 5, Rule 7 of the
Rules of Court; (b) whether or not Alcaraz was sufficiently informed
of the reasonable standards to qualify her as a regular employee; (c)
whether or not Alcaraz was validly terminated from her employment;
and (d) whether or not the individual petitioners herein are liable.
The Court’s Ruling
A. Forum Shopping and
Violation of Section 5, Rule 7
of the Rules of Court.
At the outset, it is noteworthy to mention that the prohibition against
forum shopping is different from a violation of the certification
requirement under Section 5, Rule 7 of the Rules of Court. In Sps.
Ong v. CA,55 the Court explained that:
x x x The distinction between the prohibition against forum shopping
and the certification requirement should by now be too elementary to
be misunderstood. To reiterate, compliance with the certification
against forum shopping is separate from and independent of the
avoidance of the act of forum shopping itself. There is a difference in
the treatment between failure to comply with the certification
requirement and violation of the prohibition against forum shopping
not only in terms of imposable sanctions but also in the manner of
enforcing them. The former constitutes sufficient cause for the
dismissal without prejudice to the filing of the complaint or initiatory
pleading upon motion and after hearing, while the latter is a ground
for summary dismissal thereof and for direct contempt. x x x. 56
As to the first, forum shopping takes place when a litigant files
multiple suits involving the same parties, either simultaneously or
successively, to secure a favorable judgment. It exists where the
elements of litis pendentia are present, namely: (a) identity of
parties, or at least such parties who represent the same interests in
both actions; (b) identity of rights asserted and relief prayed for, the
relief being founded on the same facts; and (c) the identity with
respect to the two preceding particulars in the two (2) cases is such
that any judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata
in the other case.57
In this case, records show that, except for the element of identity of
parties, the elements of forum shopping do not exist. Evidently, the
First CA Petition was instituted to question the ruling of the NLRC
that Alcaraz was illegally dismissed. On the other hand, the Second
CA Petition pertains to the propriety of the enforcement of the
judgment award pending the resolution of the First CA Petition and
the finality of the decision in the labor dispute between Alcaraz and
the petitioners. Based on the foregoing, a judgment in the Second
CA Petition will not constitute res judicata insofar as the First CA
Petition is concerned. Thus, considering that the two petitions clearly
cover different subject matters and causes of action, there exists no
forum shopping.
As to the second, Alcaraz further imputes that the petitioners
violated the certification requirement under Section 5, Rule 7 of the
Rules of Court58 by not disclosing the fact that it filed the June 16,
2010 Memorandum of Appeal before the NLRC in the instant
petition.
In this regard, Section 5(b), Rule 7 of the Rules of Court requires
that a plaintiff who files a case should provide a complete statement
of the present status of any pending case if the latter involves the
same issues as the one that was filed. If there is no such similar
pending case, Section 5(a) of the same rule provides that the
plaintiff is obliged to declare under oath that to the best of his
knowledge, no such other action or claim is pending.
Records show that the issues raised in the instant petition and those
in the June 16, 2010 Memorandum of Appeal filed with the NLRC
likewise cover different subject matters and causes of action. In this
case, the validity of Alcaraz’s dismissal is at issue whereas in the
said Memorandum of Appeal, the propriety of the issuance of a writ
of execution was in question.
Thus, given the dissimilar issues, petitioners did not have to disclose
in the present petition the filing of their June 16, 2010 Memorandum
of Appeal with the NLRC. In any event, considering that the issue on
the propriety of the issuance of a writ of execution had been
resolved in the Second CA Petition – which in fact had already
attained finality – the matter of disclosing the June 16, 2010
Memorandum of Appeal is now moot and academic.
Having settled the foregoing procedural matter, the Court now
proceeds to resolve the substantive issues.
B. Probationary employment;
grounds for termination.
A probationary employee, like a regular employee, enjoys security of
tenure. However, in cases of probationary employment, aside from
just or authorized causes of termination, an additional ground is
provided under Article 295 of the Labor Code, i.e., the probationary
employee may also be terminated for failure to qualify as a regular
employee in accordance with the reasonable standards made
known by the employer to the employee at the time of the
engagement.59 Thus, the services of an employee who has been
engaged on probationary basis may be terminated for any of the
following: (a) a just or (b) an authorized cause; and (c) when he fails
to qualify as a regular employee in accordance with reasonable
standards prescribed by the employer.60
Corollary thereto, Section 6(d), Rule I, Book VI of the Implementing
Rules of the Labor Code provides that if the employer fails to inform
the probationary employee of the reasonable standards upon which
the regularization would be based on at the time of the engagement,
then the said employee shall be deemed a regular employee, viz.:
(d) In all cases of probationary employment, the employer shall
make known to the employee the standards under which he will
qualify as a regular employee at the time of his engagement. Where
no standards are made known to the employee at that time, he shall
be deemed a regular employee.
In other words, the employer is made to comply with two (2)
requirements when dealing with a probationary employee: first, the
47
employer must communicate the regularization standards to the
probationary employee; and second, the employer must make such
communication at the time of the probationary employee’s
engagement. If the employer fails to comply with either, the
employee is deemed as a regular and not a probationary employee.
Keeping with these rules, an employer is deemed to have made
known the standards that would qualify a probationary employee to
be a regular employee when it has exerted reasonable efforts to
apprise the employee of what he is expected to do or accomplish
during the trial period of probation. This goes without saying that the
employee is sufficiently made aware of his probationary status as
well as the length of time of the probation.
The exception to the foregoing is when the job is self-descriptive in
nature, for instance, in the case of maids, cooks, drivers, or
messengers.61 Also, in Aberdeen Court, Inc. v. Agustin,62 it has been
held that the rule on notifying a probationary employee of the
standards of regularization should not be used to exculpate an
employee who acts in a manner contrary to basic knowledge and
common sense in regard to which there is no need to spell out a
policy or standard to be met. In the same light, an employee’s failure
to perform the duties and responsibilities which have been clearly
made known to him constitutes a justifiable basis for a probationary
employee’s non-regularization.
In this case, petitioners contend that Alcaraz was terminated
because she failed to qualify as a regular employee according to
Abbott’s standards which were made known to her at the time of her
engagement. Contrarily, Alcaraz claims that Abbott never apprised
her of these standards and thus, maintains that she is a regular and
not a mere probationary employee.
The Court finds petitioners’ assertions to be well-taken.
A punctilious examination of the records reveals that Abbott had
indeed complied with the above-stated requirements. This
conclusion is largely impelled by the fact that Abbott clearly
conveyed to Alcaraz her duties and responsibilities as Regulatory
Affairs Manager prior to, during the time of her engagement, and the
incipient stages of her employment. On this score, the Court finds it
apt to detail not only the incidents which point out to the efforts
made by Abbott but also those circumstances which would show
that Alcaraz was well-apprised of her employer’s expectations that
would, in turn, determine her regularization:
(a) On June 27, 2004, Abbott caused the publication in a
major broadsheet newspaper of its need for a Regulatory
Affairs Manager, indicating therein the job description for
as well as the duties and responsibilities attendant to the
aforesaid position; this prompted Alcaraz to submit her
application to Abbott on October 4, 2004;
(b) In Abbott’s December 7, 2004 offer sheet, it was stated
that Alcaraz was to be employed on a probationary status;
(c) On February 12, 2005, Alcaraz signed an employment
contract which specifically stated, inter alia, that she was
to be placed on probation for a period of six (6) months
beginning February 15, 2005 to August 14, 2005;
(d) On the day Alcaraz accepted Abbott’s employment
offer, Bernardo sent her copies of Abbott’s organizational
structure and her job description through e-mail;
(e) Alcaraz was made to undergo a pre-employment
orientation where Almazar informed her that she had to
implement Abbott’s Code of Conduct and office policies
on human resources and finance and that she would be
reporting directly to Walsh;
(f) Alcaraz was also required to undergo a training
program as part of her orientation;
(g) Alcaraz received copies of Abbott’s Code of Conduct
and Performance Modules from Misa who explained to
her the procedure for evaluating the performance of
probationary employees; she was further notified that
Abbott had only one evaluation system for all of its
employees; and
(h) Moreover, Alcaraz had previously worked for another
pharmaceutical company and had admitted to have an
"extensive training and background" to acquire the
necessary skills for her job.63
Considering the totality of the above-stated circumstances, it cannot,
therefore, be doubted that Alcaraz was well-aware that her
regularization would depend on her ability and capacity to fulfill the
requirements of her position as Regulatory Affairs Manager and that
her failure to perform such would give Abbott a valid cause to
terminate her probationary employment.
Verily, basic knowledge and common sense dictate that the
adequate performance of one’s duties is, by and of itself, an inherent
and implied standard for a probationary employee to be regularized;
such is a regularization standard which need not be literally spelled
out or mapped into technical indicators in every case. In this regard,
it must be observed that the assessment of adequate duty
performance is in the nature of a management prerogative which
when reasonably exercised – as Abbott did in this case – should be
respected. This is especially true of a managerial employee like
Alcaraz who was tasked with the vital responsibility of handling the
personnel and important matters of her department.
In fine, the Court rules that Alcaraz’s status as a probationary
employee and her consequent dismissal must stand. Consequently,
in holding that Alcaraz was illegally dismissed due to her status as a
regular and not a probationary employee, the Court finds that the
NLRC committed a grave abuse of discretion.
To elucidate, records show that the NLRC based its decision on the
premise that Alcaraz’s receipt of her job description and Abbott’s
Code of Conduct and Performance Modules was not equivalent to
being actually informed of the performance standards upon which
she should have been evaluated on.64 It, however, overlooked the
legal implication of the other attendant circumstances as detailed
herein which should have warranted a contrary finding that Alcaraz
was indeed a probationary and not a regular employee – more
particularly the fact that she was well-aware of her duties and
responsibilities and that her failure to adequately perform the same
would lead to her non-regularization and eventually, her termination.
Accordingly, by affirming the NLRC’s pronouncement which is
tainted with grave abuse of discretion, the CA committed a
reversible error which, perforce, necessitates the reversal of its
decision.
C. Probationary employment;
termination procedure.
A different procedure is applied when terminating a probationary
employee; the usual two-notice rule does not govern.65 Section 2,
Rule I, Book VI of the Implementing Rules of the Labor Code states
that "if the termination is brought about by the x x x failure of an
employee to meet the standards of the employer in case of
probationary employment, it shall be sufficient that a written notice is
served the employee, within a reasonable time from the effective
date of termination."
As the records show, Alcaraz's dismissal was effected through a
letter dated May 19, 2005 which she received on May 23, 2005 and
again on May 27, 2005. Stated therein were the reasons for her
termination, i.e., that after proper evaluation, Abbott determined that
she failed to meet the reasonable standards for her regularization
considering her lack of time and people management and decision-
making skills, which are necessary in the performance of her
functions as Regulatory Affairs Manager.66 Undeniably, this written
notice sufficiently meets the criteria set forth above, thereby
legitimizing the cause and manner of Alcaraz’s dismissal as a
probationary employee under the parameters set by the Labor
Code.67
D. Employer’s violation of
company policy and
procedure.
Nonetheless, despite the existence of a sufficient ground to
terminate Alcaraz’s employment and Abbott’s compliance with the
Labor Code termination procedure, it is readily apparent that Abbott
breached its contractual obligation to Alcaraz when it failed to abide
by its own procedure in evaluating the performance of a
probationary employee.
Veritably, a company policy partakes of the nature of an implied
contract between the employer and employee. In Parts Depot, Inc.
v. Beiswenger,68 it has been held that:
48
Employer statements of policy . . . can give rise to contractual rights
in employees without evidence that the parties mutually agreed that
the policy statements would create contractual rights in the
employee, and, hence, although the statement of policy is signed by
neither party, can be unilaterally amended by the employer without
notice to the employee, and contains no reference to a specific
employee, his job description or compensation, and although no
reference was made to the policy statement in pre-employment
interviews and the employee does not learn of its existence until
after his hiring. Toussaint, 292 N.W .2d at 892. The principle is akin
to estoppel. Once an employer establishes an express personnel
policy and the employee continues to work while the policy remains
in effect, the policy is deemed an implied contract for so long as it
remains in effect. If the employer unilaterally changes the policy, the
terms of the implied contract are also thereby
changed.1âwphi1 (Emphasis and underscoring supplied.)
Hence, given such nature, company personnel policies create an
obligation on the part of both the employee and the employer to
abide by the same.
Records show that Abbott’s PPSE procedure mandates, inter alia,
that the job performance of a probationary employee should be
formally reviewed and discussed with the employee at least twice:
first on the third month and second on the fifth month from the date
of employment. Abbott is also required to come up with a
Performance Improvement Plan during the third month review to
bridge the gap between the employee’s performance and the
standards set, if any.69 In addition, a signed copy of the PPSE form
should be submitted to Abbott’s HRD as the same would serve as
basis for recommending the confirmation or termination of the
probationary employment.70
In this case, it is apparent that Abbott failed to follow the above-
stated procedure in evaluating Alcaraz. For one, there lies a hiatus
of evidence that a signed copy of Alcaraz’s PPSE form was
submitted to the HRD. It was not even shown that a PPSE form was
completed to formally assess her performance. Neither was the
performance evaluation discussed with her during the third and fifth
months of her employment. Nor did Abbott come up with the
necessary Performance Improvement Plan to properly gauge
Alcaraz’s performance with the set company standards.
While it is Abbott’s management prerogative to promulgate its own
company rules and even subsequently amend them, this right
equally demands that when it does create its own policies and
thereafter notify its employee of the same, it accords upon itself the
obligation to faithfully implement them. Indeed, a contrary
interpretation would entail a disharmonious relationship in the work
place for the laborer should never be mired by the uncertainty of
flimsy rules in which the latter’s labor rights and duties would, to
some extent, depend.
In this light, while there lies due cause to terminate Alcaraz’s
probationary employment for her failure to meet the standards
required for her regularization, and while it must be further pointed
out that Abbott had satisfied its statutory duty to serve a written
notice of termination, the fact that it violated its own company
procedure renders the termination of Alcaraz’s employment
procedurally infirm, warranting the payment of nominal damages. A
further exposition is apropos.
Case law has settled that an employer who terminates an employee
for a valid cause but does so through invalid procedure is liable to
pay the latter nominal damages.
In Agabon v. NLRC (Agabon),71 the Court pronounced that where
the dismissal is for a just cause, the lack of statutory due process
should not nullify the dismissal, or render it illegal, or ineffectual.
However, the employer should indemnify the employee for the
violation of his statutory rights.72 Thus, in Agabon, the employer was
ordered to pay the employee nominal damages in the amount of
₱30,000.00.73
Proceeding from the same ratio, the Court modified Agabon in the
case of Jaka Food Processing Corporation v. Pacot (Jaka)74 where it
created a distinction between procedurally defective dismissals due
to a just cause, on one hand, and those due to an authorized cause,
on the other.
It was explained that if the dismissal is based on a just cause under
Article 282 of the Labor Code (now Article 296) but the employer
failed to comply with the notice requirement, the sanction to be
imposed upon him should be tempered because the dismissal
process was, in effect, initiated by an act imputable to the employee;
if the dismissal is based on an authorized cause under Article 283
(now Article 297) but the employer failed to comply with the notice
requirement, the sanction should be stiffer because the dismissal
process was initiated by the employer’s exercise of his management
prerogative.75 Hence, in Jaka, where the employee was dismissed
for an authorized cause of retrenchment76 – as contradistinguished
from the employee in Agabon who was dismissed for a just cause of
neglect of duty77 – the Court ordered the employer to pay the
employee nominal damages at the higher amount of ₱50,000.00.
Evidently, the sanctions imposed in both Agabon and Jaka proceed
from the necessity to deter employers from future violations of the
statutory due process rights of employees.78 In similar regard, the
Court deems it proper to apply the same principle to the case at bar
for the reason that an employer’s contractual breach of its own
company procedure – albeit not statutory in source – has the parallel
effect of violating the laborer’s rights. Suffice it to state, the contract
is the law between the parties and thus, breaches of the same impel
recompense to vindicate a right that has been violated.
Consequently, while the Court is wont to uphold the dismissal of
Alcaraz because a valid cause exists, the payment of nominal
damages on account of Abbott’s contractual breach is warranted in
accordance with Article 2221 of the Civil Code.79
Anent the proper amount of damages to be awarded, the Court
observes that Alcaraz’s dismissal proceeded from her failure to
comply with the standards required for her regularization. As such, it
is undeniable that the dismissal process was, in effect, initiated by
an act imputable to the employee, akin to dismissals due to just
causes under Article 296 of the Labor Code. Therefore, the Court
deems it appropriate to fix the amount of nominal damages at the
amount of ₱30,000.00, consistent with its rulings in both Agabon
and Jaka.
E. Liability of individual
petitioners as corporate
officers.
It is hornbook principle that personal liability of corporate directors,
trustees or officers attaches only when: (a) they assent to a patently
unlawful act of the corporation, or when they are guilty of bad faith or
gross negligence in directing its affairs, or when there is a conflict of
interest resulting in damages to the corporation, its stockholders or
other persons; (b) they consent to the issuance of watered down
stocks or when, having knowledge of such issuance, do not forthwith
file with the corporate secretary their written objection; (c) they agree
to hold themselves personally and solidarily liable with the
corporation; or (d) they are made by specific provision of law
personally answerable for their corporate action.80
In this case, Alcaraz alleges that the individual petitioners acted in
bad faith with regard to the supposed crude manner by which her
probationary employment was terminated and thus, should be held
liable together with Abbott. In the same vein, she further attributes
the loss of some of her remaining belongings to them.81
Alcaraz’s contention fails to persuade.
A judicious perusal of the records show that other than her
unfounded assertions on the matter, there is no evidence to support
the fact that the individual petitioners herein, in their capacity as
Abbott’s officers and employees, acted in bad faith or were
motivated by ill will in terminating
Alcaraz’s services. The fact that Alcaraz was made to resign and not
allowed to enter the workplace does not necessarily indicate bad
faith on Abbott’s part since a sufficient ground existed for the latter
to actually proceed with her termination. On the alleged loss of her
personal belongings, records are bereft of any showing that the
same could be attributed to Abbott or any of its officers. It is a well-
settled rule that bad faith cannot be presumed and he who alleges
bad faith has the onus of proving it. All told, since Alcaraz failed to
prove any malicious act on the part of Abbott or any of its officers,
the Court finds the award of moral or exemplary damages
unwarranted.
WHEREFORE, the petition is GRANTED. The Decision dated
December 10, 2009 and Resolution dated June 9, 2010 of the Court
of Appeals in CA-G.R. SP No. 101045 are hereby REVERSED and
SET ASIDE. Accordingly, the Decision dated March 30, 2006 of the
Labor Arbiter is REINSTATED with the MODIFICATION that
petitioner Abbott Laboratories, Philippines be ORDERED to pay
respondent Pearlie Ann F. Alcaraz nominal damages in the amount
of ₱30,000.00 on account of its breach of its own company
procedure.
49
SO ORDERED.
G.R. No. 185829 April 25, 2012
ARMANDO ALILING, Petitioner,
vs.
JOSE B. FELICIANO, MANUEL F. SAN MATEO III, JOSEPH R.
LARIOSA, and WIDE WIDE WORLD EXPRESS
CORPORATION, Respondents.
DECISION
VELASCO, JR., J.:
The Case
This Petition for Review on Certiorari under Rule 45 assails and
seeks to set aside the July 3, 2008 Decision1 and December 15,
2008 Resolution2 of the Court of Appeals (CA), in CA-G.R. SP No.
101309, entitled Armando Aliling v. National Labor Relations
Commission, Wide Wide World Express Corporation, Jose B.
Feliciano, Manuel F. San Mateo III and Joseph R. Lariosa. The
assailed issuances modified the Resolutions dated May 31,
20073 and August 31, 20074 rendered by the National Labor
Relations Commission (NLRC) in NLRC NCR Case No. 00-10-
11166-2004, affirming the Decision dated April 25, 20065 of the
Labor Arbiter.
The Facts
Via a letter dated June 2, 2004,6 respondent Wide Wide World
Express Corporation (WWWEC) offered to employ petitioner
Armando Aliling (Aliling) as "Account Executive (Seafreight Sales),"
with the following compensation package: a monthly salary of PhP
13,000, transportation allowance of PhP 3,000, clothing allowance of
PhP 800, cost of living allowance of PhP 500, each payable on a per
month basis and a 14th month pay depending on the profitability and
availability of financial resources of the company. The offer came
with a six (6)-month probation period condition with this express
caveat: "Performance during [sic] probationary period shall be made
as basis for confirmation to Regular or Permanent Status."
On June 11, 2004, Aliling and WWWEC inked an Employment
Contract7 under the following terms, among others:
 Conversion to regular status shall be determined on the
basis of work performance; and
 Employment services may, at any time, be terminated for
just cause or in accordance with the standards defined at
the time of engagement.8
Training then started. However, instead of a Seafreight Sale
assignment, WWWEC asked Aliling to handle Ground Express (GX),
a new company product launched on June 18, 2004 involving
domestic cargo forwarding service for Luzon. Marketing this product
and finding daily contracts for it formed the core of Aliling’s new
assignment.
Barely a month after, Manuel F. San Mateo III (San Mateo),
WWWEC Sales and Marketing Director, emailed Aliling9to express
dissatisfaction with the latter’s performance, thus:
Armand,
My expectations is [sic] that GX Shuttles should be 80% full by the
3rd week (August 5) after launch (July 15). Pls. make that happen. It
has been more than a month since you came in. I am expecting
sales to be pumping in by now. Thanks.
Nonong
Thereafter, in a letter of September 25, 2004,10 Joseph R. Lariosa
(Lariosa), Human Resources Manager of WWWEC, asked Aliling to
report to the Human Resources Department to explain his absence
taken without leave from September 20, 2004.
Aliling responded two days later. He denied being absent on the
days in question, attaching to his reply-letter11 a copy of his
timesheet12 which showed that he worked from September 20 to 24,
2004. Aliling’s explanation came with a query regarding the
withholding of his salary corresponding to September 11 to 25,
2004.
In a separate letter dated September 27, 2004,13 Aliling wrote San
Mateo stating: "Pursuant to your instruction on September 20, 2004,
I hereby tender my resignation effective October 15, 2004." While
WWWEC took no action on his tender, Aliling nonetheless
demanded reinstatement and a written apology, claiming in a
subsequent letter dated October 1, 200414 to management that San
Mateo had forced him to resign.
Lariosa’s response-letter of October 1, 2004,15 informed Aliling that
his case was still in the process of being evaluated. On October 6,
2004,16 Lariosa again wrote, this time to advise Aliling of the
termination of his services effective as of that date owing to his "non-
satisfactory performance" during his probationary period. Records
show that Aliling, for the period indicated, was paid his outstanding
salary which consisted of:
PhP (salary for the September 25, 2004
4,988.18 payroll)
1,987.28 (salary for 4 days in October 2004)
------------------
PhP
6,975.46 Total
Earlier, however, or on October 4, 2004, Aliling filed a
Complaint17 for illegal dismissal due to forced resignation,
nonpayment of salaries as well as damages with the NLRC against
WWWEC. Appended to the complaint was Aliling’s Affidavit dated
November 12, 2004,18 in which he stated: "5. At the time of my
engagement, respondents did not make known to me the standards
under which I will qualify as a regular employee."
Refuting Aliling’s basic posture, WWWEC stated in its Position
Paper dated November 22, 200419 that, in addition to the letter-offer
and employment contract adverted to, WWWEC and Aliling have
signed a letter of appointment20 on June 11, 2004 containing the
following terms of engagement:
Additionally, upon the effectivity of your probation, you and your
immediate superior are required to jointly define your objectives
compared with the job requirements of the position. Based on the
pre-agreed objectives, your performance shall be reviewed on the
3rd month to assess your competence and work attitude. The 5th
month Performance Appraisal shall be the basis in elevating or
confirming your employment status from Probationary to Regular.
Failure to meet the job requirements during the probation stage
means that your services may be terminated without prior notice and
without recourse to separation pay.
WWWEC also attached to its Position Paper a memo dated
September 20, 200421 in which San Mateo asked Aliling to explain
why he should not be terminated for failure to meet the expected job
performance, considering that the load factor for the GX Shuttles for
the period July to September was only 0.18% as opposed to the
allegedly agreed upon load of 80% targeted for August 5, 2004.
According to WWWEC, Aliling, instead of explaining himself, simply
submitted a resignation letter.
In a Reply-Affidavit dated December 13, 2004,22 Aliling denied
having received a copy of San Mateo’s September 20, 2004 letter.
Issues having been joined, the Labor Arbiter issued on April 25,
200623 a Decision declaring Aliling’s termination as unjustified. In its
pertinent parts, the decision reads:
The grounds upon which complainant’s dismissal was based did not
conform not only the standard but also the compliance required
under Article 281 of the Labor Code, Necessarily, complainant’s
termination is not justified for failure to comply with the mandate the
law requires. Respondents should be ordered to pay salaries
corresponding to the unexpired portion of the contract of
employment and all other benefits amounting to a total of THIRTY
FIVE THOUSAND EIGHT HUNDRED ELEVEN PESOS
(P35,811.00) covering the period from October 6 to December 7,
2004, computed as follows:
Unexpired Portion of the Contract:
50
 Aliling’s motion for reconsideration was rejected by the CA through
Basic Salary P13,000.00 the assailed Resolution dated December 15, 2008.
Transportation 3,000.00
Hence, the instant petition.
Clothing Allowance 800.00
The Issues
ECOLA 500.00

----------------- Aliling raises the following issues for consideration:

P17,300.00
A. The failure of the Court of Appeals to order
reinstatement (despite its finding that petitioner was
10/06/04 – 12/07/04
illegally dismissed from employment) is contrary to law
P17,300.00 x 2.7 mos. = P35,811.00
and applicable jurisprudence.

Complainant’s 13th month pay proportionately for 2004 was not

B. The failure of the Court of Appeals to award backwages
shown to have been paid to complainant, respondent be made liable
(even if it did not order reinstatement) is contrary to law
to him therefore computed at SIX THOUSAND FIVE HUNDRED
and applicable jurisprudence.
THIRTY TWO PESOS AND 50/100 (P6,532.50).

C. The failure of the Court of Appeals to award moral and

For engaging the services of counsel to protect his interest,
exemplary damages (despite its finding that petitioner was
complainant is likewise entitled to a 10% attorney’s fees of the
dismissed to prevent the acquisition of his regular status)
judgment amount. Such other claims for lack of basis sufficient to
is contrary to law and applicable jurisprudence.25
support for their grant are unwarranted.

In their Comment,26 respondents reiterated their position that

WHEREFORE, judgment is hereby rendered ordering respondent
WWWEC hired petitioner on a probationary basis and fired him
company to pay complainant Armando Aliling the sum of THIRTY
before he became a regular employee.
FIVE THOUSAND EIGHT HUNDRED ELEVEN PESOS
(P35,811.00) representing his salaries and other benefits as
discussed above. The Court’s Ruling

Respondent company is likewise ordered to pay said complainant The petition is partly meritorious.
the amount of TEN THOUSAND SEVEN HUNDRED SIXTY SIX
PESOS AND 85/100 ONLY (10.766.85) representing his
Petitioner is a regular employee
proportionate 13th month pay for 2004 plus 10% of the total
judgment as and by way of attorney’s fees.
On a procedural matter, petitioner Aliling argues that WWWEC, not
having appealed from the judgment of CA which declared Aliling as
Other claims are hereby denied for lack of merit. (Emphasis
a regular employee from the time he signed the employment
supplied.)
contract, is now precluded from questioning the appellate court’s
determination as to the nature of his employment.
The labor arbiter gave credence to Aliling’s allegation about not
receiving and, therefore, not bound by, San Mateo’s purported
Petitioner errs. The Court has, when a case is on appeal, the
September 20, 2004 memo. The memo, to reiterate, supposedly
authority to review matters not specifically raised or assigned as
apprised Aliling of the sales quota he was, but failed, to meet.
error if their consideration is necessary in reaching a just conclusion
Pushing the point, the labor arbiter explained that Aliling cannot be
of the case. We said as much in Sociedad Europea de Financiacion,
validly terminated for non-compliance with the quota threshold
SA v. Court of Appeals,27 "It is axiomatic that an appeal, once
absent a prior advisory of the reasonable standards upon which his
accepted by this Court, throws the entire case open to review, and
performance would be evaluated.
that this Court has the authority to review matters not specifically
raised or assigned as error by the parties, if their consideration is
Both parties appealed the above decision to the NLRC, which necessary in arriving at a just resolution of the case."
affirmed the Decision in toto in its Resolution dated May 31, 2007.
The separate motions for reconsideration were also denied by the
The issue of whether or not petitioner was, during the period
NLRC in its Resolution dated August 31, 2007.
material, a probationary or regular employee is of pivotal import. Its
resolution is doubtless necessary at arriving at a fair and just
Therefrom, Aliling went on certiorari to the CA, which eventually disposition of the controversy.
rendered the assailed Decision, the dispositive portion of which
reads:
The Labor Arbiter cryptically held in his decision dated April 25,
2006 that:
WHEREFORE, the petition is PARTLY GRANTED. The assailed
Resolutions of respondent (Third Division) National Labor Relations
Be that as it may, there appears no showing that indeed the said
Commission are AFFIRMED, with the following
September 20, 2004 Memorandum addressed to complainant was
MODIFICATION/CLARIFICATION: Respondents Wide Wide World
received by him. Moreover, complainant’s tasked where he was
Express Corp. and its officers, Jose B. Feliciano, Manuel F. San
assigned was a new developed service. In this regard, it is noted:
Mateo III and Joseph R. Lariosa, are jointly and severally liable to
pay petitioner Armando Aliling: (A) the sum of Forty Two Thousand
Three Hundred Thirty Three & 50/100 (P42,333.50) as the total "Due process dictates that an employee be apprised beforehand of
money judgment, (B) the sum of Four Thousand Two Hundred Thirty the conditions of his employment and of the terms of advancement
Three & 35/100 (P4,233.35) as attorney’s fees, and (C) the therein. Precisely, implicit in Article 281 of the Labor Code is the
additional sum equivalent to one-half (1/2) month of petitioner’s requirement that reasonable standards be previously made known
salary as separation pay. by the employer to the employee at the time of his engagement
(Ibid, citing Sameer Overseas Placement Agency, Inc. vs. NLRC,
G.R. No. 132564, October 20, 1999).28
SO ORDERED.24 (Emphasis supplied.)

The CA anchored its assailed action on the strength of the following
premises: (a) respondents failed to prove that Aliling’s dismal
performance constituted gross and habitual neglect necessary to
justify his dismissal; (b) not having been informed at the time of his
engagement of the reasonable standards under which he will qualify
as a regular employee, Aliling was deemed to have been hired from
day one as a regular employee; and (c) the strained relationship
existing between the parties argues against the propriety of
reinstatement.
From our review, it appears that the labor arbiter, and later the
NLRC, considered Aliling a probationary employee despite finding
that he was not informed of the reasonable standards by which his
probationary employment was to be judged.
The CA, on the other hand, citing Cielo v. National Labor Relations
Commission,29 ruled that petitioner was a regular employee from the
outset inasmuch as he was not informed of the standards by which
his probationary employment would be measured. The CA wrote:

51
Petitioner was regularized from the time of the execution of the
employment contract on June 11, 2004, although respondent
company had arbitrarily shortened his tenure. As pointed out,
respondent company did not make known the reasonable standards
under which he will qualify as a regular employee at the time of his
engagement. Hence, he was deemed to have been hired from day
one as a regular employee.30 (Emphasis supplied.)
WWWEC, however, excepts on the argument that it put Aliling on
notice that he would be evaluated on the 3rd and 5th months of his
probationary employment. To WWWEC, its efforts translate to
sufficient compliance with the requirement that a probationary
worker be apprised of the reasonable standards for his
regularization. WWWEC invokes the ensuing holding in Alcira v.
National Labor Relations Commission31 to support its case:
Conversely, an employer is deemed to substantially comply with the
rule on notification of standards if he apprises the employee that he
will be subjected to a performance evaluation on a particular date
after his hiring. We agree with the labor arbiter when he ruled that:
In the instant case, petitioner cannot successfully say that he was
never informed by private respondent of the standards that he must
satisfy in order to be converted into regular status. This rans (sic)
counter to the agreement between the parties that after five months
of service the petitioner’s performance would be evaluated. It is only
but natural that the evaluation should be made vis-à-vis the
performance standards for the job.1âwphi1 Private respondent
Trifona Mamaradlo speaks of such standard in her affidavit referring
to the fact that petitioner did not perform well in his assigned work
and his attitude was below par compared to the company’s standard
required of him. (Emphasis supplied.)
WWWEC’s contention is untenable.
Alcira is cast under a different factual setting. There, the labor
arbiter, the NLRC, the CA, and even finally this Court were one in
their findings that the employee concerned knew, having been duly
informed during his engagement, of the standards for becoming a
regular employee. This is in stark contrast to the instant case where
the element of being informed of the regularizing standards does not
obtain. As such, Alcira cannot be made to apply to the instant case.
To note, the June 2, 2004 letter-offer itself states that the
regularization standards or the performance norms to be used are
still to be agreed upon by Aliling and his supervisor. WWWEC has
failed to prove that an agreement as regards thereto has been
reached. Clearly then, there were actually no performance
standards to speak of. And lest it be overlooked, Aliling was
assigned to GX trucking sales, an activity entirely different to the
Seafreight Sales he was originally hired and trained for. Thus, at the
time of his engagement, the standards relative to his assignment
with GX sales could not have plausibly been communicated to him
as he was under Seafreight Sales. Even for this reason alone, the
conclusion reached in Alcira is of little relevant to the instant case.
Based on the facts established in this case in light of extant
jurisprudence, the CA’s holding as to the kind of employment
petitioner enjoyed is correct. So was the NLRC ruling, affirmatory of
that of the labor arbiter. In the final analysis, one common thread
runs through the holding of the labor arbiter, the NLRC and the CA,
i.e., petitioner Aliling, albeit hired from management’s standpoint as
a probationary employee, was deemed a regular employee by force
of the following self-explanatory provisions:
Article 281 of the Labor Code
ART. 281. Probationary employment. - Probationary employment
shall not exceed six (6) months from the date the employee started
working, unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a just
cause or when he 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 engagement. An
employee who is allowed to work after a probationary period shall be
considered a regular employee. (Emphasis supplied.)
Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A of the
Labor Code
Sec. 6. Probationary employment. – There is probationary
employment where the employee, upon his engagement, is made to
undergo a trial period where the employee determines his fitness to
qualify for regular employment, based on reasonable standards
made known to him at the time of engagement.
Probationary employment shall be governed by the following rules:
xxxx
(d) In all cases of probationary employment, the employer shall
make known to the employee the standards under which he will
qualify as a regular employee at the time of his engagement. Where
no standards are made known to the employee at that time, he shall
be deemed a regular employee. (Emphasis supplied.)
To repeat, the labor arbiter, NLRC and the CA are agreed, on the
basis of documentary evidence adduced, that respondent WWWEC
did not inform petitioner Aliling of the reasonable standards by which
his probation would be measured against at the time of his
engagement. The Court is loathed to interfere with this factual
determination. As We have held:
Settled is the rule that the findings of the Labor Arbiter, when
affirmed by the NLRC and the Court of Appeals, are binding on the
Supreme Court, unless patently erroneous. It is not the function of
the Supreme Court to analyze or weigh all over again the evidence
already considered in the proceedings below. The jurisdiction of this
Court in a petition for review on certiorari is limited to reviewing only
errors of law, not of fact, unless the factual findings being assailed
are not supported by evidence on record or the impugned judgment
is based on a misapprehension of facts.32
The more recent Peñafrancia Tours and Travel Transport, Inc., v.
Sarmiento33 has reaffirmed the above ruling, to wit:
Finally, the CA affirmed the ruling of the NLRC and adopted as its
own the latter's factual findings. Long-established is the doctrine that
findings of fact of quasi-judicial bodies x x x are accorded respect,
even finality, if supported by substantial evidence. When passed
upon and upheld by the CA, they are binding and conclusive upon
this Court and will not normally be disturbed. Though this doctrine is
not without exceptions, the Court finds that none are applicable to
the present case.
WWWEC also cannot validly argue that "the factual findings being
assailed are not supported by evidence on record or the impugned
judgment is based on a misapprehension of facts." Its very own
letter-offer of employment argues against its above posture.
Excerpts of the letter-offer:
Additionally, upon the effectivity of your probation, you and your
immediate superior are required to jointly define your objectives
compared with the job requirements of the position. Based on the
pre-agreed objectives, your performance shall be reviewed on the
3rd month to assess your competence and work attitude. The 5th
month Performance Appraisal shall be the basis in elevating or
confirming your employment status from Probationary to Regular.
Failure to meet the job requirements during the probation stage
means that your services may be terminated without prior notice and
without recourse to separation pay. (Emphasis supplied.)
Respondents further allege that San Mateo’s email dated July 16,
2004 shows that the standards for his regularization were made
known to petitioner Aliling at the time of his engagement. To recall,
in that email message, San Mateo reminded Aliling of the sales
quota he ought to meet as a condition for his continued employment,
i.e., that the GX trucks should already be 80% full by August 5,
2004. Contrary to respondents’ contention, San Mateo’s email
cannot support their allegation on Aliling being informed of the
standards for his continued employment, such as the sales quota, at
the time of his engagement. As it were, the email message was sent
to Aliling more than a month after he signed his employment
contract with WWWEC. The aforequoted Section 6 of the
Implementing Rules of Book VI, Rule VIII-A of the Code specifically
requires the employer to inform the probationary employee of such
reasonable standards at the time of his engagement, not at any time
later; else, the latter shall be considered a regular employee. Thus,
pursuant to the explicit provision of Article 281 of the Labor Code,
Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A of the
Labor Code and settled jurisprudence, petitioner Aliling is deemed a
regular employee as of June 11, 2004, the date of his employment
contract.
Petitioner was illegally dismissed
52
To justify fully the dismissal of an employee, the employer must, as
a rule, prove that the dismissal was for a just cause and that the
employee was afforded due process prior to dismissal. As a
complementary principle, the employer has the onus of proving with
clear, accurate, consistent, and convincing evidence the validity of
the dismissal.34
WWWEC had failed to discharge its twin burden in the instant case.
First off, the attendant circumstances in the instant case aptly show
that the issue of petitioner’s alleged failure to achieve his quota, as a
ground for terminating employment, strikes the Court as a mere
afterthought on the part of WWWEC. Consider: Lariosa’s letter of
September 25, 2004 already betrayed management’s intention to
dismiss the petitioner for alleged unauthorized absences. Aliling was
in fact made to explain and he did so satisfactorily. But, lo and
behold, WWWEC nonetheless proceeded with its plan to dismiss the
petitioner for non-satisfactory performance, although the
corresponding termination letter dated October 6, 2004 did not even
specifically state Aliling’s "non-satisfactory performance," or that
Aliling’s termination was by reason of his failure to achieve his set
quota.
What WWWEC considered as the evidence purportedly showing it
gave Aliling the chance to explain his inability to reach his quota was
a purported September 20, 2004 memo of San Mateo addressed to
the latter. However, Aliling denies having received such letter and
WWWEC has failed to refute his contention of non-receipt. In net
effect, WWWEC was at a loss to explain the exact just reason for
dismissing Aliling.
At any event, assuming for argument that the petitioner indeed failed
to achieve his sales quota, his termination from employment on that
ground would still be unjustified.
Article 282 of the Labor Code considers any of the following acts or
omission on the part of the employee as just cause or ground for
terminating employment:
(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. (Emphasis
supplied)
In Lim v. National Labor Relations Commission,35 the Court
considered inefficiency as an analogous just cause for termination of
employment under Article 282 of the Labor Code:
We cannot but agree with PEPSI that "gross inefficiency" falls within
the purview of "other causes analogous to the foregoing," this
constitutes, therefore, just cause to terminate an employee under
Article 282 of the Labor Code. One is analogous to another if it is
susceptible of comparison with the latter either in general or in some
specific detail; or has a close relationship with the latter. "Gross
inefficiency" is closely related to "gross neglect," for both involve
specific acts of omission on the part of the employee resulting in
damage to the employer or to his business. In Buiser vs. Leogardo,
this Court ruled that failure to observed prescribed standards to
inefficiency may constitute just cause for dismissal. (Emphasis
supplied.)
It did so anew in Leonardo v. National Labor Relations
Commission36 on the following rationale:
An employer is entitled to impose productivity standards for its
workers, and in fact, non-compliance may be visited with a penalty
even more severe than demotion. Thus,
[t]he practice of a company in laying off workers because they failed
to make the work quota has been recognized in this jurisdiction.
(Philippine American Embroideries vs. Embroidery and Garment
Workers, 26 SCRA 634, 639). In the case at bar, the petitioners'
failure to meet the sales quota assigned to each of them constitute a
just cause of their dismissal, regardless of the permanent or
probationary status of their employment. Failure to observe
prescribed standards of work, or to fulfill reasonable work
assignments due to inefficiency may constitute just cause for
dismissal. Such inefficiency is understood to mean failure to attain
work goals or work quotas, either by failing to complete the same
within the allotted reasonable period, or by producing unsatisfactory
results. This management prerogative of requiring standards may be
availed of so long as they are exercised in good faith for the
advancement of the employer's interest. (Emphasis supplied.)
In fine, an employee’s failure to meet sales or work quotas falls
under the concept of gross inefficiency, which in turn is analogous to
gross neglect of duty that is a just cause for dismissal under Article
282 of the Code. However, in order for the quota imposed to be
considered a valid productivity standard and thereby validate a
dismissal, management’s prerogative of fixing the quota must be
exercised in good faith for the advancement of its interest. The duty
to prove good faith, however, rests with WWWEC as part of its
burden to show that the dismissal was for a just cause. WWWEC
must show that such quota was imposed in good faith. This
WWWEC failed to do, perceptibly because it could not. The fact of
the matter is that the alleged imposition of the quota was a
desperate attempt to lend a semblance of validity to Aliling’s illegal
dismissal. It must be stressed that even WWWEC’s sales manager,
Eve Amador (Amador), in an internal e-mail to San Mateo, hedged
on whether petitioner performed below or above expectation:
Could not quantify level of performance as he as was tasked to
handle a new product (GX). Revenue report is not yet administered
by IT on a month-to-month basis. Moreover, this in a way is an
experimental activity. Practically you have a close monitoring with
Armand with regards to his performance. Your assessment of him
would be more accurate.
Being an experimental activity and having been launched for the first
time, the sales of GX services could not be reasonably quantified.
This would explain why Amador implied in her email that other
bases besides sales figures will be used to determine Aliling’s
performance. And yet, despite such a neutral observation, Aliling
was still dismissed for his dismal sales of GX services. In any event,
WWWEC failed to demonstrate the reasonableness and the bona
fides on the quota imposition.
Employees must be reminded that while probationary employees do
not enjoy permanent status, they enjoy the constitutional protection
of security of tenure. They can only be terminated for cause or when
they otherwise fail to meet the reasonable standards made known to
them by the employer at the time of their engagement.37 Respondent
WWWEC miserably failed to prove the termination of petitioner was
for a just cause nor was there substantial evidence to demonstrate
the standards were made known to the latter at the time of his
engagement. Hence, petitioner’s right to security of tenure was
breached.
Aliling’s right to procedural due process was violated
As earlier stated, to effect a legal dismissal, the employer must show
not only a valid ground therefor, but also that procedural due
process has properly been observed. When the Labor Code speaks
of procedural due process, the reference is usually to the two (2)-
written notice rule envisaged in Section 2 (III), Rule XXIII, Book V of
the Omnibus Rules Implementing the Labor Code, which provides:
Section 2. Standard of due process: requirements of notice. — In all
cases of termination of employment, the following standards of due
process shall be substantially observed.
I. For termination of employment based on just causes as defined in
Article 282 of the Code:
(a) A written notice served on the employee specifying the
ground or grounds for termination, and giving to said
employee reasonable opportunity within which to explain
his side;
(b) A hearing or conference during which the employee
concerned, with the assistance of counsel if the employee
so desires, is given opportunity to respond to the charge,
53
 present his evidence or rebut the evidence presented
against him; and
(c) A written notice [of] termination served on the
employee indicating that upon due consideration of all the
circumstance, grounds have been established to justify his
termination.
In case of termination, the foregoing notices shall be served on the
employee’s last known address.
MGG Marine Services, Inc. v. NLRC38 tersely described the
mechanics of what may be considered a two-part due process
requirement which includes the two-notice rule, "x x x one, of the
intention to dismiss, indicating therein his acts or omissions
complained against, and two, notice of the decision to dismiss; and
an opportunity to answer and rebut the charges against him, in
between such notices."
King of Kings Transport, Inc. v. Mamac39 expounded on this
procedural requirement in this manner:
(1) The first written notice to be served on the employees
should contain the specific causes or grounds for
termination against them, and a directive that the
employees are given the opportunity to submit their
written explanation within a reasonable period.
"Reasonable opportunity" under the Omnibus Rules
means every kind of assistance that management must
accord to the employees to enable them to prepare
adequately for their defense. This should be construed as
a period of at least five calendar days from receipt of the
notice xxxx Moreover, in order to enable the employees to
intelligently prepare their explanation and defenses, the
notice should contain a detailed narration of the facts and
circumstances that will serve as basis for the charge
against the employees. A general description of the
charge will not suffice. Lastly, the notice should
specifically mention which company rules, if any, are
violated and/or which among the grounds under Art. 288
[of the Labor Code] is being charged against the
employees
(2) After serving the first notice, the employees should
schedule and conduct a hearing or conference wherein
the employees will be given the opportunity to (1) explain
and clarify their defenses to the charge against them; (2)
present evidence in support of their defenses; and (3)
rebut the evidence presented against them by the
management. During the hearing or conference, the
employees are given the chance to defend themselves
personally, with the assistance of a representative or
counsel of their choice x x x.
(3) After determining that termination is justified, the
employer shall serve the employees a written notice of
termination indicating that: (1) all the circumstances
involving the charge against the employees have been
considered; and (2) grounds have been established to
justify the severance of their employment. (Emphasis in
the original.)
Here, the first and second notice requirements have not been
properly observed, thus tainting petitioner’s dismissal with illegality.
The adverted memo dated September 20, 2004 of WWWEC
supposedly informing Aliling of the likelihood of his termination and
directing him to account for his failure to meet the expected job
performance would have had constituted the "charge sheet,"
sufficient to answer for the first notice requirement, but for the fact
that there is no proof such letter had been sent to and received by
him. In fact, in his December 13, 2004 Complainant’s Reply
Affidavit, Aliling goes on to tag such letter/memorandum as
fabrication. WWWEC did not adduce proof to show that a copy of
the letter was duly served upon Aliling. Clearly enough, WWWEC
did not comply with the first notice requirement.
Neither was there compliance with the imperatives of a hearing or
conference. The Court need not dwell at length on this particular
breach of the due procedural requirement. Suffice it to point out that
the record is devoid of any showing of a hearing or conference
having been conducted. On the contrary, in its October 1, 2004 letter
to Aliling, or barely five (5) days after it served the notice of
termination, WWWEC acknowledged that it was still evaluating his
case. And the written notice of termination itself did not indicate all
the circumstances involving the charge to justify severance of
employment.
Aliling is entitled to backwages
and separation pay in lieu of reinstatement
As may be noted, the CA found Aliling’s dismissal as having been
illegally effected, but nonetheless concluded that his employment
ceased at the end of the probationary period. Thus, the appellate
court merely affirmed the monetary award made by the NLRC,
which consisted of the payment of that amount corresponding to the
unserved portion of the contract of employment.
The case disposition on the award is erroneous.
As earlier explained, Aliling cannot be rightfully considered as a
mere probationary employee. Accordingly, the probationary period
set in the contract of employment dated June 11, 2004 was of no
moment. In net effect, as of that date June 11, 2004, Aliling became
part of the WWWEC organization as a regular employee of the
company without a fixed term of employment. Thus, he is entitled to
backwages reckoned from the time he was illegally dismissed on
October 6, 2004, with a PhP 17,300.00 monthly salary, until the
finality of this Decision. This disposition hews with the Court’s
ensuing holding in Javellana v. Belen:40
Article 279 of the Labor Code, as amended by Section 34 of
Republic Act 6715 instructs:
Art. 279. Security of Tenure. - In cases of regular employment, the
employer shall not terminate the services of an employee except for
a just cause or when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
(Emphasis supplied)
Clearly, the law intends the award of backwages and similar benefits
to accumulate past the date of the Labor Arbiter’s decision until the
dismissed employee is actually reinstated. But if, as in this case,
reinstatement is no longer possible, this Court has consistently ruled
that backwages shall be computed from the time of illegal dismissal
until the date the decision becomes final. (Emphasis supplied.)
Additionally, Aliling is entitled to separation pay in lieu of
reinstatement on the ground of strained relationship.
In Golden Ace Builders v. Talde,41 the Court ruled:
The basis for the payment of backwages is different from that for the
award of separation pay.1âwphi1 Separation pay is granted where
reinstatement is no longer advisable because of strained relations
between the employee and the employer. Backwages represent
compensation that should have been earned but were not collected
because of the unjust dismissal. The basis for computing
backwages is usually the length of the employee's service while that
for separation pay is the actual period when the employee was
unlawfully prevented from working.
As to how both awards should be computed, Macasero v. Southern
Industrial Gases Philippines instructs:
[T]he award of separation pay is inconsistent with a finding that
there was no illegal dismissal, for under Article 279 of the Labor
Code and as held in a catena of cases, an employee who is
dismissed without just cause and without due process is entitled to
backwages and reinstatement or payment of separation pay in lieu
thereof:
Thus, an illegally dismissed employee is entitled to two reliefs:
backwages and reinstatement. The two reliefs provided are separate
and distinct. In instances where reinstatement is no longer feasible
because of strained relations between the employee and the
employer, separation pay is granted. In effect, an illegally dismissed
employee is entitled to either reinstatement, if viable, or separation
pay if reinstatement is no longer viable, and backwages.
The normal consequences of respondents’ illegal dismissal, then,
are reinstatement without loss of seniority rights, and payment of
backwages computed from the time compensation was withheld up
to the date of actual reinstatement. Where reinstatement is no
54
longer viable as an option, separation pay equivalent to one (1)
month salary for every year of service should be awarded as an
alternative. The payment of separation pay is in addition to payment
of backwages. x x x
Velasco v. National Labor Relations Commission emphasizes:
The accepted doctrine is that separation pay may avail in lieu of
reinstatement if reinstatement is no longer practical or in the best
interest of the parties. Separation pay in lieu of reinstatement may
likewise be awarded if the employee decides not to be reinstated.
(emphasis in the original; italics supplied)
Under the doctrine of strained relations, the payment of separation
pay is considered an acceptable alternative to reinstatement when
the latter option is no longer desirable or viable. On one hand, such
payment liberates the employee from what could be a highly
oppressive work environment. On the other hand, it releases the
employer from the grossly unpalatable obligation of maintaining in its
employ a worker it could no longer trust.
Strained relations must be demonstrated as a fact, however, to be
adequately supported by evidence — substantial evidence to show
that the relationship between the employer and the employee is
indeed strained as a necessary consequence of the judicial
controversy.
In the present case, the Labor Arbiter found that actual animosity
existed between petitioner Azul and respondent as a result of the
filing of the illegal dismissal case. Such finding, especially when
affirmed by the appellate court as in the case at bar, is binding upon
the Court, consistent with the prevailing rules that this Court will not
try facts anew and that findings of facts of quasi-judicial bodies are
accorded great respect, even finality. (Emphasis supplied.)
As the CA correctly observed, "To reinstate petitioner [Aliling] would
only create an atmosphere of antagonism and distrust, more so that
he had only a short stint with respondent company."42 The Court
need not belabor the fact that the patent animosity that had
developed between employer and employee generated what may be
considered as the arbitrary dismissal of the petitioner.
Following the pronouncements of this Court Sagales v. Rustan’s
Commercial Corporation,43 the computation of separation pay in lieu
of reinstatement includes the period for which backwages were
awarded:
Thus, in lieu of reinstatement, it is but proper to award petitioner
separation pay computed at one-month salary for every year of
service, a fraction of at least six (6) months considered as one whole
year. In the computation of separation pay, the period where
backwages are awarded must be included. (Emphasis supplied.)
Thus, Aliling is entitled to both backwages and separation pay (in
lieu of reinstatement) in the amount of one (1) month’s salary for
every year of service, that is, from June 11, 2004 (date of
employment contract) until the finality of this decision with a fraction
of a year of at least six (6) months to be considered as one (1)
whole year. As determined by the labor arbiter, the basis for the
computation of backwages and separation pay will be Aliling’s
monthly salary at PhP 17,300.
Finally, Aliling is entitled to an award of PhP 30,000 as nominal
damages in consonance with prevailing jurisprudence44 for violation
of due process.
Petitioner is not entitled to moral and exemplary damages
In Nazareno v. City of Dumaguete,45 the Court expounded on the
requisite elements for a litigant’s entitlement to moral damages,
thus:
Moral damages are awarded if the following elements exist in the
case: (1) an injury clearly sustained by the claimant; (2) a culpable
act or omission factually established; (3) a wrongful act or omission
by the defendant as the proximate cause of the injury sustained by
the claimant; and (4) the award of damages predicated on any of the
cases stated Article 2219 of the Civil Code. In addition, the person
claiming moral damages must prove the existence of bad faith by
clear and convincing evidence for the law always presumes good
faith. It is not enough that one merely suffered sleepless nights,
mental anguish, and serious anxiety as the result of the actuations
of the other party. Invariably such action must be shown to have
been willfully done in bad faith or with ill motive. Bad faith, under the
law, does not simply connote bad judgment or negligence. It imports
a dishonest purpose or some moral obliquity and conscious doing of
a wrong, a breach of a known duty through some motive or interest
or ill will that partakes of the nature of fraud. (Emphasis supplied.)
In alleging that WWWEC acted in bad faith, Aliling has the burden of
proof to present evidence in support of his claim, as ruled in Culili v.
Eastern Telecommunications Philippines, Inc.:46
According to jurisprudence, "basic is the principle that good faith is
presumed and he who alleges bad faith has the duty to prove the
same." By imputing bad faith to the actuations of ETPI, Culili has the
burden of proof to present substantial evidence to support the
allegation of unfair labor practice. Culili failed to discharge this
burden and his bare allegations deserve no credit.
This was reiterated in United Claimants Association of NEA
(UNICAN) v. National Electrification Administration (NEA),47 in this
wise:
It must be noted that the burden of proving bad faith rests on the
one alleging it. As the Court ruled in Culili v. Eastern
Telecommunications, Inc., "According to jurisprudence, ‘basic is the
principle that good faith is presumed and he who alleges bad faith
has the duty to prove the same.’" Moreover, in Spouses Palada v.
Solidbank Corporation, the Court stated, "Allegations of bad faith
and fraud must be proved by clear and convincing evidence."
Similarly, Aliling has failed to overcome such burden to prove bad
faith on the part of WWWEC. Aliling has not presented any clear and
convincing evidence to show bad faith. The fact that he was illegally
dismissed is insufficient to prove bad faith. Thus, the CA correctly
ruled that "[t]here was no sufficient showing of bad faith or abuse of
management prerogatives in the personal action taken against
petitioner."48 In Lambert Pawnbrokers and Jewelry Corporation v.
Binamira,49 the Court ruled:
A dismissal may be contrary to law but by itself alone, it does not
establish bad faith to entitle the dismissed employee to moral
damages. The award of moral and exemplary damages cannot be
justified solely upon the premise that the employer dismissed his
employee without authorized cause and due process.
The officers of WWWEC cannot be held
jointly and severally liable with the company
The CA held the president of WWWEC, Jose B. Feliciano, San
Mateo and Lariosa jointly and severally liable for the monetary
awards of Aliling on the ground that the officers are considered
"employers" acting in the interest of the corporation. The CA cited
NYK International Knitwear Corporation Philippines (NYK) v.
National Labor Relations Commission50 in support of its argument.
Notably, NYK in turn cited A.C. Ransom Labor Union-CCLU v.
NLRC.51
Such ruling has been reversed by the Court in Alba v.
Yupangco,52 where the Court ruled:
By Order of September 5, 2007, the Labor Arbiter denied
respondent’s motion to quash the 3rd alias writ. Brushing aside
respondent’s contention that his liability is merely joint, the Labor
Arbiter ruled:
Such issue regarding the personal liability of the officers of a
corporation for the payment of wages and money claims to its
employees, as in the instant case, has long been resolved by the
Supreme Court in a long list of cases [A.C. Ransom Labor Union-
CLU vs. NLRC (142 SCRA 269) and reiterated in the cases of Chua
vs. NLRC (182 SCRA 353), Gudez vs. NLRC (183 SCRA 644)]. In
the aforementioned cases, the Supreme Court has expressly held
that the irresponsible officer of the corporation (e.g. President) is
liable for the corporation’s obligations to its workers. Thus,
respondent Yupangco, being the president of the respondent YL
Land and Ultra Motors Corp., is properly jointly and severally liable
with the defendant corporations for the labor claims of Complainants
Alba and De Guzman. x x x
xxxx
As reflected above, the Labor Arbiter held that respondent’s liability
is solidary.
55
There is solidary liability when the obligation expressly so states,
when the law so provides, or when the nature of the obligation so
requires. MAM Realty Development Corporation v. NLRC, on
solidary liability of corporate officers in labor disputes, enlightens:
x x x A corporation being a juridical entity, may act only through its
directors, officers and employees. Obligations incurred by them,
acting as such corporate agents are not theirs but the direct
accountabilities of the corporation they represent. True solidary
liabilities may at times be incurred but only when exceptional
circumstances warrant such as, generally, in the following cases:
1. When directors and trustees or, in appropriate cases, the officers
of a corporation:
(a) vote for or assent to patently unlawful acts of the
corporation;
(b) act in bad faith or with gross negligence in directing the
corporate affairs;
xxxx
In labor cases, for instance, the Court has held corporate directors
and officers solidarily liable with the corporation for the termination
of employment of employees done with malice or in bad faith.
A review of the facts of the case does not reveal ample and
satisfactory proof that respondent officers of WWEC acted in bad
faith or with malice in effecting the termination of petitioner Aliling.
Even assuming arguendo that the actions of WWWEC are ill-
conceived and erroneous, respondent officers cannot be held jointly
and solidarily with it. Hence, the ruling on the joint and solidary
liability of individual respondents must be recalled.
Aliling is entitled to Attorney’s Fees and Legal Interest
Petitioner Aliling is also entitled to attorney’s fees in the amount of
ten percent (10%) of his total monetary award, having been forced
to litigate in order to seek redress of his grievances, pursuant to
Article 111 of the Labor Code and following our ruling in Exodus
International Construction Corporation v. Biscocho,53 to wit:
In Rutaquio v. National Labor Relations Commission, this Court held
that:
It is settled that in actions for recovery of wages or where an
employee was forced to litigate and, thus, incur expenses to protect
his rights and interest, the award of attorney’s fees is legally and
morally justifiable.
In Producers Bank of the Philippines v. Court of Appeals this Court
ruled that:
Attorney’s fees may be awarded when a party is compelled to
litigate or to incur expenses to protect his interest by reason of an
unjustified act of the other party.
While in Lambert Pawnbrokers and Jewelry Corporation, 54 the Court
specifically ruled:
However, the award of attorney’s fee is warranted pursuant to Article
111 of the Labor Code. Ten (10%) percent of the total award is
usually the reasonable amount of attorney’s fees awarded. It is
settled that where an employee was forced to litigate and, thus,
incur expenses to protect his rights and interest, the award of
attorney’s fees is legally and morally justifiable.
Finally, legal interest shall be imposed on the monetary awards
herein granted at the rate of 6% per annum from October 6, 2004
(date of termination) until fully paid.
WHEREFORE, the petition is PARTIALLY GRANTED. The July 3,
2008 Decision of the Court of Appeals in CA-G.R. SP No. 101309 is
hereby MODIFIED to read:
WHEREFORE, the petition is PARTIALLY GRANTED. The assailed
Resolutions of respondent (Third Division) National Labor Relations
Commission are AFFIRMED, with the following
MODIFICATION/CLARIFICATION: Respondent Wide Wide World
Express Corp. is liable to pay Armando Aliling the following: (a)
backwages reckoned from October 6, 2004 up to the finality of this
Decision based on a salary of PhP 17,300 a month, with interest at
6% per annum on the principal amount from October 6, 2004 until
fully paid; (b) the additional sum equivalent to one (1) month salary
for every year of service, with a fraction of at least six (6) months
considered as one whole year based on the period from June 11,
2004 (date of employment contract) until the finality of this Decision,
as separation pay; (c) PhP 30,000 as nominal damages; and (d)
Attorney’s Fees equivalent to 10% of the total award.
SO ORDERED.
G.R. No. L-63316 July 31, 1984
ILUMINADA VER BUISER, MA. CECILIA RILLOACUÑA and MA.
MERCEDES P. INTENGAN, petitioners,
vs.
HON. VICENTE LEOGARDO, JR., in his capacity as Deputy
Minister of the Ministry of Labor & Employment, and GENERAL
TELEPHONE DIRECTORY, CO., respondents.
Jimenez, Apolo & Leynes Law Office for petitioners.
The Solicitor General for respondent Deputy Minister.
Abad, Legayada & Associates for private respondent.
GUERRERO, J.:
This is a petition for certiorari seeking to set aside the Order of the
Deputy Minister of Labor and Employment, affirming the Order of the
Regional Director, National Capital Region, in Case No. NCR-STF-
5-2851-81, which dismissed the petitioners' complainant for alleged
illegal dismissal and unpaid commission.
Petitioners were employed by the private respondent GENERAL
TELEPHONE DIRECTORY COMPANY as sales representatives
and charged with the duty of soliciting advertisements for inclusion
in a telephone directory.
The records show that petitioners Iluminada Ver Buiser and Ma.
Mercedes P. Intengan entered into an "Employment Contract (on
Probationary Status)" on May 26, 1980 with private respondent, a
corporation engaged in the business of publication and circulation of
the directory of the Philippine Long Distance Telephone Company.
Petitioner Ma. Cecilia Rillo-Acuna entered into the same
employment contract on June 11, 1980 with the private respondent.
Among others, the "Employment Contract (On Probationary Status)"
included the following common provisions:
l. The company hereby employs the employee
as telephone representative on a probationary
status for a period of eighteen (18) months, i.e.
from May 1980 to October 1981, inclusive. It is
understood that darung the probationary period
of employment, the Employee may be
terminated at the pleasure of the company
without the necessity of giving notice of
termination or the payment of termination pay.
The Employee recognizes the fact that the
nature of the telephone sales representative's
job is such that the company would be able to
determine his true character, conduct and
selling capabilities only after the publication of
the directory, and that it takes about eighteen
(18) months before his worth as a telephone
saw representative can be fully evaluated
inasmuch as the advertisement solicited by him
for a particular year are published in the
directory only the following year.
Corollary to this, the private respondent prescribed sales quotas to
be accomplished or met by the petitioners. Failing to meet their
respective sales quotas, the petitioners were dismissed from the
service by the private respondent. The records show that the private
respondent terminated the services of petitioners Iluminada Ver
56
Buiser and Cecilia Rillo-Acuna on May 14, 1981 and petitioner Ma.
Mercedes P. Intengan on May 18, 1981 for their failure to meet their
sales quotas.
Thus, on May 27, 1981, petitioners filed with the National Capital
Region, Ministry of Labor and Employment, a complaint for illegal
dismissal with claims for backwages, earned commissions and other
benefits, docketed as Case No. NCR-STF-5-2851-81.
The Regional Director of said ministry, in an Order dated September
21, 1982, dismissed the complaints of the petitioners, except the
claim for allowances which private respondent was ordered to pay.
A reconsideration of the Order was sought by the petitioners in a
motion filed on September 30, 1982. This motion, however, was
treated as an appeal to the Minister of Labor.
On appeal, Deputy Minister Vicente Leogardo, Jr. of the Ministry of
Labor issued an Order dated January 7, 1983, affirming the
Regional Director's Order dated September 21, 1982, wherein it
ruled that the petitioners have not attained permanent status since
private respondent was justified in requiring a longer period of
probation, and that the termination of petitioners' services was valid
since the latter failed to meet their sales quotas.
Hence, this petition for certiorari on the alleged ground that public
respondent committed grave abuse of discretion amounting to lack
of jurisdiction. Specifically, petitioners submit that:
1. The Hon. Regional Director and the Hon. Deputy Minister
committed grave abuse of discretion amounting to lack of jurisdiction
in ruling that the probationary employment of petitioners herein is
eighteen (18) months instead of the mandated six (6) months under
the Labor Code, and in consequently further ruling that petitioners
are not entitled to security of tenure while under said probation for
18 months.
2. The Hon. Regional Director and the Hon. Deputy Minister
committed grave abuse of discretion amounting to lack of jurisdiction
in ruling that petitioners were dismissed for a just and valid cause.
3. The Hon. Regional Director and the Hon. Deputy Minister
committed grave abuse of discretion amounting to lack of jurisdiction
in ruling that petitioners are not entitled to the commissions they
have earned and accrued during their period of employment.
Petitioners contend that under Articles 281-282 of the Labor Code,
having served the respondent company continuously for over six (6)
months, they have become automatically regular employees
notwithstanding an agreement to the contrary. Articles 281-282 read
thus:
Art. 282. Probationary Employment. —
Probationary employment shall not exceed six
(6) months from the date the employee started
working, unless it iscCovered by an
apprenticeship agreement stipulating a longer
period. The services of an employee who has
been engaged on a probationary basis may be
terminated for a just cause or when he 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
engagement. An employee who is allowed to
work after a probationary period shall be
considered a regular employee. (As amended
by PD 850).
Art. 281. Regular and Casual Employment. —
The provisions of written agreement to the
contrary notwithstanding and regardless of the
oral agreements of the parties, an employment
shall be deemed to be regular where the
employee has been engaged to perform
activities which are usually necessary or
desirable in the usual business or trade of the
employer, except where the employment has
been fixed for a specific project or undertaking
the completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or services to be
performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if
it is not covered by the preceeding paragraph.
Provided, That, any employee who has
rendered at least one year of service, whether
such service is continuous or broken, shall be
considered a regular employee with respect to
the activity in which he is employed and his
employment shall continue while such actually
exists. (As amended by PD 850).
It is petitioners' submission that probationary employment cannot
exceed six (6) months, the only exception being apprenticeship and
learnership agreements as provided in the Labor Code; that the
Policy Instruction of the Minister of Labor and Employment nor any
agreement of the parties could prevail over this mandatory
requirement of the law; that this six months prescription of the Labor
Code was mandated to give further efficacy to the constitutionally-
guaranteed security of tenure of workers; and that the law does not
allow any discretion on the part of the Minister of Labor and
Employment to extend the probationary period for a longer period
except in the aforecited instances. Finally, petitioners maintain that
since they are regular employees, they can only be removed or
dismissed for any of the just and valid causes enumerated under
Article 283 of the Labor Code.
We reject petitioners' contentions. They have no basis in law.
Generally, the probationary period of employment is limited to six (6)
months. The exception to this general rule is When the parties to an
employment contract may agree otherwise, such as when the same
is established by company policy or when the same is required by
the nature of work to be performed by the employee. In the latter
case, there is recognition of the exercise of managerial prerogatives
in requiring a longer period of probationary employment, such as in
the present case where the probationary period was set for eighteen
(18) months, i.e. from May, 1980 to October, 1981 inclusive,
especially where the employee must learn a particular kind of work
such as selling, or when the job requires certain qualifications, skills,
experience or training.
Policy Instruction No. 11 of the Minister of Labor and Employment
has clarified any and all doubts on the period of probationary
employment. It states as follows:
Probationary Employment has been the subject
of misunderstanding in some quarter. Some
people believe six (6) months is the
probationary period in all cases. On the other
hand employs who have already served the
probationary period are sometimes required to
serve again on probation.
Under the Labor Code, six (6) months is the
general probationary period ' but the
probationary period is actually the period
needed to determine fitness for the job. This
period, for lack of a better measurement is
deemed to be the period needed to learn the
job.
The purpose of this policy is to protect the
worker at the same time enable the employer to
make a meaningful employee selection. This
purpose should be kept in mind in enforcing this
provision of the Code. This issuance shall take
effect immediately.
In the case at bar, it is shown that private respondent Company
needs at least eighteen (18) months to determine the character and
selling capabilities of the petitioners as sales representatives. The
Company is engaged in advertisement and publication in the Yellow
Pages of the PLDT Telephone Directories. Publication of solicited
ads are only made a year after the sale has been made and only
then win the company be able to evaluate the efficiency, conduct,
and selling ability of its sales representatives, the evaluation being
based on the published ads. Moreover, an eighteen month
probationary period is recognized by the Labor Union in the private
respondent company, which is Article V of the Collective Bargaining
Agreement, ... thus:
Probationary Period — New employees hired
for regular or permanent shall undergo a
probationary or trial period of six (6) months,
except in the cases of telephone or sales
representatives where the probationary period
shall be eighteen (I 8) months.
57
And as indicated earlier, the very contracts of employment signed
and acquiesced to by the petitioners specifically indicate that "the
company hereby employs the employee as telephone sales
representative on a probationary status for a period of eighteen (18)
months, i.e. from May 1980 to October 1981, inclusive. This
stipulation is not contrary to law, morals and public policy.
We, therefore, hold and rule that the probationary employment of
petitioners set to eighteen (18) months is legal and valid and that the
Regional Director and the Deputy Minister of Labor and Employment
committed no abuse of discretion in ruling accordingly.
On the second assignment of error that public respondent
committed grave abuse of discretion in ruling that petitioners were
dismissed for a just and valid cause, this is not the first time that this
issue has been raised before this Court. Earlier, in the case of
"Arthur Golez vs. The National Labor Relations Commission and
General Telephone Directory Co. "G.R. No. L-64459, July 25, 1983,
the petition for certiorari which raised the same issue against the
herein private respondent was dismissed by this Court for lack of
merit.
The practice of a company in laying off workers because they failed
to make the work quota has been recognized in this jurisdiction.
(Philippine American Embroideries vs. Embroidery and Garment
Workers, 26 SCRA 634, 639). In the case at bar, the petitioners'
failure to meet the sales quota assigned to each of them constitute a
just cause of their dismissal, regardless of the permanent or
probationary status of their employment. Failure to observe
prescribed standards of work, or to fulfill reasonable work
assignments due to inefficiency may constitute just cause for
dismissal. Such inefficiency is understood to mean failure to attain
work goals or work quotas, either by failing to complete the same
within the alloted reasonable period, or by producing unsatisfactory
results. This management prerogative of requiring standards availed
of so long as they are exercised in good faith for the advancement of
the employer's interest.
Petitioners anchor their claim for commission pay on the Collective
Bargaining Agreement (CBA) of September 1981, in support of their
third assignment of error. Petitioners cannot avail of this agreement
since their services had been terminated in May, 1981, at a time
when the CBA of September, 1981 was not yet in existence.
In fine, there is nothing in the records to show any abuse or misuse
of power properly vested in the respondent Deputy Minister of Labor
and Employment. For certiorari to lie, "there must be capricious,
arbitrary and whimsical exercise of power, the very antithesis of the
judicial prerogative inaccordance with centuries of both civil and
common law traditions." (Panaligan vs. Adolfo, 67 SCRA 176, 180).
The "abuse of discretion must be grave and patent, and it must be
shown that the discretion was exercised arbitrarily or despotically."
(Palma and Ignacio vs. Q. & S., Inc., et al., 17 SCRA 97, 100;
Philippine Virginia Tobacco Administration vs. Lucero, 125 SCRA
337, 343).
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
G.R. No. 160240 October 29, 2008
WOODRIDGE SCHOOL (now known as WOODRIDGE
COLLEGE, INC.), Petitioner,
vs.
JOANNE C. PE BENITO and RANDY T.
BALAGUER, Respondents.
DECISION
NACHURA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court seeking to set aside the Court of Appeals (CA)
Decision1 dated June 30, 2003 and its Resolution2 dated September
26, 2003 in CA-G.R. SP No. 75249. The assailed decision in turn set
aside the Resolution3 of the National Labor Relations Commission
(NLRC) dated June 28, 2002 in NLRC Case No. RAB-IV-3-13593-
01-C (CA No. 030579-02).
The factual and procedural antecedents follow:
Petitioner Woodridge School is a private educational institution
located at Woodwinds Village, Molino 6, Bacoor, Cavite.
Respondents Joanne C. Pe Benito (Pe Benito) and Randy T.
Balaguer (Balaguer) were hired as probationary high school
teachers effective June 1998 and June 1999, respectively.4 Their
contracts of employment covered a three (3) year probationary
period. Pe Benito handled Chemistry and Physics while Balaguer
taught Values Education and Christian Living.5
On February 19, 2001, respondents, together with twenty other
teachers, presented petitioner with a Manifesto Establishing
Relevant Issues Concerning the School6 raising various issues
which they wanted addressed, among which were:
I. NSAT/NEAT ANOMALY:
We emphatically condemn the school’s grave act of wrongdoing
when it involved itself on the NSAT and NEAT anomaly. We demand
that we be given assurance "in writing" that this illegal and immoral
conduct will never happen again, otherwise, we will be obligated as
moral guardians of the youth to make more proper action.
II. TEACHER’S RIGHT FOR A DUE PROCESS:
We felt betrayed when one of our former colleague[s] who was then
regularly employed and was perceived to be harmless and an asset
to the school, for no solid basis or apparent investigation conducted
by the school, was suddenly expelled from his job.
xxxx
III. ISSUANCE OF INDIVIDUAL CONTRACTS:
We wonder until now even after a number of years have already
passed, our copies of individual contracts with the school have not
yet been furnished to us. We demand that this legal document will
be (sic) issued to us for job security and other legal purposes it may
serve.
We also demand that AN APPOINTMENT OF PERMANENCY shall
be (sic) given to a permanent teacher from the time the teacher is
qualified to be permanent based on the duly set terms/standards of
permanency of the school.
IV. NON-CLEAR-CUT SCHOOL POLICIES:
It has been observed and experienced from the past school years
and until the present that there are a lot of inconsistencies regarding
the school’s policies like:
A. Changing of:
· The narrative forms of students
· Grades, and
· Behavioral rating sheets
With these experiences, the teachers felt cheated and that these
affect (sic) their sense of worth and credibility. We then ask that the
school should as always respect what the teachers deemed to be
right and just fitting for the students. After all, the teachers are the
ones meeting and facing the students and they know what is due to
the students better that (sic) anyone else in the school.
B. Others.7
A confrontation between the school administrators and the
concerned teachers was held, but no settlement was arrived at.
For failure of the parties to resolve the issues, especially the alleged
NSAT/NEAT anomaly, respondents filed a formal complaint against
petitioner with the Department of Education, Culture and Sports
(DECS)8 requesting the latter to undertake a formal investigation,
institute appropriate charges, and impose proper sanctions against
petitioner.9 During the pendency of the DECS case, and for lack of a
positive action from petitioner, respondents appeared on television
and spoke over the radio on the alleged NEAT/NSAT anomaly.
58
On February 28, 2001, petitioner sent two separate Memoranda10 to
respondents placing them under preventive suspension for a period
of thirty days on the following grounds: 1) uttering defamatory
remarks against the school principal in the presence of their co-
teachers; 2) announcing to the students and teachers their alleged
immediate termination from service; 3) tardiness; 4) spreading false
accusations against petitioner; 5) absence without official leave; and
6) appearing on television and speaking over the radio to malign
petitioner. In the same memoranda, respondents were required to
explain in writing within seventy-two (72) hours why they should not
be terminated from their employment. This prompted respondents to
commence an action for illegal suspension before the NLRC. The
case was docketed as NLRC NCR CASE NO. RAB-IV-3-13593-01-
C.
On March 19, 2001, petitioner issued respondents their Notice of
Termination,11 each to take effect similarly on March 31, 2001, citing
the foregoing grounds. In addition, petitioner informed respondents
that they did not qualify as regular employees for their failure to
meet the performance standards made known to them at the start of
their probationary period.
Respondents then amended their initial complaint, to include illegal
dismissal.
After the submission of the parties’ position papers, on November
29, 2001, Labor Arbiter Vicente R. Layawen rendered a Decision
dismissing the complaint.12 He concluded that the termination of the
respondents’ probationary employment was justified because of
their failure to submit vital teaching documents. Specifically, Pe
Benito failed to submit her day book/lesson plans; while Balaguer
failed to submit the subject syllabi and he had no record of class
requirements as to quizzes, seatworks, homeworks, and recitation
which were supposed to be the bases in rating the students’
performance.13 More importantly, the Labor Arbiter found
respondents guilty of serious misconduct warranting their dismissal
from service because of maliciously spreading false accusation
against the school through the mass media. These acts, according
to the Labor Arbiter, made them unfit to remain in the school’s roster
of teachers.14 The Labor Arbiter also validated the preventive
suspension of respondents for their having used the classroom as
venue in spreading uncorroborated charges against petitioner, thus
posing a serious threat to petitioner’s business and reputation as a
respectable institution.15
On appeal to the NLRC, the Commission affirmed16 the Labor
Arbiter’s disposition in its entirety. The Commission concluded that
respondents’ acts, taken together, constitute serious misconduct,
warranting their dismissal from service.
Aggrieved, respondents elevated the matter to the CA in CA-G.R.
SP No. 75249. The CA granted the petition and set aside the NLRC
ruling in a decision, the dispositive portion of which reads:
WHEREFORE, premises considered, the present petition is hereby
GIVEN DUE COURSE and the writ prayed for accordingly
GRANTED. Consequently, the assailed Resolutions of public
respondent NLRC are hereby SET ASIDE and a new one is hereby
entered declaring the thirty (30)-day suspension of petitioners on
February 28, 2001 as illegal and ordering private respondent
Woodridge School to pay to both petitioners Joanne C. Pe Benito
and Randy T. Balaguer their salaries and benefits accruing during
said period of illegal suspension. Woodridge School is also ordered
to pay to petitioner Balaguer back wages for the period April 1, 2001
up to March 31, 2002. Finally, it is further ordered to pay each of the
petitioners the sums of ₱50,000.00 as moral damages, ₱50,000.00
as exemplary damages and attorney’s fees equivalent to ten percent
(10%) of the total amount due.
No pronouncement as to costs.
SO ORDERED.17
The appellate court declared the preventive suspension of
respondents invalid because it was based on the alleged violation of
school regulations on the wearing of uniform, tardiness or absence,
and maliciously spreading false accusations against the school,
grounds that do not pose a serious threat to the life or property of
the employer or of the workers.18 Contrary to the Labor Arbiter and
the Commission’s findings, the CA concluded that respondents’ acts
do not constitute serious misconduct. Respondents’ act of exposing
the alleged NSAT/NEAT anomaly, as well as raising the other issues
haunting the school administration, only indicates their concern for
the integrity of the government examination and of the school. The
use of the mass media was simply the respondents’ response to the
petitioner’s inaction on their grievances.19 No bad faith could be
attributed to respondents in acting the way they did.
The appellate court likewise refused to sustain petitioner’s
contention that respondents failed to qualify for permanent
employment, as there was no sufficient evidence to prove the
same.20 The appellate court emphasized that because respondents
are probationary employees, legal protection extends only to the
period of their probation.21 The dismissal breached their
probationary employment, and being tainted with bad faith, the court
upheld the award of moral and exemplary damages.22
Aggrieved, petitioner comes before this Court in this petition for
review on certiorari, raising the sole issue of:
WHETHER OR NOT THE COURT OF APPEALS COMMITTED
SERIOUS ERROR IN GRANTING RESPONDENTS’ PETITION
FOR CERTIORARI AND IN SETTING ASIDE THE FINDINGS OF
BOTH THE NLRC AND THE LABOR ARBITER A QUO.23
We deny the petition.
Petitioner asserts that the CA should have outrightly dismissed the
petition, because the verification and certificate of non-forum
shopping was signed by only one of the respondents, without the
authority of the other.24
Time and again, we have said that the lack of verification is merely a
formal defect that is neither jurisdictional nor fatal. In a proper case,
the court may order the correction of the pleading, or act on the
unverified pleading, if the attending circumstances are such that the
rule may be dispensed with in order to serve the ends of justice. It
should be stressed that rules of procedure were conceived and
promulgated to effectively aid the court in the dispensation of
justice.25 Verification is mainly intended to secure the assurance that
the allegations in the petition are done in good faith or are true and
correct and not mere speculation.26
In the instant case, this requirement was substantially complied with
when one of the petitioners (respondents herein), who undoubtedly
had sufficient knowledge and belief to swear to the truth of the
allegations in the petition, signed the verification attached to it.
Indeed, the Court has ruled in the past that a pleading required by
the Rules of Court to be verified may be given due course even
without a verification, if the circumstances warrant the suspension of
the rules in the interest of justice, as in the present case. 27
As to the certification against forum shopping, the CA correctly
relaxed the Rules in order to serve the ends of justice. While the
general rule is that the certificate of non-forum shopping must be
signed by all the plaintiffs or petitioners in a case and the signature
of only one of them is insufficient, this Court has stressed that the
rules on forum shopping, which were designed to promote and
facilitate the orderly administration of justice, should not be
interpreted with absolute literalness as to subvert its own ultimate
and legitimate objective. Strict compliance with the provisions
regarding the certificate of non-forum shopping merely underscores
its mandatory nature in that the certification cannot be altogether
dispensed with or its requirements completely disregarded. It does
not, however, interdict substantial compliance with its provisions
under justifiable circumstances.28
In fact, we have relaxed the rules in a number of cases for two
compelling reasons: social justice considerations 29and the apparent
merit30 of the petition. In light of these jurisprudential
pronouncements, the CA should not be faulted in setting aside the
procedural infirmity, allowing the petition to proceed and deciding
the case on the merits. In rendering justice, courts have always
been, as they ought to be, conscientiously guided by the norm that
on the balance, technicalities take a backseat vis-à-vis substantive
rights, and not the other way around.31
Now on the substantive issue of the validity of the dismissal and
preventive suspension of respondents.
Petitioner insists that respondents’ dismissal from service was lawful
and justified by the following grounds: 1) as probationary
employees, respondents failed to meet the reasonable standards for
their permanent employment; and 2) in publicly accusing petitioner
on radio and national television, of dishonesty and wrongdoing,
during the pendency of the administrative investigation of the
alleged dishonest acts, undertaken by the proper government
agency.32
59
Initially, it should be clarified that this controversy revolves only on
respondents’ probationary employment. On March 31, 2001, the
effective date of their dismissal,33 respondents were not regular or
permanent employees; they had not yet completed three (3) years of
satisfactory service as academic personnel which would have
entitled them to tenure as permanent employees in accordance with
the Manual of Regulations for Private Schools.34 On that date, Pe
Benito’s contract of employment still had two months to run, while
Balaguer’s probationary employment was to expire after one year
and two months.
A probationary employee is one who, for a given period of time, is
being observed and evaluated to determine whether or not he is
qualified for permanent employment. A probationary appointment
affords the employer an opportunity to observe the skill, competence
and attitude of a probationer. The word "probationary," as used to
describe the period of employment, implies the purpose of the term
or period. While the employer observes the fitness, propriety and
efficiency of a probationer to ascertain whether he is qualified for
permanent employment, the probationer at the same time, seeks to
prove to the employer that he has the qualifications to meet the
reasonable standards for permanent employment.35
Probationary employees enjoy security of tenure in the sense that
during their probationary employment, they cannot be dismissed
except for cause or when he fails to qualify as a regular
employee.36 However, upon expiration of their contract of
employment, probationary employees cannot claim security of
tenure and compel their employers to renew their employment
contracts. In fact, the services of an employee hired on probationary
basis may be terminated when he 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 engagement. There
is nothing that would hinder the employer from extending a regular
or permanent appointment to an employee once the employer finds
that the employee is qualified for regular employment even before
the expiration of the probationary period. Conversely, if the purpose
sought by the employer is neither attained nor attainable within the
said period, the law does not preclude the employer from
terminating the probationary employment on justifiable ground.37
The notices of termination sent by petitioner to respondents stated
that the latter failed to qualify as regular employees.38 However,
nowhere in the notices did petitioner explain the details of said
"failure to qualify" and the standards not met by respondents. We
can only speculate that this conclusion was based on the alleged
acts of respondents in uttering defamatory remarks against the
school and the school principal;39 failure to report for work for two or
three times;40 going to class without wearing proper uniform;41 delay
in the submission of class records; and non-submission of class
syllabi. Yet, other than bare allegations, petitioner failed to
substantiate the same by documentary evidence. Considering that
respondents were on probation for three years, and they were
subjected to yearly evaluation by the students and by the school
administrators (principal and vice-principal), it is safe to assume that
the results thereof were definitely documented. As such, petitioner
should have presented the evaluation reports and other related
documents to support its claim, instead of relying solely on the
affidavits of their witnesses. The unavoidable inference, therefore,
remains that the respondents’ dismissal is invalid.
If respondents could not be dismissed on the above-mentioned
ground, could their services have been validly terminated on the
ground of serious misconduct?
The Labor Code commands that before an employer may legally
dismiss an employee from the service, the requirement of
substantial and procedural due process must be complied
with.42 Under the requirement of substantial due process, the
grounds for termination of employment must be based on just43 or
authorized causes.44
Misconduct is defined as improper or wrong conduct. It is the
transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error of judgment. The misconduct to
be serious within the meaning of the Act, must be of such a grave
and aggravated character and not merely trivial or
unimportant.45 Such misconduct, however serious, must
nevertheless be in connection with the work of the employee to
constitute just cause for his separation.46 It is not sufficient that the
act or conduct complained of has violated some established rules or
policies. It is equally important and required that the act or conduct
must have been performed with wrongful intent.47
Petitioner anchored its imputation of serious misconduct principally
on the respondents’ expose of the NSAT/NEAT anomaly. Petitioner
argues that by appearing on television and speaking over the radio,
respondents were undeserving to become part of the school
community, and the school, therefore, could not be compelled to
retain in its employ such undisciplined teachers.
In this regard, we find it necessary to go back to where the
controversy started, when the concerned teachers, including
respondents, presented to petitioner a manifesto, setting forth the
issues they wanted the school to address. As correctly observed by
the CA, the tenor of the manifesto indicated good faith, as the
teachers, in fact, expressly stated that their ultimate objective was
not to put the school down, but to work for some changes which
would be beneficial to the students, teachers, the school and the
country as a whole.48 In their effort to settle the issues amicably, the
teachers (including respondents) asked for a dialogue with petitioner
but the latter, instead of engaging in creative resolution of the
matter, uttered unnecessary statement against respondents. This
incident was followed by subsequent acts of petitioner showing
abuse of its power over the teachers, especially respondents, who at
that time, were under probation. Notwithstanding its claim that
respondents were remiss in their duties as teachers during the
whole period of probation, it was only after the NSAT/NEAT exposé
when petitioner informed respondents of their alleged substandard
performance. The chronology of events, therefore, supports the view
that respondents’ suspension and eventual dismissal from service
were tainted with bad faith, as obvious retaliatory acts on the part of
petitioner.
The totality of the acts of respondents cannot be characterized as
"misconduct" under the law, serious enough to warrant the severe
penalty of dismissal. This is especially true because there is no
finding of malice or wrongful intent attributable to respondents. We
quote with approval the CA’s ratiocination in this wise:
Petitioners [respondents herein], along with their colleagues,
initiated the dialogue and brought the above issues to the school
authorities but the School Principal’s reaction was far from what the
teachers expected. Instead of taking serious concern and properly
addressing the teachers’ grievances as expressed in the Manifesto,
Mrs. Palabrica got angry and hysterical accusing the petitioners
[respondents] of malice and bad faith and even threatened to
dismiss them. Petitioners’ [respondents’] subsequent media exposé
and filing of a formal complaint was necessitated by private
respondents’ [petitioner’s] inaction and refusal to heed their
legitimate complaint. Being but a legitimate exercise of their rights
as such teachers/educators and as citizens, under the
circumstances, We cannot readily impute malice and bad faith on
the part of the petitioners [respondents] who, in fact, risked such the
harsh consequence of loss of their job and non-renewal of their
probationary employment contract just so the issue of the
NEAT/NSAT anomaly involving their school would be ventilated in
the proper forum as to compel or somehow pressure not only their
school but more important, the government’s education officials at
the DECS to undertake proper and urgent measures. Hardly would
such acts in relation to a matter impressed with public interest – i.e.
the integrity of the NEAT/NSAT process as a tool designed by the
DECS to measure or gauge the achievement level of pupils and
students in the schools nationwide – be considered as showing
moral depravity or ill will on the part of the petitioners. x x x49
In light of this disquisition, it is settled that petitioner failed to comply
with the requirement of substantial due process in terminating the
employment of respondents.
We now determine whether petitioner had complied with the
procedural aspect of lawful dismissal.
In the termination of employment, the employer must (a) give the
employee a written notice specifying the ground or grounds of
termination, giving to said employee reasonable opportunity within
which to explain his side; (b) conduct a hearing or conference during
which the employee concerned, with the assistance of counsel if the
employee so desires, is given the opportunity to respond to the
charge, present his evidence or rebut the evidence presented
against him; and (c) give the employee a written notice of
termination indicating that upon due consideration of all
circumstances, grounds have been established to justify his
termination.50
Suffice it to state that respondents were afforded their rights to
answer to petitioner’s allegation and were given the opportunity to
present evidence in support of their defense. Nowhere in any of their
pleadings did they question the procedure for their termination
except to challenge the ground relied upon by petitioner. Ostensibly,
therefore, petitioner had complied with the procedural aspect of due
process in terminating the employment of respondents. However,
60
we still hold that the dismissal is illegal, because of petitioner’s
failure to satisfy the substantive aspect thereof, as discussed above.
We are not unmindful of the equally important right of petitioner, as
employer, under our Constitution, to be protected in their property
and interest. Nevertheless, the particular circumstances surrounding
this case convince us that the supreme penalty of dismissal upon
respondents is not justified. The law regards the workers with
compassion. This is not only because of the law’s concern for the
workingman. There is, in addition, his family to consider.
Unemployment brings untold hardships and sorrows on those
dependent upon the wage-earner.51
Respondents likewise questioned their preventive suspension, but
the Labor Arbiter and the NLRC sustained its validity. The CA, on
the other hand, declared the same to be illegal. Thus, petitioner
insists that respondents’ preventive suspension was proper, in view
of the latter’s acts of utilizing their time, not to teach, but to spread
rumors that the former was about to cease operation. 52
The law is clear on this matter. While the employer may place the
worker concerned under preventive suspension, it can do so only if
the latter’s continued employment poses a serious and imminent
threat to the life or property of the employer or of his co-workers.53 In
this case, the grounds relied upon by petitioner in placing
respondents under preventive suspension were the alleged violation
of school rules and regulations on the wearing of uniform, tardiness
or absence, and maliciously spreading false accusations against the
school.54 These grounds do not, in any way, pose a threat to the life
or property of the school, of the teachers or of the students and their
parents. Hence, we affirm the CA’s conclusion that respondents’
preventive suspension was illegal.lawphi1
As probationary employees, respondents’ security of tenure is
limited to the period of their probation – for Pe Benito, until June
200155 and for Balaguer, June 2002.56 As they were no longer
extended new appointments, they are not entitled to reinstatement
and full backwages. Rather, Pe Benito is only entitled to her salary
for her 30-day preventive suspension.57 As to Balaguer, in addition
to his 30-day salary during his illegal preventive suspension, he is
entitled to his backwages for the unexpired term of his contract of
probationary employment.
Lastly, petitioner faults the appellate court for awarding moral and
exemplary damages in favor of respondents despite lack of sufficient
basis to support the award.58
A dismissed employee is entitled to moral damages when the
dismissal is attended by bad faith or fraud; or constitutes an act
oppressive to labor; or is done in a manner contrary to good morals,
good customs or public policy. Exemplary damages, on the other
hand, may be awarded if the dismissal is effected in a wanton,
oppressive or malevolent manner.59 The award of said damages
cannot be justified solely upon the premise that the employer fired
his employee without just cause or due process. It is necessary that
additional facts be pleaded and proven that the act of dismissal was
attended by bad faith, fraud, et al., and that social humiliation,
wounded feelings and grave anxiety resulted therefrom. 60
Be that as it may, we find the award of moral and exemplary
damages proper, as we quote with approval the CA’s justification for
the award, thus:
At any rate, there is no question that both petitioners [respondents
herein] are entitled to the award of moral and exemplary damages,
in view of the proven acts done in bad faith on the part of private
respondents [petitioner herein] who threatened petitioners’
[respondents’] immediate dismissal when the Manifesto was
presented by petitioners [respondents], berating and verbally
castigating petitioner [respondent] Pe Benito, portraying them as
mere detractors in an open letter to the parents who were merely
motivated by the design to malign the integrity of the school. x x x
We find such bad faith on the part of private respondents [petitioner]
in effectively exerting pressure to silence the petitioners
[respondents] regarding their legitimate grievances against the
school as sufficiently established in the records, private
respondents’ [petitioner’s] actuations having sullied the professional
integrity of the petitioners [respondents] and divided the faculty
members on the controversy. For such unjustified acts in relation to
the NEAT/NSAT controversy that resulted to loss, prejudice and
damage to petitioners [respondents], private respondents [petitioner]
are liable for moral and exemplary damages.61
WHEREFORE, premises considered, the petition is hereby
DENIED. The Court of Appeals Decision and Resolution dated June
30, 2003 and September 26, 2003, respectively, in CA-G.R. SP No.
75249, are AFFIRMED.
SO ORDERED.
G.R. No. 164532 July 24, 2007
PHILIPPINE DAILY INQUIRER, INC., Petitioner,
vs.
LEON M. MAGTIBAY, JR. and PHILIPPINE DAILY INQUIRER
EMPLOYEES UNION (PDIEU), Respondents.
DECISION
GARCIA, J.:
By this petition for review on certiorari under Rule 45 of the Rules of
Court, petitioner Philippine Daily Inquirer, Inc. (PDI) seeks the
reversal and setting aside of the decision1 dated May 25, 2004 of the
Court of Appeals (CA) in CA G.R. SP No. 78963, affirming the
resolution dated September 23, 2002 of the National Labor
Relations Commission (NLRC) in NLRC Case No. 00-03-01945-96.
The affirmed NLRC resolution reversed an earlier decision dated
July 29, 1996 of the Labor Arbiter in NLRC Case No. 011800-96,
which dismissed the complaint for illegal dismissal filed by the herein
respondent Leon Magtibay, Jr. against the petitioner.
The factual antecedents are undisputed:
On February 7, 1995, PDI hired Magtibay, on contractual basis, to
assist, for a period of five months from February 17, 1995, the
regular phone operator. Before the expiration of Magtibay’s
contractual employment, he and PDI agreed to a fifteen-day contract
extension, or from July 17, 1995 up to July 31, 1995, under the
same conditions as the existing contract.
After the expiration of Magtibay’s contractual employment, as
extended, PDI announced the creation and availability of a new
position for a second telephone operator who would undergo
probationary employment. Apparently, it was PDI’s policy to accord
regular employees preference for new vacancies in the company.
Thus, Ms. Regina M. Layague, a PDI employee and member of
respondent PDI Employees Union (PDIEU), filed her application for
the new position. However, she later withdrew her application,
paving the way for outsiders or non-PDI employees, like Magtibay in
this case, to apply.
After the usual interview for the second telephone operator slot, PDI
chose to hire Magtibay on a probationary basis for a period of six (6)
months. The signing of a written contract of employment followed.
On March 13, 1996, or a week before the end the agreed 6-month
probationary period, PDI officer Benita del Rosario handed Magtibay
his termination paper, grounded on his alleged failure to meet
company standards. Aggrieved, Magtibay immediately filed a
complaint for illegal dismissal and damages before the Labor
Arbiter. PDIEU later joined the fray by filing a supplemental
complaint for unfair labor practice.
Magtibay anchored his case principally on the postulate that he had
become a regular employee by operation of law, considering that he
had been employed by and had worked for PDI for a total period of
ten months, i.e., four months more than the maximum six-month
period provided for by law on probationary employment. He also
claimed that he was not apprised at the beginning of his
employment of the performance standards of the company, hence,
there was no basis for his dismissal. Finally, he described his
dismissal as tainted with bad faith and effected without due process.
PDI, for its part, denied all the factual allegations of Magtibay,
adding that his previous contractual employment was validly
terminated upon the expiration of the period stated therein. Pressing
the point, PDI alleged that the period covered by the contractual
employment cannot be counted with or tacked to the period for
probation, inasmuch as there is no basis to consider Magtibay a
regular employee. PDI additionally claimed that Magtibay was
dismissed for violation of company rules and policies, such as
allowing his lover to enter and linger inside the telephone operator’s
booth and for failure to meet prescribed company standards which
were allegedly made known to him at the start through an orientation
seminar conducted by the company.
61
After due proceedings, the Labor Arbiter found for PDI and
accordingly dismissed Magtibay’s complaint for illegal dismissal. The
Labor Arbiter premised his holding on the validity of the previous
contractual employment of Magtibay as an independent contract. He
also declared as binding the stipulation in the contract specifying a
fixed period of employment. According to the Labor Arbiter, upon
termination of the period stated therein, the contractual employment
was also effectively terminated, implying that Magtibay was merely
on a probationary status when his services were terminated
inasmuch as the reckoning period for probation should be from
September 21, 1995 up to March 31, 1996 as expressly provided in
their probationary employment contract. In fine, it was the Labor
Arbiter’s position that Magtibay’s previous contractual employment,
as later extended by 15 days, cannot be considered as part of his
subsequent probationary employment.
Apart from the foregoing consideration, the Labor Arbiter further
ruled that Magtibay’s dismissal from his probationary employment
was for a valid reason. Albeit the basis for termination was couched
in the abstract, i.e., "you did not meet the standards of the
company," there were three specific reasons for Magtibay’s
termination, to wit: (1) he repeatedly violated the company rule
prohibiting unauthorized persons from entering the telephone
operator’s room; (2) he intentionally omitted to indicate in his
application form his having a dependent child; and (3) he exhibited
lack of sense of responsibility by locking the door of the telephone
operator’s room on March 10, 1996 without switching the proper
lines to the company guards so that incoming calls may be
answered by them.
The Labor Arbiter likewise dismissed allegations of denial of due
process and the commission by PDI of unfair labor practice.
PDIEU and Magtibay appealed the decision of the Labor Arbiter to
the NLRC. As stated earlier, the NLRC reversed and set aside said
decision, effectively ruling that Magtibay was illegally dismissed.
According to the NLRC, Magtibay’s probationary employment had
ripened into a regular one.
With the NLRC’s denial of its motion for reconsideration, PDI went to
the CA on a petition for certiorari. Eventually, the CA denied due
course to PDI’s petition on the strength of the following
observations:
We agree with the findings of respondent NLRC.
Petitioner PDI failed to prove that such rules and regulations were
included in or form part of the standards that were supposed to be
made known to respondent Magtibay at the time of his engagement
as telephone operator. Particularly, as regards the first stated
infraction xxx petitioner PDI, contrary to its assertion, stated in its
position paper, motion for reconsideration and in this petition that
respondent Magtibay failed to abide by the rules and regulations of
the company issued by Ms. Benita del Rosario regarding the entry of
persons in the operator’s booth when respondent was already
working for petitioner PDI. Further, nowhere can it be found in the
list of Basic Responsibility and Specific Duties and Responsibilities
(Annex D of the petition) of respondent Magtibay that he has to
abide by the duties, rules and regulations that he has allegedly
violated. The infractions considered by petitioner PDI as grounds for
the dismissal of respondent Magtibay may at most be classified as
just causes for the termination of the latter’s employment. x x x.
xxx xxx xxx
Finally, the three questionable grounds also relied upon by petitioner
PDI in dismissing respondent Magtibay may be considered as just
causes. However, petitioner PDI did not raise the same as an issue
in the present petition because the procedure it adopted in
dismissing respondent Magtibay fell short of the minimum
requirements provided by law.
PDI filed a motion for reconsideration but to no avail.
Hence, this recourse by PDI on the following submissions:
I.
THE COURT OF APPEALS COMMITTED GRAVE
ERROR IN FINDING THAT A PROBATIONARY
EMPLOYEE’S FAILURE TO FOLLOW AN EMPLOYER’S
RULES AND REGULATIONS CANNOT BE DEEMED
FAILURE BY SAID EMPLOYEE TO MEET THE
STANDARDS OF HIS EMPLOYER THUS
EMASCULATING PETITIONER’S RIGHT TO CHOOSE
ITS EMPLOYEES.
II.
THE COURT OF APPEALS COMMITTED A GRAVE
ERROR IN REFUSING TO FIND THAT PROCEDURAL
DUE PROCESS AS LAID DOWN IN SECTION 2, RULE
XXIII OF THE IMPLEMENTING RULES OF THE LABOR
CODE HAD BEEN OBSERVED BY THE PETITIONER.
We GRANT the petition.
This Court, to be sure, has for a reason, consistently tended to be
partial in favor of workers or employees in labor cases whenever
social legislations are involved. However, in its quest to strike a
balance between the employer’s prerogative to choose his
employees and the employee’s right to security of tenure, the Court
remains guided by the gem of a holding in an old but still applicable
case of Pampanga Bus, Co. v. Pambusco Employees Union, Inc.2 In
it, the Court said:
The right of a laborer to sell his labor to such persons as he may
choose is, in its essence, the same as the right of an employer to
purchase labor from any person whom it chooses. The employer
and the employee have thus an equality of right guaranteed by the
Constitution. If the employer can compel the employee to work
against the latter’s will, this is servitude. If the employee can compel
the employer to give him work against the employer’s will, this is
oppression.
Management and labor, or the employer and the employee are more
often not situated on the same level playing field, so to speak.
Recognizing this reality, the State has seen fit to adopt measures
envisaged to give those who have less in life more in law. Article
279 of the Labor Code which gives employees the security of tenure
is one playing field leveling measure:
Art. 279. Security of Tenure. ̶ In cases of regular employment, the
employer shall not terminate the services of an employee except for
a just cause or when authorized by this Title. x x x.
But hand in hand with the restraining effect of Section 279, the same
Labor Code also gives the employer a period within which to
determine whether a particular employee is fit to work for him or not.
This employer’s prerogative is spelled out in the following provision:
Art. 281. Probationary employment. ̶ Probationary employment shall
not exceed six (6) months from the date the employee started
working, unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a just
cause or when he 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 engagement. An
employee who is allowed to work after a probationary period shall be
considered a regular employee.
In International Catholic Migration Commission v. NLRC,3 we have
elucidated what probationary employment entails:
x x x. A probationary employee, as understood under Article 282
(now Article 281) of the Labor Code, is one who is on trial by an
employer during which the employer determines whether or not he is
qualified for permanent employment. A probationary appointment is
made to afford the employer an opportunity to observe the fitness of
a probationer while at work, and to ascertain whether he will become
a proper and efficient employee. The word "probationary," as used
to describe the period of employment, implies the purpose of the
term or period but not its length.
Being in the nature of a "trial period" the essence of a probationary
period of employment fundamentally lies in the purpose or objective
sought to be attained by both the employer and the employee during
said period. The length of time is immaterial in determining the
correlative rights of both in dealing with each other during said
period. While the employer, as stated earlier, observes the fitness,
propriety and efficiency of a probationer to ascertain whether he is
qualified for permanent employment, the probationer, on the other,
seeks to prove to the employer, that he has the qualifications to
meet the reasonable standards for permanent employment.
It is well settled that the employer has the right or is at liberty to
choose who will be hired and who will be denied employment. In that
62
sense, it is within the exercise of the right to select his employees
that the employer may set or fix a probationary period within which
the latter may test and observe the conduct of the former before
hiring him permanently. x x x.
Within the limited legal six-month probationary period, probationary
employees are still entitled to security of tenure. It is expressly
provided in the afore-quoted Article 281 that a probationary
employee may be terminated only on two grounds: (a) for just
cause, or (b) when he 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 engagement.4
PDI invokes the second ground under the premises. In claiming that
it had adequately apprised Magtibay of the reasonable standards
against which his performance will be gauged for purposes of
permanent employment, PDI cited the one-on-one seminar between
Magtibay and its Personnel Assistant, Ms. Rachel Isip-Cuzio. PDI
also pointed to Magtibay’s direct superior, Benita del Rosario, who
diligently briefed him about his responsibilities in PDI. These factual
assertions were never denied nor controverted by Magtibay. Neither
did he belie the existence of a specific rule prohibiting unauthorized
persons from entering the telephone operator’s booth and that he
violated that prohibition. This notwithstanding, the NLRC and the CA
proceeded nonetheless to rule that the records of the case are
bereft of any evidence showing that these rules and regulations form
part of the so-called company standards.
We do not agree with the appellate court when it cleared the NLRC
of commission of grave abuse of discretion despite the latter’s
disregard of clear and convincing evidence that there were
reasonable standards made known by PDI to Magtibay during his
probationary employment. It is on record that Magtibay committed
obstinate infractions of company rules and regulations, which in turn
constitute sufficient manifestations of his inadequacy to meet
reasonable employment norms. The suggestion that Magtibay ought
to have been made to understand during his briefing and orientation
that he is expected to obey and comply with company rules and
regulations strains credulity for acceptance. The CA’s observation
that "nowhere can it be found in the list of Basic Responsibility and
Specific Duties and Responsibilities of respondent Magtibay that he
has to abide by the duties, rules and regulations that he has
allegedly violated" is a strained rationalization of an unacceptable
conduct of an employee. Common industry practice and ordinary
human experience do not support the CA’s posture. All employees,
be they regular or probationary, are expected to comply with
company-imposed rules and regulations, else why establish them in
the first place. Probationary employees unwilling to abide by such
rules have no right to expect, much less demand, permanent
employment. We, therefore find sufficient factual and legal basis,
duly established by substantial evidence, for PDI to legally terminate
Magtibay’s probationary employment effective upon the end of the
6-month probationary period.
It is undisputed that PDI apprised Magtibay of the ground of his
termination, i.e., he failed to qualify as a regular employee in
accordance with reasonable standards made known to him at the
time of engagement, only a week before the expiration of the six-
month probationary period. Given this perspective, does this make
his termination unlawful for being violative of his right to due process
of law?
It does not.
Unlike under the first ground for the valid termination of probationary
employment which is for just cause, the second ground does not
require notice and hearing. Due process of law for this second
ground consists of making the reasonable standards expected of the
employee during his probationary period known to him at the time of
his probationary employment. By the very nature of a probationary
employment, the employee knows from the very start that he will be
under close observation and his performance of his assigned duties
and functions would be under continuous scrutiny by his superiors. It
is in apprising him of the standards against which his performance
shall be continuously assessed where due process regarding the
second ground lies, and not in notice and hearing as in the case of
the first ground.
Even if perhaps he wanted to, Magtibay cannot deny – as he has
not denied – PDI’s assertion that he was duly apprised of the
employment standards expected of him at the time of his
probationary employment when he underwent a one-on-one
orientation with PDI’s personnel assistant, Ms. Rachel Isip-Cuzio.
Neither has he denied nor rebutted PDI’s further claim that his direct
superior, Benita del Rosario, briefed him regarding his
responsibilities in PDI.
Lest it be overlooked, Magtibay had previously worked for PDI as
telephone operator from February 7, 1995 to July 31, 1995 as a
contractual employee. Thus, the Court entertains no doubt that
when PDI took him in on September 21, 1995, Magtibay was
already very much aware of the level of competency and
professionalism PDI wanted out of him for the entire duration of his
probationary employment.
PDI was only exercising its statutory hiring prerogative when it
refused to hire Magtibay on a permanent basis upon the expiration
of the six-month probationary period. This was established during
the proceedings before the labor arbiter and borne out by the
records and the pleadings before the Court. When the NLRC
disregarded the substantial evidence establishing the legal
termination of Magtibay’s probationary employment and rendered
judgment grossly and directly contradicting such clear evidence, the
NLRC commits grave abuse of discretion amounting to lack or
excess of jurisdiction. It was, therefore, reversible error on the part
of the appellate court not to annul and set aside such void judgment
of the NLRC.1avvphi1
WHEREFORE, the assailed decision dated May 25, 2004 of the CA
in CA G.R. SP No. 78963 is hereby REVERSED and SET ASIDE,
and the earlier resolution dated September 23, 2002 of the NLRC in
NLRC Case No. 00-03-01945-96 is declared NULL and VOID. The
earlier decision dated July 29, 1996 of the Labor Arbiter in NLRC
Case No. 011800-96, dismissing respondent Leon Magtibay, Jr.’s
complaint for alleged illegal dismissal, is REINSTATED.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 96779 November 10, 1993
PINE CITY EDUCATIONAL CENTER and EUGENIO
BALTAO, petitioners,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION (THIRD
DIVISION) and DANGWA BENTREZ, ROLAND PICART, APOLLO
RIBAYA, SR., RUPERTA RIBAYA, VIRGINIA BOADO, CECILIA
EMOCLING, JANE BENTREZ, LEILA DOMINGUEZ, ROSE ANN
BERMUDEZ and LUCIA CHAN, respondents.
Tenefrancia, Agranzamendez, Liceralde & Associates for
petitioners.
Reynaldo B. Cajucom for private respondents.
NOCON, J.:
The is a petition for certiorari seeking the reversal of the resolution
of public respondent National Labor Relations Commission dated
November 29, 1990, in NLRC Case No. 01-04-0056-89, which
affirmed in toto the decision of the Labor Arbiter dated February
28,1990.
The antecedent facts are, a follows:
Private respondents Dangwa Bentrez, Roland Picart, Apollo Ribaya,
Sr., Ruperta Ribaya, Virginia Boado, Cecilia Emocling, Jane
Bentrez, Leila Dominguez, Rose Ann Bermudez and Lucia Chan
were all employed as teachers on probationary basis by petitioner
Pines City Educational Center, represented in this proceedings by
its President, Eugenio Baltao. With the exception of Jane Bentrez
who was hired as a grade school teacher, the remaining private
respondents were hired as college instructors. All the private
respondents, except Roland Picart and Lucia Chan, signed
contracts of employment with petitioner for a fixed duration. On
March 31, 1989, due to the expiration of private respondents'
contracts and their poor performance as teachers, they were notified
of petitioners' decision not to renew their contracts anymore.
On April 10, 1989, private respondents filed a complaint for illegal
dismissal before the Labor Arbiter, alleging that their dismissals
were without cause and in violation of due process. Except for
private respondent Leila Dominguez who worked with petitioners for
one semester, all other private respondents were employed for one
to two years. They were never informed in writing by petitioners
63
regarding the standards or criteria of evaluation so as to enable
them to meet the requirements for appointment as regular
employees. They were merely notified in writing by petitioners,
through its chancellor, Dra. Nimia R. Concepcion, of the termination
of their respective services as on March 31, 1989, on account of
their below-par performance as teachers.
For their part, petitioners contended that private respondents'
separation from employment, apart from their poor performance,
was due to the expiration of the periods stipulated in their respective
contracts. In the case of private respondent Dangwa Bentrez, the
duration of his employment contract was for one year, or beginning
June, 1988 to March 1989 whereas in the case of the other private
respondents, the duration of their employment contracts was for one
semester, or beginning November, 1988 to March 1989. These
stipulations were the laws that governed their relationships, and
there was nothing in said contracts which was contrary to law,
morals, good customs and public policy. They argued further that
they cannot be compelled o enter into new contracts with private
respondents. they concluded that the separation of private
respondents from the service was justified.
On February 28, 1990, the Labor Arbiter rendered judgment in favor
of private respondents, the dispositive portion of which reads:
WHEREFORE, in the light of the foregoing
considerations, judgment is hereby rendered
ORDERING the respondents to reinstate the
complainants immediately to their former
positions and to pay their full backwages and
other benefits and privileges without
qualification and deduction from the time they
were dismissed up to their actual reinstatement.
Thus respondents should pay complainants the
following:
BACKWAGES
NOTE: Computation covers only the
period complainants were terminated
up to January 31, 1990 or 10 months
and does not include backwages from
January 31, 1990 up to their actual
reinstatement.
1) ROLAND PICART
a) Latest salary per month P2,136.00
b) Multiplied by period covered
(March 31, 1989 to January 31, 1990) x 10
months
—————
c) Equals backwages due P21,360.00
2) LUCIA CHAN
a) Latest salary per month P1,600.00
b) Multiplied by period covered x 10 months
—————
c) Equals backwages due P16,000.00
3) LEILA DOMINGUEZ
a) Latest salary per month P1,648.24
b) Multiplied by period covered x 10 months
—————
c) Equals backwages due P16,482.40
4) RUPERTA RIBAYA
a) Latest salary per month P1,856.00
b) Multiplied by period covered x 10 months
—————
c) Equals backwages due P18,560.00
5) CECILIA EMOCLING
a) Latest salary per month P1,648.00
b) Multiplied by period covered x 10 months
—————
c) Equals backwages due P16,480.00
6) ROSE ANN BERMUDEZ
a) Latest salary per month P2,600.00
b) Multiplied by period covered x 10 months
—————
c) Equals backwages due P26,000.00
7) DANGWA BENTREZ
a) Latest salary per month P1,700.00
b) Multiplied by period covered x 10 months
—————
c) Equals backwages due P17,000.00
8) JANE BENTREZ
a) Latest salary per month P1,315.44
b) ultiplied by period covered x 10 months
—————
c) Equals backwages due P13,154.40
9) APOLLO RIBAYA
a) Latest salary per month P1,875.00
b) Multiplied by period covered x 10 months
—————
c) Equals backwages due P18,7500.00
10) VIRGINIA BOADO
a) Latest salary per month P1,648.24
b) Multiplied by period covered x 10 months
—————
c) Equals backwages due P16,482.40
SUMMARY
1) Roland Picart 21,360.00
2) Lucia Chan 16,000.00
3) Leila Dominguez
16,482.40
4) Ruperta Ribaya
18,560.00
5) Cecilia Emocling
16,480.00
6) Rose Ann Bermudez
26,000.00
7) Dangwa Bentrez
17,000.00
8) Jane Bentrez 13,154.40
9) Apollo Ribaya 18,750.00
10) Virginia Boado
16,482.40
—————
GRAND TOTAL
(Backwages) P180,269.20
Complainants claims for indemnity pay,
premium pay for holidays and rest days, illegal
deduction, 13th month pay and underpayment
are hereby DENIED for lack of merit.
SO ORDERED.1
In support of this decision, the Labor Arbiter rationalized that the
teacher's contracts2 are vague and do not include the specific
description of duties and assignments of private respondents. They
do not categorically state that there will be no renewal because their
appointments automatically terminate at the end of the semester.
Petitioners did not present any written evidence to substantiate their
allegation that the Academic Committee has evaluated private
respondents' performance during their one semester employment.
On the contrary, they were hastily dismissed.
On appeal to the National Labor Relations Commission, the decision
was affirmed in toto in its resolution dated November 29, 1990, with
the additional reasoning that "the stipulation in the contract providing
for a definite period in the employment of complainant is obviously
null and void, as such stipulation directly assails the safeguards laid
down in Article 280 (of the Labor Code), 3 which explicitly abhors the
consideration of written or oral agreements pertaining to definite
period in regular employments. 4 Hence, the present petition
64
for certiorari with prayer for the issuance of a temporary restraining
order.
As prayed for, this Court issued a temporary restraining order on
March 11, 1991, enjoining respondents from enforcing the
questioned resolution.5
Petitioners raise this sole issue: "THAT THERE IS PRIMA
FACIE EVIDENCE OF GRAVE ABUSE OF DISCRETION ON THE
PART OF THE LABOR ARBITER BY WANTONLY,
CAPRICIOUSLY AND MALICIOUSLY DISREGARDING
PROVISIONS OF THE LAW AND JURISPRUDENCE LAID DOWN
IN DECISIONS OF THE HONORABLE SUPREME COURT."6
Petitioners reiterate their previous arguments, relying heavily in the
case of Brent School, Inc. et al., v. Zamora, et al. 7
It is quite easy to resolve the present controversy because
the Brent case, which is a product of extensive research, already
provides the answer. We were categorical therein that:
Accordingly, and since the entire purpose
behind the development of legislation
culminating in the present Article 280 of the
Labor Code clearly appears to have been, as
already observed, to prevent circumvention of
the employee's right to be secure in his tenure,
the clause in said article indiscriminately and
completely ruling out all written and oral
agreements conflicting with the concept of
regular employment as defined therein should
be construed to refer to the substantive evil that
the Code itself has singled out: agreements
entered into precisely to prevent security of
tenure. It should have no application to
instances where a fixed period of employment
was agreed upon knowingly and voluntarily by
the parties, without any force, duress or
improper pressure brought to bear upon the
employee and absent any other circumstances
vitiating his consent, or where it satisfactorily
appears that the employer or employee dealt
with each other on more or less equal terms
with no moral dominance whatever being
exercised by the former over the latter. Unless
thus limited in its purview, the law would be
made to apply to purposes other than those
expressly stated by its framers; it thus becomes
pointless and arbitrary, unjust in its effects and
apt to lead to absurd and unintended
consequences. (Emphasis supplied.)
The ruling was reiterated in Pakistan International Airlines
Corporation v. Ople, etc., et al.8 and La Sallete of
Santiago, Inc. v. NLRC, et al.9
In the present case, however, We have to make a distinction.
Insofar as the private respondents who knowingly and voluntarily
agreed upon fixed periods of employment are concerned, their
services were lawfully terminated by reason of the expiration of the
periods of their respective contracts. These are Dangwa Bentrez,
Apollo Ribaya, Sr., Ruperta Ribaya, Virginia Boado, Cecilia
Emocling, Jose Bentrez, Leila Dominguez and Rose Ann Bermudez.
Thus, public respondent committed grave abuse of discretion in
affirming the decision of the Labor Arbiter ordering the reinstatement
and payment of full backwages and other benefits and privileges.
With respect to private respondents Roland Picart and Lucia Chan,
both of whom did not sign any contract fixing the periods of their
employment nor to have knowingly and voluntarily agreed upon
fixed periods of employment, petitioners had the burden of proving
that the termination of their services was legal. As probationary
employees, they are likewise protected by the security of tenure
provision of the Constitution. Consequently, they cannot be removed
from their positions unless for cause. 10 On the other hand, petitioner
contended that base don the evaluation of the Academic Committee
their performance as teachers was poor. The Labor Arbiter,
however, was not convinced. Thus he found as follows:
Respondents likewise aver that the Academic
Committee has evaluated their performance
during their one semester employment (see
Annexes "M" to "X" of complainants' position
paper). However, they did not present any
written proofs or evidence to support their
allegation. 11
xxx xxx xxx
There is absolutely nothing in the record which
will show that the complainants were afforded
even an iota of chance to refute respondents'
allegations that the complainants did not meet
the reasonable standards and criteria set by the
school. . . .12
We concur with these factual findings, there being no showing that
they were resolved arbitrarily. 13 Thus, the order for their
reinstatement and payment of full backwages and other benefits and
privileges from the time they were dismissed up to their actual
reinstatement is proper, conformably with Article 279 of the Labor
Code, as amended by Section 34 of Republic Act No. 6715, 14 which
took effect on March 21, 1989. 15 It should be noted that private
respondents Roland Picart and Lucia Chan were dismissed illegally
on March 31, 1989, or after the effectivity of said amendatory law.
However, in ascertaining the total amount of backwages payable to
them, we go back to the rule prior to the mercury drug rule 16 that the
total amount derived from employment elsewhere by the employee
from the date of dismissal up to the date of reinstatement, if any,
should be deducted therefrom. 17 We restate the underlying reason
that employees should not be permitted to enrich themselves at the
expense of their employer.18In addition, the law abhors double
compensation.19 to this extent, our ruling in Alex Ferrer, et al., v.
NLRC, et al.,G.R. No. 100898, promulgated on July 5, 1993, is
hereby modified.
Public respondent cannot claim not knowing the ruling in
the Brent case because in its questioned resolution, it is stated that
one of the cases invoked by petitioners in their appeal is said
case.20 This notwithstanding, it disregarded Our ruling therein
without any reason at all and expressed the erroneous view that:
The agreement of the parties fixing a definite
date for the termination of the employment
relations is contrary to the specific provision of
Article 280. being contrary to law, the
agreement cannot be legitimized. . . . 21
Stare decisis et no quieta movere. Once a case ha been decided
one way, then another case, involving exactly the same point at
issue, should be decided in the same manner. Public respondent
had no choice on the matter. It could not have ruled in any other
way. This Tribunal having spoken in the Brent case, its duty was to
obey. 22 Let it be warned that to defy its decisions is to court
contempt. 23
WHEREFORE, the resolution of public respondent National Labor
Relations Commission dated November 29, 1990 is hereby
MODIFIED. private respondents Roland Picart and Lucia Chan are
ordered reinstated without loss of seniority rights and other
privileges and their backwages paid in full inclusive of allowances,
and to their other benefits or their monetary equivalent pursuant to
Article 279 of the Labor Code, as amended by Section 34 of
Republic Act No. 6715, subject to deduction of income earned
elsewhere during the period of dismissal, if any, to be computed
from the time they were dismissed up to the time of their actual
reinstatement. the rest of the Labor Arbiter's decision dated
February 28, 1990, as affirmed by the NLRC is set aside. The
temporary restraining order issued on March 11, 1991 is made
permanent.
SO ORDERED.
G.R. No. 204406 February 26, 2014
MACARTHUR MALICDEM and HERMENIGILDO
FLORES, Petitioners,
vs.
MARULAS INDUSTRIAL CORPORATION and MIKE
MANCILLA, Respondents.
DECISION
MENDOZA, J.:
65
This petition for review on certiorari1 under Rule 45 of the Rules of
Court filed by Macarthur Malicdem (Malicdem) and Hermenigildo
Flores (Flores) assails the July 18, 2012 Decision2 and the
November 12, 2012 Resolution3 of the Court of Appeals (CA) in CA-
G.R. SP No. 1244 70, dismissing their petition for certiorari under
Rule 65 in an action for illegal dismissal.
The Facts:
A complaint4 for illegal dismissal, separation pay, money claims,
moral and exemplary damages, and attorney's fees was filed by
petitioners Malicdem and Flores against respondents Marulas
Industrial Corporation (Marulas) and Mike Mancilla (Mancilla), who
were engaged in the business of manufacturing sacks intended for
local and export markets.
Malicdem and Flores were first hired by Marulas as extruder
operators in 2006, as shown by their employment contracts. They
were responsible for the bagging of filament yarn, the quality of pp
yarn package and the cleanliness of the work place area. Their
employment contracts were for a period of one (1) year. Every year
thereafter, they would sign a Resignation/Quitclaim in favor of
Marulas a day after their contracts ended, and then sign another
contract for one (1) year. Until one day, on December 16, 2010,
Flores was told not to report for work anymore after being asked to
sign a paper by Marulas' HR Head to the effect that he
acknowledged the completion of his contractual status. On February
1, 2011, Malicdem was also terminated after signing a similar
document. Thus, both claimed to have been illegally dismissed.
Marulas countered that their contracts showed that they were fixed-
term employees for a specific undertaking which was to work on a
particular order of a customer for a specific period. Their severance
from employment was due to the expiration of their contracts.
On February 7, 2011, Malicdem and Flores lodged a complaint
against Marulas and Mancilla for illegal dismissal.
On July 13, 2011, the Labor Arbiter (LA) rendered a decision5 in
favor of the respondents, finding no illegal dismissal. He ruled that
Malicdem and Flores were not terminated and that their employment
naturally ceased when their contracts expired. The LA, however,
ordered Marulas to pay Malicdem and Flores their respective wage
differentials, to wit:
WHEREFORE, the complaints for illegal dismissal are dismissed for
lack of merit. Respondent Marulas Industrial Corporation is,
however, ordered to pay complainants wage differential in the
following amounts:
1. Macarthur Malicdem ₱20,111.2
6
2/2/07 – 6/13/08 = None
6/14/08 – 8/27/08 = 2.47 mos.
₱377 – 362 = ₱15
x 26 days x 2.47 mos. = 963.30
8/28/08 – 6/30/10 = 22.06 mos.
₱382 – ₱362 = ₱20
x 26 days x 22.06 mos. = 11,471.20
7/1/10 – 2/2/11 = 7.03 mos.
₱404 – ₱362 = ₱42
x 26 days x 7.03 mos. = 7,676.76
20,111.26
; and
2. Herminigildo Flores ₱18,440.50
2/2/08 – 6/13/08 = 4.36 mos. None
6/14/08 – 8/27/08 = 963.30
8/28/08 – 6/30/10 = 11,471.20
7/1/10 – 12/16/10 = 5.50 mos.
₱404 x ₱362 = ₱42
x 26 days x 5.50 mos. = 6,006.00
18,440.50
All other claims are dismissed for lack of merit.
SO ORDERED.6
Malicdem and Flores appealed to the NLRC which partially granted
their appeal with the award of payment of 13th month pay, service
incentive leave and holiday pay for three (3) years. The dispositive
portion of its December 19, 2011 Decision7 reads:
WHEREFORE, the appeal is GRANTED IN PART. The Decision of
Labor Arbiter Raymund M. Celino, dated July 13, 2011, is
MODIFIED. In addition to the award of salary differentials,
complainants should also be awarded 13th month pay, service
incentive leave and holiday pay for three years.
SO ORDERED.8
Still, petitioners filed a motion for reconsideration, but it was denied
by the NLRC on February 29, 2011.
Aggrieved, Malicdem and Flores filed a petition for certiorari under
Rule 65 with the CA.
On July 18, 2012, the CA denied the petition,9 finding no grave
abuse of discretion amounting to lack or excess of jurisdiction on the
part of the NLRC. It ruled that the issue of whether or not the
petitioners were project employees or regular employees was
factual in nature and, thus, not within the ambit of a petition for
certiorari. Moreover, it accorded respect and due consideration to
the factual findings of the NLRC, affirming those of the LA, as they
were supported by substantial evidence.
On the substantive issue, the CA explained that "the repeated and
successive rehiring of project employees do not qualify them as
regular employees, as length of service is not the controlling
determinant of the employment tenure of a project employee, but
whether the employment has been fixed for a specific project or
undertaking, its completion has been determined at the time of the
engagement of the employee."10
Corollarily, considering that there was no illegal dismissal, the CA
ruled that payment of backwages, separation pay, damages, and
attorney's fees had no factual and legal bases. Hence, they could
not be awarded to the petitioners.
Aggrieved, Malicdem and Flores filed a motion for reconsideration,
but their pleas were denied in the CA Resolution, dated November
12, 2012.
The Petition
Malicdem and Flores now come before this Court by way of a
petition for review on certiorari under Rule 45 of the Rules of Court
praying for the reversal of the CA decision anchored on the principal
argument that the appellate court erred in affirming the NLRC
decision that there was no illegal dismissal because the petitioners’
contracts of employment with the respondents simply expired. They
claim that their continuous rehiring paved the way for their
regularization and, for said reason, they could not be terminated
from their jobs without just cause.
In their Comment,11 the respondents averred that the petitioners
failed to show that the CA erred in affirming the NLRC decision.
They posit that the petitioners were contractual employees and their
rehiring did not amount to regularization. The CA cited William Uy
Construction Corp. v. Trinidad,12 where it was held that the repeated
and successive rehiring of project employees did not qualify them as
regular employees, as length of service was not the controlling
determinant of the employment tenure of a project employee, but
whether the employment had been fixed for a specific project or
undertaking, its completion had been determined at the time of the
engagement of the employee. The respondents add that for said
reason, the petitioners were not entitled to full backwages,
separation pay, moral and exemplary damages, and attorney’s fees.
66
Now, the question is whether or not the CA erred in not finding any
grave abuse of discretion amounting to lack or excess of jurisdiction
on the part of the NLRC.
The Court’s Ruling:
The Court grants the petition.
The petitioners have convincingly shown that they should be
considered regular employees and, as such, entitled to full
backwages and other entitlements.
A reading of the 2008 employment contracts,13 denominated as
"Project Employment Agreement," reveals that there was a
stipulated probationary period of six (6) months from its
commencement. It was provided therein that in the event that they
would be able to comply with the company’s standards and criteria
within such period, they shall be reclassified as project employees
with respect to the remaining period of the effectivity of the contract.
Specifically, paragraph 3(b) of the agreement reads:
The SECOND PARTY hereby acknowledges, agrees and
understands that the nature of his/her employment is probationary
and on a project-basis. The SECOND PARTY further acknowledges,
agrees and understands that within the effectivity of this Contract,
his/her job performance will be evaluated in accordance with the
standards and criteria explained and disclosed to him/her prior to
signing of this Contract. In the event that the SECOND PARTY is
able to comply with the said standards and criteria within the
probationary period of six month/s from commencement of this
Contract, he/she shall be reclassified as a project employee of (o)f
the FIRST PARTY with respect to the remaining period of the
effectivity of this Contract.
Under Article 281 of the Labor Code, however, "an employee who is
allowed to work after a probationary period shall be considered a
regular employee." When an employer renews a contract of
employment after the lapse of the six-month probationary period, the
employee thereby becomes a regular employee. No employer is
allowed to determine indefinitely the fitness of its employees. 14 While
length of time is not the controlling test for project employment, it is
vital in determining if the employee was hired for a specific
undertaking or tasked to perform functions vital, necessary and
indispensable to the usual business of trade of the
employer.15 Thus, in the earlier case of Maraguinot, Jr. v. NLRC,16 it
was ruled that a project or work pool employee, who has been: (1)
continuously, as opposed to intermittently, rehired by the same
employer for the same tasks or nature of tasks; and (2) those tasks
are vital, necessary and indispensable to the usual business or trade
of the employer, must be deemed a regular employee. Thus:
x x x. Lest it be misunderstood, this ruling does not mean that simply
because an employee is a project or work pool employee even
outside the construction industry, he is deemed, ipso jure, a regular
employee. All that we hold today is that once a project or work pool
employee has been: (1) continuously, as opposed to intermittently,
re-hired by the same employer for the same tasks or nature of tasks;
and (2) these tasks are vital, necessary and indispensable to the
usual business or trade of the employer, then the employee must be
deemed a regular employee, pursuant to Article 280 of the Labor
Code and jurisprudence. To rule otherwise would allow
circumvention of labor laws in industries not falling within the ambit
of Policy Instruction No. 20/Department Order No. 19, hence
allowing the prevention of acquisition of tenurial security by project
or work pool employees who have already gained the status of
regular employees by the employer's conduct.1âwphi1
The test to determine whether employment is regular or not is the
reasonable connection between the particular activity performed by
the employee in relation to the usual business or trade of the
employer. If the employee has been performing the job for at least
one year, even if the performance is not continuous or merely
intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not
indispensability of that activity to the business.17
Guided by the foregoing, the Court is of the considered view that
there was clearly a deliberate intent to prevent the regularization of
the petitioners.
To begin with, there is no actual project. The only stipulations in the
contracts were the dates of their effectivity, the duties and
responsibilities of the petitioners as extruder operators, the rights
and obligations of the parties, and the petitioners’ compensation and
allowances. As there was no specific project or undertaking to speak
of, the respondents cannot invoke the exception in Article 280 of the
Labor Code.18 This is a clear attempt to frustrate the regularization
of the petitioners and to circumvent the law.
Next, granting that they were project employees, the petitioners
could only be considered as regular employees as the two factors
enumerated in Maraguinot, Jr., are present in this case. It is
undisputed that the petitioners were continuously rehired by the
same employer for the same position as extruder operators. As
such, they were responsible for the operation of machines that
produced the sacks. Hence, their work was vital, necessary and
indispensable to the usual business or trade of the employer.
In D.M. Consunji, Inc. v. Estelito Jamin19 and Liganza v. RBL
Shipyard Corporation,20 the Court reiterated the ruling that an
employment ceases to be coterminous with specific projects when
the employee is continuously rehired due to the demands of the
employer’s business and re-engaged for many more projects without
interruption.
The respondents cannot use the alleged expiration of the
employment contracts of the petitioners as a shield of their illegal
acts. The project employment contracts that the petitioners were
made to sign every year since the start of their employment were
only a stratagem to violate their security of tenure in the company.
As restated in Poseidon Fishing v. NLRC,21 "if from the
circumstances it is apparent that periods have been imposed to
preclude acquisition of tenurial security by the employee, they
should be disregarded for being contrary to public policy."
The respondents’ invocation of William Uy Construction Corp. v.
Trinidad22 is misplaced because it is applicable only in cases
involving the tenure of project employees in the construction
industry. It is widely known that in the construction industry, a project
employee's work depends on the availability of projects, necessarily
the duration of his employment.23 It is not permanent but
coterminous with the work to which he is assigned. 24 It would be
extremely burdensome for the employer, who depends on the
availability of projects, to carry him as a permanent employee and
pay him wages even if there are no projects for him to work
on.25 The rationale behind this is that once the project is completed it
would be unjust to require the employer to maintain these
employees in their payroll. To do so would make the employee a
privileged retainer who collects payment from his employer for work
not done. This is extremely unfair to the employers and amounts to
labor coddling at the expense of management.26"
Now that it has been clearly established that the petitioners were
regular employees, their termination is considered illegal for lack of
just or authorized causes. Under Article 279 of the Labor Code, an
employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and
to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement. The law intends the award of backwages and similar
benefits to accumulate past the date of the LA decision until the
dismissed employee is actually reinstated.
WHEREFORE, the petition is GRANTED. The assailed July 18,
2012 decision of the Court of Appeals and its November 12, 2012
Resolution in CA-G.R. SP No. 1244 70, are hereby ANNULLED and
SET ASIDE.
Accordingly, respondent Marulas Industrial Corporation is hereby
ordered to reinstate petitioners Macarthur Malicdem and
Hermenigildo Flores to their former positions without loss of seniority
rights and other privileges and to pay their full backwages, inclusive
of allowances and their other benefits or their monetary equivalent
computed from the time their compensations were withheld from
them up to the time of their actual reinstatement plus the wage
differentials stated in the July 13, 2011 decision of the Labor Arbiter,
as modified by the December 19, 2011 NLRC decision.
SO ORDERED.
G.R. Nos. 196280 & 196286 April 2, 2014
UNIVERSIDAD DE STA. ISABEL, Petitioner,
vs.
MARVIN-JULIAN L. SAMBAJON, JR., Respondent.
67
 DECISION
VILLARAMA, JR., J.:
Before us is a petition for review on certiorari under Rule 45 urging
this Court to set aside the Decision1 dated March 25, 2011 of the
Court of Appeals (CA) in CA-GR. SP Nos. 108103 and 108168
which affirmed with modification the Decision2 dated August 1, 2008
of the National Labor Relations Commission (NLRC). The NLRC
affirmed the Decision3 dated August 22, 2006 of the Labor Arbiter in
NLRC Sub-RAB V-05-04-00053-05) declaring petitioner liable for
illegal dismissal of respondent.
The Facts
Universidad de Sta. Isabel (petitioner) is a non-stock, non-profit
religious educational institution in Naga City. Petitioner hired Marvin-
Julian L. Sambajon, Jr. (respondent) as a full-time college faculty
member with the rank of Assistant Professor on probationary status,
as evidenced by an Appointment Contract4 dated November 1,
2002, effective November 1, 2002 up to March 30, 2003.
After the aforesaid contract expired, petitioner continued to give
teaching loads to respondent who remained a full-time faculty
member of the Department of Religious Education for the two
semesters of school-year (SY) 2003-2004 (June 1, 2003 to March
31, 2004); and two semesters of SY 2004-2005 (June 2004 to
March 31, 2005).5
Sometime in June 2003, after respondent completed his course in
Master of Arts in Education, major in Guidance and Counseling, he
submitted the corresponding Special Order from the Commission on
Higher Education (CHED), together with his credentials for the said
master’s degree, to the Human Resources Department of petitioner
for the purpose of salary adjustment/increase. Subsequently,
respondent’s salary was increased, as reflected in his pay slips
starting October 1-15, 2004.6 He was likewise re-ranked from
Assistant Professor to Associate Professor.
In a letter dated October 15, 2004 addressed to the President of
petitioner, Sr. Ma. Asuncion G. Evidente, D.C., respondent
vigorously argued that his salary increase should be made effective
as of June 2003 and demanded the payment of his salary
differential. The school administration thru Sr. Purita Gatongay,
D.C., replied by explaining its policy on re-ranking of faculty
members7, viz:
xxxx
Please be informed that teachers in the Universidad are not re-
ranked during their probationary period. The Faculty Manual as
revised for school year 2002-2003 provides (page 38) "Re-ranking is
done every two years, hence the personnel hold their present rank
for two years. Those undergoing probationary period and those on
part-time basis of employment are not covered by this provision."
This provision is found also in the 2000-2001 Operations Manual.
Your personnel file shows that you were hired as a probationary
teacher in the second semester of school year 2002-2003. By
October 2004, you will be completing four (4) semesters (two school
years) of service. Even permanent teachers are re-ranked only
every two years, and you are not even a permanent teacher. I am
informed that you have been told several times and made to read
the Provision in the Faculty Manual by the personnel office that you
cannot be re-ranked because you are still a probationary teacher.
x x x x8
Respondent insisted on his demand for retroactive pay. In a letter
dated January 10, 2005, Sr. Evidente reiterated the school policy on
re-ranking of teachers, viz:
xxx
Under the Faculty Manual a permanent teacher is not entitled to re-
ranking oftener than once every two years. From this it should be
obvious that, with all the more reason, a probationary teacher would
not be entitled to "evaluation," which could result in re-ranking or
"adjustment in salary" oftener than once every two years.
Since you are a probationary teacher, the University is under no
obligation to re-rank you or adjust your salary after what you refer to
as "evaluation." Nevertheless, considering that in October 2004 you
were completing two years of service, the University adjusted your
salary in the light of the CHED Special Order you submitted showing
that you had obtained the degree of Master of Arts in Education.
Instead of being grateful for the adjustment, you insist that the
adjustment be made retroactive to June 2003. Simply stated, you
want your salary adjusted after one semester of probationary
service. We do not think a probationary teacher has better rights
than a permanent teacher in the matter of re-ranking or
"evaluation."9
However, respondent found the above explanation insufficient and
not clear enough. In his letter dated January 12, 2005, he pointed
out the case of another faculty member -- whom he did not name --
also on probationary status whose salary was supposedly adjusted
by petitioner at the start of school year (June) after he/she had
completed his/her master’s degree in March. Respondent thus
pleaded for the release of his salary differential, or at the very least,
that petitioner give him categorical answers to his questions.10
Apparently, to resolve the issue, a dialogue was held between
respondent and Sr. Evidente. As to the outcome of this
conversation, the parties gave conflicting accounts. Respondent
claimed that Sr. Evidente told him that the school administration had
decided to shorten his probationary period to two years on the basis
of his satisfactory performance.11 This was categorically denied by
Sr. Evidente though the latter admitted having informed respondent
"that he was made Associate Professor on account of his incessant
requests for a salary increase which the Universidad de Santa
Isabel eventually accommodated…considering that [respondent]
had obtained a Master’s Degree in June 2003." She further informed
respondent that "his appointment as Associate Professor did not
affect his status as a probationary employee" and that petitioner
"was not and did not exercise its prerogative to shorten his
probationary period to only two years." Sr. Stella O. Real, D.C., who
issued a Certificate of Employment to respondent, likewise denied
that she confirmed to respondent that petitioner has shortened his
probationary employment.12
On February 26, 2005, respondent received his letter of termination
which stated:
Greetings of Peace in the Lord!
We regret to inform your good self that your full time probationary
appointment will not be renewed when it expires at the end of this
coming March 31, 2005.
Thank you so much for the services that you have rendered to USI
and to her clientele the past several semesters. We strongly and
sincerely encourage you to pursue your desire to complete your
Post Graduate studies in the University of your choice as soon as
you are able.
God bless you in all your future endeavors.
Godspeed! 13
On April 14, 2005, respondent filed a complaint for illegal dismissal
against the petitioner.
In his Decision dated August 22, 2006, Labor Arbiter Jesus Orlando
M. Quinones ruled that there was no just or authorized cause in the
termination of respondent’s probationary employment.
Consequently, petitioner was found liable for illegal dismissal, thus:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered finding respondent school UNIVERSIDAD DE SANTA
ISABEL liable for the illegal dismissal of complainant MARVIN-
JULIAN L. SAMBAJON, JR.
Accordingly, and consistent with Article 279 of the Labor Code,
respondent school is hereby directed to pay complainant full
backwages covering the period/duration of the 1st semester of
academic year 2005-2006. Reinstatement being rendered moot by
the expiration of the probationary period, respondent school is
directed to pay complainant separation pay in lieu of reinstatement
computed at one (1) month’s pay for every year of service. An award
of 10% attorney’s fees in favor of complainant is also held in order.
(please see attached computation of monetary award as integral
part of this decision).
68
All other claims and charges are DISMISSED for lack of legal and award of back wages to respondent. The dispositive portion of the
factual basis. said decision reads:

SO ORDERED.14 WHEREFORE, premises considered, the petition docketed as CA-

G.R. SP No. 108103 is GRANTED. The challenged Decision of the
NLRC dated August 1, 2008 in NLRC NCR CA No. 050481-06
Petitioner appealed to the NLRC raising the issue of the correct
(NLRC Sub-RAB V-05-04-00053-05) is AFFIRMED with
interpretation of Section 92 of the Manual of Regulations for Private
MODIFICATION in that Universidad de Sta. Isabel is directed to
Schools and DOLE-DECS-CHED-TESDA Order No. 01, series of
reinstate Marvin-Julian L. Sambajon, Jr. to his former position
1996, and alleging grave abuse of discretion committed by the Labor
without loss of seniority rights and to pay him full backwages
Arbiter in ruling on a cause of action/issue not raised by the
computed from the time his compensation was withheld from him up
complainant (respondent) in his position paper.
to the time of his actual reinstatement. All other aspects are
AFFIRMED.
On August 1, 2008, the NLRC rendered its Decision affirming the
Labor Arbiter and holding that respondent had acquired a
As regards CA-G.R. SP No. 108168, the petition is DENIED for lack
permanent status pursuant to Sections 91, 92 and 93 of the 1992
of merit.
Manual of Regulations for Private Schools, in relation to Article 281
of the Labor Code, as amended. Thus:
SO ORDERED.17
In the instant case, the first contract (records, pp. 36; 92) executed
by the parties provides that he was hired on a probationary status The Petition/Issues
effective November 1, 2002 to March 30, 2003. While his
employment continued beyond the above-mentioned period and
Before this Court, petitioner ascribes grave error on the part of the
lasted for a total of five (5) consecutive semesters, it appears that
CA in sustaining the NLRC which ruled that respondent was
the only other contract he signed is the one (records, p. 103) for the
dismissed without just or authorized cause at the time he had
second semester of SY 2003-2004. A portion of this contract reads:
already acquired permanent or regular status since petitioner
allowed him to continue teaching despite the expiration of the first
"I am pleased to inform you that you are designated and contract of probationary employment for the second semester of SY
commissioned to be an Apostle of Love and Service, Unity and 2002-2003. Petitioner at the outset underscores the fact that the
Peace as you dedicate and commit yourself in the exercise of your NLRC decided an issue which was not raised on appeal, i.e.,
duties and responsibilities as a: whether respondent had attained regular status. It points out that the
Labor Arbiter’s finding that respondent was dismissed while still a
probationary employee was not appealed by him, and hence such
FULL-TIME FACULTY MEMBER
finding had already become final.
of the Religious Education Department from November 1, 2003 to
March 31, 2004.
In fine, petitioner asks this Court to rule on the following issues: (1)
whether the NLRC correctly resolved an issue not raised in
Unless otherwise renewed in writing this designation automatically
petitioner’s appeal memorandum; and (2) whether respondent’s
terminates as of the date expiration above stated without further
probationary employment was validly terminated by petitioner.
notice."

Our Ruling
There is no showing that the complainant signed a contract for the
first and second semesters of SY 2004-2005.
The petition is partly meritorious.
Under the circumstances, it must be concluded that the complainant
has acquired permanent status. The last paragraph of Article 281 of Issues on Appeal before the NLRC
the Labor Code provides that "an employee who is allowed to work
after a probationary period shall be considered a regular employee."
Section 4(d), Rule VI of the 2005 Revised Rules of Procedure of the
Based thereon, the complainant required [sic] permanent status on
NLRC, which was in force at the time petitioner appealed the Labor
the first day of the first semester of SY 2003-2004.
Arbiter’s decision, expressly provided that, on appeal, the NLRC
shall limit itself only to the specific issues that were elevated for
As presently worded, Section 92 of the revised Manual of review, to wit:
Regulations for Private Schools merely provides for the maximum
lengths of the probationary periods of academic personnel of private
Section 4. Requisites for perfection of appeal. x x x.
schools in the three (3) levels of education (elementary, secondary,
tertiary). The periods provided therein are not requirements for the
acquisition, by them, of permanent status. xxxx

WHEREFORE, the decision appealed from is hereby AFFIRMED. (d) Subject to the provisions of Article 218 of the Labor Code, once
the appeal is perfected in accordance with these Rules, the
Commission shall limit itself to reviewing and deciding only the
SO ORDERED.15
specific issues that were elevated on appeal.

Petitioner and respondent sought reconsideration of the above

We have clarified that the clear import of the aforementioned
decision, with the former contending that the NLRC resolved an
procedural rule is that the NLRC shall, in cases of perfected
issue not raised in the appeal memorandum, while the latter
appeals, limit itself to reviewing those issues which are raised on
asserted that the NLRC erred in not awarding him full back wages
appeal. As a consequence thereof, any other issues which were not
so as to conform to the finding that he had acquired a permanent
included in the appeal shall become final and executory.18
status. Both motions were denied by the NLRC which ruled that
regardless of whether or not the parties were aware of the rules for
the acquisition of permanent status by private school teachers, In this case, petitioner sets forth the following issues in its appeal
these rules applied to them and overrode their mistaken beliefs. As memorandum:
to respondent’s plea for back wages, the NLRC said the award of
back wages was not done in this case because respondent did not
appeal the Labor Arbiter’s decision. 5.01

Both parties filed separate appeals before the CA. On motion by WHETHER THE MARVIN JULIAN L. SAMBAJON, JR. WAS
respondent, the two cases were consolidated (CA-G.R. SP Nos. ILLEGALLY DISMISSED FROM THE UNIVERSIDAD DE STA.
ISABEL.
108103 and 108168).16

By Decision dated March 25, 2011, the CA sustained the conclusion 5.02
of the NLRC that respondent had already acquired permanent status
when he was allowed to continue teaching after the expiration of his WHETHER THE UNIVERSIDAD DE STA. ISABEL SHORTENED
first appointment-contract on March 30, 2003. However, the CA THE PROBATIONARY PERIOD OF MARVIN JULIAN L.
found it necessary to modify the decision of the NLRC to include the SAMBAJON.

69
5.03
WHETHER RESPONDENTS-APPELLANTS ARE ENTITLED TO
DAMAGES.19
Specifically, petitioner sought the correct interpretation of the
Manual of Regulations for Private School Teachers and DOLE-
DECS-CHED-TESDA Order No. 01, series of 1996, insofar as the
probationary period for teachers.
In reviewing the Labor Arbiter’s finding of illegal dismissal, the NLRC
concluded that respondent had already attained regular status after
the expiration of his first appointment contract as probationary
employee. Such conclusion was but a logical result of the NLRC’s
own interpretation of the law. Since petitioner elevated the questions
of the validity of respondent’s dismissal and the applicable
probationary period under the aforesaid regulations, the NLRC did
not gravely abuse its discretion in fully resolving the said issues.
As the Court held in Roche (Phils.) v. NLRC20:
Petitioners then suggest that the respondent Commission abused its
discretion in awarding reliefs in excess of those stated in the
decision of the labor arbiter despite the absence of an appeal by
Villareal. To stress this point, they cited Section 5(c) of the Rules of
Procedure of the National Labor Relations Commission which
provides that the Commission shall, in cases of perfected appeals,
limits itself to reviewing those issues which were raised on appeal.
Consequently, those which were not raised on appeal shall be final
and executory.
There is no merit to this contention. The records show that the
petitioners elevated the issues regarding the correctness of the
award of damages, reinstatement with backpay, retirement benefits
and the cost-saving bonus to the respondent Commission in their
appeal. This opened the said issues for review and any action taken
thereon by the Commission was well within the parameters of its
jurisdiction. (Emphasis supplied.)
Probationary Employment Period
A probationary employee is one who is on trial by the employer
during which the employer determines whether or not said employee
is qualified for permanent employment. A probationary appointment
is made to afford the employer an opportunity to observe the fitness
of a probationary employee while at work, and to ascertain whether
he will become a proper and efficient employee. The word
probationary as used to describe the period of employment implies
the purpose of the term or period, but not its length.21
It is well settled that the employer has the right or is at liberty to
choose who will be hired and who will be denied employment. In that
sense, it is within the exercise of the right to select his employees
that the employer may set or fix a probationary period within which
the latter may test and observe the conduct of the former before
hiring him permanently.22 The law, however, regulates the exercise
of this prerogative to fix the period of probationary employment.
While there is no statutory cap on the minimum term of probation,
the law sets a maximum "trial period" during which the employer
may test the fitness and efficiency of the employee.23
Article 281 of the Labor Code provides:
ART. 281. Probationary Employment.–Probationary employment
shall not exceed six (6) months from the date the employee started
working, unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a just
cause or when he 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 engagement. An
employee who is allowed to work after a probationary period shall be
considered a regular employee.
The probationary employment of teachers in private schools is not
governed purely by the Labor Code. The Labor Code is
supplemented with respect to the period of probation by special
rules found in the Manual of Regulations for Private Schools.24 On
the matter of probationary period, Section 92 of the 1992 Manual of
Regulations for Private Schools regulations states:
Section 92. Probationary Period. – Subject in all instances to
compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more than
three (3) consecutive years of satisfactory service for those in the
elementary and secondary levels, six (6) consecutive regular
semesters of satisfactory service for those in the tertiary level, and
nine (9) consecutive trimesters of satisfactory service for those in
the tertiary level where collegiate courses are offered on a trimester
basis. (Emphasis supplied.)
Thus, it is the Manual of Regulations for Private Schools, and not
the Labor Code, that determines whether or not a faculty member in
an educational institution has attained regular or permanent
status.25 Section 9326 of the 1992 Manual of Regulations for Private
Schools provides that full-time teachers who have satisfactorily
completed their probationary period shall be considered regular or
permanent.
In this case, the CA sustained the NLRC’s ruling that respondent
was illegally dismissed considering that he had become a regular
employee when petitioner allowed him to work beyond the date
specified in his first probationary appointment contract which expired
on March 30, 2003. According to the CA:
… As can be gleaned from Section 92 of the 1992 Manual of
Regulations for Private Schools, the probationary period applicable
in this case is not more than six (6) consecutive regular semesters
of satisfactory service. In other words, the probationary period for
academic personnel in the tertiary level runs from one (1) semester
to six (6) consecutive regular semesters of satisfactory service. In
the instant case, records reveal that Sambajon, Jr. only signed two
appointment contracts. The first appointment-contract which he
signed was dated November 2002 for the period November 1, 2002
to March 30, 2003, as Assistant Professor 10 on probationary
status. x x x The second appointment-contract which Sambajon, Jr.
executed was dated February 26, 2004, for the period November 1,
2003 to March 31, 2004. x x x Compared with the first appointment-
contract, it was not indicated in the February 26, 2004 appointment-
contract that Sambajon, Jr. was hired on probationary status, which
explains the NLRC’s conclusion that Sambajon, Jr. already attained
permanent status. At this juncture, it is worthy to emphasize that
other than the period provided under Article 281 of the Labor Code,
the following quoted portion of Article 281 of the Labor Code still
applies:
"ART. 281. PROBATIONARY EMPLOYMENT. –
x x x x An employee who is allowed to work after a probationary
period shall be considered a regular employee."
Thus, We sustain the NLRC’s conclusion that Sambajon, Jr.
acquired permanent status on the first day of the first semester of
SY 2003-2004 when he was allowed to continue with his teaching
stint after the expiration of his first appointment-contract on March
30, 2003.27
On record are five appointment contracts28 of respondent:
Date Contract Period
November 1, 2002 November 1, 2002-March 30, 2003
September 28, 2003 June 1, 2003-October 31, 2003
February 26, 2004 November 1, 2003-March 31, 2004
September 30, 2004 June 1, 2004-October 31, 2004
October 28, 2004 November 3, 2004-March 31, 2005
Only the first and third contracts were signed by the respondent.
However, such lack of signature in the second contract appears not
to be the crucial element considered by the CA but the fact that the
third contract dated February 26, 2004, unlike the previous
contracts, does not indicate the nature of the appointment as
probationary employment. According to the CA, this implies, as
concluded by the NLRC, that respondent was already a regular
employee.
We disagree.
The third appointment contract dated February 26, 2004 reads:
February 26, 2004
70
MR. MARVIN JULIAN SAMBAJON
Religious Education Department
Dear Mr. Sambajon,
I am pleased to inform you that you are designated and
commissioned to be an Apostle of Love and Service, Unity and
Peace as you dedicate and commit yourself in the exercise of your
duties and responsibilities as a:
FULL TIME FACULTY MEMBER
of the Religious Education Department from November 1, 2003 to
March 31, 2004.
Unless otherwise renewed in writing, this designation automatically
terminates as of the date expiration above states without further
notice.
As a member of the academic/clinical community, you are expected
to live by and give your full support to the promotion and attainment
of the Vision-Mission, goals and objectives, the rules and
regulations, the Core Values which the University professes to
believe and live by.
Congratulations and keep your work full in the spirit of the Lord for
the Charity of Christ urges us to live life to the fullest.
God bless
In Christ,
Sr. Ma. Asuncion G. Evidente, D.C.
USI President
Witness:
Sr. Stella O. Real, D.C.
HR Officer
I, ______________________ understand that unless renewed in
writing, my services as ________________ expires automatically on
the specific date above stated.
Furthermore, I fully accept this appointment to help build the
Kingdom of God here and now and to facilitate the living of the Core
Values and the attainment of the Vision-Mission and the goals and
objectives of the University.
Received and Conforme:
(SGD.) MARVIN-JULIAN L. SAMBAJON, JR.29
Since it was explicitly provided in the above contract that unless
renewed in writing respondent’s appointment automatically expires
at the end of the stipulated period of employment, the CA erred in
concluding that simply because the word "probationary" no longer
appears below the designation (Full-Time Faculty Member),
respondent had already become a permanent employee.
Noteworthy is respondent’s admission of being still under
probationary period in his January 12, 2005 letter to Sr. Evidente
reiterating his demand for salary differential, which letter was sent
almost one year after he signed the February 26, 2004 appointment
contract, to wit:
The problem is that your good office has never categorically
resolved whether or not probationary teachers can also be
evaluated for salary adjustment. Nevertheless, inferring from your
statement that evaluation precedes re-ranking and in fact is the
basis for re-ranking, may I categorically ask: does it really mean that
since, it precedes re-ranking, evaluation should not take place
among probationary teachers for they can not yet be re-ranked? If
so, then how pitiful are we, probationary teachers for our credentials
are never evaluated since we cannot yet be re-ranked. Oh my
goodness! Can your good office not give me a clearer and more
convincing argument shedding light on this matter?30
Respondent nonetheless claims that subsequently, the probationary
period of three years under the regulations was shortened by
petitioner as relayed to him by Sr. Evidente herself. However, the
latter, together with Sr. Real, categorically denied having informed
respondent that his probationary period was abbreviated, allegedly
the reason his salary adjustment was not made retroactive. Apart
from his bare assertion, respondent has not adduced proof of any
decision of the school administration to shorten his probationary
period.
In Rev. Fr. Labajo v. Alejandro,31 we held that:
The three (3)-year period of service mentioned in paragraph 75 [of
the Manual of Regulations for Private Schools] is of course the
maximum period or upper limit, so to speak, of probationary
employment allowed in the case of private school teachers. This
necessarily implies that a regular or permanent employment status
may, under certain conditions, be attained in less than three (3)
years. By and large, however, whether or not one has indeed
attained permanent status in one’s employment, before the passage
of three (3) years, is a matter of proof. (Emphasis supplied.)
There can be no dispute that the period of probation may be
reduced if the employer, convinced of the fitness and efficiency of a
probationary employee, voluntarily extends a permanent
appointment even before the three-year period ends. Conversely, if
the purpose sought by the employer is neither attained nor
attainable within the said period, the law does not preclude the
employer from terminating the probationary employment on
justifiable ground; or, a shorter probationary period may be
incorporated in a collective bargaining agreement. But absent any
circumstances which unmistakably show that an abbreviated
probationary period has been agreed upon, the three-year
probationary term governs.32
As to the Certificate of Employment33 issued by Sr. Real on January
31, 2005, it simply stated that respondent "was a full time faculty
member in the Religious Education Department of this same
institution" and that he holds the rank of Associate Professor. There
was no description or qualification of respondent’s employment as
regular or permanent. Neither did the similar Certification34 also
issued by Sr. Real on March 18, 2005 prove respondent’s status as
a permanent faculty member of petitioner.
It bears stressing that full-time teaching primarily refers to the extent
of services rendered by the teacher to the employer school and not
to the nature of his appointment. Its significance lies in the rule that
only full-time teaching personnel can acquire regular or permanent
status. The provisions of DOLE-DECS-CHED-TESDA Order No. 01,
series of 1996, "Guidelines on Status of Employment of Teachers
and of Academic Personnel in Private Educational Institutions" are
herein reproduced:
2. Subject in all instances to compliance with the
concerned agency and school requirements, the
probationary period for teaching or academic personnel
shall not be more than three (3) consecutive school years
of satisfactory service for those in the elementary and
secondary levels; six (6) consecutive regular semesters of
satisfactory service for those in the tertiary and graduate
levels, and nine (9) consecutive trimesters of satisfactory
service for those in the tertiary level where collegiate
courses are offered on a trimester basis.
Unless otherwise provided by contract, school academic
personnel who are under probationary employment
cannot be dismissed during the applicable probationary
period, unless dismissal is compelled by a just cause or
causes.
3. Teachers or academic personnel who have served the
probationary period as provided for in the immediately
preceding paragraph shall be made regular or permanent
if allowed to work after such probationary period. The
educational institution, however, may shorten the
probationary period after taking into account the
qualifications and performance of the probationary
teachers and academic personnel.
Full-time teaching or academic personnel are those
meeting all the following requirements:
3.1. Who possess at least the minimum
academic qualifications prescribed by the
Department of Education, Culture and Sports
for Basic Education, the Commission on Higher
Education for Tertiary Education, and the
Technical Education and Skills Development
Authority for Technical and Vocational
71
 Education under their respective Manual of
Regulations governing said personnel;
3.2 Who are paid monthly or hourly, based on
the normal or regular teaching loads as
provided for in the policies, rules and standards
of the agency concerned;
3.3 Whose regular working day of not more than
eight (8) hours a day is devoted to the school;
3.4 Who have no other remunerative occupation
elsewhere requiring regular hours of work that
will conflict with the working hours in the school;
and
3.5 Who are not teaching full-time in any other
educational institution.
All teaching or academic personnel who do not meet the
foregoing qualifications are considered part time.
4. Part-time teaching or academic personnel cannot
acquire regular or permanent employment status.
5. Teaching or academic personnel who do not meet the
minimum academic qualifications shall not acquire tenure
or regular status. The school may terminate their services
when a qualified teacher becomes available.35
In this case, petitioner applied the maximum three-year probationary
period – equivalent to six consecutive semesters – provided in the
Manual of Regulations. This can be gleaned from the letter dated
March 24, 2004 of Sr. Grace Namocancat, D.C. addressed to
respondent, informing the latter of the result of evaluation of his
performance for SY 2003-2004 and stating that November 2004
marks his second year of full-time teaching, which means he had
one more year to become a permanent employee.36
The circumstance that respondent’s services were hired on
semester basis did not negate the applicable probationary period,
which is three school years or six consecutive semesters. In Magis
Young Achievers’ Learning Center37 the Court explained the three
years probationary period rule in this wise:
The common practice is for the employer and the teacher to enter
into a contract, effective for one school year. At the end of the
school year, the employer has the option not to renew the contract,
particularly considering the teacher’s performance. If the contract is
not renewed, the employment relationship terminates. If the contract
is renewed, usually for another school year, the probationary
employment continues. Again, at the end of that period, the parties
may opt to renew or not to renew the contract. If renewed, this
second renewal of the contract for another school year would then
be the last year – since it would be the third school year – of
probationary employment. At the end of this third year, the employer
may now decide whether to extend a permanent appointment to the
employee, primarily on the basis of the employee having met the
reasonable standards of competence and efficiency set by the
employer. For the entire duration of this three-year period, the
teacher remains under probation. Upon the expiration of his contract
of employment, being simply on probation, he cannot automatically
claim security of tenure and compel the employer to renew his
employment contract. It is when the yearly contract is renewed for
the third time that Section 93 of the Manual becomes operative, and
the teacher then is entitled to regular or permanent employment
status.38 (Emphasis supplied.)
Petitioner argues that respondent’s probationary period expires after
each semester he was contracted to teach and hence it was not
obligated to renew his services at the end of the fifth semester
(March 2005) of his probationary employment. It asserts that the
practice of issuing appointment contracts for every semester was
legal and therefore respondent was not terminated when petitioner
did not renew his contract for another semester as his probationary
contract merely expired. Plainly, petitioner considered the subject
appointment contracts as fixed-term contracts such that it can validly
dismiss respondent at the end of each semester for the reason that
his contract had expired.
The Court finds no merit in petitioner’s interpretation of the Manual
of Regulations, supplemented by DOLE-DECS-CHED-TESDA Order
No. 01, series of 1996. As we made clear in the afore-cited case of
Magis Young Achievers’ Learning Center, the teacher remains
under probation for the entire duration of the three-year period.
Subsequently, in the case of Mercado v. AMA Computer College-
Parañaque City, Inc.39 the Court, speaking through Justice Arturo D.
Brion, recognized the right of respondent school to determine for
itself that it shall use fixed-term employment contracts as its medium
for hiring its teachers. Nevertheless, the Court held that the
teachers’ probationary status should not be disregarded simply
because their contracts were fixed-term. Thus:
The Conflict: Probationary Status
and Fixed-term Employment
The existence of the term-to-term contracts covering the petitioners’
employment is not disputed, nor is it disputed that they were on
probationary status – not permanent or regular status – from the
time they were employed on May 25, 1998 and until the expiration of
their Teaching Contracts on September 7, 2000. As the CA correctly
found, their teaching stints only covered a period of at least seven
(7) consecutive trimesters or two (2) years and three (3) months of
service. This case, however, brings to the fore the essential question
of which, between the two factors affecting employment, should
prevail given AMACC’s position that the teachers contracts expired
and it had the right not to renew them. In other words, should the
teachers’ probationary status be disregarded simply because the
contracts were fixed-term?
The provision on employment on probationary status under the
Labor Code is a primary example of the fine balancing of interests
between labor and management that the Code has institutionalized
pursuant to the underlying intent of the Constitution.
On the one hand, employment on probationary status affords
management the chance to fully scrutinize the true worth of hired
personnel before the full force of the security of tenure guarantee of
the Constitution comes into play. Based on the standards set at the
start of the probationary period, management is given the widest
opportunity during the probationary period to reject hirees who fail to
meet its own adopted but reasonable standards. These standards,
together with the just and authorized causes for termination of
employment the Labor Code expressly provides, are the grounds
available to terminate the employment of a teacher on probationary
status. For example, the school may impose reasonably stricter
attendance or report compliance records on teachers on probation,
and reject a probationary teacher for failing in this regard, although
the same attendance or compliance record may not be required for
a teacher already on permanent status. At the same time, the same
just and authorize[d] causes for dismissal under the Labor Code
apply to probationary teachers, so that they may be the first to be
laid-off if the school does not have enough students for a given
semester or trimester. Termination of employment on this basis is an
authorized cause under the Labor Code.
Labor, for its part, is given the protection during the probationary
period of knowing the company standards the new hires have to
meet during the probationary period, and to be judged on the basis
of these standards, aside from the usual standards applicable to
employees after they achieve permanent status. Under the terms of
the Labor Code, these standards should be made known to the
teachers on probationary status at the start of their probationary
period, or at the very least under the circumstances of the present
case, at the start of the semester or the trimester during which the
probationary standards are to be applied. Of critical importance in
invoking a failure to meet the probationary standards, is that the
school should show – as a matter of due process – how these
standards have been applied. This is effectively the second notice in
a dismissal situation that the law requires as a due process
guarantee supporting the security of tenure provision, and is in
furtherance, too, of the basic rule in employee dismissal that the
employer carries the burden of justifying a dismissal. These rules
ensure compliance with the limited security of tenure guarantee the
law extends to probationary employees.
When fixed-term employment is brought into play under the above
probationary period rules, the situation – as in the present case –
may at first blush look muddled as fixed-term employment is in itself
a valid employment mode under Philippine law and jurisprudence.
The conflict, however, is more apparent than real when the
respective nature of fixed-term employment and of employment on
probationary status are closely examined.
The fixed-term character of employment essentially refers to the
period agreed upon between the employer and the employee;
employment exists only for the duration of the term and ends on its
own when the term expires. In a sense, employment on probationary
status also refers to a period because of the technical meaning
"probation" carries in Philippine labor law – a maximum period of six
months, or in the academe, a period of three years for those
72
engaged in teaching jobs. Their similarity ends there, however,
because of the overriding meaning that being "on probation"
connotes, i.e., a process of testing and observing the character or
abilities of a person who is new to a role or job.
Understood in the above sense, the essentially protective character
of probationary status for management can readily be appreciated.
But this same protective character gives rise to the countervailing
but equally protective rule that the probationary period can only last
for a specific maximum period and under reasonable, well-laid and
properly communicated standards. Otherwise stated, within the
period of the probation, any employer move based on the
probationary standards and affecting the continuity of the
employment must strictly conform to the probationary rules.
Under the given facts where the school year is divided into
trimesters, the school apparently utilizes its fixed-term contracts as a
convenient arrangement dictated by the trimestral system and not
because the workplace parties really intended to limit the period of
their relationship to any fixed term and to finish this relationship at
the end of that term. If we pierce the veil, so to speak, of the parties’
so-called fixed-term employment contracts, what undeniably comes
out at the core is a fixed-term contract conveniently used by the
school to define and regulate its relations with its teachers during
their probationary period.
To be sure, nothing is illegitimate in defining the school-teacher
relationship in this manner. The school, however, cannot forget that
its system of fixed-term contract is a system that operates during the
probationary period and for this reason is subject to the terms of
Article 281 of the Labor Code. Unless this reconciliation is made, the
requirements of this Article on probationary status would be fully
negated as the school may freely choose not to renew contracts
simply because their terms have expired. The inevitable effect of
course is to wreck the scheme that the Constitution and the Labor
Code established to balance relationships between labor and
management.
Given the clear constitutional and statutory intents, we cannot but
conclude that in a situation where the probationary status overlaps
with a fixed-term contract not specifically used for the fixed term it
offers, Article 281 should assume primacy and the fixed-period
character of the contract must give way. This conclusion is
immeasurably strengthened by the petitioners’ and the AMACC’s
hardly concealed expectation that the employment on probation
could lead to permanent status, and that the contracts are
renewable unless the petitioners fail to pass the school’s
standards.40 (Additional emphasis supplied.)
Illegal Dismissal
Notwithstanding the limited engagement of probationary employees,
they are entitled to constitutional protection of security of tenure
during and before the end of the probationary period.41 The services
of an employee who has been engaged on probationary basis may
be terminated for any of the following: (a) a just or (b) an authorized
cause; and (c) when he fails to qualify as a regular employee in
accordance with reasonable standards prescribed by the
employer.42
Thus, while no vested right to a permanent appointment had as yet
accrued in favor of respondent since he had not completed the
prerequisite three-year period (six consecutive semesters)
necessary for the acquisition of permanent status as required by the
Manual of Regulations for Private Schools43 -- which has the force of
law44 -- he enjoys a limited tenure. During the said probationary
period, he cannot be terminated except for just or authorized
causes, or if he fails to qualify in accordance with reasonable
standards prescribed by petitioner for the acquisition of permanent
status of its teaching personnel.
In a letter dated February 26, 2005, petitioner terminated the
services of respondent stating that his probationary employment as
teacher will no longer be renewed upon its expiry on March 31,
2005, respondent’s fifth semester of teaching. No just or authorized
cause was given by petitioner. Prior to this, respondent had
consistently achieved above average rating based on evaluation by
petitioner’s officials and students. He had also been promoted to the
rank of Associate Professor after finishing his master’s degree
course on his third semester of teaching. Clearly, respondent’s
termination after five semesters of satisfactory service was illegal.
Respondent therefore is entitled to continue his three-year
probationary period, such that from March 31, 2005, his
probationary employment is deemed renewed for the following
semester (1st semester of SY 2005-2006). However, given the
discordant relations that had arisen from the parties’ dispute, it can
be inferred with certainty that petitioner had opted not to retain
respondent in its employ beyond the three-year period.
On the appropriate relief and damages, we adhere to our disposition
in Magis Young Achievers’ Learning Center45:
Finally, we rule on the propriety of the monetary
awards.1âwphi1 Petitioner, as employer, is entitled to decide
whether to extend respondent a permanent status by renewing her
contract beyond the three-year period. Given the acrimony between
the parties which must have been generated by this controversy, it
can be said unequivocally that petitioner had opted not to extend
respondent's employment beyond this period. Therefore, the award
of backwages as a consequence of the finding of illegal dismissal in
favor of respondent should be confined to the three-year
probationary period. Computing her monthly salary of F15,000.00 for
the next two school years (F15,000.00 x 10 months x 2), respondent
already having received her full salaries for the year 2002-2003, she
is entitled to a total amount of F300,000.00. Moreover, respondent is
also entitled to receive her 13th month pay correspondent to the
said two school years, computed as yearly salary, divided by 12
months in a year, multiplied by 2, corresponding to the school years
2003-2004 and 2004-2005, or F150,000.00 I 12 months x 2 =
F25,000.00. Thus, the NLRC was correct in awarding respondent
the amount of F325,000.00 as backwages, inclusive of 13th month
pay for the school years 2003-2004 and 2004-2005, and the amount
of ₱3,750.00 as pro-rated 13th month pay.
WHEREFORE, the petition for review on certiorari is PARTLY
GRANTED. The Decision dated March 25, 2011 of the Court of
Appeals in CA-G.R. SP Nos. 108103 & 108168 is hereby
MODIFIED. Petitioner Universidad de Sta. Isabel is hereby
DIRECTED to PAY respondent Marvin-Julian L. Sambajon, Jr. back
wages corresponding to his full monthly salaries for one semester
(1st semester of SY 2005-2006) and pro-rated 13th month pay.
The case is REMANDED to the Labor Arbiter for a recomputation of
the amounts due to respondent in conformity with this Decision.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 109835 November 22, 1993
JMM PROMOTIONS & MANAGEMENT, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ULPIANO L.
DE LOS SANTOS, respondent.
Don P. Porciuncula for petitioner.
Eulogio Nones, Jr. for private respondent.
CRUZ, J.:
The sole issue submitted in this case is the validity of the order of
respondent National Labor Relations Commission dated October 30,
1992, dismissing the petitioner's appeal from a decision of the
Philippine Overseas Employment Administration on the ground of
failure to post the required appeal bond.1
The respondent cited the second paragraph of Article 223 of the
Labor Code as amended, providing that:
In the case of a judgment involving a monetary
award, an appeal by the employer may be
perfected only upon the posting of a cash or
surety bond issued by a reputable bonding
company duly accredited by the Commission in
an amount equivalent to the monetary award in
the judgment appealed from.
and Rule VI, Section 6 of the new Rules of Procedure of the NLRC,
as amended, reading as follows:
73
 Sec. 6. Bond — In case the decision of a Labor
Arbiter involves a monetary award, an appeal
by the employer shall be perfected only upon
the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by
the Commission or the Supreme Court in an
amount equivalent to the monetary award.
The petitioner contends that the NLRC committed grave abuse of
discretion in applying these rules to decisions rendered by the
POEA. It insists that the appeal bond is not necessary in the case of
licensed recruiters for overseas employment because they are
already required under Section 4, Rule II, Book II of the POEA Rules
not only to pay a license fee of P30,000 but also to post a cash bond
of P100,000 and a surety bond of P50,000, thus:
Upon approval of the application, the applicant
shall pay a license fee of P30,000. It shall also
post a cash bond of P100,000 and surety bond
of P50,000 from a bonding company acceptable
to the Administration and duly accredited by the
Insurance Commission. The bonds shall answer
for all valid and legal claims arising from
violations of the conditions for the grant and use
of the license, and/or accreditation
and contracts of employment. The bonds shall
likewise guarantee compliance with the
provisions of the Code and its implementing
rules and regulations relating to recruitment and
placement, the Rules of the Administration and
relevant issuances of the Department and all
liabilities which the Administration may impose.
The surety bonds shall include the condition
that the notice to the principal is notice to the
surety and that any judgment against the
principal in connection with matters falling under
POEA's jurisdiction shall be binding and
conclusive on the surety. The surety bonds shall
be co-terminus with the validity period of
license. (Emphasis supplied)
In addition, the petitioner claims it has placed in escrow the sum of
P200,000 with the Philippine National Bank in compliance with
Section 17, Rule II, Book II of the same Rule, "to primarily answer
for valid and legal claims of recruited workers as a result of
recruitment violations or money claims."
Required to comment, the Solicitor General sustains the appeal
bond requirement but suggest that the rules cited by the NLRC are
applicable only to decisions of the Labor Arbiters and not of the
POEA. Appeals from decisions of the POEA, he says, are governed
by the following provisions of Rule V, Book VII of the POEA Rules:
Sec. 5. Requisites for Perfection of Appeal. The
appeal shall be filed within the reglementary
period as provided in Section 1 of this Rule;
shall be under oath with proof of payment of the
required appeal fee and the posting of a cash or
surety bond as provided in Section 6 of this
Rule; shall be accompanied by a memorandum
of appeal which shall state the grounds relied
upon and the arguments in support thereof; the
relief prayed for; and a statement of the date
when the appellant received the appealed
decision and/or award and proof of service on
the other party of such appeal.
A mere notice of appeal without complying with
the other requisites aforestated shall not stop
the running of the period for perfecting an
appeal.
Sec. 6. Bond. In case the decision of the
Administration involves a monetary award, an
appeal by the employer shall be perfected only
upon the posting of a cash or surety
bond issued by a reputable bonding company
duly accredited by the Commission in an
amount equivalent to the monetary award.
(Emphasis supplied)
The question is, having posted the total bond of P150,000 and
placed in escrow the amount of P200,000 as required by the POEA
Rules, was the petitioner still required to post an appeal bond to
perfect its appeal from a decision of the POEA to the NLRC?
It was.
The POEA Rules are clear. A reading thereof readily shows that in
addition to the cash and surety bonds and the escrow money, an
appeal bond in an amount equivalent to the monetary award is
required to perfect an appeal from a decision of the POEA.
Obviously, the appeal bond is intended to further insure the payment
of the monetary award in favor of the employee if it is eventually
affirmed on appeal to the NLRC.
It is true that the cash and surety bonds and the money placed in
escrow are supposed to guarantee the payment of all valid and legal
claims against the employer, but these claims are not limited to
monetary awards to employees whose contracts of employment
have been violated. The POEA can go against these bonds also for
violations by the recruiter of the conditions of its license, the
provisions of the Labor Code and its implementing rules, E.O. 247
(reorganizing POEA) and the POEA Rules, as well as the settlement
of other liabilities the recruiter may incur.
As for the escrow agreement, it was presumably intended to provide
for a standing fund, as it were, to be used only as a last resort and
not to be reduced with the enforcement against it of every claim of
recruited workers that may be adjudged against the employer. This
amount may not even be enough to cover such claims and, even if it
could initially, may eventually be exhausted after satisfying other
subsequent claims.
As it happens, the decision sought to be appealed grants a
monetary award of about P170,000 to the dismissed employee, the
herein private respondent. The standby guarantees required by the
POEA Rules would be depleted if this award were to be enforced
not against the appeal bond but against the bonds and the escrow
money, making them inadequate for the satisfaction of the other
obligations the recruiter may incur.
Indeed, it is possible for the monetary award in favor of the
employee to exceed the amount of P350,000, which is the sum of
the bonds and escrow money required of the recruiter.
It is true that these standby guarantees are not imposed on local
employers, as the petitioner observes, but there is a simple
explanation for this distinction. Overseas recruiters are subject to
more stringent requirement because of the special risks to which our
workers abroad are subjected by their foreign employers, against
whom there is usually no direct or effective recourse. The overseas
recruiter is solidarily liable with a foreign employer. The bonds and
the escrow money are intended to insure more care on the part of
the local agent in its choice of the foreign principal to whom our
overseas workers are to be sent.
It is a principle of legal hermeneutics that in interpreting a statute (or
a set of rules as in this case), care should be taken that every part
thereof be given effect, on the theory that it was enacted as an
integrated measure and not as a hodge-podge of conflicting
provisions. Ut res magis valeat quam pereat. 2 Under the petitioner's
interpretation, the appeal bond required by Section 6 of the
aforementioned POEA Rule should be disregarded because of the
earlier bonds and escrow money it has posted. The petitioner would
in effect nullify Section 6 as a superfluity but we do not see any such
redundancy; on the contrary, we find that Section 6 complements
Section 4 and Section 17. The rule is that a construction that would
render a provision inoperative should be avoided; instead,
apparently inconsistent provisions should be reconciled whenever
possible as parts of a coordinated and harmonious whole.
Accordingly, we hold that in addition to the monetary obligations of
the overseas recruiter prescribed in Section 4, Rule II, Book II of the
POEA Rules and the escrow agreement under Section 17 of the
same Rule, it is necessary to post the appeal bond required under
Section 6, Rule V, Book VII of the POEA Rules, as a condition for
perfecting an appeal from a decision of the POEA.
Every intendment of the law must be interpreted in favor of the
working class, conformably to the mandate of the Constitution. By
sustaining rather than annulling the appeal bond as a further
protection to the claimant employee, this Court affirms once again its
commitment to the interest of labor.
WHEREFORE, the petition is DISMISSED, with costs against the
petitioner. It is so ordered.
74

G.R. No. 81958 June 30, 1988
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS,
INC., petitioner,
vs.
HON. FRANKLIN M. DRILON as Secretary of Labor and
Employment, and TOMAS D. ACHACOSO, as Administrator of
the Philippine Overseas Employment
Administration, respondents.
Gutierrez & Alo Law Offices for petitioner.
SARMIENTO, J.:
The petitioner, Philippine Association of Service Exporters, Inc.
(PASEI, for short), a firm "engaged principally in the recruitment of
Filipino workers, male and female, for overseas
placement," 1 challenges the Constitutional validity of Department
Order No. 1, Series of 1988, of the Department of Labor and
Employment, in the character of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO
DOMESTIC AND HOUSEHOLD WORKERS," in this petition for
certiorari and prohibition. Specifically, the measure is assailed for
"discrimination against males or females;" 2 that it "does not apply to
all Filipino workers but only to domestic helpers and females with
similar skills;" 3 and that it is violative of the right to travel. It is held
likewise to be an invalid exercise of the lawmaking power, police
power being legislative, and not executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article
XIII, of the Constitution, providing for worker participation "in policy
and decision-making processes affecting their rights and benefits as
may be provided by law." 4 Department Order No. 1, it is contended,
was passed in the absence of prior consultations. It is claimed,
finally, to be in violation of the Charter's non-impairment clause, in
addition to the "great and irreparable injury" that PASEI members
face should the Order be further enforced.
On May 25, 1988, the Solicitor General, on behalf of the
respondents Secretary of Labor and Administrator of the Philippine
Overseas Employment Administration, filed a Comment informing
the Court that on March 8, 1988, the respondent Labor Secretary
lifted the deployment ban in the states of Iraq, Jordan, Qatar,
Canada, Hongkong, United States, Italy, Norway, Austria, and
Switzerland. * In submitting the validity of the challenged
"guidelines," the Solicitor General invokes the police power of the
Philippine State.
It is admitted that Department Order No. 1 is in the nature of a police
power measure. The only question is whether or not it is valid under
the Constitution.
The concept of police power is well-established in this jurisdiction. It
has been defined as the "state authority to enact legislation that may
interfere with personal liberty or property in order to promote the
general welfare." 5 As defined, it consists of (1) an imposition of
restraint upon liberty or property, (2) in order to foster the common
good. It is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all-
comprehensive embrace.
"Its scope, ever-expanding to meet the exigencies of the times, even
to anticipate the future where it could be done, provides enough
room for an efficient and flexible response to conditions and
circumstances thus assuring the greatest benefits." 6
It finds no specific Constitutional grant for the plain reason that it
does not owe its origin to the Charter. Along with the taxing power
and eminent domain, it is inborn in the very fact of statehood and
sovereignty. It is a fundamental attribute of government that has
enabled it to perform the most vital functions of governance.
Marshall, to whom the expression has been credited, 7 refers to it
8 or his subalterns, especially when the legislature itself has
succinctly as the plenary power of the State "to govern its citizens."
"The police power of the State ... is a power coextensive with self-
protection, and it is not inaptly termed the "law of overwhelming
necessity." It may be said to be that inherent and plenary power in
the State which enables it to prohibit all things hurtful to the comfort,
safety, and welfare of society." 9
It constitutes an implied limitation on the Bill of Rights. According to
Fernando, it is "rooted in the conception that men in organizing the
state and imposing upon its government limitations to safeguard
constitutional rights did not intend thereby to enable an individual
citizen or a group of citizens to obstruct unreasonably the enactment
of such salutary measures calculated to ensure communal peace,
safety, good order, and welfare." 10 Significantly, the Bill of Rights
itself does not purport to be an absolute guaranty of individual rights
and liberties "Even liberty itself, the greatest of all rights, is not
unrestricted license to act according to one's will." 11 It is subject to
the far more overriding demands and requirements of the greater
number.
Notwithstanding its extensive sweep, police power is not without its
own limitations. For all its awesome consequences, it may not be
exercised arbitrarily or unreasonably. Otherwise, and in that event, it
defeats the purpose for which it is exercised, that is, to advance the
public good. Thus, when the power is used to further private
interests at the expense of the citizenry, there is a clear misuse of
the power. 12
In the light of the foregoing, the petition must be dismissed.
As a general rule, official acts enjoy a presumed vahdity. 13 In the
absence of clear and convincing evidence to the contrary, the
presumption logically stands.
The petitioner has shown no satisfactory reason why the contested
measure should be nullified. There is no question that Department
Order No. 1 applies only to "female contract workers," 14 but it does
not thereby make an undue discrimination between the sexes. It is
well-settled that "equality before the law" under the
Constitution 15does not import a perfect Identity of rights among all
men and women. It admits of classifications, provided that (1) such
classifications rest on substantial distinctions; (2) they are germane
to the purposes of the law; (3) they are not confined to existing
conditions; and (4) they apply equally to all members of the same
class. 16
The Court is satisfied that the classification made-the preference for
female workers — rests on substantial distinctions.
As a matter of judicial notice, the Court is well aware of the unhappy
plight that has befallen our female labor force abroad, especially
domestic servants, amid exploitative working conditions marked by,
in not a few cases, physical and personal abuse. The sordid tales of
maltreatment suffered by migrant Filipina workers, even rape and
various forms of torture, confirmed by testimonies of returning
workers, are compelling motives for urgent Government action. As
precisely the caretaker of Constitutional rights, the Court is called
upon to protect victims of exploitation. In fulfilling that duty, the Court
sustains the Government's efforts.
The same, however, cannot be said of our male workers. In the first
place, there is no evidence that, except perhaps for isolated
instances, our men abroad have been afflicted with an Identical
predicament. The petitioner has proffered no argument that the
Government should act similarly with respect to male workers. The
Court, of course, is not impressing some male chauvinistic notion
that men are superior to women. What the Court is saying is that it
was largely a matter of evidence (that women domestic workers are
being ill-treated abroad in massive instances) and not upon some
fanciful or arbitrary yardstick that the Government acted in this case.
It is evidence capable indeed of unquestionable demonstration and
evidence this Court accepts. The Court cannot, however, say the
same thing as far as men are concerned. There is simply no
evidence to justify such an inference. Suffice it to state, then, that
insofar as classifications are concerned, this Court is content that
distinctions are borne by the evidence. Discrimination in this case is
justified.
As we have furthermore indicated, executive determinations are
generally final on the Court. Under a republican regime, it is the
executive branch that enforces policy. For their part, the courts
decide, in the proper cases, whether that policy, or the manner by
which it is implemented, agrees with the Constitution or the laws, but
it is not for them to question its wisdom. As a co-equal body, the
judiciary has great respect for determinations of the Chief Executive
specifically given them enough room on how the law should be
effectively enforced. In the case at bar, there is no gainsaying the
fact, and the Court will deal with this at greater length shortly, that
Department Order No. 1 implements the rule-making powers
granted by the Labor Code. But what should be noted is the fact that
in spite of such a fiction of finality, the Court is on its own persuaded
that prevailing conditions indeed call for a deployment ban.
75
There is likewise no doubt that such a classification is germane to
the purpose behind the measure. Unquestionably, it is the avowed
objective of Department Order No. 1 to "enhance the protection for
Filipino female overseas workers" 17 this Court has no quarrel that in
the midst of the terrible mistreatment Filipina workers have suffered
abroad, a ban on deployment will be for their own good and welfare.
The Order does not narrowly apply to existing conditions. Rather, it
is intended to apply indefinitely so long as those conditions exist.
This is clear from the Order itself ("Pending review of the
administrative and legal measures, in the Philippines and in the host
countries . . ."18), meaning to say that should the authorities arrive at
a means impressed with a greater degree of permanency, the ban
shall be lifted. As a stop-gap measure, it is possessed of a
necessary malleability, depending on the circumstances of each
case. Accordingly, it provides:
9. LIFTING OF SUSPENSION. — The
Secretary of Labor and Employment (DOLE)
may, upon recommendation of the Philippine
Overseas Employment Administration (POEA),
lift the suspension in countries where there are:
1. Bilateral agreements or understanding with
the Philippines, and/or,
2. Existing mechanisms providing for sufficient
safeguards to ensure the welfare and protection
of Filipino workers. 19
The Court finds, finally, the impugned guidelines to be applicable to
all female domestic overseas workers. That it does not apply to "all
Filipina workers" 20 is not an argument for unconstitutionality. Had
the ban been given universal applicability, then it would have been
unreasonable and arbitrary. For obvious reasons, not all of them are
similarly circumstanced. What the Constitution prohibits is the
singling out of a select person or group of persons within an existing
class, to the prejudice of such a person or group or resulting in an
unfair advantage to another person or group of persons. To apply
the ban, say exclusively to workers deployed by A, but not to those
recruited by B, would obviously clash with the equal protection
clause of the Charter. It would be a classic case of what Chase
refers to as a law that "takes property from A and gives it to B." 21 It
would be an unlawful invasion of property rights and freedom of
contract and needless to state, an invalid act. 22 (Fernando says:
"Where the classification is based on such distinctions that make a
real difference as infancy, sex, and stage of civilization of minority
groups, the better rule, it would seem, is to recognize its validity only
if the young, the women, and the cultural minorities are singled out
for favorable treatment. There would be an element of
unreasonableness if on the contrary their status that calls for the law
ministering to their needs is made the basis of discriminatory
legislation against them. If such be the case, it would be difficult to
refute the assertion of denial of equal protection." 23 In the case at
bar, the assailed Order clearly accords protection to certain women
workers, and not the contrary.)
It is incorrect to say that Department Order No. 1 prescribes a total
ban on overseas deployment. From scattered provisions of the
Order, it is evident that such a total ban has hot been contemplated.
We quote:
5. AUTHORIZED DEPLOYMENT-The
deployment of domestic helpers and workers of
similar skills defined herein to the following [sic]
are authorized under these guidelines and are
exempted from the suspension.
5.1 Hirings by immediate
members of the family of
Heads of State and
Government;
5.2 Hirings by Minister,
Deputy Minister and the
other senior government
officials; and
5.3 Hirings by senior
officials of the diplomatic
corps and duly accredited
international organizations.
5.4 Hirings by employers in
countries with whom the
Philippines have [sic]
bilateral labor agreements
or understanding.
xxx xxx xxx
7. VACATIONING DOMESTIC HELPERS AND
WORKERS OF SIMILAR SKILLS--Vacationing
domestic helpers and/or workers of similar skills
shall be allowed to process with the POEA and
leave for worksite only if they are returning to
the same employer to finish an existing or
partially served employment contract. Those
workers returning to worksite to serve a new
employer shall be covered by the suspension
and the provision of these guidelines.
xxx xxx xxx
9. LIFTING OF SUSPENSION-The Secretary of
Labor and Employment (DOLE) may, upon
recommendation of the Philippine Overseas
Employment Administration (POEA), lift the
suspension in countries where there are:
1. Bilateral agreements or
understanding with the
Philippines, and/or,
2. Existing mechanisms
providing for sufficient
safeguards to ensure the
welfare and protection of
Filipino workers. 24
xxx xxx xxx
The consequence the deployment ban has on the right to travel
does not impair the right. The right to travel is subject, among other
things, to the requirements of "public safety," "as may be provided
by law." 25 Department Order No. 1 is a valid implementation of the
Labor Code, in particular, its basic policy to "afford protection to
labor," 26 pursuant to the respondent Department of Labor's rule-
making authority vested in it by the Labor Code. 27 The petitioner
assumes that it is unreasonable simply because of its impact on the
right to travel, but as we have stated, the right itself is not absolute.
The disputed Order is a valid qualification thereto.
Neither is there merit in the contention that Department Order No. 1
constitutes an invalid exercise of legislative power. It is true that
police power is the domain of the legislature, but it does not mean
that such an authority may not be lawfully delegated. As we have
mentioned, the Labor Code itself vests the Department of Labor and
Employment with rulemaking powers in the enforcement whereof. 28
The petitioners's reliance on the Constitutional guaranty of worker
participation "in policy and decision-making processes affecting their
rights and benefits" 29 is not well-taken. The right granted by this
provision, again, must submit to the demands and necessities of the
State's power of regulation.
The Constitution declares that:
Sec. 3. 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. 30
"Protection to labor" does not signify the promotion of employment
alone. What concerns the Constitution more paramountly is that
such an employment be above all, decent, just, and humane. It is
bad enough that the country has to send its sons and daughters to
strange lands because it cannot satisfy their employment needs at
home. Under these circumstances, the Government is duty-bound to
insure that our toiling expatriates have adequate protection,
personally and economically, while away from home. In this case,
the Government has evidence, an evidence the petitioner cannot
seriously dispute, of the lack or inadequacy of such protection, and
as part of its duty, it has precisely ordered an indefinite ban on
deployment.
The Court finds furthermore that the Government has not
indiscriminately made use of its authority. It is not contested that it
76
has in fact removed the prohibition with respect to certain countries
as manifested by the Solicitor General.
The non-impairment clause of the Constitution, invoked by the
petitioner, must yield to the loftier purposes targetted by the
Government. 31 Freedom of contract and enterprise, like all other
freedoms, is not free from restrictions, more so in this jurisdiction,
where laissez faire has never been fully accepted as a controlling
economic way of life.
This Court understands the grave implications the questioned Order
has on the business of recruitment. The concern of the Government,
however, is not necessarily to maintain profits of business firms. In
the ordinary sequence of events, it is profits that suffer as a result of
Government regulation. The interest of the State is to provide a
decent living to its citizens. The Government has convinced the
Court in this case that this is its intent. We do not find the impugned
Order to be tainted with a grave abuse of discretion to warrant the
extraordinary relief prayed for.
WHEREFORE, the petition is DISMISSED. No costs.
SO ORDERED.
G.R. No. 157010 June 21, 2005
PHILIPPINE NATIONAL BANK, petitioner,
vs.
FLORENCE O. CABANSAG, respondent.
DECISION
PANGANIBAN, J.:
The Court reiterates the basic policy that all Filipino workers,
whether employed locally or overseas, enjoy the protective mantle of
Philippine labor and social legislations. Our labor statutes may not
be rendered ineffective by laws or judgments promulgated, or
stipulations agreed upon, in a foreign country.
The Case
Before us is a Petition for Review on Certiorari1 under Rule 45 of the
Rules of Court, seeking to reverse and set aside the July 16, 2002
Decision2 and the January 29, 2003 Resolution3 of the Court of
Appeals (CA) in CA-GR SP No. 68403. The assailed Decision
dismissed the CA Petition (filed by herein petitioner), which had
sought to reverse the National Labor Relations Commission
(NLRC)’s June 29, 2001 Resolution,4 affirming Labor Arbiter Joel S.
Lustria’s January 18, 2000 Decision.5
The assailed CA Resolution denied herein petitioner’s Motion for
Reconsideration.
The Facts
The facts are narrated by the Court of Appeals as follows:
"In late 1998, [herein Respondent Florence Cabansag] arrived in
Singapore as a tourist. She applied for employment, with the
Singapore Branch of the Philippine National Bank, a private banking
corporation organized and existing under the laws of the Philippines,
with principal offices at the PNB Financial Center, Roxas Boulevard,
Manila. At the time, the Singapore PNB Branch was under the helm
of Ruben C. Tobias, a lawyer, as General Manager, with the rank of
Vice-President of the Bank. At the time, too, the Branch Office had
two (2) types of employees: (a) expatriates or the regular
employees, hired in Manila and assigned abroad including
Singapore, and (b) locally (direct) hired. She applied for employment
as Branch Credit Officer, at a total monthly package of
$SG4,500.00, effective upon assumption of duties after approval.
Ruben C. Tobias found her eminently qualified and wrote on
October 26, 1998, a letter to the President of the Bank in Manila,
recommending the appointment of Florence O. Cabansag, for the
position.
xxxxxxxxx
"The President of the Bank was impressed with the credentials of
Florence O. Cabansag that he approved the recommendation of
Ruben C. Tobias. She then filed an ‘Application,’ with the Ministry of
Manpower of the Government of Singapore, for the issuance of an
‘Employment Pass’ as an employee of the Singapore PNB Branch.
Her application was approved for a period of two (2) years.
"On December 7, 1998, Ruben C. Tobias wrote a letter to Florence
O. Cabansag offering her a temporary appointment, as Credit
Officer, at a basic salary of Singapore Dollars 4,500.00, a month
and, upon her successful completion of her probation to be
determined solely, by the Bank, she may be extended at the
discretion of the Bank, a permanent appointment and that her
temporary appointment was subject to the following terms and
conditions:
‘1. You will be on probation for a period of three (3)
consecutive months from the date of your assumption of
duty.
‘2. You will observe the Bank’s rules and regulations and
those that may be adopted from time to time.
‘3. You will keep in strictest confidence all matters related
to transactions between the Bank and its clients.
‘4. You will devote your full time during business hours in
promoting the business and interest of the Bank.
‘5. You will not, without prior written consent of the Bank,
be employed in anyway for any purpose whatsoever
outside business hours by any person, firm or company.
‘6. Termination of your employment with the Bank may be
made by either party after notice of one (1) day in writing
during probation, one month notice upon confirmation or
the equivalent of one (1) day’s or month’s salary in lieu of
notice.’
"Florence O. Cabansag accepted the position and assumed office.
In the meantime, the Philippine Embassy in Singapore processed
the employment contract of Florence O. Cabansag and, on March 8,
1999, she was issued by the Philippine Overseas Employment
Administration, an ‘Overseas Employment Certificate,’ certifying that
she was a bona fide contract worker for Singapore.
xxxxxxxxx
"Barely three (3) months in office, Florence O. Cabansag submitted
to Ruben C. Tobias, on March 9, 1999, her initial ‘Performance
Report.’ Ruben C. Tobias was so impressed with the ‘Report’ that he
made a notation and, on said ‘Report’: ‘GOOD WORK.’ However, in
the evening of April 14, 1999, while Florence O. Cabansag was in
the flat, which she and Cecilia Aquino, the Assistant Vice-President
and Deputy General Manager of the Branch and Rosanna
Sarmiento, the Chief Dealer of the said Branch, rented, she was told
by the two (2) that Ruben C. Tobias has asked them to tell Florence
O. Cabansag to resign from her job. Florence O. Cabansag was
perplexed at the sudden turn of events and the runabout way Ruben
C. Tobias procured her resignation from the Bank. The next day,
Florence O. Cabansag talked to Ruben C. Tobias and inquired if
what Cecilia Aquino and Rosanna Sarmiento had told her was true.
Ruben C. Tobias confirmed the veracity of the information, with the
explanation that her resignation was imperative as a ‘cost-cutting
measure’ of the Bank. Ruben C. Tobias, likewise, told Florence O.
Cabansag that the PNB Singapore Branch will be sold or
transformed into a remittance office and that, in either way, Florence
O. Cabansag had to resign from her employment. The more
Florence O. Cabansag was perplexed. She then asked Ruben C.
Tobias that she be furnished with a ‘Formal Advice’ from the PNB
Head Office in Manila. However, Ruben C. Tobias flatly refused.
Florence O. Cabansag did not submit any letter of resignation.
"On April 16, 1999, Ruben C. Tobias again summoned Florence O.
Cabansag to his office and demanded that she submit her letter of
resignation, with the pretext that he needed a Chinese-speaking
Credit Officer to penetrate the local market, with the information that
a Chinese-speaking Credit Officer had already been hired and will
be reporting for work soon. She was warned that, unless she
submitted her letter of resignation, her employment record will be
blemished with the notation ‘DISMISSED’ spread thereon. Without
giving any definitive answer, Florence O. Cabansag asked Ruben C.
Tobias that she be given sufficient time to look for another job.
Ruben C. Tobias told her that she should be ‘out’ of her employment
by May 15, 1999.
77
"However, on April 19, 1999, Ruben C. Tobias again summoned
Florence O. Cabansag and adamantly ordered her to submit her
letter of resignation. She refused. On April 20, 1999, she received a
letter from Ruben C. Tobias terminating her employment with the
Bank.
xxxxxxxxx
"On January 18, 2000, the Labor Arbiter rendered judgment in favor
of the Complainant and against the Respondents, the decretal
portion of which reads as follows:
‘WHEREFORE, considering the foregoing premises, judgment is
hereby rendered finding respondents guilty of Illegal dismissal and
devoid of due process, and are hereby ordered:
1. To reinstate complainant to her former or substantially
equivalent position without loss of seniority rights, benefits
and privileges;
2. Solidarily liable to pay complainant as follows:
a) To pay complainant her backwages from 16
April 1999 up to her actual reinstatement. Her
backwages as of the date of the promulgation of
this decision amounted to SGD 40,500.00 or its
equivalent in Philippine Currency at the time of
payment;
b) Mid-year bonus in the amount of SGD
2,250.00 or its equivalent in Philippine Currency
at the time of payment;
c) Allowance for Sunday banking in the amount
of SGD 120.00 or its equivalent in Philippine
Currency at the time of payment;
d) Monetary equivalent of leave credits earned
on Sunday banking in the amount of SGD
1,557.67 or its equivalent in Philippine Currency
at the time of payment;
e) Monetary equivalent of unused sick leave
benefits in the amount of SGD 1,150.60 or its
equivalent in Philippine Currency at the time of
payment.
f) Monetary equivalent of unused vacation leave
benefits in the amount of SGD 319.85 or its
equivalent in Philippine Currency at the time of
payment.
g) 13th month pay in the amount of SGD
4,500.00 or its equivalent in Philippine Currency
at the time of payment;
3. Solidarily to pay complainant actual damages in the
amount of SGD 1,978.00 or its equivalent in Philippine
Currency at the time of payment, and moral damages in
the amount of PhP 200,000.00, exemplary damages in the
amount of PhP 100,000.00;
4. To pay complainant the amount of SGD 5,039.81 or its
equivalent in Philippine Currency at the time of payment,
representing attorney’s fees.
SO ORDERED." 6 [Emphasis in the original.]
PNB appealed the labor arbiter’s Decision to the NLRC. In a
Resolution dated June 29, 2001, the Commission affirmed that
Decision, but reduced the moral damages to ₱100,000 and the
exemplary damages to ₱50,000. In a subsequent Resolution, the
NLRC denied PNB’s Motion for Reconsideration.
Ruling of the Court of Appeals
In disposing of the Petition for Certiorari, the CA noted that petitioner
bank had failed to adduce in evidence the Singaporean law
supposedly governing the latter’s employment Contract with
respondent. The appellate court found that the Contract had actually
been processed by the Philippine Embassy in Singapore and
approved by the Philippine Overseas Employment Administration
(POEA), which then used that Contract as a basis for issuing an
Overseas Employment Certificate in favor of respondent.
According to the CA, even though respondent secured an
employment pass from the Singapore Ministry of Employment, she
did not thereby waive Philippine labor laws, or the jurisdiction of the
labor arbiter or the NLRC over her Complaint for illegal dismissal. In
so doing, neither did she submit herself solely to the Ministry of
Manpower of Singapore’s jurisdiction over disputes arising from her
employment. The appellate court further noted that a cursory
reading of the Ministry’s letter will readily show that no such waiver
or submission is stated or implied.
Finally, the CA held that petitioner had failed to establish a just
cause for the dismissal of respondent. The bank had also failed to
give her sufficient notice and an opportunity to be heard and to
defend herself. The CA ruled that she was consequently entitled to
reinstatement and back wages, computed from the time of her
dismissal up to the time of her reinstatement.
Hence, this Petition.7
Issues
Petitioner submits the following issues for our consideration:
"1. Whether or not the arbitration branch of the NLRC in
the National Capital Region has jurisdiction over the
instant controversy;
"2. Whether or not the arbitration of the NLRC in the
National Capital Region is the most convenient venue or
forum to hear and decide the instant controversy; and
"3. Whether or not the respondent was illegally dismissed,
and therefore, entitled to recover moral and exemplary
damages and attorney’s fees."8
In addition, respondent assails, in her Comment,9 the propriety of
Rule 45 as the procedural mode for seeking a review of the CA
Decision affirming the NLRC Resolution. Such issue deserves scant
consideration. Respondent miscomprehends the Court’s discourse
in St. Martin Funeral Home v. NLRC,10 which has indeed affirmed
that the proper mode of review of NLRC decisions, resolutions or
orders is by a special civil action for certiorari under Rule 65 of the
Rules of Court. The Supreme Court and the Court of Appeals
have concurrent original jurisdiction over such petitions
for certiorari. Thus, in observance of the doctrine on the hierarchy of
courts, these petitions should be initially filed with the CA.11
Rightly, the bank elevated the NLRC Resolution to the CA by way of
a Petition for Certiorari. In seeking a review by this Court of the CA
Decision -- on questions of jurisdiction, venue and validity of
employment termination -- petitioner is likewise correct in invoking
Rule 45.12
It is true, however, that in a petition for review on certiorari, the
scope of the Supreme Court’s judicial review of decisions of the
Court of Appeals is generally confined only to errors of law. It does
not extend to questions of fact. This doctrine applies with greater
force in labor cases. Factual questions are for the labor tribunals to
resolve. 13 In the present case, the labor arbiter and the NLRC have
already determined the factual issues. Their findings, which are
supported by substantial evidence, were affirmed by the CA. Thus,
they are entitled to great respect and are rendered conclusive upon
this Court, absent a clear showing of palpable error or arbitrary
disregard of evidence.14
The Court’s Ruling
The Petition has no merit.
First Issue:
Jurisdiction
The jurisdiction of labor arbiters and the NLRC is specified in Article
217 of the Labor Code as follows:
"ART. 217. Jurisdiction of Labor Arbiters and the Commission. – (a)
Except as otherwise provided under this Code the Labor Arbiters
78
shall have original and exclusive jurisdiction to hear and decide,
within thirty (30) calendar days after the submission of the case by
the parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wage, rates of pay,
hours of work and other terms and conditions of
employment
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of strikes
and lockouts; and
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount of exceeding five thousand
pesos (₱5,000.00) regardless of whether accompanied
with a claim for reinstatement.
(b) The commission shall have exclusive appellate jurisdiction over
all cases decided by Labor Arbiters.
x x x x x x x x x."
More specifically, Section 10 of RA 8042 reads in part:
"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.
x x x x x x x x x"
Based on the foregoing provisions, labor arbiters clearly
have original and exclusive jurisdiction over claims arising from
employer-employee relations, including termination
disputes involving all workers, among whom are overseas Filipino
workers (OFW).15
We are not unmindful of the fact that respondent was directly hired,
while on a tourist status in Singapore, by the PNB branch in that city
state. Prior to employing respondent, petitioner had to obtain an
employment pass for her from the Singapore Ministry of Manpower.
Securing the pass was a regulatory requirement pursuant to the
immigration regulations of that country.16
Similarly, the Philippine government requires non-Filipinos working
in the country to first obtain a local work permit in order to be legally
employed here. That permit, however, does not automatically mean
that the non-citizen is thereby bound by local laws only, as averred
by petitioner. It does not at all imply a waiver of one’s national laws
on labor. Absent any clear and convincing evidence to the contrary,
such permit simply means that its holder has a legal status as a
worker in the issuing country.1avvphil.zw+
Noteworthy is the fact that respondent likewise applied for and
secured an Overseas Employment Certificate from the POEA
through the Philippine Embassy in Singapore. The Certificate,
issued on March 8, 1999, declared her a bona fide contract worker
for Singapore. Under Philippine law, this document authorized her
working status in a foreign country and entitled her to all benefits
and processes under our statutes. Thus, even
assuming arguendothat she was considered at the start of her
employment as a "direct hire" governed by and subject to the laws,
common practices and customs prevailing in Singapore17 she
subsequently became a contract worker or an OFW who was
covered by Philippine labor laws and policies upon certification by
the POEA. At the time her employment was illegally terminated, she
already possessed the POEA employment Certificate.
Moreover, petitioner admits that it is a Philippine corporation doing
business through a branch office in Singapore.18Significantly,
respondent’s employment by the Singapore branch office had to be
approved by Benjamin P. Palma Gil,19 the president of the bank
whose principal offices were in Manila. This circumstance militates
against petitioner’s contention that respondent was "locally hired";
and totally "governed by and subject to the laws, common practices
and customs" of Singapore, not of the Philippines. Instead, with
more reason does this fact reinforce the presumption that
respondent falls under the legal definition of migrant worker, in this
case one deployed in Singapore. Hence, petitioner cannot escape
the application of Philippine laws or the jurisdiction of the NLRC and
the labor arbiter.
In any event, we recall the following policy pronouncement of the
Court in Royal Crown Internationale v. NLRC:20
"x x x. Whether employed locally or overseas, all Filipino workers
enjoy the protective mantle of Philippine labor and social legislation,
contract stipulations to the contrary notwithstanding. This
pronouncement is in keeping with the basic public policy of the State
to afford protection to labor, promote full employment, ensure equal
work opportunities regardless of sex, race or creed, and regulate the
relations between workers and employers.1awphi1.net For the State
assures the basic rights of all workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of
work [Article 3 of the Labor Code of the Philippines; See
also Section 18, Article II and Section 3, Article XIII, 1987
Constitution]. This ruling is likewise rendered imperative by Article
17 of the Civil Code which states that laws ‘which have for their
object public order, public policy and good customs shall not be
rendered ineffective by laws or judgments promulgated, or by
determination or conventions agreed upon in a foreign country.’"
Second Issue:
Proper Venue
Section 1(a) of Rule IV of the NLRC Rules of Procedure reads:
"Section 1. Venue – (a) All cases which Labor Arbiters have
authority to hear and decide may be filed in the Regional Arbitration
Branch having jurisdiction over the workplace of the
complainant/petitioner; Provided, however that cases of Overseas
Filipino Worker (OFW) shall be filed before the Regional Arbitration
Branch where the complainant resides or where the principal office
of the respondent/employer is situated, at the option of the
complainant.
"For purposes of venue, workplace shall be understood as the place
or locality where the employee is regularly assigned when the cause
of action arose. It shall include the place where the employee is
supposed to report back after a temporary detail, assignment or
travel. In the case of field employees, as well as ambulant or
itinerant workers, their workplace is where they are regularly
assigned, or where they are supposed to regularly receive their
salaries/wages or work instructions from, and report the results of
their assignment to their employers."
Under the "Migrant Workers and Overseas Filipinos Act of 1995"
(RA 8042), a migrant worker "refers to a person who is to be
engaged, is engaged or has been engaged in a remunerated activity
in a state of which he or she is not a legal resident; to be used
interchangeably with overseas Filipino worker."21 Undeniably,
respondent was employed by petitioner in its branch office in
Singapore. Admittedly, she is a Filipino and not a legal resident of
that state. She thus falls within the category of "migrant worker" or
"overseas Filipino worker."
As such, it is her option to choose the venue of her Complaint
against petitioner for illegal dismissal. The law gives her two
choices: (1) at the Regional Arbitration Branch (RAB) where she
resides or (2) at the RAB where the principal office of her employer
is situated. Since her dismissal by petitioner, respondent has
returned to the Philippines -- specifically to her residence at Filinvest
II, Quezon City. Thus, in filing her Complaint before the RAB office
in Quezon City, she has made a valid choice of proper venue.
Third Issue:
Illegal Dismissal
79
The appellate court was correct in holding that respondent was
already a regular employee at the time of her dismissal, because her
three-month probationary period of employment had already ended.
This ruling is in accordance with Article 281 of the Labor Code: "An
employee who is allowed to work after a probationary period shall be
considered a regular employee." Indeed, petitioner recognized
respondent as such at the time it dismissed her, by giving her one
month’s salary in lieu of a one-month notice, consistent with
provision No. 6 of her employment Contract.
Notice and Hearing Not Complied With
As a regular employee, respondent was entitled to all rights, benefits
and privileges provided under our labor laws. One of her
fundamental rights is that she may not be dismissed without due
process of law. The twin requirements of notice and hearing
constitute the essential elements of procedural due process, and
neither of these elements can be eliminated without running afoul of
the constitutional guarantee.22
In dismissing employees, the employer must furnish them two
written notices: 1) one to apprise them of the particular acts or
omissions for which their dismissal is sought; and 2) the other to
inform them of the decision to dismiss them. As to the requirement
of a hearing, its essence lies simply in the opportunity to be heard. 23
The evidence in this case is crystal-clear. Respondent was not
notified of the specific act or omission for which her dismissal was
being sought. Neither was she given any chance to be heard, as
required by law. At any rate, even if she were given the opportunity
to be heard, she could not have defended herself effectively, for she
knew no cause to answer to.
All that petitioner tendered to respondent was a notice of her
employment termination effective the very same day, together with
the equivalent of a one-month pay. This Court has already held that
nothing in the law gives an employer the option to substitute the
required prior notice and opportunity to be heard with the mere
payment of 30 days’ salary.24
Well-settled is the rule that the employer shall be sanctioned for
noncompliance with the requirements of, or for failure to observe,
due process that must be observed in dismissing an employee.25
No Valid Cause for Dismissal
Moreover, Articles 282,26 28327 and 28428 of the Labor Code provide
the valid grounds or causes for an employee’s dismissal. The
employer has the burden of proving that it was done for any of those
just or authorized causes. The failure to discharge this burden
means that the dismissal was not justified, and that the employee is
entitled to reinstatement and back wages.29
Notably, petitioner has not asserted any of the grounds provided by
law as a valid reason for terminating the employment of respondent.
It merely insists that her dismissal was validly effected pursuant to
the provisions of her employment Contract, which she had
voluntarily agreed to be bound to.
Truly, the contracting parties may establish such stipulations,
clauses, terms and conditions as they want, and their agreement
would have the force of law between them. However, petitioner
overlooks the qualification that those terms and conditions agreed
upon must not be contrary to law, morals, customs, public policy or
public order.30 As explained earlier, the employment Contract
between petitioner and respondent is governed by Philippine labor
laws. Hence, the stipulations, clauses, and terms and conditions of
the Contract must not contravene our labor law provisions.
Moreover, a contract of employment is imbued with public interest.
The Court has time and time again reminded parties that they "are
not at liberty to insulate themselves and their relationships from the
impact of labor laws and regulations by simply contracting with each
other."31 Also, while a contract is the law between the parties, the
provisions of positive law that regulate such contracts are deemed
included and shall limit and govern the relations between the
parties.32
Basic in our jurisprudence is the principle that when there is no
showing of any clear, valid, and legal cause for the termination of
employment, the law considers the matter a case of illegal
dismissal.33
Awards for Damages Justified
Finally, moral damages are recoverable when the dismissal of an
employee is attended by bad faith or constitutes an act oppressive
to labor or is done in a manner contrary to morals, good customs or
public policy.34 Awards for moral and exemplary damages would be
proper if the employee was harassed and arbitrarily dismissed by
the employer.35
In affirming the awards of moral and exemplary damages, we quote
with approval the following ratiocination of the labor arbiter:
"The records also show that [respondent’s] dismissal was effected
by [petitioners’] capricious and high-handed manner, anti-social and
oppressive, fraudulent and in bad faith, and contrary to morals, good
customs and public policy. Bad faith and fraud are shown in the acts
committed by [petitioners] before, during and after [respondent’s]
dismissal in addition to the manner by which she was dismissed.
First, [respondent] was pressured to resign for two different and
contradictory reasons, namely, cost-cutting and the need for a
Chinese[-]speaking credit officer, for which no written advice was
given despite complainant’s request. Such wavering stance or
vacillating position indicates bad faith and a dishonest purpose.
Second, she was employed on account of her qualifications,
experience and readiness for the position of credit officer and
pressured to resign a month after she was commended for her good
work. Third, the demand for [respondent’s] instant resignation on 19
April 1999 to give way to her replacement who was allegedly
reporting soonest, is whimsical, fraudulent and in bad faith, because
on 16 April 1999 she was given a period of [sic] until 15 May 1999
within which to leave. Fourth, the pressures made on her to resign
were highly oppressive, anti-social and caused her absolute torture,
as [petitioners] disregarded her situation as an overseas worker
away from home and family, with no prospect for another job. She
was not even provided with a return trip fare. Fifth, the notice of
termination is an utter manifestation of bad faith and whim as it
totally disregards [respondent’s] right to security of tenure and due
process. Such notice together with the demands for [respondent’s]
resignation contravenes the fundamental guarantee and public
policy of the Philippine government on security of tenure.
"[Respondent] likewise established that as a proximate result of her
dismissal and prior demands for resignation, she suffered and
continues to suffer mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock and social
humiliation. Her standing in the social and business community as
well as prospects for employment with other entities have been
adversely affected by her dismissal. [Petitioners] are thus liable for
moral damages under Article 2217 of the Civil Code.
xxxxxxxxx
"[Petitioners] likewise acted in a wanton, oppressive or malevolent
manner in terminating [respondent’s] employment and are therefore
liable for exemplary damages. This should served [sic] as protection
to other employees of [petitioner] company, and by way of example
or correction for the public good so that persons similarly minded as
[petitioners] would be deterred from committing the same acts."36
The Court also affirms the award of attorney’s fees. It is settled that
when an action is instituted for the recovery of wages, or when
employees are forced to litigate and consequently incur expenses to
protect their rights and interests, the grant of attorney’s fees is
legally justifiable.37
WHEREFORE, the Petition is DENIED and the assailed Decision
and Resolution AFFIRMED. Costs against petitioner.
SO ORDERED.
G.R. No. 112175 July 26, 1996
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ENGINEER RODOLFO DIAZ, accused-appellant.
TORRES, JR., J.:p
Rodolfo 'Erwin' Diaz seeks the mandate of this Court to review the
decision dated September 2, 1993, of the Regional Trial Court, 11th
Judicial Region, Branch 10, Davao City, 1 in Criminal Case No. 26,
80
993-92 convicting him of the crime of Illegal Recruitment in Large for processing of their
Scale, and sentencing him to suffer life imprisonment and to pay a papers (tsn 9-7-92 pp. 11 &
fine of P100,000.00 plus the costs. 23-24 & 9-8-92 pp. 46 &
58). Telling them that he
knew "pretty well the
In an Information dated August 15, 1992, Assistant City Prosecutor
recruiter" Engr. Diaz and
David W. Natividad of Davao City charged appellant of violating
that "We don't have to
Articles 38 (a) and 38 (b) in relation to Article 39 of the Labor Code,
worry we can really go
as amended, as follows:
abroad and as a matter of
fact he said that his three
That sometime in the month of July 1992, in the children were applying (to
City of Davao, and within the jurisdiction of this go) to Brunei," he offered to
Honorable Court, the abovementioned accused, accompany them to Engr.
purporting himself to have the capacity to Erwin Diaz at the office of
contract, enlist and transport Filipino workers for the CIS (tsn 9-7-92 p.11).
employment abroad, particularly Brunei and They asked Mr. Lim when
Japan, did then and there, willfully, unlawfully he was available, and he
recruit and promise employment/job placement said July 18 (1992),
abroad to Mary Anne Navarro, Maria Theresa Saturday morning (tsn 9-8-
Fabricante and Maria Elena Ramirez, without 92 p. 34).
first securing the required license and/or
authority from the Department of Labor and
On July 18, Mr. Paulo Lim
Employment.
and Mrs. Remedios
Aplicador accompanied the
CONTRARY TO LAW. 2 three complainants to Engr.
Diaz who was then being
detained in the CIS
The antecedent facts found by the Court a quo reads: Detention Center in Davao
City and introduced them to
Mary Anne Navarro was 22 years old, single him. The complainants
and a student of the University of the asked Engr. Diaz why he
Immaculate Concepcion in 1992, taking up was "inside the cell." and
bachelor of science in music, Davao City. he explained that four
applicants had filed a case
against him "because they
Maria Theresa Fabricante was 23 years old, could not accept that they
single and jobless in 1992. She is accordingly a were sick of hepatitis and
commerce graduate of the Notre Dame that the CIS elements are
University in Cotabato City. just making money out of it"
(tsn 9-8-92 p. 35). They
Maria Elena Ramirez was 27 years old, married asked him if he was
and a businesswoman in 1992. She is "recruiting applicants for
accordingly a college graduate of the University Brunei" and "he said yes";
of Mindanao in Davao City where she finished they also inquired what
the course of bachelor of science in commerce, were the requirements, and
major in management. he said four passport size
pictures of each applicant,
bio-data, income tax return,
From the combined testimonies of these three medical certificate, NBI
complainants, the Court has gathered that this clearance, passport,
is what happened, which gave rise to this case: P2,500.00 for processing of
the papers of each
In June 1992 they were all applicant, and P65,000.00
enrolled at the Henichi as placement fee, but only
Techno Exchange Cultural P20,000.00 for plane fare
Foundation in Davao City, was to be paid by each
studying Niponggo. Their applicant, the balance of
teacher was Mrs. P45,000.00 was to be paid
Remedios Aplicador. by means of salary
deductions (tsn 9-7-92 p.
12; tsn 9-8-92 p. 35 & p.
One day Mrs. Aplicador told 59). The P2,500.00 for
them that if they wanted to processing of their
go and work abroad, respective applications was
particularly Brunei where to be paid at the house of
they could earn a salary of Engr. Diaz at 14 Aries
"$700.00 for four hours Street, GSIS Heights,
daily work," she would refer Davao City, with telephone
them to Mr. Paulo Lim who no. 8-46-71 (tsn 9-7-92 p.
knew one Engr. Erwin Diaz 12).
who was recruiting
applicants for Brunei (tsn 9-
7-92 pp. 10-11 & tsn 9-8-92 Mary Anne Navarro paid
p. 34). P2,300.00 to Engr. Diaz at
his residence on July 22,
1992 (Exh. "C"). There is
Accompanied by Mrs. no explanation by her why
Aplicador, the three she paid only P2,300.00
complainants went to Mr. and not P2,500.00.
Paulo Lim who explained to
them that he was not the
one recruiting workers but Maria Theresa Fabricante
Engr. Diaz (tsn 9-8-92 p. paid only P2,000.00 to
34). Mr. Lim informed them Engr. Diaz also on July 22,
that his children had 1992 (Exh. "E"). She paid
already applied with Engr. only that amount because,
Diaz and that the according to her testimony,
requirements were bio- she already had a passport
data, passport, medical and Engr. Diaz said she
checkup, I.D. and income was required to pay only
tax return, and P2,500.00
81
P2,000.00 (tsn 9-8-92 p.
35).
Maria Elena Ramirez paid
to Engr. Diaz P2,500.00 but
she lost her receipt (tsn 9-
8-92 p. 59). However, it
was returned to her by
Engr. Diaz on August 17,
1992 (Exh. "G").
Exhibit "G" is a RECEIPT
signed by the three
complainants
acknowledging the return to
them respectively of the
amounts of P2,300.00,
P2,000.00 and P2,500.00
by the accused and his wife
who also signed it as
witnesses (tsn 9-8-92 p.
43).
After submitting to the
accused all the required
papers and undergoing
medical examination
(before the return of said
amounts to the
complainants), they asked
him when they could leave.
The accused told them to
wait for three to four weeks
as his papers were still
being processed by the CIS
(tsn 9-7-92 p. 15). During
this period when the
accused had already been
released from detention
(testimony of the accused,
tsn 4-27-93 pp. 16-17), the
complainants kept inquiring
from him when they would
be leaving for Brunei, going
to his house several times
where they saw many other
applicants like them. But
the accused just kept
saying that his papers were
still with the CIS (tsn 9-7-92
p. 15).
When he was still detained,
he told the complainants
that "the name of his
agency is confidential but
the owner thereof is Erlinda
Romualdez" who "used to
be her (sic) mistress"
assuring them that "we
don't have to worry about it
because he said it is
government project and
then he said he will escort
us to Philippine Plaza Hotel
for briefing before leaving
for abroad and after the
briefing at the Philippine
Plaza Hotel we will proceed
to POEA where we will sign
a contract that is the time
we will give him the amount
of P20,000.00 and then we
will proceed to the
residence of Erlinda
Romualdez where we will
be staying for three days"
(tsn 9-8-92 pp. 40-41).
Mary Anne Navarro asked
her father for P20,000.00
for her plane fare, and so
they mortgaged their piano
for P30,000.00 to Serve
Loan Mart as evidenced by
a promissory note for
P30,000.00 (Exh. "D" & tsn
9-7-92 p. 16).
From the borrowed
P30,000.00, Mary Anne
Navarro set aside
P20,000.00 "for placement
fee and the remaining
P10,000.00 I used in
buying travelling bag,
dresses, shoes and of
course make up (sic)
because we were told that
we will be working there as
salesgirls. Then hairband,
pair of earrings and ring"
(tsn 9-7-92 pp. 16-17). It
was the accused who told
them that they would be
working in one of the
department stores in Brunei
and receiving a monthly
pay of $700.00 for working
only four hours a day (tsn
9-7-92 p. 17). Earlier, she
said Engr. Diaz told her and
her co-complainants herein
that the P20,000.00 was for
plane fare (tsn 9-7-92 p.
12).
Maria theresa Fabricante
went home to Cotabato to
secure the required
P20,000.00. Her father sold
a horse for P5,000.00. As
for the balance of
P15,000.00 "Our plan was
to mortgage our five
hectare land to a friend of
my father."
Q Was the land actually
mortgage?
A The money was ready for
release.
Q Now, was the money
release?
A No sir.
Q Why?
A The money was
supposed to be released on
August 6, but before that
date August 3, I came back
to Davao and went to the
office of POEA and verify
whether Engr. Diaz was
indeed a licensed recruiter.
Q What did you find out
when you go there?
A He is not registered or in
the list. His name does not
appear on the list.
Q With whom did you talk
to with the POEA?
A Atty. Evangelio.
Q Now, upon learning that
Mr. Diaz is not included in
the masters list, what did
you do?
A After knowing that I went
to my two companions Ma.
Elena Ramirez and Mary
Anne Navarro and informed
them of what I found out
that the agency
82
 represented by Engr. Diaz
was a fake agency and I
advised them they too
should follow it up by
themselves.

Q Now, of your own

knowledge, did they do?

A Yes sir.

Q What about you?

A Yes sir, we set a date to

go to the POEA but before
that we agreed that we will
go and see Engr. Diaz to
get back the money that we
paid as well as the papers.

Q Did you actually go to

Engr. Diaz?

A Yes sir.

Q What happened?

A We went to see Eng.

Diaz and when we met him,
he greet us by saying: "If
you are ready to leave?"
But we told him that we are
not going to leave and we
are withdrawing our
applications because we
found from the office of the
POEA that he is a fake
recruiter and so he got
angry and said that if our
purpose in going there was
to withdraw, he said we can
and we can get back our
documents the next day but
he said we will have to pay
him charges. And we said,
what for? He said for labor
because he already
secured a plane ticket for
us and when I asked where
the plane tickets are? He
said it is in Cagayan (tsn 9-
8-92 pp. 38-39)
At the POEA the three complainants learned that the "agency
represented by Engr. Diaz was a fake agency" (tsn 9-8-92 p. 38).
The Philippine Overseas Employment Administration issued a
CERTIFICATION (Exh. "A") which reads:
This is to certify that Eng'r. Diaz a.k.a. Erwin,
Rudy, Edwin, Rodolfo, Ariel Mateo of Aries St.,
GSIS Subd., Matina, Davao City; Mr. Paulo Lim
and Remedios Aplicador both of Sto. Rosario
St., Buhangin, Davao City were never granted
an authority to conduct recruitment for overseas
employment in Davao City or in any part of
Region XI, and that the agency of the former
known as Phil Jap Constr'n and Tanaka and
Diaz Asso. were never been a licensed agency
for overseas recruitment.
This certification is being issued upon the
written request of Ma. Elena Ramirez, Mary
Anne Navarro and Ma. Theresa Fabricante for
whatever legal purpose it may serve them best.
14 August 1992 Davao City, Philippines.
The three complainants withdrew their
applications from Engr. Diaz without paying his
charges. The mounts they paid for processing
fees were all returned to them by Engr. Diaz
(Exh. "G"). 3
On September 2, 1993 the trial court rendered a decision finding the
appellant guilty of the crime charged, the dispositive portion of which
states:
WHEREFORE, this Court finds the accused
Rodolfo "Erwin" Diaz guilty beyond reasonable
doubt of the offense of large scale illegal
recruitment and sentences him to suffer life
imprisonment and to pay a fine of P100,000.00,
plus the costs.
Accused appellant Diaz predicated the instant appeal on the
following assignment of errors:
I
THE LOWER COURT ERRED IN FINDING
THAT THE ACCUSED NOT ONLY CONFINED
HIMSELF TO FACILITATING THE PASSPORT
AND MEDICAL EXAMINATION OF THE
COMPLAINANTS BUT ALSO PROMISED
THEM EMPLOYMENT ABROAD.
II
THE LOWER COURT ERRED IN NOT
FINDING THAT THE ACCUSED WAS
MERELY A FACILITATOR OF TRAVEL
DOCUMENTS AND NOT AN ILLEGAL
RECRUITER.
III
THE LOWER COURT ERRED IN
CONVICTING THE ACCUSED OF THE CRIME
CHARGED. 4
(
The foregoing assigned errors, being intertwined,
S shall be discussed
together. g
d
)
The crime of illegal recruitment, as defined under Articles 38 (a) in
relation to Articles 13 (b) and 34 and penalized under Article 39 of
G
83
the Labor Code, as amended by Presidential Decree 1920 and 1] the offender is a non-licensee or non-holder
Presidential Decree 2018, is any recruitment activity, including the of authority to engage in recruitment and
prohibited practices enumerated under Article 34, undertaken by a placement activity,
non-licensee or non-holder of authority.
2] the offender undertakes recruitment and
Thus, in People v. Cabacang 5 this Court ruled that the crime of placement activity defined under Article 13 (b),
illegal recruitment is committed when two elements concur, namely: or any prohibited practices enumerated under
Article 34, and
1] That the offender has no valid license or
authority required by law to enable one to 3] illegal recruitment is committed against three
lawfully engage in recruitment and placement of or more persons individually or as a group. 10
workers; and,
As can be ascertained after a thorough reading of the records,
2] That the offender undertakes either any appellant Diaz was neither a licensee nor a holder of authority to
activity within the meaning of recruitment and qualify him to lawfully engage in recruitment and placement activity.
placement defined under Article 13 (b), or any
prohibited practices enumerated under Article
Pursuant to the Certification issued by the POEA dated 14th of
34.
August 1992, 11 duly signed by Gaudencio de la Pena, Unit
Coordinator, appellant was never granted an authority to conduct
Article 13 (b) of the Labor Code, provides for the statutory definition recruitment for overseas employment.
of "recruitment and placement", as follows:
As to the third element of the crime, there were obviously three
Recruitment and placement refers to any act of persons who were victims of the appellant's nefarious act of large
canvassing, enlisting, contracting, transporting, scale illegal recruitment.
utilizing, hiring or procuring workers, and
includes referrals, contract services, promising
Relative to the question of whether or not appellant Diaz was
or advertising for employment, locally or abroad,
engaged in recruitment activity, it is clear from the testimonies of the
whether for profit or not; Provided that any
three complaints that appellant undertook to recruit them, thus:
person or entity which in any manner offers or
promises for a fee employment to two or more
persons shall be deemed engaged in Maria Elena Ramirez testified in the following tenor:
recruitment and placement.
Q: When you went to see
In People v. Panis, 6 we made the pronouncement that any of the Mr. Diaz, what happened?
acts mentioned in Article 13(b) will constitute recruitment and
placement even if only one prospective worker is involved. The
number of persons dealt with is not an essential ingredient of the act A: We were introduced by
of recruitment and placement. Mr. Lim to Diaz, and then
we asked Diaz if it is true
that he's recruiting
Article 38 (a) clearly shows that illegal recruitment is an offense applicants for abroad. He
which is essentially committed by a non-licensee or non-holder of said that he is recruiting
authority. applicants for Japan or
Brunei and if we have
P20,000 we can go to
A non-licensee or non-holder of authority means any person,
Brunei and we will be given
corporation or entity which has not been issued a valid license or
priority if we have the
authority to engage in recruitment and placement by the Secretary
amount.
of Labor, or whose license or authority has been suspended,
revoked or cancelled by the POEA or the Secretary. 7
Q: What else did you ask
Mr. Diaz?
Moreover, recruitment and placement activities of agents or
representatives whose appointments by a license or holder of
authority were not previously authorized by the POEA shall likewise A: We asked him what
constitute illegal were the requirements.
recruitment. 8
Q: And what did he
We ruled in People vs. Goce, in this wise: answer?

"Article 38 (b) of the Labor Code, as amended by Presidential A: Well, he told us that we
Decree No. 2018, provides that any recruitment activity, including are required to submit 8
the prohibited practices enumerated in Article 34 of said Code, copies of passport, ID
undertaken by non-licensees or non-holders of authority shall be photos, income tax return,
deemed illegal and punishable under Article 39 thereof. The same passport, medical
article further provides that illegal recruitment shall be considered an certificate and the the
offense involving economic sabotage if any of the qualifying amount of P2,500 and he
circumstances exist, namely, further said that our
placement fee will be
P65,000 but all we have to
a] when illegal recruitment is committed by a
pay in advance is the
syndicate, that is, if carried out by a group of
amount of P20,000 and the
three or more persons conspiring or
remaining balance of
confederating with one another; or,
P45,000 shall be given
through salary
b] when illegal recruitment is committed in large deductions. 12
scale, that is, if committed against three or more
persons individually or as a group. 9
Maria Theresa Fabricante testified in the following manner:

Considering the clear import of the foregoing doctrine which spells

She declared:
the unmistakable intent of the specific provision applicable at bar,
the instant case without doubt involves illegal recruitment in large
scale. Q: What else did you ask
Mr. Diaz?
The elements of the crime of illegal recruitment in large scale, which
are undoubtedly present in this case are: A: We asked him if he is
indeed recruiting applicants
84
 for Brunei. And he said,
Yes. After that we asked
him what are the
requirements and he told
us that we need passport,
four passport size ID
pictures, income tax return
and NBI clearance, and if
we have diplomas to attach
with the other documents.
Q: What else did Mr. Diaz
tell you to do?
A: He said that if we are
interested, he will take care
of the processing of the
documents by giving him
the amount of P2,500, and
that he explained that our
placement fee will be in the
sum of P65,000 and we will
just have to raise P20,000
for the processing of our
visa, plane tickets and
POEA expenses. 13
She continued:
Q: What about your work in
Brunei, what did you ask
him?
A: I asked Engr. Diaz
whether our work would be
contract worker and he said
yeas and we did not have
to worry about it because
he said it was a
government project and
then he said he would
escort us to Philippine
Plaza Hotel for briefing
before leaving for abroad
and after the briefing we
will proceed to the POEA
where we would sign our
contract and after signing
that is the time we would
give the amount of P20,000
and then we would proceed
to the residence of Erlinda
Romualdez where we
would be staying for three
days. 14
The same thing was testified to by Mary Anne Navarro. Appellant
told her that he was recruiting contract workers for abroad,
particularly Brunei, and promised her a job opportunity if she can
produce various amounts of money for expenses and processing of
documents. 15
Testifying in his behalf, appellant denied these complainants'
allegations. He asserted that he never made a promise in favor of
complainants for employment abroad but assisted them in the
procurement of passports and medical certificates.
This Court is not, however, persuaded by appellant's bare denials.
Evidently, greater weight must generally be given to the positive
testimonies of the prosecution witnesses than to the denial of the
defendant in weighing contradictory declarations and
statements. 16 We stated this rule with curt emphasis in Goce
(supra) that —
The lame defense consisting of such bare
denials by appellant cannot overcome the
evidence presented by the prosecution proving
her guilt beyond reasonable doubt. 17
The acts of the appellant, which were clearly described in the lucid
testimonies of the three victims, such as collecting from each of the
complainants payment for passport, medical tests, placement fee,
plane tickets and other sundry expenses, promising them
employment abroad, contracting and advertising for employment,
unquestionably constitute acts of large scale illegal recruitment.
Appellant sought refuge in the testimonies of his three witnesses
that would give credence to the claim that he was only a facilitator of
travel documents and not a recruiter.
The trial court did not give weight to appellant's allegations.
As observed by the trial court, the testimony of Edgar Macomao, is
incredible which would raise serious doubts about his motive as a
witness. 18 It also describes the testimony of Paulo Lim as unclear
and confusing. 19 Neither was the testimony of Abednigo Neri given
much credit by the trial court.
Admittedly, the findings of the trial court as to the credibility of
witnesses are to be given great weight and a high degree of respect
by the Appellate Court.
In People vs. Reyes (242 SCRA 264), we enunciated the rule that —
When the issue is the credibility of witnesses,
appellate courts will in general not disturb the
findings of the trial court unless certain facts or
circumstances of weight have been overlooked,
misunderstood or misapplied which, if
considered, might affect the result of the case.
This is because the trial court heard the
testimony of the witnesses and observed their
deportment and manner of testifying during
trial. 20
In the case at bar, we see no reason to disturb these observations of
the trial court. A careful scrutiny of the records reveals that no facts
or circumstances had been overlooked or misapplied by the trial
court which might affect the result of the case when considered.
As aptly pointed out by the Solicitor General, to wit:
With the evidence on record, it is hard to believe
that services promised by the appellant to the
three complainants were to consists only of his
assistance in the procurement of passports and
medical certificates for each of them for they
themselves could have easily secured these
documents at a lesser cost. Moreover, the fact
that the appellant still collected P2,000 from
Theresa Fabricante who already had a passport
belies his claim that his services were limited
only to procuring a passport and medical
certificate. 21
The accused's assertion that he only assisted in the processing of
passport and medical certificate is nothing more than a frivolous
excuse to divert the truth.
Likewise, it is the settled rule that a person is guilty of illegal
recruitment when he gives the impression that he has the power to
send workers abroad. 22 Appellant Diaz manifestly gave that
impression to the three complainants that he had the ability to send
workers abroad. Misrepresenting himself as a recruiter of workers
for Brunei, he promised them work for a fee and convinced them to
give their money for the purpose of getting an employment
overseas.
The findings of the trial court, to which we agree, were arrived at
with meticulous care, to wit:
There is no direct and express denial by Mr.
Diaz of the following testimonies of the
complainants:
1] That they had asked Mr. Diaz if he was
"recruiting applicants for Brunei" and he said
"Yes".
2] That when asked what his requirements
were, he said four passport size pictures, bio-
data, income tax returns, medical certificates,
NBI clearance, passport, P2,500 for processing
fee, and P65,000 as placement fee, but only
P20,000 for plane fare was to be paid as the
85
 balance of P45,000 was payable by salary
deductions.
3] That he was asked by the complainants as to
what agency he would be referring them, he
said "the name of the agency is confidential but
the owner thereof is one Erlinda Romualdez,
who used to be his mistress"; that the
complainants did not have to worry because "it
is a government project and then he said he'd
escort us to the Philippine Plaza Hotel for
briefing before leaving for abroad and after the
briefing we will proceed to POEA where we will
sign our contract and after the signing that is the
time we will give the P20,000, and then we will
proceed to the residence of Erlinda Romualdez
where we will be staying for three days."
4] That Mr. Diaz told me the complainants that
they would be working "as salesgirls in one of
the department stores in Brunei, that they will
be getting $700 a month and they will be only
working four hours a day"
These are definitely prohibited practices or
activities constituting large scale illegal
recruitment according to the above quoted
provisions of the law. There is no denial of
these by the accused. 23
This Court is aware of a new law, RA 8042, otherwise known as
Migrant Workers for Overseas Employment, which was approved on
June 07, 1995. It is An Act to Institute the Policies of Overseas
Employment and 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. This new
law, amends the pertinent provisions of the Labor Code of the
Philippines and gives a new definition of the crime of illegal
recruitment and provides for its higher penalty.
We are not in anyway applying the otherwise restrictive provisions of
this new law as it is not applicable in the case at bar, considering the
rule that crimes are punishable by the laws in force at the time of
their commission.
In synthesis, considering the positive testimonies of the
complainants against the negative bare denials of accused-
appellant, no other conclusion could be arrived at but to sustain the
conviction of accused-appellant finding the latter guilty of large scale
illegal recruitment beyond reasonable doubt.
IN VIEW OF THE FOREGOING PREMISES, the Decision appealed
from dated September 2, 1993 is hereby AFFIRMED in all respects,
with costs against accused-appellant Rodolfo Diaz.
SO ORDERED.
G.R. No. 84966 November 21, 1991
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE COURT OF APPEALS and ANTONINA GUIDO, MAURO
CASTAÑEDA, MARGARITA GUIDO, GRACIANO L. AMANTE,
FELIZA GUIDO, ANTONIO AQUINO, CRISANTA GUIDO,
BUENAVENTURA B. ENRIQUEZ, CANDIDA GUIDO, JACOB
ASSAD, ESPERANZA GUIDO, ANGEL BENITO, ALFREDO
GUIDO, CLARA MINDA ANSELMO, EUFRONIA GUIDO, JOSE
LORENO, PRISCILLA GUIDO VDA. DE ESGUERRA,
BENEDICTO LOPEZ, PROFETIZA GUIDO, AIDA DEL CARMEN,
BUENSUCESO GUIDO, HERMINIA VILLAREAL, CARLOS
GUIDO, AMANDA C. RIVERA, JOSE A. ROJAS and EMILIAN M.
ROJAS, the INTERPORT RESOURCES CORPORATION and the
REGISTER OF DEEDS OF RIZAL (Morong Branch), respondents.
Rhodora B. Morales for Interport Resources Corp.
Gilbert M. Fabella for Executrix Claraminda Anselmo Guido.
Quiason, Makalintal, Barot, Torres, Ibarra & Sison for B. Guido, A.
del Carmen, E. Guido and A. Ruiz.
MEDIALDEA, J.:
This petition seeks the review of the decision of the Court of Appeals
in C.A.-G.R. CV No. 12933 entitled "Republic of the Philippines,
Plaintiff-Appellants versus Antonina Guido, et al., Defendants-
Appellees," which affirmed the decision of the Regional Trial Court,
National Capital Region, Branch CLV, stationed in Pasig, declaring
the authenticity of Decreto No. 6145 and Transfer Certificate of Title
No. 23377 of the Registry of Deeds of Morong, Rizal.
The facts of the case are as follows:
The Republic of the Philippines, represented by the Solicitor
General, filed on August 22, 1979, a complaint for declaration of
nullity of Decreto No. 6145, the owner's duplicate copy of TCT No.
2337 and all titles derived from said decree; and the declaration of
the parcel of land covered by the decree as belonging to the state,
except so much thereof as had been validly disposed of to third
persons. The complaint was amended on October 12, 1979. It was
docketed as Civil Case No. 34242 of the Court of First Instance of
Rizal. The complaint alleged inter alia, that:
15. The alleged Decree No. 6145 issued on September
10, 1911 and the alleged owner's copy of Transfer
Certificate of Title No. 23377 issued on May 12, 1933,
both in the name of Francisco and Hermogenes Guido,
and which supposed owner's duplicate was made the
basis of the administrative reconstitution of Transfer
Certificate of Title No. (23377) RT-M-0002 on March 29,
1976, or about 43 years later, are false, spurious and
fabricated and were never issued by virtue of judicial
proceedings for registration of land, either under Act No.
496, as amended, otherwise known as the Land
Registration Act, or any other law, . . . (pp. 91-92, Rollo)
Named defendants were: 1) Antonina, Margarita, Feliza, Crisanta
and Candida, nee Guido, who claim to be the heirs of Francisco
Guido and whose spouses were joined as defedants; 2) Esperanza,
Alfredo (who died during the pendency of this case and who was
substituted by his heirs), Eufronia, Gliceria, Priscilla, Profetiza,
Buenaventura, Buensuceso and Carlos, all surnamed Guido, who
claimed to be the heirs of Hermogenes Guido and whose respective
spouses were joined as defendants; 3) Spouses Jose and Emilina
Rojas; 4) Pacil Development Corporation; and 5) Interport
Resources Corporation.
The defendants, herein private respondents, denied that Decreto
No. 6145 and TCT No. 23377 were false and spurious. They
consistently claimed (from the trial court up to this Court) that the
parcel of land covered by the questioned document is a portion of
the vast Hacienda de Angono owned by their predecessor-in-
interest, Don Buenaventura Guido y Sta. Ana; that Don
Buenaventura Guido left a portion of the hacienda (porcion del plano
11-627) to his heirs, Francisco and Hermogenes Guido; that the
subject matter of the petition is only a portion of plano 11-627,
consisting of an area of 3,181.74 hectares and covered by Decreto
No. 6145, issued on September 1, 1911 in the name of the heirs of
Buenaventura Guido y Sta. Ana (Francisco and Hermogenes
Guido); that on June 12, 1912, an Original Certificate of Title (OCT
No. 633) was issued on the basis of Decreto No. 6145; that the
original title was subsequently cancelled and in lieu thereof, Transfer
Certificate of Title No. 23377 was issued on May 12, 1933; that the
heirs of Francisco and Hermogenes Guido adjudicated among
themselves the estate left by their predecessors and transferred
one-half portion thereof to Jose Rojas sometime in 1942, as
contained in an Extra-judicial Settlement of Estate with Quitclaim
dated December 17, 1973.
The parties, however, admit that on August 20, 1974, the heirs of
Buenaventura Guido, represented by their lawyer, requested the
then Land Registration Commission (now Land Registration
Authority) to issue the corresponding original certificate of title based
on Decreto 6145. The request was denied on January 8, 1976.
On March 29, 1976, Alfredo Guido, representing the other heirs,
filed a petition (Exhibit "I-I"-1, p. 180, Records) for reconstitution of
TCT No. 23377 with the Registry of Deeds of Morong. The petition
alleged that the original of Transfer Certificate of Title No. 23377
could not be located in the files of the Registry of Deeds of Rizal
86
after he and his co-heirs sought the registration of their Extra-judicial
Settlement with Quitclaim dated December 17, 1973. The petition
was supported by the owner's duplicate copy of the title.
The petition for administrative reconstitution of TCT No. 23377 was
granted and a reconstituted certificate of title [TCT (23377) RT-M-
0002] was issued dated March 29, 1976.
After the reconstitution, the heirs presented before the Registry of
Deeds of Morong the Extra-judicial Settlement of Estate with
Quitclaim which they executed on December 17, 1973 in favor of
Jose Rojas and which they had earlier presented for registration.
Subsequently, the entire parcel of land covered by the decree was
subdivided into twenty-one (21) lots and twenty-one (21) different
certificates of titles were issued in lieu of the reconstituted TCT No.
23377. The named heirs and now spouses Jose and Emilia Rojas
sold the property to Pacil Management Corporation and new titles
were issued in favor of the buyer on June 25, 1976. However, on
August 26, 1976, Pacil Management Corporation reconveyed all the
twenty one lots to the former owners. On August 25, 1978, fourteen
(14) of these twenty-one (21) lots were exchanged with shares of
stocks of Interport Resources Corporation. On April 21, 1980, all the
named heirs renounced their rights over the property in favor of their
co-heir Alfredo Guido, Sr. in exchange for monetary considerations.
It appears that the only parties with existing interests in the property
subject of this case are Interport Resources Corporation, the Heirs
of Alfredo Guido, Sr. and spouses Jose Rojas and Emilia Rojas.
After trial, the court a quo rendered judgment dismissing the
complaint and declaring Decree No. 6145 and TCT No. 23377,
genuine and authentic. The pertinent portion of the decision states:
Considering that Decree 6145 and TCT No. 23377 are
genuine and authentic, the decree cannot now be
reopened or revived.
A decree of registration binds the lands (sic),
quiets title thereto, is conclusive upon all
persons and cannot be reopened or revived
after the lapse of one year after entry of the
decree. (Ylarde v. Lichauco, 42 SCRA 641)
WHEREFORE, premises considered, this case is hereby
dismissed. Likewise, the counter claims of the defendants
are dismissed.
The decision of the trial court was appealed by the Solicitor General
to the Court of Appeal which affirmed said decision on July 12, 1988
(pp. 149-154, Rollo).
On July 16, 1988, the Solicitor General filed a motion for
reconsideration of the decision of the Court of Appeals. In the same
motion, he prayed for an alternative judgment declaring the decree
and its derivative titles authentic except with respect to such portions
of the property which were either: 1) possessed and owned by bona
fideoccupants who had already acquired indefeasible titles thereto;
2) possessed and owned by bona fide occupants and their families
with lengths of possession which amounted to ownership (p.
224, Rollo).
The motion for reconsideration was denied by the appellate court in
a resolution dated September 14, 1988, which reads:
After careful consideration of the motion for
reconsideration and defendants-appellees' opposition
thereto, we find no cogent reason to justify the reversal of
Our Decision dated July 12, 1988, hence, the motion is
DENIED.
Likewise DENIED, is the alternative prayer to modify the
aforementioned Decision "to the extent that the
recognition of the authenticity of Decree No. 6145 and
TCT No. 23371 shall not affect and prejudice the parcels
of land already possessed and owned
by bonafide occupants who have already acquired
indefeasible titles thereto," for to grant said alternative
prayer would be to run roughshod over Our decision
averred to. (p. 80, Rollo)
This petition before Us was filed on October 14, 1988 with the same
prayer for the declaration of nullity of Decreto No. 6145 and TCT No.
23377 as in the complaint before the Regional Trial Court and in the
appeal before the Court of Appeals. The prayer for an alternative
judgment first brought to the Court of Appeals in the motion for
reconsideration of its decision was also reiterated, thus:
In the alternative, judgment be rendered on equitable
grounds, modifying the aforesaid Decision dated July 12,
1988 of the respondent Court of Appeals, that the
recognition of the authenticity of Decree No. 6145 and
TCT No. 23377 shall be valid only to the extent of the area
of land in question not possessed and owned
by bonafide occupants with indefeasible registered titles of
ownership or with the length of possession which has
ripened to title of ownership thereto. (p. 54, Rollo)
On May 19, 1989, private respondent Interport Resources
Corporation filed a manifestation that on May 15, 1989, it entered
into an Agreement with the Presidential Commission on Urban Poor
(PCUP) for the disposition of five hundred (500) hectares of the
property involved in this case for the use of deserving urban poor
and to help the government in its objective of alleviating the squatter
problem in Metro Manila area. In the same manifestation, it also
stated that Interport Resources had agreed to accept the alternative
prayer of petitioner (pp. 301-304, Rollo). Counsel for private
respondents Jose and Emiliana Rojas filed a joint Comment (p.
324, Rollo) manifesting no objection to the granting of petitioner's
alternative prayer. The illegitimate heirs of private respondent
Alfredo Guido, Sr., represented by Atty. Gilbert M. Fabella 1 filed a
separate comment in which they manifested that there is no legal
basis for the recognition of any alleged right of those occupants who
were able to secure titles over portions of the Hacienda de Angono
(pp. 571-574, Rollo). The other set of heirs of private respondent
Alfredo Guido, Sr. conceded in their comment, to a portion of
petitioners' alternative prayer, that is, only insofar as it would benefit
those occupants in the property who obtained certificates of titles to
specific portions thereof (p. 428, Rollo).
In their joint memorandum (pp. 624-635, Rollo), all of the private
respondents submitted that they had unanimously agreed to accept
the alternative prayer of the petitioner, thus:
Since December 4, 1990 up to this submission favorable
developments have occurred in the relationship between
the group denominated as the legitimate heirs of Alfredo
Guido, Sr. represented herein by the Laurel Law Offices
and the other group of heirs represented herein by
Executrix Claraminda Anselmo Guido and Claraminda
Guido represented herein by Atty. Gilbert M. Fabella. 2
These developments have prompted the latter group to withdraw as they hereby withdraw
using this Joint memorandum signed by their counsel Atty. Gilbert M. Fabella as the venue,
their opposition to the Alternative Prayer. With the signature of their counsel, they now
manifest before this Honorable Supreme Court their adherence to the position of all the other
private respondents, i.e., accepting the Alternative Prayer of the petition, adopting Interport's
Manifestation and Motion under date of May 16, 1989 and praying likewise that judgment be
rendered based on said Alternative Prayer.
In this petition, the petitioner alleged that respondent appellate court committed serious errors and committed
grave abuse of discretion in rendering its decision more specifically:
a) in concluding and ruling that petitioner RP "failed to satisfy the requirements of
preponderant proof in support of its theory" when, on the contrary, it has satisfactorily
adduced more than sufficient evidentiary and conclusive proof, demonstrating convincingly
that both documents in question, purporting, respectively, to be a Decreto No. 6145 and
Transfer Certificate of Title No. 23377, covering a vast area of land, so called "Hacienda
Angono," located in Binangonan, Rizal, are fake and spurious; and
b) in denying and riding "roughshod" over the alternative prayer in the Motion for
Reconsideration (Annex "F") to modify the main CA Decision (Annex "A"), despite the
justifiably legal and equitable grounds for respondent Court of Appeals to grant the same,
since there is evidentiary basis pointing to the alarming situation with disastrous
consequences, if and when the CA Decision (Annex "A") would be arbitrarily and fully
implemented, by way of cadastral chaos, multiplicity of suits and loss of public faith in the
Torrens System as well as the ensuing grandscale dispossession and social displacement of
several hundreds of bonafideoccupants and their families who had already secured
indefeasible registered titles to portions of the so-called Hacienda Angono.
It is the contention of petitioner that respondent Court of Appeals committed serious errors in the assessment
of the evidence on record and acted with grave abuse of discretion in concluding that the Republic failed to
satisfy the requirements of preponderant proof in support of its theory.
In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence.
Stated differently, the general rule in civil cases is that a party having the burden of proof of an essential fact
must produce a preponderance of evidence thereon (I Moore on Facts, 4, cited in Vicente J. Francisco, The
Revised Rules of Court in the Philippines, Vol. VII, Part II, p. 542, 1973 Edition). By preponderance of
evidence is meant simply evidence which is of greater weight, or more convincing than that which is offered in
87
opposition to it (32 C.J.S., 1051). The term "preponderance of evidence" means the weight, credit and value
of the aggregate evidence on either side and is usually considered to be synonymous with the terms "greater
weight of evidence" or "greater weight of the credible evidence." Preponderance of the evidence is a phrase
which, in the last analysis, means probability of the truth. Preponderance of the evidence means evidence
which is more convincing to the court as worthy of belief than that which is offered in opposition thereto. . . . .
(20 Am. Jur., 1100-1101)
The matter of determining which party had the preponderant evidence is within the province of the trial court
before whom the evidence of both parties are presented. The decision of who to believe and who not to
believe goes to the credibility of a witness which, likewise, is within the province of the trial court.
All the facts and circumstances of the case must properly be considered in determining the weight of
evidence (20 Am. Jur., 1027). In weighing the evidence of witnesses, the trial court takes into consideration all
the surrounding facts and circumstances of the case on trial including the means of knowledge of the
witnesses, their true intentions, their seeming honesty or lack of it, their respective opportunities for seeing
and knowing the things about which they testify, their conduct upon the witness stand, their manner of
testifying, etc.
We have carefully gone through the records of this case and there is no reason for this Court to reverse the
decisions of both the court a quo and the appellate court. Both courts were one in concluding that the
preponderance of evidence is in favor of the theory presented by the private respondents, i.e., the authenticity
of the questioned documents.
Petitioner's primary witness was Francisco Cruz, Jr., a document examiner of the PC Crime Laboratory. The
trial court summarized his testimony as follows:
. . . . He found that as to Transfer Certificate of Title No. 23377, the signature above the
printed words Register of Deeds reveal fundamental divergencies in that the questioned
signature was written on a slow and drawn manner, and no gradation of the ink lines of the
up and down stroke whereas the standard signatures are executed with smooth and fluent
manner, habitual speed, firmness of the strokes, and show gradation of the ink lines; the
questioned and standard signatures have different slants, different initial and different
strokes. As to the printing in the questioned and standards TCTs, they have different printing
characteristics, defects, spacing size and length. Regarding the red seal on the TCT, the
questioned seal is dark red in color, while the standards are bright red and on exposure to
ultra-violet lamp the questioned seal has no fluorescence reaction while the standards give
red reactions. As to the paper the surface of the questioned TCT has a deep brown
discoloration and did not penetrate inward indicative of artificial aging.
Regarding Decree No. 6145, Francisco Cruz, Jr. testified that as to the signature and ink
used are still intensely dark without the indication of fading of color or oxidation and appear
fresh while the ink used in the standards are faded or discolored due to oxidation, the
signatures in the questioned and standard decrees have different shading, divergent strokes
and penlifts. On the dry seal, the borderline reeds of the questioned seal are sharp while in
the standards they are full, there are 77 surrounding beads in the questioned seal while there
are 97 in the standards, the distances between letters are different in the questioned and
standard documents indicating they were not impressed by one and the same machine. As to
the rubber stamp name, RALPH E. McPIE, the color of the ink in the questioned signature is
reddish while in the standards they are blue; they have different characteristics indicating
they were not from one and the same machine. With respect to the rubber stamp Received,
the ink used in the questioned document is pink-red while the standards faded violet, the
rubber stamp have different characteristics, size and spacing of letters; the paper used in the
questioned decree has no water mark. (pp., 151-152, Rollo).
The testimony of Francisco Cruz was corroborated by the report dated December 15, 1980 of Segundo A.
Tabayoyong, NBI Chief Document Examiner and Chief, Questioned Documents Station. However,
Tabayoyong was not presented in court.
The private respondents, on the other hand, presented Atty. Desiderio Pagui, former Chief, Questioned
Documents Section of the NBI. In 1975, even before the complaint for declaration of nullity of Decreta 6145
and TCT. No. 23377 was filed in court, he was requested by the Land Registration Commission to examine
and verify the authenticity of Decree No. 6145. The court a quo summarized his testimony as follows:
. . . He declared that the NBI received a request for examination of Decree 6145 from the
Land Registration Commission which was forwarded to him and after his examination and
investigation, he made a report, Questioned Document Report No. 476-675 dated August 22,
1975 approved by Ernesto G. Brion, Chief Criminalistics Division and noted by Lorenzo Brion,
Deputy Director for Technical Services, NBI. He found that there are significant similarities in
handwriting characteristics existing between the questioned and standard signatures RALPH
E. McPIE in the decree such as proportion of the base and height alignment, made in fact
and unconscious movement; lateral spacing; consistent peculiar sight upward tendency of the
signature; gradation of pen pressure, presence of pen emphasis and tapering of lines;
individual highly developed letter designs; line quality; natural variation, i-dots, periods and
dash; and location of crossings of strokes and that there are no significant dissimilarities in
writing characteristics. There are similarities in type face design existing between the
typewritings appearing in the questioned and standard documents indicating that the decrees
were typed from the same brand or kind of typewriter. Further, he testified the Decree 6145
shows natural brownish coloration (unartificially) indicative of aged document similar with the
decrees executed in 1910, 1911 an 1912 on file in the vault section, LRC, the figure in writing
in "Stamp Receipt" in Decree 6145 shows general characteristics with those figures in writing
on Stamp Receipt in decrees executed in 1910, 1911 and 1912; the dry seal disclose
similarities in general characteristics and the stamped signature in questioned decree and the
standard decrees have identical similarities. As a consequence of all these findings, he
concluded that Decree No. 6145 is genuine. He also testified on the authenticity of the
owner's duplicate of TCT 23377, as follows: He testified further that he likewise examined
Transfer Certificate of Title No. 23377 and after a comparative examination between TCT No.
23377 and various exemplars he found that there are significant similarities in handwriting
characteristics between the questioned and exemplar signatures above the printed words
"Register of Deeds" indicating that the signatures were written by one and the same person.
There are significant similarities in type printing impressions between the questioned typed
printed word and the corresponding exemplars indicating that the printed words in the
questioned TCT and different exemplars were impressed from the same printing machine. As
to the dry seal impressions, there are significant similarities between the questioned and
exemplar dry seal impressions, although the questioned dry seal appears darker while the
exemplars are lighter in color as variance in color is affected by different conditions of
storage. Likewise, the variance in color of the documents could be attributed to the different
conditions when the documents were kept in file. All these findings of the witness were
likewise explained by way of various charts and photo-enlargements pp. 152-153, Rollo)
We are confronted here with varying testimonies of two expert witnesses. However, We agree with the court a
quoand respondent appellate court in giving more weight to the testimony of Atty. Desiderio Pagui than to that
of Mr. Francisco A. Cruz. Their respective educational and work background speak of the differing levels of
their qualifications and competence to testify as expert witnesses. Francisco Cruz, a Document Examiner of
the PC Crime Laboratory, is a BSBA graduate who had examined not less than 10,000 documents. Atty.
Pagui, on the other hand, is the former Chief of the Questioned Document Section of the NBI, an LLB and B.
S. Criminology graduate, and had examined about 50,000 questioned documents. The court a quo observed,
and We note this fact, that Atty. Pagui testified in a straight-forward manner while Mr. Cruz wavered in
answering some pertinent questions. We also note from the transcript of stenographic notes that Pagui's
answers to some technical questions reveal his authority as a document and handwriting witness, which
cannot be said of Francisco Cruz.
Atty. Pagui was first to render a report on these questioned documents. On August 22, 1975, upon the
request of the Land Registration Commission, he, then Chief of the NBI, Questioned Documents Section,
conducted his investigation and submitted his report finding these documents authentic. At the time he made
the investigation, he was impartial and not conscious of any impending ease before the court. Four (4) years
later, in 1979, another request for investigation, this time from the Office of the Solicitor General, was received
by the NBI. He was disappointed and disgusted by the reaction of then NBI Director who pretended not to
have known about the existing NBI report on Decreto 6145. This, according to Pagui was one of the reasons
for his early retirement from the NBI (TSN, March 27, 1984, pp. 39-45). On December 15, 1980, the NBI
rendered another report (Exhibit "M") finding Decreto No. 6145 not genuine, signed by Segundo Tabayoyong,
who was appointed NBI Chief Document Examiner and Chief of the Questioned Documents Section after the
retirement of Atty. Pagui. It is noteworthy that, Mr. Tabayoyong was one of those who conformed with the
previous report of the NBI submitted by Atty. Pagui in 1975 as claimed by the latter and which was not
contradicted by the petitioner.
The petitioner also alleged that Decree No. 6145, solitary in its hidden isolation and detached from
the expediente of the land registration case, surfaced 64 years later under mysterious and bizarre
circumstances.
The circumstances surrounding the appearance of Decree 6145 was far from mysterious. Racquel Marfori, a
witness for the petitioner, who was then Chief of the Ordinary Decree Section of the Division of Original
Registration, Land Registration Commission testified that her office function is to receive copies of decrees,
certified copies of titles from the Registers of Deeds, papers and documents from the Courts, the Bureau of
Lands and other agencies and keeps circulars and memoranda issued by the office and from the Department
of Justice. She further testified that on September 4, 1954, then LRC Commissioner Antonio Noblejas issued
Circular No. 4, instructing all Registers of Deeds to forward all copies of decrees in their possession for
custody to the LRC to complete the records of the Commission. As appearing in the record book of inventory
in the LRC, among the decrees forwarded to their office is Decree 6145 (TSN, October 26, 1982, pp. 54-55).
She likewise categorically stated that in the course of investigation of this case, a copy of Decree 6145 was
found in the vault section of the Commission (Ibid, p. 66).
Petitioner's witness Mr. Jose Cruz, testified that the alleged GLRO number stated on the decreto pertains to a
tract of land owned by Victorio Banaag and not Buenaventura Guido; that said property was located in
Bulacan and not in Rizal and that TCT No. 25829 was issued in that case and not OCT 633 as alleged by the
private respondents. However, on cross-examination, he said that TCT No. 26829 of Banaag did not contain
any decree number nor GLRO number. He also admitted that indeed Decree No. 6145 was issued on
September 1, 1911 in GLR Record No. 2350.
Q In your report Mr. Cruz appearing on page 2 thereof, I am quoting a portion of your report
appearing on page 2 thereof, second paragraph: "Alfredo Guido one of the heirs of
Hermogenes Guido, petitioned for the reconstitution of the original Transfer Certificate of Title
No. 23377 of the Register of Deeds of Rizal and issuance of new original Transfer Certificate
of Title, etc., etc." and furthermore, this is the portion that I am going to ask you of: "but upon
verification it appears that the original of said Transfer Certificate of Title No. 23377 bearing
Book T-94, page 177 could not be located in the files of the Register of Deeds of Rizal." Do
you remember having stated that in your report which I am showing to you?
A Yes sir, I cannot find the original Transfer Certificate of Title on file with the Register of
Deeds of Pasig.
Q So, this statement of Mr. Guido in his petition for reconstitution is correct?
A Yes sir.
Q And also on the same page under the heading findings, you stated and I quote: "In the
Ordinary Decree Book that Court of Land Registration Record No. 2350 was approved on
August 26, 1977 and issued Decree No. 6145 on September 1, 1911 for a parcel of land
located in the province of Rizal, but the name of owner, area and the municipality it is located
was not mentioned." And you further stated and I quote: "It shows that CLR Record No. 2350
was really issued Decree No. 6145 on September 1, 1911." Do you affirm those statements
you made?
88
 A Yes sir.
Q In other words, there was really such a decree issued on September 1, 1911?
A Yes sir.
Q In fact Mr. Cruz, in one of your annexes to Exhibit "C" which is your report and which has
been marked in this proceedings as Exhibit "C-7", it would appear that there is such a Record
2350, correct?
A Yes sir.
Q In the Province of Rizal?
A Yes sir.
Q And there was a decree issued on August 26, 1906 as appearing in the column date okay
for decree, is that correct?
A Yes sir.
Q Moreover, it states in the last column that the decree was issued on September 1, 1911?
A Yes sir.
Q Bearing the Decree No. 6145?
A Yes sir.
Q And it is equally true Mr. Cruz that Decree 6145 from your investigation was among those
old documents and decrees found in the Vault Section of the Land Registration Commission,
is that correct?
A That appears to be in the vault Section because Justice Kapunan was the one who gave
me that decree.
Q And Justice kapunan I suppose told you that it came from the Vault Section of the Land
Registration Commission that is why in your report, the one in the Vault Section where
salvage and issued Decrees are kept shows that Decree No. 6145 was found in their files, is
that correct?
A Yes sir. (TSN, pp. 18-22, Hearing of June 9, 1982)
The testimonies of the municipal treasurers and tax assessors that none of the private respondents registered
in their names big tracts of land nor paid any property tax corresponding to large tracts of land was sufficiently
explained by private respondents. Originally, the property subject of this case was wholly owned by the heirs,
herein private respondents Guidos, pro-indiviso. The title to this land was never registered in their individual
names. Decree No. 6145 was issued in the name of "Herederos de Buenaventura Guido y Sta. Ana
(Francisco and Hermogenes Guido)" while TCT No. 23377 was registered in the name of his two sons,
Francisco and Hermogenes Guido. The declaration of property dated 1941 (Exhibit 8) and the property taxes
(Exhibits 11, 11-A to 11-F) for defendants were all in the name of Don Buenaventura Guido y Sta. Ana. In
fact, even after the reconstitution of TCT No. 23377 on March 29, 1976 and its subsequent subdivision into 21
different titles, these parcels were still registered in the name of the heirs of Francisco and Hermogenes,
Guido (See TCT Nos. M-00789, M-00846 to M-00866).
Alfredo Guido, Sr., during his lifetime, testified that the owner's duplicate copy of TCT No. 23377 (Exhibits "5"
and "5-A" for defendants) was given to him by Joaquin Guido who is the son of Justo Guido, the latter
appearing to be a brother of Don Buenaventura Guido. Thus,
q Will you explain to us how Exhibits 5 and 5-A came into your possession?
a It was given to me by Joaguin Guido, my uncle.
q Will you relay to this Hon. Court under what circumstances this document was given to you
by your uncle?
a I sued Joaquin Guido and his brother because they wanted to get the possession and
administration of Hacienda de Angono, sir.
q Where did you file the case?
a In Pasig, sir.
q Who is Joaquin Guido?
a He is the son of Justo Guido, sir.
q What happened to the case you file?
a Nothing happened, they just kept silent. When Joaquin Guido testified in Court he said he
cannot deny that we are his nephews and even pointed and identified us in Court giving their
names. Joaquin Guido even testified that he is already old and he does not want his
conscience to bother him.
q Will you relay to us under what circumstances your uncle Joaquin Guido gave you these
documents?
a Joaquin Guido went to our house in Cardona, one Sunday and he said, Alfredo I have
documents here regarding that land and I will give it to you but help me because I am sick
and I want to be treated. I said, I do not have much money but if you like, I wig bring you to
the office of Jose Roxas, you bring all those documents in your possession.
q Was that proposal of yours to go to the office of Mr. Roxas materialized?
a Yes, sir, we proceeded to Cinerama.?
q What transpired while you were at the office of Mr. Roxas at Cinerama?
a Mr. Roxas checked the documents and he said to Joaquin Guido, I will give you the help
you were asking.
ATTY. MENDOZA
The original of these documents is now in the possession of the LRC, I will reserve my
examination of the witness on that point, your Honor.
q What happened when Mr. Roxas checked the documents?
a He asked Mr. Joaquin Guido to return.
q Did he return thereafter?
a Yes, Sir, after three days, more or less.
q What happened when he returned to the office of Mr. Roxas?
a He was given the amount of P30,000.00, sir.
q What happened after the money was given to Joaquin Guido?
a He left, sir.
q Is that payment to Mr. Joaquin Guido evidenced by any document?
a A check, sir.
q We request that this check No. 16459 HO of the Republic Bank, Escolta dated March 29,
1976 for P30,000.00 . . . (pp. 33-40, TSN, August 22, 1983).
The petitioner suspects that the circumstances attending issuance of the reconstituted TCT 23377 was not
regular. alleged that the petition for reconstitution was filed and proved on the same day and the reconstituted
title issued on the same day. When presented on the stand, Atty. Priscilla M. Tech, then Register of Deeds of
Rizal (Morong Branch), who issued the reconstituted title clarified that the reconstituted title was not issued on
the same day the petition was filed. The reconstituted title was actually issued days after the petition for
reconstitution was filed although the reconstituted title showed that it was released on the same day the
petition was filed in accordance with Section 56 3
of Act 496. Be that as it may, the fact
alone that the petition for reconstitution was approved on the same
day that it was filed did not render the approval suspect. In
administrative reconstitution of a certificate of title supported by the
owner's duplicate copy of the title, no other requisite was required
under Section 6 of Republic Act 26 unlike in judicial reconstitution
under Section 12 of the same law. The Register of Deeds correctly
granted the reconstitution on the basis of private respondents
owners' duplicate copy of TCT No. 23377.
In civil cases, it is a well settled rule that the appellate will not
reverse a finding of fact by the trial court made conflicting testimony
and depending largely upon the cridibility of witnesses who testified
in the presence of the court, the court failed to take into
consideration some material circumstance or to weigh accurately all
of the material facts circumstances presented to it for consideration
(Baltazar, et al. v. Alberto, 33 Phil. 336; See also Garcia v. Garcia
de Bartolome, 63 Phil. 425; Melliza v. Towle, 34 Phil. 347; Caragay
89
v. Urquiza, 53 Phil. 79; Jai-alai Corp. of the Philippines v. Ching Kiat
Biek, et al., G.R. L-7969, March 30,1960; Tui Bon Hui v. Republic, L-
8370, November 19,1956; Neyra v. Neyra, 76 Phil. 298). In the
instant case, We do not see any reason for the application of the
exception to the just cited rule. Moreover, questions of authenticity
being one of fact, this Court will not disturb the conclusions of the
Court of Appeals (Egao v. CA, G.R. No. 79787, June 29, 1989, 174
SCRA 484.), especially when said appellate court merely aimed the
findings of the court a quo which conducted the trial, had the
opportunity to observe the demeanor of the principal witnesses (the
handwriting and document experts), assessed their ability to answer
technical questions calling for the application of their special
education and training.
No less than this Court in the case of Guido, et al., v. de Borja, et al.,
G.R. No. 4013, February 4,1909,12 Phil. 718 declared the existence
of Hacienda de Angono and recognized the ownership thereof by
the "Guidos" when it affirmed the decision of the then Court of First
Instance of the Province of Rizal, that:
1. That the ownership and possession of the hacienda of
Angono, as it appears described in the decision of said
court, in accordance with the amended complaint, pertains
to Justo Guido, Juliana Guido, Buenaventura Guido and
other participants with them in said hacienda; by virtue
thereof the court below ordered the defendants to restore
said possession to the plaintiffs.
The Solicitor General also faulted respondent appellate court from
denying their alternative prayer seeking the modification of its
decision by rendering judgment declaring Decreta 6145 and TCT
23377 valid and genuine except with respect to such portions of the
property which were either: 1) possessed and owned by bona
fide occupants who had already acquired indefeasible titles thereto;
or 2) possessed by bona fide occupants for such length of time as to
amount to ownership without having obtained certificates of titles
thereto.
Anent the alternative prayer of the petitioner, We find no legal basis
for the declaration of the questioned documents as valid only with
respect to such portions of the property not possessed and owned
by bonafide occupants with indefeasible registered titles of
ownership or with lengths of possession which had ripened to
ownership. Having been found valid genuine, Decreta No. 6145
therefore, possessed all the attributes of a decree of registration.
Section 31 of the Prope Registration Decree (P.D. 1529), second
paragraph provides:
The decree of registration shall bind the land and quiet
title thereto, subject only to such exceptions or liens as
may be provided by law. It shall be conclusive upon and
against all persons, including the National Government
and all branches thereof, whether mention by name in the
application or notice, the same being included in the
general description "To all whom it may concern".
Likewise, TCT No. 23377, having been found true and authentic
also possessed all the attributes of a torrens certificate of title. By
express provision of Section 47 of P.D. 1529, no to registered land
in derogation to that of the registered owner shall be acquired by
prescription or adverse possession. declare that the decree and its
derivative titles is valid but only with respect to the extent of the area
described in the decree possessed by occupants with indefeasible
registered titles or possessors with such lengths of possession
which had ripened ownership is to undermine the people's faith in
the torrens being conclusive as to all matters contained therein. The
certificate serves as evidence of an indefeasible title to the proper
favor of the person whose names appear therein. After expiration of
the one year period from the issuance of the decree of registration
upon which it is based, it becomes incontrovertible (see case of
Pamintuan v. San Agustin, 43 Phil, 558; Reyes and Nadres v.
Borbon and Director of Lands, 50 Phil. 791, Juco v. Francisco, O.G.
p. 2186, April 15,1957, Brizuela v. Vargas, 53 O.G. 2822, May
15,1957), unless subsequent to issuance of the decree a third party
may be able to show that acquired title thereto by any of the means
recognized by law.
It should be noted however, that prior to the reconstruction of TCT
No. 23377 on March 29, 1976, [there was] no record in Office of the
Register of Deeds of Rizal show of the existence any registered title
covering the land area subject of this case. The Court takes judicial
notice of the fact that prior to said certain portions of the area were
in the possession of occupants who successfully obtained
certificates of titles over the are occupied by them. There were also
occupants who had obtained certificates of titles over the area
possessed by the but the lengths of their possession were long
enough to amount to ownership, had the land been in fact
unregistered. This fact is admitted by the parties.
Although prescription is unavailing against private respondents
because they are holders of a valid certificate of title, the equitable
presumption of laches may be applied against the for failure to
assert their ownership for such an unreasonable length of time (only
in 1976) against subsequent occupants. The records showed that it
was only in 1974 when they tried obtain an original certificate of title.
When rebuffed by the LRC they applied for a reconstitution of a TCT
only in 1976.
In the recent case of Lola v. CA, G.R. No. L-46573, Nov. 13, 1986,
145 SCRA 439, citing the cases of Pabalete v. Echarri, Jr., G.R. No.
L-24357, 37 SCRA 518, 521, 522 quoting Mejia de Lucas v.
Gamponia, 100 Phil. 277, it was held that "although the defense of
prescription is unavailing to the petitioners (Pablo and Maxima Lola)
because, admittedly, the title to Lot No. 5517 is still registered in the
name of the respondent (dolores Zabala), still the petitioners have
acquired title to it by virtue of the equitable principle of laches due to
the respondent's failure to assert her claim ownership for thirty two
(32) years."
Moreover, conscious of the resulting "large scale dispossession and
social displacement of several hundreds ofbona fide occupants and
their families" which the Solicitor General pointed out, the private
respondent agreed unanimously to accept the alternative prayer of
the petitioner in their joint memorandum (pp. 624-636, Rollo). This
agreement by private respondents takes the form of a waiver.
Though a valid and clear right over the property exists in their
favors, they seemingly have voluntarily abandoned the same in
favor of. 1) those who possessed and actually occupied specific
portions and obtained torrens certificates of titles, and 2) those who
possessed certain specific portions for such lengths of time as to
amount to full ownership. The waiver, not being contrary to law,
morals, good customs and good policy, is valid and binding on the
private respondents.
However, with respect to the second set of possessors, whose
alleged bona fide occupancy of specific portions of the property is
not evidenced by Torrens Titles, it is imperative that their
claims/occupancy be duly proven in an appropriate proceeding.
ACCORDINGLY, the decision of the Court of Appeals in CA-G.R.
No. 12933 is AFFIRMED subject to the herein declared superior
rights of bona fide occupants with registered titles within the area
covered by the questioned decree and bona fide occupants therein
with length of possession which had ripened to ownership, the latter
to be determined in an appropriate proceeding.
SO ORDERED.
G.R. No. 119160 January 30, 1997
PEOPLE OF THE PHILIPPINES, plaintiff-appelle,
vs.
EDITHA SEÑORON Y LIMORA, accused-appellant.
FRANCISCO, J.:
Appellant Editha L. Señoron and her co-accused Aquilino Ilano and
one John Doe, both at large, were charged in four separate
informations with one count of illegal recruitment in large scale1 and
three counts of estafa2 before the Regional Trial Court of Pasay
City.3 When arraigned, appellant pleaded not guilty. Trial thereafter
ensued. On October 25, 1994, the trial court rendered a decision
convicting appellant as charged and sentencing her "to suffer a
penalty of life imprisonment and to pay a fine of one hundred
thousand pesos (P100,000.00)"4 for illegal recruitment, and "to
suffer a penalty of three (3) times of arresto mayor in its maximum
period as minimum (or two (2) years ten (10) months and twenty one
(21) days) to prision mayor in its minimum period as maximum (or to
eight (8) years) and to compensate the private complainants the
sum of fifty nine thousand pesos (P59,000.00)"5 for the three counts
of estafa. Dissatisfied, appellant interposed the instant appeal with
the following assignment of errors, thus:
90
 I employment abroad (ibid, p. 9). The promise to
THE LOWER COURT ERRED IN NOT
FINDING THAT THE PROSECUTION FAILED
TO PROVE THE GUILT OF THE ACCUSED-
APPELLANT EDITHA SEÑORON BEYOND
REASONABLE DOUBT IN THE ILLEGAL
RECRUITMENT, (LARGE SCALE) CASE.
II
THE LOWER COURT ERRED IN
CONVICTING ACCUSED-APPELLANT
EDITHA SEÑORON OF THE CRIME OF
ILLEGAL RECRUITMENT, (LARGE SCALE)
AND SENTENCING HER TO SUFFER A
PENALTY OF LIFE IMPRISONMENT AND TO
PAY A FINE OF ONE HUNDRED THOUSAND
PESOS (P100,000.00).6
Aptly narrated in the People's brief and supported by the evidence
on record are the following facts:
At the consolidated hearing of the cases filed
against appellant, complainants Cesar Virtucio,
Ronilo Bueno and Greg Corsega testified for the
prosecution.
Cesar Virtucio testified that sometime in
October 1991, he met appellant at accused
Aquilino Ilano's house in Malibay, Pasay City,
when he (Virtucio) and other applicants applied
for jobs abroad (tsn, May 27, 1993, p. 6). During
the meeting at Ilano's residence, Virtucio and
his companions were given job application
forms which they filled up as told (ibid, p. 9).
Thereafter, Virtucio paid Ilano, in the presence
of appellant, the amount of P20,000.00 as
placement fee (Exhibit "B"). After paying the
placement fee, Virtucio and his companions
were told by appellant to follow-up their
applications at her office or at Padre Faura,
Manila (ibid, p. 14). Appellant failed to send
Virtucio and his companions abroad, hence, he
(Virtucio), together with applicants Ronilo Bueno
and Greg Corsega, filed a complaint for illegal
Recruitment and Estafa against appellant, a
certain John Doe and Aquilino Ilano before the
National Bureau of Investigation (ibid, p. 18).
"Greg Corsega, one of the three (3)
complainants, testified that accused Aquilino
Ilano introduced him to appellant as the person
who will process his papers for employment
abroad (tsn, June 30, 1993, pp. 8 to 9).
Thereafter, Ilano demanded from Corsega the
amount of Twenty Thousand Pesos
(P20,000.00) as placement fee (ibid). The
amount of Twenty Thousand Pesos
(P20,000.00) was given to Ilano in the presence
of appellant and it was at this juncture that
appellant promised Corsega and his
companions (Virtucio and Bueno) that they will
be called as a group to sign a contract.
However, appellant's promise to deploy
Corsega, Virtucio and Bueno for employment
abroad never materialized, prompting him
(Corsega), Virtucio and Bueno to file a
complaint for Illegal Recruitment and Estafa
against appellant, John Doe and Aquilino Ilano
before the National Bureau of Investigation.
Ronilo Bueno testified that he was initially
referred by Aquilino Ilano to his (Ilano's)
secretary in order to sign papers for
employment abroad (August 31, 1993, p. 4).
After signing some papers, Bueno was required
by Ilano to pay the amount of P19,000.00 for
the processing of his passport and visa (ibid, p.
5).
The amount of P19,000.00 was immediately
paid to Ilano in the presence of appellant (ibid,
p. 7). Whereupon, Ilano told Bueno that the
money will be given to appellant who will be
responsible in the processing of their papers for
deploy Bueno, Virtucio and Corsega abroad did
not materialize, hence, the three (Bueno,
Virtucio and Corcega) went to appellant, who
showed them the list of the money paid by
them. At the same time, appellant advised the
three to wait for notice of their employment
abroad (ibid., pp. 9 to 10). Again, nothing
happened to their applications and this
prompted Bueno and his companions (Virtucio
and Corcega) to file charges of Illegal
Recruitment and Estafa against Aquilino Ilano,
John Doe and appellant before the National
Bureau of Investigation.
Bueno, Virtucio and Corcega uniformly testified
that before the filing of Illegal Recruitment and
Estafa cases against Aquilino Ilano, John Doe
and appellant before the National Bureau of
Investigation, they (Bueno, Virtucio and
Corcega) asked for the return of their money.
Consequently, appellant issued Interbank
Check No. 05263108 in the amount of
P135,000.00 in words but P130,000.00 in
figures. They also testified that the amount
covers the payment given by nine (9) applicants
including complainants (tsn, May 27, 1993, p.
16 and tsn, June 30, 1993, pp. 33 to 34).
However, Interbank Check No. 05263108 was
never encashed as an inquiry from the bank
revealed that the check was not sufficiently
funded (ibid., p. 38).
The prosecution presented as its last witness
Socorro Landas, an employee of the Philippine
Overseas Employment Administration (POEA),
who testified that appellant is not licensed by
the Philippine Overseas Employment
Administration to be a recruiter (tsn, February
11, 1993, pp. 2 to 5).7
On the other hand, as lone witness for her
defense, accused EDITHA SEÑORON, testified
that she only met the private complainants at
the National Bureau of Investigation on
September 1993, that she has nothing to do
with the receipts of payment to Greg Corsega;
and Cesar Virtucio which receipts were signed
by Aquilino Ilano. She admitted having issued
check No. 05263108 (Exh. C) just to
accommodate co-accused Aquilino Ilano who
promised that he will be the one to put funds on
said check.8
At the outset, the Court observes that appellant confines her appeal
to her conviction for illegal recruitment as she neither questioned nor
assailed her convictions for the three (3) counts of estafa. The
failure to appeal therefrom rendered the estafa convictions final and
executory; hence, this review shall be limited to the illegal
recruitment case.
In essence, the centerpiece of appellant's defense dwells on the
alleged insufficiency of the prosecution's evidence to prove her guilt
as "[t]here is nothing on record . . . which says that placement fees
received by Aquilino Ilano from the three (3) private complainants
was turned over to [her]".9 Appellant asserts that she never issued
or signed any receipts and that as a matter of fact "[t]he receipts of
payment of alleged placement fees were received and receipted by
accused Aquilino Ilano."10 Appellant also harps on her being a mere
accommodation party in the issuance of the Interbank Check in the
amount of P135,000.00 and "that after the check bounced", she
contends that "no notice whatsoever was given to [her]". 11 Thus,
appellant concludes that the prosecution failed to discharge its
burden of proof thereby necessitating her acquittal.
We are not persuaded.
Illegal recruitment is defined under Article 38 (a) of the Labor Code,
as amended, as "(a)ny recruitment activities, including the prohibited
practices enumerated under Article 34 of this Code, to be
undertaken by non-licensees or non-holders of authority." Article 13
(b) of the Code defines "recruitment and placement" as
[A]ny act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring
workers, and includes referrals, contract
91
 services, promising or advertising for
employment, locally or abroad, whether for
profit or not: Provided, that any person or entity
which in any manner, offers or promises for a
fee employment to two or more persons shall be
deemed engaged in recruitment and placement.
To prove illegal recruitment, two elements must be shown namely:
(1) the person charged with the crime must have undertaken
recruitment activities, or any of the activities enumerated in Article
34 of the Labor Code, as amended; and (2) said person does not
have a license12 or authority13 to do so.14 Contrary to appellant's
mistaken notion, therefore, it is not the issuance or signing of
receipts for the placement fees that makes a case for illegal
recruitment, but rather the undertaking of recruitment activities
without the necessary license or authority. And in this case,
evidence on record belie appellant's assertion that she did not
engage in any recruitment activity and that the fees paid by the
applicants were not turned over to her possession as shown by the
following testimony of private complainant Virtucio, thus:
Fiscal Untalan:
Q: Now, you said that you
together with your co-
complainant were recruited
by the accused at Malibay,
Pasay City, now, in
connection with that
recruitment of applicant, do
you remember when was
your transaction if there
was any?
A: Before we were recruited
she gave us an application
paper which we filled up
and she told us to file (sic)
it up.
Q: And did you comply?
A: Yes, sir."
xxx xxx xxx
Q: Now, after having paid
that placement fee of
P20,000.00 to the accused,
what happened next?
A: She told us to follow it up
at her residence and also at
her office in Padre Faura.
Q: And what happened to
your follow up?
A: Nothing, sir." (tsn, May
27, 1993, pp. 9-10, 13-
14.) 15
which testimony was corroborated by prosecution witness
Ronilo Bueno. Thus:
Fiscal Untalan:
Q: Is this promised of Ilano
materialized? (sic)
A: No, sir.
Q: Do you know the reason
why?
A: Ilano told us that our
money will be paid to Edith
and that Edith would be the
one to attend to our papers.
Q: After knowing that
information what did you
do?
A: We went to Edith.
Q: You said, we, who are
your companions?
A: Corsega and Virtucio.
Q: What happened when
you together with Corsega
and Virtucio went to Editha
Señoron?
A: She showed to us the list
of the money that we paid
and told us to wait.
Q: And then what did you
do, did you wait?
A: Yes, sir.
Q: What happened?
A: Nothing happened and
"tumagal"
Q: You said nothing
happened and "tumagal"
for how long?
A: Almost a year.
Q: After that period of time
what did you do together
with the others?
A: We filed a complaint
before the NBI.
Q: Before you filed this
complaint did you ask the
return of your money before
the accused?
A: Yes, sir.
Q: What was the answer?
A: Edith issued a check.
Q: What check?
A: Interbank check.
xxx xxx xxx
Fiscal Untalan:
Q: Now, when you filed
your application to the
accused for a job abroad
particularly in Taiwan and
you were failed to be
deployed together with your
companions, what did you
do? (sic)
A: We asked for the refund
of the money we have paid.
Q: Now, what else aside
from that?
92
 A: When the check she
issued to us bounced we
filed the complaint before
the NBI.
Q: Before filing any case
with the NBI did you make
any investigation as to the
capacity of the agency
whether they are
authorized?
A: Yes, sir.
Q: Where did you verify its
authority?
A: POEA.
Q: What happened there?
A: That they were not
legitimate to recruit (sic)."
(tsn, August 31, 1993, pp 9-
12) 16
Appellant made a distinct impression that she had the ability to send
applicants for work abroad. She, however, does not possess any
license or authority to recruit which fact was confirmed by the duly
authenticated certification17issued by the Manager of the Licensing
Branch of the POEA, and by the testimony of Ms. Socorro Landas
representing the Licensing Division of the Philippine Overseas
Employment Administration (POEA). It is the lack of necessary
license or authority that renders the recruitment activity, as in this
case, unlawful or criminal.18
Appellant's residual arguments that she was just an accommodation
maker in the issuance of the check and that private complainants
failed to notify her after the check bounced do not merit serious
consideration. It has to be emphasized that appellant is not being
prosecuted for violation of the anti-bouncing check law19 where the
foregoing contentions may have an impact, but for illegal recruitment
which the prosecution was able to establish beyond reasonable
doubt.
WHEREFORE, the trial court's decision is hereby AFFIRMED.
SO ORDERED.
G.R. Nos. L-58674-77 July 11, 1990
PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First
Instance of Zambales & Olongapo City, Branch III and SERAPIO
ABUG, respondents.
CRUZ, J:
The basic issue in this case is the correct interpretation of Article
13(b) of P.D. 442, otherwise known as the Labor Code, reading as
follows:
(b) Recruitment and placement' refers to any act
of canvassing, enlisting, contracting,
transporting, hiring, or procuring workers, and
includes referrals, contract services, promising
or advertising for employment, locally or abroad,
whether for profit or not: Provided, That any
person or entity which, in any manner, offers or
promises for a fee employment to two or more
persons shall be deemed engaged in
recruitment and placement.
Four informations were filed on January 9, 1981, in the Court of First
Instance of Zambales and Olongapo City alleging that Serapio
Abug, private respondent herein, "without first securing a license
from the Ministry of Labor as a holder of authority to operate a fee-
charging employment agency, did then and there wilfully, unlawfully
and criminally operate a private fee charging employment agency by
charging fees and expenses (from) and promising employment in
Saudi Arabia" to four separate individuals named therein, in violation
of Article 16 in relation to Article 39 of the Labor Code. 1
Abug filed a motion to quash on the ground that the informations did
not charge an offense because he was accused of illegally recruiting
only one person in each of the four informations. Under the proviso
in Article 13(b), he claimed, there would be illegal recruitment only
"whenever two or more persons are in any manner promised or
offered any employment for a fee. " 2
Denied at first, the motion was reconsidered and finally granted in
the Orders of the trial court dated June 24 and September 17, 1981.
The prosecution is now before us on certiorari. 3
The 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
93
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.
G.R. No. 113161 August 29, 1995
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
LOMA GOCE y OLALIA, DAN GOCE and NELLY D. AGUSTIN,
accused. NELLY D. AGUSTIN, accused-appellant.
REGALADO, J.:
On January 12, 1988, an information for illegal recruitment
committed by a syndicate and in large scale, punishable under
Articles 38 and 39 of the Labor Code (Presidential Decree No. 442)
as amended by Section 1(b) of Presidential Decree No. 2018, was
filed against spouses Dan and Loma Goce and herein accused-
appellant Nelly Agustin in the Regional Trial Court of Manila, Branch
5, alleging —
That in or about and during the period
comprised between May 1986 and June 25,
1987, both dates inclusive, in the City of Manila,
Philippines, the said accused, conspiring and
confederating together and helping one another,
representing themselves to have the capacity to
contract, enlist and transport Filipino workers for
employment abroad, did then and there willfully
and unlawfully, for a fee, recruit and promise
employment/job placement abroad, to (1)
Rolando Dalida y Piernas, (2) Ernesto Alvarez y
Lubangco, (3) Rogelio Salado y Savillo, (4)
Ramona Salado y Alvarez, (5) Dionisio Masaya
y de Guzman, (6) Dave Rivera y de Leon, (7)
Lorenzo Alvarez y Velayo, and (8) Nelson
Trinidad y Santos, without first having secured
the required license or authority from the
Department of Labor.1
On January 21, 1987, a warrant of arrest was issued against the
three accused but not one of them was arrested. 2Hence, on
February 2, 1989, the trial court ordered the case archived but it
issued a standing warrant of arrest against the accused. 3
Thereafter, on learning of the whereabouts of the accused, one of
the offended parties, Rogelio Salado, requested on March 17, 1989
for a copy of the warrant of arrest.4 Eventually, at around midday of
February 26, 1993, Nelly Agustin was apprehended by the
Parañaque police.5 On March 8, 1993, her counsel filed a motion to
revive the case and requested that it be set for hearing "for purposes
of due process and for the accused to immediately have her day in
court" 6 Thus, on April 15, 1993, the trial court reinstated the case
and set the arraignment for May 3, 1993,7 on which date of Agustin
pleaded not guilty8 and the case subsequently went to trial.
Four of the complainants testified for the prosecution. Rogelio
Salado was the first to take the witness stand and he declared that
sometime in March or April, 1987, he was introduced by Lorenzo
Alvarez, his brother-in-law and a co-applicant, to Nelly Agustin in the
latter's residence at Factor, Dongalo, Parañaque, Metro Manila.
Representing herself as the manager of the Clover Placement
Agency, Agustin showed him a job order as proof that he could
readily be deployed for overseas employment. Salado learned that
he had to pay P5,000.00 as processing fee, which amount he gave
sometime in April or May of the same year. He was issued the
corresponding receipt.9
Also in April or May, 1987, Salado, accompanied by five other
applicants who were his relatives, went to the office of the
placement agency at Nakpil Street, Ermita, Manila where he saw
Agustin and met the spouses Dan and Loma Goce, owners of the
agency. He submitted his bio-data and learned from Loma Goce that
he had to give P12,000.00, instead of the original amount of
P5,000.00 for the placement fee. Although surprised at the new and
higher sum, they subsequently agreed as long as there was an
assurance that they could leave for abroad.10
Thereafter, a receipt was issued in the name of the Clover
Placement Agency showing that Salado and his aforesaid co-
applicants each paid P2,000.00, instead of the P5,000.00 which
each of them actually paid. Several months passed but Salado failed
to leave for the promised overseas employment. Hence, in October,
1987, along with the other recruits, he decided to go to the
Philippine Overseas Employment Administration (POEA) to verify
the real status of Clover Placement Agency. They discovered that
said agency was not duly licensed to recruit job applicants. Later,
upon learning that Agustin had been arrested, Salado decided to
see her and to demand the return of the money he had paid, but
Agustin could only give him P500.00. 11
Ramona Salado, the wife of Rogelio Salado, came to know through
her brother, Lorenzo Alvarez, about Nelly Agustin. Accompanied by
her husband, Rogelio, Ramona went to see Agustin at the latter's
residence. Agustin persuaded her to apply as a cutter/sewer in
Oman so that she could join her husband. Encouraged by Agustin's
promise that she and her husband could live together while working
in Oman, she instructed her husband to give Agustin P2,000.00 for
each of them as placement fee, or the total sum of P4,000.00. 12
Much later, the Salado couple received a telegram from the
placement agency requiring them to report to its office because the
"NOC" (visa) had allegedly arrived. Again, around February, or
March, 1987, Rogelio gave P2,000.00 as payment for his and his
wife's passports. Despite follow-up of their papers twice a week from
February to June, 1987, he and his wife failed to leave for abroad. 13
Complainant Dionisio Masaya, accompanied by his brother-in-law,
Aquiles Ortega, applied for a job in Oman with the Clover Placement
Agency at Parañaque, the agency's former office address. There,
Masaya met Nelly Agustin, who introduced herself as the manager
of the agency, and the Goce spouses, Dan and Loma, as well as the
latter's daughter. He submitted several pertinent documents, such
as his bio-data and school credentials. 14
In May, 1986, Masaya gave Dan Goce P1,900.00 as an initial
downpayment for the placement fee, and in September of that same
year, he gave an additional P10,000.00. He was issued receipts for
said amounts and was advised to go to the placement office once in
a while to follow up his application, which he faithfully did. Much to
his dismay and chagrin, he failed to leave for abroad as promised.
Accordingly, he was forced to demand that his money be refunded
but Loma Goce could give him back only P4,000.00 in
installments. 15
As the prosecution's fourth and last witness, Ernesto Alvarez took
the witness stand on June 7, 1993. He testified that in February,
1987, he met appellant Agustin through his cousin, Larry Alvarez, at
her residence in Parañaque. She informed him that "madalas siyang
nagpapalakad sa Oman" and offered him a job as an ambulance
driver at the Royal Hospital in Oman with a monthly salary of about
$600.00 to $700.00. 16
On March 10, 1987, Alvarez gave an initial amount of P3,000.00 as
processing fee to Agustin at the latter's residence. In the same
month, he gave another P3,000.00, this time in the office of the
placement agency. Agustin assured him that he could leave for
abroad before the end of 1987. He returned several times to the
placement agency's office to follow up his application but to no avail.
Frustrated, he demanded the return of the money he had paid, but
Agustin could only give back P500.00. Thereafter, he looked for
Agustin about eight times, but he could no longer find her. 17
Only herein appellant Agustin testified for the defense. She asserted
that Dan and Loma Goce were her neighbors at Tambo, Parañaque
and that they were licensed recruiters and owners of the Clover
Placement Agency. Previously, the Goce couple was able to send
her son, Reynaldo Agustin, to Saudi Arabia. Agustin met the
aforementioned complainants through Lorenzo Alvarez who
requested her to introduce them to the Goce couple, to which
request she acceded. 18
Denying any participation in the illegal recruitment and maintaining
that the recruitment was perpetrated only by the Goce couple,
94
Agustin denied any knowledge of the receipts presented by the
prosecution. She insisted that the complainants included her in the
complaint thinking that this would compel her to reveal the
whereabouts of the Goce spouses. She failed to do so because in
truth, so she claims, she does not know the present address of the
couple. All she knew was that they had left their residence in
1987. 19
Although she admitted having given P500.00 each to Rogelio
Salado and Alvarez, she explained that it was entirely for different
reasons. Salado had supposedly asked for a loan, while Alvarez
needed money because he was sick at that time. 20
On November 19, 1993, the trial court rendered judgment finding
herein appellant guilty as a principal in the crime of illegal
recruitment in large scale, and sentencing her to serve the penalty of
life imprisonment, as well as to pay a fine of P100,000.00. 21
In her present appeal, appellant Agustin raises the following
arguments: (1) her act of introducing complainants to the Goce
couple does not fall within the meaning of illegal recruitment and
placement under Article 13(b) in relation to Article 34 of the Labor
Code; (2) there is no proof of conspiracy to commit illegal
recruitment among appellant and the Goce spouses; and (3) there is
no proof that appellant offered or promised overseas employment to
the complainants. 22 These three arguments being interrelated, they
will be discussed together.
Herein appellant is accused of violating Articles 38 and 39 of the
Labor Code. Article 38 of the Labor Code, as amended by
Presidential Decree No. 2018, provides that any recruitment activity,
including the prohibited practices enumerated in Article 34 of said
Code, undertaken by non-licensees or non-holders of authority shall
be deemed illegal and punishable under Article 39 thereof. The
same article further provides that illegal recruitment shall be
considered an offense involving economic sabotage if any of these
qualifying circumstances exist, namely, (a) when illegal recruitment
is committed by a syndicate, i.e., if it is carried out by a group of
three or more persons conspiring and/or confederating with one
another; or (b) when illegal recruitment is committed in large
scale, i.e., if it is committed against three or more persons
individually or as a group.
At the outset, it should be made clear that all the accused in this
case were not authorized to engage in any recruitment activity, as
evidenced by a certification issued by Cecilia E. Curso, Chief of the
Licensing and Regulation Office of the Philippine Overseas
Employment Administration, on November 10, 1987. Said
certification states that Dan and Loma Goce and Nelly Agustin are
neither licensed nor authorized to recruit workers for overseas
employment. 23 Appellant does not dispute this. As a matter of fact
her counsel agreed to stipulate that she was neither licensed nor
authorized to recruit applicants for overseas employment. Appellant,
however, denies that she was in any way guilty of illegal
recruitment. 24
It is appellant's defensive theory that all she did was to introduce
complainants to the Goce spouses. Being a neighbor of said couple,
and owing to the fact that her son's overseas job application was
processed and facilitated by them, the complainants asked her to
introduce them to said spouses. Allegedly out of the goodness of her
heart, she complied with their request. Such an act, appellant
argues, does not fall within the meaning of "referral" under the Labor
Code to make her liable for illegal recruitment.
Under said 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; 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. 25 On the other hand, referral is the act of passing along
or forwarding of an applicant for employment after an initial interview
of a selected applicant for employment to a selected employer,
placement officer or bureau. 26
Hence, the inevitable query is whether or not appellant Agustin
merely introduced complainants to the Goce couple or her actions
went beyond that. The testimonial evidence hereon show that she
indeed further committed acts constitutive of illegal recruitment. All
four prosecution witnesses testified that it was Agustin whom they
initially approached regarding their plans of working overseas. It was
from her that they learned about the fees they had to pay, as well as
the papers that they had to submit. It was after they had talked to
her that they met the accused spouses who owned the placement
agency.
As correctly held by the trial court, being an employee of the Goces,
it was therefore logical for appellant to introduce the applicants to
said spouses, they being the owners of the agency. As such,
appellant was actually making referrals to the agency of which she
was a part. She was therefore engaging in recruitment activity. 27
Despite Agustin's pretensions that she was but a neighbor of the
Goce couple, the testimonies of the prosecution witnesses paint a
different picture. Rogelio Salado and Dionisio Masaya testified that
appellant represented herself as the manager of the Clover
Placement Agency. Ramona Salado was offered a job as a
cutter/sewer by Agustin the first time they met, while Ernesto
Alvarez remembered that when he first met Agustin, the latter
represented herself as "nagpapaalis papunta sa Oman." 28 Indeed,
Agustin played a pivotal role in the operations of the recruitment
agency, working together with the Goce couple.
There is illegal recruitment when one gives the impression of having
the ability to send a worker abroad." 29 It is undisputed that appellant
gave complainants the distinct impression that she had the power or
ability to send people abroad for work such that the latter were
convinced to give her the money she demanded in order to be so
employed. 30
It cannot be denied that Agustin received from complainants various
sums for purpose of their applications. Her act of collecting from
each of the complainants payment for their respective passports,
training fees, placement fees, medical tests and other sundry
expenses unquestionably constitutes an act of recruitment within the
meaning of the law. In fact, appellant demanded and received from
complainants amounts beyond the allowable limit of P5,000.00
under government regulations. It is true that the mere act of a
cashier in receiving money far exceeding the amount allowed by law
was not considered per se as "recruitment and placement" in
contemplation of law, but that was because the recipient had no
other participation in the transactions and did not conspire with her
co-accused in defrauding the victims. 31 That is not the case here.
Appellant further argues that "there is no evidence of receipts of
collections/payments from complainants to appellant." On the
contrary, xerox copies of said receipts/vouchers were presented by
the prosecution. For instance, a cash voucher marked as Exhibit
D, 32 showing the receipt of P10,000.00 for placement fee and duly
signed by appellant, was presented by the prosecution. Another
receipt, identified as Exhibit E, 33 was issued and signed by
appellant on February 5, 1987 to acknowledge receipt of P4,000.00
from Rogelio and Ramona Salado for "processing of documents for
Oman." Still another receipt dated March 10, 1987 and presented in
evidence as Exhibit F, shows that appellant received from Ernesto
Alvarez P2,000.00 for "processing of documents for Oman." 34
Apparently, the original copies of said receipts/vouchers were lost,
hence only xerox copies thereof were presented and which, under
the circumstances, were admissible in evidence. When the original
writing has been lost or destroyed or cannot be produced in court,
upon proof of its execution and loss or destruction, or unavailability,
its contents may be proved by a copy or a recital of its contents in
some authentic document, or by the recollection of witnesses. 35
Even assuming arguendo that the xerox copies presented by the
prosecution as secondary evidence are not allowable in court, still
the absence thereof does not warrant the acquittal of appellant.
In People vs. Comia, 36where this particular issue was involved, the
Court held that the complainants' failure to ask for receipts for the
fees they paid to the accused therein, as well as their consequent
failure to present receipts before the trial court as proof of the said
payments, is not fatal to their case. The complainants duly proved
by their respective testimonies that said accused was involved in the
entire recruitment process. Their testimonies in this regard, being
clear and positive, were declared sufficient to establish that factum
probandum.
Indeed, the trial court was justified and correct in accepting the
version of the prosecution witnesses, their statements being positive
and affirmative in nature. This is more worthy of credit than the mere
uncorroborated and self-serving denials of appellant. The lame
defense consisting of such bare denials by appellant cannot
overcome the evidence presented by the prosecution proving her
guilt beyond reasonable doubt. 37
The presence of documentary evidence notwithstanding, this case
essentially involves the credibility of witnesses which is best left to
the judgment of the trial court, in the absence of abuse of discretion
95
therein. The findings of fact of a trial court, arrived at only after a
hearing and evaluation of what can usually be expected to be
conflicting testimonies of witnesses, certainly deserve respect by an
appellate court. 38 Generally, the findings of fact of the trial court on
the matter of credibility of witnesses will not be disturbed on
appeal. 39
In a last-ditch effort to exculpate herself from conviction, appellant
argues that there is no proof of conspiracy between her and the
Goce couple as to make her liable for illegal recruitment. We do not
agree. The evidence presented by the prosecution clearly establish
that appellant confabulated with the Goces in their plan to deceive
the complainants. Although said accused couple have not been tried
and convicted, nonetheless there is sufficient basis for appellant's
conviction as discussed above.
In People vs. Sendon, 40 we held that the non-prosecution of another
suspect therein provided no ground for the appellant concerned to
fault the decision of the trial court convicting her. The prosecution of
other persons, equally or more culpable than herein appellant, may
come later after their true identities and addresses shall have been
ascertained and said malefactors duly taken into custody. We see
no reason why the same doctrinal rule and course of procedure
should not apply in this case.
WHEREFORE, the appealed judgment of the court a quo is hereby
AFFIRMED in toto, with costs against accused-appellant Nelly D.
Agustin.
SO ORDERED.
G.R. No. 125044 July 13, 1998
IMELDA DARVIN, petitioner,
vs.
HON. COURT OF APPEALS and PEOPLE OF THE
PHILIPPINES, respondents.
ROMERO, J.:
Before us is a petition for review of the decision of the Court of
Appeals in C.A.-G.R. No. 15624 dated January 31, 1996, 1 which
affirmed in toto the judgment of the Regional Trial Court,
Branch 19, Bacoor, Cavite, convicting accused-appellant,
Imelda Darvin for simple illegal recruitment under Article 38
and Article 39, in relation to Article 13 (b) and (c), of the Labor
Code as amended.
Accused-appellant was charged under the following
information:
That on our about the 13th day of April 1992,
in the Municipality of Bacoor, Province of
Cavite, Philippines and within the
jurisdiction of this Honorable Court, the
above-named accused, through fraudulent
representation to one Macaria Toledo to the
effect that she has the authority to recruit
workers and employees for abroad and can
facilitate the necessary papers in connection
thereof, did, then and there, wilfully,
unlawfully and feloniously, hire, recruit and
promise a job abroad to one Macaria Toledo,
without first securing the necessary license
and permit from the Philippine Overseas
Employment Administration to do so,
thereby causing damage and prejudice to
the aforesaid Macaria Toledo.
Contrary to law. 2
The evidence for the prosecution, based on the testimony of
private respondent, Macaria Toledo, shows that sometime in
March, 1992, she met accused-appellant Darvin in the latter's
residence at Dimasalang, Imus, Cavite, through the
introduction of their common friends, Florencio Jake Rivera
and Leonila Rivera. In said meeting, accused-appellant
allegedly convinced Toledo that by giving her P150,000.00, the
latter can immediately leave for the United States without any
appearance before the U.S. embassy. 3 Thus, on April 13, 1992,
Toledo gave Darvin the amount of P150,000.00, as evidenced by
a receipt stating that the "amount of P150,000.00 was for U.S.
Visa and Air fare." 4 After receiving the money, Darvin assured
Toledo that she can leave within one week. However, when
after a week, there was no word from Darvin, Toledo went to
her residence to inquire about any development, but could not
find Darvin. Thereafter, on May 7, 1992, Toledo filed a complaint
with the Bacoor Police Station against Imelda Darvin. Upon
further investigation, a certification was issued by the
Philippine Overseas Employment Administration (POEA)
stating that Imelda Darvin is neither licensed nor authorized to
recruit workers for overseas employment. 5 Accused-appellant
was then charged for estafa and illegal recruitment by the
Office of the Provincial Prosecutor of Cavite.
Accused-appellant, on the other hand, testified that she used to
be connected with Dale Travel Agency and that in 1992, or
thereabouts, she was assisting individuals in securing
passports, visa, and airline tickets. She came to know Toledo
through Florencio Jake Rivera, Jr. and Leonila Rivera, alleging
that Toledo sought her help to secure a passport, US visa and
airline tickets to the States. She claims that she did not promise
any employment in the U.S. to Toledo. She, however, admits
receiving the amount of P150,000.00 from the latter on April 13,
1992 but contends that it was used for necessary expenses of
an intended trip to the United States of Toledo and her friend,
Florencio Rivera 6 as follows. P45,000.00 for plane fare for one
person; P1,500.00 for passport, documentation and other
incidental expenses for each person; P20,000.00 for visa
application cost for each person; and P17,000.00 for
services. 7 After receiving the money, she allegedly told Toledo
that the papers will be released within 45 days. She likewise
testified that she was able to secure Toledo's passport on April
20, 1992 and even set up a date for an interview with the US
embassy. Accused alleged that she was not engaged in illegal
recruitment but merely acted as a travel agent in assisting
individuals to secure passports and visa.
In its judgment rendered on June 17, 1993, the Bacoor, Cavite
RTC found accused-appellant guilty of the crime of simple
illegal recruitment but acquitted her of the crime of estafa. The
dispositive portion of the judgment reads as follows:
WHEREFORE, premises considered,
accused Imelda Darvin is hereby found
guilty beyond reasonable doubt of the crime
of Simple Illegal Recruitment for having
committed the prohibited practice as defined
by paragraph (b) of Article 34 and punished
by paragraph (c) of Article 39 of the Labor
Code, as amended by PD 2018.
Accused Imelda Darvin is hereby ordered to
suffer the prison term of Four (4) years, as
minimum, to Eight (8) years, as maximum;
and to pay the fine of P25,000.00.
Regarding her civil liability, she is hereby
ordered to reimburse the private
complainant the sum of P150,000.00 and
attorney's fees of P10,000.00.
She is hereby acquitted of the crime of
Estafa.
SO ORDERED. 8
On appeal, the Court of Appeals affirmed the decision of the
trial court in toto, hence this petition.
Before this Court, accused-appellant assails the decision of the
trial and appellate courts in convicting her of the crime of
simple illegal recruitment. She contends that based on the
evidence presented by the prosecution, her guilt was not
proven beyond reasonable doubt.
We find the appeal impressed with merit.
Art. 13 of the Labor Code, as amended, provides the definition
of recruitment and placement as:
96
 . . .; b) any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or
procuring workers, and includes referrals,
contract services, promising or advertising
for employment locally or abroad, whether
for profit or not: Provided, that any 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.
On the other hand, Article 38 of the Labor Code provides:
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.
xxx xxx xxx
Applied to the present case, to uphold the conviction of
accused-appellant, two elements need to be shown: (1) the
person charged with the crime must have undertaken
recruitment activities; and (2) the said person does not have a
license or authority to do so. 9
In this case, private respondent, Macaria Toledo alleged that
she was offered a job in the United States as nursing aide 10 by
accused-appellant. In her direct examination, she testified as
follows:
Atty. Alejandro:
Q : How did you come to
know the accused?
Witness : I was
introduced by my two
friends. One of whom is
my best friend. That
according to them, this
accused has connections
and authorizations, that
she can make people
leave for abroad, sir.
Court : What
connections?
Witness : That she has
connections with the
Embassy and with people
whom she can approach
regarding work abroad,
your Honor.
xxx xxx xxx
Q : When you came to
meet for the first time in
Imus, Cavite, what
transpired in that meeting
of yours?
A : When I came to her
house, the accused
convinced me that by
means of P150,000.00, I
will be able to leave
immediately without any
appearance to any
embassy, non-
appearance, Sir.
Q : When you mentioned
non-appearance, as told
to you by the accused,
precisely, what do you
mean by that?
A : I was told by the
accused that non-
appearance, means
without working
personally for my papers
and through her efforts
considering that she is
capacitated as according
to her I will be able to
leave the country, Sir.
xxx xxx xxx
Atty. Alejandro : What
transpired after the
accused told you all
these things that you will
be able to secure all the
documents without
appearing to anybody or
to any embassy and that
you will be able to work
abroad?
Witness : She told me to
get ready with my
P150,000.00, that is if I
want to leave
immediately, Sir.
Atty. Alejandro : When
you mentioned kaagad,
how many days or week?
Witness : She said that if
I will able to part with my
P150,000.00. I will be able
to leave in just one week
time, Sir.
xxx xxx xxx 11
The prosecution, as evidence, presented the certification
issued by the POEA that accused-appellant Imelda Darvin is
not licensed to recruit workers abroad.
It is not disputed that accused-appellant does not have a
license or authority to engage in recruitment activities. The
pivotal issue to be determined, therefore, is whether the
accused-appellant indeed engaged in recruitment activities, as
defined under the Labor Code. Applying the rule laid down in
the case of People v. Goce, 12 to prove that accused-appellant
was engaged in recruitment activities as to commit the crime of
illegal recruitment, it must be shown that the accused appellant
gave private respondent the distinct impression that she had
the power or ability to send the private respondent abroad for
work such that the latter was convinced to part with her money
in order to be so employed.
In this case, we find no sufficient evidence to prove that
accused-ppellant offered a job to private respondent. It is not
clear that accused gave the impression that she was capable of
providing the private respondent work abroad. What is
established, however, is that the private respondent gave
accused-appellant P150,000.00. The claim of the accused that
the P150,000.00 was for payment of private respondent's air
fare and US visa and other expenses cannot be ignored
because the receipt for the P150,000.00, which was presented
by both parties during the trial of the case, stated that it was
"for Air Fare and Visa to USA." 13 Had the amount been for
something else in addition to air fare and visa expenses, such
as work placement abroad, the receipt should have so stated.
By themselves, procuring a passport, airline tickets and foreign
visa for another individual, without more, can hardly qualify as
recruitment activities. Aside from the testimony of private
respondent, there is nothing to show that accused-appellant
engaged in recruitment activities. We also note that the
prosecution did not present the testimonies of witnesses who
could have corroborated the charge of illegal recruitment, such
as Florencio Rivera, and Leonila Rivera, when it had the
opportunity to do so. As it stands, the claim of private
97
respondent that accused-appellant promised her employment
abroad is uncorroborated. All these, taken collectively, cast
reasonable doubt on the guilt of the accused.
This Court can hardly rely on the bare allegations of private
respondent that she was offered by accused-appellant
employment abroad, nor on mere presumptions and
conjectures, to convict the latter. No sufficient evidence was
shown to sustain the conviction, as the burden of proof lies
with the prosecution to establish that accused-appellant indeed
engaged in recruitment activities, thus committing the crime of
illegal recruitment.
In criminal cases, the burden is on the prosecution to prove,
beyond reasonable doubt, the essential elements of the offense
with which the accused is charged; and if the proof fails to
establish any of the essential elements necessary to constitute
a crime, the defendant is entitled to an acquittal. Proof beyond
reasonable doubt does not mean such a degree of proof as,
excluding the possibility of error, produces absolute certainty.
Moral certainty only is required, or that degree of proof which
produces conviction in an unprejudiced mind. 14
At best, the evidence proffered by the prosecution only goes so
far as to create a suspicion that accused-appellant probably
perpetrated the crime charged. But suspicion alone is
insufficient, the required quantum of evidence being proof
beyond reasonable doubt. When the People's evidence fail to
indubitably prove the accused' s authorship of the crime of
which he stands accused, then it is the Court's duty, and the
accused's right, to proclaim his innocence. Acquittal, therefore,
is in order. 15
WHEREFORE, the appeal is hereby GRANTED and the decision
of the Court of Appeals in CA-G.R. CR No. 15624 dated January
31, 1996, is REVERSED and SET ASIDE. Accused-appellant
Imelda Darvin is hereby ACQUITTED on ground of reasonable
doubt. Accordingly, let the accused be immediately released
from her place of confinement unless there is reason to detain
her further for any other legal or valid cause. No
pronouncement as to costs.
SO ORDERED.
G.R. Nos. 115719-26 October 5, 1999
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
IRENE YABUT @ IRENE CORTEZ @ FLORENCE MADRID 1 (At-
large), FERNANDO CORTEZ y VEGA, accused-appellant.
QUISUMBING, J.:
On appeal is the decision dated February 16, 1994 of the Regional
Trial Court of Pasig City, Branch 159, convicting appellant Fernando
Cortez y Vega of the crime of illegal recruitment in large scale,
imposing upon him the penalty of life imprisonment, and ordering
him to pay a fine of P100,000.00 and to indemnify private
complainants in the following amounts —
a. Fely M. Casanova in the
amount of P151,581.00;
b. Arnel M. Diana in the
amount of P50,000.00;
c. Reynaldo P. Claudio in
the amount of P58,454.00;
d. German Aquino in the
amount of P40,000.00;
e. Manolito Latoja in the
amount of P45,000.00;
f. Alejandro P. Ruiz in the
amount of P50,000.00;
g. Antonio S. Bernardo in
the amount of P60,000.00;
and,
h. Henry Ilar in the amount
of P25,000.00; all with legal
rate of interest reckoned
from the filing of the
Information until fully paid.
Appellant is a former policeman while the co-accused, Irene Yabut,
is his common-law wife. Both were charged with estafa and illegal
recruitment in large scale, but only appellant stood trial as Yabut has
eluded arrest and remains at-large.
The facts, as summarized by the Office of the Solicitor General,
2
which we find to be duly supported by the records, are as follows:
On August 13, 1992, prosecution witness and
private complainant Mr. Henry Ilar met for the
first time the herein appellant, who was at that
time a policeman, and his live-in partner and co-
accused Irene Yabut, at Rm. 103 P.M.
Apartelle, N. Domingo Street, San Juan, Metro
Manila (TSN, June 9, 1993, pp. 3-7). Ilar
handed over to the appellant and co-accused
Irene Yabut the initial down payment of
P10,000.00 for the processing of papers and
visa for Japan where he was to work as a
roomboy in a hotel (Ibid., p. 3-4, Exh. "A" Pros.).
Appellant assured Ilar not to worry since he
would be able to leave for Japan otherwise his
money would be refunded (TSN, June 9, 1993,
p. 7). Additional amounts were given by Ilar to
co-accused Irene Yabut thru her employee
Butch Barrios, namely: P6,000.00, and
P4,000.00 for the purpose of processing his
papers (TSN, June 9, 1993, pp. 4-5; Exhs. "B"
and "C" pros.). On September 26, 1993, Ilar
handed over additional P5,000.00 to the
appellant the amount to be used allegedly for
the expenses to be incurred for Ilar's training
(TSN, June 9, 1993, p. 5; Exh. "D" pros.).
Finally, Ilar was made to sign a one (1) year
contract but he was not furnished a copy of the
same (TSN, June 9, 1993, p. 4). Ilar was
scheduled to leave for Japan on October 8,
1993 but this date was postponed allegedly due
to problems (TSN, June 9, 1993, p. 5). The
second scheduled date for departure was again
cancelled allegedly due to the necessity of
applicants undergoing medical examination
(TSN, June 9, 1993, p. 6). After undergoing the
medical examination, Ilar was again scheduled
to depart on December 12, 1992 (Ibid). Prior to
the scheduled departure, Ilar checked on Irene
Yabut but she was no longer in her apartelle
(Ibid) although he found the appellant who re-
assured Ilar that he would be able to leave for
Japan (TSN, June 9, 1993, p. 7). Sensing
fraudulent practice on the part of the appellant
and his co-accused, Ilar verified from the POEA
whether the appellant and his co-accused were
authorized or licensed to engage in recruitment
and placement activities. A certification was
issued by the POEA stating that the appellant
and co-accused Irene Yabut were neither
licensed nor authorized to recruit workers for
overseas employment (TSN, June 9, 1993, p. 6;
Exh. "E" pros). As expected, the last scheduled
departure of Ilar on December 12, 1993 (sic)
(1992) did not push through.1âwphi1.nêt
In the case of private complainant Mr. Reynaldo
P. Claudio, on July 28, 1992, he went to Room
103 P.M. Apartelle, San Juan, Metro Manila, to
apply for a job as hotel worker in Japan.
Appellant and co-accused Irene Yabut,
introducing themselves as husband and wife,
told him that he could work in Japan provided
he paid the fees (TSN, June 15, 1993, pp. 8-9,
26). Convinced by their assurances, (TSN, June
15, 1993, p. 19) Claudio gave them an initial
payment of P15,000.00 (TSN, June 15, 1993
pp. 9-10; Exhibits "A" and "G" pros.). Claudio
was required to undergo training (June 15,
1993, p. 10-11, Exhs. "B" and "H" pros.). On
August 18, 1992, Claudio paid P30,000.00 to
98
co-accused Irene Yabut (June 15, 1993, p. 11;
Exhs. "C" and "I" pros). On August 21, 1992,
Claudio paid another P25,000.00 to the co-
accused Irene Yabut (TSN, June 15, 1993, pp.
12, 22; Exhs. "J" and "D" pros.). The amounts
he paid all in all totalled P70,000.00 which
would allegedly be used for the processing of
the visa, plane ticket expenses, medical tests
and seminar costs for Claudio and his two (2)
brothers (TSN, June 15, 1993, pp. 11, 13).
Claudio was made to sign a recruitment
contract but he was not furnished a copy of the
same by the appellant and his co-accused
(TSN, June 15, 1993, p. 13). Yabut tried to
convince Claudio not to appear at the
preliminary investigation hearing scheduled the
next day at the Department of Justice by
refunding to him the amount of the plane ticket
already paid for by Claudio. This proved futile
as Claudio appeared at the hearing nonetheless
(TSN, June 15, 1993, pp. 14-16). Claudio was
scheduled to depart five (5) times but not one of
those scheduled departures for Japan
materialized for purportedly the following
reasons: that there was no escort or that the
contract had to be changed or that it was
necessary for him to undergo a medical
examination (TSN, June 15, 1993, pp. 18-19).
Persistent follow-ups made by Claudio with the
appellant and Yabut at their apartelle went for
naught as Claudio was repeatedly told to wait
as they were allegedly doing something about
the delay (TSN, June 15, 1993, p. 20).
In the case of Mr. Arnel Diana, on July 20,
1992, he along with his brother-in-law, met the
appellant and his co-accused Irene Yabut at
their room in P.M. Apartelle, No. 26 N. Domingo
Street, San Juan Metro Manila (TSN, June 15,
1993, p. 30). Diana and his companion were
assured by the appellant that they could leave
for abroad (Ibid). The appellant and his co-
accused asked Diana to pay the fee of
P50,000.00 for the travel documents and POEA
papers (TSN, June 15, 1993, p. 31). Diana was
made to sign an employment contract (Ibid;
Exhs. "A" to "A-4" and "P" to "P-4") which
convinced him to part with his money (TSN,
June 15, 1993, pp. 40-42). The amount was
paid on installments. Diana made the first
payment on July 20, 1992 for P15,000.00 (TSN,
June 15, 1993, pp. 33; Exhs. "B" and "Q" pros),
handed over to the appellant and Irene Yabut
(TSN, June 15, 1993, pp. 40-41). The second
installment on July 24, 1992 for P25,000.00
(Ibid, Exhs. "C" and "R" pros) and the third
installment was given on July 27, 1992 for
P10,000.00 (TSN, July 15, 1993, p. 34; Exhs.
"D" and "S" pros). Diana was first scheduled to
leave on August 8, 1992 but his departure did
not push through (TSN, June 15, 1993, p. 35).
Disappointed, Diana asked the appellant and
his co-accused Irene Yabut for an explanation.
Appellant cited lack of escort as the reason for
his non-departure (Ibid).
not affix his signature on the employment
contract because of his government
employment i.e., a member of the Philippine
National Police (PNP), but appellant on several
occasions promised Bernardo that he would be
able to leave for abroad (TSN, August 18, 1993,
p. 3).
Still another complainant, Fely Casanova
testified that she first met appellant and his co-
accused Irene Yabut who introduced
themselves as Mr. and Mrs. Madrid on June 8,
1992 (TSN, August 18, 1993, p. 5). Casanova
always saw the appellant at the P.M. Apartelle
on Domingo Street, San Juan, Metro Manila
whenever she made follow-ups on her papers
(Ibid). Casanova also saw the appellant and his
co-accused Irene Yabut at the Town and
Country on December 18, and 22, 1992 when
the two were already in hiding. They were
talking to other applicants whom they promised
to send abroad (TSN, August 19, 1993, p. 6).
On those two occasions, appellant and his co-
accused assured her about a job placement
abroad or the return of her money (Ibid).
Realizing that their overseas jobs would never materialize,
complainants hauled appellant and his co-accused to the
Department of Justice, which conducted a preliminary investigation
on the complaints. Both were subsequently charged with (1) Illegal
Recruitment in Large Scale in Criminal Case No. 98224, and (2)
eight (8) counts of Estafa in Criminal Case Nos. 98997-99004. The
Information for Illegal Recruitment reads: 3
The undersigned State Prosecutor of the
Department of Justice and Presidential Anti-
Crime Commission hereby accuses Irene Yabut
and Fernando Cortez for (sic) Illegal
Recruitment as defined and penalized under
Articles 38 and 39 of Presidential Decree No.
422 as Amended, otherwise known as the
Labor Code of the Philippines, committed as
follows:
That during the period from June to September,
1992 or thereabouts, in San Juan, Metro Manila
and within the jurisdiction of this Honorable
Court, the above-named accused mutually
confederating and conspiring with each other
did then and there wilfully, unlawfully and
feloniously contract; enlist and recruit for a fee,
eight (8) persons for employment abroad
without first obtaining the required license
and/or authority from the Philippine Overseas
Employment Administration.
CONTRARY TO LAW.
Manila, for Makati, Metro Manila, March 31,
1993

The second scheduled date of departure was

also cancelled for alleged unavailability of the
Japanese who was to hire him (Ibid). Diana was
scheduled five (5) times to depart but each time
the departure went for naught, while appellant
and co-accused Irene Yabut kept on assuring
him that they were going to do something about
it (TSN, June 15, 1993, p. 36). Exasperated,
Diana demanded for the return of his money
from appellant (TSN, June 15, 1993, pp. 37-38).
Despite the promises of the appellant, the
money he paid was never refunded. Thereafter,
Diana found out from another complainant
Henry Ilar, that the appellant and his co-
accused were not licensed nor authorized to
recruit workers for overseas employment (TSN,
June 15, 1993, p. 38).

In the case of private complainant Antonio S.

Bernardo, he entered into an employment
contract with appellant's co-accused Irene
Yabut (TSN, August 18, 1993, pp. 2-3).
Bernardo was told by the appellant that he did

99

Upon arraignment, appellant entered a plea of not guilty to all
charge. 4 Accused Irene Yabut already fled and was not arraigned.
During joint trial, the prosecution presented as its witnesses three
(3) of the complainants, namely: (1) Henry L. Ilar; (2) Reynaldo P.
Claudio; and (3) Arnel M. Diana. The testimonies of the other five (5)
complainants were dispensed with upon the agreement of the
prosecution and the defense that affidavits would be offered as their
testimonies. The corresponding receipts issued by accused Yabut
for amounts received from complainants were marked as evidence
for the prosecution. 5
For the defense, appellant testified on his behalf. He admitted that
accused Irene Yabut was his live-in partner with whom he has a
child, but he washed his hands of any participation in her business
activities. He further insisted that Yabut was not engaged in
recruitment of workers for overseas employment but only in the
processing of visas. He also denied any knowledge of the special
power of attorney executed in his favor by Yabut for the refund of
the PAL tickets of several recruits. Moreover, he claimed that he
was not present at any given time when large sum of money were
received by Yabut and that he never gave any assurances to
complainants regarding their departure to Japan. 6
The prosecution then presented complainants Antonio S. Bernardo,
Fely M. Casanova, and Henry L. Ilar as rebuttal witnesses to refute
appellants denials and protestations of innocence regarding
accused Yabut's recruitment activities.
On February 16, 1994, the trial court rendered a decision 7 acquitting
of eight (8) counts of estafa but convicting him of illegal recruitment
in large scale. The dispositive portion of the decision states:
WHEREFORE, accused Fernando Cortez is
hereby Acquitted under Criminal Case Nos.
98997-99004 of the crime of Estafa under Art.
315, par. 2 (a) of the Revised Penal Code, on
grounds of reasonable doubt.
Upon the other hand, the prosecution having
established beyond reasonable doubt the guilt
of accused Fernando Cortez under Criminal No.
98224 of the crime of Illegal Recruitment (in
large scale) penalized under Art. 38(a) in
relation to Art. 39(b) of P.D. 442, this Court
hereby imposes upon accused Fernando Cortez
as follows:
1. To suffer life imprisonment and pay a fine of
ONE HUNDRED THOUSAND PESOS
(P100,000.00);
2. To indemnify private complainants —
a) Fely M. Casanova in the amount of
P151,581.00;
b) Arnel M. Diana in the amount of P50,000.00;
c) Reynaldo P. Claudio in the amount of
P58,454.00;
d) German Aquino in the amount of P40,000.00;
r
.
e) Manolito Latoja in the amount of P45,000.00;
S
t
f) Alejandro F. Ruiz in the amount of
a
P50,000.00;
t
e
g) Antonio S. Bernardo in the amount of
P60,000.00; and P
r
o
h) Henry Ilar in the amount of P25,000.00; all s
with legal rate of interest reckoned from the
e
filing of the Information until fully paid. c
u
SO ORDERED. t
o
r
Hence, the present appeal. Appellant contends that the trial
court 8 — I
I
. . . ERRED IN THE APPRECIATION OF THE
EVIDENCE ADDUCED DURING THE TRIAL
ON THE MERITS AND AS A RESULT IT ALSO
ERRED IN CONVICTING FERNANDO
CORTEZ OF ILLEGAL RECRUITMENT WHILE
AT THE SAME TIME IT ACQUITTED HIM OF
THE CRIME OF ESTAFA BASED ON THE
SAME EVIDENCE.
Appellant anchors his bid for acquittal on the insufficiency of
evidence, documentary and testimonial, to prove his guilt beyond
reasonable doubt. If at all, appellant argues, the sole person guilty of
illegal recruitment in large scale should be Yabut since she was the
only one who signed the receipts for the amounts received from the
complainants. He contends that the mere fact that he is
"romantically linked" with Yabut does not mean he acted in
conspiracy with her.
The Office of the Solicitor General, in praying for the affirmance in
toto of the trial court decision, insists that appellant acted in
conspiracy with his co-accused, as shown by the following acts: 9
. . . (1) He received deposits of money to defray
travelling expenses (TSN, June 9, 1993, pp. 3-
5; June 15, 1993, pp. 9-12, 22, 40-41; July 15,
1993, p. 34); (2) He informed the complainants
that the money turned over would be used for
the processing of papers and visas for Japan
(TSN, June 9, 1993, pp. 3-5; June 15, 1993, pp.
11, 13, 31); (3) He gave assurance to the
complainants that they would be able to leave
for Japan otherwise their money would be
refunded (TSN, June 9, 1993, p. 7; June 15,
1993, pp. 8-9, 20, 26, 30, 36; August 18, 1993,
p. 3; August 19, 1993, p. 6); (4) He stayed at
the apartelle office and manned the office by
entertaining job seekers even after his co-
accused Irene Yabut had gone into hiding (TSN,
June 9, 1993, pp. 3-7; June 15, 1993, pp. 8-9,
20, 30; August 18, 1993, p. 5)
The crux of the issue is whether appellant could be convicted of
illegal recruitment in large scale despite his acquittal of the crime of
estafa. If so, did the prosecution prove beyond reasonable doubt all
the elements of illegal recruitment in large scale insofar as appellant
is concerned?
In this jurisdiction, it is settled that a person who commits illegal
recruitment may be charged and convicted separately of illegal
recruitment under the Labor Code and estafa under par. 2 (a) of Art.
315 of the Revised Penal Code. 10 The offense of illegal recruitment
is malum prohibitum where the criminal intent of the accused is not
necessary for conviction, while estafa is malum in se where the
criminal intent of the accused is crucial for conviction. 11 Conviction
for offenses under the Labor Code does not bar conviction for
offenses punishable by other laws. 12 Conversely, conviction for
estafa under par. 2 (a) of Art. 315 of the Revised Penal Code does
not bar a conviction for illegal recruitment under the Labor Code. It
follows that one's acquittal of the crime of estafa will not necessarily
result in his acquittal of the crime of illegal recruitment in large scale,
and vice versa.
Art. 13, par. (b) of the Labor Code enumerates the acts which
constitute recruitment and placement as follows —
100
 (b) "Recruitment and placement" refer 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.
The acts of appellant consisting of his promises, offers and
assurances of employment to complainants fall squarely within the
ambit of recruitment and placement as defined above. The fact that
he did not issue the receipts for amounts received from
complainants has no bearing on his culpability for the complainants
have shown through their respective testimonies and affidavits that
appellant was involved in the prohibited recruitment. 13 It is
immaterial that appellant ingeniously stated to one of the
complainants that he (appellant) was a member of the PNP and a
government employee, hence could not sign the receipts. 14
Art. 38 of the Labor Code renders illegal all recruitment activities
without the necessary license or authority from the Philippine
Overseas Employment Administration. Art. 38 of the Labor Code
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 (now
Department of Labor and Employment) or any
law enforcement officer may initiate complaints
under this Article.1âwphi1.nêt
(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. . . .
Thus, if the illegal recruitment is committed by a syndicate or in large
scale, the Labor Code considers it an offense involving economic
sabotage and imposes a stiffer penalty therefor in accordance with
Article 39 of the Labor Code.
The elements of illegal recruitment in large scale are: "(1) the
accused undertakes any recruitment activity defined under Art. 13,
par. (b), or any prohibited practice enumerated under Art. 34 of the
Labor Code; (2) he does not have a license or authority to lawfully
engage in the recruitment and placement of workers; and, (3) he
commits the same against three (3) or more persons, individually or
as a group. 15
Indisputably, all three (3) elements exist in the case at bar. First, the
complaining witnesses have satisfactorily established that appellant
had actively promised them employment, gave assurance of their
placement overseas, and with his co-accused received certain sums
as fees therefor. Second, the Licensing Division of the Philippine
Overseas Employment Administration issued a Certification dated
March 1, 1993 that JAWOH GENERAL
MERCHANDISING 16 represented by Irene Yabut and Fernando
Cortez are neither licensed nor authorized by the POEA to recruit
workers for overseas employment. 17 In fact, the defense even
entered into a stipulation during trial that appellant is not authorized
by the POEA to recruit overseas workers. 18 Third, appellant and co-
accused undertook recruitment of not less than eight (8) workers —
complainants herein, who were recruited individually on different
occasions. For purposes of illegal recruitment, however, the law
makes no distinction whether the workers were recruited as a group
or individually.
There is no showing that any of the complainants had ill-motive to
testify falsely against appellant. And it is generally observed that it is
against human nature and experience for strangers to conspire and
accuse another stranger of a most serious crime just to mollify their
hurt feelings. 19 Moreover, we have no reason to discount the trial
court's appreciation of the complainants' truthfulness, honesty and
candor. For such appreciation deserves the highest respect, since
the trial court is best-equipped to make the assessment of the
witnesses' credibility, and its factual findings are generally not
disturbed on appeal. 20 Thus, after a careful review of the records,
we see no cogent reason to disturb the findings of the trial court.
As to the amounts to be refunded to complainants, we find the trial
court's computations in accord with the evidence, except with
respect to complainant Fely M. Casanova. Upon recomputation, the
amount to be refunded for the failed promise of employment of her
daughter and sister-in-law should be P150,781.00 instead of
P151,581.00. 21
Lastly, it would not be amiss to stress that in these difficult times,
many of our countrymen venture abroad and work even in
hazardous places to ensure for themselves and their families a life
worthy of human dignity. They labor overseas to provide proper
education for their children and secure a decent future for them.
Illegal recruiters prey on hapless workers, charge exorbitant fees
that siphon their meager savings, then cruelly dash their dreams
with false promises of lucrative jobs overseas. For this reason,
illegal recruiters have no place in society. Illegal recruitment
activities must be stamped out by the full force of the law.
WHEREFORE, WE AFFIRM the Decision of the Regional Trial
Court finding appellant Fernando Cortez y Vega guilty of Illegal
Recruitment in Large Scale beyond reasonable doubt and
sentencing him to life imprisonment, as well as to pay a fine of
P100,000.00 and to indemnify complainants in the amounts stated
therein, EXCEPT that only P150,781.00 instead of P151,581.00
should be paid to complainant Fely M. Casanova, with interest at the
legal rate from the time of filing the information until fully paid. Costs
against appellant.1âwphi1.nêt
SO ORDERED.
G.R. No. 125903 November 15, 2000
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ROMULO SAULO, AMELIA DE LA CRUZ, and CLODUALDO DE
LA CRUZ, accused.
ROMULO SAULO, accused-appellant.
DECISION
GONZAGA-REYES, J.:
Accused-appellant, together with Amelia de la Cruz and Clodualdo
de la Cruz, were charged with violation of Article 38 (b) of the Labor
Code1 for illegal recruitment in large scale in an information which
states –
CRIM. CASE NO. Q-91-21911
The undersigned Assistant City Prosecutor accuses ROMULO
SAULO, AMELIA DE LA CRUZ and CLODUALDO DE LA CRUZ, of
the crime of ILLEGAL RECRUITMENT IN LARGE SCALE (ART.
38(b) in relation to Art. 39(a) of the Labor Code of the Philippines, as
amended by P.D. No. 2018, committed as follows:
That on or about the period comprised from April 1990 to May 1990
in Quezon City, Philippines, and within the jurisdiction of the
Honorable Court, the above-named accused, conspiring together,
confederating with and mutually helping one another, by falsely
representing themselves to have the capacity to contract, enlist and
recruit workers for employment abroad, did, then and there, wilfully,
unlawfully and feloniously for a fee, recruit and promise
employment/job placement abroad to LEODEGARIO MAULLON,
BENY MALIGAYA and ANGELES JAVIER, without first securing the
required license or authority from the Department of Labor and
Employment, in violation of said law.
101
That the crime described above is committed in large scale as the
same was perpetrated against three (3) persons individually or as [a]
group penalized under Articles 38 and 39 as amended by PD 2018
of the Labor Code (P.D. 442).
CONTRARY TO LAW.2
In addition, accused were charged with three counts of estafa
(Criminal Case Nos. Q-91-21908, Q-91-21909 and Q-91-21910).
Except for the names of the complainants, the dates of commission
of the crime charged, and the amounts involved, the
informations3 were identical in their allegations –
CRIM. CASE NO. Q-91-21908
The undersigned Assistant City Prosecutor accuses ROMULO
SAULO, AMELIA DE LA CRUZ AND CLODUALDO DE LA CRUZ of
the crime of ESTAFA (Art. 315, par. 2 (a) RPC), committed as
follows:
That on or about the period comprised from April 1990 to May 1990,
in Quezon City, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, conspiring together,
confederating with and mutually helping one another, with intent of
gain, by means of false pretenses and/or fraudulent acts executed
prior to or simultaneously with the commission of the fraud, did, then
and there wilfully, unlawfully and feloniously defraud one BENY
MALIGAYA, in the following manner, to wit: on the date and in the
place aforementioned, accused falsely pretended to the offended
party that they had connection and capacity to deploy workers for
overseas employment and that they could secure
employment/placement for said Beny Maligaya and believing said
misrepresentations, the offended party was later induced to give
accused, as in fact she did give the total amount of P35,000.00,
Philippine Currency, and once in possession of the said amount and
far from complying with their commitment and despite repeated
demands made upon them to return said amount, did, then and
there wilfully, unlawfully and feloniously and with intent to defraud,
misappropriate, misapply and convert the same to their own
personal use and benefit, to the damage and prejudice of said
offended party in the aforementioned amount and in such amount as
may be awarded under the provisions of the Civil Code.
CONTRARY TO LAW.
Upon arraignment, accused-appellant pleaded not guilty to all the
charges against him. Meanwhile accused Amelia de la Cruz and
Clodualdo de la Cruz have remained at large.
During trial, the prosecution sought to prove the following material
facts and circumstances surrounding the commission of the crimes:
Benny Maligaya, having learned from a relative of accused-appellant
that the latter was recruiting workers for Taiwan, went to accused-
appellant’s house in San Francisco del Monte, Quezon City,
together with Angeles Javier and Amelia de la Cruz, in order to
discuss her chances for overseas employment. During that meeting
which took place sometime in April or May, 1990, accused-appellant
told Maligaya that she would be able to leave for Taiwan as a factory
worker once she gave accused-appellant the fees for the processing
of her documents. Sometime in May, 1990, Maligaya also met with
Amelia de la Cruz and Clodualdo de la Cruz at their house in Baesa,
Quezon City and they assured her that they were authorized by the
Philippine Overseas Employment Administration (POEA) to recruit
workers for Taiwan. Maligaya paid accused-appellant and Amelia de
la Cruz the amount of P35,000.00, which is evidenced by a receipt
dated May 21, 1990 signed by accused-appellant and Amelia de la
Cruz (Exhibit A in Crim. Case No. Q-91-21908). Seeing that he had
reneged on his promise to send her to Taiwan, Maligaya filed a
complaint against accused-appellant with the POEA.4
Angeles Javier, a widow and relative by affinity of accused-
appellant, was told by Ligaya, accused-appellant’s wife, to apply for
work abroad through accused-appellant. At a meeting in accused-
appellant’s Quezon City residence, Javier was told by accused-
appellant that he could get her a job in Taiwan as a factory worker
and that she should give him P35,000.00 for purposes of preparing
Javier’s passport. Javier gave an initial amount of P20,000.00 to
accused-appellant, but she did not ask for a receipt as she trusted
him. As the overseas employment never materialized, Javier was
prompted to bring the matter before the POEA.5
On April 19, 1990, Leodigario Maullon, upon the invitation of his
neighbor Araceli Sanchez, went to accused-appellant’s house in
order to discuss his prospects for gaining employment abroad. As in
the case of Maligaya and Javier, accused-appellant assured Maullon
that he could secure him a job as a factory worker in Taiwan if he
paid him P30,000.00 for the processing of his papers. Maullon paid
P7,900.00 to accused-appellant’s wife, who issued a receipt dated
April 21, 1990 (Exhibit A in Crim. Case No. Q-91-21910). Thereafter,
Maullon paid an additional amount of P6,800.00 in the presence of
accused-appellant and Amelia de la Cruz, which payment is also
evidenced by a receipt dated April 25, 1990 (Exhibit B in Crim. Case
No. Q-91-21910). Finally, Maullon paid P15,700.00 to a certain
Loreta Tumalig, a friend of accused-appellant, as shown by a receipt
dated September 14, 1990 (Exhibit C in Crim. Case No. Q-91-
21910). Again, accused-appellant failed to deliver on the promised
employment. Maullon thus filed a complaint with the POEA.6
The prosecution also presented a certification dated July 26, 1994
issued by the POEA stating that accused are not licensed to recruit
workers for overseas employment (Exhibit A in Crim. Case No. Q-
91-21911).7
In his defense, accused-appellant claimed that he was also applying
with Amelia de la Cruz for overseas employment. He asserts that it
was for this reason that he met all three complainants as they all
went together to Amelia de la Cruz’ house in Novaliches, Quezon
City sometime in May, 1990 in order to follow up their applications.
Accused-appellant flatly denied that he was an overseas
employment recruiter or that he was working as an agent for one.
He also denied having received any money from any of the
complainants or having signed any of the receipts introduced by the
prosecution in evidence. It is accused-appellant’s contention that the
complainants were prevailed upon by accused-appellant’s mother-
in-law, with whom he had a misunderstanding, to file the present
cases against him.8
The trial court found accused-appellant guilty of three counts of
estafa and of illegal recruitment in large scale. It adjudged:
WHEREFORE, this Court finds the accused Romulo Saulo:
A. In Criminal Case No. Q-91-21908, guilty beyond
reasonable doubt of Estafa under Article 315, paragraph
2(a) of the Revised Penal Code as amended, without any
mitigating or aggravating circumstances, and this Court
hereby sentences the accused Romulo Saulo to suffer the
indeterminate penalty of imprisonment of three (3) years,
four (4) months and one (1) day of prision correccional as
minimum to seven (7) years and one (1) day of prision
mayor as maximum, and to indemnify the complainant
Beny Maligaya in the amount of P35,000.00, with interest
thereon at 12% per annum until the said amount is fully
paid, with costs against the said accused.
B. In Criminal Case No. Q-91-21909, guilty beyond
reasonable doubt of Estafa under Article 315, paragraph
2(a) of the Revised Penal Code as amended, without any
mitigating or aggravating circumstances, and this Court
hereby sentences the accused Romulo Saulo to suffer the
indeterminate penalty of imprisonment of two (2) years,
four (4) months and one (1) day of prision correccional as
minimum to six (6) years and one (1) day of prision mayor
as maximum, and to indemnify the complainant Angeles
Javier in the amount of P20,000.00 with interest thereon
at 12% per annum until the said amount is fully paid, with
costs against said accused.
C. In Criminal Case No. Q-91-21910, guilty beyond
reasonable doubt of Estafa under Article 315, paragraph
2(a) of the Revised Penal Code as amended, without any
mitigating or aggravating circumstances, and this Court
hereby sentences the accused Romulo Saulo to suffer the
indeterminate penalty of imprisonment of two (2) years,
four (4) months and one (1) day of prision correccional as
minimum to six (6) years and one (1) day of prision mayor
as maximum, and to indemnify the complainant Leodigario
Maullon in the amount of P30,400.00 with interest thereon
at 12% per annum until the said amount is fully paid, with
costs against said accused.
D. In Criminal Case No. Q-91-21911, guilty beyond
reasonable doubt of Illegal Recruitment in Large Scale as
defined and punished under Article 38 (b) in relation to
Article 39 (a) of the Labor Code of the Philippines as
amended, and this Court sentences the accused Romulo
Saulo to suffer the penalty of life imprisonment and to pay
a fine of One Hundred Thousand Pesos (P100,000.00).
102
Being a detention prisoner, the accused Romulo Saulo shall be
entitled to the benefits of Article 29 of the Revised Penal Code as
amended.
SO ORDERED.9
The Court finds no merit in the instant appeal.
The essential elements of illegal recruitment in large scale, as
defined in Art. 38 (b) of the Labor Code and penalized under Art. 39
of the same Code, are as follows:
(1) the accused engages in the recruitment and placement
of workers, as defined under Article 13 (b) or in any
prohibited activities under Article 34 of the Labor Code;
(2) accused has not complied with the guidelines issued
by the Secretary of Labor and Employment, particularly
with respect to the securing of a license or an authority to
recruit and deploy workers, whether locally or overseas;
and
(3) accused commits the same against three (3) or more
persons, individually or as a group.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; 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."
After a careful and circumspect review of the records, the Court
finds that the trial court was justified in holding that accused-
appellant was engaged in unlawful recruitment and placement
activities. The prosecution clearly established that accused-
appellant promised the three complainants - Benny Maligaya,
Angeles Javier and Leodigario Maullon – employment in Taiwan as
factory workers and that he asked them for money in order to
process their papers and procure their passports. Relying
completely upon such representations, complainants entrusted their
hard-earned money to accused-appellant in exchange for what they
would later discover to be a vain hope of obtaining employment
abroad. It is not disputed that accused-appellant is not
authorized11 nor licensed12 by the Department of Labor and
Employment to engage in recruitment and placement activities. The
absence of the necessary license or authority renders all of
accused-appellant’s recruitment activities criminal.
Accused-appellant interposes a denial in his defense, claiming that
he never received any money from the complainants nor processed
their papers. Instead, accused-appellant insists that he was merely a
co-applicant of the complainants and similarly deceived by the
schemes of Amelia and Clodualdo de la Cruz. He contends that the
fact that Benny Maligaya and Angleles Javier went to the house of
Amelia and Clodualdo de la Cruz in Novaliches, Quezon City, to get
back their money and to follow-up their application proves that
complainants knew that it was the de la Cruz’ who received the
processing fees, and not accused-appellant. Further, accused-
appellant argues that complainants could not have honestly believed
that he could get them their passports since they did not give him
any of the necessary documents, such as their birth certificate,
baptismal certificate, NBI clearance, and marriage contract.
Accused-appellant’s asseverations are self-serving and
uncorroborated by clear and convincing evidence. They cannot
stand against the straightforward and explicit testimonies of the
complainants, who have identified accused-appellant as the person
who enticed them to part with their money upon his representation
that he had the capability of obtaining employment for them abroad.
In the absence of any evidence that the prosecution witnesses were
motivated by improper motives, the trial court’s assessment of the
credibility of the witnesses shall not be interfered with by this
Court.13
The fact that accused-appellant did not sign all the receipts issued to
complainants does not weaken the case of the prosecution. A
person charged with illegal recruitment may be convicted on the
strength of the testimonies of the complainants, if found to be
credible and convincing.14 The absence of receipts to evidence
payment does not warrant an acquittal of the accused, and it is not
necessarily fatal to the prosecution’s cause.15
Accused-appellant contends that he could not have committed the
crime of illegal recruitment in large scale since Nancy Avelino, a
labor and employment officer at the POEA, testified that licenses for
recruitment and placement are issued only to corporations and not
to natural persons. This argument is specious and illogical. The
Labor Code states 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."16 Corrolarily, a nonlicensee or nonholder of authority is
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 canceled by the POEA or the Secretary. 17 It
also bears stressing that agents or representatives appointed by a
licensee or a holder of authority but whose appointments are not
previously authorized by the POEA fall within the meaning of the
term nonlicensee or nonholder of authority.18 Thus, any person,
whether natural or juridical, that engages in recruitment activities
without the necessary license or authority shall be penalized under
Art. 39 of the Labor Code.
It is well established in jurisprudence that a person may be charged
and convicted for both illegal recruitment and estafa. The reason for
this is that illegal recruitment is a malum prohibitum, whereas estafa
is malum in se, meaning that the criminal intent of the accused is not
necessary for conviction in the former, but is required in the latter. 19
The elements of estafa under Art. 315, paragraph 2 (a), of the
Revised Penal Code are: (1) that the accused has defrauded
another by abuse of confidence or by deceit, and (2) that damage or
prejudice capable of pecuniary estimation is caused to the offended
party or third person.20 The trial court was correct in holding
accused-appellant liable for estafa in the case at bench. Owing to
accused-appellant’s false assurances that he could provide them
with work in another country, complainants parted with their money,
to their damage and prejudice, since the promised employment
never materialized.
Under Art. 315 of the Revised Penal Code, the penalty for the crime
of estafa is as follows:
1st. The penalty of prision correccional in its maximum period
to prision mayor in its minimum period, if the amount of the fraud is
over 12,000 pesos but does not exceed 22,000 pesos, and if such
amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year
for each additional 10,000 pesos; but the total penalty which may be
imposed shall not exceed twenty years. In such cases, and in
connection with the accessory penalties which may be imposed
under the provisions of this Code, the penalty shall be
termed prision mayor or reclusion temporal, as the case may be.
xxx xxx xxx
Under the Indeterminate Sentence Law, the maximum term of the
penalty shall be that which, in view of the attending circumstances,
could be properly imposed under the Revised Penal Code, and the
minimum shall be within the range of the penalty next lower to that
prescribed for the offense. Since the penalty prescribed by law for
the estafa charge against accused-appellant is prision
correccional maximum to prision mayor minimum, the penalty next
lower in degree is prision correccional minimum to medium. Thus,
the minimum term of the indeterminate sentence should be
anywhere within six (6) months and one (1) day to four (4) years and
two (2) months.
In fixing the maximum term, the prescribed penalty of prision
correccional maximum to prision mayor minimum should be divided
into three equal portions of time, each of which portion shall be
deemed to form one period, as follows –
Minimum Period : From 4 years, 2 months and 1 day to 5 years, 5
months and 10 days
Medium Period : From 5 years, 5 months and 11 days to 6 years, 8
months and 20 days
Maximum Period : From 6 years, 8 months and 21 days to 8 years
pursuant to Article 65, in relation to Article 64, of the Revised Penal
Code.
When the amounts involved in the offense exceeds P22,000, the
penalty prescribed in Article 315 of the Revised Penal Code shall be
103
imposed in its maximum period, adding one year for each additional
P10,000.00, although the total penalty which may be imposed shall
not exceed twenty (20) years.21
Accordingly, the following penalties shall be imposed upon accused-
appellant:
In Criminal Case No. Q-91-21908 where accused-appellant
defrauded Benny Maligaya in the amount of P35,000.00, one year
for the additional amount of P13,000.00 in excess of P22,000.00
provided for in Article 315 shall be added to the maximum period of
the prescribed penalty of prision correccional maximum to prision
mayor minimum. Thus, accused-appellant shall suffer the
indeterminate penalty of four (4) years, and two (2) months of prision
correccional medium, as minimum to nine (9) years of prision
mayor as maximum.22 Accused-appellant shall also pay Benny
Maligaya P35,000.00 by way of actual damages.
In Criminal Case No. Q-91-21909 where accused-appellant
defrauded Angeles Javier in the amount of P20,000.00, accused-
appellant shall suffer the indeterminate penalty of one (1) year, eight
(8) months and twenty-one (21) days of prision
correccional minimum to five (5) years, five (5) months and eleven
(11) days of prision correccionalmaximum. Accused-appellant shall
also pay Angeles Javier P20,000.00 by way of actual damages.
In Criminal Case No. Q-91-21910 where accused-appellant
defrauded Leodigario Maullon in the amount of P30,400.00,
accused-appellant shall suffer the indeterminate penalty of four (4)
years and two (2) months of prision correccional medium, as
minimum to eight (8) years of prision mayor, as
maximum.23 Accused-appellant shall also pay Leodigario Maullon
P30,400.00 by way of actual damages.
In addition, for the crime of illegal recruitment in large scale
(Criminal Case No. Q-91-21911) and pursuant to Article 39 (a) of the
Labor Code, accused-appellant shall suffer the penalty of life
imprisonment and a fine of One Hundred Thousand Pesos
(P100,000.00).
WHEREFORE, the March 6, 1996 Decision of the trial court finding
accused-appellant guilty beyond reasonable doubt of the crime of
illegal recruitment in large scale and estafa is hereby AFFIRMED
subject to the following modifications:
In Criminal Case No. Q-91-21908 where accused-appellant
defrauded Benny Maligaya in the amount of P35,000.00, one year
for the additional amount of P13,000.00 in excess of P22,000.00
provided for in Article 315 shall be added to the maximum period of
the prescribed penalty of prision correccional maximum to prision
mayorminimum. Thus, accused-appellant shall suffer the
indeterminate penalty of four (4) years, and two (2) months of prision
correccional medium, as minimum to nine (9) years of prision
mayor as maximum. Accused-appellant shall also pay Benny
Maligaya P35,000.00 by way of actual damages.1âwphi1
In Criminal Case No. Q-91-21909 where accused-appellant
defrauded Angeles Javier in the amount of P20,000.00, accused-
appellant shall suffer the indeterminate penalty of one (1) year, eight
(8) months and twenty-one (21) days of prision
correccional minimum to five (5) years, five (5) months and eleven
(11) days of prision correccionalmaximum. Accused-appellant shall
also pay Angeles Javier P20,000.00 by way of actual damages.
In Criminal Case No. Q-91-21910 where accused-appellant
defrauded Leodigario Maullon in the amount of P30,400.00,
accused-appellant shall suffer the indeterminate penalty of four (4)
years and two (2) months of prision correccional medium, as
minimum to eight (8) years of prision mayor, as maximum. Accused-
appellant shall also pay Leodigario Maullon P30,400.00 by way of
actual damages.
In addition, for the crime of illegal recruitment in large scale
(Criminal Case No. Q-91-21911) and pursuant to Article 39 (a) of the
Labor Code, accused-appellant shall suffer the penalty of life
imprisonment and a fine of One Hundred Thousand Pesos
(P100,000.00).
Costs against accused-appellant.
SO ORDERED.
G.R. No. 151303. April 15, 2005
ATHENNA* INTERNATIONAL MANPOWER SERVICES,
INC., Petitioners,
vs.
NONITO VILLANOS, Respondents.
DECISION
QUISUMBING, J.:
For review on certiorari are the Decision1 dated May 23, 2001
and Resolution2 dated November 23, 2001, of the Court of Appeals
in CA-G.R. SP No. 59594. The Court of Appeals reversed the
Resolutions3 of the National Labor Relations Commission and
reinstated the Labor Arbiter’s Decision4 in NLRC Case No. Sub-
RAB-09-OFW-(LB)-02-00002-99.
The antecedent facts, as summarized by the Court of Appeals, are
as follows:
Petitioner Athenna International Manpower Services, Inc. is a
domestic corporation engaged in recruitment and placement of
workers for overseas employment. Respondent Nonito Villanos is a
contract worker recruited by petitioner to work as a caretaker in
Taiwan.
Respondent applied to work overseas thru petitioner sometime in
February 1998. He alleged that he was assessed ₱100,000
placement fee by petitioner. As he had only ₱30,000 to pay
petitioner, respondent begged for a reduced fee. Petitioner agreed
and the placement fee was reduced to ₱94,000 only, on the
condition that the remaining balance of ₱64,000 shall be paid
through salary deductions upon his deployment. Respondent
received no receipt for the ₱30,000 cash that he advanced as partial
placement fee. Instead, petitioner gave him a schedule of his
monthly salary deduction payments for one year for his balance,
which included interest and other charges, amounting to ₱90,725.
In October 1998, respondent’s Contract of Employment with a
certain Wei Yu Hsien arrived. Under this contract, he was to work as
caretaker for one year, ten months and twenty-eight days with a
monthly pay of New Taiwan Dollars (NT$) 15,840.
On October 15, 1998, he flew to Taiwan. Respondent alleged that
upon his arrival in Taiwan, he was assigned to a mechanical shop,
owned by Hsien, as a hydraulic installer/repairer for car lifters,
instead of the job for which he was hired. He found out that Hsien
was actually engaged in the installation and repair of hydraulic
machines for gasoline stations and other mechanical shops. Since
then, he traveled from one place to another, even during nighttime
as hydraulic installer/repair man for car lifters, as required by his
employer. He did not, however, complain because he needed
money to pay for the debts he incurred back home.
Barely a month after his placement, he was terminated by Hsien. On
November 14, 1998, respondent was made to sign a document
stating that he was not qualified for the position. He did not,
however, sign the document. At dawn of November 16,
1998,5 respondent was handed his salary, with the accompanying
computation and instruction for his departure to the Philippines.
Upon his arrival in the Philippines, he immediately went to
petitioner’s office and confronted its representative, Lorenza Ching,
about the assignment given to him and demanded that he be
reimbursed the ₱30,000 he paid as downpayment. Instead of
returning the said amount, petitioner gave him a summary of
expenses amounting to ₱30,493, which it allegedly incurred for his
deployment abroad.
Aggrieved, respondent filed a complaint docketed as POEA Case
No. RV98-12-1586, before the Adjudication Office of the Philippine
Overseas Employment Administration (POEA).
However, because of financial constraints, he had to go home to
Polanco, Zamboanga del Norte where, on February 17, 1999, he
filed a complaint against petitioner for illegal dismissal, violation of
contract, and recovery of unpaid salaries and other benefits before
the NLRC Sub-Regional Arbitration Branch No. 9, Dipolog City.
104
In its defense, petitioner alleged that it hired respondent to work in
Taiwan for one year and that for his deployment, he was charged a
placement fee of merely ₱15,840 plus ₱5,050 for documentation
expenses. Petitioner further claimed that under the employment
contract, respondent was to undergo a probationary period of forty
(40) days. However, at the job site, respondent was found to be unfit
for his work, thus he resigned from his employment and requested
for his repatriation signing a statement to that effect.
On May 14, 1999, the Labor Arbiter rendered a Decision holding
petitioner and Wei Yu Hsien solidarily liable for the wages
representing the unserved portion of the employment contract, the
amount unlawfully deducted from respondent’s monthly wage, moral
damages, exemplary damages and attorney’s fees. For the
remittance of illegal placement fee in the amount of ₱99,110,
petitioner was held solely liable. The dispositive portion of the
decision reads:
WHEREFORE, couched in the foregoing premises, judgment is
hereby rendered:
(1) declaring that the respondents’ act for having severed
complainant’s employment, after service of one (1) month founded
on unjustifiable grounds and encroaching against the safeguard of
fundamental due process and security of tenure clauses as well as
for being in contradiction to the well engendered basic policy of the
state to grant ample protection to labor, to be illegal. Thus, in effect
hereof, on the basis of established jurisprudence and mandate of
the law, complainant Nonito Villanos, as a contractual employee, is
entitled to be paid of the supposed wages which he could have
received throughout the period of employment manifested in the
contract, had not because of the unceremonious, abnormal and
unlawful act of respondents in having put his employment to an end
after about one (1) month services, which entitlement shall be paid
jointly and severally by respondents Athena International Manpower
Services, Inc., [r]epresented by Lorenza Ching and/or Wei Yu Hsien,
1-11 Hsia Yuan Rd. Tali City, Taichung Country, Taiwan, ROC,
[which] specific amount is reflected in paragraph "6" hereof.
(2) declaring further that the deductions made by respondent Wei Yu
Hsien, from the monthly wage of complainant, to be illegal, since the
act is incidental to the unlawful scheme of having terminated
complainant’s employment untimely in the guise of inefficiency in the
performance of work wrongly assigned to him and in breach of the
provisions of the valid contract of employment having been entered
into by the parties. For this reason, respondents are hereby jointly
and severally directed to remit the exact amount of complainant’s
salary withheld, which amount is specifically found in paragraph "6".
(3) holding that the imposition of the placement fee of P120,000.00
against complainant as illegal, which in effect making respondent
Athena International Manpower Services, Inc., [r]epresented by
Lorenza Ching individually to pay complainant the exact amount
which is likewise found in paragraph "6" hereof.
(4) imposing moral and exemplary damages arising from breach of
contract and bad faith of respondents, which shall be paid by
respondents in solidum, and which amounts are specifically
reflected in paragraph "6".
(5) establishing liability upon respondents severally to pay attorney’s
fees equivalent to ten percent (10%) of the aggregate amount
payable to complainant by respondents.
(6) And, specifically ordering respondents to pay complainant the
following, as based on the preceding paragraphs:
A.) JOINT AND SEVERALLY LIABILITIES OF RESPON-DENTS IN
THIS CASE:
a.) Supposed wages of the
unserved portion of
complainant’s duration
of employment ….............................. NT$ 348,480.00;
(subject to proper future
conversion to Philippine Peso)
b.) Amount unlawfully deducted
from complainant’s monthly
wage ................................................. NT$ 11, 114.00;
(subject to proper future
conversion to Philippine Currency)
(c.) Moral damages …………........................ P 50,000.00;
d.) Exemplary damages …………………… P 30,000.00; and
e.) Attorney’s fees …..……………………. Ten Percent (10%) of the
aggregate amount
of liabilities of respondents,
whether joint or several, or
individual liabilities.
B.) INDIVIDUAL OR PERSONAL LIABILITY OF RESPONDENT
ATHENA INTERNATIONAL MANPOWER SERVICES, INC.,
REPRESENTED BY LORENZA CHING;
a.) Remittance of illegal
placement fee …………………………. P 99,110.00.
SO ORDERED.6
On appeal, the NLRC reversed the Labor Arbiter and dismissed the
complaint for lack of merit. It found that respondent was not at all
dismissed, much less illegally. Respondent seasonably filed a
motion for reconsideration, which the NLRC denied in its second
resolution.
Undaunted, respondent appealed to the Court of Appeals ascribing
grave abuse of discretion to the NLRC in its ruling that there was no
violation of the contract of employment by petitioner and in holding
that respondent was not illegally dismissed.
The Court of Appeals held that Wei Yu Hsien violated the contract of
employment when respondent was made to work as hydraulic
installer/repairer, not as caretaker. The appellate court concluded
that the supposed voluntary resignation of respondent was
inconsistent with his immediate demand for refund of the placement
fee upon his arrival in the Philippines; his filing of an administrative
case before the POEA Adjudication Office; and his subsequent filing
of the complaint with the Labor Arbiter. The Court of Appeals
decreed:
WHEREFORE, the petition is hereby GRANTED reversing the
questioned resolutions of the National Labor Relations Commission,
Fifth Division, Cagayan de Oro City and REINSTATING the decision
of the Labor Arbiter in NLRC Case No. Sub-RAB-09-OFW-(LB)-02-
00002-99.
SO ORDERED.7
Hence, the instant appeal, raising the following issues:
1. Did the respondent voluntarily resign or was he illegally
dismissed?
2. Assuming that the respondent was illegally dismissed, was it
proper for the Court of Appeals to affirm in toto the monetary awards
in the Decision of the Labor Arbiter, especially: (a) the award of his
supposed salaries for the entire unexpired portion of his employment
contract, i.e., NT$348,480.00 and (b) the award of "remittance of
placement fee" in the amount of P99,110.00?8
Anent the first issue, petitioner insists that respondent was not
illegally dismissed but voluntarily resigned; that respondent failed to
prove that he was made to work as hydraulic installer/repairer
105
instead of a caretaker; and that the documents he adduced were
self-serving and immaterial.
Petitioner further contends that although the resignation of
respondent was in a pre-printed form, it did not mean his resignation
was involuntary. The requirement that the employer has the burden
of proof that the employee was illegally dismissed is, says petitioner,
applicable only when the fact of dismissal is established. Petitioner
submits that, in this case, respondent bore the burden of proving
that his resignation was involuntary.
For his part, respondent avers that he did not resign voluntarily but,
he was asked to sign a letter of resignation. Furthermore, he avers
that petitioner did not explain why he was unqualified. Neither was
he informed of any qualifications needed for the job prior to his
deployment, as mandated by Article 2819 of the Labor Code.
Respondent points out that the allegation he resigned voluntarily is
belied by petitioner’s own admission in its position paper that he
was, in fact, found unfit for the job. He maintains that his purported
resignation was obviously inconsistent with his filing a complaint for
illegal dismissal against petitioner.
After a thorough consideration of the submissions of the parties, we
find no persuasive grounds nor substantial basis to reverse the
decision and the resolution of the appellate court.
An employee voluntarily resigns when he finds himself in a situation
where he believes that personal reasons cannot be sacrificed in
favor of the exigency of the service; thus, he has no other choice but
to disassociate himself from his employment.10
Records show that upon his repatriation from Taiwan, respondent
immediately went to petitioner’s office and confronted its
representative, Lorenza Ching, about the assignment given to him
which was contrary to the agreed position of caretaker, for which he
specifically applied. He demanded that he be reimbursed the
₱30,000 he paid as downpayment. When refused, he lodged a
complaint with the POEA. He also immediately filed a complaint for
illegal dismissal before Labor Arbiter Cresencio R. Iniego, upon his
arrival in his hometown, indicating that respondent did not voluntarily
resign, but was forced to resign, which was tantamount to a
dismissal.11 Petitioner did not refute respondent’s contentions
regarding these incidents. Further, it failed to prove the legality of
the dismissal, despite the fact that the burden of proof lies on the
employment and recruitment agency. Thus, the presumption stands
to the effect that respondent was illegally dismissed by his employer.
Even assuming respondent was a mere probationary employee as
claimed by petitioner, respondent could only be terminated for a
pertinent and just cause, such as when he fails to qualify as a
regular employee in accordance with reasonable standards of
employment made known to him by his employer at the time of his
engagement.12 Here, it appears that the petitioner failed to prove
that, at the time of respondent’s engagement, the employer’s
reasonable standards for the job were made known to respondent.
Moreover, in this case, respondent was assigned to a job different
from the one he applied and was hired for.
On the second issue. Petitioner claims that Section 10 of Republic
Act No. 8042,13 entitles respondent only to six months worth of the
unserved portion of his employment contract; and that the order to
refund the amount of ₱99,110 as placement fee has no factual basis
because respondent himself admitted he only paid ₱30,000 as
placement fee, albeit, he was assessed the amount of ₱94,000.
Respondent counters that he worked for only a month because he
was hastily and unceremoniously terminated; and that he was
entitled to his salary corresponding to the remaining portion of the
employment contract. Further, he demands full reimbursement of
the ₱30,000 he paid as placement fee.
Pertinent to this issue is Section 10 of Rep. Act No. 8042
SEC. 10. Money Claims. - . . .
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.
...
Thus, for the computation of the lump-sum salary due an illegally
dismissed overseas employee, there are two clauses as points of
reckoning: first is the cumulative salary for the unexpired portion of
his employment; and the other is the grant of three months salary for
every year of the unexpired term, whichever is lesser.
Since respondent was dismissed after only one month of service,
the unexpired portion of his contract is admittedly one year, nine
months and twenty-eight days. But the applicable clause is not the
first but the second: three months salary for every year of the
unexpired term, as the lesser amount, hence it is what is due the
respondent.
Note that the fraction of nine months and twenty-eight days is
considered as one whole year following the Labor Code. Thus,
respondent’s lump-sum salary should be computed as follows:
3 months x 2 (years) = 6 months worth of salary
6 months x (NT$) 15,840 = NT$95,040, subject to proper conversion
to Philippine currency by Labor Arbiter Cresencio Iniego.
Under the aforequoted provision, an illegally dismissed overseas
worker is also entitled to the full reimbursement of his placement fee
with interest at twelve percent (12%) per annum.
We note that while respondent was assessed ₱94,000 in placement
fee, he paid only ₱30,000 on the agreement that the balance of
₱64,000 would be paid on a monthly salary deduction upon his
deployment. Hence, we cannot grant respondent reimbursement of
the entire assessed amount of ₱94,000. He is only entitled to the
reimbursement of the amount of placement fee he actually paid,
which is the ₱30,000 he gave as downpayment plus interest at
twelve percent (12%) per annum.
Lastly, because of the breach of contract and bad faith alleged
against the employer and the petitioner, we must sustain the award
of ₱50,000 in moral damages and ₱50,000 as exemplary damages,
in addition to attorney’s fees of ten percent (10%) of the aggregate
monetary awards.
WHEREFORE, the petition is DENIED. The assailed Decision dated
May 23, 2001, and Resolution dated November 23, 2001, of the
Court of Appeals are AFFIRMED with MODIFICATION. Petitioner
Athenna International Manpower Services, Inc. is hereby
DECLARED solidarily liable with Wei Yu Hsien to pay respondent
NONITO VILLANOS the amount of NT$95,040.00, subject to proper
conversion to Philippine currency, as unpaid salary of respondent
equivalent to six months service under Rep. Act No. 8042, Section
10 as well as ₱50,000.00 in moral damages, and ₱50,000.00 as
exemplary damages suffered by respondent; and ten percent (10%)
of the aggregate monetary awards as attorney’s fees, pursuant to
law and jurisprudence. Petitioner herein is also ordered to pay
respondent the amount of ₱30,000.00 as reimbursement of the
placement fee, with 12% interest per annum until fully paid.
SO ORDERED.
G.R. No. 146964 August 10, 2006
ROSA C. RODOLFO, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
CARPIO MORALES, J.:
Petitioner was charged before the Regional Trial Court (RTC) of
Makati for illegal recruitment alleged to have been committed as
follows:
That in or about and during the period from August to September
1984, in Makati, Metro Manila, Philippines, and within the jurisdiction
of this Honorable Court, the said accused representing herself to
have the capacity to contract, enlist and transport Filipino workers
for employment abroad, did then and there willfully and unlawfully,
for a fee, recruit and promise employment/job placement abroad to
VILLAMOR ALCANTARA, NARCISO CORPUZ, 1NECITAS R.
FERRE, GERARDO H. TAPAWAN and JOVITO L. CAMA, without
106
first securing the required license or authority from the Ministry of
Labor and Employment. 2
After trial on the merits, Branch 61 of the Makati RTC rendered its
Judgment on the case, 3 the decretal portion of which reads:
WHEREFORE, PREMISES ABOVE CONSIDERED, the Court finds
the accused ROSA C. RODOLFO as GUILTY of the offense of
ILLEGAL RECRUITMENT and hereby sentences her [to] a penalty
of imprisonment of EIGHT YEARS and to pay the
costs. 4 (Underscoring supplied)
In so imposing the penalty, the trial court took note of the fact that
while the information reflected the commission of illegal recruitment
in large scale, only the complaint of the two of the five complainants
was proven.
On appeal, the Court of Appeals correctly synthesized the evidence
presented by the parties as follows:
[The evidence for the prosecution] shows that sometime in August
and September 1984, accused-appellant approached private
complainants Necitas Ferre and Narciso Corpus individually
and invited them to apply for overseas employment in Dubai. The
accused-appellant being their neighbor, private complainants agreed
and went to the former’s office. This office which bore the business
name "Bayside Manpower Export Specialist" was in a building
situated at Bautista St. Buendia, Makati, Metro Manila. In that
office, private complainants gave certain amounts to appellant for
processing and other fees. Ferre gave P1,000.00 as processing fee
(Exhibit A) and another P4,000.00 (Exhibit B). Likewise, Corpus
gave appellant P7,000.00 (Exhibit D). Appellant then told private
complainants that they were scheduled to leave for Dubai on
September 8, 1984. However, private complainants and all the other
applicants were not able to depart on the said date as their employer
allegedly did not arrive. Thus, their departure was rescheduled to
September 23, but the result was the same. Suspecting that they
were being hoodwinked, private complainants demanded of
appellant to return their money. Except for the refund of P1,000.00
to Ferre, appellant was not able to return private complainants’
money. Tired of excuses, private complainants filed the present
case for illegal recruitment against the accused-appellant.
To prove that accused-appellant had no authority to recruit workers
for overseas employment, the prosecution presented Jose
Valeriano, a Senior Overseas Employment Officer of the Philippine
Overseas Employment Agency (POEA), who testified that accused-
appellant was neither licensed nor authorized by the then Ministry of
Labor and Employment to recruit workers for overseas employment.
For her defense, appellant denied ever approaching private
complainants to recruit them for employment in Dubai. On the
contrary, it was the private complainants who asked her help in
securing jobs abroad. As a good neighbor and friend, she brought
the private complainants to the Bayside Manpower Export Specialist
agency because she knew Florante Hinahon, 5 the owner of the said
agency. While accused-appellant admitted that she received money
from the private complainants, she was quick to point out that she
received the same only in trust for delivery to the agency. She
denied being part of the agency either as an owner or employee
thereof. To corroborate appellant’s testimony, Milagros Cuadra, who
was also an applicant and a companion of private complainants,
testified that appellant did not recruit them. On the contrary, they
were the ones who asked help from appellant. To further bolster the
defense, Eriberto C. Tabing, the accountant and cashier of the
agency, testified that appellant is not connected with the agency and
that he saw appellant received money from the applicants but she
turned them over to the agency through either Florantino Hinahon or
Luzviminda Marcos. 6 (Emphasis and underscoring supplied)
In light thereof, the appellate court affirmed the judgment of the trial
court but modified the penalty imposed due to the trial court’s failure
to apply the Indeterminate Sentence Law.
The appellate court thus disposed:
WHEREFORE, finding no merit in the appeal, this Court
DISMISSES it and AFFIRMS the appealed Decision EXCEPT
the penalty x x x which is hereby changed to five (5) years as
minimum to seven (7) years as maximum with perpetual
disqualification from engaging in the business of recruitment and
placement of workers. 7(Underscoring supplied)
Petitioner’s Motion for Reconsideration having been denied, 8 the
present petition was filed, faulting the appellate court
I
x x x IN GIVING CREDENCE TO THE TESTIMONIES OF THE
COMPLAINING WITNESSES, [AND]
II
x x x IN FINDING THE PETITIONER-ACCUSED GUILTY WHEN
THE PROSECUTION FAILED TO PROVE HER GUILT BEYOND
REASONABLE DOUBT. 9 (Underscoring supplied)
Petitioner bewails the failure of the trial court and the Court of
Appeals to credit the testimonies of her witnesses, her companion
Milagros Cuadra, and Eriberto C. Tabing who is an accountant-
cashier of the agency.
Further, petitioner assails the trial court’s and the appellate court’s
failure to consider that the provisional receipts she issued indicated
that the amounts she collected from the private complainants were
turned over to the agency through Minda Marcos and Florante
Hinahon. At any rate, she draws attention to People v.
Señoron 10 wherein this Court held that the issuance or signing of
receipts for placement fees does not make a case for illegal
recruitment.11
The petition fails.
Articles 38 and 39 of the Labor Code, the legal provisions applicable
when the offense charged was committed, 12provided:
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. x x x
Article 39. Penalties. – x x x x
(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 x (Underscoring supplied)
The elements of the offense of illegal recruitment, which must
concur, are: (1) that the offender has no valid license or authority
required by law to lawfully engage in recruitment and placement of
workers; and (2) that the offender undertakes any activity within the
meaning of recruitment and placement under Article 13(b), or any
prohibited practices enumerated under Article 34 of the Labor
Code. 13 If another element is present that the accused commits
the act against three or more persons, individually or as a group, it
becomes an illegal recruitment in a large scale. 14
Article 13 (b) of the Labor Code defines "recruitment and placement"
as "[a]ny 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." (Underscoring supplied)
That the first element is present in the case at bar, there is no doubt.
Jose Valeriano, Senior Overseas Employment Officer of the
Philippine Overseas Employment Administration, testified that the
records of the POEA do not show that petitioner is authorized to
recruit workers for overseas employment. 15 A Certification to that
effect was in fact issued by Hermogenes C. Mateo, Chief of the
Licensing Division of POEA. 16
Petitioner’s disclaimer of having engaged in recruitment activities
from the very start does not persuade in light of the evidence for the
prosecution. In People v. Alvarez, this Court held:
Appellant denies that she engaged in acts of recruitment and
placement without first complying with the guidelines issued by the
Department of Labor and Employment. She contends that she did
not possess any license for recruitment, because she never
engaged in such activity.
107
We are not persuaded. In weighing contradictory declarations and
statements, greater weight must be given to the positive testimonies
of the prosecution witnesses than to the denial of the defendant.
Article 38 (a) clearly shows that illegal recruitment is an offense that
is essentially committed by a non-licensee or non-holder of
authority. A non-licensee means any person, corporation or entity to
which the labor secretary has not issued a valid license or authority
to engage in recruitment and placement; or whose license or
authority has been suspended, revoked or cancelled by the POEA
or the labor secretary. A license authorizes a person or an entity to
operate a private employment agency, while authority is given to
those engaged in recruitment and placement activities.
xxxx
That appellant in this case had been neither licensed nor
authorized to recruit workers for overseas employment was certified
by Veneranda C. Guerrero, officer-in-charge of the Licensing and
Regulation Office; and Ma. Salome S. Mendoza, manager of the
Licensing Branch – both of the Philippine Overseas Employment
Administration. Yet, as complainants convincingly proved, she
recruited them for jobs in Taiwan. 17 (Italics in the original;
underscoring supplied)
The second element is doubtless also present. The act of referral,
which is included in recruitment, 18 is "the act of passing along or
forwarding of an applicant for employment after an initial interview of
a selected applicant for employment to a selected employer,
placement officer or bureau." 19 Petitioner’s admission that she
brought private complainants to the agency whose owner she knows
and her acceptance of fees including those for processing betrays
her guilt.
That petitioner issued provisional receipts indicating that the
amounts she received from the private complainants were turned
over to Luzviminda Marcos and Florante Hinahon does not free her
from liability. For the act of recruitment may be "for profit or not." It is
sufficient that the accused "promises or offers for a fee employment"
to warrant conviction for illegal recruitment. 20 As the appellate court
stated:
x x x Sec. 13(b) of P.D. 442 [The Labor Code] does not require that
the recruiter receives and keeps the placement money for himself or
herself. For as long as a person who has no license to engage in
recruitment of workers for overseas employment offers for a fee an
employment to two or more persons, then he or she is guilty of
illegal recruitment. 21
Parenthetically, why petitioner accepted the payment of fees from
the private complainants when, in light of her claim that she merely
brought them to the agency, she could have advised them to directly
pay the same to the agency, she proferred no explanation.
On petitioner’s reliance on Señoron, 22 true, this Court held that
issuance of receipts for placement fees does not make a case for
illegal recruitment. But it went on to state that it is "rather
the undertaking of recruitment activities without the necessary
license or authority" that makes a case for illegal recruitment. 23
A word on the penalty. Indeed, the trial court failed to apply the
Indeterminate Sentence Law which also applies to offenses
punished by special laws.
Thus, Section 1 of Act No. 4103 (An Act to Provide for an
Indeterminate Sentence and Parole for All Persons Convicted of
Certain Crimes by the Courts of the Philippine Islands; To Create A
Board of Indeterminate Sentence and to Provide Funds Therefor;
and for Other Purposes) provides:
SECTION 1. Hereafter, in imposing a prison sentence for an offense
punished by the Revised Penal Code, or its amendments, the court
shall sentence the accused to an indeterminate sentence the
maximum term of which shall be that which, in view of the attending
circumstances, could be properly imposed under the rules of the
said Code, and the minimum which shall be within the range of the
penalty next lower to that prescribed by the Code for the offense;
and if the offense is punished by any other law, the court shall
sentence the accused to an indeterminate sentence, the maximum
term of which shall not exceed the maximum fixed by said law and
the minimum shall not be less than the minimum term prescribed by
the same. (As amended by Act No. 4225) (Underscoring supplied)
While the penalty of imprisonment imposed by the appellate court is
within the prescribed penalty for the offense, its addition of
"perpetual disqualification from engaging in the business of
recruitment and placement of workers" is not part thereof. Such
additional penalty must thus be stricken off.
WHEREFORE, the petition is DENIED. The assailed Decision and
Resolution of the Court of Appeals are AFFIRMED with
MODIFICATION in that the accessory penalty imposed by it
consisting of "perpetual disqualification from engaging in the
business of recruitment and placement of workers" is DELETED.
Costs against petitioner.
SO ORDERED.
G.R. No. 195666
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
FE ABELLA y BUHAIN, Accused-Appellant.
DECISION
LEONARDO-DE CASTRO, J.:
For Our consideration is an appeal from the Decision1 dated
September 30, 2010 of the Court of Appeals in CA-G.R. CR.-H.C.
No. 03974, which affirmed with modification the Decision2 dated
March 26, 2009 of the Regional Trial Court (RTC), Manila City,
Branch 52, in Criminal Case No. 04-225062, which found accused-
appellant Fe Abella y Buhain (Abella) guilty of Illegal Recruitment in
Large Scale.
The Information3 reads:
That in or about and during the period comprised between October
8, 2003 and March 18, 2004, inclusive, in the City of Manila,
Philippines, the said accused conspiring and confederating with
another whose true name, real identity and present whereabouts is
still unknown, and mutually helping each other, representing herself
to have the capacity to contract, enlist and transport Filipino workers
for employment abroad, did then and there willfully, unlawfully, and
feloniously for a fee, recruit and promise employment/job placement
to the following persons:
Mary Jean Mateo y Sanchez
Grace Marcelino y dela Peña
Nobella Castro y Fernandez
Imelda Miguel y Factor
Lolita Pansoy y Garcia
Ester Castro y Pamisttan
Janice Belvis y Morales
Ruby Badua y Cabacungan
Visitacion Rosete y Cedron
Generoso Gumpal y Bangloy
Fernando Callang y Buhanget
Joselito Danver Huta y Cataño
as Laundrywomen/Laundrymen and Waiter in Istanbul, Turkey and
Dubai, without first having secured the required license or authority
from the Department of Labor and Employment, charged or accept
directly or indirectly from said complainants amounts which are in
excess of or greater than those specified in the schedule of
allowable fees prescribed by the Department of Labor and
Employment under Memorandum Order No. 5, Series of 1985 and
having failed to deploy aforesaid complainants, continuously fails to
reimburse despite demands, the expenses they incurred in
108
connection with the documentation and processing for their
deployment.
Upon arraignment, Abella, assisted by counsel, pleaded not guilty to
the offense charge.
In the course of the trial, the prosecution presented Imelda F. Miguel
(Miguel), Grace P. Marcelino (Marcelino), Fernando B. Callang
(Callang), Mildred Versoza (Versoza), and Senior Police Officer
(SPO) 1 Jaime Bunag (Bunag) as witnesses.
Miguel testified that she came to know Abella through Zeny Agpalza
(Agpalza) and Lina Mateo (Mateo), who informed her that Abella
could help her get work abroad. Interested, Miguel met Abella at the
latter’s office, bearing the name Rofema Business Consultancy
(RBC), at 1807 Nakpil St., Barangay 697, Malate, Manila. During
their meeting, Abella offered Miguel work as a laundrywoman in
Istanbul, Turkey, with a salary of $600.00 to $700.00 but Miguel
must undergo training in laundry service and pay a placement fee of
P100,000.00. Miguel, however, was able to raise and pay only
P30,000.004 as placement fee on November 17, 2003 for which
Abella issued a cash voucher signed by Abella herself in Miguel’s
presence. Miguel also claimed that she underwent training in
laundry service for five days at the Executive Technical Consultants
Trade Test and Training Center, valued at P5,000.00, which was
sponsored by Abella. Miguel was issued a certification after said
training. Abella discussed with Miguel the details of the latter’s job
abroad and provided Miguel with a photocopy of their written
agreement, together with the certificate evidencing registration by
Abella of the business name of RBC. Until the day that Miguel gave
her testimony before the RTC, Abella, contrary to her representation
and promise, was not able to deploy Miguel as a laundrywoman in
Istanbul, Turkey, and neither did Abella return the placement fee of
P30,000.00 which Miguel had paid.5
Marcelino narrated that she came to know Abella through Rosette
Danao (Danao). Danao first recruited Marcelino to work as a
domestic helper in Saipan, but later turned over Marcelino’s
application to Agpalza who was in charge of those applying for jobs
in Turkey. Danao and Agpalza both referred to Abella as their
Manager. Marcelino paid a total of P50,000.006 for the processing of
her papers in four installments: P10,000.00 on November 24, 2003;
P15,000.00 on December 3, 2003; P10,000.00 on December 23,
2003, and P15,000.00 on January 15, 2004, all personally received
by Abella either at the RBC office or at McDonald’s, Ermita, and
evidenced by vouchers signed by Abella. Nothing happened to
Marcelino’s application and the amounts she had paid to Abella
were not returned to her.7
According to Callang, he was recruited by Danao, Abella’s agent,
who brought him to the RBC office in Malate, Manila. At the RBC
office, Abella told Callang of the job order for laundryman in Istanbul,
Turkey with a monthly salary of $600.00 and for which the
placement fee was P65,000.00. Callang paid to Abella P10,000.00
on November 17, 2003; P10,000.00 on December 23, 2003; and
P20,000.00 on January 9, 2004, for a total of
P40,000.00,8 evidenced by a voucher signed by Abella in Callang’s
presence. The first two payments were made at the RBC office while
the last payment was at McDonald’s, Ermita. Callang was not
deployed for employment abroad, neither was he able to recover the
amount he paid to Abella.
Versoza was an employee at the Licensing Division of the Philippine
Overseas Employment Administration (POEA). Versoza recounted
that upon the instruction of Yolanda Paragua (Paragua), Officer-in-
Charge (OIC) of the POEA Licensing Division, she verified from the
database and other records of their office whether Abella/RBC had
license to recruit workers for employment abroad. Versoza found out
that Abella/RBC had no such license and she prepared a
Certification to that effect, which was signed by OIC Paragua in her
presence. In compliance with the subpoena duces tecum issued by
the RTC, Versoza personally appeared before the trial court to
identify OIC Paragua’s signature on the Certification. 9
SPO1 Bunag was the investigator assigned to the case and affirmed
on the witness stand that he was the one who took down the private
complainants’ Sinumpang Salaysay Pag-aresto, and prepared
Abella’s Booking Sheet and Arrest Report and letter of referral for
inquest dated March 19, 2004.
Only Abella herself testified for the defense.
Before Abella took the witness stand, her counsel, Atty. Rodrigo
Mariñas, moved that the following private complainants: Mary Jean
S. Mateo, Nobella F. Castro, Lolito G. Pansoy, Ester P. Castro,
Janice M. Belvis, Ruby C. Badua, Generoso B. Gumpal, and
Joselito Danver C. Huta, be provisionally dropped as such from the
Information for their repeated failure to appear and testify in support
of their complaints.10 Without objection from Assistant City
Prosecutor Francisco L. Salomon, the RTC granted the defense’s
motion, thus, leaving Miguel, Marcelino, and Callang as private
complainants.
Abella anchored her defense on denial. Abella alleged that she had
been working as a cashier since November 11, 2004 at RBC, a
travel agency registered with the Department of Trade and Industry.
As cashier at RBC, Abella’s main duty was to receive payments
from clients for which she issued cash vouchers. Abella claimed that
she did not personally meet the clients nor did she directly receive
money from them, as the clients coursed their payments through
Agpalza, an RBC agent. Agpalza would then turn over the payments
to Abella, for which the latter issued cash vouchers; and Abella
would subsequently hand over the payments to RBC owner,
Elizabeth Reyes (Reyes). Abella disputed private complainants’
assertion and insisted that she did not promise private complainants
employment abroad. During her re-direct examination, Abella
refuted her purported arrest and confrontation with private
complainants. Abella maintained that she voluntarily went with
Agpalza to the police headquarters and that she and Agpalza were
detained at the second floor while private complainants were kept at
the ground floor of the police headquarters.
On March 26, 2009, the RTC rendered a Decision with the following
verdict:
WHEREFORE, the Court finds the accused FE ABELLA y BUHAIN
guilty beyond reasonable doubt of the crime of Illegal Recruitment in
large scale and imposes upon her the penalty of life imprisonment
and a fine of Php100,000.00.
FE ABELLA y BUHAIN is also ordered to return to, or refund the
sums of money she had received from the following private
complainants: a) Imelda Miguel the sum of Php30,000.00; b)
Fernando Callang the amount of Php40,000.00; and c) Grace
Marcelino the amount of Php50,000.00.
With costs against the accused.11
Aggrieved, Abella appealed before the Court of Appeals.
The Court of Appeals, in a Decision dated September 30, 2010,
affirmed the RTC judgment of conviction but with the modification
increasing the amount of fine imposed against Abella. The
dispositive portion of the said Decision reads:
WHEREFORE, premises considered, the appeal is DENIED. The
Decision dated 26 March 2009 of the Regional Trial Court of Manila,
Branch 52, in Criminal Case No. 04-225062 finding accused-
appellant Fe Abella y Buhain guilty beyond reasonable doubt of
illegal recruitment in large scale, sentencing her to suffer the penalty
of life imprisonment and ordering her to pay a fine and to return to
private complainants Imelda Miguel, Fernando Callang and Grace
Marcelino the amounts of Php30,000.00, Php40,000.00 and
Php50,000.00, respectively, is
hereby AFFIRMED with MODIFICATION in that the amount of fine
is increased from Php100,000.00 to Php500,000.00. Costs against
accused-appellant.12
Hence, the present appeal.
In her Supplemental Brief, Abella contends that the prosecution
failed to prove her guilt beyond reasonable doubt as the first
element of illegal recruitment in large scale, i.e., the accused
undertook a recruitment activity under Article 13(b) of the Labor
Code or any prohibited practice under Article 34 of the same Code,
is wanting. Abella points out that: (a) it was not Abella who enticed
private complainants to apply for work overseas given that by private
complainants’ own testimonies, they learned about the job
opportunities abroad not from Abella, but from Agpalza, Mateo, and
Danao, who were so persuasive that private complainants travelled
from their respective provinces to Manila just to meet Abella; (b) if it
were true that Abella received money from private complainants,
she would have already fled after getting private complainants’
money so as to evade arrest; and (c) the prosecution presented a
mere photocopy of the handwritten agreement supposedly executed
by Abella in Miguel’s favor, and considering that the contents of
such agreement are in issue in this case, the RTC wrongfully
accorded much weight to such evidence.
We find no merit in the instant appeal.
109
To constitute illegal recruitment in large scale, three elements must
concur: (a) the offender has no valid license or authority required by
law to enable him to lawfully engage in recruitment placement of
workers: (b) the offender undertakes any of the activities within the
meaning of "recruitment and placement" under Article 13(b) of the
Labor Code, or any of the prohibited practices enumerated under
Article 34 of the same Code (now Section 6 of Republic Act No.
8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995); and (c) the offender committed the same
against three or more persons, individually or as a group.13
Article 13(b) of the Labor Code defines "recruitment and placement"
as "any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad,
whether for profit or not." It also provides 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."
Article 38 of the same Code particularly defines "illegal recruitment"
as follows:
ART. 38. Illegal Recruitment. – (a) Any recruitment activities,
including the prohibited practices enumerated under Article 34 of
this Code, to be undertaken by non-licensees or non-holders of
authority, shall be deemed illegal and punishable under Article 39 of
this Code. The Department of Labor and Employment or any law
enforcement officer may initiate complaints under this Article.
(b) Illegal recruitment when committed by a syndicate or in large
scale shall be considered an offense involving economic sabotage
and shall be penalized in accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out
by a group of three (3) or more persons conspiring and/or
confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first paragraph
hereof. Illegal recruitment is deemed committed in large scale if
committed against three (3) or more persons individually or as a
group.
Republic Act No. 8042 broadened the concept of illegal recruitment
under the Labor Code and provided stiffer penalties, especially if it
constitutes economic sabotage, either illegal recruitment in large
scale or illegal recruitment committed by a syndicate. Under Section
6 of Republic Act No. 8042, the following acts constitute "illegal
recruitment":
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 acts, 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;
(b) To furnish or publish any false notice or information or
document in relation to recruitment or employment;
(c) To give any false notice, testimony, information or
document or commit any act of misrepresentation for the
purpose of securing a license or authority under the Labor
Code;
(d) To induce or attempt to induce a worker already
employed to quit his employment in order to offer him
another unless the transfer is designed to liberate a
worker from oppressive terms and conditions of
employment;
(e) To influence or attempt to influence any person or
entity not to employ any worker who has not applied for
employment through his agency;
(f) To engage in the recruitment or placement of workers
in jobs harmful to public health or morality or to the dignity
of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by the
Secretary of Labor and Employment or by his duly
authorized representative;
(h) To fail to submit reports on the status of employment,
placement vacancies, remittance of foreign exchange
earnings, separation from jobs, departures and such other
matters or information as may be required by the
Secretary of Labor and Employment;
(i) To substitute or alter to the prejudice of the worker,
employment contracts approved and verified by the
Department of Labor and Employment from the time of
actual signing thereof by the parties up to and including
the period of the expiration of the same without the
approval of the Department of Labor and Employment;
(j) For an officer or agent of a recruitment or placement
agency to become an officer or member of the Board of
any corporation engaged in travel agency or to be
engaged directly or indirectly in the management of a
travel agency;
(k) To withhold or deny travel documents from applicant
workers before departure for monetary or financial
considerations other than those authorized under the
Labor Code and its implementing rules and regulations;
(l) Failure to actually deploy without valid 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, 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. (Emphases ours.)
The elements of illegal recruitment in large scale are all obtaining in
this case and that the prosecution had sufficiently proved that Abella
is guilty of said offense.
First, it is undisputed that neither Abella nor RBC was licensed as a
recruitment agency. The Certification14 dated May 17, 2005 signed
by OIC Paragua of the POEA Licensing Division states that "per
available records of this Office, Fe Abella y Buhain, in her personal
capacity, and ROFEMA BUSINESS CONSULTANCY with address
at 1807 Nakpil St., Brgy. 697, Malate, Manila, are not licensed by
this Administration to recruit workers for overseas employment. Any
recruitment activity undertaken by the above-named person/entity is
deemed illegal." Versoza, the POEA Licensing Division employee
who actually perused the database and other records of their office,
prepared the Certification for OIC Paragua’s signature, and
personally witnessed OIC Paragua signing the said Certification,
appeared as witness before the RTC to authenticate the Certification
as one of the documentary evidence for the prosecution. A POEA
certification is a public document issued by a public officer in the
performance of an official duty; hence, it is prima facie evidence of
the facts therein stated pursuant to Section 23, Rule 132 of the
Rules of Court.15 Public documents are entitled to a presumption of
regularity, consequently, the burden of proof rests upon the person
who alleges the contrary. Abella does not negate the contents of the
Certification but merely argues that it has no bearing on whether or
not she represented herself to the private complainants as someone
authorized to recruit for overseas employment.
Second, both the RTC and the Court of Appeals found that Abella
had engaged in recruitment activities. The trial and appellate courts
110
accorded weight and credence to the consistent testimonies of
private complainants Miguel, Marcelino, and Callang that at
separate instances, Agpalza, Mateo, and/or Danao brought private
complainants to the RBC office and introduced them to Abella, and it
was Abella herself who offered and promised private complainants
jobs in Istanbul, Turkey, in consideration of placement fees. Miguel’s
testimony is further supported by a handwritten agreement 16 signed
by Abella, stating in detail the terms of Miguel’s alleged overseas
employment, and we quote:
1. Salary is $400 excluding overtime. There is a
probationary period of 3 months.
2. Free board and lodging, one yr. contract renewable, 8
working hrs.
3. Total placement is P100TH, P50TH cash out and
P50TH salary deduction. Training fee of P4,500 & PDOS
is included in the placement fee.
4. Downpayment of P25,000 to be used in the stamping of
visa in the passport. After 1 week, applicant will receive a
xeroxed copy of his/her passport with stamped visa.
5. After downpayment, applicant will start training for 5
days, 8:00 AM-5:00 PM.
6. Remaining balance of P25TH will be given upon signing
of the contract.
7. Downpayment is refundable in case of failure to
process papers within the time frame agreed upon which
is within 2 months time. In case of refund certain charges
will be deducted so the applicant cannot get the full
amount of downpayment.
8. Every payday, the applicant should deposit certain
amount which they can afford to the ATM account of the
company.
9. Before departure, an Attorney’s Affidavit will be
prepared signed by Ms. Fe Abella, the applicant, one
member of the applicant[’]s family particularly the nearest
kin and the Agent handling the applicant. In case the
applicant does not comply with the payment of the
remaining placement (P50TH), the member of the family
will be answerable for his/her obligation.
10. Ms. Fe Abella will be the one answerable for expired
medical certificate.
11. In case problems arise in Turkey, applicant should
approach the Philippine Embassy.
Abella is challenging the probative value of the above handwritten
agreement on the ground that it is a mere photocopy. Abella
reasons that since the contents of said agreement are in issue, the
best evidence rule applies. The original of the agreement is the best
evidence of Abella making representations that she had the power
to send private complainants abroad to work.
The non-presentation of the original copy of the handwritten
agreement is not fatal to the prosecution’s case. Miguel personally
testified before the RTC as to the circumstances of her recruitment
by Abella. Abella made verbal, and not only written, promises to
Miguel of employment abroad. The handwritten agreement merely
substantiates Miguel’s testimony at best. In People v. Pabalan,17 we
affirmed the sufficiency of testimonial evidence to prove receipt by
therein accused-appellant of placement fees, even in the absence of
documentary evidence such as receipts issued by accused-
appellant, thus:
[T]he absence of receipts for some of the amounts delivered to the
accused did not mean that the appellant did not accept or receive
such payments. Neither in the Statute of Frauds nor in the rules of
evidence is the presentation of receipts required in order to prove
the existence of a recruitment agreement and the procurement of
fees in illegal recruitment cases. Such proof may come from the
testimonies of witnesses.18
Abella denies representing to private complainants that she was
capable of deploying workers to Istanbul, Turkey. Abella avows that
she was a mere cashier at RBC who issued vouchers for payments
made by clients and that she subsequently turned over such
payments to Reyes, the true owner of RBC.
We are not swayed by Abella’s bare allegations, which
conspicuously lacked any corroborative evidence. If Abella was
really a mere employee at RBC, then she could have presented
basic evidence of her employment, such as appointment papers, an
identification card, or payslips. Also, the vouchers for the placement
fees paid by private complainants were issued and signed by Abella
herself, without any indication that she issued and signed the same
on behalf of Reyes, the purported true owner of RBC. There is
likewise absence of any proof of Abella’s turnover to or Reyes’s
receipt of the amounts received from private complainants.1âwphi1
In contrast, the private complainants Miguel, Marcelino, and Callang
were positive and categorical in their testimonies that Abella
promised them employment abroad in exchange for their payment of
placement fees. Abella herself provided Miguel with a Certification
proving Abella’s registration of the business name RBC; hence,
negating Abella’s claim that RBC is actually owned by another
person, Reyes. The private complainants’ testimonies were
consistent and corroborative of one another on material points, such
as the placement fees asked of them, the nature of work available,
and their employment destination, which is, Istanbul, Turkey.
Well-settled is the rule that the trial court, having the opportunity to
observe the witnesses and their demeanor during the trial, can best
assess the credibility of the witnesses and their testimonies. Abella’s
mere denial cannot prevail over the positive and categorical
testimonies of the private complainants. The findings of the trial
court are accorded great respect unless the trial court has
overlooked or misconstrued some substantial facts, which, if
considered, might affect the result of the case. Furthermore, factual
findings of the trial court, when affirmed by the Court of Appeals, are
deemed binding and conclusive.19
Lastly, it was established that there were at least three victims in this
case, namely, Miguel, Marcelino, and Callang, who all testified
before the RTC in support of their respective complaints.
Based on the foregoing, there is no doubt, as the RTC found and the
Court of Appeals affirmed, that Abella is guilty of illegal recruitment
in large scale, which constitutes economic sabotage under the last
paragraph of Section 6 of Republic Act No. 8042.
Section 7(b) of Republic Act No. 8042 provides that "[t]he penalty of
life imprisonment and a fine of not less than Five hundred thousand
pesos (P500,000.00) nor more than One million pesos
(Pl,000,000.00) shall be imposed if illegal recruitment constitutes
economic sabotage as defined herein." Hence, we sustain the
penalty of life imprisonment and a fine of P500,000.00 imposed on
Abella by the Court of Appeals.
WHEREFORE, we AFFIRM in toto the Decision dated September
30, 2010 of the Court of Appeals in CA-G.R. CR.-H.C. No. 03974.
SO ORDERED.
G.R. No. L-79436-50 January 17, 1990
EASTERN ASSURANCE & SURETY CORPORATION, petitioner,
vs.
SECRETARY OF LABOR, PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION, ELVIRA VENTURA, ESTER
TRANGUILLAN, et al., respondents.
Tanjuatco, Oreta, Tanjuatco, Berenguer & San Vicente for petitioner.
NARVASA, J.:
In connection with the application with the Philippine Overseas
Employment Administration (POEA) of J & B Manpower Specialist,
Inc. for a license to engage in business as a recruitment agency, a
surety bond was filed on January 2, 1985 by the applicant and the
Eastern Assurance and Surety Corporation, herein petitioner, in
virtue of which they both held themselves —
111
 . . . firmly bound unto (said) Philippine Overseas
Employment Administration, Ministry of Labor in the penal
sum of PESOS ONE HUNDRED FIFTY THOUSAND
ONLY . . . (Pl50,000.00) for the payment of which will and
truly to be made, . . . (they bound themselves, their) heirs,
executors, administrators, successors and assigns, jointly
and severally . .
The bond stipulated that:
a) it was "conditioned upon the true and faithful performance and
observance of the . . . principal (J & B Manpower Specialist, Inc.) of
its duties and obligations in accordance with all the rules and
regulations promulgated by the Ministry of Labor Philippine
Overseas Employment Administration and with the terms and
conditions stipulated in the License;
b) the liability of the . . . Surety (petitioner) shall in no case exceed
the sum of PESOS ONE HUNDRED FIFTY THOUSAND
(P150,000.00) ONLY, PHILIPPINE CURRENCY; 1
c) notice to the Principal is also a notice to the Surety; and
d) LIABILITY of the surety . . . shall expire on JANUARY 02, 1986
and this bond shall be automatically cancelled ten (10) days after its
expiration and the surety shall not be liable for any claim not
discovered and presented to it in writing within said period of . . .
from expiration and the obligee hereby expressly waives the rights
to file any court action against the Surety after termination of said
period of . . . . above cited. 2
As narrated by respondent Secretary of Labor, the facts are as
follows: 3
From June 1983 to December 1985 . . . thirty three (33) . .
. (persons) applied for overseas employment with . . . (J &
B). In consideration of promised deployment,
complainants paid respondent various amounts for
various fees. Most of' the receipts issued were sighed by
Mrs. Baby Bundalian, Executive Vice-President of . . . (J &
B).
Because of non-deployment . . . (the applicants) filed
separate complaints with the Licensing and Regulation
Office of POEA against . . . (J & B) for violation of Articles
32 and 34 (a) of the Labor Code between the months of
April to October 1985.
Despite summons/notices of hearing,, . . . (J & B) failed to
file Answer nor appear in the hearings conducted.
In its separate Answer, . . . EASCO essentially disclaimed
liability on the ground that the claims were not expressly
covered by the bond, that POEA had no jurisdiction to
order forfeiture of the bond, that some of the claims were
paid beyond or prior to the period of effectivity of the bond.
On September 8, 1986, the POEA Administrator issued
the Order in favor of complainants ruling thus:
After careful evaluation, we find that the receipts
and testimonies of complainants, in the absence
of controverting evidence substantially establish
that respondent charged and collected fees
from them in amounts exceeding what is
prescribed by this Administration. Complainants'
non-deployment strongly indicates that there
was no employment obtained for them. Hence,
violation of Articles 32 and 34 (a) of the Labor
Code, as amended, is established against
respondent. The claims of complainants having
arose (arisen) out of acts of the principal
covered under the surety (bond), the
respondent surety is equally liable therefor.
Except for complainants Ramos, Samson, de Leon and
Rizada, whose claims were transacted prior to the
effectivity of the bond, . . . EASCO was declared jointly
and severally liable with . . . (J & B) to twenty-nine (29)
complainants.
(The dispositive portion of the POEA Administrator's Order
also contained the following statement and direction, viz.:
Respondent was suspended on May 23, 1985,
June 26, 1985 and January 17, 1986 all for
illegal exaction. Considering its track record of
illegal exaction activities and considering further
the gross violation of recruitment rules and
regulations established against it in the instant
cases, and the expiration of its license on
February 15, 1985, it is hereby forever banned
from participation in the overseas employment
program. It is ordered to cease and desist from
further engaging in recruitment activities
otherwise it shall be prosecuted for illegal
recruitment.')
(J & B filed a motion for reconsideration). On December
19, 1986, the then deputy Minister of Labor and
Employment denied the . . . Motion for Reconsideration for
lack of merit and affirmed the findings in the Order of the
POEA Administrator finding no reversible error therein.
On appeal by EASCO — J & B having as aforestated taken no part
in the proceeding despite due service of summons — the judgment
was modified by the Secretary of Labor, by Order dated July 1,
1987, disposing as follows: 4
WHEREFORE, in view of the foregoing, the Resolution of
the then Deputy Minister of Labor dated December 19,
1986 affirming the Order of the POEA Administrator dated
September 8, 1986 is hereby MODIFIED. Respondent J &
B Manpower Specialist is directed to refund all thirty-three
(33) complainants as listed in the Order of September 8,
1986 in the amounts listed thereto with the modification
that complainants Lucena Cabasal and Felix Rivero are
both entitled only to P15,980 and not P15,980
each. Respondent Eastern Assurance and Surety
Corporation is hereby found jointly and severally liable
with respondent J & B Manpower Specialist to refund
nineteen (19) complainants in the modified amounts . .
. (particularly specified).
The other findings in the Order of the POEA Administrator
dated September 8, 1986 affirmed in the Resolution of the
then Deputy Minister . . . are also hereby AFFIRMED. This
Order is FINAL. No further Motion for Reconsideration
hereof shall be entertained.
It is noteworthy that EASCO's liability for the refund, jointly and
severally with its principal, was limited to 19 named complainants (in
contrast to verdicts of the POEA and the Deputy Minister which both
ordered payment to no less than 33 complainants) and was
correspondingly reduced from P308,751.75 and US $ 400.00 5 to the
aggregate amount of P 140,817.75. 6
The special civil action of certiorari at bar was thereafter instituted by
EASCO 7 praying for the nullification of the POEA Administrator's
Order of September 8, 1986, the Resolution of the Deputy Minister
of Labor of' December 19, 1986, and the Order of the Secretary of
Labor of July 1, 1987, It theorizes that:
1) the POEA had no jurisdiction over the claims for refund
filed by non-employees;
2) neither did the Secretary of Labor have jurisdiction of
the claims;
3) assuming they had jurisdiction, both the POEA and
Secretary of Labor also committed legal errors and acted
with grave abuse of discretion when they ruled that
petitioner is liable on the claims.
EASCO contends that the POEA had no "adjudicatory jurisdiction"
over the monetary claims in question because the same "did not
arise from employer-employee relations." Invoked in support of the
argument is Section 4 (a) of EO 797 providing in part 8 that the
POEA has —
. . . original and exclusive jurisdiction over all cases,
including money claims, involving employer-employee
relations arising out of or by virtue of any law or contract
involving Filipino workers for overseas employment
including seamen . . .
112
The complaints are however for violation of Articles 32 and 34 a) of
the Labor Code. Article 32 and paragraph (a) of Article 34 read as
follows:
Art. 32. Fees to be paid by workers.—Any person applying
with a private fee-charging employment agency for
employment assistance shall not be charged any fee until
he has obtained employment through its efforts or has
actually commenced employment. Such fee shall be
always covered with the approved receipt clearly showing
the amount paid. The Secretary of Labor shall promulgate
a schedule of allowable fees.
Art. 34. Prohibited practices.—It shall be unlawful for any
individual, entity, licensee, or holder of authority:
a) To charge or accept, directly or indirectly, any amount
greater than that specified in the schedule of allowable
fees prescribed by the Secretary of Labor, or to make a
worker pay any amount greater than actually received by
him as a loan or advance; . . .
The penalties of suspension and cancellation of license or authority
are prescribed for violations of the above quoted provisions, among
others. And the Secretary of Labor has the power under Section 35
of the law to apply these sanctions, as well as the authority,
conferred by Section 36, not only, to "restrict and regulate the
recruitment and placement activities of all agencies," but also to
"promulgate rules and regulations to carry out the objectives and
implement the provisions" governing said activities. Pursuant to this
rule-making power thus granted, the Secretary of Labor gave the
POEA 9 "on its own initiative or upon filing of a complaint or report or
upon request for investigation by any aggrieved person, . . .
(authority to) conduct the necessary proceedings for the suspension
or cancellation of the license or authority of any agency or entity" for
certain enumerated offenses including —
1) the imposition or acceptance, directly or indirectly, of any amount
of money, goods or services, or any fee or bond in excess of what is
prescribed by the Administration, and
2) any other violation of pertinent provisions of the Labor Code and
other relevant laws, rules and regulations. 10
The Administrator was also given the power to "order the
dismissal of the case or the suspension of the license or
authority of the respondent agency or contractor or
recommend to the Minister the cancellation thereof." 11
Implicit in these powers is the award of appropriate relief to the
victims of the offenses committed by the respondent agency or
contractor, specially the refund or reimbursement of such fees as
may have been fraudulently or otherwise illegally collected, or such
money, goods or services imposed and accepted in excess of what
is licitly prescribed. It would be illogical and absurd to limit the
sanction on an offending recruitment agency or contractor to
suspension or cancellation of its license, without the concomitant
obligation to repair the injury caused to its victims. It would result
either in rewarding unlawful acts, as it would leave the victims
without recourse, or in compelling the latter to litigate in another
forum, giving rise to that multiplicity of actions or proceedings which
the law abhors.
Even more untenable is EASCO's next argument that the recruiter
and its victims are in pari delicto — the former for having required
payment, and the latter for having voluntarily paid, "prohibited
recruitment fees" — and therefore, said victims are barred from
obtaining relief. The sophistical, if not callous, character of the
argument is evident upon the most cursory reading thereof; it merits
no consideration whatever.
The Court is intrigued by EASCO's reiteration of its argument that it
should not be held liable for claims which accrued prior to or after
the effectivity of its bond, considering that the respondent Secretary
had conceded the validity of part of said argument, at least. The
Secretary ruled that EASCO's "contention that it should not be held
liable for claims/payments made to respondent agency before the
effectivity of the surety bond on January 2, 1985 is well taken."
According to the Secretary: 12
. . . A close examination of the records reveal(s) that
respondent EASCO is not jointly and severally liable with
respondent agency to refund complainants Lucena
Cabasal, Felix Rivero, Romulo del Rosario, Rogelio
Banzuela, Josefina Ogatis, Francisco Sorato, Sonny
Quiazon, Josefina Dictado, Mario del Guzman and
Rogelio Mercado (10 in all). These complainants paid
respondent agency in 1984, or before the effectivity of the
bond on January 2, 1985 as evidence by the reciept and
their testimonies.
The related argument, that it is also not liable for claims filed after
the expiry (on January 2, 1986) of the period stipulated in the surety
bond for the filing of claims against the bond, must however be
rejected, as the Secretary did. The Court discerns no grave abuse of
discretion in the Secretary's statement of his reasons for doing so, to
wit:
. . . While it may be true that respondent EASCO received
notice of their claims after the ten (10) day expiration
period from cancellation or after January 12, 1986 as
provided in the surety bond, records show that . . .
EASCO's principal, respondent agency, was notified/
summoned prior to the expiration period or before January
12, 1986. Respondent agency received summons on July
24, 1985 with respect to claims of complainants
Penarroyo, dela Cruz and Canti. It also received
summons on November 26, 1985 with respect to Giovanni
Garbillons' claim. Respondent agency was likewise
considered constructively notified of the claims of
complainants Calayag, Danuco Domingo and Campena
on October 6, 1985. In this connection, it may be stressed
that the surety bond provides that notice to the principal is
notice to the surety. Besides, it has been held that the
contract of a compensated surety like respondent EASCO
is to be interpreted liberally in the interest of the promises
and beneficiaries rather than strictly in favor of the surety
(Acoustics Inc. v. American Surety, 74 Nev-6, 320 P2d.
626, 74 Am. Jur. 2d).
So, too, EASCO's claim that it had not been properly served with
summons as regards a few of the complaints must be rejected, the
issue being factual, and the Court having been cited to no grave
error invalidating the respondent Secretary's conclusion that
summons had indeed been duly served.
Finally, EASCO's half-hearted argument that its liability should be
limited to the maximum amount set in its surety bond, i.e.,
P150,000.00, is palpably without merit, since the aggregate liability
imposed on it, P140,817.75, supra, does not in fact exceed that limit.
WHEREFORE, the petition is DISMISSED for lack of merit, and this
decision is declared to be immediately executory. Costs against
petitioner.
SO ORDERED.
G.R. No. 91096 April 3, 1990
CAPRICORN INTERNATIONAL TRAVEL AND TOURS,
INC., petitioner,
vs.
COURT OF APPEALS and SAMEER OVERSEAS PLACEMENT
AGENCY, respondents.
Antonio V. Ferrer for petitioner.
Gaspar V. Tagala for private respondent.
RESOLUTION
CORTES, J.:
The sole issue in this petition to review the decision of the Court of
Appeals is whether or not the cash bond posted by a recruitment
agency in the Philippine Overseas Employment Administration
(POEA) may be garnished by a judgment creditor of the agency.
In Civil Case No. 86-36195 of the Regional Trial Court of Manila,
judgment was rendered in favor of petitioner and against private
respondent, ordering the latter to pay Ninety-one Thousand Two
Hundred Sixteen Pesos and Sixty Centavos (P91,216.60) with legal
interest from the filing of the complaint, 10% attorney's fees, and
costs. A writ of execution was issued and a notice of garnishment of
113
the cash bond posted by private respondent was served on the
POEA.
The POEA, through its officials, was against delivering the amount
of private respondent's cash bond to the sheriff, but subsequently,
left with no other recourse but to comply with the trial court's orders,
the POEA delivered a check for One Hundred Thousand Pesos
(P100,000.00) representing the amount of the cash bond to
petitioner's counsel.
In the meantime, private respondent moved to quash the notice of
garnishment, but this was denied by the trial court. A motion for
reconsideration was filed, but this was also denied.
Private respondent filed a petition for certiorari with the Court of
Appeals, alleging that the trial court judge gravely abused his
discretion when he denied the motion to quash the notice of
garnishment. The Court of Appeals granted the petition and annulled
the trial court's orders relative to the notice of garnishment. It also
permanently enjoined petitioner from attaching, levying and
garnishing private respondent's cash bond and ordered petitioner to
return it to the POEA, if still unreturned.
Hence, this petition.
1. Relative to the State's regulation of recruitment and overseas
placement activities, the Labor Code provides:
Art. 31. Bonds. — All applicants for license or authority
shall post such cash and surety bonds as determined by
the Secretary of Labor to guarantee compliance with
prescribed recruitment procedures, rules and regulations,
and terms and conditions of employment as appropriate.
Implementing this provision, Book II, Rule II of the POEA Rules and
Regulations provides:
Section 4. Payment of Fees and Posting of Bonds. —
Upon approval of the application by the Minister, the
applicant shall pay an annual license fee of P6,000.00. It
shall also post a cash bond of P100,000.00 and a surety
bond of P150,000.00 from a bonding company acceptable
to the Administration duly accredited by the Office of the
Insurance Commission. The bonds shall answer for all
valid and legal claims arising from violations of the
conditions for the grant and use of the license or authority
and contracts of employment, The bonds shall likewise
guarantee compliance with the provisions of the Labor
Code and its implementing rules and regulations relating
to recruitment and placement, the rules of the
Administration and relevant issuances of the Ministry and
all liabilities which the Administration may impose. The
surety bonds shall include the condition that notice of
garnishment to the principal is notice to the surety.
Section 5. Issuance of License or Authority. — The
Administration shall issue the corresponding license or
authority upon payment in full of the required fees and
posting of bonds.
xxx xxx xxx
Section 15. Renewal of License. — Within forty-five (45)
days before the expiry date of the license, an agency, or
entity shall submit an application for the renewal thereof to
the Administration. Such application shall be supported by
the following documents:
xxx xxx xxx
e. Replenishment of the cash bond in case such or any
part thereof is garnished;
xxx xxx xxx
Section 19. Replenishment of Cash or Surety Bonds. —
Within thirty (30) days from notice by the Administration
that the bonds or any part thereof had been garnished, the
agency or entity shall replenish the same. Failure to
replenish shall cause the suspension or cancellation of the
license or authority.
Section 20. Refund of Cash Bond. —A licensed agency or
entity which voluntarily surrenders its license or authority
shall be entitled to the refund of its cash bond only after
posting a surety bond of similar amount valid for three (3)
years.
2. Explicit from the provisions abovequoted are:
(a) that the cash bond is a requisite for the issuance and renewal of
a license or authority to engage in the business of recruitment and
overseas placement;
(b) that the cash bond is to answer for the liabilities of the agency
arising from violations of the conditions for the grant or use of the
license or authority or the contracts of employment, the Labor Code,
the POEA rules and Labor Department issuances and all liabilities
that the POEA may impose;
(c) that the amount of the cash bond must be maintained during the
lifetime of the license or authority; and
(d) that the amount of the cash bond shall be returned to the agency
only when it surrenders its license or authority, and only upon
posting of a surety bond of the same amount valid for three (3)
years.
It must also be added that the requirement for the posting of a cash
bond is also an indispensable adjunct to the requirement that the
agency undertakes to assume joint and solidary liability with the
employer for all claims and liabilities which may arise in connection
with the implementation of the contract of overseas employment and
to guarantee compliance with existing labor and social legislation of
the Philippines and the country of employment [POEA Rules and
Regulations, Book II, Rule II secs. l(d), (3) and (4)].
On a broader scale, the undertaking to assume joint and solidary
liability and to guarantee compliance with labor laws, and the
consequent posting of cash and surety bonds, may be traced all the
way back to the constitutional mandate for the State to "afford full
protection to labor, local and overseas" [Art. XIII, sec. 3]. The
peculiar nature of overseas employment makes it very difficult for
the Filipino overseas worker to effectively go after his foreign
employer for employment-related claims and, hence, public policy
dictates that, to afford overseas workers' protection from
unscrupulous employers, the recruitment or placement agency in the
Philippines be made to share in the employer's responsibility.
3. Considering the rationale for requiring the posting of a cash bond
and its nature, it cannot therefore be argued that the cash bond is
not exempt from execution by a judgment creditor simply because it
is not one of those enumerated in Rule 39, sec. 12 of the Rules of
Court. To accede to such an argument would be tantamount to
turning a blind eye to the clear intent of the law to reserve the cash
bond for the employment-related claims of overseas workers and for
violations of labor laws.
4. From a different angle, neither may it be argued that petitioner's
judgment credit, pertaining as it does to the value of airline tickets
ostensibly used by private respondent to transport overseas workers
abroad, this one of those for which the cash bond should answer.
Private respondent's liability to petitioner relates to a purely
contractual obligation arising from the purchase and sale of airline
tickets. While the liability may have been incurred in connection with
the business of recruiting or placing overseas workers, it is definitely
not one arising from violations of the conditions for the grant and use
of the license or authority and contracts of employment. Nor is it one
arising from the violation of labor laws.
5. Thus, it cannot be said that the Court of Appeals erred when it
annulled the assailed orders of respondent judge, enjoined petitioner
from garnishing the cash bond, and ordered it to return the amount
of the bond to the POEA if it had not yet done so.
ACCORDINGLY, after deliberating on the Petition, Comment and
Reply, the Court Resolved to DENY the petition for lack of merit.
G.R. No. 89020 May 5, 1992
STRONGHOLD INSURANCE CO., INC., petitioner,
vs.
COURT OF APPEALS, respondent.
114
Gascon, Garcia & Associates for petitioner.
Castillo, Laman, Tan & Pantaleon for Northern Motors, Inc.
PARAS, J.:
In this petition for review on certiorari, petitioner Stronghold
Insurance Co., Inc. assails the decision * of the Court of Appeals in
CA-G.R. CV No. 16154 affirming the order of the Regional Trial
Court, Branch 167, Pasig, Metro Manila in its Civil Case No. 52177.
The dispositive portion of this order of the Trial court reads:
WHEREFORE, in view of the foregoing
consideration, the claim of the defendant
against SICI Bond No. 11652 of the Stronghold
Insurance Company, Inc. is found to have been
established and said surety company is
adjudged liable for damages suffered by the
defendant as found by this Court in its decision
dated June 9, 1986, to the extent of the amount
of the replevin bond, which is P42,000.00 (p.
20, Rollo)
The factual antecedents are not disputed.
On March 21, 1985, Leisure Club, Inc. filed Civil Case No. 52177
against Northern Motors Inc. for replevin and damages. It sought the
recovery of certain office furnitures and equipments. In an order
dated March 22, 1985, the lower court ordered the delivery of
subject properties to Leisure Club Inc. subject to the posting of the
requisite bond under Section 2, Rule 60 of the Rules of Court.
Accordingly, Leisure Club Inc. posted a replevin bond (SICI Bond
No. 11652) dated March 25, 1985 in the amount of P42,000.00
issued by Stronghold Insurance Co., Inc. In due course, the lower
court issued the writ of replevin, thereby enabling Leisure Club Inc.
to take possession of the disputed properties.
Northern Motors Inc. filed a counterbond for the release of the
disputed properties. However, efforts to recover these properties
proved futile as Leisure Club Inc. was never heard of again.
For failure to appear in the pre-trial of the case, Leisure Club, Inc.
was declared non-suited. Northern Motors Inc. presented its
evidence ex-parte and on June 9, 1986, the lower court rendered its
decision in favor of Northern Motors Inc., the dispositive portion of
which reads —
PREMISE CONSIDERED, the instant petition is
hereby dismissed and on the counterclaim,
plaintiff is ordered to pay defendant the
following:
a) the actual value of the property sold at public
auction by defendant, and repossessed by
plaintiff, of P20,900.00;
b) exemplary damages of P10,000.00;
c) attorney's fees in the amount of P10,000.00;
and
d) costs of suit.
SO ORDERED. (p. 21, Rollo)
In the said decision, the lower court ruled that:
1. Northern Motors Inc. had rightful ownership
and right of possession over the subject
properties.
2. Leisure Club Inc. is a sister company of
Macronics Inc., a debtor of Northern Motors
Inc., and former owner of these properties.
3) Under the circumstances, Leisure Club Inc.
instituted the action for replevin as part of a
scheme to spirit away these properties and
pave the way for the evasion of lawful
obligations by its sister company. (Decision
dated June 4, 1986, p. 4).
On July 3, 1986, Northern Motors Inc. filed a "Motion for Issuance of
Writ of Execution Against Bond of Plaintiff's Surety", pursuant to
Section 10, Rule 20 of the Rules of Court, which was treated by the
lower court as an application for damages against the replevin bond.
At the hearing of the said motion as well as the opposition thereto
filed by Stronghold Insurance Co., Inc., Northern Motors Inc.
presented one witness in the person of its former manager Clarissa
G. Ocampo, whose testimony proved that:
(a) Northern Motors Inc., and Macronics
Marketing entered into a leased agreement
wherein the latter leased certain premises from
the former.
(b) Macronics failed to pay its bills to Northern
Motors Inc., so the latter was forced to
terminate the lease.
(c) Because of Macronics' unpaid liabilities to
Northern Motors Inc., the latter was forced to
sell off the former's properties in an auction sale
wherein Northern Motors Inc. was the buyer.
Macronics was duly notified of the sale.
(d) These properties sold were the sole means
available by which Northern Motors Inc. could
enforce its claim against Macronics. (TSN dated
January 30, 1987; pp. 94-95, Rollo)
Stronghold Insurance Co., Inc. did not cross-examine the said
witness. Instead it asked for continuance in order to present its own
witness. Stronghold, however, never presented any witness.
On July 21, 1987, the lower court issued its now disputed Order
finding Stronghold liable under its surety bond for the damages
awarded to Northern Motors Inc. in the June 8, 1986 Decision. In the
said Order, the lower court held:
Submitted for resolution is the "Motion for
Issuance of Writ of Execution Against Bond of
Plaintiff's Surety" filed by the defendant and the
opposition thereto filed by the Stronghold
Insurance Company, Inc.
In the decision rendered by the Court on June
9, 1977, the defendant Northern Motors, Inc.
was the prevailling party and the judgment in its
favor ordered the plaintiff to pay the actual value
of the property sold at public auction by the
defendant and repossessed by plaintiff in the
amount of P20,900.00, which is in favor of the
plaintiff if the latter is found not entitled to the
writ of replevin earlier issued against the
defendant.
The thrust of the opposition of the bonding
company is to the effect that the motion for a
writ of execution is not the proper remedy but
an application against the bond should have
been the remedy pursued. The surety company
contends that it is not a party to the case and
that the decision clearly became final and
executory and, therefore, is no longer liable on
the bond. The surety company likewise raised
the issue as to when the decision became final
and executory. Moreover, the surety company
avers that the defendant failed to prove any
damage by reason of the insurance of replevin
bond.
Sec. 20 of Rule 57, in relation to Sec. 10 of Rule
60, provides that the party against whom the
bond was issued may recover on the bond for
any damage resulting from the issuance of the
bond upon application and hearing. The
application must be filed either: before trial;
before appeal is perfected; before judgment
becomes final and executory.
115
 Being the prevailing party, it is undeniable that
the defendant is entitled to recover against the
bond. The application for that propose was
made before the decision became final and
before the appeal was perfected. Both the
prevailing and losing parties may appeal the
decision. In the case of the plaintiff appears that
its counsel did not claim the decision which was
sent by registered mail on June 20, 1986 and
filed the motion for execution against the bond
on July 3, 1986. Hence, with respect to the
defendant the motion against the bond was filed
before any appeal was instituted and definitely
on or before the judgment became final.
Although the claim against the bond was
denominated as a motion for issuance of a writ
of execution, the allegations are to the effect
that the defendant is applying for damages
against the bond. In fact, the defendant invokes
Sec. 10, Rule 60, in relation to Sec. 20, Rule 57,
Rules of Court. Evidently, therefore, the
defendant is in reality claiming damages against
the bond.
It is undisputed that the replevin bond was
obtained by the plaintiff to answer for whatever
damages the defendant may suffer for the
wrongful issuance of the writ. By virtue of the
writ, the plaintiff took possession of the
auctioned properties. Despite a redelivery bond
issued by the defendant, the plaintiff refused to
return the properties and in the fact
repossessed the same. Clearly, defendant
suffered damages by reason of the wrongful
replevin, in that it has been deprived of the
properties upon which it was entitled to enforce
its claim. Moreover, the extent of the damages
has been qualified in the decision dated June 9,
1986.
(pp. 21-23, Rollo)
This Order was appealed by Stronghold to the Court of Appeals. In a
decision dated July 7, 1989, the Court of Appeals affirmed the order
of the lower court. This decision is now the subject of the instant
petition.
Petitioner raises the following assignment of error:
1. The lower court erred in awarding damages
against herein petitioner despite complete
absence of evidence in support of the
application.
2. The lower court erred in just adopting the
dispositive portion of the decision dated June 7,
1986 as basis for the award of damages against
herein petitioner.
3. The lower court erred in awarding exemplary
damages in favor of Northern Motors, Inc. and
against petitioner Stronghold Insurance Co.,
Inc.
4. The lower court erred in awarding the
attorney's fees of P10,000.00 as damages
against the bond.
(pp. 10-11, Rollo)
We find no merit in the petition.
In the case of Visayan Surety & Insurance Corp. vs. Pascual, 85
Phil. 779, the Court explained the nature of the proceedings to
recover damages against a surety, in this wise:
In such case, upon application of the prevailing
party, the court must order the surety to show
cause why the bond should not respond for the
judgment of damages. If the surety should
contest the reality or reasonableness of the
damages claimed by the prevailing party, the
court must set the application and answer for
hearing. The hearing will be summary and will
be limited to such new defense, not previously
set up by the principal, as the surety may allege
and offer to prove. (Id. at 785; emphasis
supplied) (p. 96, Rollo)
Stronghold Insurance Co., Inc., never denied that it issued a replevin
bond. Under the terms of the said bond, Stronghold Insurance
together with Leisure Club Inc. solidarily bound themselves in the
sum of P42,000 —
(a) for the prosecution of the action,
(b) for the return of the property to the
defendant if the return thereof be adjudged, and
(c) for the payment of such sum as may in the
cause be recovered against the plaintiff and the
costs of the action.
In the case at bar, all the necessary conditions for proceeding
against the bond are present, to wit:
(i) the plaintiff a quo, in bad faith, failed to
prosecute the action, and after relieving the
property, it promptly disappeared;
(ii) the subject property disappeared with the
plaintiff, despite a court order for their return;
and
(iii) a reasonable sum was adjudged to be due
to respondent, by way of actual and exemplary
damages, attorney's fees and costs of suit.
(p. 63, Rollo)
On the propriety of the award for damages and attorney's fees,
suffice it to state, that as correctly observed by the Court of Appeals,
the record shows that the same is supported by sufficient evidence.
Northern Motors proved the damages it suffered thru evidence
presented in the hearing of the case itself and in the hearing of its
motion for execution against the replevin bond. No evidence to the
contrary was presented by Stronghold Insurance Co., Inc. in its
behalf. It did not impugn said award of exemplary damages and
attorney's fees despite having every opportunity to do so.
As correctly held by respondent Court of Appeals ––
Stronghold Insurance, Inc. has no ground to
assail the awards against it in the disputed
Order. Unless it has a new defense, it cannot
simplistically dissociate itself from Leisure Club,
Inc. and disclaim liability vis-a-vis the findings
made in the Decision of the lower court dated
June 9, 1986. Under Section 2, Rule 60 the
bond it filed is to ensure "the return of the
property to the defendant if the return thereof be
adjudged, and for the payment to the defendant
of such sum as he may recover from the plaintiff
in the action." The bond itself ensures, inter alia,
"the payment of such sum as may in the cause
be recovered against the plaintiff and the cost of
the action." (pp. 24-25, Rollo)
Beside, Leisure Club Inc.'s act of filing a replevin suit without the
intention of prosecuting the same but for the mere purpose of
disappearing with the provisionally recovered property in order to
evade lawfully contracted obligations constitutes a wanton,
fraudulent, reckless, oppressive and malevolent breach of contract
which justifies award of exemplary damages under Art. 2232 of the
Civil Code.
The attorney's fees awarded in favor of Northern Motors Inc. are
likewise warranted under Article 2208 of the New Civil Code.
In any event, the trial court has decided with finality that the
circumstances justifying the award of exemplary damages and
attorney's fees exist. The obligation of Stronghold Insurance Co.,
Inc., under the bond is specific. It assures "the payment of such sum
as may in the cause be recovered against the plaintiff, and the costs
of the action." (emphasis supplied)
WHEREFORE, the petition is DENIED for lack of merit. No costs.
116
SO ORDERED.
G.R. No. 77279 April 15, 1988
MANUELA S. CATAN/M.S. CATAN PLACEMENT
AGENCY, petitioners,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE
OVERSEAS EMPLOYMENT ADMINISTRATION and FRANCISCO
D. REYES, respondents.
Demetria Reyes, Merris & Associates for petitioners.
The Solicitor General for public respondents.
Bayani G. Diwa for private respondent.
CORTES, J.:
Petitioner, in this special civil action for certiorari, alleges grave
abuse of discretion on the part of the National Labor Relations
Commission in an effort to nullify the latters resolution and thus free
petitioner from liability for the disability suffered by a Filipino worker
it recruited to work in Saudi Arabia. This Court, however, is not
persuaded that such an abuse of discretion was committed. This
petition must fail.
The facts of the case are quite simple.
Petitioner, a duly licensed recruitment agency, as agent of Ali and
Fahd Shabokshi Group, a Saudi Arabian firm, recruited private
respondent to work in Saudi Arabia as a steelman.
The term of the contract was for one year, from May 15,1981 to May
14, 1982. However, the contract provided for its automatic renewal:
FIFTH: The validity of this Contract is for ONE
YEAR commencing from the date the SECOND
PARTY assumes hill port. This Contract is
renewable automatically if neither of the
PARTIES notifies the other PARTY of his
wishes to terminate the Contract by at least
ONE MONTH prior to the expiration of the
contractual period. [Petition, pp. 6-7; Rollo, pp.
7-8].
The contract was automatically renewed when private respondent
was not repatriated by his Saudi employer but instead was assigned
to work as a crusher plant operator. On March 30, 1983, while he
was working as a crusher plant operator, private respondent's right
ankle was crushed under the machine he was operating.
On May 15, 1983, after the expiration of the renewed term, private
respondent returned to the Philippines. His ankle was operated on at
the Sta. Mesa Heights Medical Center for which he incurred
expenses.
On September 9, 1983, he returned to Saudi Arabia to resume his
work. On May 15,1984, he was repatriated.
Upon his return, he had his ankle treated for which he incurred
further expenses.
On the basis of the provision in the employment contract that the
employer shall compensate the employee if he is injured or
permanently disabled in the course of employment, private
respondent filed a claim, docketed as POEA Case No. 84-09847,
against petitioner with respondent Philippine Overseas Employment
Administration. On April 10, 1986, the POEA rendered judgment in
favor of private respondent, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in
favor of the complainant and against the
respondent, ordering the latter to pay to the
complainant:
1. SEVEN THOUSAND NINE HUNDRED
EIGHTY-FIVE PESOS and 60/100 (P7,985.60),
Philippine currency, representing disability
benefits;
2. TWENTY-FIVE THOUSAND NINETY-SIX
Philippine pesos and 20/100 (29,096.20)
representing reimbursement for medical
expenses;
3. Ten percent (10%) of the abovementioned
amounts as and for attorney's fees. [NLRC
Resolution, p. 1; Rollo, p. 16].
On appeal, respondent NLRC affirmed the decision of the POEA in
a resolution dated December 12, 1986.
Not satisfied with the resolution of the POEA, petitioner instituted the
instant special civil action for certiorari, alleging grave abuse of
discretion on the part of the NLRC.
1. Petitioner claims that the NLRC gravely abused its discretion
when it ruled that petitioner was liable to private respondent for
disability benefits since at the time he was injured his original
employment contract, which petitioner facilitated, had already
expired. Further, petitioner disclaims liability on the ground that its
agency agreement with the Saudi principal had already expired
when the injury was sustained.
There is no merit in petitioner's contention.
Private respondents contract of employment can not be said to have
expired on May 14, 1982 as it was automatically renewed since no
notice of its termination was given by either or both of the parties at
least a month before its expiration, as so provided in the contract
itself. Therefore, private respondent's injury was sustained during
the lifetime of the contract.
A private employment agency may be sued jointly and solidarily with
its foreign principal for violations of the recruitment agreement and
the contracts of employment:
Sec. 10. Requirement before recruitment.—
Before recruiting any worker, the private
employment agency shall submit to the Bureau
the following documents:
(a) A formal appointment or agency contract
executed by a foreign-based employer in favor
of the license holder to recruit and hire
personnel for the former ...
xxx xxx xxx
2. Power of the agency to
sue and be sued jointly and
solidarily with the principal
or foreign-based employer
for any of the violations of
the recruitment agreement
and the contracts of
employment. [Section 10(a)
(2) Rule V, Book I, Rules to
Implement the Labor
Code].
Thus, in the recent case of Ambraque International Placement &
Services v. NLRC [G.R. No. 77970, January 28,1988], the Court
ruled that a recruitment agency was solidarily liable for the unpaid
salaries of a worker it recruited for employment in Saudi Arabia.
Even if indeed petitioner and the Saudi principal had already
severed their agency agreement at the time private respondent was
injured, petitioner may still be sued for a violation of the employment
contract because no notice of the agency agreement's termination
was given to the private respondent:
Art 1921. If the agency has been entrusted for
the purpose of contra with specified persons, its
revocation shall not prejudice the latter if they
were not given notice thereof. [Civil Code].
117
In this connection the NLRC elaborated:
Suffice it to state that albeit local respondent M.
S. Catan Agency was at the time of
complainant's accident resulting in his
permanent partial disability was (sic) no longer
the accredited agent of its foreign principal,
foreign respondent herein, yet its responsibility
over the proper implementation of complainant's
employment/service contract and the welfare of
complainant himself in the foreign job site, still
existed, the contract of employment in question
not having expired yet. This must be so,
because the obligations covenanted in the
recruitment agreement entered into by and
between the local agent and its foreign principal
are not coterminus with the term of such
agreement so that if either or both of the parties
decide to end the agreement, the
responsibilities of such parties towards the
contracted employees under the agreement do
not at all end, but the same extends up to and
until the expiration of the employment contracts
of the employees recruited and employed
pursuant to the said recruitment agreement.
Otherwise, this will render nugatory the very
purpose for which the law governing the
employment of workers for foreign jobs abroad
was enacted. [NLRC Resolution, p. 4; Rollo, p.
18]. (Emphasis supplied).
2. Petitioner contends that even if it is liable for disability benefits,
the NLRC gravely abused its discretion when it affirmed the award
of medical expenses when the said expenses were the
consequence of private respondent's negligence in returning to work
in Saudi Arabia when he knew that he was not yet medically fit to do
so.
Again, there is no merit in this contention.
No evidence was introduced to prove that private respondent was
not medically fit to work when he returned to Saudi Arabia. Exhibit
"B", a certificate issued by Dr. Shafquat Niazi, the camp doctor, on
November 1, 1983, merely stated that private respondent was
"unable to walk properly, moreover he is still complaining [of] pain
during walking and different lower limbs movement" [Annex "B",
Reply; Rollo, p. 51]. Nowhere does it say that he was not medically
fit to work.
Further, since petitioner even assisted private respondent in
returning to work in Saudi Arabia by purchasing his ticket for him
[Exhibit "E"; Annex "A", Reply to Respondents' Comments], it is as if
petitioner had certified his fitness to work. Thus, the NLRC found:
Furthermore, it has remained unrefuted by
respondent that complainant's subsequent
departure or return to Saudi Arabia on
September 9, 1983 was with the full knowledge,
consent and assistance of the former. As shown
in Exhibit "E" of the record, it was respondent
who facilitated the travel papers of complainant.
[NLRC Resolution, p. 5; Rollo, p. 19].
WHEREFORE, in view of the foregoing, the petition is DISMISSED
for lack of merit, with costs against petitioner.
SO ORDERED.
G.R. No. 78085 October 16, 1989
ROYAL CROWN INTERNATIONALE, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSI0N and VIRGILIO P.
NACIONALES, respondents.
Ceferino Padua Law Office for petitioner.
Acosta & Rico Law Offices for private respondent.
CORTES, J.:
Petitioner Royal Crown Internationale seeks the nullification of a
resolution of the National Labor Relations Commission (NLRC)
which affirmed a decision of the Philippine Overseas Employment
Administration (POEA) holding it liable to pay, jointly and severally
with Zamel-Turbag Engineering and Architectural Consultant
(ZAMEL), private respondent Virgilio P. Nacionales' salary and
vacation pay corresponding to the unexpired portion of his
employment contract with ZAMEL.
In 1983, petitioner, a duly licensed private employment agency,
recruited and deployed private respondent for employment with
ZAMEL as an architectural draftsman in Saudi Arabia. On May 25,
1983, a service agreement was executed by private respondent and
ZAMEL whereby the former was to receive per month a salary of
US$500.00 plus US$100.00 as allowance for a period of one (1)
year commencing from the date of his arrival in Saudi Arabia.
Private respondent departed for Saudi Arabia on June 28,1983.
On February 13, 1984, ZAMEL terminated the employment of
private respondent on the ground that his performance was below
par. For three (3) successive days thereafter, he was detained at his
quarters and was not allowed to report to work until his exit papers
were ready. On February 16, 1984, he was made to board a plane
bound for the Philippines.
Private respondent then filed on April 23, 1984 a complaint for illegal
termination against petitioner and ZAMEL with the POEA, docketed
as POEA Case No. (L) 84-04-401.
Based on a finding that petitioner and ZAMEL failed to establish that
private respondent was terminated for just and valid cause, the
Workers' Assistance and Adjudication Office of the POEA issued a
decision dated June 23, 1986 signed by Deputy Administrator and
Officer-in-Charge Crescencio M. Siddayao, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered in
favor of the complainant and against
respondents, ordering the latter to pay, jointly
and severally, to complainant the following
amounts:
1. TWO THOUSAND SIX HUNDRED FORTY
US DOLLARS (US$2,640.00) or its equivalent
in Philippine currency at the time of payment,
representing the salaries corresponding to the
unexpired portion of complainant's contract;
2. SIX HUNDRED US DOLLARS (US$ 600.00)
less partial payment of FIVE HUNDRED FIFTY-
EIGHT SAUDI RIYALS (SR558), or its
equivalent in Philippine currency at the time of
actual payment, representing the unpaid
balance of complainant's vacation pay;
3. THREE HUNDRED FIFTY US DOLLARS
(US$350.00) or its equivalent in Philippine
currency at the time of actual payment
representing reimbursement of salary
deductions for return travel fund;
4. Ten percent (10%) of the above-stated
amounts, as and for attorney's fees.
Complainant's claim for legal and transportation
expenses are hereby DISMISSED for lack of
merit.
SO ORDERED.
[POEA Decision, p. 5; Rollo, p. 34.]
On July 18, 1986, petitioner filed thru its new counsel a motion for
reconsideration which was treated as an appeal to the NLRC by the
POEA. Petitioner alleged that the POEA erred in holding it solidarity
liable for ZAMEL's violation of private respondent's service
agreement even if it was not a party to the agreement.
In a resolution promulgated on December 11, 1986, the NLRC
affirmed the POEA decision, holding that, as a duly licensed private
employment agency, petitioner is jointly and severally liable with its
118
foreign principal ZAMEL for all claims and liabilities which may arise
in connection with the implementation of the employment contract or
service agreement [NLRC Decision, pp. 3-4; Rollo, pp. 26-27].
On March 30, 1987, the NLRC denied for lack of merit petitioner's
motion for reconsideration.
Hence, petitioner filed the present petition captioned as "Petition for
Review".
At this point, it is not amiss to note that the filing of a "Petition for
Review" under Rule 45 of the Rules of Court is not the proper
means by which NLRC decisions are appealed to the Supreme
Court. It is only through a petition for certiorari under Rule 65 that
NLRC decisions may be reviewed and nullified on the grounds of
lack of jurisdiction or grave abuse of discretion amounting to lack or
excess of jurisdiction. Nevertheless, in the interest of justice, this
Court opted to treat the instant petition as if it were a petition
for certiorari. Thus, after the filing of respondents' comments,
petitioner's joint reply thereto, and respondents' rejoinders, the Court
resolved to consider the issues joined and the case submitted for
decision.
The case at bar involves two principal issues, to wit:
I. Whether or not petitioner as a private
employment agency may be held jointly and
severally liable with the foreign-based employer
for any claim which may arise in connection with
the implementation of the employment contracts
of the employees recruited and deployed
abroad;
II. Whether or not sufficient evidence was
presented by petitioner to establish the
termination of private respondent's employment
for just and valid cause.
I.
Petitioner contends that there is no provision in the Labor Code, or
the omnibus rules implementing the same, which either provides for
the "third-party liability" of an employment agency or recruiting entity
for violations of an employment agreement performed abroad, or
designates it as the agent of the foreign-based employer for
purposes of enforcing against the latter claims arising out of an
employment agreement. Therefore, petitioner concludes, it cannot
be held jointly and severally liable with ZAMEL for violations, if any,
of private respondent's service agreement.
Petitioner's conclusion is erroneous. Petitioner conveniently
overlooks the fact that it had voluntarily assumed solidary liability
under the various contractual undertakings it submitted to the
Bureau of Employment Services. In applying for its license to
operate a private employment agency for overseas recruitment and
placement, petitioner was required to submit, among others, a
document or verified undertaking whereby it assumed all
responsibilities for the proper use of its license and the
implementation of the contracts of employment with the workers it
recruited and deployed for overseas employment [Section 2(e), Rule
V, Book 1, Rules to Implement the Labor Code (1976)]. It was also
required to file with the Bureau a formal appointment or agency
contract executed by the foreign-based employer in its favor to
recruit and hire personnel for the former, which contained a
provision empowering it to sue and be sued jointly and solidarily with
the foreign principal for any of the violations of the recruitment
agreement and the contracts of employment [Section 10 (a) (2),
Rule V, Book I of the Rules to Implement the Labor Code (1976)].
Petitioner was required as well to post such cash and surety bonds
as determined by the Secretary of Labor to guarantee compliance
with prescribed recruitment procedures, rules and regulations, and
terms and conditions of employment as appropriate [Section 1 of
Pres. Dec. 1412 (1978) amending Article 31 of the Labor Code].
These contractual undertakings constitute the legal basis for holding
petitioner, and other private employment or recruitment agencies,
liable jointly and severally with its principal, the foreign-based
employer, for all claims filed by recruited workers which may arise in
connection with the implementation of the service agreements or
employment contracts [See Ambraque International Placement and
Services v. NLRC, G.R. No. 77970, January 28, 1988, 157 SCRA
431; Catan v. NLRC, G.R. No. 77279, April 15, 1988, 160 SCRA
691; Alga Moher International Placement Services v. Atienza, G.R.
No. 74610, September 30, 1988].
In a belated attempt to bolster its position, petitioner contends in its
joint reply that the omnibus rules implementing the Labor Code are
invalid for not having been published in the Official Gazette pursuant
to the Court's pronouncements in the cases of Tanada v.
Tuvera [G.R. No. 63915, April 25, 1985, 136 SCRA 27; December
29, 1986, 146 SCRA 446]. Petitioner further contends that the 1985
POEA Rules and Regulations, in particular Section 1, Rule I of Book
VII** quoted in the NLRC decision, should not have been
retroactively applied to the case at bar.
But these contentions are irrelevant to the issues at bar. They
proceed from a misapprehension of the legal basis of petitioner's
liabilities as a duly licensed private employment agency. It bears
repeating that the basis for holding petitioner jointly and severally
liable with the foreign-based employer ZAMEL is the contractual
undertakings described above which it had submitted to the Bureau
of Employment Services. The sections of the omnibus rules
implementing the Labor Code cited by this Court merely enumerate
the various documents or undertakings which were submitted by
petitioner as applicant for the license to operate a private
employment agency for overseas recruitment and placement. These
sections do not create the obligations and liabilities of a private
employment agency to an employee it had recruited and deployed
for work overseas. It must be emphasized again that petitioner
assumed the obligations and liabilities of a private employment
agency by contract. Thus, whether or not the omnibus rules are
effective in accordance with Tanada v. Tuvera is an issue the
resolution of which does not at all render nugatory the binding effect
upon petitioner of its own contractual undertakings.
The Court, consequently, finds it unnecessary to pass upon both the
implications of Tanada v. Tuvera on the omnibus rules implementing
the Labor Code as well as the applicability of the 1985 POEA Rules
and Regulations.
Petitioner further argues that it cannot be held solidarily liable with
ZAMEL since public respondent had not acquired jurisdiction over
ZAMEL through extra-territorial service of summons as mandated by
Section 17, Rule 14 of the Rules of Court.
This argument is untenable. It is well-settled that service upon any
agent of a foreign corporation, whether or not engaged in business
in the Philippines, constitutes personal service upon that
corporation, and accordingly, judgment may be rendered against
said foreign corporation [Facilities Management Corporation v. De la
Osa, G.R. No. L-38649, March 26, 1979, 89 SCRA 131]. In the case
at bar, it cannot be denied that petitioner is an agent of ZAMEL. The
service agreement was executed in the Philippines between private
respondent and Milagros G. Fausto, the General Manager of
petitioner, for and in behalf of ZAMEL [Annex "D" of Petition, p. 3;
Rollo, p. 37]. Moreover, one of the documents presented by
petitioner as evidence, i.e., the counter-affidavit of its General
Manager Ms. Fausto, contains an admission that it is the
representative and agent of ZAMEL [See Paragraph No. 1 of Annex
"H" of Petition; Rollo. p. 43].
Considering the foregoing, the Court holds that the NLRC committed
no grave abuse of discretion amounting to lack or excess of
jurisdiction in declaring petitioner jointly and severally liable with its
foreign principal ZAMEL for all claims which have arisen in
connection with the implementation of private respondent's
employment contract.
II.
Petitioner asserts that the NLRC failed to consider the overwhelming
evidence it had presented before the POEA which establishes the
fact that private respondent was terminated for just and valid cause
in accordance with his service agreement with ZAMEL.
This assertion is without merit. The NLRC upheld the POEA finding
that petitioner's evidence was insufficient to prove termination from
employment for just and valid cause. And a careful study of the
evidence thus far presented by petitioner reveals to this Court that
there is legal basis for public respondent's conclusion.
It must be borne in mind that the basic principle in termination cases
is that the burden of proof rests upon the employer to show that the
dismissal is for just and valid cause, and failure to do so would
necessarily mean that the dismissal was not justified and, therefore,
was illegal [Polymedic General Hospital v. NLRC, G.R. No. 64190,
January 31, 1985,134 SCRA 420; and also Article 277 of the Labor
Code]. And where the termination cases involve a Filipino worker
recruited and deployed for overseas employment, the burden
naturally devolves upon both the foreign-based employer and the
employment agency or recruitment entity which recruited the worker,
119
for the latter is not only the agent of the former, but is also solidarily
liable with its foreign principal for any claims or liabilities arising from
the dismissal of the worker.
In the case at bar, petitioner had indeed failed to discharge the
burden of proving that private respondent was terminated from
employment for just and valid cause. Petitioner's evidence consisted
only of the following documents:
(1) A letter dated May l5, 1984 allegedly written
by an official of ZAMEL, stating that a periodic
evaluation of the entire staff was conducted;
that the personnel concerned were given a
chance to improve; that complainant's
performance was found below par; and that on
February 13,1984, at about 8:30 AM,
complainant was caught on the way out of the
office to look for another job during office hours
without the permission of his supervisor;
(2) A telex message allegedly sent by
employees of ZAMEL, stating that they have not
experienced maltreatment, and that the working
conditions (in ZAMEL) are good;
(3) The signatures of fifteen (15) persons who
allegedly sent the telex message;
(4) A receipt dated February 16, 1984 signed by
complainant, stating that he was paid SR915
representing his salary and SR558,
representing vacation pay for the month of
February 1984;
(5) The counter-affidavit of Milagros G. Fausto,
the General Manager of Royal Crown, stating
that complainant was dismissed because of
poor performance, acts of dishonesty and
misconduct, and denying complainant's claim
that his salary and leave pay were not paid, and
that he was maltreated [See POEA Decision, p.
3; Rollo, p. 32, See also Annexes "E", "F", "F-1
", "G" and "H" of Petition; Rollo, pp. 38-43].
Certainly, the telex message supposedly sent by the employees of
ZAMEL is not relevant in the determination of the legality of private
respondent's dismissal. On the other hand, the receipt signed by
private respondent does not prove payment to him of the salary and
vacation pay corresponding to the unexpired portion of his contract.
More importantly, except for its allegation that private respondent
was caught on February 13,1984 on his way out of the office
compound without permission, petitioner had failed to allege and to
prove with particularity its charges against private respondent. The
letter dated May 15, 1984 allegedly written by the Actg. Project
Architect and the counter-affidavit of petitoner's General Manager
merely stated that the grounds for the employee's dismissal were his
unsatisfactory performance and various acts of dishonesty,
insubordination and misconduct. But the particular acts which would
indicate private respondent's incompetence or constitute the above
infractions were neither specified nor described therein. In the
absence of any other evidence to substantiate the general charges
hurled against private respondent, these documents, which
comprise petitioner's evidence in chief, contain empty and self-
serving statements insufficient to establish just and valid cause for
the dismissal of private respondent [See Euro-Lines, Phils., Inc. v.
NLRC, G.R. No. 75782, December 1, 1987,156 SCRA 78;
Ambraque International Placement and Services v. NLRC, supra].
The Court is aware of the document attached in petitioner's
manifestation and joint reply which is purportedly a xerox copy of a
statement executed on December 13, 1987 in Saudi Arabia by
private respondent claiming that the latter had settled the case with
ZAMEL and had "received all [his] benefits that is salary, vacation
pay, severance pay and all other bonuses before [he] left the
kingdom of Saudi Arabia on 13 Feb. 1984 and hereby indemnify
[ZAMEL] from any claims or liabilities, [he] raised in the Philippine
Courts" [Annex "A" of petitioner's Manifestation with Motion to hold
in Abeyance; Rollo, p. 82. And also Annex "A" of petitioner's Joint
Reply; Rollo, p. 111].
But the veracity of the contents of the document is precisely
disputed by private respondent. He claims that he was made to sign
the above statement against his will and under threat of deportation
[See Telex of private respondent received by the Supreme Court of
the Philippines on January 14,1988; Rollo, p. 83. And also private
respondent's Rejoinder, pp. 1-3; Rollo, pp. 139-141].
Petitioner finally contends that inasmuch as clause no. 13 of the
service agreement provided that the law under which the agreement
shall be regulated was the laws of Saudi Arabia [Annex "D" of
Petition, p. 2; Rollo, p. 36], public respondent should have taken into
account the laws of Saudi Arabia and the stricter concept of morality
availing in that jurisdiction for the determination of the legality of
private respondent's dismissal.
This contention is patently erroneous. The provisions of the Labor
Code of the Philippines, its implementing rules and regulations, and
doctrines laid down in jurisprudence dealing with the principle of due
process and the basic right of all Filipino workers to security of
tenure, provide the standard by which the legality of the exercise by
management of its prerogative to dismiss incompetent, dishonest or
recalcitrant employees, is to be determined. Whether employed
locally or overseas, all Filipino workers enjoy the protective mantle
of Philippine labor and social legislation, contract stipulations to the
contrary notwithstanding. This pronouncement is in keeping with the
basic public policy of the State to afford protection to labor, promote
full employment, ensure equal work opportunities regardless of sex,
race or creed, and regulate the relations between workers and
employers. For the State assures the basic rights of all workers to
self-organization, collective bargaining, security of tenure, and just
and humane conditions of work [Article 3 of the Labor Code of the
Philippines; See also Section 18, Article II and Section 3, Article XIII,
1987 Constitution]. This ruling is likewise rendered imperative by
Article 17 of the Civil Code which states that laws "which have for
their object public order, public policy and good customs shall not be
rendered ineffective by laws or judgments promulgated, or by
determination or conventions agreed upon in a foreign country."
Needless to say, the laws of Saudi Arabia which were, incidentally,
neither pleaded nor proved by petitioner, have absolutely no bearing
whatsoever to the case at bar.
The Court holds, therefore, that the NLRC committed no grave
abuse of discretion amounting to lack or excess of jurisdiction in
upholding the POEA's finding of insufficiency of evidence to prove
termination for just and valid cause.
WHEREFORE, the Court Resolved to DISMISS the instant petition.
SO ORDERED.
G.R. No. 109583 September 5, 1997
TRANS ACTION OVERSEAS CORPORATION, petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR, ROSELLE
CASTIGADOR, JOSEFINA MAMON, JENELYN CASA, PEACHY
LANIOG, VERDELINA BELGIRA, ELMA FLORES, RAMONA
LITURCO, GRACE SABANDO, GLORIA PALMA, AVELYN
ALVAREZ, CANDELARIA NONO, NITA BUSTAMANTE, CYNTHIA
ARANDILLO, SANDIE AGUILAR, DIGNA PANAGUITON,
VERONICA BAYOGOS, JULIANITA ARANADOR, LEONORA
CABALLERO, NANCY BOLIVAR, NIMFA BUCOL, ZITA
GALINDO, ESTELITA BIOCOS, MARJORIE MACATE, RUBY
SEPULVIDA, ROSALIE SONDIA, NORA MAQUILING, PAULINA
CORDERO, LENIROSE ABANGAN, SELFA PALMA, ANTONIA
NAVARRO, ELSIE PENARUBIA, IRMA SOBREQUIL, SONY
JAMUAT, CLETA MAYO, respondents.
ROMERO, J.:
The issue presented in the case at bar is whether or not the
Secretary of Labor and Employment has jurisdiction to cancel or
revoke the license of a private fee-charging employment agency.
From July 24 to September 9, 1987, petitioner Trans Action
Overseas Corporation, a private fee-charging employment agency,
scoured Iloilo City for possible recruits for alleged job vacancies in
Hongkong. Private respondents sought employment as domestic
helpers through petitioner's employees, Luzviminda Aragon, Ben
Hur Domincil and his wife Cecille. The applicants paid placement
120
fees ranging from P1,000.00 to P14,000.00, but petitioner failed to
deploy them. Their demands for refund proved unavailing; thus, they
were constrained to institute complaints against petitioner for
violation of Articles 32 and 34(a) 1 of the Labor Code, as amended.
Petitioner denied having received the amounts allegedly collected
from respondents, and averred that Aragon, whose only duty was to
pre-screen and interview applicants, and the spouses Domincil were
not authorized to collect fees from the applicants. Accordingly, it
cannot be held liable for the money claimed by respondents.
Petitioner maintains that it even warned respondents not to give any
money to unauthorized individuals.
POEA Regional Extension Unit Coordinator Edgar Somes testified
that although he was aware that petitioner collected fees from
respondents, the latter insisted that they be allowed to make the
payments on the assumption that it could hasten their deployment
abroad. He added that Mrs. Honorata Manliclic, a representative of
petitioner tasked to oversee the conduct of the interviews, told him
that she was 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 it was
Somes who instructed her to leave the receipts behind as it was
perfectly alright to collect fees.
On April 5, 1991, then Labor Undersecretary Nieves R. Confesor
rendered the assailed order, the dispositive portion of which reads:
WHEREFORE, respondents are hereby ordered
to pay, jointly and severally, the following
claims:
1. Rosele Castigador
P14,000.00
2. Josefina Mamon
3,000.00
3. Jenelyn Casa 3,000.00
4. Peachy Laniog
13,500.00
5. Verdelina Belgira
2,000.00
6. Elma Flores 2,500.00
7. Ramona Liturco 2,500.00
8. Grace Sabando 3,500.00
9. Gloria Palma 1,500.00
10. Avelyn Alvarez
1,500.00
11. Candelaria Nono
1,000.00
12. Nita Bustamante
5,000.00
13. Cynthia Arandillo
1,000.00
14. Sandie Aguilar 3,000.00
15. Digna Panaguiton
2,500.00
16. Veronica Bayogos
2,000.00
17. Sony Jamuat 4,500.00
18. Irma Sobrequil 2,000.00
19. Elsie Penarubia
2,000.00
20. Antonia Navarro
2,000.00
21. Selfa Palma 3,000.00
22. Lenirose Abangan
13,300.00
23. Paulina Cordero
1,400.00
24. Nora Maquiling
2,000.00
25. Rosalie Sondia
2,000.00
26. Ruby Sepulvida
3,500.00
27. Marjorie Macate
1,500.00
28. Estelita Biocos
3,000.00
29. Zita Galindo 3,500.00
30. Nimfa Bucol 1,000.00
31. Nancy Bolivar 2,000.00
32. Leonora Caballero
13,900.00
33. Julianita Aranador
14,000.00
The complaints of Ma. Luz Alingasa, Nimfa
Perez, and Cleta Mayo are hereby dismissed in
view of their desistance.
The following complaints are hereby dismissed
for failure to appear/prosecute:
1. Jiyasmin Bantillo 6. Edna
Salvante
2. Rosa de Luna Senail 7.
Thelma Beltiar
3. Elnor Bandojo 8. Cynthia
Cepe
4. Teresa Caldeo 9. Rosie
Pavillon
5. Virginia Castroverde
The complaints filed by the following are hereby
dismissed for lack of evidence:
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
121
 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.
2 the Labor Code and other relevant laws, rules
SO ORDERED. (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.
Petitioner contends that Secretary; Confesor acted with grave abuse
of discretion in rendering the assailed orders on alternative
grounds, viz.: (1) it is the Philippine Overseas Employment
Administration (POEA) which has the exclusive and original
jurisdiction to hear and decide illegal recruitment cases, including
the authority to 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 Administrative Code of 1987
regarding its registration with the U.P. Law Center.
Under Executive Order No. 7973 (E.O. No. 797) and Executive
Order No. 247 (E.O. No. 247),4 the POEA was established and
mandated to assume the functions of the Overseas Employment
Development Board (OEDB), the National Seamen Board (NSB),
and the overseas employment function of the Bureau of
Employment Services (BES). Petitioner theorizes that when POEA
absorbed the powers of these agencies, Article 35 of the Labor
Code, as amended, was rendered ineffective.
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. 5. 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
these sanctions, as well as the authority,
conferred by Section 36, not only to "restrict and
regulate the recruitment and placement
activities of all agencies," but also to
"promulgate rules and regulations to carry out
the objectives and implement the provisions"
governing said activities. Pursuant to this rule-
making power thus granted, the Secretary of
Labor gave the POEA,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
2) any other violation of pertinent provisions of
and regulations.7
The Administrator was also given the power to
"order the dismissal of the case of 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.
G.R. No. 81510 March 14, 1990
HORTENCIA SALAZAR, petitioner,
vs.
HON. TOMAS D. ACHACOSO, in his capacity as Administrator
of the Philippine Overseas Employment Administration, and
FERDIE MARQUEZ, respondents.
Gutierrez & Alo Law Offices for petitioner.
122
 ko at
sinabin
g
SARMIENTO, J.:
hahana
pan
This concerns the validity of the power of the Secretary of Labor to ako ng
issue warrants of arrest and seizure under Article 38 of the Labor bookin
Code, prohibiting illegal recruitment. g sa
Japan.
Mag 9
The facts are as follows:
month'
s na
xxx xxx xxx ako sa
Phils.
ay
1. On October 21, 1987, Rosalie Tesoro of 177 hindi
Tupaz Street, Leveriza, Pasay City, in a sworn pa niya
statement filed with the Philippine Overseas ako
Employment Administration (POEA for brevity) napa-
charged petitioner Hortencia Salazar, viz: alis. So
lumipat
04. T: ako ng
Ano ba ibang
ang compa
dahilan ny pero
at ikaw ayaw
ngayon niyang
ay ibigay
narito and
at PECC
nagbibi Card
gay ng ko.
salays
ay. 2. On November 3, 1987, public respondent
Atty. Ferdinand Marquez to whom said
S: Upang ireklamo sa complaint was assigned, sent to the petitioner
dahilan ang aking PECC the following telegram:
Card ay
ayaw ibigay sa akin ng dati YOU ARE HEREBY
kong manager. — Horty DIRECTED TO APPEAR
Salazar — 615 R.O. BEFORE FERDIE
Santos, Mandaluyong, Mla. MARQUEZ POEA ANTI
ILLEGAL RECRUITMENT
05. T: UNIT 6TH FLR. POEA
Kailan BLDG. EDSA COR.
at saan ORTIGAS AVE.
nagana MANDALUYONG MM ON
p and NOVEMBER 6, 1987 AT 10
ginawa AM RE CASE FILED
ng AGAINST YOU. FAIL NOT
panlolo UNDER PENALTY OF
ko sa LAW.
iyo ng
tao/mg 4. On the same day, having ascertained that the
a taong petitioner had no license to operate a
inirekla recruitment agency, public respondent
mo Administrator Tomas D. Achacoso issued his
mo? challenged CLOSURE AND SEIZURE ORDER
NO. 1205 which reads:
S. Sa
bahay HORTY SALAZAR
ni No. 615 R.O. Santos St.
Horty Mandaluyong, Metro Manila
Salaza
r.
Pursuant to the powers vested in me under
Presidential Decree No. 1920 and Executive
06. T: Order No. 1022, I hereby order the CLOSURE
Paano of your recruitment agency being operated at
naman No. 615 R.O. Santos St., Mandaluyong, Metro
nagana Manila and the seizure of the documents and
p ang paraphernalia being used or intended to be
pangya used as the means of committing illegal
yari? recruitment, it having verified that you have —

S. (1) No valid license or

Pagka authority from the
galing Department of Labor and
ko sa Employment to recruit and
Japan deploy workers for
ipinata overseas employment;
wag
niya
ako. (2) Committed/are
Kinuha committing acts prohibited
under Article 34 of the New
ang Labor Code in relation to
PECC Article 38 of the same
Card code.
123
 This ORDER is without
prejudice to your criminal
prosecution under existing
laws.
Done in the City of Manila,
this 3th day of November,
1987.
5. On January 26, 1988 POEA Director on
Licensing and Regulation Atty. Estelita B.
Espiritu issued an office order designating
respondents Atty. Marquez, Atty. Jovencio
Abara and Atty. Ernesto Vistro as members of a
team tasked to implement Closure and Seizure
Order No. 1205. Doing so, the group assisted
by Mandaluyong policemen and mediamen Lito
Castillo of the People's Journal and Ernie
Baluyot of News Today proceeded to the
residence of the petitioner at 615 R.O. Santos
St., Mandaluyong, Metro Manila. There it was
found that petitioner was operating Hannalie
Dance Studio. Before entering the place, the
team served said Closure and Seizure order on
a certain Mrs. Flora Salazar who voluntarily
allowed them entry into the premises. Mrs. Flora
Salazar informed the team that Hannalie Dance
Studio was accredited with Moreman
Development (Phil.). However, when required to
show credentials, she was unable to produce
any. Inside the studio, the team chanced upon
twelve talent performers — practicing a dance
number and saw about twenty more waiting
outside, The team confiscated assorted
costumes which were duly receipted for by Mrs.
Asuncion Maguelan and witnessed by Mrs.
Flora Salazar.
6. On January 28, 1988, petitioner filed with
POEA the following letter:
Gentlemen:
On behalf of Ms. Horty Salazar of 615 R.O.
Santos, Mandaluyong, Metro Manila, we
respectfully request that the personal properties
seized at her residence last January 26, 1988
be immediately returned on the ground that said
seizure was contrary to law and against the will
of the owner thereof. Among our reasons are
the following:
1. Our client has not been
given any prior notice or
hearing, hence the Closure
and Seizure Order No.
1205 dated November 3,
1987 violates "due process
of law" guaranteed under
Sec. 1, Art. III, of the
Philippine Constitution.
2. Your acts also violate
Sec. 2, Art. III of the
Philippine Constitution
which guarantees right of
the people "to be secure in
their persons, houses,
papers, and effects against
unreasonable searches and
seizures of whatever nature
and for any purpose."
3. The premises invaded by
your Mr. Ferdi Marquez and
five (5) others (including 2
policemen) are the private
residence of the Salazar
family, and the entry,
search as well as the
seizure of the personal
properties belonging to our
client were without her
consent and were done
with unreasonable force
and intimidation, together
with grave abuse of the
color of authority, and
constitute robbery and
violation of domicile under
Arts. 293 and 128 of the
Revised Penal Code.
Unless said personal
properties worth around
TEN THOUSAND PESOS
(P10,000.00) in all (and
which were already due for
shipment to Japan) are
returned within twenty-four
(24) hours from your receipt
hereof, we shall feel free to
take all legal action, civil
and criminal, to protect our
client's interests.
We trust that you will give
due attention to these
important matters.
7. On February 2, 1988, before POEA could
answer the letter, petitioner filed the instant
petition; on even date, POEA filed a criminal
complaint against her with the Pasig Provincial
Fiscal, docketed as IS-88-836.1
On February 2, 1988, the petitioner filed this suit for prohibition.
Although the acts sought to be barred are alreadyfait accompli,
thereby making prohibition too late, we consider the petition as one
for certiorari in view of the grave public interest involved.
The Court finds that a lone issue confronts it: May the Philippine
Overseas Employment Administration (or the Secretary of Labor)
validly issue warrants of search and seizure (or arrest) under Article
38 of the Labor Code? It is also an issue squarely raised by the
petitioner for the Court's resolution.
Under the new Constitution, which states:
. . . no search warrant or warrant of arrest shall
issue except upon probable cause to be
determined personally by the judge after
examination under oath or affirmation of the
complainant and the witnesses he may
produce, and particularly describing the place to
be searched and the persons or things to be
seized. 2
it is only a judge who may issue warrants of search and arrest. 3 In
one case, it was declared that mayors may not exercise this power:
xxx xxx xxx
But it must be emphasized here and now that
what has just been described is the state of the
law as it was in September, 1985. The law has
since been altered. No longer does the mayor
have at this time the power to conduct
preliminary investigations, much less issue
orders of arrest. Section 143 of the Local
Government Code, conferring this power on the
mayor has been abrogated, rendered functus
officio by the 1987 Constitution which took
effect on February 2, 1987, the date of its
ratification by the Filipino people. Section 2,
Article III of the 1987 Constitution pertinently
provides that "no search warrant or warrant of
arrest shall issue except upon probable cause
to be determined personally by the judge after
examination under oath or affirmation of the
complainant and the witnesses he may
produce, and particularly describing the place to
be searched and the person or things to be
seized." The constitutional proscription has
thereby been manifested that thenceforth, the
function of determining probable cause and
issuing, on the basis thereof, warrants of arrest
or search warrants, may be validly exercised
only by judges, this being evidenced by the
elimination in the present Constitution of the
phrase, "such other responsible officer as may
124
 be authorized by law" found in the counterpart
provision of said 1973 Constitution, who, aside
from judges, might conduct preliminary
investigations and issue warrants of arrest or
search warrants. 4
Neither may it be done by a mere prosecuting body:
We agree that the Presidential Anti-Dollar
Salting Task Force exercises, or was meant to
exercise, prosecutorial powers, and on that
ground, it cannot be said to be a neutral and
detached "judge" to determine the existence of
probable cause for purposes of arrest or search.
Unlike a magistrate, a prosecutor is naturally
interested in the success of his case. Although
his office "is to see that justice is done and not
necessarily to secure the conviction of the
person accused," he stands, invariably, as the
accused's adversary and his accuser. To permit
him to issue search warrants and indeed,
warrants of arrest, is to make him both judge
and jury in his own right, when he is neither.
That makes, to our mind and to that extent,
Presidential Decree No. 1936 as amended by
Presidential Decree No. 2002,
unconstitutional. 5
Section 38, paragraph (c), of the Labor Code, as now written, was
entered as an amendment by Presidential Decrees Nos. 1920 and
2018 of the late President Ferdinand Marcos, to Presidential Decree
No. 1693, in the exercise of his legislative powers under
Amendment No. 6 of the 1973 Constitution. Under the latter, the
then Minister of Labor merely exercised recommendatory powers:
(c) The Minister of Labor or his duly authorized
representative shall have the power to
recommend the arrest and detention of any
person engaged in illegal recruitment. 6
On May 1, 1984, Mr. Marcos promulgated Presidential Decree No.
1920, with the avowed purpose of giving more teeth to the campaign
against illegal recruitment. The Decree gave the Minister of Labor
arrest and closure powers:
(b) The Minister of Labor and Employment shall
have the power to cause the arrest and
detention of such non-licensee or non-holder of
authority if after proper investigation it is
determined that his activities constitute a
danger to national security and public order or
will lead to further exploitation of job-seekers.
The Minister shall order the closure of
companies, establishment and entities found to
be engaged in the recruitment of workers for
overseas employment, without having been
licensed or authorized to do so. 7
On January 26, 1986, he, Mr. Marcos, promulgated Presidential
Decree No. 2018, giving the Labor Minister search and seizure
powers as well:
(c) The Minister of Labor and Employment or
his duly authorized representatives shall have
the power to cause the arrest and detention of
such non-licensee or non-holder of authority if
after investigation it is determined that his
activities constitute a danger to national security
and public order or will lead to further
exploitation of job-seekers. The Minister shall
order the search of the office or premises and
seizure of documents, paraphernalia, properties
and other implements used in illegal recruitment
activities and the closure of companies,
establishment and entities found to be engaged
in the recruitment of workers for overseas
employment, without having been licensed or
authorized to do so. 8
The above has now been etched as Article 38, paragraph (c) of the
Labor Code.
The decrees in question, it is well to note, stand as the dying
vestiges of authoritarian rule in its twilight moments.
We reiterate that the Secretary of Labor, not being a judge, may no
longer issue search or arrest warrants. Hence, the authorities must
go through the judicial process. To that extent, we declare Article 38,
paragraph (c), of the Labor Code, unconstitutional and of no force
and effect.
The Solicitor General's reliance on the case of Morano v. Vivo 9 is
not well-taken. Vivo involved a deportation case, governed by
Section 69 of the defunct Revised Administrative Code and by
Section 37 of the Immigration Law. We have ruled that in
deportation cases, an arrest (of an undesirable alien) ordered by the
President or his duly authorized representatives, in order to carry out
a final decision of deportation is valid. 10 It is valid, however,
because of the recognized supremacy of the Executive in matters
involving foreign affairs. We have held: 11
xxx xxx xxx
The State has the inherent power to deport
undesirable aliens (Chuoco Tiaco vs. Forbes,
228 U.S. 549, 57 L. Ed. 960, 40 Phil. 1122,
1125). That power may be exercised by the
Chief Executive "when he deems such action
necessary for the peace and domestic
tranquility of the nation." Justice Johnson's
opinion is that when the Chief Executive finds
that there are aliens whose continued presence
in the country is injurious to the public interest,
"he may, even in the absence of express law,
deport them". (Forbes vs. Chuoco Tiaco and
Crossfield, 16 Phil. 534, 568, 569; In re
McCulloch Dick, 38 Phil. 41).
The right of a country to expel or deport aliens
because their continued presence is detrimental
to public welfare is absolute and unqualified (Tiu
Chun Hai and Go Tam vs. Commissioner of
Immigration and the Director of NBI, 104 Phil.
949, 956). 12
The power of the President to order the arrest of aliens for
deportation is, obviously, exceptional. It (the power to order arrests)
can not be made to extend to other cases, like the one at bar. Under
the Constitution, it is the sole domain of the courts.
Moreover, the search and seizure order in question, assuming, ex
gratia argumenti, that it was validly issued, is clearly in the nature of
a general warrant:
Pursuant to the powers vested in me under
Presidential Decree No. 1920 and Executive
Order No. 1022, I hereby order the CLOSURE
of your recruitment agency being operated at
No. 615 R.O. Santos St., Mandaluyong, Metro
Manila and the seizure of the documents and
paraphernalia being used or intended to be
used as the means of committing illegal
recruitment, it having verified that you have —
(1) No valid license or
authority from the
Department of Labor and
Employment to recruit and
deploy workers for
overseas employment;
(2) Committed/are
committing acts prohibited
under Article 34 of the New
Labor Code in relation to
Article 38 of the same
code.
This ORDER is without prejudice to your
13
criminal prosecution under existing laws.
We have held that a warrant must identify clearly the things to be
seized, otherwise, it is null and void, thus:
xxx xxx xxx
Another factor which makes the search
warrants under consideration constitutionally
objectionable is that they are in the nature of
125
general warrants. The search warrants describe
the articles sought to be seized in this wise:
1) All printing equipment,
paraphernalia, paper, ink,
photo equipment,
typewriters, cabinets,
tables, communications/
recording equipment, tape
recorders, dictaphone and
the like used and/or
connected in the printing of
the "WE FORUM"
newspaper and any and all
documents/communication
s, letters and facsimile of
prints related to the "WE
FORUM" newspaper.
2) Subversive documents,
pamphlets, leaflets, books,
and other publications to
promote the objectives and
purposes of the subversive
organizations known as
Movement for Free
Philippines, Light-a-Fire
Movement and April 6
Movement; and
3) Motor vehicles used in
the distribution/circulation
of the "WE FORUM" and
other subversive materials
and propaganda, more
particularly,
1) Toyota-Corolla, colored
yellow with Plate No. NKA
892;
2) DATSUN, pick-up
colored white with Plate No.
NKV 969;
3) A delivery truck with
Plate No. NBS 542;
4) TOYOTA-TAMARAW,
colored white with Plate No.
PBP 665; and
5) TOYOTA Hi-Lux, pick-up
truck with Plate No. NGV
472 with marking "Bagong
Silang."
In Stanford v. State of Texas, the search
warrant which authorized the search for "books,
records, pamphlets, cards, receipts, lists,
memoranda, pictures, recordings and other
written instruments concerning the Communist
Parties of Texas, and the operations of the
Community Party in Texas," was declared void
by the U.S. Supreme Court for being too
general. In like manner, directions to "seize any
evidence in connection with the violation of SDC
13-3703 or otherwise" have been held too
general, and that portion of a search warrant
which authorized the seizure of any
"paraphernalia which could be used to violate
Sec. 54-197 of the Connecticut General
Statutes (the statute dealing with the crime of
conspiracy)" was held to be a general warrant,
and therefore invalid. The description of the
articles sought to be seized under the search
warrants in question cannot be characterized
differently.
In the Stanford case, the U.S. Supreme court
calls to mind a notable chapter in English
history; the era of disaccord between the Tudor
Government and the English Press, when
"Officers of the Crown were given roving
commissions to search where they pleased in
order to suppress and destroy the literature of
dissent both Catholic and Puritan." Reference
herein to such historical episode would not be
relevant for it is not the policy of our government
to suppress any newspaper or publication that
speaks with "the voice of non-conformity" but
poses no clear and imminent danger to state
security. 14
For the guidance of the bench and the bar, we reaffirm the following
principles:
1. Under Article III, Section 2, of the l987
Constitution, it is only judges, and no other, who
may issue warrants of arrest and search:
2. The exception is in cases of deportation of
illegal and undesirable aliens, whom the
President or the Commissioner of Immigration
may order arrested, following a final order of
deportation, for the purpose of deportation.
WHEREFORE, the petition is GRANTED. Article 38, paragraph (c)
of the Labor Code is declared UNCONSTITUTIONAL and null and
void. The respondents are ORDERED to return all materials seized
as a result of the implementation of Search and Seizure Order No.
1205.
No costs.
SO ORDERED.
G.R. No. 205188, April 22, 2015
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY
HONORABLE LOURDES M. TRASMONTE IN HER
CAPACITY AS UNDERSECRETARY OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT, AND
AHONORABLE JENNIFER JARDIN-MANALILI, IN HER
CAPACITY AS THEN PHILIPPINE OVERSEAS
EMPLOYMENT
ADMINISTRATOR, Petitioner, v. HUMANLINK
MANPOWER CONSULTANTS, INC. (FORMERLY MHY
NEW RECRUITMENT INTERNATIONAL,
INC.), Respondent.
DECISION
VILLARAMA, JR., J.:
Before us is a petition for review on certiorari1 filed by the
Republic of the Philippines represented by the Secretary of
the Department of Labor and Employment (DOLE) and the
Administrator of the Philippine Overseas Employment
Administration (POEA) assailing the Court of Appeals'
September 24, 2012 Decision2 and January 14, 2013
Resolution3 in CA-G.R. SP No. 121332. The petition
questions whether the Court of Appeals (CA) erred when it
ruled that the POEA had no power to declare that the
officers and directors of Humanlink Manpower Consultants,
Inc.4 (Humanlink) were disqualified from participating in the
overseas employment program.5
A complaint6 for violation of Section 2(b) (excessive
collection of fees), (d) (collecting a fee without issuing a
receipt) and (e) (misrepresentation) of Rule I,7 Part VI of
the POEA Rules and Regulations Governing the Recruitment
and Employment of Land-Based Overseas Workers (POEA
Rules and Regulations) was filed by Renelson8 L. Carlos
against Worldview International Services Corporation
(Worldview) and Humanlink before the POEA Adjudication
Office.
Briefly, the facts of the case.
Carlos applied at Worldview as a heavy equipment driver in
Doha, Qatar with a salary of US$700.00. After undergoing
126
the required medical examination, Worldview submitted
Carlos' application and other documents to the POEA under
Humanlink as his recruiting agency.9 During processing of
his application, he paid placement fee adding up to a total
of P60,000.0010 but no receipt was issued. On December 2,
2007, while awaiting his departure at the airport, he was
made to sign an employment contract stating that he was
to work as a duct man with a salary of US$400.00, instead
of the heavy equipment driver position he applied for. He
was told that the duct man contract was only for entry
purposes and was assured that he would work as a heavy
equipment driver in Doha as advertised.
Upon his arrival in Doha, he worked as a duct installer with
a salary of US$400.00.11 Carlos complained that the terms
of the employment contract were not complied with.12 In
March 2008, the foreign employer made Carlos sign a new
employment contract reducing his monthly salary in
half.13 Carlos filed a complaint with the Philippine Overseas
Labor Office but the complaint was not acted upon. This
prompted him to speak with the Qatar Labor Office where
he discussed his grievance. On April 29, 2008, Carlos was
informed that his visa was cancelled and that he was being
repatriated at his own expense.
Approximately a week after his return to the Philippines,
Humanlink's President14 persuaded him to sign a
quitclaim15 absolving it of any liability from the collection of
the placement fee.16
On March 31, 2010, the POEA Adjudication Office found the
assertions of Carlos credible and supported by sufficient
evidence. First, it noticed that no receipts were issued to
Carlos for the payments he made. Second, considering that
Carlos' salary only amounted to US$400.00, the amount of
P60,000.0017collected from him as placement fee was
patently excessive. Lastly, it further found that in
advertising for a heavy equipment driver but having Carlos
sign a contract for a duct man, Humanlink engaged in
misrepresentation. It thus found Humanlink liable for
violation of Section 2(b), (d) and (e) of the 2002 POEA
Rules and Regulations. Worldview was only found liable for
violating Section 2(e) of the 2002 POEA Rules and
Regulations.18 The fallo reads:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, for the established
violation of Section 2 (b), (d), and (e) of Rule I, Part VI of
the Rules and Regulations Governing the Recruitment and
Employment of Land-based Overseas Workers, the penalty
of cancellation of license and fine in the amount of
PHP80,000.00 is hereby imposed upon [Humanlink
Manpower Consultants, Inc.] As a consequence of the
cancellation of its license, its officers and directors as
of November 2007 are hereby ordered disqualified
from participating in the overseas employment
program of the government.19(Emphasis ours)
Humanlink appealed20 before the DOLE but the same was
dismissed for lack of merit in the DOLE February 17, 2011
Order.21 It moved for reconsideration but the same was
denied.22
Humanlink appealed to the CA via a petition for
certiorari.23 In its September 24, 2012 Decision, the CA
affirmed with modification the February 17, 2011 Order. It
agreed that Humanlink was guilty of violating Section 2 (b),
(d), and (e) of the POEA Rules and Regulations and ordered
the cancellation of its license. However, it disagreed that as
a consequence of the cancellation of the license, automatic
disqualification of officers and directors from participating in
government's overseas employment program should be
imposed. It considered such penalty to be violative of due
process and in excess of the POEA's supervisory powers. It
stated:chanroblesvirtuallawlibrary
As a general rule, the Legislature cannot surrender or
abdicate its legislative power, for doing so will be
unconstitutional. Although the power to make laws cannot
be delegated by the Legislature to any other authority, a
power that is not legislative in character may be delegated.
Under certain circumstances, the Legislature can delegate
to executive officers and administrative boards the
authority to adopt and promulgate Implementing Rules and
Regulations [IRRs]. To render such delegation lawful, the
Legislature must declare the policy of the law and fix the
legal principles that are to control in given cases. The
Legislature should set a definite or primary standard to
guide those empowered to execute the law. The authority
to make IRRs in order to carry out an express legislative
purpose, or to effect the operation and enforcement of a
law is not a power exclusively legislative in character, but is
rather administrative in nature. The rules and regulations
adopted and promulgated must not, however, subvert or be
contrary to existing statutes. The function of promulgating
IRRs may be legitimately exercised only for the purpose of
carrying out the provisions of a law. The power of
administrative agencies is confined to implementing
the law or putting it into effect. Thus, the [POEA]
cannot go beyond the extent and scope of the concerned
particular implementing rules which are merely putting into
effect the mandate of the Labor Code of the Philippines.
Also, it goes without saying that the automatic
disqualification of officers and directors of herein petitioner,
without specifically impleading the parties concerned,
cannot be enforced without violating the due process of law
as they were deprived of every opportunity to put up their
respective defenses.24cralawlawlibrary
The CA thus decreed:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the instant petition
is DENIED. Accordingly, the Order and Resolution dated
February 17, 2011 and July 6, 2011 of the Undersecretary
of the Department of Labor and Employment in OS-POEA-
0098-0521-2010 [POEA Case No. RV 08-08-1455] are
hereby AFFIRMED with a modification in that the
affirmation as to the declaration disqualifying the officers
and directors of Humanlink Manpower Consultants, Inc. to
engage in the overseas employment program of the
government is declared null and void.
SO ORDERED.25cralawlawlibrary
Humanlink moved for reconsideration but it was denied.
Hence, this petition.
The DOLE and POEA contend that the disqualification of the
officers and directors from participation in the overseas
employment program of the government is expressly
sanctioned under Section 2(f), Rule I, Part II of the POEA
Rules and Regulations which
reads:chanroblesvirtuallawlibrary
Section 2. Disqualification. The following are not qualified to
engage in the business of recruitment and placement of
Filipino workers overseas.
xxxx
f. Persons or partners, officers and Directors of
corporations whose licenses have been previously
cancelled or revoked for violation of recruitment laws.
It claims that the disqualification is within the delegated
powers of the DOLE Secretary and the POEA and argues
that the provision "upholds the purpose of the law to
establish a higher standard of protection and promotion of
the welfare of migrant workers."26
Humanlink, on the other hand, reiterates its position that
petitioner did not raise any substantial argument to warrant
the reversal of the CA Decision.27
The issue for consideration before this Court is whether the
POEA has the power to automatically disqualify officers and
directors from participating in the government's overseas
employment program upon the cancellation of a license.
We rule in the affirmative.
We have long settled the role of the POEA and the DOLE
with respect to the recruitment, placement and deployment
of overseas workers.28
While Section 2(c),29 Republic Act (R.A.) No. 804230 states
that the State does not promote overseas employment as a
means to sustain economic growth, the State recognizes
the vital role of overseas Filipino workers to the nation's
economy and development. Aware that overseas workers
are vulnerable to exploitation, the State sought to protect
the interests and well-being of these workers with creation
of specialized bodies such as the POEA under the direct
supervision of the DOLE Secretary.
One of the roles of the POEA is the regulation and
adjudication of private sector participation in the
recruitment and placement of overseas workers.31 Article
127
25 of the Labor Code, as amended,
reads:chanroblesvirtuallawlibrary
ART. 25. Private Sector Participation in the Recruitment and
Placement of Workers. — Pursuant to national development
objectives and in order to harness and maximize the use of
private sector resources and initiative in the development
and implementation of a comprehensive employment
program, the private employment sector shall
participate in the recruitment and placement of
workers, locally and overseas, under such guidelines,
rules and regulations as may be issued by the
Secretary of Labor. (Emphasis supplied)
This is echoed in Article 35 of the Labor Code, as amended,
and Section 23(b.l), R.A. No. 8042 as amended by R.A. No.
9422, where the legislature empowered the DOLE and
POEA to regulate private sector participation in the
recruitment and overseas placement of workers, to
wit:chanroblesvirtuallawlibrary
ART. 35. Suspension and/or Cancellation of License
Authority. - The Secretary 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
Secretary 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 Instruction. (Emphasis
supplied)
Section 23. x x x
xxxx
(b.1) Philippine Overseas Employment Administration.
The Administration shall regulate private sector
participation in the recruitment and overseas
placement of workers by setting up a licensing and
registration system. It shall also formulate and
implement, in coordination with appropriate entities
concerned, when necessary, a system for promoting and
monitoring the overseas employment of Filipino workers
taking into consideration their welfare and the domestic
manpower requirements.
In addition to its powers and functions, the administration
shall inform migrant workers not only of their rights as
workers but also of their rights as human beings, instruct
and guide the workers how to assert their rights and
provide the available mechanism to redress violation of
their rights.
In the recruitment and placement of workers to service the
requirements for trained and competent Filipino workers of
foreign governments and their instrumentalities, and such
other employers as public interests may require, the
administration shall deploy only to countries where the
Philippines has concluded bilateral labor agreements or
arrangements: Provided, That such countries shall
guarantee to protect the rights of Filipino migrant workers;
and: Provided, further, That such countries shall observe
and/or comply with the international laws and standards for
migrant workers. (Emphasis supplied)
This Court in Eastern Assurance and Surety Corporation v.
Secretary of Labor32 affirmed the POEA's power to cancel
the license of erring recruitment agencies as a consequence
of not adhering to the rules and regulations set by the
POEA and DOLE. Rules and regulations referred to includes
POEA Rules and Regulations.
Sections 1 and 2, Rule I, Part II of the POEA Rules and
Regulations provide the qualifications and disqualifications
for private sector participation in the overseas employment
program. Section 1 of this rule provides that for persons to
participate in recruitment and placement of land-based
overseas Filipino workers, they must not possess any of the
disqualifications as provided in Section 2. Section 1 partly
reads:chanroblesvirtuallawlibrary
Section 1. Qualifications. Only those who possess the
following qualifications may be permitted to engage in the
business of recruitment and placement of Filipino workers:
xxxx
c. Those not otherwise disqualified by law or other
government regulations to engage in the recruitment
and placement of workers for overseas employment.
In connection with the foregoing, Section 2 provides for the
disqualifications. Specifically, Section 2(d)(4) and (f)
provides that persons, directors and officers of whose
licenses have been previously revoked or cancelled are
disqualified from engaging in the recruitment and
placement of workers. It states:chanroblesvirtuallawlibrary
Section 2. Disqualification. The following are not
qualified to engage in the business of recruitment and
placement of Filipino workers overseas.
xxxx
d. Persons, partnerships or corporations which
have derogatory records, such asbut not limited to
the following:
xxxx
4. Those agencies whose licenses have been
previously revoked or cancelled by the
Administration for violation of RA 8042, PD
442 as amended and their implementing
rules and regulations as well as these rules and
regulations.
xxxx
f. Persons or partners, officers and Directors of
corporations whose licenses have been previously
cancelled or revoked for violation of recruitment
laws. (Emphases supplied)
Thus, upon the cancellation of a license, persons, officers
and directors of the concerned corporations are
automatically prohibited from engaging in recruiting and
placement of land-based overseas Filipino workers. The
grant of a license is a privilege and not a right thus making
it a proper subject of its regulatory powers. If we are to
protect the welfare of vulnerable overseas workers, then we
must prevent all instances wherein they may be taken
advantage upon. This must be so since the rules must be
read as a whole to achieve its particular purpose. Particular
words, clauses and phrases should not be studied as
detached and isolated expressions but as a whole and every
part of the statute must be considered in fixing the
meaning of any of its parts and in order to produce a
harmonious whole.33
It is inconsequential therefore whether or not the POEA or
the DOLE stated then in their decision that persons, officers
and directors are disqualified from participating in the
government's overseas employment program. The law and
rules implementing the same unequivocally state that once
a recruitment license of an entity is cancelled, its officers
and directors are automatically prohibited from engaging in
such activity. The failure of the POEA and DOLE to indicate
this fact cannot by any means indicate the contrary. Dura
lex sed lex.
Given the foregoing, we therefore affirm with modification
the decision of the CA and reiterate that officers and
directors of Humanlink are prohibited from engaging in the
recruitment and placement of overseas workers upon
cancellation of Humanlink's license. Based on the listed
qualifications and disqualifications of the Rules, they
are not qualified to participate in the government's
overseas employment program upon such cancellation. It
was thus unnecessary for the POEA or the DOLE to issue a
separate decision explicitly stating that persons, officers or
directors of Humanlink are disqualified from participating in
government overseas recruitment programs.cralawred
WHEREFORE, the petition is GRANTED. The Decision
dated September 24, 2012 of the Court of Appeals in CA-
G.R. SP No. 121332 is hereby PARTIALLY
REVERSED insofar as it modified the February 17, 2011
Order and July 6, 2011 Resolution of the Undersecretary of
the Department of Labor and Employment in OS-POEA-
0098-0521-2010 [POEA Case No. RV 08-08-1455] by
declaring the disqualification of the officers and directors of
Humanlink Manpower Consultants, Inc. to engage in the
overseas employment program of the government as null
and void. Accordingly, the aforesaid order and resolution of
the DOLE Undersecretary are AFFIRMED and UPHELD in
toto.
128

SO ORDERED.chanroblesvirtuallawlibrary
G.R. No. L-58011 & L-58012 November 18, 1983
VIR-JEN SHIPPING AND MARINE SERVICES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ROGELIO
BISULA RUBEN ARROZA JUAN GACUTNO LEONILO ATOK,
NILO CRUZ, ALVARO ANDRADA, NEMESIO ADUG SIMPLICIO
BAUTISTA, ROMEO ACOSTA, and JOSE ENCABO respondents.
Antonio R. Atienza for petitioner.
The Solicitor General for respondent NLRC,
Quasha, Asperilia, Ancheta &- Valmonte Pena Marcos Law Offices
for private respondents.
RESOLUTION
GUTIERREZ, JR., J.:ñé+.£ªwph!1
Before the Court en banc is a motion to reconsider the decision
promulgated on July 20, 1982 which set aside the decision of
respondent National Labor Relations Commission and reinstated the
decision of the National Seamen Board.
To better understand the issues raised in the motion for
reconsideration, we reiterate the background facts of the case,
Taken from the decision of the National Labor Relations
Commission: têñ.£îhqwâ£
It appears that on different dates in December,
1978 and January, 1979, the Seamen entered
into separate contracts of employment with the
Company, engaging them to work on board M/T'
Jannu for a period of twelve (12) months. After
verification and approval of their contracts by
the NSB, the Seamen boarded their vessel in
Japan.
On 10 January 1919, the master of the vessel
complainant Rogelio H. Bisula, received a cable
from the Company advising him of the
possibility that the vessel might be directed to
call at ITF-controlled ports said at the same time
informing him of the procedure to be followed in
the computation of the special or additional
compensation of crew members while in said
ports. ITF is the acronym for the International
Transport Workers Federation, a militant
international labor organization with affiliates in
different ports of the world, which reputedly can
tie down a vessel in a port by preventing its
loading or unloading, This is a sanction resorted
to by ITF to enforce the payment of its wages
rates for seafarers the so-called ITF rates, if the
wages of the crew members of a vessel who
have affiliated with it are below its prescribed
rates.) In the same cable of the Company, the
expressed its regrets for hot clarifying earlier the
procedure in computing the special
compensation as it thought that the vessel
would 'trade in Caribbean ports only.
On 22 March 1979, the Company sent another
cable to complainant Bisula, this time informing
him of the respective amounts each of the
officers and crew members would receive as
special compensation when the vessel called at
the port of Kwinana Australia, an ITF-controlled
port. This was followed by another cable on 23
March 1979, informing him that the officers and
crew members had been enrolled as members
of the ITF in Sidney, Australia, and that the
membership fee for the 28 personnel
complement of the vessel had already been
paid.
In answer to the Company's cable last
mentioned, complainant Bisula, in
representation of the other officers and crew
members, sent on 24 March 1979 a cable
informing the Company that the officers and
crew members were not agreeable to its
'suggestion'; that they were not contented with
their present salaries 'based on the volume of
works, type of ship with hazardous cargo and
registered in a world wide trade': that the
'officers and crew (were) not interested in ITF
membership if not actually paid with ITF rate
that their 'demand is only 50% increase based
on present basic salary and that the proposed
wage increase is the 'best and only solution to
solve ITF problem' since the Company's salary
rates 'especially in tankers (are) very far in
comparison with other shipping agencies in
Manila ...
In reply, the Company proposed a 25%
increase in the basic pay of the complainant
crew members, although it claimed, that it would
"suffer and absorb considerable amount of
losses." The proposal was accepted by the
Seamen with certain conditions which were
accepted by the Company. Conformably with
the agreement of the parties which was effected
through the cables abovementioned, the
Seamen were paid their new salary rates.
Subsequently, the Company sought authority
from the NSB to cancel the contracts of
employment of the Seamen, claiming that its
principals had terminated their manning
agreement because of the actuations of the
Seamen. The request was granted by the NSB
Executive Director in a letter dated 10 April
1979. Soon thereafter, the Company cabled the
Seamen informing them that their contracts
would be terminated upon the vessel's arrival in
Japan. On 19 April 1979 they Arere asked to
disembark from the vessel, their contracts were
terminated, and they were repatriated to Manila.
There is no showing that the Seamen were
given the opportunity to at least comment on the
Company's request for the cancellation of their
contracts, although they had served only three
(3) out of the twelve (12) months' duration of
their contracts.
The private respondents filed a complaint for illegal dismissal and
non-payment of earned wages with the National Seamen Board.
The Vir-jen Shipping and Marine Services Inc. in turn filed a
complaint for breach of contract and recovery of excess salaries and
overtime pay against the private respondents. On July 2, 1980, the
NSB rendered a decision declaring that the seamen breached their
employment contracts when they demanded and received from Vir-
jen Shipping wages over and above their contracted rates. The
dismissal of the seamen was declared legal and the seamen were
ordered suspended.
The seamen appealed the decision to the NLRC which reversed the
decision of the NSB and required the petitioner to pay the wages
and other monetary benefits corresponding to the unexpired portion
of the manning contract on the ground that the termination of the
contract by the petitioner was without valid cause. Vir-jen Shipping
filed the present petition.
The private respondents submit the following issues in their motion
for reconsideration: têñ.£îhqwâ£
A. THIS HONORABLE COURT DID VIOLENCE
TO LAW AND JURISPRUDENCE WHEN IT
HELD THAT THE FINDING OF FACT OF THE
NATIONAL SEAMEN BOARD THAT THE
SEAMEN VIOLATED THEIR CONTRACTS IS
MORE CREDIBLE THAN THE FINDING OF
FACT OF THE NATIONAL LABOR
RELATIONS COMMISSION THAT THE
SEAMEN DID NOT VIOLATE THEIR
CONTRACT.
129
 B. THIS HONORABLE COURT ERRED IN
FINDING THAT VIR-JEN'S HAVING AGREED
TO A 25% INCREASE OF THE SEAMEN'S
BASIC WAGE WAS NOT VOLUNTARY BUT
WAS DUE TO THREATS.
C. THIS HONORABLE COURT ERRED WHEN
IT TOOK COGNIZANCE OF THE ADDENDUM
AGREEMENT; ASSUMING THAT THE
ADDENDUM AGREEMENT COULD BE
TAKEN COGNIZANCE OF, THIS HONORABLE
COURT ERRED WHEN' IT FOUND THAT
PRIVATE RESPONDENTS HAD VIOLATED
THE SAME.
D, THIS HONORABLE COURT ERRED WHEN
IT DID NOT FIND PETITIONER VIRJEN
LIABLE FOR HAVING TERMINATED BEFORE
EXPIRY DATE THE EMPLOYMENT
CONTRACTS OF PRIVATE RESPONDENTS,
THERE BEING NO LEGAL AND JUSTIFIABLE
GROUND FOR SUCH TERMINATION.
E. THIS HONORABLE COURT ERRED IN
FINDING THAT THE PREPARATION BY
PETITIONER OF THE TWO PAYROLLS AND
THE EXECUTION OF THE SIDE CONTRACT
WERE NOT MADE IN BAD FAITH.
F. THIS HONORABLE COURT
INADVERTENTLY DISCRIMINATED AGAINST
PRIVATE RESPONDENTS.
At the outset, we are faced with the question whether or not the
Court en banc should give due course to the motion for
reconsideration inspite of its having been denied twice by the
Court's Second Division. The case was referred to and accepted by
the Court en banc because of the movants' contention that the
decision in this case by the Second Division deviated from Wallem
Phil. Shipping Inc. v. Minister of Labor (L-50734-37, February 20,
1981), a First Division case with the same facts and issues. We are
constrained to answer the initial question in the affirmative.
A fundamental postulate of Philippine Constitutional Law is the fact,
that there is only one Supreme Court from whose decisions all other
courts are required to take their bearings. (Albert v. Court of First
Instance, 23 SCRA 948; Barrera v. Barrera, 34 SCRA 98; Tugade v.
Court of Appeals, 85 SCRA 226). The majority of the Court's work is
now performed by its two Divisions, but the Court remains one court,
single, unitary, complete, and supreme. Flowing from this nature of
the Supreme Court is the fact that, while ' individual Justices may
dissent or partially concur with one another, when the Court states
what the law is, it speaks with only one voice. And that voice being
authoritative should be a clear as possible.
Any doctrine or principle of law laid down by the Court, whether en
banc or in Division, may be modified or reversed only by the Court
en banc. (Section 2(3), Article X, Constitution.) In the rare instances
when one Division disagrees in its views with the other Division, or
the necessary votes on an issue cannot be had in a Division, the
case is brought to the Court en banc to reconcile any seeming
conflict, to reverse or modify an earlier decision, and to declare the
Court's doctrine. This is what has happened in this case.
The decision sought to be reconsidered appears to be a deviation
from the Court's decision, speaking through the First Division,
in Wallem Shipping, Inc. v. Hon. Minister of Labor (102 SCRA 835).
Faced with two seemingly conflicting resolutions of basically the
same issue by its two Divisions, the Court. therefore, resolved to
transfer the case to the Court en banc. Parenthetically, the
petitioner's comment on the third motion for reconsideration states
that the resolution of the motion might be the needed vehicle to
make the ruling in the Wallem case clearer and more in time with the
underlying principles of the Labor Code. We agree with the
petitioner.
After an exhaustive, painstaking, and perspicacious consideration of
the motions for reconsideration and the comments, replies, and
other pleadings related thereto, the Court en banc is constrained to
grant the motions. To grant the motion is to keep faith with the
constitutional mandate to afford protection to labor and to assure the
rights of workers to self-organization and to just and humane
conditions of work. We sustain the decision of the respondent
National labor Relations Commission.
There are various arguments raised by the petitioners but the
common thread running through all of them is the contention, if not
the dismal prophecy, that if the respondent seamen are sustained by
this Court, we would in effect "kill the en that lays the golden egg." In
other words, Filipino seamen, admittedly among the best in the
world, should remain satisfied with relatively lower if not the lowest,
international rates of compensation, should not agitate for higher
wages while their contracts of employment are subsisting, should
accept as sacred, iron clad, and immutable the side contracts which
require them to falsely pretend to be members of international labor
federations, pretend to receive higher salaries at certain foreign
ports only to return the increased pay once the ship leaves that port,
should stifle not only their right to ask for improved terms of
employment but their freedom of speech and expression, and
should suffer instant termination of employment at the slightest sign
of dissatisfaction with no protection from their Government and their
courts. Otherwise, the petitioners contend that Filipinos would no
longer be accepted as seamen, those employed would lose their
jobs, and the still unemployed would be left hopeless.
This is not the first time and it will not be the last where the threat of
unemployment and loss of jobs would be used to argue against the
interests of labor; where efforts by workingmen to better their terms
of employment would be characterized as prejudicing the interests
of labor as a whole.
In 1867 or one hundred sixteen years ago. Chief Justice Beasley of
the Supreme Court of New Jersey was ponente of the court's
opinion declaring as a conspiracy the threat of workingmen to strike
in connection with their efforts to promote unionism, têñ.£îhqwâ£
It is difficult to believe that a right exists in law
which we can scarcely conceive can produce, in
any posture of affairs, other than injuriois
results. It is simply the right of workmen, by
concert of action, and by taking advantage of
their position, to control the business of another,
I am unwilling to hold that a right which cannot,
in any, event, be advantageous to the
employee, and which must always be hurtful to
the employer, exists in law. In my opinion this
indictment sufficiently shows that the force of
the confederates was brought to bear upon their
employer for the purpose of oppression and
mischief and that this amounts to a conspiracy,
(State v. Donaldson, 32 NJL 151, 1867. Cited in
Chamberlain, Sourcebook on Labor, p. 13.
Emphasis supplied)
The same arguments have greeted every major advance in the
rights of the workingman. And they have invariably been proved
unfounded and false.
Unionism, employers' liability acts, minimum wages, workmen's
compensation, social security and collective bargaining to name a
few were all initially opposed by employers and even well meaning
leaders of government and society as "killing the hen or goose which
lays the golden eggs." The claims of workingmen were described as
outrageously injurious not only to the employer but more so to the
employees themselves before these claims or demands were
established by law and jurisprudence as "rights" and before these
were proved beneficial to management, labor, and the nation as a
whole beyond reasonable doubt.
The case before us does not represent any major advance in the
rights of labor and the workingmen. The private respondents merely
sought rights already established. No matter how much the
petitioner-employer tries to present itself as speaking for the entire
industry, there is no evidence that it is typical of employers hiring
Filipino seamen or that it can speak for them.
The contention that manning industries in the Philippines would not
survive if the instant case is not decided in favor of the petitioner is
not supported by evidence. The Wallem case was decided on
February 20, 1981. There have been no severe repercussions, no
drying up of employment opportunities for seamen, and none of the
dire consequences repeatedly emphasized by the petitioner. Why
should Vir-jen be all exception?
The wages of seamen engaged in international shipping are
shouldered by the foreign principal. The local manning office is an
agent whose primary function is recruitment and who .usually gets a
lump sum from the shipowner to defray the salaries of the crew. The
hiring of seamen and the determination of their compensation is
subject to the interplay of various market factors and one key factor
is how much in terms of profits the local manning office and the
130
foreign shipowner may realize after the costs of the voyage are met. Petitioner claims that the
And costs include salaries of officers and crew members. dismissal of private
respondents was justified
because the latter
Filipino seamen are admittedly as competent and reliable as
threatened the ship
seamen from any other country in the world. Otherwise, there would
authorities in acceding to
not be so many of them in the vessels sailing in every ocean and
their demands, and this
sea on this globe. It is competence and reliability, not cheap labor
constitutes serious
that makes our seamen so greatly in demand. Filipino seamen have
misconduct as
never demanded the same high salaries as seamen from the United
contemplated by the Labor
States, the United Kingdom, Japan and other developed nations.
Code. This contention is
But certainly they are entitled to government protection when they
not well-taken. But even if
ask for fair and decent treatment by their employer.-, and when they
there had been such a
exercise the right to petition for improved terms of employment,
threat, respondents'
especially when they feel that these are sub-standard or are capable
behavior should not be
of improvement according to internationally accepted rules. In the
censured because it is but
domestic scene, there are marginal employers who prepare two sets
natural for them to employ
of payrolls for their employees — one in keeping with minimum
some means of pressing
wages and the other recording the sub-standard wages that the
their demands for
employees really receive, The reliable employers, however, not only
petitioner, the refusal to
meet the minimums required by fair labor standards legislation but
abide with the terms of the
even go way above the minimums while earning reasonable profits
Special Agreement, to
and prospering. The same is true of international employment.
honor and respect the
There is no reason why this Court and the Ministry of Labor and.
same, They were only
Employment or its agencies and commissions should come out with
acting in the exercise of
pronouncements based on the standards and practices of
their rights, and to deprive
unscrupulous or inefficient shipowners, who claim they cannot
them of their freedom of
survive without resorting to tricky and deceptive schemes, instead of
expression is contrary to
Government maintaining labor law and jurisprudence according to
law and public policy. There
the practices of honorable, competent, and law-abiding employers,
is no serious misconduct to
domestic or foreign.
speak of in the case at bar
which would justify
If any minor advantages given to Filipino seamen may somehow cut respondents' dismissal just
into the profits of local manning agencies and foreign shipowners, because of their firmness in
that is not sufficient reason why the NSB or the ILRC should not their demand for the
stand by the former instead of listening to unsubstantiated fears that fulfillment by petitioner of its
they would be killing the hen which lays the golden eggs. obligation it entered into
without any coercion,
specially on the part of
Prescinding from the above, we now hold that neither the National
private respondents.
Seamen Board nor the National Labor Relations Commission (Emphasis supplied).
should, as a matter of official policy, legitimize and enforce cubious
arrangements where shipowners and seamen enter into fictitious
contracts similar to the addendum agreements or side contracts in The above citation is from Wallem.
this case whose purpose is to deceive. The Republic of the
Philippines and its ministries and agencies should present a more
The facts show that when the respondents boarded the M/T Jannu
honorable and proper posture in official acts to the whole world,
there was no intention to send their ship to Australia. On January 10,
notwithstanding our desire to have as many job openings both here
1979, the petitioner sent a cable to respondent shipmaster Bisula
and abroad for our workers. At the very least, such as sensitive
informing him of the procedure to be followed in the computation of
matter involving no less than our dignity as a people and the welfare
special compensation of crewmembers while in ITF controlled ports
of our workingmen must proceed from the Batasang Pambansa in
and expressed regrets for not having earlier clarified the procedure
the form of policy legislation, not from administrative rule making or
as it thought that the vessel would trade in Carribean ports only.
adjudication

On March 22, 1979, the petitioner sent another cable informing

Another issue raised by the movants is whether or not the seamen
Bisula of the special compensation when the ship would call at
violated their contracts of employment.
Kwinana Australia.

The form contracts approved by the National Seamen Board are

The following day, shipmaster Bisula cabled Vir-jen stating that the
designed to protect Filipino seamen not foreign shipowners who can
officers and crews were not interested in ITF membership if not paid
take care of themselves. The standard forms embody' the basic
ITF rates and that their only demand was a 50 percent increase
minimums which must be incorporated as parts of the employment
based on their then salaries. Bisula also pointed out that Vir-jen
contract. (Section 15, Rule V, Rules and Regulations Implementing
rates were "very far in comparison with other shipping agencies in
the Labor Code.) They are not collective bargaining agreements or
Manila."
immutable contracts which the parties cannot improve upon or
modify in the course of the agreed period of time. To state,
therefore, that the affected seamen cannot petition their employer In reply, Vir-jen counter proposed a 25 percent increase. Only after
for higher salaries during the 12 months duration of the contract runs Kyoei Tanker Co., Ltd., declined to increase the lumps sum amount
counter to established principles of labor legislation. The National given monthly to Vir-jen was the decision to terminate the
Labor Relations Commission, as the appellate tribunal from respondents' employment formulated.
decisions of the National Seamen Board, correctly ruled that the
seamen did not violate their contracts to warrant their dismissal.
The facts show that Virjen Initiated the discussions which led to the
demand for increased . The seamen made a proposal and the
The respondent Commission ruled: têñ.£îhqw⣠petitioner organized with a counter-proposal. The ship had not vet
gone to Australia or any ITF controlled port. There was absolutely no
mention of any strike. much less a threat to strike. The seamen had
In the light of all the foregoing facts, we find that
done in act which under Philippine law or any other civilized law
the cable of the seamen proposing an increase
would be termed illegal, oppressive, or malicious. Whatever
in their wage rates was not and could not have
pressure existed, it was mild compared to accepted valid modes of
been intended as a threat to comp el the
labor activity.
Company to accede to their proposals. But even
assuming, if only for the sake of argument, that
the demand or — proposal for a wage increase We reiterate our ruling in Wallem. têñ.£îhqwâ£
was accompanied by a threat that they would
report to ITF if the Company did not accede to
Petitioner claims that the
the contract revision - although there really was
dismissal of private
no such threat as pointed out earlier — the
respondents was justified
Seamen should not be held at fault for asking
because the latter
such a demand. In the same case cited above,
threatened the ship
the Supreme Court held: têñ.£îhqwâ£
authorities in acceding to

131
 their demands, and this
constitutes serious
misconduct as
contemplated by the Labor
Code. This contention is
not well-taken. The records
fail to establish clearly the
commission of any threat,
But even if there had been
such a threat, respondents'
behavior should not be
censured because it is but
natural for them to employ
some means of pressing
their demands for
petitioner, who refused to
abide with the terms of the
Special Agreement, to
honor and respect the
same, They were only
acting in the exercise of
their rights, and to deprive
them of their form of
expression is contrary to
law and public policy. ...
Our dismissing the petition is premised on the assumption that the
Ministry of Labor and Employment and all its agencies exist primarily
for the workinginan's interests and, of course, the nation as a whole.
The points raised by the Solicitor-General in his comments refer to
the issue of allowing what the petitioner importunes under the
argument of "killing the hen which lays the golden eggs." This is one
of policy which should perhaps be directed to the Batasang
Pambansa and to our country's other policy makers for more specific
legislation on the matter, subject to the constitutional provisions
protecting labor, promoting social justice, and guaranteeing non-
abridgement of the freedom of speech, press, peaceable assembly
and petition. We agree with the movants that there is no showing of
any cause, which under the Labor Code or any current applicable
law, would warrant the termination of the respondents' services
before the expiration of their contracts. The Constitution guarantees
State assurance of the rights of workers to security of tenure. (Sec.
9, Article II, Constitution). Presumptions and provisions of law, the
evidence on record, and fundamental State policy all dictate that the
motions for reconsideration should be granted.
WHEREFORE, the motions for reconsideration are hereby
GRANTED. The petition is DISMISSED for lack of merit. The
decision of the National Labor Relations Commission is AFFIRMED.
No costs.
SO ORDERED.1äwphï1.ñët
G.R. Nos. L-57999, 58143-53 August 15, 1989
RESURRECCION SUZARA, CESAR DIMAANDAL, ANGELITO
MENDOZA, ANTONIO TANEDO, AMORSOLO CABRERA,
DOMINADOR SANTOS, ISIDRO BRACIA, RAMON DE BELEN,
ERNESTO SABADO, MARTIN MALABANAN, ROMEO HUERTO
and VITALIANO PANGUE, petitioners,
vs.
THE HON. JUDGE ALFREDO L. BENIPAYO and MAGSAYSAY
LINES, INC., respondents.
G.R. Nos. L-64781-99 August 15, 1989
RESURRECCION SUZARA, CESAR DIMAANDAL, ANGELITO
MENDOZA, ANTONIO TANEDO, RAYMUNDO PEREZ,
AMORSOLO CABRERA, DOMINADOR SANTOS, ISIDRO
BRACIA, CATALINO CASICA, VITALIANO PANGUE, RAMON DE
BELEN, EDUARDO PAGTALUNAN, ANTONIO MIRANDA,
RAMON UNIANA, ERNESTO SABADO, MARTIN MALABANAN,
ROMEO HUERTO and WILFREDO CRISTOBAL, petitioners,
vs.
THE HONORABLE NATIONAL LABOR RELATIONS
COMMISSION, THE NATIONAL SEAMEN BOARD (now the
Philippine Overseas Employment Administration), and
MAGSAYSAY LINES, INC., respondents.
Quasha, Asperilla, Ancheta, Peñ;a and Nolasco for petitioners.
Samson S. Alcantara for private respondent.
GUTIERREZ, JR., J.:
These petitions ask for a re-examination of this Court's precedent —
setting decision in Vir-Jen Shipping and Marine Services Inc. v.
National Labor Relations Commission, et al. (125 SCRA 577
[1983]). On constitutional, statutory, and factual grounds, we find no
reason to disturb the doctrine in Vir-Jen Shipping and to turn back
the clock of progress for sea-based overseas workers. The
experience gained in the past few years shows that, following said
doctrine, we should neither deny nor diminish the enjoyment by
Filipino seamen of the same rights and freedoms taken for granted
by other working-men here and abroad.
The cases at bar involve a group of Filipino seamen who were
declared by the defunct National Seamen Board (NSB) guilty of
breaching their employment contracts with the private respondent
because they demanded, upon the intervention and assistance of a
third party, the International Transport Worker's Federation (ITF), the
payment of wages over and above their contracted rates without the
approval of the NSB. The petitioners were ordered to reimburse the
total amount of US$91,348.44 or its equivalent in Philippine
Currency representing the said over-payments and to be suspended
from the NSB registry for a period of three years. The National Labor
Relations Commission (NLRC) affirmed the decision of the NSB.
In a corollary development, the private respondent, for failure of the
petitioners to return the overpayments made to them upon demand
by the former, filed estafa charges against some of the petitioners.
The criminal cases were eventually consolidated in the sala of then
respondent Judge Alfredo Benipayo. Hence, these consolidated
petitions, G.R. No. 64781-99 and G.R. Nos. 57999 and 58143-53,
which respectively pray for the nullification of the decisions of the
NLRC and the NSB, and the dismissal of the criminal cases against
the petitioners.
The facts are found in the questioned decision of the NSB in G.R.
No. 64781-99.
From the records of this case it appears that the
facts established and/or admitted by the parties
are the following: that on different dates in 1977
and 1978 respondents entered into separate
contracts of employment (Exhs. "B" to "B-17",
inclusive) with complainant (private respondent)
to work aboard vessels
owned/operated/manned by the latter for a
period of 12 calendar months and with different
rating/position, salary, overtime pay and
allowance, hereinbelow specified: ...; that
aforesaid employment contracts were verified
and approved by this Board; that on different
dates in April 1978 respondents (petitioners)
joined the M/V "GRACE RIVER"; that on or
about October 30, 1978 aforesaid vessel, with
the respondents on board, arrived at the port of
Vancouver, Canada; that at this port respondent
received additional wages under rates
prescribed by the Intemational Transport
Worker's Federation (ITF) in the total amount of
US$98,261.70; that the respondents received
the amounts appearing opposite their names, to
wit: ...; that aforesaid amounts were over and
above the rates of pay of respondents as
appearing in their employment contracts
approved by this Board; that on November 10,
1978, aforesaid vessel, with respondent on
board, left Vancouver, Canada for Yokohama,
Japan; that on December 14, 1978, while
aforesaid vessel, was at Yura, Japan, they were
made to disembark. (pp. 64-66, Rollo)
Furthermore, according to the petitioners, while the vessel was
docked at Nagoya, Japan, a certain Atty. Oscar Torres of the NSB
Legal Department boarded the vessel and called a meeting of the
seamen including the petitioners, telling them that for their own good
and safety they should sign an agreement prepared by him on board
the vessel and that if they do, the cases filed against them with NSB
on November 17, 1978 would be dismissed. Thus, the petitioners
signed the. "Agreement" dated December 5, 1978. (Annex C of
Petition) However, when they were later furnished xerox copies of
what they had signed, they noticed that the line "which amount(s)
was/were received and held by CREWMEMBERS in trust for
SHIPOWNERS" was inserted therein, thereby making it appear that
the amounts given to the petitioners representing the increase in
their wages based on ITF rates were only received by them in trust
for the private respondent.
132
When the vessel reached Manila, the private respondent demanded
from the petitioners the "overpayments" made to them in Canada.
As the petitioners refused to give back the said amounts, charges
were filed against some of them with the NSB and the Professional
Regulations Commission. Estafa charges were also filed before
different branches of the then Court of First Instance of Manila
which, as earlier stated, were subsequently consolidated in the sala
of the respondent Judge Alfredo Benipayo and which eventually led
to G.R. Nos. 57999 and 58143-53.
In G.R. Nos. 64781-99, the petitioners claimed before the NSB that
contrary to the private respondent's allegations, they did not commit
any illegal act nor stage a strike while they were on board the
vessel; that the "Special Agreement" entered into in Vancouver to
pay their salary differentials is valid, having been executed after
peaceful negotiations. Petitioners further argued that the amounts
they received were in accordance with the provision of law, citing
among others, Section 18, Rule VI, Book I of the Rules and
Regulations Implementing the Labor Code which provides that "the
basic minimum salary of seamen shall not be less than the
prevailing minimum rates established by the International Labor
Organization (ILO) or those prevailing in the country whose flag the
employing vessel carries, whichever is higher ..."; and that the
"Agreement" executed in Nagoya, Japan had been forced upon
them and that intercalations were made to make it appear that they
were merely trustees of the amounts they received in Vancouver.
On the other hand, the private respondent alleged that the
petitioners breached their employment contracts when they, acting
in concert and with the active participations of the ITF while the
vessel was in Vancouver, staged an illegal strike and by means of
threats, coercion and intimidation compelled the owners of the
vessel to pay to them various sums totalling US$104,244.35; that
the respondent entered into the "Special Agreement" to pay the
petitioners' wage differentials because it was under duress as the
vessel would not be allowed to leave Vancouver unless the said
agreement was signed, and to prevent the shipowner from incurring
further delay in the shipment of goods; and that in view of
petitioners' breach of contract, the latter's names must be removed
from the NSB's Registry and that they should be ordered to return
the amounts they received over and above their contracted rates.
The respondent NSB ruled that the petitioners were guilty of breach
of contract because despite subsisting and valid NSB-approved
employment contracts, the petitioners sought the assistance of a
third party (ITF) to demand from the private respondent wages in
accordance with the ITF rates, which rates are over and above their
rates of pay as appearing in their NSB-approved contracts. As
bases for this conclusion, the NSB stated:
1) The fact that respondents sought the aid of a
third party (ITF) and demanded for wages and
overtime pay based on ITF rates is shown in the
entries of their respective Pay-Off Clearance
Slips which were marked as their Exhs. "1" to
"18", and we quote "DEMANDED ITF WAGES,
OVERTIME, DIFFERENTIALS APRIL TO
OCTOBER 1978". Respondent Suzara admitted
that the entries in his Pay-Off Clearance Slip
(Exh. "1") are correct (TSN., p. 16, Dec. 6,
1979).lâwphî1.ñèt Moreover, it is the policy
(reiterated very often) by the ITF that it does not
interfere in the affairs of the crewmembers and
masters and/or owners of a vessel unless its
assistance is sought by the crewmembers
themselves. Under this pronounced policy of the
ITF, it is reasonable to assume that the
representatives of the ITF in Vancouver,
Canada assisted and intervened by reason of
the assistance sought by the latter.
2) The fact that the ITF assisted and intervened
for and in behalf of the respondents in the
latter's demand for higher wages could be
gleaned from the answer of the respondents
when they admitted that the ITF acted in their
behalf in the negotiations for increase of wages.
Moreover, respondent Cesar Dimaandal
admitted that the ITF differential pay was
computed by the ITF representative (TSN, p. 7,
Dec. 12, 1979)
3) The fact that complainant and the
owner/operator of the vessel were compelled to
sign the Special Agreement (Exh. "20") and to
pay ITF differentials to respondents in order not
to delay the departure of the vessel and to
prevent further losses is shown in the
"Agreement" (Exhs. "R-21") ... (pp. 69-70, Rollo)
The NSB further said:
While the Board recognizes the rights of the
respondents to demand for higher wages,
provided the means are peaceful and legal, it
could not, however, sanction the same if the
means employed are violent and illegal. In the
case at bar, the means employed are violent
and illegal for in demanding higher wages the
respondents sought the aid of a third party and
in turn the latter intervened in their behalf and
prohibited the vessel from sailing unless the
owner and/or operator of the vessel acceded to
respondents' demand for higher wages. To
avoid suffering further incalculable losses, the
owner and/or operator of the vessel had no
altemative but to pay respondents' wages in
accordance with the ITF scale. The Board
condemns the act of a party who enters into a
contract and with the use of force/or intimidation
causes the other party to modify said contract. If
the respondents believe that they have a valid
ground to demand from the complainant a
revision of the terms of their contracts, the same
should have been done in accordance with law
and not thru illegal means. (at p. 72, Rollo).
Although the respondent NSB found that the petitioners were
entitled to the payment of earned wages and overtime
pay/allowance from November 1, 1978 to December 14, 1978, it
nevertheless ruled that the computation should be based on the
rates of pay as appearing in the petitioners' NSB-approved
contracts. It ordered that the amounts to which the petitioners are
entitled under the said computation should be deducted from the
amounts that the petitioners must return to the private respondent.
On appeal, the NLRC affirmed the NSB's findings. Hence, the
petition in G.R. Nos. 64781-99.
Meanwhile, the petitioners in G.R. Nos. 57999 and 58143-53 moved
to quash the criminal cases of estafa filed against them on the
ground that the alleged crimes were committed, if at all, in
Vancouver, Canada and, therefore, Philippine courts have no
jurisdiction. The respondent judge denied the motion. Hence, the
second petition.
The principal issue in these consolidated petitions is whether or not
the petitioners are entitled to the amounts they received from the
private respondent representing additional wages as determined in
the special agreement. If they are, then the decision of the NLRC
and NSB must be reversed. Similarly, the criminal cases of estafa
must be dismissed because it follows as a consequence that the
amounts received by the petitioners belong to them and not to the
private respondent.
In arriving at the questioned decision, the NSB ruled that the
petitioners are not entitled to the wage differentials as determined by
the ITF because the means employed by them in obtaining the
same were violent and illegal and because in demanding higher
wages the petitioners sought the aid of a third party, which, in turn,
intervened in their behalf and prohibited the vessel from sailing
unless the owner and/or operator of the vessel acceded to
respondents' demand for higher wages. And as proof of this
conclusion, the NSB cited the following: (a) the entries in the
petitioners Pay-Off Clearance Slip which contained the phrase
"DEMANDED ITF WAGES ..."; (b) the alleged policy of the ITF in
not interfering with crewmembers of a vessel unless its intervention
is sought by the crewmembers themselves; (c), the petitioners'
admission that ITF acted in their behalf; and (d) the fact that the
private respondent was compelled to sign the special agreement at
Vancouver, Canada.
There is nothing in the public and private respondents' pleadings, to
support the allegations that the petitioners used force and violence
to secure the special agreement signed in Vancouver. British
Columbia. There was no need for any form of intimidation coming
from the Filipino seamen because the Canadian Brotherhood of
Railways and Transport Workers (CBRT), a strong Canadian labor
union, backed by an international labor federation was actually doing
all the influencing not only on the ship-owners and employers but
also against third world seamen themselves who, by receiving lower
wages and cheaper accommodations, were threatening the
employment and livelihood of seamen from developed nations.
133
The bases used by the respondent NSB to support its decision do
not prove that the petitioners initiated a conspiracy with the ITF or
deliberately sought its assistance in order to receive higher wages.
They only prove that when ITF acted in petitioners' behalf for an
increase in wages, the latter manifested their support. This would be
a logical and natural reaction for any worker in whose benefit the ITF
or any other labor group had intervened. The petitioners admit that
while they expressed their conformity to and their sentiments for
higher wages by means of placards, they, nevertheless, continued
working and going about their usual chores. In other words, all they
did was to exercise their freedom of speech in a most peaceful way.
The ITF people, in turn, did not employ any violent means to force
the private respondent to accede to their demands. Instead, they
simply applied effective pressure when they intimated the possibility
of interdiction should the shipowner fail to heed the call for an
upward adjustment of the rates of the Filipino seamen. Interdiction is
nothing more than a refusal of ITF members to render service for the
ship, such as to load or unload its cargo, to provision it or to perform
such other chores ordinarily incident to the docking of the ship at a
certain port. It was the fear of ITF interdiction, not any action taken
by the seamen on board the vessel which led the shipowners to
yield.
The NSB's contusion that it is ITF's policy not to intervene with the
plight of crewmembers of a vessel unless its intervention was sought
is without basis. This Court is cognizant of the fact that during the
period covered by the labor controversies in Wallem Philippines
Shipping, Inc. v. Minister of Labor (102 SCRA 835 [1981]; Vir-Jen
Shipping and Marine Services, Inc. v. NLRC (supra) and these
consolidated petitions, the ITF was militant worldwide especially in
Canada, Australia, Scandinavia, and various European countries,
interdicting foreign vessels and demanding wage increases for third
world seamen. There was no need for Filipino or other seamen to
seek ITF intervention. The ITF was waiting on its own volition in all
Canadian ports, not particularly for the petitioners' vessel but for all
ships similarly situated. As earlier stated, the ITF was not really
acting for the petitioners out of pure altruism. The ITF was merely
protecting the interests of its own members. The petitioners
happened to be pawns in a higher and broader struggle between the
ITF on one hand and shipowners and third world seamen, on the
other. To subject our seamen to criminal prosecution and
punishment for having been caught in such a struggle is out of the
question.
As stated in Vir-Jen Shipping (supra):
The seamen had done no act which under
Philippine law or any other civilized law would
be termed illegal, oppressive, or malicious.
Whatever pressure existed, it was mild
compared to accepted and valid modes of labor
activity. (at page 591)
Given these factual situations, therefore, we cannot affirm the NSB
and NLRC's finding that there was violence, physical or otherwise
employed by the petitioners in demanding for additional wages. The
fact that the petitioners placed placards on the gangway of their ship
to show support for ITF's demands for wage differentials for their
own benefit and the resulting ITF's threatened interdiction do not
constitute violence. The petitioners were exercising their freedom of
speech and expressing sentiments in their hearts when they placed
the placard We Want ITF Rates." Under the facts and circumstances
of these petitions, we see no reason to deprive the seamen of their
right to freedom of expression guaranteed by the Philippine
Constitution and the fundamental law of Canada where they
happened to exercise it.
As we have ruled in Wallem Phil. Shipping Inc. v. Minister of Labor,
et al. supra:
Petitioner claims that the dismissal of private
respondents was justified because the latter
threatened the ship authorities in acceding to
their demands, and this constitutes serious
misconduct as contemplated by the Labor
Code. This contention is now well-taken. The
records fail to establish clearly the commission
of any threat. But even if there had been such a
threat, respondents' behavior should not be
censured because it is but natural for them to
employ some means of pressing their demands
for petitioner, who refused to abide with the
terms of the Special Agreement, to honor and
respect the same. They were only acting in the
exercise of their rights, and to deprive them of
their freedom of expression is contrary to law
and public policy. ... (at page 843)
We likewise, find the public respondents' conclusions that the acts of
the petitioners in demanding and receiving wages over and above
the rates appearing in their NSB-approved contracts is in effect an
alteration of their valid and subsisting contracts because the same
were not obtained through. mutual consent and without the prior
approval of the NSB to be without basis, not only because the
private respondent's consent to pay additional wages was not
vitiated by any violence or intimidation on the part of the petitioners
but because the said NSB-approved form contracts are not
unalterable contracts that can have no room for improvement during
their effectivity or which ban any amendments during their term.
For one thing, the employer can always improve the working
conditions without violating any law or stipulation.
We stated in the Vir-Jen case (supra) that:
The form contracts approved by the National
Seamen Board are designed to protect Filipino
seamen not foreign shipowners who can take
care of themselves. The standard forms
embody the basic minimums which must be
incorporated as parts of the employment
contract. (Section 15, Rule V, Rules and
Regulations Implementing the Labor
Code).lâwphî1.ñèt They are not collective
bargaining agreements or immutable contracts
which the parties cannot improve upon or
modify in the course of the agreed period of
time. To state, therefore, that the affected
seamen cannot petition their employer for
higher salaries during the 12 months duration of
the contract runs counter to estabhshed
principles of labor legislation. The National
Labor Relations Commission, as the appellate
tribunal from the decisions of the National
Seamen Board, correctly ruled that the seamen
did not violate their contracts to warrant their
dismissal. (at page 589)
It is impractical for the NSB to require the petitioners, caught in the
middle of a labor struggle between the ITF and owners of ocean
going vessels halfway around the world in Vancouver, British
Columbia to first secure the approval of the NSB in Manila before
signing an agreement which the employer was willing to sign. It is
also totally unrealistic to expect the petitioners while in Canada to
exhibit the will and strength to oppose the ITF's demand for an
increase in their wages, assuming they were so minded.
An examination of Annex C of the petition, the agreement signed in
Japan by the crewmembers of the M/V Grace River and a certain M.
Tabei, representative of the Japanese shipowner lends credence to
the petitioners' claim that the clause "which amount(s) was received
and held by CREWMEMBERS in trust for SHIPOWNER" was an
intercalation added after the execution of the agreement. The clause
appears too closely typed below the names of the 19 crewmen and
their wages with no similar intervening space as that which appears
between all the paragraphs and the triple space which appears
between the list of crewmembers and their wages on one hand and
the paragraph above which introduces the list, on the other. The
verb "were" was also inserted above the verb "was" to make the
clause grammatically correct but the insertion of "were" is already on
the same line as "Antonio Miranda and 5,221.06" where it clearly
does not belong. There is no other space where the word "were"
could be intercalated. (See Rollo, page 80).
At any rate, the proposition that the petitioners should have
pretended to accept the increased wages while in Vancouver but
returned them to the shipowner when they reached its country,
Japan, has already been answered earlier by the Court:
Filipino seamen are admittedly as competent
and reliable as seamen from any other country
in the world. Otherwise, there would not be so
many of them in the vessels sailing in every
ocean and sea on this globe. It is competence
and reliability, not cheap labor that makes our
seamen so greatly in demand. Filipino seamen
have never demanded the same high salaries
as seamen from the United States, the United
Kingdom, Japan and other developed nations.
But certainly they are entitled to government
protection when they ask for fair and decent
treatment by their employer and when they
exercise the right to petition for improved terms
of employment, especially when they feel that
these are sub-standard or are capable of
134
 improvement according to internationally
accepted rules. In the domestic scene, there are
marginal employers who prepare two sets of
payrolls for their employees — one in keeping
with minimum wages and the other recording
the sub-standard wages that the employees
really receive. The reliable employers, however,
not only meet the minimums required by fair
labor standards legislation but even go away
above the minimums while earning reasonable
profits and prospering. The same is true of
international employment. There is no reason
why this court and the Ministry of Labor and
Employment or its agencies and commissions
should come out with pronouncements based
on the standards and practices of unscrupulous
or inefficient shipowners, who claim they cannot
survive without resorting to tricky and deceptive
schemes, instead of Government maintaining
labor law and jurisprudence according to the
practices of honorable, competent, and law-
abiding employers, domestic or foreign. (Vir-Jen
Shipping, supra, pp. 587-588)
It is noteworthy to emphasize that while the Intemational Labor
Organization (ILO) set the minimum basic wage of able seamen at
US$187.00 as early as October 1976, it was only in 1979 that the
respondent NSB issued Memo Circular No. 45, enjoining all shipping
companies to adopt the said minimum basic wage. It was correct for
the respondent NSB to state in its decision that when the petitioners
entered into separate contracts between 1977-1978, the monthly
minimum basic wage for able seamen ordered by NSB was still fixed
at US$130.00. However, it is not the fault of the petitioners that the
NSB not only violated the Labor Code which created it and the
Rules and Regulations Implementing the Labor Code but also seeks
to punish the seamen for a shortcoming of NSB itself.
Article 21(c) of the Labor Code, when it created the NSB, mandated
the Board to "(O)btain the best possible terms and conditions of
employment for seamen."
Section 15, Rule V of Book I of the Rules and Regulations
Implementing the Labor Code provides:
Sec. 15. Model contract of employment. — The
NSB shall devise a model contract of
employment which shall embody all the
requirements of pertinent labor and social
legislations and the prevailing standards set by
applicable International Labor Organization
Conventions. The model contract shall set the
minimum standards of the terms and conditions
to govern the employment of Filipinos on board
vessels engaged in overseas trade. All
employers of Filipinos shall adopt the model
contract in connection with the hiring and
engagement of the services of Filipino
seafarers, and in no case shall a shipboard
employment contract be allowed where the
same provides for benefits less than those
enumerated in the model employment contract,
or in any way conflicts with any other provisions
embodied in the model contract.
Section 18 of Rule VI of the same Rules and Regulations provides:
Sec. 18. Basic minimum salary of able-seamen.
— The basic minimum salary of seamen shall
be not less than the prevailing minimxun rates
established by the International Labor
Organization or those prevailing in the country
whose flag the employing vessel carries,
whichever is higher. However, this provision
shall not apply if any shipping company pays its
crew members salaries above the minimum
herein provided.
Section 8, Rule X, Book I of the Omnibus Rules provides:
Section 8. Use of standard format of service
agreement. — The Board shall adopt a
standard format of service agreement in
accordance with pertinent labor and social
legislation and prevailing standards set by
applicable International Labor Organization
Conventions. The standard format shall set the
minimum standard of the terms and conditions
to govern the employment of Filipino seafarers
but in no case shall a shipboard employment
contract (sic), or in any way conflict with any
other provision embodied in the standard
format.
It took three years for the NSB to implement requirements which,
under the law, they were obliged to follow and execute immediately.
During those three years, the incident in Vancouver happened. The
terms and conditions agreed upon in Vancouver were well within
ILO rates even if they were above NSB standards at the time.
The sanctions applied by NSB and affirmed by NLRC are moreover
not in keeping with the basic premise that this Court stressed in
the Vir-Jen Shipping case (supra) that the Ministry now the
Department of Labor and Employment and all its agencies exist
primarily for the workingman's interest and the nation's as a whole.
Implicit in these petitions and the only reason for the NSB to take the
side of foreign shipowners against Filipino seamen is the "killing the
goose which lays the golden eggs" argument. We reiterate the ruling
of the Court in Vir-Jen Shipping (supra)
There are various arguments raised by the
petitioners but the common thread running
through all of them is the contention, if not the
dismal prophecy, that if the respondent seamen
are sustained by this Court, we would in effect
"kill the hen that lays the golden egg." In other
words, Filipino seamen, admittedly among the
best in the world, should remain satisfied with
relatively lower if not the lowest, international
rates of compensation, should not agitate for
higher wages while their contracts of
employment are subsisting, should accept as
sacred, iron clad, and immutable the side
contracts which require: them to falsely pretend
to be members of international labor
federations, pretend to receive higher salaries
at certain foreign ports only to return the
increased pay once the ship leaves that port,
should stifle not only their right to ask for
improved terms of employment but their
freedom of speech and expression, and should
suffer instant termination of employment at the
slightest sign of dissatisfaction with no
protection from their Government and their
courts. Otherwise, the petitioners contend that
Filipinos would no longer be accepted as
seamen, those employed would lose their jobs,
and the still unemployed would be left hopeless.
This is not the first time and it will not be the last where the threat of
unemployment and loss of jobs would be used to argue against the
interests of labor; where efforts by workingmen to better their terms
of employment would be characterized as prejudicing the interests
of labor as a whole.
xxx xxx xxx
Unionism, employers' liability acts, minimum
wages, workmen's compensation, social
security and collective bargaining to name a few
were all initially opposed by employers and
even well meaning leaders of government and
society as "killing the hen or goose which lays
the golden eggs." The claims of workingmen
were described as outrageously injurious not
only to the employer but more so to the
employees themselves before these claims or
demands were established by law and
jurisprudence as "rights" and before these were
proved beneficial to management, labor, and
the national as a whole beyond reasonable
doubt.
The case before us does not represent any
major advance in the rights of labor and the
workingmen. The private respondents merely
sought rights already established. No matter
how much the petitioner-employer tries to
present itself as speaking for the entire industry,
there is no evidence that it is typical of
employers hiring Filipino seamen or that it can
speak for them.
135
 The contention that manning industries in the
Philippines would not survive if the instant case
is not decided in favor of the petitioner is not
supported by evidence. The Wallem case was
decided on February 20, 1981. There have
been no severe repercussions, no drying up of
employment opportunities for seamen, and
none of the dire consequences repeatedly
emphasized by the petitioner. Why should Vir-
Jen be an exception?
The wages of seamen engaged in international
shipping are shouldered by the foreign principal.
The local manning office is an agent whose
primary function is recruitment and who usually
gets a lump sum from the shipowner to defray
the salaries of the crew. The hiring of seamen
and the determination of their compensation is
subject to the interplay of various market factors
and one key factor is how much in terms of
profits the local manning office and the foreign
shipowner may realize after the costs of the
voyage are met. And costs include salaries of
officers and crew members. (at pp. 585-586)
The Wallem Shipping case, was decided in 1981. Vir-Jen
Shipping was decided in 1983. It is now 1989. There has'been no
drying up of employment opportunities for Filipino seamen. Not only
have their wages improved thus leading ITF to be placid and quiet
all these years insofar as Filipinos are concerned but the hiring of
Philippine seamen is at its highest level ever.
Reporting its activities for the year 1988, the Philippine Overseas
Employment Administration (POEA) stated that there will be an
increase in demand for seamen based overseas in 1989 boosting
the number to as high as 105,000. This will represent a 9.5 percent
increase from the 1988 aggregate. (Business World, News
Briefs, January 11, 1989 at page 2) According to the POEA,
seabased workers numbering 95,913 in 1988 exceeded by a wide
margin of 28.15 percent the year end total in 1987. The report
shows that sea-based workers posted bigger monthly increments
compared to those of landbased workers. (The Business
Star, Indicators, January 11, 1988 at page 2)
Augmenting this optimistic report of POEA Administrator Tomas
Achacoso is the statement of Secretary of Labor Franklin M. Drilon
that the Philippines has a big jump over other crewing nations
because of the Filipinos' abilities compared with any European or
westem crewing country. Drilon added that cruise shipping is also a
growing market for Filipino seafarers because of their flexibility in
handling odd jobs and their expertise in handling almost all types of
ships, including luxury liners. (Manila Bulletin, More Filipino
Seamen Expected Development, December 27, 1988 at page
29).lâwphî1.ñèt Parenthetically, the minimum monthly salary of able
bodied seamen set by the ILO and adhered to by the Philippines is
now $276.00 (id.) more than double the $130.00 sought to be
enforced by the public respondents in these petitions.
The experience from 1981 to the present vindicates the finding
in Vir-Jen Shipping that a decision in favor of the seamen would not
necessarily mean severe repercussions, drying up of employment
opportunities for seamen, and other dire consequences predicted by
manning agencies and recruiters in the Philippines.
From the foregoing, we find that the NSB and NLRC committed
grave abuse of discretion in finding the petitioners guilty of using
intimidation and illegal means in breaching their contracts of
employment and punishing them for these alleged offenses.
Consequently, the criminal prosecutions for estafa in G.R. Nos.
57999 and 58143-53 should be dismissed.
WHEREFORE, the petitions are hereby GRANTED. The decisions
of the National Seamen Board and National Labor Relations
Commission in G. R. Nos. 64781-99 are REVERSED and SET
ASIDE and a new one is entered holding the petitioners not guilty of
the offenses for which they were charged. The petitioners'
suspension from the National Seamen Board's Registry for three (3)
years is LIFTED. The private respondent is ordered to pay the
petitioners their earned but unpaid wages and overtime
pay/allowance from November 1, 1978 to December 14, 1978
according to the rates in the Special Agreement that the parties
entered into in Vancouver, Canada.
The criminal cases for estafa, subject matter of G. R. Nos. 57999
and 58143-53, are ordered DISMISSED.
SO ORDERED.
G.R. No. 82252 February 28, 1989
SEAGULL MARITIME CORP. AND PHILIMARE SHIPPING &
EQUIPMENT SUPPLY, petitioners
vs.
NERRY D. BALATONGAN, NATIONAL LABOR RELATIONS
COMMISSION AND PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, respondents.
Tanjuatco, Oreta, Tanjuatco, Berenguer & San Vicente for
petitioners.
The Solicitor General for public respondent.
Benjamin B. Vergara for private respondent
GANCAYCO, J.:
On November 2, 1982, a "crew Agreement" was entered into by
private respondent Nerry D. Balatongan and Philimare Shipping and
Equipment Supply (hereinafter called Philimare) whereby the latter
employed the former as able seaman on board its vessel "Santa
Cruz" (renamed "Turtle Bay") with a monthly salary of US $ 300.00.
Said agreement was processed and approved by the National
Seaman's Board (NSB) on November 3, 1982. 1
While on board said vessel the said parties entered into a
supplementary contract of employment on December 6,
1982 2 which provides among others:
1. The employer shall be obliged to insure the
employee during his engagement against death
or permanent invalidity caused by accident on
board up to:
US $ 40,000 - for death
caused by accident
US $ 50,000 - for
permanent total disability
caused by accident. 3
On October 6, 1983 Balatongan met an accident in the Suez Canal,
Egypt as a result of which he was hospitalized at the Suez Canal
Authority Hospital. Later, he was repatriated to the Philippines and
was hospitalized at the Makati Medical Center from October 23,
1983 to March 27, 1984. On August 19, 1985 the medical certificate
was issued describing his disability as "permanent in nature."
Balatongan demanded payment for his claim for total disability
insurance in the amount of US $ 50,000.00 as provided for in the
contract of employment but his claim was denied for having been
submitted to the insurers beyond the designated period for doing so.
Thus, Balatongan filed on June 21, 1985 a complaint against
Philimare and Seagull Maritime Corporation (hereinafter called
Seagull) in the Philippine Overseas Employment Administration
(POEA) for non-payment of his claim for permanent total disability
with damages and attorney's fees.
After the parties submitted their respective position papers with the
corresponding documentary evidence, the officer-in-charge of the
Workers Assistance and Adjudication Office of the POEA rendered a
decision on May 2, 1986, the dispositive part of which reads as
follows:
WHEREFORE, premises considered,
respondents are hereby ordered to pay
complainant the amount of US $ 50,000.00
representing permanent total disability
insurance and attorney's fees at 10% of the
award. Payment should be made in this Office
within ten (10) days from receipt hereof at the
136
 prevailing rate of exchange. This Office cannot
however rule on damages, having no
jurisdiction on the matter.
SO ORDERED. 4
Seagull and Philimare appealed said decision to the National Labor
Relations Commission (NLRC) on June 4, 1986. Pending resolution
of their appeal because of the alleged transfer of the agency of
Seagull to Southeast Asia Shipping Corporation, Seagull filed on
April 28, 1987 a Motion For Substitution/Inclusion of Party
Respondent which was opposed by Balatongan. 5 This was followed
by an ex-parte motion for leave to file third party complaint on June
4, 1987 by Seagull. A decision was promulgated on December 7,
1987 denying both motions and dismissing the appeal for lack of
merit. 6 A motion for reconsideration of said decision was denied for
lack of merit in a resolution dated February 26, 1988. 7
Hence, Seagull and Philimare filed this petition for certiorari with a
prayer for the issuance of a temporary restraining order based on
the following grounds:
1. Respondent POEA erred in applying the
Supplemental Contract;
2. Respondents POEA and NLRC acted with
grave abuse of discretion in holding that the
Supplemental Contract was signed on board
MV Santa Cruz by and between private
respondent and your petitioner; and
3. Respondent NLRC acted with grave abuse of
discretion in not giving due course to your
petitioners' Motion for Leave to File Third Party
Complaint as well as their Motion for
Inclusion/Substitution of respondents. 8
On March 21, 1988, the Court issued a temporary restraining order
enjoining respondents from enforcing the questioned decision and
resolution of public respondents.
Petitioners argue that prior to private respondent's departure he
executed a crew agreement on November 2, 1982 which was duly
approved by the POEA; that the supplementary contract of
employment that was entered into on board the vessel "Turtle Bay"
which provides for a US $ 50,000.00 insurance benefit in case of
permanent disability was neither approved nor verified by
respondent POEA; and that the same violates Article 34(i) of the
Labor Code, as amended, which provides as follows:
Art. 34. Prohibited Practices. - It shall be
unlawful for any individual, entity, licensee, or
holder of authority:
xxx xxx xxx
xxx xxx xxx
(i) to substitute or alter employment contracts
approved and verified by the Department of
Labor from the time of actual signing thereof by
the parties up to and including the period of
expiration of the same without the approval of
the Department of Labor.
Petitioners also call attention to Article VIII, paragraph 2 of the
Supplementary Contract which provides as follows:
2. Notwithstanding his claim against the
insurers the employee hereby expressly waives
all claims of his own or his heirs for
compensation of damages due to death or
permanent invalidity which he suffered during
his engagement against the employers ...
unless his death or permanent invalidity has
been caused by willful act of any of the above-
named persons. 9
Petitioners stress that while public respondents upheld the
applicability of said supplementary contract insofar as it increased
the benefits to private respondent, public respondents considered
the provision on the waiver against all claims by private respondent
to be contrary to public policy.
In its questioned decision dated December 7, 1987, the respondent
NLRC made the following disquisition:
The focal issue for determination is the validity
and enforceability of the second contract of
employment entered into by and between
complainant and respondents on board the
vessel where the former had served as a
member of its complement despite the absence
of NSB verification or approval. With respect to
the findings of facts in the appealed decision,
We consider the same as duly supported by
substantial evidence and the admissions of the
parties in their pleadings.
Much stress and emphasis are made by the
respondents in their appeal that this claim has
no legal basis or footing inasmuch as the
second contract of employment containing a
total disability insurance benefit of US $
50,000.00, much more than that embodied in
the first contract of employment which was
approved by the defunct NSB, was not verified
or approved by the latter. Accordingly, the
respondents posit the argument that subject
claim may not prosper pursuant to the
provisions of Art. 34(i) of the Labor Code, as
amended, which provides that it shall be
unlawful for any individual, entity, licensee, or
holder of authority '(T)o substitute or alter
employment contracts approved and verified by
the Department of Labor from the time of actual
signing thereof by the parties up to and
including the period of expiration of the same
without the approval of the Department of
Labor.
Did the POEA commit a reversible error when it
considered the second contract of employment
as valid sans any verification or approval
thereof by the NSB? Our answer to this query is
in the negative. Apparently, the intention of the
law when Art. 34 of the Labor Code was
enacted is to provide for the prohibited and
unlawful practices relative to recruitment and
placement. As shown in the 'Explanatory Note'
of Parliamentary Bill No. 4531, pertaining to Art.
34 (supra), thus:
Many of the provisions are already existing and
were simply restated. Some however were
restated with modifications and new ones were
introduced to reflect what in the past have been
noted to be pernicious practices which tend
to place workers at a disadvantage.'
it is indubitably clear that the purpose of having
overseas contracts of employment approved by
the NSB(POEA) is whether or not such
contracts conform to the minimum terms and
conditions prescribed by the NSB (POEA). In
other words, the law did not at all prohibit any
alteration which provided for increases in wages
or other benefits voluntarily granted by the
employer. Precisely, under Section 2, Rule 1,
Book V of the Rules and Regulations of the
POEA, '(t)he standard format of employment
contracts shall set the minimum standards of
the terms and conditions of employment. All
employers and principals shall adopt the model
contract in connection with the hiring of workers
without prejudice to their adopting other terms
and conditions of employment over and above
the minimum standards of the
Administration.' Where, as here, it is admitted
that the second contract although not verified or
approved by the NSB (POEA) granted more
benefits by way of total disability insurance to
the complainant, the respondents may not be
allowed to disvow their own voluntary acts by
insisting that such beneficial contract in favor of
the seaman is null and void. (Emphasis
supplied.) 10
We agree.
137
The supplementary contract of employment was entered into
between petitioner and private respondent to modify the original
contract of employment The reason why the law requires that the
POEA should approve and verify a contract under Article 34(i) of the
Labor Code is to insure that the employee shall not thereby be
placed in a disadvantageous position and that the same are within
the minimum standards of the terms and conditions of such
employment contract set by the POEA. This is why a standard
format for employment contracts has been adopted by the
Department of Labor. However, there is no prohibition against
stipulating in a contract more benefits to the employee than those
required by law. Thus, in this case wherein a "supplementary
contract" was entered into affording greater benefits to the employee
than the previous one, and although the same was not submitted for
the approval of the POEA, the public respondents properly
considered said contract to be valid and enforceable. Indeed, said
pronouncements of public respondents have the effect of an
approval of said contract. Moreover, as said contract was voluntarily
entered into by the parties the same is binding between them. 11 Not
being contrary to law, morals, good customs, public policy or public
order, its validity must be sustained. 12 By the same token, the court
sustains the ruling of public respondents that the provision in the
supplementary contract whereby private respondent waives any
claim against petitioners for damages arising from death or
permanent disability is against public policy, oppressive and inimical
to the rights of private respondent. The said provision defeats and is
inconsistent with the duty of petitioners to insure private respondent
against said contingencies as clearly stipulated in the said contract.
Petitioners however argue that they could not have entered into said
supplementary contract of employment as Philimare was a mere
manning agent in the Philippines of the shipping company managed
by Navales Shipping Management and Marine Consultant (Pte) Ltd.,
its principal. Petitioners assert that the said supplementary contract
was entered into by private respondent with their principal, Navales
Shipping Management and Marine Consultant (Pte) Ltd. on board
the vessel Turtle Bay so petitioners cannot be held responsible
thereunder.
This Court is not a trier of facts and the findings of the public
respondents are conclusive in this proceeding. Public respondents
found that petitioner Philimare and private respondent entered into
said supplementary contract of employment on December 6, 1982.
Assuming for the sake of argument that it was petitioners' principal
which entered into said contract with private respondent,
nevertheless petitioner, as its manning agent in the Philippines, is
jointly responsible with its principal thereunder. 13
There is no question that under the said supplementary contract of
employment, it is the duty of the employer, petitioners herein, to
insure the employee, during his engagement, against death and
permanent invalidity caused by accident on board up to $ 50,000.00.
Consequently, it is also its concomitant obligation to see to it that the
claim against the insurance company is duly filed by private
respondent or in his behalf, and within the time provided for by the
terms of the insurance contract.
In this case, the private respondent met the accident on October 6,
1983. Since then, he was hospitalized at the Suez Canal Authority
Hospital and thereafter be was repatriated to the Philippines wherein
he was also hospitalized from October 22, 1983 to March 27, 1984.
It was only on August 19, 1985 that he was issued a medical
certificate describing his disability to be permanent in nature. It was
not possible for private respondent to file a claim for permanent
disability with the insurance company within the one-year period
from the time of the injury, as his disability was ascertained to be
permanent only thereafter. Petitioners did not exert any effort to
assist private respondent to recover payment of his claim from the
insurance company. They did not even care to dispute the finding of
the insurer that the claim was not flied on time. 14 Petitioners must,
therefore, be held responsible for its omission, if not negligence, by
requiring them to pay the claim of private respondent.
The Court finds that the respondent NLRC did not commit a grave
abuse of discretion in denying petitioners, motion for leave to file
third-party complaint and substitution inclusion of party respondent.
Such motion is largely addressed to the discretion of the said
Commission. Inasmuch as the alleged transfer of interest took place
only after the POEA had rendered its decision, the denial of the
motion so as to avoid further delay in the settlement of the claim of
private respondent was well-taken. At any rate, petitioners may
pursue their claim against their alleged successor-in-interest in a
separate suit.
WHEREFORE, the petition is hereby DISMISSED for lack of merit
and the temporary restraining order issued by this Court on March
21, 1988 is hereby LIFTED. No costs. This decision is immediately
executory.
SO ORDERED.
G.R. No. 109808 March 1, 1995
ESALYN CHAVEZ, petitioner,
vs.
HON. EDNA BONTO-PEREZ, HON. ROGELIO T. RAYALA, HON.
DOMINGO H. ZAPANTA, HON. JOSE N. SARMIENTO, CENTRUM
PROMOTIONS PLACEMENT CORPORATION, JOSE A.
AZUCENA, JR., and TIMES SURETY & INSURANCE COMPANY,
INC. respondents.
PUNO, J.:
One of the anguished cries in our society today is that while our laws
appear to protect the poor, their interpretation is sometimes anti-
poor. In the case at bench, petitioner, a poor, uncounselled
entertainment dancer signed a contract with her Japanese employer
calling for a monthly salary of One Thousand Five Hundred U.S.
Dollars (US$1,500) but later had to sign an immoral side agreement
reducing her salary below the minimum standard set by the POEA.
Petitioner invoked the law to collect her salary differentials, but
incredibly found public respondent straining the seams of our law to
disfavor her. There is no greater disappointment to the poor like
petitioner than to discover the ugly reality behind the beautiful
rhetoric of laws. We will not allow this travesty.
This is a petition for certiorari to review the Decision of the National
Labor Relations Commission (NLRC),1 dated December 29, 1992,
which affirmed the Decision of public respondent Philippine
Overseas Employment Agency (POEA) Administrator Jose N.
Sarmiento, dated February 17, 1992, dismissing petitioner's
complaint for unpaid salaries amounting to Six Thousand Dollars
(US$6,000.00).
The facts are undisputed.
On December 1, 1988, petitioner, an entertainment dancer, entered
into a standard employment contract for overseas Filipino artists and
entertainers with Planning Japan Co., Ltd.,2 through its Philippine
representative, private respondent Centrum Placement &
Promotions Corporation. The contract had a duration of two (2) to
six (6) months, and petitioner was to be paid a monthly
compensation of One Thousand Five Hundred Dollars
(US$1,5000.00). On December 5, 1888, the POEA approved the
contract. Subsequently, petitioner executed the following side
agreement with her Japanese employer through her local manager,
Jaz Talents Promotion:
Date: Dec. 10, 1988
SUBJECT: Salary Deduction
MANAGERIAL COMMISSION
DATE OF DEPARTURE: _________________
ATTENTION: MR. IWATA
I, ESALYN CHAVEZ, DANCER, do hereby with
my own free will and voluntarily have the honor
to authorize your good office to please deduct
the amount of TWO HUNDRED FIFTY
DOLLARS ($250) from my contracted monthly
salary of SEVEN HUNDRED FIFTY DOLLARS
($750) as monthly commission for my Manager,
Mr. Jose A. Azucena, Jr.
That, my monthly salary (net) is FIVE
HUNDRED DOLLARS ($500).
138

On December 16, 1988, petitioner left for Osaka, Japan, where she
worked for six (6) months, until June 10, 1989. She came back to
the Philippines on June 14, 1989.
Petitioner instituted the case at bench for underpayment of wages
with the POEA on February 21, 1991. She prayed for the payment of
Six Thousand U.S. Dollars (US$6,000.00), representing the unpaid
portion of her basic salary for six months. Charged in the case were
private respondent Centrum Promotions and Placement
Corporation, the Philippine representative of Planning Japan, Co.,
Inc., its insurer, Times Surety and Insurance Co., Inc., and Jaz
Talents Promotion.
The complaint was dismissed by public respondent POEA
Administrator on February 17, 1992. He ratiocinated, inter alia:
. . . Apparently and from all indications,
complainant (referring to petitioner herein) was
satisfied and did not have any complaint (about)
anything regarding her employment in Japan
until after almost two (2) years (when) she filed
the instant complaint on February 21, 1991. The
records show that after signing the Standard
Employment Contract on December 1, 1988,
she entered into a side agreement with the
Japanese employer thru her local manager, Jaz
Talents Promotion consenting to a monthly
salary of US$750.00 which she affirmed during
the conference of May 21, 1991. Respondent
agency had no knowledge nor participation in
the said agreement such that it could not be
faulted for violation of the Standard Employment
Contract regarding the stipulated salary. We
cannot take cognizance of such violation when
one of the principal party (sic) thereto opted to
receive a salary different from what has been
stipulated in their contract, especially so if the
contracting party did not consent/participate in
such arrangement. Complainant (petitioner)
cannot now demand from respondent agency to
pay her the salary based (on) the processed
Employment Contract for she is now considered
in bad faith and hence, estopped from claiming
thereto thru her own act of consenting and
agreeing to receive a salary not in accordance
with her contract of employment. Moreover, her
self-imposed silence for a long period of time
worked to her own disadvantage as she allowed
laches to prevail which barred respondent from
doing something at the outset. Normally, if a
person's right (is) violated, she/he would
immediately react to protect her/his rights which
is not true in the case at bar.
The term laches has been defined as one's
negligence or failure to assert his right in due
time or within reasonable time from the accrual
of his cause of action, thus, leading another
party to believe that there is nothing wrong with
his own claim. This resulted in placing the
negligent party in estoppel to assert or enforce
his right. . . . Likewise, the Supreme Court in
one case held that not only is inaction within
reasonable time to enforce a right the basic
premise that underlies a valid defense of laches
but such inaction evinces implied consent or
acquiescence to the violation of the right . . .
Underg the prevailing circumstances of this case,
it isd outside the regulatory powers of the
Administration
. to rule on the liability of
respondent Jaz Talents Promotions, if any, (it)
notbbeing a licensed private agency but a
promotion
y which trains entertainers for abroad.
p
xxx xxx xxx
e
t
i
(Citations omitted.)
t
i
On appeal, the NLRC upheld the Decision, thus:
o
n
Wee fail to see any conspiracy that the
r
complainant (petitioner herein) imputes to the
)
respondents. She has, to put it bluntly, not
3
established and/or laid the basis for Us to arrive
at a conclusion that the respondents have been
and should be held liable for her claims.
The way We see it, the records do not at all
indicate any connection between respondents
Centrum Promotion & Placement Corporation
and Jaz Talents Promotion.
There is, therefore, no merit in the appeal.
Hence, We affirmed.4
Dissatisfied with the NLRC's Decision, petitioner instituted the
present petition, alleging that public respondents committed grave
abuse of discretion in finding: that she is guilty of laches; that she
entered into a side contract on December 10, 1988 for the reduction
of her basic salary to Seven Hundred Fifty U.S. Dollars (US$750.00)
which superseded, nullified and invalidated the standard
employment contract she entered into on December 1, 1988; and
that Planning Japan Co., Ltd. and private respondents are not
solidarily liable to her for Six Thousand US Dollars (US$6,000.00) in
unpaid wages.5
The petition is meritorious.
Firstly, we hold that the managerial commission agreement
executed by petitioner to authorize her Japanese Employer to
deduct Two Hundred Fifty U.S. Dollars (US$250.00) from her
monthly basic salary is void because it is against our existing laws,
morals and public policy. It cannot supersede the standard
employment contract of December 1, 1988 approved by the POEA
with the following stipulation appended thereto:
It is understood that the terms and conditions
stated in this Employment Contract are in
conformance with the Standard Employment
Contract for Entertainers prescribed by the
POEA under Memorandum Circular No. 2,
Series of 1986. Any alterations or changes
made in any part of this contract without prior
approval by the POEA shall be null and
void; 6 (Emphasis supplied.)
The stipulation is in line with the provisions of Rule II, Book V and
Section 2(f), Rule I, Book VI of the 1991 Rules and Regulations
Governing Overseas Employment, thus:
Book V, Rule II
Sec. 1. Employment Standards. The
Administration shall determine, formulate and
review employment standards in accordance
with the market development and welfare
objectives of the overseas employment program
and the prevailing market conditions.
Sec. 2. Minimum Provisions for Contract. The
following shall be considered the minimum
requirements for contracts of employment:
a. Guaranteed wages for
regular working hours and
overtime pay for services
rendered beyond regular
working hours in
accordance with the
139
 standards established by
the Administration;
xxx xxx xxx
Sec. 3. Standard Employment Contract. The
administration shall undertake development
and/or periodic review of region, country and
skills specific employment contracts for
landbased workers and conduct regular review
of standard employment contracts (SEC) for
seafarers. These contracts shall provide for
minimum employment standards herein
enumerated under Section 2, of this Rule and
shall recognize the prevailing labor and social
legislations at the site of employment and
international conventions. The SEC shall set the
minimum terms and conditions of employment.
All employers and principals shall adopt the
SEC in connection with the hiring of workers
without prejudice to their adoption of other
terms and conditions of employment over and
above the minimum standards of the
Administration. (Emphasis supplied.)
and
BOOK VI, RULE I
Sec. 2. Grounds for suspension/cancellation of
license.
xxx xxx xxx
f. Substituting or altering employment contracts
and other documents approved and verified by
the Administration from the time of actual
signing thereof by the parties up to and
including the period of expiration of the same
without the Administration's approval.
xxx xxx xxx
(Emphasis supplied.)
Clearly, the basic salary of One Thousand Five Hundred U.S.
Dollars (US$1,500.00) guaranteed to petitioner under the parties'
standard employment contract is in accordance with
the minimum employment standards with respect to wages set by
the POEA, Thus, the side agreement which reduced petitioner's
basic wage to Seven Hundred Fifty U.S. Dollars (US$750.00) is null
and void for violating the POEA's minimum employment standards,
and for not having been approved by the POEA. Indeed, this side
agreement is a scheme all too frequently resorted to by
unscrupulous employers against our helpless overseas workers who
are compelled to agree to satisfy their basic economic needs.
Secondly. The doctrine of laches or "stale demands"' cannot be
applied to petitioner. Laches has been defined as the failure or
neglect for an unreasonable and unexplained length time to do that
which, by exercising due diligence, could or should have been done
earlier, 7 thus giving rise to a presumption that the party entitled to
assert it either has abandoned or declined to assert it. 8 It is not
concerned with mere lapse of time; the fact of delay, standing alone,
is insufficient to constitute laches.9
The doctrine of laches is based upon grounds of public policy which
requires, for the peace of society, the discouragement of stale
claims, and is principally a question of the inequity or unfairness of
permitting a right or claim to be enforced or asserted. 10 There is no
absolute rule as to what constitutes laches; each case is to be
determined according to its particular circumstances. The question
of laches is addressed to the sound discretion of the court, and
since it is an equitable doctrine, its application is controlled by
equitable considerations. It cannot be worked to defeat justice or to
perpetrate fraud and injustice.11
In the case at bench, petitioner filed her claim well within the three-
year prescriptive period for the filing of money claims set forth in
Article 291 of the Labor Code. 12 For this reason, we hold the
doctrine of laches inapplicable to petitioner. As we ruled in Imperial
Victory Shipping Agency v. NLRC, 200 SCRA 178 (1991):
. . . Laches is a doctrine in equity while
prescription is based on law. Our courts are
basically courts of law not courts of equity.
Thus, laches cannot be invoked to resist the
enforcement of an existing legal right. We have
ruled in Arsenal v. Intermediate Appellate
Court . . . that it is a long standing principle that
equity follows the law. Courts exercising equity
jurisdiction are bound by rules of law and have
no arbitrary discretion to disregard them.
In Zabat, Jr. v. Court of Appeals . . ., this Court
was more emphatic upholding the rules of
procedure. We said therein:
As for equity, which has
been aptly described as a
"justice outside legality,"
this applied only in the
absence of, and never
against, statutory law or, as
in this case, judicial rules of
procedure. Aequetas
nunguam contravenit legis.
The pertinent positive rules
being present here, they
should pre-empt and
prevail over all abstract
arguments based only on
equity.
Thus, where the claim was filed within the three-
year statutory period, recovery therefore cannot
be barred by laches. Courts should never apply
the doctrine of laches earlier than the expiration
of time limited for the commencement of actions
at law.
xxx xxx xxx
(Emphasis supplied. Citations omitted.)
Thirdly, private respondents Centrum and Times as well as Planning
Japan Co., Ltd. — the agency's foreign principal — are solidarily
liable to petitioner for her unpaid wages. This is in accordance with
stipulation 13.7 of the parties' standard employment contract which
provides:
13.7. The Employer (in this case, Planning
Japan Co., Ltd. ) and its locally (sic)
agent/promoter/representative (private
respondent Centrum Promotions & Placement
Corporation) shall be jointly and
severally responsible for the proper
implementation of the terms and conditions in
this Contract. 13 (Emphasis supplied.)
This solidary liability also arises from the provisions of
Section 10(a)(2), Rule V, Book I of the Omnibus Rules
Implementing the Labor Code, as amended, thus:
Sec. 10. Requirement before recruitment. —
Before recruiting any worker, the private
employment agency shall submit to the Bureau
the following documents:
a) A formal appointment or agency contract
executed by a foreign-based employer in favor
of the license holder to recruit and hire
personnel for the former . . . . Such formal
appointment or recruitment agreement shall
contain the following provisions, among others:
xxx xxx xxx
2. Power of the agency to sue and be sued
jointly and solidarily with the principal or foreign
based employer for any of the violations of the
recruitment agreement and the contracts of
employment.
xxx xxx xxx
(Emphasis supplied.)
140
Our overseas workers constitute an exploited class. Most of them
come from the poorest sector of our society. They are thoroughly
disadvantaged. Their profile shows they live in suffocating slums,
trapped in an environment of crime. Hardly literate and in ill health,
their only hope lies in jobs they can hardly find 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 in our
land. Regretfully, respondent public officials who should sympathize
with the working class appear to have a different orientation.
IN VIEW WHEREOF, the petition is GRANTED. The Decisions of
respondent POEA Administrator and NLRC Commissioners in
POEA Case No. Adj. 91-02-199 (ER), respectively dated February
17 and December 29, 1992, and the Resolution of the NLRC, dated
March 23, 1993, are REVERSED and SET ASIDE. Private
respondents are held jointly and severally liable to petitioner for the
payment of SIX THOUSAND US DOLLARS (US$6,000.00) in
unpaid wages. Costs against private respondents.
SO ORDERED.
G.R. No. 115497 September 16, 1996
INTERORIENT MARITIME ENTERPRISES, INC., FIRCROFT
SHIPPING CORPORATION and TIMES SURETY & INSURANCE
CO., INC., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and
CONSTANCIA PINEDA, respondents.
PANGANIBAN, J.:
Are the local crewing or manning agent and its foreign principal (the
shipowner) liable for the death of a Filipino seaman-employee who,
after having been discharged, was killed in transit while being
repatriated home?
The instant petition 1 seeks the reversal and/or modification of the
Resolution 2 dated March 30, 1994 of public respondent National
Labor Relations Commission 3 dismissing the appeals of petitioners
and affirming the decision dated November 16, 1992 4 of Philippine
Overseas Employment Administration (POEA) Administrator
Felicisimo C. Joson, which ordered
that. 5
WHEREFORE, in view of the foregoing
consideration, respondents are hereby jointly
and severally held liable to pay the complainant
the following amounts:
1. P130,000.00 as death compensation
benefits.
2. P18,000.00 as burial expenses.
The Facts
The proceedings below originated as a claim for death
compensation benefits filed by Constancia Pineda as heir of her
deceased son, seaman Jeremias Pineda, against Interorient
Maritime Enterprises, Inc. and its foreign principal, Fircroft Shipping
Corporation and the Times Surety and Insurance Co., Inc. The
following facts were found by the POEA Administrator: 6
As can be gathered from the records of the
case, it was alleged that deceased seaman,
Jeremias Pineda was contracted to work as
Oiler on board the vessels, "MV Amazonia",
owned and operated by its foreign principal,
Fircroft Shipping Corporation for a period of
nine (9) months with additional three (3) months
upon mutual consent of both parties with a
monthly basic salary of US$276.00 plus fixed
overtime rate of US$83.00 and a leave pay of 2
1/2 days per month; that on October 2, 1989, he
met his death when he was shot by a Thai
Policeman in Bangkok, Thailand; that
considering that the deceased seaman was
suffering from mental disorders aggravated by
threats on his life by his fellow seamen, the Ship
Captain should not have allowed him to travel
alone.
xxx xxx xxx
In its Answer/Position Paper, respondent
agency averred that deceased seaman signed a
contract of employment as Oiler for a period of
nine (9) months with additional three (3) months
upon mutual consent of both parties with a
monthly salary of US$276.00, fixed overtime
rate of US$83.00; that on December 21, 1988,
deceased seaman jointed the vessels MV
Amazonia and proceeded to discharge his
duties as Oiler; that on September 28, 1989, he
finished his contract and was discharged from
the port of Dubai for repatriation to Manila; that
his flight schedule from Dubai to the Philippines
necessitated a stopover at Bangkok, Thailand,
and during said stopover he disembarked on his
own free will and failed to join the connecting
flight to Hongkong with final destination to
Manila; that on October 5, 1990, it received a
fax transmission from the Department of
Foreign Affairs to the effect that Jeremias
Pineda was shot by a Thai Officer on duty on
October 2, 1989 at around 4:00 P.M.; that the
police report submitted to the Philippine
Embassy in Bangkok confirmed that it was
Pineda who "approached and tried to stab the
police sergeant with a knife and that therefore
he was forced to pull out his gun and shot
Pineda"; that they are not liable to pay any
death/burial benefits pursuant to the provisions
of Par. 6, Section C. Part II, POEA Standard
Format of Employment which state(s) that "no
compensation shall be payable in respect of any
injury, (in)capacity, disability or death resulting
from a willful (sic) act on his own life by the
seaman"; that the deceased seaman died due
to his own willful (sic) act in attacking a
policeman in Bangkok who shot him in self-
defense.
After the parties presented their respective evidence, the POEA
Administrator rendered his decision holding petitioners liable for
death compensation benefits and burial expenses.
Petitioners appealed the POEA decision to the public respondent. In
a Decision dated March 30, 1994, public respondent upheld the
POEA.
Thus, this recourse to this Court by way of a special civil action
for certiorari per Rule 65 of the Rules of Court.
The Issues
The petitioners made the following "assignment of errors":
Respondent NLRC committed a grave abuse of
discretion in ruling that herein petitioners are
liable for death compensation benefits despite
the fact that there is no direct evidence proving
that Pineda was mentally sick at the time of
repatriation.
Respondent NLRC committed a serious error of
law in not upholding the provisions of Par. 6,
Section C, Part II of the POEA standard format
Contract of Employment.
Respondent NLRC committed a grave abuse of
discretion in finding for compensability of
Pineda's death when respondents (should read
"petitioners") have proven that his death was
not work-connected.
The principal issue in this case is whether the petitioners can be
held liable for the death of seaman Jeremias Pineda.
141
The petitioners challenge the factual bases of the NLRC Decision,
and argue that there was "no evidence, whether documentary or
testimonial, that the deceased Pineda, at the time of his repatriation
was not in full control of his mental faculties", and that "there (was)
no showing that seaman Pineda acted strangely when he
disembarked from the vessel" in Dubai where he was discharge, and
from which point he flew to Bangkok without any untoward incident
during the entire trip. They thus insist that they were under no
obligation to have Pineda accompanied home when he was
discharged at the end of the contract term of nine months, that they
were in no position to control the deceased's movements and
behavior after he was repatriated and therefore should not be held
answerable for the deceased's own voluntary acts, and that the
deceased could have, while in Bangkok, ingested some drugs or
other mindaltering substance resulting in his aggressive behavior
and untimely demise.
The Court's Ruling
Procedural and Substantive Defects
At the outset, we note that the petition suffers from serious
procedural defects that warrant its being dismissed outright.
Petitioners acted prematurely, not having filed any motion for
reconsideration with the public respondent before bringing the
instant petition to this Court. This constitutes a fatal infirmity.
. . . The unquestioned rule in this jurisdiction is
that certiorari will lie only if there is no appeal or
any other plain, speedy and adequate remedy
in the ordinary course of law against the acts of
public respondent. In the instant case, the plain
and adequate remedy expressly provided by the
law was a motion for reconsideration of the
assailed decision, based on palpable or patent
errors, to be made under oath and filed within
ten (10) calendar days from receipt of the
questioned decision.7
(T)he filing of such a motion is intended to
afford public respondent an opportunity to
correct any actual or fancied error attributed to it
by way of a re-examination of the legal and
factual aspects of the case. Petitioner's inaction
or negligence under the circumstances is
tantamount to a deprivation of the right and
opportunity of the respondent Commission to
cleanse itself of an error unwittingly committed
or to vindicate itself of an act unfairly imputed. .
..8
. . . And for failure to avail of the correct remedy
expressly provided by law, petitioner has
permitted the subject Resolution to be come
final and executory after the lapse of the ten day
period within which to file such motion for
reconsideration. 9
But even if the aforesaid procedural defect were to be overlooked,
the instant petition nevertheless suffers from serious substantive
flaws. The petition assails the Resolution of the respondent
Commission as lacking factual and legal bases to support the same.
A petition for certiorari under Rule 65 of the Rules of Court will lie
only in cases where a grave abuse of discretion or an act without or
in excess of jurisdiction is clearly shown to have been committed by
the respondent Commission, and this Court's jurisdiction to review
decisions or resolutions of the respondent NLRC does not include a
correction of its evaluation of the evidence. 10 Moreover, it is a
fundamental rule that the factual findings of quasi-judicial agencies
like the respondent NLRC, if supported by substantial evidence, are
generally accorded not only great respect but even finality, and are
binding upon this Court, unless the petitioner is able to clearly
demonstrate that respondent Commission had arbitrarily
disregarded evidence before it or had misapprehended evidence to
such an extent as to compel a contrary conclusion if such evidence
had been properly appreciated. 11
First Issue: No Direct Evidence of Mental State?
At any rate, even disregarding for the nonce the substantive as well
as procedural defects discussed above, a judicious review of the
records of this case turns up no indication whatsoever that the
respondent Commission committed any grave abuse or acted
beyond or without jurisdiction. On the contrary, the petitioners
contention that the assailed Resolution has no factual and legal
bases is belied by the adoption with approval by the public
respondent of the findings of the POEA Administrator, which recites
at length the reasons for holding that the deceased Pineda was
mentally sick prior to his death and concomitantly, was no longer in
full control of his mental faculties.
First, a word about the evidence supporting the findings of the
POEA Administrator. We have held that claims of overseas workers
against their foreign employers should not be subjected to the rules
of evidence and procedure that courts usually apply to other
complainants who have more facility in obtaining the required
evidence to prove their demands. 12 Section 5, Rule 133 of the
Rules of Court provides that in cases filed before administrative or
quasi-judicial bodies (like the POEA), a fact may be deemed
established if it is supported by substantial evidence, i.e., that
amount of evidence which a reasonable mind might accept as
adequate to justify a conclusion. 13 In this instance, seaman Pineda,
who was discharged in Dubai, a foreign land, could not reasonably
be expected to immediately resort to and avail of psychiatric
examination, assuming that he was still capable of submitting
himself to such examination at that time, not to mention the fact that
when he disembarked in Dubai, he was already discharged and
without employment — his contract having already run its full term
— and he had already been put on a plane bound for the
Philippines. This explains the lack or absence of direct evidence
showing his mental state.
The circumstances prior to and surrounding his death, however,
provide substantial evidence of the existence of such mental defect
or disorder. Such mental disorder became evident when he failed to
join his connecting flight to Hongkong, having during said stopover
wandered out of the Bangkok airport's immigration area on his own.
We can perceive no sane and sufficient reason for a Pinoy overseas
contract worker or seaman to want to while away his time in a
foreign land, when he is presumably unfamiliar with its native
tongue, with nothing to do and no source of income, and after
having been absent from kith and kin, heart and home for almost an
entire year. Nor can we find any plausible reason for him to be
wielding a knife and scaring away passersby, and even taking a stab
at an armed policeman, unless he is no longer in full possession of
his sanity. To our mind, these circumstances are sufficient in
themselves to produce a firm conviction that the deceased seaman
in this case was no longer in full control of his senses when he left
his work. To reiterate, in this case, no more than substantial
evidence is required.
Second Issue: Employer Exempted from Liability?
It is petitioner's contention that "Pineda's death caused by
his own willful act of attacking a Thai policeman and
getting shot at in self-defense is not compensable",
inasmuch as Par. 6, Section C, Part II of the POEA's
Standard Format Contract of Employment for Seaman
states that:
No compensation shall be payable in respect of
any injury, incapacity, disability
or death resulting from a (deliberate or) willful
act on his own life by the seaman(,) provided,
however, that the employer can prove that such
injury, incapacity, disability or death is directly
attributable to the seaman. (Emphasis
supplied).
Moreover, petitioners contend that this Court already held
in the case of Mabuhay Shipping Services, Inc. vs.NLRC
and Cecilia Sentina 14 that the employer is not liable for
the willful act of an employee on his own life. Further,
Article 172 of the Labor Code provides for a limitation on
the liability of the State Insurance Fund when the
"disability or death was occasioned by the employee's
intoxication, willful intention to injure or kill himself or
another, notorious negligence . . . . ".
Petitioners are in error. This Court agrees with the POEA
Administrator that seaman Pineda was no longer acting
sanely when he attacked the Thai policeman. The report
of the Philippine Embassy in Thailand dated October 9,
1990 depicting the deceased's strange behavior shortly
before he was shot dead, after having wandered around
Bangkok for four days, clearly shows that the man was not
in full control of his own self: 15
(CAD) IN REPLY TO TELEX SENT TO
EMBASSY BY ADM. SARMIENTO/DELA
ROSA OF OWWA/DOLE RE CAUSE OF
DEATH OF DECEASED SEAMAN JEREMIAS
142
 PINEDA, KINDLY ADVICE HIS OFFICE THAT
SUBJECT ARRIVED BANGKOK 1515H ON
BOARD XC903 ON A STOP OVER FLIGHT
FROM DUBAI ON HIS WAY TO HONGKONG
PROCEEDING TO MANILA.
UNFORTUNATELY PINEDA FAILED TO TAKE
THE SAME FLIGHT OUT AT 1630H,
CHECKED OUT OF IMMIGRATION, WENT
OUT OF AIRPORT AND WANDERED OUT
AND FEW DAYS LATER MET HIS UNTIMELY
DEMISE. PLS. REFER TO OURAD DATED 5
OCT 89 QUOTING FULL TEXT OF POLICE
REPORT ADDRESSED TO THIS EMBASSY
RECOUNTING INCIDENT LEADING TO
FATAL SHOOTING OF PINEDA. KINDLY
FURNISH OWWA/DOLE FULL TEXT OF SAID
REPORT FOR THEIR INFO.
PER REPORT RECEIVED FROM AIRPORT
PERSONNEL PINEDA WAS ACTING
STRANGELY, REFUSED TO BOARD HIS
SCHEDULED FLIGHT AND DISAPPEARED
FROM AIRPORT . POLICE REPORT ALSO
CONFIRMED HIS STRANGE BEHAVIOR
LEADING TO HIS ARREST, THEN RUNNING
AMOK AND CAUSING TROUBLE TO
PASSERS AND ATTEMPT TO STAB THE
DUTY POLICEMAN WHO TRIED TO PACIFY
HIM .
PINEDA SEEMED TO HAVE BEEN
SUFFERING FROM SOME MENTAL
DISORDER AS CAN BE GLEANED FROM HIS
PERSONAL LETTERS DISCOVERED AMONG
HIS PERSONAL EFFECTS.HE COMPLAINED
OF SUFFERING FROM SEVERE HEAD PAINS
AND EVEN REPORTED TO CAPTAIN OF A
SHIP ABOUT THREATS ON HIS LIFE BY
FELLOW SEAMAN WHICH INVARIABLY LEAD
(sic) TO HIS BEING REPATRIATED HOME
WHICH GREATLY AFFECTED HIS
DISPOSITION .
SUGGEST DOLE CONTACT CAPTAIN OF M/V
AMAZSON (sic) AND ASCERTAIN AS TO
WHY PINEDA HAVE (sic) TO DISEMBARK
AND SUBSEQUENTLY REPATRIATED. IF
PINEDA WAS ALREADY SUFFERING FROM
MENTAL DISORDER AS FEARED, HE
SHOULD HAVE NOT BEEN ALLOWED TO
TRAVEL HOME ALONE AND SHOULD HAVE
BEEN ACCOMPANIED BY A PHYSICIAN.
(emphasis supplied)
The POEA Administrator ruled, and this Court agrees, that
since Pineda attacked the Thai policeman when he was
no longer in complete control of his mental faculties, the
aforequoted provision of the Standard Format Contract of
Employment exemption the employer from liability should
not apply in the instant case. Firstly, the fact that the
deceased suffered from mental disorder at the time of his
repatriation means that he must have been deprived of
the full use of his reason, and that thereby, his will must
have been impaired, at the very least. Thus, his attack on
the policeman can in no wise be characterized as a
deliberate, willful or voluntary act on his part. Secondly,
and apart from that, we also agree that in light of the
deceased's mental condition, petitioners "should have
observed some precautionary measures and should not
have allowed said seaman to travel home alone", 16 and
their failure to do so rendered them liable for the death of
Pineda. Indeed, "the obligations and liabilities of the
(herein petitioners) do not end upon the expiration of the
contracted period as (petitioners are) duty bound to
repatriate the seaman to the point of hire to effectively
terminate the contract of employment." 17
The instant case should be distinguished from the case
of Mabuhay, where the deceased, Romulo Sentina, had
been in a state of intoxication, then ran amuck and
inflicted injury upon another person, so that the latter in
his own defense fought back and in the process killed
Sentina. Previous to said incident, there was no proof of
mental disorder on the part of Sentina. The cause of
Sentina's death is categorized as a deliberate and willful
act on his own life directly attributable to him. But seaman
Pineda was not similarly situated.
Incidentally, petitioners conjecture that the deceased
could have been on drugs when he assaulted the
policeman. If this had been the case, the Thai police and
the Philippine Embassy in Bangkok would most certainly
have made mention thereof in their respective reports. But
they did not do so.
Third Issue: Was Death Work-Related?
Petitioners further argue that the cause of Pineda's death
"is not one of the occupational diseases listed by law",
and that in the case of De Jesus vs. Employee's
Compensation Commission, 18 this Court held that ". . . for
the sickness and the resulting disability or death to be
compensable, the sickness must be the result of an
occupational disease listed under Annex 'A' of the Rules
(the Amended Rules on Employee's Compensation) with
the conditions set therein satisfied; otherwise, proof must
be shown that the risk of contracting the disease is
increased by the working conditions." 19
Petitioner's reliance on De Jesus is misplaced, as the
death and burial benefits being claimed in this case are
not payable by the Employee's Compensation
Commission and chargeable against the State Insurance
Fund. These claims arose from the responsibility of the
foreign employer together with the local agency for the
safety of the employee during his repatriation and until his
arrival in this country, i.e., the point of hire. Through the
termination of the employment contract was duly effected
in Dubai, still, the responsibility of the foreign employer to
see to it that Pineda was duly repatriated to the point of
hiring subsisted. Section 4, Rule VIII of the Rules and
Regulations Governing Overseas Employment clearly
provides for the duration of the mandatory personal
accident and life insurance covering accident death,
dismemberment and disability of overseas workers:
Sec. 4. Duration of Insurance Coverage. — The
minimum coverage shall take effect upon
payment of the premium and shall be extended
worldwide, on and off the job, for the duration of
the worker's contract plus sixty (60) calendar
days after termination of the contract of
employment; provided that in no case shall the
duration of the insurance coverage be less than
one year. (Emphasis supplied)
The foreign employer may not have been obligated by its
contract to provide a companion for a returning employee,
but it cannot deny that it was expressly tasked by its
agreement to assure the safe return of said worker. The
uncaring attitude displayed by petitioners who, knowing
fully well that its employee had been suffering from some
mental disorder, nevertheless still allowed him to travel
home alone, is appalling to say the least. Such attitude
harks back to another time when the landed gentry
practically owned the serfs, and disposed of them when
the latter had grown old, sick or otherwise lost their
usefulness.
WHEREFORE, premises considered, the petition is
hereby DISMISSED and the Decision assailed in this
petition is AFFIRMED. Costs against petitioners.
SO ORDERED.
G.R. No. 169973 June 26, 2006
PLACEWELL INTERNATIONAL SERVICES
CORPORATION, Petitioner,
vs.
IRENEO B. CAMOTE, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of
Court assails the September 27, 2005 Decision1of the Court of
Appeals in CA-G.R. SP No. 77145, which set aside the November
20, 2002 Resolution2 of the National Labor Relations Commission
143
(NLRC) and reinstated with modifications the May 31, 2002
Decision3 of Labor Arbiter Arturo L. Gamolo.
The records show that on August 15, 1999, petitioner Placewell
International Services Corporation (PISC) deployed respondent
Ireneo B. Camote to work as building carpenter for SAAD Trading
and Contracting Co. (SAAD) at the Kingdom of Saudi Arabia (KSA)
for a contract duration of two years, with a corresponding salary of
US$370.00 per month.
At the job site, respondent was allegedly found incompetent by his
foreign employer; thus the latter decided to terminate his services.
However, respondent pleaded for his retention and consented to
accept a lower salary of SR 800.00 per month. Thus, SAAD retained
respondent until his return to the Philippines two years after.
On November 27, 2001, respondent filed a sworn Complaint4 for
monetary claims against petitioner alleging that when he arrived at
the job site, he and his fellow Filipino workers were required to sign
another employment contract written in Arabic under the constraints
of losing their jobs if they refused; that for the entire duration of the
new contract, he received only SR 590.00 per month; that he was
not given his overtime pay despite rendering nine hours of work
everyday; that he and his co-workers sought assistance from the
Philippine Embassy but they did not succeed in pursuing their cause
of action because of difficulties in communication.
On May 31, 2002, the labor arbiter rendered a decision holding that
the modification of respondent’s employment contract is not allowed
under Section 10 of Republic Act No. 8042 (R.A. No. 8042);5 thus,
he should have received the original contracted salary of US$370.00
per month instead of the new rate given by SAAD. It was also noted
that respondent did not refute petitioner’s allegation regarding the
non-payment of placement and other processing fees prior to
deployment. The labor arbiter also found that there is no differential
as far as respondent’s overtime pay is concerned considering that
he was given overtime pay based on the new rate of SR 800.00.
Since respondent rendered one hour of overtime work per day for
only 18 months, and not the entire 24 months as claimed, the total
overtime pay he received is more or less equivalent to the amount
he ought to have received if the original contracted rate of
US$370.00 was used. Finally, the labor arbiter awarded respondent
attorney’s fees equivalent to 10% of the total judgment award for
being compelled to hire a counsel to protect his rights and interests.
The dispositive portion of the Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered
ORDERING respondent PLACEWELL INTERNATIONAL
SERVICES CORPORATION to pay complainant IRENEO B.
CAMOTE the amount of PESOS: TWO HUNDRED FIFTEEN
THOUSAND FOUR HUNDRED TWENTY FOUR ONLY
(P215,424.00) representing underpayment of wages and attorney’s
fees.
SO ORDERED.6
On appeal by the petitioner, the NLRC set aside the Decision of the
Labor Arbiter, to wit:
WHEREFORE, premises considered, the appealed decision
is Vacated and Set Aside. In lieu thereof, a new judgment is
rendered, dismissing the above-entitled case for lack of cause of
action.
SO ORDERED.7
Aggrieved, respondent filed a Petition for Certiorari under Rule 65 in
the Court of Appeals which set aside the Resolution of the NLRC,
and reinstated with modifications the Decision of the labor arbiter.
The appellate court held that there was a diminution of respondent’s
salary – from a rate of US$370.00 to SR 800.00 per month in clear
violation of Section 10 of R.A. No. 8042.
As to the alleged incompetence of respondent, the appellate court
noted that said allegation has not been substantiated hence should
not be given any credence. Thus, for failure of petitioner to show just
cause for the demotion of respondent, the appellate court granted
the petition, set aside resolution dated November 24, 2000 of the
NLRC, and reinstated the decision of the Labor Arbiter dated May
31, 2002, the dispositive portion of which follows:
WHEREFORE, premises considered, the petition is GRANTED. The
assailed Resolution dated 24 November 2000 of the NLRC, Fifth
Division is SET ASIDE and the Decision of the Labor Arbiter dated
31 May 2002 is REINSTATEDand AFFIRMED with modifications.
The exchange rate shall be that prevailing at the time of actual
payment. Private respondent, PLACEWELL INTERNATIONAL
SERVICES CORPORATION is hereby ordered jointly and severally
liable to pay petitioner, IRENEO B. CAMOTE the following:
Per POEA approved contract or $370.00 x (rate of exchange at the
time of actual payment) x 24 months = Total salary in the original
contract
Less:
Salary as Modified or SR 800 x P12.00 x
P230,400.00
24 months =
Less:
Unauthorized Deductions or SR 4,885 x
P171,780.00
P12 =
P 58,620.00
Less:
Unpaid placement fee
Equals:
Total unpaid salary
Add:
Attorney’s fees or 5% of the total unpaid salary
Equals:
Total Money Claims.
SO ORDERED.8
Hence, this petition.
Petitioner avers that respondent failed to substantiate the allegation
that he was forced to enter into the new employment contract with
SAAD which proves that the new contract was actually voluntarily
entered and agreed upon between said parties; that if respondent
was indeed forced to sign the new contract, his claims are now
barred by laches because respondent never informed petitioner of
any problem at the job site until two years after his deployment; that
the appellate court’s award for unauthorized deductions in the
amount of P171,780.00 should be deleted for lack of legal or factual
basis; that respondent is not entitled to attorney’s fees.
R.A. 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.9 Thus, we held in Chavez v. Bonto-
Perez10 that the subsequently executed side agreement of an
overseas contract worker with her foreign employer which reduced
her 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 her standard employment
contract approved by the POEA.11
Applying the same rule in the case at bar, the unauthorized
alteration in the employment contract of respondent, particularly the
diminution in his salary from US$370.00 to SR 800.00 per month, is
void for violating the POEA-approved contract which set the
minimum standards, terms, and conditions of his employment.
Moreover, we find that there was no proper dismissal of respondent
by SAAD; the "termination" of respondent was clearly a ploy to
pressure him to agree to a lower wage rate for continued
employment. Thus, the original POEA-approved employment
contract of respondent subsists despite the so-called new
agreement with SAAD. Consequently, the solidary liability of
petitioner with SAAD for respondent’s money claims continues in
accordance with Section 10 of R.A. 8042.12
Petitioner’s contention that respondent is guilty of laches is without
basis. Laches has been defined as the failure of or neglect for an
unreasonable and unexplained length of time to do that which by
144
exercising due diligence, could or should have been done earlier, or
to assert a right within reasonable time, warranting a presumption
that the party entitled thereto has either abandoned it or declined to
assert it. Thus, the doctrine of laches presumes that the party guilty
of negligence had the opportunity to do what should have been
done, but failed to do so. Conversely, if the said party did not have
the occasion to assert the right, then, he can not be adjudged guilty
of laches. Laches is not concerned with the mere lapse of time,
rather, the party must have been afforded an opportunity to pursue
his claim in order that the delay may sufficiently constitute laches.13
The doctrine of laches is based upon grounds of public policy which
requires, for the peace of society, the discouragement of stale Year
claims, and is principally a question of the inequity or unfairness
1997of
permitting a right or claim to be enforced or asserted. There is no
1998
absolute rule as to what constitutes laches; each case is to be
1999
determined according to its particular circumstances. The question
of laches is addressed to the sound discretion of the court, and
since it is an equitable doctrine, its application is controlled by
equitable considerations. It cannot be worked to defeat justice or to
perpetrate fraud and injustice.14
In the instant case, respondent filed his claim within the three-year
prescriptive period for the filing of money claims set forth in Article
291 of the Labor Code from the time the cause of action accrued.
Thus, we find that the doctrine of laches finds no application in this
case.
The labor arbiter and the Court of Appeals did not err in awarding
attorney’s fees to respondent. It is settled that in actions for recovery
of wages or where an employee was forced to litigate and incur
expenses to protect his rights and interests, he is entitled to an
award of attorney’s fees.15 However, with regard to Unauthorized
Deductions amounting to P171,780.00;16 we note that the appellate
court did not state any basis for its award, thus, the same is deleted
for lack of factual and legal basis.
WHEREFORE, the instant petition is PARTLY GRANTED. The
Decision of the Court of Appeals in CA-G.R. SP No. 77145 dated
September 27, 2005 is AFFIRMED with MODIFICATION that the
amount of P171,780 representing Unauthorized Deductions is
DELETED for lack of basis.
SO ORDERED.
G.R. No. 161757 January 25, 2006
SUNACE INTERNATIONAL MANAGEMENT SERVICES,
INC.Petitioner,
vs.
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.
DECISION
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:
Deduction for Income Tax Deduction for Savings
NT10,450.00 NT23,100.00
NT9,500.00 NT36,000.00
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,6claiming 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"7alleging 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
145
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, 2004,18Sunace 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 brokerWang, 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.
146
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.
G.R. No. 162419 July 10, 2007
PAUL V. SANTIAGO, petitioner,
vs.
CF SHARP CREW MANAGEMENT, INC., respondent.
DECISION
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. 2On 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.3
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. 4
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.9
147
Petitioner moved for the reconsideration of the NLRC’s Decision but
his motion was denied for lack of merit.10 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.12
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.13 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.15
Petitioner’s subsequent motion for reconsideration was denied on 19
February 2004.16
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.18Petitioner 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.20
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.22 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. 23
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
148
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
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
The Court also holds that petitioner is entitled to attorney’s fees in
attorney’s fees at the reasonable rate of 10% of the recoverable
the concept of damages and expenses of litigation. Attorney's fees
amount.
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 SO ORDERED.
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

149