G.R. No.
170734             May 14, 2008
ARCO METAL PRODUCTS, CO., INC., and MRS. SALVADOR UY, petitioners,
vs.
SAMAHAN NG MGA MANGGAGAWA SA ARCO METAL-NAFLU (SAMARM-
NAFLU), respondent.
DECISION
TINGA, J.:
This treats of the Petition for Review1 of the Resolution2 and Decision3 of the Court of
Appeals dated 9 December 2005 and 29 September 2005, respectively in CA-G.R. SP
No. 85089 entitled
Samahan ng mga Manggagawa sa Arco Metal-NAFLU (SAMARM-NAFLU) v. Arco
Metal Products Co., Inc. and/or Mr. Salvador Uy/Accredited Voluntary Arbitrator Apron
M. Mangabat,4 which ruled that the 13th month pay, vacation leave and sick leave
conversion to cash shall be paid in full to the employees of petitioner regardless of the
actual service they rendered within a year.
Petitioner is a company engaged in the manufacture of metal products, whereas
respondent is the labor union of petitioner’s rank and file employees. Sometime in
December 2003, petitioner paid the 13th month pay, bonus, and leave encashment of
three union members in amounts proportional to the service they actually rendered in
a year, which is less than a full twelve (12) months. The employees were:
Sickness 27 August 2003 to 27 February 2004
1. Rante Lamadrid
2. Alberto Gamban Suspension 10 June 2003 to 1 July 2003
3. Rodelio Collantes Sickness August 2003 to February 2004
Respondent protested the prorated scheme, claiming that on several occasions
petitioner did not prorate the payment of the same benefits to seven (7) employees
who had not served for the full 12 months. The payments were made in 1992, 1993,
1994, 1996, 1999, 2003, and 2004. According to respondent, the prorated payment
violates the rule against diminution of benefits under Article 100 of the Labor Code.
Thus, they filed a complaint before the National Conciliation and Mediation Board
(NCMB). The parties submitted the case for voluntary arbitration.
The voluntary arbitrator, Apron M. Mangabat, ruled in favor of petitioner and found that
the giving of the contested benefits in full, irrespective of the actual service rendered
within one year has not ripened into a practice. He noted the affidavit of Joselito
Baingan, manufacturing group head of petitioner, which states that the giving in full of
the benefit was a mere error. He also interpreted the phrase "for each year of service"
found in the pertinent CBA provisions to mean that an employee must have rendered
one year of service in order to be entitled to the full benefits provided in the CBA.5
Unsatisfied, respondent filed a Petition for Review6 under Rule 43 before the Court of
Appeals, imputing serious error to Mangabat’s conclusion. The Court of Appeals ruled
that the CBA did not intend to foreclose the application of prorated payments of leave
benefits to covered employees. The appellate court found that petitioner, however,
had an existing voluntary practice of paying the aforesaid benefits in full to its
employees, thereby rejecting the claim that petitioner erred in paying full benefits to its
seven employees. The appellate court noted that aside from the affidavit of petitioner’s
officer, it has not presented any evidence in support of its position that it has no
voluntary practice of granting the contested benefits in full and without regard to the
service actually rendered within the year. It also questioned why it took petitioner
eleven (11) years before it was able to discover the alleged error. The dispositive
portion of the court’s decision reads:
WHEREFORE, premises considered, the instant petition is
hereby GRANTED and the Decision of Accredited Voluntary Arbiter Apron
M. Mangabat in NCMB-NCR Case No. PM-12-345-03, dated June 18, 2004
is hereby AFFIRMED WITH MODIFICATION in that the 13th month pay,
bonus, vacation leave and sick leave conversions to cash shall be paid to
the employees in full, irrespective of the actual service rendered within a
year.7
Petitioner moved for the reconsideration of the decision but its motion was denied,
hence this petition.
Petitioner submits that the Court of Appeals erred when it ruled that the grant of
13th month pay, bonus, and leave encashment in full regardless of actual service
rendered constitutes voluntary employer practice and, consequently, the prorated
payment of the said benefits does not constitute diminution of benefits under Article
100 of the Labor Code.8
The petition ultimately fails.
First, we determine whether the intent of the CBA provisions is to grant full benefits
regardless of service actually rendered by an employee to the company. According to
petitioner, there is a one-year cutoff in the entitlement to the benefits provided in the
CBA which is evident from the wording of its pertinent provisions as well as of the
existing law.
We agree with petitioner on the first issue. The applicable CBA provisions read:
ARTICLE XIV-VACATION LEAVE
Section 1. Employees/workers covered by this agreement who have
rendered at least one (1) year of service shall be entitled to sixteen (16)
days vacation leave with pay for each year of service. Unused leaves shall
not be cumulative but shall be converted into its cash equivalent and shall
become due and payable every 1st Saturday of December of each year.
However, if the 1st Saturday of December falls in December 1, November 30
(Friday) being a holiday, the management will give the cash conversion of
leaves in November 29.
Section 2. In case of resignation or retirement of an employee, his vacation
leave shall be paid proportionately to his days of service rendered during the
 year.
ARTICLE XV-SICK LEAVE
Section 1. Employees/workers covered by this agreement who have
rendered at least one (1) year of service shall be entitled to sixteen (16)
days of sick leave with pay for each year of service. Unused sick leave shall
not be cumulative but shall be converted into its cash equivalent and shall
become due and payable every 1st Saturday of December of each year.
Section 2. Sick Leave will only be granted to actual sickness duly certified
by the Company physician or by a licensed physician.
Section 3. All commutable earned leaves will be paid proportionately upon
retirement or separation.
ARTICLE XVI – EMERGENCY LEAVE, ETC.
Section 1. The Company shall grant six (6) days emergency leave to
employees covered by this agreement and if unused shall be converted into
cash and become due and payable on the 1st Saturday of December each
year.
Section 2. Employees/workers covered by this agreement who have
rendered at least one (1) year of service shall be entitled to seven (7) days
of Paternity Leave with pay in case the married employee’s legitimate
spouse gave birth. Said benefit shall be non-cumulative and non-
commutative and shall be deemed in compliance with the law on the same.
Section 3. Maternity leaves for married female employees shall be in
accordance with the SSS Law plus a cash grant of P1,500.00 per month.
xxx
ARTICLE XVIII- 13TH MONTH PAY & BONUS
Section 1. The Company shall grant 13 th Month Pay to all employees
covered by this agreement. The basis of computing such pay shall be the
basic salary per day of the employee multiplied by 30 and shall become due
and payable every 1st Saturday of December.
Section 2. The Company shall grant a bonus to all employees as practiced
which shall be distributed on the 2nd Saturday of December.
Section 3. That the Company further grants the amount of Two Thousand
Five Hundred Pesos (P2,500.00) as signing bonus plus a free CBA
Booklet.9 (Underscoring ours)
There is no doubt that in order to be entitled to the full monetization of sixteen (16)
days of vacation and sick leave, one must have rendered at least one year of service.
The clear wording of the provisions does not allow any other interpretation. Anent the
13th month pay and bonus, we agree with the findings of Mangabat that the CBA
provisions did not give any meaning different from that given by the law, thus it should
be computed at 1/12 of the total compensation which an employee receives for the
whole calendar year. The bonus is also equivalent to the amount of the 13 th month pay
given, or in proportion to the actual service rendered by an employee within the year.
On the second issue, however, petitioner founders.
As a general rule, in petitions for review under Rule 45, the Court, not being a trier of
facts, does not normally embark on a re-examination of the evidence presented by the
contending parties during the trial of the case considering that the findings of facts of
the Court of Appeals are conclusive and binding on the Court.10 The rule, however,
admits of several exceptions, one of which is when the findings of the Court of
Appeals are contrary to that of the lower tribunals. Such is the case here, as the
factual conclusions of the Court of Appeals differ from that of the voluntary arbitrator.
Petitioner granted, in several instances, full benefits to employees who have not
served a full year, thus:
Reason Duration
Name
1. Percival Bernas Sickness July 1992 to November 1992
2. Cezar Montero Sickness 21 Dec. 1992 to February 1993
3. Wilson Sayod Sickness May 1994 to July 1994
4. Nomer Becina Suspension 1 Sept. 1996 to 5 Oct. 1996
5. Ronnie Licuan Sickness 8 Nov. 1999 to 9 Dec. 1999
6. Guilbert Villaruel Sickness 23 Aug. 2002 to 4 Feb. 2003
7. Melandro Moque Sickness 29 Aug. 2003 to 30 Sept. 2003
Petitioner claims that its full payment of benefits regardless of the length of service to
the company does not constitute voluntary employer practice. It points out that the
payments had been erroneously made and they occurred in isolated cases in the
years 1992, 1993, 1994, 1999, 2002 and 2003. According to petitioner, it was only in
2003 that the accounting department discovered the error "when there were already
three (3) employees involved with prolonged absences and the error was corrected by
implementing the pro-rata payment of benefits pursuant to law and their existing
CBA."12 It adds that the seven earlier cases of full payment of benefits went unnoticed
considering the proportion of one employee concerned (per year) vis à vis the 170
employees of the company. Petitioner describes the situation as a "clear oversight"
which should not be taken against it.13 To further bolster its case, petitioner argues that
for a grant of a benefit to be considered a practice, it should have been practiced over
a long period of time and must be shown to be consistent, deliberate and intentional,
which is not what happened in this case. Petitioner tries to make a case out of the fact
that the CBA has not been modified to incorporate the giving of full benefits regardless
of the length of service, proof that the grant has not ripened into company practice.
We disagree. were paid in accordance with law.25

Any benefit and supplement being enjoyed by employees cannot be reduced, Indeed, if petitioner wants to prove that it merely erred in giving full benefits, it could
diminished, discontinued or eliminated by the employer.14 The principle of non- have easily presented other proofs, such as the names of other employees who did
diminution of benefits is founded on the Constitutional mandate to "protect the rights of not fully serve for one year and thus were given prorated benefits. Experientially, a
workers and promote their welfare,"15 and "to afford labor full protection."16 Said perfect attendance in the workplace is always the goal but it is seldom achieved.
mandate in turn is the basis of Article 4 of the Labor Code which states that "all doubts There must have been other employees who had reported for work less than a full
in the implementation and interpretation of this Code, including its implementing rules year and who, as a consequence received only prorated benefits. This could have
and regulations shall be rendered in favor of labor." Jurisprudence is replete with easily bolstered petitioner’s theory of mistake/error, but sadly, no evidence to that
cases which recognize the right of employees to benefits which were voluntarily given effect was presented.
by the employer and which ripened into company practice. Thus in Davao Fruits
Corporation v. Associated Labor Unions, et al.17 where an employer had freely and
continuously included in the computation of the 13th month pay those items that were IN VIEW HEREOF, the petition is DENIED. The Decision of the Court of Appeals in
expressly excluded by the law, we held that the act which was favorable to the CA-G.R. SP No. 85089 dated 29 September 2005 is and its Resolution dated 9
employees though not conforming to law had thus ripened into a practice and could December 2005 are hereby AFFIRMED.
not be withdrawn, reduced, diminished, discontinued or eliminated. In Sevilla Trading
Company v. Semana,18 we ruled that the employer’s act of including non-basic SO ORDERED.
benefits in the computation of the 13 th month pay was a voluntary act and had ripened
into a company practice which cannot be peremptorily withdrawn. Meanwhile in Davao
Integrated Port Stevedoring Services v. Abarquez,19 the Court ordered the payment of Quisumbing,Chairperson, Carpio-Morales, Velasco, Jr., JJ., concur.
the cash equivalent of the unenjoyed sick leave benefits to its intermittent workers Brion, J., Separate Concurring Opinion.
after finding that said workers had received these benefits for almost four years until
the grant was stopped due to a different interpretation of the CBA provisions. We held Footnotes
that the employer cannot unilaterally withdraw the existing privilege of commutation or 1
conversion to cash given to said workers, and as also noted that the employer had in  Rollo, pp. 3-31.
2
fact granted and paid said cash equivalent of the unenjoyed portion of the sick leave  Id. at 36.
benefits to some intermittent workers. 3
 Id. at 38-56.
4
 Penned by Associate Justice Jose C. Reyes, Jr. with Associate Justices
In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy Eugenio S. Labitoria and Eliezer R. De Los Santos, concurring.
of freely, voluntarily and consistently granting full benefits to its employees regardless 5
 Id. at 175.
of the length of service rendered. True, there were only a total of seven employees 6
 Id. at 57-77.
who benefited from such a practice, but it was an established practice nonetheless. 7
Jurisprudence has not laid down any rule specifying a minimum number of years  Id. at 55.
8
within which a company practice must be exercised in order to constitute voluntary  Id. at 17.
company practice.20 Thus, it can be six (6) years,21 three (3) years,22 or even as short 9
 Id. at 110-111. These provisions were carried over from four (4) previous
as two (2) years.23 Petitioner cannot shirk away from its responsibility by merely CBAs covering the following dates: 28 August 1990 to 27 August 1991, 1
claiming that it was a mistake or an error, supported only by an affidavit of its August 1993 to 31 July 1996, 1 August 1996 to 31 July 1999, and 1 August
manufacturing group head portions of which read: 1999 to 31 July 2002.
10
 New City Builders, Inc. v. National Labor Relations Commission, G.R. No.
5. 13th month pay, bonus, and cash conversion of unused/earned vacation 149281, 15 June 2005, 460 SCRA 220, 227.
leave, sick leave and emergency leave are computed and paid in full to 11
 Rollo, p. 22.
employees who rendered services to the company for the entire year and 12
 Id.
proportionately to those employees who rendered service to the company 13
for a period less than one (1) year or twelve (12) months in accordance with  Id. at 23.
the CBA provision relative thereto. 14
 Tiangco, et al. v. Hon. Leogardo, Jr., etc., et al., 207 Phil. 2235 (1983) .
15
 Constitution, Article II, Section 18.
6. It was never the intention much less the policy of the management to 16
 Constitution, Article XIII, Section 3.
grant the aforesaid benefits to the employees in full regardless of whether or 17
 G.R. No. 85073, 24 August 1993, 225 SCRA 562.
not the employee has rendered services to the company for the entire year, 18
 G.R. No. 152456, 28 April 2004, 428 SCRA 239, 249.
otherwise, it would be unjust and inequitable not only to the company but to
19
other employees as well.24  G.R. No. 102132, 19 March 1993, 220 SCRA 197.
20
 Sevilla Trading Company v. Semana, supra note 12.
21
In cases involving money claims of employees, the employer has the burden of  Davao Fruits Corporation v. Associated Labor Unions, supra note 11.
proving that the employees did receive the wages and benefits and that the same 22
 Tianco v. Leogardo, Jr., supra note 10
 23
 Sevilla Trading Company v. Semana, supra.
24
 Rollo, pp. 120-121. Condemnation was found to have been fabricated and all signatories therein, namely,
25
 Mark Roche International v. NLRC, 372 Phil. 238, 247 (1999). Ed Garcia, Stockkeeper; Catherino A. Bero, DIU Supervisor; and Constantino L. Cruz,
were held "accountable for the irregular loss of the unaccounted Marlboro KS Pack of
The Lawphil Project - Arellano Law Foundation 5…"

After further investigation, it was discovered that the subject merchandise was illegally
brought out of the warehouse and it was made to appear that in all the documents
prepared said goods were legally condemned on December 27, 1996. Ed Garcia, one
of the respondents in the Audit Review, implicated [respondent] and [two] others.
Garcia claimed that he was unaware of the illegality of the transaction as he was only
obeying the orders of his superiors who included [respondent]. Garcia disclosed that it
was [respondent] who ordered him to look for a van for the supposed "direct
condemnation" of the subject merchandise.

Consequently, the Discipline Committee requested [respondent] to submit a written

reply/explanation regarding the findings in the Audit Report and the allegations of
Garcia.

[Respondent] denied his participation in the illegal transaction. Although he admitted

that he instructed Garcia to look for a van, it was for the purpose of transferring the
damaged merchandise from the main warehouse to the proper warehouse for
G.R. No. 174809               June 27, 2012 damaged goods.

DUTY FREE PHILIPPINES SERVICES, INC., Petitioner,
vs.
MANOLITO Q. TRIA, Respondent.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court are
the Court of Appeals (CA) Decision1 dated May 31, 2006 and Resolution2 dated
September 21, 2006 in CA-G.R. SP No. 70839. The assailed decision affirmed the
National Labor Relations Commission (NLRC) Resolution3 dated March 15, 2002 in
NLRC NCR Case No. 00-12-009965-98, while the assailed resolution denied petitioner
Duty Free Philippines Services, Inc.’s (DFPSI’s) motion for reconsideration.
The facts, as found by the CA, are as follows:
Petitioner Duty Free Philippines Services, Inc. is a manpower agency that provides
personnel to Duty Free Philippines (DFP).
On March 16, 1989, [respondent] Manolo Tria was employed by Petitioner and was
seconded to DFP as a Warehouse Supervisor.
In an Audit Report, dated January 16, 1998, it was revealed that 1,020 packs of
Marlboro bearing Merchandise Code No. 020101 under WRR No. 36-04032 were not
included in the condemnation proceedings held on December 27, 1996 and that there
were "glaring discrepancies" in the related documents which "indicate a malicious
attempt to conceal an anomalous irregularity." The relevant Request for
On August 27, 1998, the DFP Discipline Committee [DFPDC] issued a Joint
Resolution holding [respondent] "GUILTY OF DISHONESTY for (his) direct
participation in the fake condemnation" and pilferage of the missing 1,020 Marlboro
Pack of 5’s cigarettes … and orders (his) DISMISSAL from the service for cause and
for loss of trust and confidence, with forfeiture of all rights and privileges due them
from the company, except earned salaries and leave credits."
On September 18, 1998, Petitioner sent [respondent] a memorandum terminating his
employment with Petitioner and his secondment to DFP "on the basis of the findings
and recommendation of the (DFP’s) Discipline Committee."
Aggrieved, [respondent] filed a Complaint against Petitioner for Illegal Dismissal and
for payment of backwages, attorney’s fees and damages.4
On May 31, 1999, the Labor Arbiter (LA) rendered a Decision 5 finding respondent to
have been illegally dismissed from employment. The dispositive portion of the decision
reads:
WHEREFORE, all the foregoing premises being considered, judgment is hereby
rendered ordering the respondent company to reinstate complainant to his former
position with all the rights, privileges, and benefits appertaining thereto, including
seniority, plus full backwages which as of May 31, 1999 already amount to
₱172,672.50. Further, the respondent is ordered to pay complainant the equivalent of
ten percent (10%) of the total backwages as and for attorney’s fees.
The claim for damages is denied for lack of merit.
SO ORDERED.6
On appeal, the NLRC affirmed 7 the LA decision, but deleted the award of attorney’s
fees. Petitioner’s motion for reconsideration was also denied8 on March 15, 2002.
When petitioner elevated the case to the CA, it denied for the first time the existence
of employer-employee relationship and pointed to DFP as respondent’s real employer.
The appellate court, however, considered said defense barred by estoppel for its
failure to raise the defense before the LA and the NLRC.9 It nonetheless ruled that
although DFPDC conducted the investigation, petitioner’s dismissal letter effected
respondent’s termination from employment. 10 On the validity of respondent’s dismissal
from employment, the CA respected the LA and NLRC findings and reached the same
conclusion that respondent was indeed illegally dismissed from
employment.11 Petitioner’s motion for reconsideration was likewise denied in a
12 
Resolution dated September 21, 2006.
Undaunted, petitioner elevates the case before the Court in this petition for review on
certiorari based on the following grounds:
THE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT
PETITIONER DFPSI IS LIABLE FOR ILLEGAL DISMISSAL AND DECLARE THAT:
A. DFPSI IS THE DIRECT EMPLOYER OF RESPONDENT
INSTEAD OF DUTY FREE PHILIPPINES ("DFP"); AND
B. THE ISSUE AS TO WHO TERMINATED RESPONDENT WAS
RAISED ONLY FOR THE FIRST TIME ON APPEAL.
THE COURT OF APPEALS GRAVELY ERRED AND RULED CONTRARY TO LAW
AND JURISPRUDENCE WHEN IT FAILED TO RULE ON THE LIABILITY OF DFP,
AS AN INDISPENSABLE PARTY TO THE COMPLAINT FOR ILLEGAL DISMISSAL.
THE COURT OF APPEALS GRAVELY ERRED AND RULED CONTRARY TO LAW
AND JURISPRUDENCE WHEN IT HELD THAT RESPONDENT’S EMPLOYMENT
WAS ILLEGALLY TERMINATED.13
Petitioner insists that the CA erred in not considering its argument that it is not the
employer of respondent. It likewise faults the CA in not ruling on the liability of DFP as
an indispensable party.
We cannot sustain petitioner’s contention. In its Position Paper, 14 petitioner highlighted
respondent’s complicity and involvement in the alleged "fake condemnation" of
damaged cigarettes as found by the DFPDC. This, according to petitioner, was a just
cause for terminating an employee.
In its Motion for Reconsideration and/or Appeal, 15 petitioner insisted that there was
basis for the termination of respondent’s employment. Even in its Supplemental
Appeal16 with the NLRC, petitioner reiterated its stand that respondent was terminated
for a just and valid cause and due process was strictly observed in his dismissal. It
further questioned the reinstatement aspect of the LA decision allegedly because of
strained relations between them.
With the aforesaid pleadings submitted by petitioner, together with the corresponding
pleadings filed by respondent, the LA and the NLRC declared the dismissal of
respondent illegal. These decisions were premised on the finding that there was an
employer-employee relationship. 17 Nowhere in said pleadings did petitioner deny the
existence of said relationship. Rather, the line of its defense impliedly admitted said
relationship. The issue of illegal dismissal would have been irrelevant had there been
no employer-employee relationship in the first place.
It was only in petitioner’s Petition for Certiorari before the CA did it impute liability on
DFP as respondent’s direct employer and as the entity who conducted the
investigation and initiated respondent’s termination proceedings. Obviously, petitioner
changed its theory when it elevated the NLRC decision to the CA. The appellate court,
therefore, aptly refused to consider the new theory offered by petitioner in its petition.
As the object of the pleadings is to draw the lines of battle, so to speak, between the
litigants, and to indicate fairly the nature of the claims or defenses of both parties, a
party cannot subsequently take a position contrary to, or inconsistent, with its
pleadings.18 It is a matter of law that when a party adopts a particular theory and the
case is tried and decided upon that theory in the court below, he will not be permitted
to change his theory on appeal. The case will be reviewed and decided on that theory
and not approached and resolved from a different point of view.19
The review of labor cases is confined to questions of jurisdiction or grave abuse of
discretion.20 The alleged absence of employer-employee relationship cannot be raised
for the first time on appeal.21 The resolution of this issue requires the admission and
calibration of evidence and the LA and the NLRC did not pass upon it in their
decisions.22 We cannot permit petitioner to change its theory on appeal. It would be
unfair to the adverse party who would have no more opportunity to present further
evidence, material to the new theory, which it could have done had it been aware
earlier of the new theory before the LA and the NLRC.23 More so in this case as the
supposed employer of respondent which is DFP was not and is not a party to the
present case.
In Pamplona Plantation Company v. Acosta, 24 petitioner therein raised for the first time
in its appeal to the NLRC that respondents therein were not its employees but of
another company. In brushing aside this defense, the Court held:
x x x Petitioner is estopped from denying that respondents worked for it. In the first
place, it never raised this defense in the proceedings before the Labor Arbiter.
Notably, the defense it raised pertained to the nature of respondents’ employment, i.e.,
whether they are seasonal employees, contractors, or worked under the pakyaw
system. Thus, in its Position Paper, petitioner alleged that some of the respondents
are coconut filers and copra hookers or sakadors; some are seasonal employees who
worked as scoopers or lugiteros; some are contractors; and some worked under the
pakyaw system. In support of these allegations, petitioner even presented the
company’s payroll which will allegedly prove its allegations.
By setting forth these defenses, petitioner, in effect, admitted that respondents worked
for it, albeit in different capacities. Such allegations are negative pregnant – denials
pregnant with the admission of the substantial facts in the pleading responded to
which are not squarely denied, and amounts to an acknowledgment that respondents
were indeed employed by petitioner. 25 (Emphasis supplied.)
Also in Telephone Engineering & Service Co., Inc. v. WCC, et al.,26 the Court held that
the lack of employer-employee relationship is a matter of defense that the employer
 2006, in CA-G.R. SP No. 70839, are AFFIRMED.
should properly raise in the proceedings below. The determination of this relationship
involves a finding of fact, which is conclusive and binding and not subject to review by
this Court.27 SO ORDERED.

In this case, petitioner insisted that respondent was dismissed from employment for DIOSDADO M. PERALTA
cause and after the observance of the proper procedure for termination. Associate Justice
Consequently, petitioner cannot now deny that respondent is its employee. While
indeed, jurisdiction cannot be conferred by acts or omission of the parties, petitioner’s
belated denial that it is the employer of respondent is obviously an afterthought, a WE CONCUR:
devise to defeat the law and evade its obligations.28
PRESBITERO J. VELASCO, JR.
It is a fundamental rule of procedure that higher courts are precluded from entertaining Associate Justice
matters neither alleged in the pleadings nor raised during the proceedings below, but Chairperson
ventilated for the first time only in a motion for reconsideration or on
appeal.29 Petitioner is bound by its submissions that respondent is its employee and it LUCAS P. BERSAMIN* ROBERTO A. ABAD
should not be permitted to change its theory. Such change of theory cannot be Associate Justice Associate Justice
tolerated on appeal, not due to the strict application of procedural rules, but as a ESTELA M. PERLAS-BERNABE
matter of fairness.30 Associate Justice

As to the legality of respondent’s dismissal, it is well settled that under Rule 45 of the ATTESTATION
Rules of Court, only questions of law may be raised, the reason being that this Court is
not a trier of facts, and it is not for this Court to reexamine and reevaluate the evidence
on record.31 Findings of fact and conclusions of the Labor Arbiter as well as those of I attest that the conclusions in the above Decision had been reached in consultation
the NLRC or, for that matter, any other adjudicative body which can be considered as before the case was assigned to the writer of the opinion of the Court’s Division.
a trier of facts on specific matters within its field of expertise, should be considered as
binding and conclusive upon the appellate courts.32 PRESBITERO J. VELASCO, JR.
Associate Justice
Petitioner dismissed respondent from employment based on the recommendation of Chairperson, Third Division
the DFPDC holding respondent guilty of dishonesty for his direct participation in the
"fake condemnation" and "pilferage" of the missing 1,020 Marlboro Pack of 5 CERTIFICATION
cigarettes.33 Respondent was implicated in the anomalous transaction by his co-
employees who pointed to the former as the one who ordered the other suspects to
look for a vehicle that would be used to transport the subject cigarettes. This, I certify that the conclusions in the above Decision had been reached in consultation
according to the DFPDC, was odd and strange. With this act alone and by reason of before the case was assigned to the writer of the opinion of the Court.
his position, the DFPDC concluded, and affirmed by petitioner, that respondent
definitely had knowledge of the "fake condemnation." From these circumstances, ANTONIO T. CARPIO
petitioner sustained the findings of dishonesty and dismissed respondent from Senior Associate Justice
employment. (Per Section 12, R.A. 296, The Judiciary Act of 1948, as amended)

Again, we agree with the appellate court that DFPDC’s conclusions are not supported Footnotes
by clear and convincing evidence to warrant the dismissal of respondent. In illegal
* Designated Acting Member in lieu of Associate Justice Jose Catral
dismissal cases, the employer is burdened to prove just cause for terminating the
Mendoza, per Special Order No. 1241 dated June 14, 2012.
employment of its employee with clear and convincing evidence. This principle is 1 
designed to give flesh and blood to the guaranty of security of tenure granted by the Penned by Associate Justice Noel G. Tijam, with Associate Justices Elvi
Constitution to employees under the Labor Code.34 In this case, petitioner failed to John S. Asuncion and Mariflor P. Punzalan Castillo, concurring; rollo, pp.
submit clear and convincing evidence of respondent’s direct participation in the 33-41.
2 
alleged fake condemnation proceedings. To be sure, unsubstantiated suspicions, Rollo, p. 44.
3 
accusations, and conclusions of employers do not provide for legal justification for Penned by Commissioner Tito F. Genilo, with Presiding Commissioner
dismissing employees. In case of doubt, such cases should be resolved in favor of Lourdes C. Javier and Commissioner Ireneo B. Bernardo, concurring; CA
labor, pursuant to the social justice policy of labor laws and the Constitution.35 rollo, pp. 35-37.
4 
Rollo, pp. 34-36.
5 
CA rollo, pp. 49-55.
WHEREFORE, premises considered, the petition is DENIED for lack of merit. The 6 
Court of Appeals Decision dated May 31, 2006 and Resolution dated September 21, Id. at 54-55.
 [5]
7 
Embodied in a Decision dated January 21, 2002; penned by Commissioner  It operates a manufacturing plant in Ungka, Pavia, Iloilo City, where the aggrieved former
Tito F. Genilo, with Presiding Commissioner Lourdes C. Javier and employees herein, as represented by respondent Iloilo Coca-Cola Plant Employees Labor Union
Commissioner Ireneo B. Bernardo, concurring; id. at 38-48. (respondent), worked as regular route drivers and helpers. [6]
8 
CA rollo, pp. 35-37.
9 
Rollo, p. 37. The conflict arose due to the CCBPI's policy involving Saturday work. In the said policy, several
10  of CCBPI's employees were required to report for work on certain Saturdays to perform a host of
Id. at 38.
11 
activities, usually involving maintenance of the facilities. This prerogative was supposedly
Id. at. 40. consistent with the pertinent provisions [7] in the Collective Bargaining Agreement (CBA) between
12 
Id. at 44. CCBPI and its employees, which stated that management had the sole option to schedule, work
13 
Id. at 14. on Saturdays on the basis of operational necessity.[8]
14 
CA rollo, pp. 59-72.
15 
Id. at 105-121. CCBPI later on informed the respondent that, starting July 2, 2005, Saturday work would no
16 
Id. at 141-156. longer be scheduled, with CCBPI citing operational necessity as the reason for the decision.
[9]
17 
CAPANELA v. NLRC, 311 Phil. 744, 755 (1995).  Specifically, the discontinuance was done with the purpose of saving on operating expenses
18 
Cocomangas Hotel Beach Resort v. Visca, G.R. No. 167045, August 29, and compensating for the anticipated decreased revenues. As Saturday work involved
2008, 563 SCRA 705, 718; Manila Electric Company v. Benamira, G.R. No. maintenance-related activities, CCBPI would then only schedule the day's work as the need
145271, July 14, 2005, 463 SCRA 331, 348-349. arose for these particular undertakings, particularly on some Saturdays from September to
19  December 2005.[10]
Cocomangas Hotel Beach Resort v. Visca, supra.
20 
Magnolia Dairy Products Corp. v. NLRC, 322 Phil. 508, 516 (1996). On July 1, 2005, the parties met, with CCBPI's Manufacturing Manager setting forth the official
21 
Id. proposal to stop the work schedule during Saturdays.[11] This proposal was opposed and rejected
22 
Id. by the officers and members of the respondent who were present at the meeting. Despite this
23 
China Air Lines, Ltd. v. Court of Appeals, G.R. Nos. 45985 and 46036, opposition, CCBPI pushed through with the non-scheduling of work on the following Saturday,
May 18, 1990, 185 SCRA 449, 458. July 2, 2005.
24 
G.R. No. 153193, December 6, 2006, 510 SCRA 249.
25 
Pamplona Plantation Company v. Acosta, supra, at 253. As a result of the foregoing, the respondent submitted to CCBPI its written grievance, stating
26 
191 Phil. 663 (1981). therein that CCBPI's act of disallowing its employees to report during Saturday is a violation of
27 
Telephone Engineering & Service Co., Inc. v. WCC, et al., supra, at 669. the CBA provisions, specifically Section 1, Article 10 thereof. [12] Along with the submission of the
28  written grievance, the respondent also requested a meeting with CCBPI to discuss the issue.
Id. at 670.
29 
CCBPI response to the request, however, was to merely send a letter reiterating to the
Manila Electric Company v. Benamira, supra note 18, at 349. respondent that under the set of facts, management has the option to schedule work on
30 
Id. Saturday on the basis of operational necessity.[13] Further letters on the part of the respondent
31 
Pamplona Plantation Company v. Acosta, supra note 24, at 252. were responded to in the same way by CCBPI.
32 
CAPANELA v. NLRC, supra note 17, at 755-756.
33 
Rollo, p. 35. Respondent thus brought its grievances to the office of the NCMB, and on June 9, 2006, the
34 
Litton Mills, Inc. v. Sales, 481 Phil. 73, 88 (2004). parties pursuant to the provisions of their CBA submitted the case for voluntary arbitration.
[14]
35 
Century Canning Corporation v. Ramil, G.R. No. 171630, August 8, 2010,  The panel comprised of three (3) voluntary arbitrators (the Panel of Arbitrators), was charged
627 SCRA 192, 202. with resolving two issues: First, whether or not members of the respondent were entitled to
receive their basic pay during Saturdays under the CBA even if they would not report for work,
and second, whether or not CCBPI could be compelled by the respondent to provide work to its
members during Saturdays under the CBA.[15]
COCA-COLA BOTTLERS PHILIPPINES, INC., PETITIONER, VS. ILOILO COCA-COLA
After the presentation of evidence and the subsequent deliberations, the Panel of Arbitrators
PLANT EMPLOYEES LABOR UNION (ICCPELU), AS REPRESENTED BY WILFREDO L.
ruled in favor of CCBPI, the dispositive part of the decision reading:
AGUIRRE, RESPONDENT.
IN VIEW OF THE FOREGOING, the Panel of Arbitrators, rules on the first issue, that the
Complainant's Union members are nary entitled to receive their Basic Pay during Saturdays
DECISION
under the CBA if they are not reporting for work, under Section I Article 10, and Sections 1(c)
A. REYES, JR., J.:
and 3(c) Article II of the CBA.
Challenged before this Court via this Petition for Review on Certiorari[1] under Rule 45 of the
Rules of Court is the Decision[2] dated June 23, 2010 of the Court of Appeals (CA), and its
On the second issue, the PANEL, rules that [CCBPI] cannot be compelled by the Complainant
Resolution[3] dated October 19, 2010 which reversed the Decision [4] dated September 7, 2006 of
Union to provide works to its members during Saturdays under the CBA, for lack of legal and
the National Conciliation and Mediation Board (NCMB), Regional Branch No.6, Iloilo City, in
factual basis.
Case No. PAC-613-RB6-02-01-06-2006.
SO ORDERED.[16]
The Antecedent Facts Respondent's Motion for Reconsideration to the Panel of Arbitrators' ruling was denied for lack
of merit on October 24, 2006.[17]
Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic corporation engaged in the
business of manufacturing and selling of leading non-alcoholic products and other beverages. Unwilling to accept the findings of the Panel of Arbitrators, the respondent elevated its case to
the CA via a Petition for Review under Rule 43 of the Rules of Court. After a review of the same,
the CA subsequently rendered a Decision[18] dated June 23, 2010 granting the respondent's
Petition for Review and reversing the decision of the Panel of Arbitrators. The dispositive portion
of the CA decision reads, to wit:
WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision, dated 07
September 2006, and, Order, dated 24 October 2006, respectively, by the panel of voluntary
arbitrators, namely: Atty. Mateo A. Valenzuela, Atty. Inocencio Fener, Jr., and Gloria Aniola, of
the NCMB. Regional Branch No. 6, Iloilo City, are REVERSED and SET ASIDE. A NEW
judgment is rendered ORDERING CCBPI to:
1. COMPLY with the CBA provisions respecting its normal work week, that is, from Monday to
Friday for eight (8) hours a day and on Saturdays for four (4) hours;
2. ALLOW the concerned union members to render work for four (4) hours on Saturdays; and
3. PAY the corresponding wage for the Saturdays work which were not performed pursuant to its
order to do so commencing on 02 July 2005, the date when it actually refused the concerned
union members to report tor work, until the finality of this decision. The rate for work rendered on
a Saturday is composed of the whole daily rate (not the amount equivalent to one-half day rate)
plus the corresponding premium.
No Costs.
SO ORDERED.[19]
CCBPI's Motion for Reconsideration was denied by the CA in a Resolution [20] dated October 19,
2010 received on January 28, 2011. On appeal to this Court, on February 11, 2011, CCBPI filed
Motion for Extension and requested for an additional period of 30 days from February 12, 2011,
or until March 14, 2014, within which to file its Petition for Certiorari, which was granted by this
Court in a Resolution[21] dated February 21, 2011.
Hence, this Petition, to which the respondent filed a Comment [22] to on June 11, 2011, the latter
pleading responded to by CCBPI via Reply[23] on September 6, 2011.
The Issues of the Case
A perusal of the parties' pleadings will show the following issues and points of contention:
First, whether or not the CA erred in ruling that under the CBA between the parties, scheduling
Saturday work for CCBPI's employees is mandatory on the part of the Company.
Second, whether scheduling Saturday work has ripened into a company practice, the removal of
which constituted a diminution of benefits, to which CCBPI is likewise liable to the affected
employees for, including the corresponding wage for the Saturday work which was not
performed pursuant to the policy of the Company to remove Saturday work based on operational
necessity.
The Arguments of the Parties
It is the contention of CCBPI that the CA erred in reversing the decision of the Panel of
Arbitrators and finding that the CBA gave the employees the right to compel CCBPI to give work
on Saturdays, that the scheduling of work on a Saturday had ripened into a company practice,
and that the subsequent withdrawal of Saturday work constituted a prohibited diminution of
wages. CCBPI states that this ruling is contrary to fact and law and unduly prejudiced CCBPI as
the company was ordered to allow the affected employees to render work for four hours on
Saturdays. CCBPI was also ordered to pay the corresponding wage for the Saturday work which
were not performed pursuant to its order to do so, the said amount corresponding to the date
when the company actually refused the affected employees to report for work, until the finality of
this decision.[24]
CCBPI argues that based on the provisions of its CBA, specifically Article 10, Section 1, in
relation with, Article 11, Section 1 (c) and Section 2(c), it is clear that work on a Saturday is
optional on the part of management,[25] and constitutes a legitimate management prerogative that
is entitled to respect and enforcement in the interest of simple fair play.[26] CCBPI likewise posits
that the option to schedule work necessarily includes the prerogative not to schedule it. And, as
the provisions in the CBA are unmistakable and unambiguous, the terms therein are to be
understood literary just as they appear on the face of the contract. [27]
For CCBPI, permitting the workers to suffer work on a Saturday would render the phrase
"required to work'' in Article 10, Section 1 and Article II, Section 2(c) meaningless and
superfluous, as while the scheduling of Saturday work would be optional on the pat1of
management, the workers would still be required to render service even if no Saturday work was
scheduled.[28]
Aside front the clear and unambiguous provisions of the CBA, CCBPI states that the evidence
on record negates the finding that Saturday work is mandatory. [29] The evidence shows that only
some, and not all the same daily-paid employees reported for work on a Saturday, and the
number of the daily-paid employees who reported for work on a Saturday always depended on
the CCBPI's operational necessity.[30] The optional nature of the work on the Saturday is also
highlighted by the fact that, subject to the fulfillment of certain conditions, the employees who
were permitted to suffer work on such day are compensated with a premium pay. [31] This means
that work on a Saturday is part of the normal work week, as there would be no reason why
employees who reported for work on such date should be given additional compensation or
premium pay.
CCBPI also disagrees with the CA that the scheduling of work on a Saturday had ripened into a
company practice and that the withdrawal of Saturday work constitutes a prohibited diminution of
wages.[32] CCBPI maintains that work on a Saturday does not amount to a benefit as a result of a
long-established practice. CCBPI states that in several analogous cases involving overtime
work, Manila Jockey Club Employees Labor-Union-PTGWO v. Manila Jockey Club, Inc.
[33]
 and San Miguel Corporation v. Layoc, Jr.,[34] the Court has already ruled that the work given in
excess of the regular work hours is not a "benefit" and the previous grant thereof cannot amount
to a "company practice." CCBPI particularly cites the Layoc case which held that there is no
violation of the rule on non-diminution of benefits as.the nature of overtime work of the
supervisory employees would show that these are not freely given by the employer, and that on
the contrary, the payment of overtime pay is made as a means of compensation for services
rendered in addition to the regular hours of work.[35]
CCBPI likewise cites several cases involving overtime work, there the Court ruled that the work
given in excess of the regular work hours is not a "benefit" and the previous grant thereof cannot
amount to a "company practice."[36] As a premium day, that Saturday would have the effect of
being a holiday wherein the employees are entitled to receive their pay whether they reported for
work or not.[37]
For CCBPI, the previous grant of Saturday work cannot amount to a benefit that cannot be
withdrawn by the Company. Contrary to the nature of "benefits" under the law, CCBPI did not
freely give payment for Saturday work, instead paying the employees the corresponding wage
and premium pay as compensation for services rendered in addition to the regular work of eight
(8) hours per day from Mondays to Fridays. [38]
On the other hand, the respondents argue that CCBPI failed to regard the express provision of
the CBA which delineates CCBPI's normal work-week which consists of five (5) consecutive
days (Monday to Friday) or eight (8) hours each and one (1) day (Saturday) of four (4) hours.
[39]
 The highlighted provision reads as follows:
ARTICLE 10
HOURS OF WORK

SECTION 1. Work Week. For daily paid workers the nom1al work week shall consist of five (5)
consecutive days (Monday to Friday) of eight (8) hours each find one (1) day (Saturday) of four
(4) hours. Provided, however, that any worker required to work on Saturday must complete the
scheduled shift tor the day and shall be entitled to the premium pay provided in Article IX hereof.
As such, the respondent advocates that the various stipulations of a contract shall be interpreted
together, and that assuming there is any ambiruity in the CBA, this ambiguity should not
prejudice respondents under the principle that any doubt in all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living for the laborer.[40] According
to the respondent, Article 11, Section 1(c) merely grants to CCBPI the option to schedule work
on Saturdays on the basis of operational necessity, and by contrast nothing in the CBA allegedly
allows or grants CCBPI the right or prerogative to unilaterally amend the duly established work
week by eliminating Saturday work.[41]
Respondent also alleges that CCBPI was obliged to provide work on Saturday, not only due to
the apparent .mandate in the CBA, but also as the same ripened into an established company
practice, as CCBPI's practice of providing Saturday work had been observed for several years.
[42]
 Respondent thus contends that the unilateral abrogation of the same would squarely
tantamount to diminution of benefits, especially as the CBA itself expressly provides that
Saturday is part of CCBPI's normal work week, hence the same cannot be unilaterally eliminated
by CCBPI,[43] and that the option granted by the CBA to CCBPI is merely to schedule Saturday
work, not eliminate it entirely. Thus, to eliminate the Saturday work allegedly would amount to
diminution of benefits because the affected employees are ultimately deprived of their supposed
salaries or income for that day.[44]
In its Reply[45] to the counter-arguments posited by the respondent in its Comment, CCBPI
alleges that if indeed Saturday work is mandatory under the CBA and all the workers are obliged
to render work on a Saturday, then the phrase "required to work" under Article 10, Section 1 and
Article 11, Section 2(c) would be meaningless and superfluous.[46] Also, CCBPI takes stock in the
fact that the compensation for work on Saturday is not freely given. Under the scheme followed
by the parties under the CBA, i.e., if the daily-paid employees were permitted to suffer work on a
Saturday, they are given additional compensation or premium pay amounting to 50% of their
hourly rate for the first eight (8) hours, and 75% of their hourly rate for the work rendered in
excess thereof under Article 11, Section 2(c) of the CBA.[47]
Ruling of the Court
The petition is impressed with merit..
As to whether or not the CBA between the parties mandates that CCBII schedule Saturday work
for its employees.
A CBA is the negotiated contract between a legitimate labor organization and the employer
concerning wages, hours of work, and all other terms and conditions of employment in a
bargaining unit.[48] It incorporates the agreement reached after negotiations between the
employer and the bargaining agent with respect to terms and conditions of employment. [49]
It is axiomatic that the CBA comprises the law between the contracting parties, and compliance
therewith is mandated by the express policy of the law. [50] The literal meaning of the stipulations
of the CBA, as with every other contract, control if they are clear and leave no doubt upon the
intention of the contracting parties. Thus, where the CBA is clear and unambiguous, it, becomes
the law between the parties and compliance therewith is mandated by the express policy of the
law.[51] Moreover, it is a familiar rule in interpretation of contracts that the various stipulations of a
contract shall be interpreted together, attributing to the doubtful ones that sense which may
result from all of them taken jointly.[52]
Consequently, in this case, recourse to the CBA between CCBPI and the respondent as regards
the hours of work is essential. In Article 10 of the CBA, the company work week is elaborated
while also defining how a Saturday is treated and in fact delineating the same from the other
days of the work week:
ARTICLE 10
Hours of Work
SECTION 1. Work Week. For daily paid workers, the normal work week shall consist of five (5)
consecutive days (Monday to Friday) of eight (8) hours and each and one (1) day (Saturday) of
four (4) hours, provided, however, that any worker required to work on Saturday must complete
the scheduled shift for the day and shall be entitled to the premium pay provided in Article IX
hereof.
x x x x
(c) Saturdays. Saturday is a premium day but shall not be considered as a rest day or equivalent
to a Sunday. It is further agreed that management has the option to schedule work on Saturdays
on the basis of operational necessity.
Section 5 of Article 9 of the CBA, explicitly referred to in Article 10 states:
SECTION 5. Special Bonus. When a regular employee goes out on his route on a Saturday,
Sunday, or Legal Holiday, either because he is so required by District Sale Supervisor or
because, after securing approval from the District Sales Supervisor. he voluntarily chooses to do
so. he shall be entitled to a special bonus of P280.00.
In making its decision, the CA reasoned that had it really been the intention that Saturday work,
by itself, is optional on CCBPI's part, then there would have been no need to state under the
CBA that Saturday is part of the, normal work week together with the Monday to Friday
schedule, and that if Saturday work is indeed optional, then it would have expressly stipulated
the same.[53] According to the CA's interpretation, the provision wherein CCBPI had the option to
schedule work on Saturdays on the basis of operational necessity, simply meant that CCBPI
could schedule the mandated four (4) hours work any time within the 24-hour period on that day,
but not remove the hours entirely.[54]
For the CA, to interpret the phrase "option to schedule'' as limited merely to scheduling
the time of work on Saturdays and not the option to allow or disallow or to grant or not to grant
the Saturday work itself, is more consistent with the idea candidly stated in the CBA regarding
the work week which is comprised of five (5) consecutive days (Monday to Friday) of eight (8)
hours each and one (1) day (Saturday) of four (4) hours. The foregoing interpretation, as held by
the CA, is in harmony with the context and the established practice in which the CBA is
negotiated,[55] and that, based on the foregoing, CCBPI should comply with the provisions
respecting its normal work week, that is, from Monday to Friday of eight (8) hours a day and on
Saturdays for four (4) hours. CCBPI thus should allow the concerned union members to render
work for four (4) hours on Saturday. [56]
The Court disagrees with the interpretation of the CA. In the perusal of the same, the Court finds
that a more logical and harmonious interpretation of the CBA provisions wherein Saturday work
is optional and not mandatory keeps more with the agreement between the parties.
To note, the CBA under Article 11, Section 1(c), clearly provides that CCBPI has the option to
schedule work on Saturdays based on operational necessity. There is no ambiguity to the
provision, and no other interpretation of the word "work" other than the work itself and not the
working hours. If the parties had truly intended that the option would be to change only the
working hours, then it would have so specified that whole term "working hours" be used, as was
done in other provisions of the CBA. By comparison, there is a provision in Article 10 that states:
SECTION 2. Changes in Work Schedule. The present regular working hours shall be maintained
for the duration of this Agreement. However, it is hereby agreed that the COMPANY may
change the prevailing working hours, if in its judgment, it shall find such change or changes
advisable or necessary either as a permanent or temporary measure, provided at least twelve
(12) hours notice in advance is given of such change or changes, and provided, further, that they
are in accordance with law.
Here, hours are specified as that which can be changed regarding the work schedule. The Court
compares this to Article 11, where it is expressly stated' that management has the option to
schedule work on Saturdays on the basis of operational necessity. To emphasize, if it is only the
hours that management may amend, then it would have been so stated, with that specific term
used instead of just merely "work," a more general term.
Also, as correctly pointed out by CCBPI, if Saturday work is indeed mandatory under the CBA,
the phrase "required to work on a Saturday" in Article 10, Section 1 would be superfluous. The
same phrase is also found in Article 11, Section 2(c) which provides that "a worker paid on daily
basis required to work on a Saturday shall be paid his basic hourly rate plus fifty (50%) percent
thereof."
For the Court, the phrase "schedule work on Saturdays based on operational necessity," by
itself, is union recognition that there are times when exigencies of the business will arise
requiring a manning complement to suffer work for four additional hours per week. Necessarily,
when no such exigencies exist, the additional hours of work need not be rendered.
As such, the provisions' tenor and plain meaning give company management the right to compel
its employees to suffer work on Saturdays. This necessarily includes the prerogative not to
schedule work. Whether or not work will be scheduled on a given Saturday is made to depend
on operational necessity. The CBA therefore gives CCBPI the management prerogative to
provide its employees with Saturday work depending on the exigencies of the business.
This reading of the CBA is made even more apparent by the fact that workers who are required
to work on Saturdays are paid a premium for such work. Notably, in the section on Premium
Pay, it is stated:
(c) Saturdays. Even though Saturday is not his rest day - A worker paid on daily basis required
to work on a Saturday shall be paid his basic hourly rate plus fifty (50%) percent thereof for each
hour worked not in excess of eight hours; if he is required to work more than eight (8) hours, he
shall be paid his basic hourly rate plus seventy-five (75%) thereof for each hour worked in
excess of eight (8) hours.
If Saturday was part of the regular work week and not dependent on management's decision to
schedule work, there would be no need to give additional compensation to employees who
report to work on that day. The CA erred in taking into account that employees required to work
on that day but who would fai1 to report, would be marked down as having gone on leave. [57] The
Court agrees with CCBPI that such conclusion is non sequitur and that the markings merely
indicated the fact that they did not report for work (even if required) and the reasons for their
absence, whether legitimate or not.[58] This understanding is bolstered by the fact that not all
daily-paid workers were required to report for work, which and if indeed Saturday was to be
considered a regular work day, all the3e employees should have been required to report for
work.[59]
In sum, by not taking these provisions into account, the CA ignored the well-settled rule that the
various stipulations of a contract must be interpreted together. The Court finds that relying on the
interpretation of the CA would result in the patent absurdity that the company would have to look
for work for the employees to do even if there is none, on the Saturday as stated. Even if one
were to downplay the lack of logic with this assertion, as mentioned the CBA provisions are clear
and unambiguous, leaving no need for a separate interpretation of the same.
As to whether scheduling Saturday work has ripened into a company practice, the removal of
which constituted a diminution of benefits.
In the decision of the CA, it was held that the fact that CCBPI had been providing work to its
employees every Saturday for several years, a circumstance that proved Saturday was part of
the regular work week, made the grant of Saturday work ripen into company practice.
In asking the Court to reverse the ruling of the CA, CCBPI argues that work on a Saturday is
akin to overtime work because employees who are required to perform such work are given
additional compensation or premium in the CBA. [60] Citing Layoc,[61] CCBPI stresses that since
overtime work does not fall within the definition of benefits, the same is not protected by Article
100 of the Labor Code which proscribes the diminution of benefits. To wit:
First. respondents assert that Article 100 of the Labor Code prohibits the elimination or
diminution of benefits. However, contrary to the nature of benefits, petitioners did not freely give
the payment for overtime work to respondents. Petitioners paid respondents overtime pay
as compensation for services rendered in addition to the regular work hours. Respondents
rendered overtime work only when their services were needed after their regular working hours
and only upon the instructions of their superiors. Respondents even differ as to the amount of
overtime pay received on account of the difference in the additional hours of services rendered.
x x x x
Aside from their allegations, respondents were not able to present anything to prove that
petitioners were obliged to permit respondents to render overtime work and give them the
corresponding overtime pay. Even if petitioners did not institute a "no time card policy,"
respondents could not demand overtime pay from petitioners if respondents did not render
overtime work. The requirement of rendering additional service differentiates overtime pay from
benefits such as thirteenth month pay or yearly merit increase. These benefits do not require any
additional service from their beneficiaries. Thus, overtime pay does not fall within the definition of
benefits under Article 100 of the Labor Code.[62]
The Court does not agree with the argument of CCBPI. CCBPI overlooks the fact that the term
overtime work has an established and technical meaning under our labor laws, to wit:
Article 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that
the employee is paid for the overtime work, an additional compensation equivalent to his regular
wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a
holiday or rest day shall be paid an additional compensation equivalent to the rate of the first
eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.
It can be deduced from the foregoing provision that overtime work is work exceeding eight hours
within the worker's 24-hour workday. [63] What is involved in this case is work undertaken within
the normal hours of work on Saturdays and not work performed beyond eight hours in one day.
Under Article 83 of the Labor Code:
Article. 83. Normal hours of work. The normal hours of work of any employee shall not exceed
eight (8) hours a day.
Despite the mistaken notion of CCBPI that Saturday work is synonymous to overtime work, the
Court still disagrees with the CA ruling that the previous practice of instituting Saturday work by
CCBPI had ripened into a company practice covered by Article 100 of the Labor Code.
To note, it is not Saturday work per se which constitutes a benefit to the company's employees.
Rather, the benefit involved in this case is the premium which the company pays its employees
above and beyond the minimum requirements set by law. The CBA between CCBPI and the
respondent guarantees the employees that they will be paid their regular wage plus an additional
50% thereof for the first eight (8) hours of work performed on Saturdays. Therefore, the benefit,
if ever there is one, is the premium pay given by reason of Saturday work, and not the grant of
Saturday work itself.
In Royal Plant Workers Union v. Coca-Cola Bottlers Philippines, Inc.-Cebu Plant,[64] the Court
had the occasion to rule that the term "benefits" mentioned in the non-diminution rule refers to
monetary benefits or privileges given to the employee with monetary equivalents. Stated
otherwise, the employee benefits contemplated by Article 100 are those which are capable of
being measured in terms of money. Thus, it can be readily concluded from past jurisprudential
pronouncements that these privileges constituted money in themselves or were convertible into
monetary equivalents.[65]
In order for there to be proscribed diminution of benefits that prejudiced the affected employees,
CCBPI should have unilaterally withdrawn the 50% premium pay without abolishing Saturday
work. These are not the facts of the case at bar. CCBPI withdrew the Saturday work itself,
pursuant, as already held, to its management prerogative. In fact, this management prerogative
highlights the fact that the scheduling of the Saturday work was actually made subject to a equivalent to one-half day's wage, plus corresponding premium.
condition, i.e., the prerogative to provide the company's employees with Saturday work based on
the existence of operational necessity. On a final note, the Court cannot emphasize enough that its primary role as the vanguard of
constitutional guaranties charges it with the solemn duty of affording full protection to labor. [70] It
In Eastern Telecommunications Philippines, Inc. v. Eastern Telecoms Employees Union,[66] the is, in fact, well-entrenched in the deluge of our jurisprudence on labor law and social legislation
company therein allegedly postponed the payment of the 14th, 15th, and 16th month bonuses that the scales of justice usually tilt in favor of the workingman. [71] Such favoritism, however, has
contained in the CBA, and unilaterally made the payment subject to availability of funds. not blinded the Court to the rule that justice is, in every case for the deserving, to be dispensed
Because of its severe financial condition, the company refused to pay the subject bonuses. The in the light of the established facts and applicable law and doctrine.[72] The law does not
Court, in holding that such act violated the proscription against diminution of benefits, observed authorize the oppression or self-destruction of the employer. [73] Management also has its own
that the CBA provided for the subject bonuses without qualification-their grant was not made to rights, which, as such, are entitled to respect and enforcement in the interest of simple fair play.
[74]
depend on the existence o,f profits. Since no conditions were specified in the CBA for the grant  After all, social justice is, in the eloquent words of Associate Justice Jose P. Laurel, "the
of the subject benefits, the company could not use its dire financial straits to justify the omission. humanization of laws and the equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may at least be approximated." [75]
As compared to the factual milieu in the Eastern Telecommunications case, the CBA between
CCBPI and the respondent has no analogous provision which grants that the 50% premium pay WHEREFORE, the Decision of the Court of Appeals dated June 23, 2010, and the Resolution
would have to be paid regardless of the occurrence of Saturday work. Thus, the non-payment of dated October 19, 2010 are REVERSED and SET ASIDE. The Decision of the National
the same would not constitute a violation of the diminution of benefits rule. Conciliation and Mediation Board, Regional Branch No. 6, Iloilo City dated September 7, 2006,
in Case No. PAC-613-RB6-02-01-06-2006 is AFFIRMED.
Also, even assuming arguendo that the Saturday work involved in this case falls within the
definition of a "benefit" protected by law, the fact that it was made subject to a condition (i.e., the SO ORDERED.
existence of operational necessity) negates the application of Article 100 pursuant to the
established doctrine that when the grant of a benefit is made subject to a condition and such Carpio, (Chairperson), Perlas-Bernabe, Caguioa, and Carandang, JJ., concur.
condition prevails, the rule on non-diminution finds no application. Otherwise stated, if Saturday
work and its corresponding premium pay were granted to CCBPI's employees without
qualification, then the company's policy of permitting its employees to suffer work on Saturdays
[1]
could have perhaps ripened into company practice protected by the non-diminution rule.  Rollo, pp. 20-61.
[2]
Lastly, the Court agrees with the assertion of CCBPI that since the affected employees are daily-  Penned by Associate Justice Socorro B. Inting, with Associate Justices Edwin D. Sorongon
paid employees, they should be given their wages and corresponding premiums for Saturday and Eduardo B. Peralta, Jr. concurring; id. at 70-78.
work only if they are permitted to suffer work. Invoking the time-honored rule of "a fair day's work
[3]
for a fair day's pay," the CCBPI argues that the CA's ruling that such unworked Saturdays should  Id. at 80-81.
be compensated is contrary to law and the evidence on record.
[4]
 Rendered by Atty. Mateo A. Valenzuela as Chairman, with Attys. Inocencio Ferrer, Jr. and
The CA, for its part, ruled that the principle of "a fair day's work for a fair day's pay" was Gloria Arriola as members; id. at 179-206.
irrelevant to the instant case. According to the appellate court, since CCBPI's employees are
[5]
daily-paid workers, they should be paid their whole daily rate plus the corresponding premium  Id. at 24.
pay in the absence of a specific CBA provision that directed wages to be paid on a different rate
[6]
on Saturdays. This was notwithstanding the fact that the duration of Saturday work lasted only  Id. at 25.
for four hours or half the time spent on other workdays.
[7]
 Id. at 143-145.
The CA erred in this pronouncement. The age-old rule governing the relation between labor and ARTICLE 10
capital, or management and employee, of a "fair day's,wage for a fair day's labor" remains the HOURS OF WORK
basic factor in determining employees' wages.[67] If there is no work performed by the employee,
there can be no wage.[68] In cases where the employee's failure to work was occasioned neither SECTION 1. Work Week. For daily paid workers the normal work week shall consist of five (5)
by his abandonment nor by termination, the burden of economic loss is not rightfully shifted to consecutive days (Monday to Friday) of eight (8) hours each and one (1) day (Saturday) of four
the employer; each party must bear his own loss.[69] In other words, where the employee is (4) hours. Provided, however, that any worker required to work on Saturday must complete the
willing and able to work and is not illegally prevented from doing so, no wage is due to him. To scheduled shift for the day and shall be entitled to the premium pay provided in Article IX hereof.
hold otherwise would be to grant to the employee that which he did not earn at the prejudice of
the employer. SECTION 2. Changes in Work Schedule. The present regular working hours shall be maintained
for the duration of this Agreement. However, it is hereby agreed that the COMPANY may
In the case at bar, CCBPI's employees were not illegally prevented from working on Saturdays. change the prevailing working hours, if in its judgment, it shall find such change or changes
The company was simply exercising its option not to schedule work pursuant to the CBA advisable or necessary either as a permanent or temporary measure, provided at least twelve
provision which gave it the prerogative to do so. It therefore follows that the principle of "no work, (12) hours notice in advance is given of such change or changes, and provided, further, that they
no pay" finds application in the instant case. are in accordance with law.
ARTICLE 11
Having disposed of the issue on wages for unworked Saturdays in consonance with the well- OVERTIME, NIGHT DIFFERENTIAL, SATURDAY, SUNDAY AND HOLIDAY PAY
settled rule of "no work, no pay," this Court deems it unnecessary to belabor on the CA ruling
that the concerned employees should be paid their whole daily rate, and not the amount SECTION 1. Definitions
 [32]
(a) An "Ordinary Day" is one that is neither a regular holiday, a special holiday, a Saturday nor  Id. at 48.
the worker's scheduled rest day.
[33]
 546 Phil. 531 (2007).
x x x x
[34]
 562 Phil. 670 (2007).
(b) Saturdays. Saturday is a premium day but shall not be considered as a rest day or equivalent
[35]
to a Sunday. It is further agreed that management has the option to schedule work on Saturdays  Rollo, p. 387.
on the basis of operational necessity.
[36]
 Id., citing Manila Jockey Club Employees Labor Union-PTGWO v. Manila Jockey Club, Inc.,
[8]
 Id. at 26. supra note 33, at 638 and San Miguel Corporation v. Layoc, Jr., supra note 34, at 679 (2007).
[9] [37]
 Id. at 87.  Rollo, p. 184.
[10] [38]
 Id.  Id. at 389.
[11] [39]
 Id. at 182.  Id. at 323.
[12] [40]
 Id.  Id.
[13] [41]
 Id.  Id. at 335.
[14] [42]
 Id. at 179.  Id.
[15] [43]
 Id.  Id. at 326.
[16] [44]
 Id. at 206.  Id.
[17] [45]
 Id. at 223-224.  Id. at 339-351.
[18] [46]
 Id. at 70-78.  Id. at 341.
[19] [47]
 Id. at 35.  Id. at 345.
[20] [48]
 Id. at 80-81.  Benson Industries Employees Union-ALU-TUCP, et al. v. Benson Industries, Inc., 740 Phil.
670, 679 (2014).
[21]
 Id. at 17.
[49]
 Pantranco North Express, Inc. v. NLRC, 328 Phil. 470, 483-484 (1996).
[22]
 Id. at 316-327.
[50]
 Marcopper Mining Corporation v. NLRC, 325 Phil. 618, 632 (1996).
[23]
 Id. at 339-354.
[51]
 Philippine Journalists, Inc. v. Journal Employees Union, 710 Phil. 94, 103 (2013).
[24]
 Id. at 78.
[52]
 CIVIL CODE OF THE PHILIPPINES, Article 1374.
[25]
 Id. at 27.
[53]
 Rollo, p. 74.
[26]
 Id. at 46, citing Sosito v. Aguinaldo Development Corporation, 240 Phil. 373, 377 (1987).
[54]
 Id. at 75.
[27]
 Rollo, p. 43, citing Gaisano Cagayan. Inc. v. Insurance Company of North America, 523 Phil.
[55]
677, 689 (2006).  Id.
[28] [56]
 Rollo, id.  Id. at 77.
[29] [57]
 Id. at 44.  Id. at 390.
[30] [58]
 Id. at 383.  Id.
[31] [59]
 Id.  Id. at 391.
 REICHL, accused,
[60]
 Id. at 50. KARL REICHL and YOLANDA GUTIERREZ DE REICHL, accused-appellants
[61]
 Supra note 34.
PUNO, J.:
[62]
 Id. at 685-686.
This is an appeal from the Joint Decision of the Regional Trial Court, Batangas City in Criminal
[63]
 Department of Labor Manual, Section 4323-01. Case Nos. 6428, 6429, 6430, 6431, 6432, 6433, 6434, 6435, 6436, 6437, 6438, 6439, 6528,
6529, 6530 and 6531 finding accused-appellants, Spouses Karl Reichl and Yolanda Gutierrez
[64]
 709 Phil. 350 (2013). de Reichl guilty of five (5) counts of estafa and one (1) count of syndicated and large scale illegal
recruitment.1
[65]
 Id. at 357-358.
[66] In April 1993, eight (8) informations for syndicated and large scale illegal recruitment and eight
 681 Phil. 519 (2012).
(8) informations for estafa were filed against accused-appellants, spouses Karl and Yolanda
[67] Reichl, together with Francisco Hernandez. Only the Reichl spouses were tried and convicted by
 Navarro v. P.V. Pajarillo Liner, Inc., 604 Phil. 383, 391 (2009).
the trial court as Francisco Hernandez remained at large.1âwphi1.nêt
[68]
 Aklan Electric Cooperative Incorporated v. NLRC, 380 Phil. 225, 244-245 (2000).
The evidence for the prosecution consisted of the testimonies of private complainants; a
[69]
 Tri-C General Services v. Matuto, et al., 770 Phil. 25 I, 264 (20 15), citing MZR Industries, et certification from the Philippine Overseas Employment Administration (POEA) that Francisco
al. v. Colambot, 716 Phil. 617, 628 (2013). Hernandez, Karl Reichl and Yolanda Gutierrez Reichl in their personal capacities were neither
licensed nor authorized by the POEA to recruit workers for overseas employment; 2 the receipts
[70]
 1987 CONSTITUTION, Article XIII, Section 3. for the payment made by private complainants; and two documents signed by the Reichl
spouses where they admitted that they promised to secure Austrian tourist visas for private
[71]
 Ilaw Buklod ng Manggagawa (IBM) Nestle Philippines, Inc. Chapter, et al. v. Nestle Phils., complainants and that they would return all the expenses incurred by them if they are not able to
Inc., 770 Phil. 266, 278 (2015). leave by March 24, 1993,3 and where Karl Reichl pledged to refund to private complainants the
total sum of P1,388,924.00 representing the amounts they paid for the processing of their
[72]
 Mercury Drug Corporation v. NLRC, 258 Phil. 384, 391 (1989). papers.4
[73]
 Paredes v. Feed the Children Philippines, Inc., 769 Phil. 418, 442 (2015).
Private complainant Narcisa Hernandez, a teacher, was first to testify for the prosecution. She
[74]
 Phil. Long Distance Telephone Company v. Honrado, 652 Phil. 331, 334 (2010). stated that Francisco Hernandez introduced her to the spouses Karl and Yolanda Reichl at the
residence of a certain Hilarion Matira at Kumintang Ibaba, Batangas City. At the time, she also
[75]
 Calalang v. Williams, et al., 70 Phil. 726, 734-735 (1940). saw the other applicants Melanie Bautista, Estela Manalo, Edwin Coleng, Anicel Umahon,
Analiza Perez and Maricel Matira. Karl and Yolanda Reichl told Narcisa that they could find her a
job as domestic helper in Italy. They, however, required her to pay the amount of P150,000.00
for the processing of her papers and travel documents. She paid the fee in three installments.
She paid the first installment of P50,000.00 on July 14, 1992, the second installment
of P25,000.00 on August 6, 1992 and the third in the amount of P75,000.00 on December 27,
1992. She gave the money to Francisco Hernandez in the presence of the Reichl spouses at
Matira's residence. Francisco Hernandez issued a receipt for the first and second
installment5 but not for the third. Narcisa was scheduled to leave on December 17, 1992 but was
not able to do so. Karl Reichl explained that she would get her transit visa to Italy in Austria, but
she could not yet leave for Austria because the hotels were fully booked at that time because of
the Christmas season. Narcisa's departure was again scheduled on January 5, 1993, but it still
did not push through. Narcisa stated that they went to Manila several times supposedly to obtain
a visa from the Austrian Embassy and Karl Reichl assured her that she would be able to leave
once she gets her visa. The accused set the departure of Narcisa and that of the other
applicants several times but these proved to be empty promises. In March 1993, the applicants
met with the three accused at the residence of private complainant Charito Balmes and asked
them to refund the payment if they could not send them abroad. The meeting resulted in an
agreement which was reduced into writing and signed by Karl Reichl. Mr. Reichl promised to
ensure private complainants' departure by April, otherwise, they would return their payment.6
G.R. No. 141221-36      March 7, 2002

Private complainant Leonora Perez also gave the following testimony: In July 1992, her sister,
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, Analiza Perez, introduced her to Francisco Hernandez at their residence in Dolor Subdivision,
vs. Batangas City. Francisco Hernandez convinced her to apply for a job in Italy. When she
FRANCISCO HERNANDEZ (at large), KARL REICHL, and YOLANDA GUTIERREZ DE accepted the offer, Francisco Hernandez told her to prepare P150,000.00 for the processing of
her papers. In August 1992, Leonora, together with her sister and Francisco Hernandez, went to
Ramada Hotel in Manila to meet with Karl and Yolanda Reichl. At said meeting, Leonora handed
her payment of P50,000.00 to Yolanda Reichl. Yolanda assured her that she would be able to
work in Italy. Francisco Hernandez and the Reichl spouses told Leonora to wait for about three
weeks before she could leave. After three weeks, Francisco Hernandez invited Leonora and the
other applicants to the house of Hilarion Matira in Batangas City to discuss some matters.
Francisco Hernandez informed the applicants that their departure would be postponed to
December 17, 1992. December 17 came and the applicants were still unable to leave as it was
allegedly a holiday. Yolanda and Karl Reichl nonetheless assured Leonora of employment as
domestic helper in Italy with a monthly salary of $1,000.00. Francisco Hernandez and the Reichl
spouses promised the applicants that they would leave for Italy on January 5, 1993. Some time
in January 1993, Francisco Hernandez went to the residence of Leonora and collected the sum
of P50,000.00 purportedly for the plane fare. Francisco issued a receipt for the payment. When
the applicants were not able to leave on the designated date, Francisco Hernandez and the
spouses again made another promise. Tired of the recruiters' unfulfilled promises, the applicants
decided to withdraw their application. However, Karl Reichl constantly assured them that they
would land a job in Italy because he had connections in Vienna. The promised employment,
however, never materialized. Thus, Karl Reichl signed a document stating that he would refund
the payment made by the applicants plus interest and other expenses. The document was
executed and signed at the house of one of the applicants, Charito Balmes, at P. Zamora St.,
Batangas City.7
Janet Perez, Leonora's sister, corroborated the latter's testimony that she paid a total amount
of P100,000.00 to the three accused.8
Private complainant Charito Balmes told a similar story when she testified before the court. She
said that Francisco Hernandez convinced her to apply for the job of domestic helper in Italy and
required her to pay a fee of P150,000.00. He also asked her to prepare her passport and other
papers to be used to secure a visa. On November 25, 1992, she gave P25,000.00 to Francisco
Hernandez. They proceeded to Kumintang Ibaba, Batangas City and Francisco Hernandez
introduced her to his business partners, spouses Karl and Yolanda Reichl. Francisco Hernandez
turned over the payment to the spouses so that they could secure a visa for her. The Reichl
spouses promised her an overseas job. They said she and the other applicants would leave on
December 17, 1992. On December 11, 1992, Charito paid the amount of P70,300.00 to
Francisco Hernandez in the presence of the Reichls. Francisco Hernandez again handed the
money to the spouses. On February 16, 1993, Charito paid P20,000.00 to Francisco Hernandez
who delivered the same to the spouses. Francisco Hernandez did not issue a receipt for the
payment made by Charito because he told her that he would not betray her trust. Like the other
applicants, Charito was not able to leave the country despite the numerous promises made by
the accused. They gave various excuses for their failure to depart, until finally the Reichls told
the applicants that Karl Reichl had so many business transactions in the Philippines that they
would not be able to send them abroad and that they would refund their payment instead.
Hence, they executed an agreement which was signed by Karl Reichl and stating that they
would return the amounts paid by the applicants. The accused, however, did not comply with
their obligation.9
Mrs. Elemenita Bautista, the mother of private complainant Melanie Bautista, also took the
witness stand. She stated that in May 1992, Melanie applied for an overseas job through
Francisco Hernandez. Francisco Hernandez told her to prepare P150,000.00 to be used for the
processing of her papers and plane ticket. On June 26, 1992, Melanie made the initial payment
of P50,000.00 to Francisco Hernandez who was then accompanied by Karl and Yolanda
Reichl.10 Upon receipt of the payment, Francisco Hernandez gave the money to Yolanda Reichl.
Melanie made two other payments: one on August 6, 1992 in the amount of P25,000.00,11 and
another on January 3, 1993 in the amount of P51,000.00.12 Three receipts were issued for the
payments.13
Rustico Manalo, the husband of private complainant Estela Abel de Manalo, testified that his
wife applied for the job of domestic helper abroad. In June 1992, Francisco Hernandez
introduced them to Karl and Yolanda Reichl who were allegedly sending workers to Italy. Rustico
and his wife prepared all the relevant documents, i.e., passport, police clearance and marriage
contract, and paid a total placement fee of P130,000.00.14 They paid P50,000.00 on June 5,
1992, P25,000.00 on August 8, 1992, and P55,000.00 on January 3, 1993. The payments were
made at the house of Hilarion Matira and were received by Francisco Hernandez who, in turn,
remitted them to the Reichl spouses. Francisco Hernandez issued a receipt for the payment.
The Reichls promised to take care of Estela's papers and to secure a job for her abroad. The
Reichls vowed to return the payment if they fail on their promise. As with the other applicants,
Estela was also not able to leave the country.15
The defense interposed denial and alibi.
Accused-appellant Karl Reichl, an Austrian citizen, claimed that he entered the Philippines on
July 29, 1992. Prior to this date, he was in various places in Europe. He came to the country on
July 29, 1992 to explore business opportunities in connection with the import and export of beer
and sugar. He also planned to establish a tourist spot somewhere in Batangas. Upon his arrival,
he and his wife, Yolanda Reichl, stayed at the Manila Intercontinental Hotel. On August 3, 1992,
they moved to Manila Midtown Hotel. They stayed there until August 26, 1992. After they left
Manila Midtown Hotel, they went to another hotel in Quezon City. Karl Reichl returned to Vienna
on September 19, 1992.16
Mr. Reichl stated that he first met Francisco Hernandez through a certain Jimmy Pineda around
August 1992 at Manila Midtown Hotel. Francisco Hernandez was allegedly looking for a
European equipment to be used for the quarrying operation of his friend. Before accepting the
deal, he made some research on the background of the intended business. Realizing that said
business would not be viable, Karl Reichl advised Francisco Hernandez to instead look for a
second-hand equipment from Taiwan or Japan. He never saw Francisco Hernandez again until
he left for Vienna in September 1992.17
Karl Reichl returned to the Philippines on October 21, 1992. Francisco Hernandez allegedly
approached him and sought his help in securing Austrian visas purportedly for his relatives. Karl
Reichl refused and told him that he was planning to stay permanently in the Philippines. On one
occasion, Francisco Hernandez invited him to an excursion at Sombrero Island. Francisco
Hernandez told him that he would also bring some of his relatives with him and he would
introduce him to them. There he met Narcisa Hernandez and Leonora Perez. Leonora Perez,
together with Francisco Hernandez, later went to see Mr. Reichl at the house of his in-laws at
No. 4 Buenafe Road, Batangas City and asked him if he could help her obtain an Austrian visa.
Karl Reichl, however, was firm on his refusal.18
In his testimony before the trial court, Karl Reichl denied any knowledge about Francisco
Hernandez's recruitment activities. He said that Francisco Hernandez merely told him that he
wanted to help his relatives go to Europe. He further denied that he promised private
complainants that he would give them overseas employment.19 As regards the document where
Mr. Reichl undertook to pay P1,388,924.00 to private complainants, he claimed that he signed
said document under duress. Francisco Hernandez allegedly told him that private complainants
would harm him and his family if he refused to sign it. He signed the document as he felt he had
no other option.20
Yolanda Gutierrez de Reichl corroborated the testimony of her husband and denied the charges
against her. She claimed that she was in Manila on the dates alleged in the various informations,
thus, she could not have committed the acts charged therein. Yolanda Reichl further stated that
she did not know of any reason why private complainants filed these cases against her and her
husband. She said that several persons were harassing her and pressuring her to pay private
complainants the sum of at least P50,000.00.21
After assessing the evidence presented by the parties, the trial court rendered a decision
convicting accused-appellants of one (1) count of illegal recruitment in large scale and six (6)
counts of estafa. The dispositive portion of the decision reads:
"WHEREFORE, judgment is hereby rendered finding the accused spouses KARL
REICHL and YOLANDA GUTIERREZ REICHL -
1. NOT GUILTY of the crime of syndicated and large-scale illegal
recruitment as charged in the above-mentioned Criminal Cases Nos. 6435,
6437 and 6529;
2. NOT GUILTY of the crime of estafa as charged in the above-mentioned
Criminal Cases Nos. 6434, 6436 and 6528;
3. GUILTY beyond reasonable doubt of the crime of syndicated and large-
scale illegal recruitment, as charged, in the above-mentioned Criminal
Cases Nos. 6429, 6431, 6433, 6439 and 6531;
4. GUILTY beyond reasonable doubt of the crime of estafa, as charged, in
the above-mentioned Criminal Cases Nos. 6428, 6430, 6432, 6438 and
6530.
The Court hereby imposes upon the accused-spouses KARL REICHL and YOLANDA
GUTIERREZ REICHL the following sentences:
1. For the 5 offenses, collectively, of syndicated and large-scale illegal recruitment in
Criminal Cases Nos. 6429, 6431, 6433, 6438 and 6531, to suffer the penalty of life
imprisonment, and to pay a fine of One Hundred Thousand Pesos (P100,000.00);
2. In Criminal Case No. 6428, there being no mitigating or aggravating circumstance,
to suffer the indeterminate sentence of Six (6) Years of prision correctional, as
minimum to Sixteen (16) Years of reclusion temporal, as maximum, and to indemnify
the complainant Narcisa Hernandez in the amount of P150,000.00;
3. In Criminal Case No. 6430, there being no mitigating or aggravating circumstance,
to suffer the indeterminate sentence of six (6) years of prision correctional as minimum
to eleven (11) years of prision mayor, as maximum and to indemnify the complainant
Leonora Perez in the amount of P100,000.00;
4. In Criminal Case No. 6432, there being no mitigating or aggravating circumstance,
to suffer the indeterminate sentence of six (6) years of prision correctional as minimum
to sixteen (16) years of reclusion temporal, as maximum and to indemnify the
complainant Melanie Bautista in the amount of P150,000.00;
5. In Criminal Case No. 6438, there being no mitigating or aggravating circumstance,
to suffer the indeterminate sentence of six (6) years of prision correctional as minimum
to fourteen (14) years of reclusion temporal as maximum and to indemnify the
complainant Estela Abel de Manalo in the amount of P130,000.00;
6. In Criminal Case No. 6530, there being no mitigating or aggravating circumstance,
to suffer the indeterminate sentence of six (6) years or prision correctional as
minimum to thirteen (13) years of reclusion temporal as maximum and to indemnify
the complainant Charito Balmes in the amount of P121,300.00; and
7. To pay the costs.
SO ORDERED."
Accused-appellants appealed from the decision of the trial court. They raise the following errors:
"1. The trial court erred in finding accused-appellant Karl Reichl guilty of the crimes of
estafa and illegal recruitment committed by syndicate and in large scale based on the
evidence presented by the prosecution which miserably failed to establish guilt beyond
reasonable doubt.
2. The trial court erred in convicting the accused-appellant of the crime of illegal
recruitment on a large scale by cummulating five separate cases of illegal recruitment
each filed by a single private complainant.
3. The trial court erred in rendering as a matter of course an automatic guilty verdict
against accused-appellant for the crime of estafa after a guilty verdict in a separate
crime for illegal recruitment. It is submitted that conviction in the latter crime does not
ipso facto result in conviction in the former."22
The appeal is bereft of merit.
Article 38 of the Labor Code defines illegal recruitment as "any recruitment activities, including
the prohibited practices enumerated under Article 34 of (the Labor Code), to be undertaken by
non-licensees or non-holders of authority." The term "recruitment and placement" refers to any
act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers,
including 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.23 The law imposes a higher penalty when the illegal recruitment is committed by
a syndicate or in large scale as they are considered an offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or
more persons conspiring and/or confederating with one another in carrying out any unlawful or
illegal transaction, enterprise or scheme. It is deemed committed in large scale if committed
against three (3) or more persons individually or as a group.24
In the case at bar, the prosecution was able to prove beyond reasonable doubt that accused-
appellants engaged in activities that fall within the definition of recruitment and placement under
the Labor Code. The evidence on record shows that they promised overseas employment to
private complainants and required them to prepare the necessary documents and to pay the
placement fee, although they did not have any license to do so. There is illegal recruitment when
one who does not possess the necessary authority or license gives the impression of having the
ability to send a worker abroad.25
Accused-appellants assert that they merely undertook to secure Austrian visas for private
complainants, which act did not constitute illegal recruitment. They cite the document marked at
Exhibit "J" stating that they promised to obtain Austrian tourist visas for private complainants.
We are not convinced. Private complainants Narcisa Hernandez, Leonora Perez and Charito
Balmes categorically stated that Karl and Yolanda Reichl told them that they would provide them
overseas employment and promised them that they would be able to leave the country on a
specified date. We do not see any reason to doubt the truthfulness of their testimony. The
defense has not shown any ill motive for these witnesses to falsely testify against accused-
appellants if it were not true that they met with the Reichl spouses and the latter represented
themselves to have the capacity to secure gainful employment for them abroad. The minor
lapses in the testimony of these witnesses pointed out by accused-appellants in their brief do not
impair their credibility, especially since they corroborate each other on the material points, i.e.,
that they met with the three accused several times, that the three accused promised to give
them overseas employment, and that they paid the corresponding placement fee but were not
able to leave the country. It has been held that truth-telling witnesses are not always expected to
give error-free testimonies considering the lapse of time and the treachery of human
memory.26 Moreover, it was shown that Karl Reichl signed a document marked as Exhibit "C"
where he promised to refund the payments given by private complainants for the processing of
their papers. We are not inclined to believe Mr. Reichl's claim that he was forced by Francisco
Hernandez to sign said document. There is no showing, whether in his testimony or in that of his
wife, that private complainants threatened to harm them if he did not sign the document. Mr.
Reichl is an educated man and it cannot be said that he did not understand the contents of the
paper he was signing. When he affixed his signature thereon, he in effect acknowledged his
obligation to ensure the departure of private complainants and to provide them gainful
employment abroad. Such obligation arose from the promise of overseas placement made by
him and his co-accused to private complainants. The admission made by accused-appellants in
Exhibit "J" that they promised to obtain Austrian visas for private complainants does not negate
the fact that they also promised to procure for them overseas employment. In fact, in Exhibit "J",
accused-appellants admitted that each of the private complainants paid the amount
of P50,000.00. However, in Exhibit "C", which was executed on a later date, accused-appellants
promised to refund to each complainant an amount exceeding P150,000.00. This is an
acknowledgment that accused-appellants received payments from the complainants not only for
securing visas but also for their placement abroad.
Accused-appellants' defense of denial and alibi fail to impress us. The acts of recruitment were
committed from June 1992 until January 1993 in Batangas City. Karl Reichl was in Manila from
July 29, 1992 until September 19, 1992, and then he returned to the Philippines and stayed in
Batangas from October 21, 1992. Yolanda Reichl, on the other hand, claimed that he was in
Manila on the dates alleged in the various informations. It is of judicial notice that Batangas City
is only a few hours' drive from Manila. Thus, even if the spouses were staying in Manila, it does
not prevent them from going to Batangas to engage in their recruitment business. Furthermore, it
appears that the three accused worked as a team and they conspired and cooperated with each
other in recruiting domestic helpers purportedly to be sent to Italy. Francisco Hernandez
introduced Karl and Yolanda Reichl to the job applicants as his business partners. Karl and
Yolanda Reichl themselves gave assurances to private complainants that they would seek
employment for them in Italy. Francisco Hernandez remitted the payments given by the
applicants to the Reichl spouses and the latter undertook to process the applicants' papers.
There being conspiracy, each of the accused shall be equally liable for the acts of his co-
accused even if he himself did not personally take part in its execution.
Accused-appellants argue that the trial court erred in convicting accused-appellants of illegal
recruitment in large scale by cummulating the individual informations filed by private
complainants. The eight informations for illegal recruitment are worded as follows:
Criminal Case No. 6429
"That on or about July 14, 1992 and sometime prior and subsequent thereto at Hilltop,
Brgy. Kumintang Ibaba, Batangas City, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, knowing fully well that they are non-
licensees nor holders of authority from the Department of Labor and Employment or
any other authorized government entity, conspiring and confederating together, did
then and there, wilfully, unlawfully and feloniously engage in syndicated and large
scale recruitment and placement activities by enlisting, contracting, procuring, offering
and promising for a fee to one Narcisa Autor de Hernandez and to more than three
other persons, job placement abroad, by reason of which said Narcisa Autor de
Hernandez relying on these misrepresentations, paid and/or gave the amount of ONE
HUNDRED FIFTY THOUSAND (P150,000.00) PESOS, Philippine Currency, to said
accused, which acts constitute a violation of the said law.
Contrary to Law."
Criminal Case No. 6431
"That on or about July 1992 and sometime prior and subsequent thereto at Dolor
Subdivision, Batangas City, Philippines and within the jurisdiction of this Honorable
Court, the above-named accused, knowing fully well that they are non-licensees nor
holders of authority from the Department of Labor and Employment or any other
authorized government entity, conspiring and confederating together, did then and
there, wilfully, unlawfully and feloniously engage in syndicated and large scale
recruitment and placement activities by enlisting, contracting, procuring, offering and
promising for a fee to one Leonora Perez y Atienza and to more than three other
persons, job placement abroad, by reason of which said Leonora Perez y Atienza
relying on these misrepresentations, paid and/or gave the amount of ONE HUNDRED
THOUSAND (P100,000.00) PESOS, Philippine Currency, to said accused, which acts
constitute a violation of the said law.
Contrary to Law."
Criminal Case No. 6433
"That on or about June 26, 1992 and sometime prior and subsequent thereto at
Hilltop, Brgy. Kumintang Ibaba, Batangas City, Philippines and within the jurisdiction of
this Honorable Court, the above-named accused, knowing fully well that they are non-
licensees nor holders of authority from the Department of Labor and Employment or
any other authorized government entity, conspiring and confederating together, did
then and there, wilfully, unlawfully and feloniously engage in syndicated and large
scale recruitment and placement activities by enlisting, contracting, procuring, offering
and promising for a fee to one Melanie Bautista y Dolor and to more than three other
persons, job placement abroad, by reason of which said Melanie Bautista y Dolor
relying on these misrepresentations, paid and/or gave the amount of ONE HUNDRED
FIFTY THOUSAND (P150,000.00) PESOS, Philippine Currency, to said accused,
which acts constitute a violation of the said law.1âwphi1.nêt
Contrary to Law."
Criminal Case No. 6435
"That on or about July 12, 1992 and sometime prior and subsequent thereto at Hilltop,
Brgy. Kumintang Ibaba, Batangas City, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, knowing fully well that they are non-
licensees nor holders of authority from the Department of Labor and Employment or
any other authorized government entity, conspiring and confederating together, did
then and there, wilfully, unlawfully and feloniously engage in syndicated and large
scale recruitment and placement activities by enlisting, contracting, procuring, offering
 and promising for a fee to one Annaliza Perez y Atienza and to more than three other
persons, job placement abroad, by reason of which said Annaliza Perez y Atienza
relying on these misrepresentations, paid and/or gave the amount of ONE HUNDRED
SIXTY THOUSAND (P160,000.00) PESOS, Philippine Currency, to said accused,
which acts constitute a violation of the said law.
Contrary to Law.
Criminal Case No. 6437
"That on or about August 15, 1992 and sometime prior and subsequent thereto at
Hilltop, Brgy. Kumintang Ibaba, Batangas City, Philippines and within the jurisdiction of
this Honorable Court, the above-named accused, knowing fully well that they are non-
licensees nor holders of authority from the Department of Labor and Employment or
any other authorized government entity, conspiring and confederating together, did
then and there, wilfully, unlawfully and feloniously engage in syndicated and large
scale recruitment and placement activities by enlisting, contracting, procuring, offering
and promising for a fee to one Edwin Coling y Coling and to more than three other
persons, job placement abroad, by reason of which said Edwin Coling y Coling relying
on these misrepresentations, paid and/or gave the amount of ONE HUNDRED FIFTY
THOUSAND (P150,000.00) PESOS, Philippine Currency, to said accused, which acts
constitute a violation of the said law.
Contrary to Law."
Criminal Case No. 6439
"That on or about June 5, 1992 and sometime prior and subsequent thereto at Hilltop,
Brgy. Kumintang Ibaba, Batangas City, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, knowing fully well that they are non-
licensees nor holders of authority from the Department of Labor and Employment or
any other authorized government entity, conspiring and confederating together, did
then and there, wilfully, unlawfully and feloniously engage in syndicated and large
scale recruitment and placement activities by enlisting, contracting, procuring, offering
and promising for a fee to one Estela Abel de Manalo and to more than three other
persons, job placement abroad, by reason of which said Estela Abel de Manalo relying
on these misrepresentations, paid and/or gave the amount of ONE HUNDRED
THIRTY THOUSAND (P130,000.00) PESOS, Philippine Currency, to said accused,
which acts constitute a violation of the said law.
Contrary to Law."
Criminal Case No. 6529
"That on or about July 1992 and sometime prior and subsequent thereto at Brgy. Sta.
Rita Karsada, Batangas City, Philippines and within the jurisdiction of this Honorable
Court, the above-named accused, knowing fully well that they are non-licensees nor
holders of authority from the Department of Labor and Employment or any other
authorized government entity, conspiring and confederating together, did then and
there, wilfully, unlawfully and feloniously engage in syndicated and large scale
recruitment and placement activities by enlisting, contracting, procuring, offering and
promising for a fee to one Anicel Umahon y Delgado and to more than three other
persons, job placement abroad, by reason of which said Anicel Umahon y Delgado
relying on these misrepresentations, paid and/or gave the amount of ONE HUNDRED
THIRTY THOUSAND (P130,000.00) PESOS, Philippine Currency, to said accused,
which acts constitute a violation of the said law.
Contrary to Law."
Criminal Case No. 6531
"That on or about November 25, 1992 and sometime prior and subsequent thereto at
No. 40 P. Zamora Street, Batangas City, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, knowing fully well that they are non-
licensees nor holders of authority from the Department of Labor and Employment or
any other authorized government entity, conspiring and confederating together, did
then and there, wilfully, unlawfully and feloniously engage in syndicated and large
scale recruitment and placement activities by enlisting, contracting, procuring, offering
and promising for a fee to one Charito Balmes y Cantos and to more than three other
persons, job placement abroad, by reason of which said Charito Balmes y Cantos
relying on these misrepresentations, paid and/or gave the amount of ONE HUNDRED
TWENTY ONE THOUSAND THREE HUNDRED PESOS (P121,300.00), Philippine
Currency, to said accused, which acts constitute a violation of the said law.
Contrary to Law."
We note that each information was filed by only one complainant. We agree with accused-
appellants that they could not be convicted for illegal recruitment committed in large scale based
on several informations filed by only one complainant. The Court held in People vs. Reyes:27
"x x x When the Labor Code speaks of illegal recruitment 'committed against three (3)
or more persons individually or as a group,' it must be understood as referring to the
number of complainants in each case who are complainants therein, otherwise,
prosecutions for single crimes of illegal recruitment can be cummulated to make out a
case of large scale illegal recruitment. In other words, a conviction for large scale
illegal recruitment must be based on a finding in each case of illegal recruitment of
three or more persons whether individually or as a group."28
This, however, does not serve to lower the penalty imposed upon accused-appellants. The
charge was not only for illegal recruitment committed in large scale but also for illegal
recruitment committed by a syndicate. 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 of Article 38 of the Labor Code. It has been shown that Karl Reichl, Yolanda
Reichl and Francisco Hernandez conspired with each other in convincing private complainants
to apply for an overseas job and giving them the guaranty that they would be hired as domestic
helpers in Italy although they were not licensed to do so. Thus, we hold that accused-appellants
should be held liable for illegal recruitment committed by a syndicate which is also punishable by
life imprisonment and a fine of one hundred thousand pesos (P100,000.00) under Article 39 of
the Labor Code.
Finally, we hold that the prosecution also proved the guilt of accused-appellants for the crime of
estafa. A person who is convicted of illegal recruitment may, in addition, be convicted of estafa
under Art. 315 (2) of the Revised Penal Code provided the elements of estafa are present.
Estafa under Article 315, paragraph 2 of the Revised Penal Code is committed by any person
who defrauds another by using a fictitious name, or falsely pretends to possess power,
influence, qualifications, property, credit, agency, business or imaginary transactions, or by
means of similar deceits executed prior to or simultaneously with the commission of the fraud.
The offended party must have relied on the false pretense, fraudulent act or fraudulent means of
the accused-appellant and as a result thereof, the offended party suffered damages. 29 It has
been proved in this case that accused-appellants represented themselves to private
complainants to have the capacity to send domestic helpers to Italy, although they did not have
any authority or license. It is by this representation that they induced private complainants to pay
a placement fee of P150,000.00. Such act clearly constitutes estafa under Article 315 (2) of the
Revised Penal Code.

IN VIEW WHEREOF, the appeal is DISMISSED. The Decision appealed from is

hereby AFFIRMED.

Cost against appellants.

SO ORDERED.

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

Footnote
1
 Penned by Judge Liberato C. Cortes.
2
 Exhibit "F".
3
 Exhibit" J".
4
 Exhibit "C".
5
 Exhibit "A".
6
 TSN, November 4, 1993, pp. 6-26.
7
 TSN, April 11, 1994, pp. 4-25; April 18, 1994, pp. 2-6.
8
 TSN, October 12, 1995, pp. 7-19.
9
 TSN, June 15, 1995, pp. 4-33.
10
 Exhibit "K".
11
 Exhibit "L".
12
 Exhibit "M".
13
 TSN, November 7, 1995, pp. 3-28.
14
 Exhibit "K".
15
 TSN, February 5, 1996, pp. 4-22.
16
 TSN, December 10, 1996, pp. 3-12; TSN, February 25, 1997, pp. 2-16; TSN, June
9, 1997, pp. 6-10; June 16, 1997, pp. 6-10.
17
 TSN, June 9, 1992, pp. 10-12.
18
 Id., pp. 22-28; June 16, 1997, pp. 10-19.
19
 TSN, June 9, 1997, pp. 27-30.
20
 TSN, June 16, 1997, pp. 19-26.
21
 TSN, September 4, 1997, pp. 4-44.
22
 Appellant's Brief, Rollo, pp. 177-178.
23
 Article 13 (b), Labor Code.
24
 Article 38 (b), Labor Code.
25
 People vs. Goce, 247 SCRA 780 (1995); People vs. Manungas, 231 SCRA 1
(1994).
26
 People vs. Quilatan, 341 SCRA 247 (2000).
27
 242 SCRA 264 (1995).
28
 At p. 272.
29
 People vs. Sagaydo, 341 SCRA 329 (2000); People vs. Banzales, 336 SCRA 64
(2000).
 The findings of fact of the RTC, which were affirmed in toto by the CA, are as follows:

In the evening of June 3, 2005, while Lolita Sagadsad Plando, 23 years old, single, was in
Tumaga, Zamboanga City on her way to the house of her grandfather, she met Ronnie Masion
Aringoy and Rachel Aringoy Cañete. Ronnie greeted Lolita, "Oy, it’s good you are here" ("oy,
maayo kay dia ka"). Rachel asked Lolita if she is interested to work in Malaysia. x x x Lolita was
interested so she gave her cellphone number to Ronnie. After their conversation, Lolita
proceeded to her grandfather’s house.

xxx

On June 4, 2005, at about 7:00 o’clock in the morning, Lolita received a text message from
Ronnie Aringoy inviting her to go to the latter’s house. At 7:30 in the morning, they met at
Tumaga on the road near the place where they had a conversation the night before. Ronnie
brought Lolita to the house of his sister in Tumaga. Lolita inquired what job is available in
Malaysia. Ronnie told her that she will work as a restaurant entertainer. All that is needed is a
passport. She will be paid 500 Malaysian ringgits which is equivalent to ₱7,000.00 pesos in
Philippine currency. Lolita told Ronnie that she does not have a passport. Ronnie said that they
will look for a passport so she could leave immediately. Lolita informed him that her younger
sister, Marife Plando, has a passport. Ronnie chided her for not telling him immediately. He told
Lolita that she will leave for Malaysia on June 6, 2005 and they will go to Hadja Jarma Lalli who
will bring her to Malaysia. Ronnie sent a text message to Lalli but the latter replied that she was
not in her house. She was at the city proper.

On June 5, 2005, at about 6:00 o’clock in the evening, Ronnie Aringoy and Rachel Aringoy
Cañete arrived on board a tricycle driven by Ronnie at the house where Lolita was staying at
G.R. No. 195419               October 12, 2011 Southcom Village. Ronnie asked if Lolita already had a passport. Lolita said that she will borrow
her sister’s passport. Ronnie, Rachel and Lolita went to Buenavista where Lolita’s other sister,
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, Gina Plando was staying. Her sister Marife Plando was there at that time. Lolita asked Marife to
vs. let her use Marife’s passport. Marife refused but Lolita got the passport. Marife cried. Ronnie,
HADJA JARMA LALLI y PURIH, RONNIE ARINGOY y MASION, and NESTOR Rachel and Lolita proceeded to Tumaga. Ronnie, Rachel and Lolita went to the house of Hadja
RELAMPAGOS (at large), Accused. Jarma Lalli just two hundred meters away from the house of Ronnie in Tumaga. Ronnie
HADJA JARMA LALLI y PURIH and RONNIE ARINGOY Accused-Appellants. introduced Lolita to Hadja Jarma, saying "Ji, she is also interested in going to Malaysia." Lolita
handed a passport to Hadja Jarma telling her that it belongs to her sister Marife Plando. Hadja
Jarma told her it is not a problem because they have a connection with the DFA (Department of
DECISION Foreign Affairs) and Marife’s picture in the passport will be substituted with Lolita’s picture.
Nestor Relampagos arrived driving an owner-type jeep. Hadja Jarma introduced Nestor to Lolita
CARPIO, J.: as their financier who will accompany them to Malaysia. x x x Lolita noticed three other women
in Hadja Jarma’s house. They were Honey, about 20 years old; Michele, 19 years old, and
another woman who is about 28 years old. The women said that they are from Ipil, Sibugay
The Case Province. Ronnie told Lolita that she will have many companions going to Malaysia to work.
They will leave the next day, June 6, and will meet at the wharf at 2:30 in the afternoon.
This is a consolidated criminal case filed against the accused-appellants for the crimes of Illegal
Recruitment (Criminal Case No. 21930) and Trafficking in Persons (Criminal Case No. 21908). On June 6, 2005, Lolita went to Zamboanga City wharf at 2:00 o’clock in the afternoon bringing a
bag containing her make-up and powder. She met at the wharf Hadja Jarma Lalli, Ronnie
The Regional Trial Court (RTC) of Zamboanga City, in its Decision dated 29 November 2005 Aringoy, Honey and Michele. Ronnie gave to Lolita her boat ticket for the vessel M/V Mary Joy
(RTC Decision),1 found accused-appellants guilty beyond reasonable doubt of the crimes of bound for Sandakan, Malaysia; a passport in the name of Marife Plando but with Lolita’s picture
Illegal Recruitment and Trafficking in Persons committed by a syndicate, and sentenced each of on it, and ₱1,000.00 in cash. Hadja Jarma, Lolita, Honey, Michele and two other women
the accused to suffer the penalty of life imprisonment plus payment of fines and damages. On boarded the boat M/V Mary Joy bound for Sandakan. Ronnie Aringoy did not go with them. He
appeal, the Court of Appeals (CA) in Cagayan de Oro, in its Decision dated 26 February 2010 did not board the boat. x x x After the boat sailed, Hadja Jarma Lalli and Nestor Relampagos
(CA Decision),2 affirmed in toto the RTC Decision. The accused-appellants appealed to this approached Lolita and her companions. Nestor told them that they will have a good job in
Court by filing a Notice of Appeal 3 in accordance with Section 3(c), Rule 122 of the Rules of Malaysia as restaurant entertainers. They will serve food to customers. They will not be harmed.
Court.
M/V Mary Joy arrived at the port of Sandakan, Malaysia at 10:00 o’clock in the morning of June
The Facts 7, 2005. After passing through the immigration office, Hadja Jarma Lalli, Nestor Relampagos,
Lolita, Honey, Michele and two other women boarded a van for Kota Kinabalu. x x x At the hotel,
Nestor Relampagos introduced to Lolita and her companions a Chinese Malay called "Boss" as
their employer. After looking at the women, "Boss" brought Lolita, Honey, Diane and Lorraine to
a restaurant near the hotel. Diane and Lorraine were also on baord M/V Mary Joy when it left the
port of Zamboanga for Sandakan on June 6, 2005. When they were already at the restaurant, a
Filipina woman working there said that the place is a prostitution den and the women there are
used as prostitutes. Lolita and her companions went back to the hotel. They told Hadja Jarma
and Nestor that they do not like to work as prostitutes. x x x After about five minutes, another
person called "boss" arrived. x x x [T]hey were fetched by a van at about 7:00 o’clock in the
evening and brought to Pipen Club owned by "Boss Awa", a Malaysian. At the club, they were
told that they owe the club 2,000 ringgits each as payment for the amount given by the club to
Hadja Jarma Lalli and Nestor Relampagos. They will pay for the said amount by entertaining
customers. The customers will pay 300 ringgits for short time services of which 50 ringgits will go
to the entertainer, and 500 ringgits for over night service of which 100 ringgits will be given to the
entertainer. Pipen Club is a big club in a two-storey building. There were about 100 women
working in the club, many of them were Filipina women.
Lolita Plando was forced to work as entertainer at Pipen Club. She started working at 8:30 in the
evening of June 14, 2005. She was given the number 60 which was pinned on her. That night,
she had her first customer who selected her among the other women at the club. He was a very
big man, about 32 years old, a Chinese-Malay who looked like a wrestler. The man paid for short
time service at the counter. Lolita was given by the cashier a small pink paper. She was
instructed to keep it. A small yellow paper is given to the entertainer for overnight services. The
customer brought Lolita to a hotel. She did not like to go with him but a "boss" at the club told
her that she could not do anything. At the hotel, the man poked a gun at Lolita and instructed her
to undress. She refused. The man boxed her on the side of her body. She could not bear the
pain. The man undressed her and had sexual intercourse with her. He had sexual intercourse
with her every fifteen minutes or four times in one hour. When the customer went inside the
comfort room, Lolita put on her clothes and left. The customer followed her and wanted to bring
her back to the hotel but Lolita refused. At about 1:00 o’clock in the morning of June 15, 2005,
Lolita was chosen by another customer, a tall dark man, about 40 years old. The customer paid
for an overnight service at the counter and brought Lolita to Mariner Hotel which is far from
Pipen Club. At the hotel, the man told Lolita to undress. When she refused, the man brought her
to the comfort room and bumped her head on the wall. Lolita felt dizzy. The man opened the
shower and said that both of them will take a bath. Lolita’s clothes got wet. She was crying. The
man undressed her and had sexual intercourse with her. They stayed at the hotel until 11:00
o’clock in the morning of June 15, 2005. The customer used Lolita many times. He had sexual
intercourse with her every hour.
Lolita worked at Pipen Club from June 14 to July 8, 2005. Every night, a customer used her. She
had at least one customer or more a night, and at most, she had around five customers a night.
They all had sexual intercourse with her. On July 9, 2005, Lolita was able to contact by
cellphone at about 10:00 o’clock in the morning her sister Janet Plando who is staying at
Sipangkot Felda x x x. Janet is married to Said Abubakar, an Indonesian national who is working
as a driver in the factory. x x x Lolita told Janet that she is in Labuan, Malaysia and beg Janet to
save her because she was sold as a prostitute. Janet told Lolita to wait because her husband
will go to Pipen Club to fetch Lolita at 9:00 o’clock that evening of that day. x x x She told Janet
to instruct her husband to ask for No. 60 at Pipen Club. x x x At 9:00 o’clock in the evening,
Lolita was told by Daddy Richard, one of the bosses at the club, that a customer requested for
No. 60. The man was seated at one of the tables. Lolita approached the man and said, "good
evening." The man asked her is she is the sister of Janet Plando. Lolita replied that she is, and
asked the man if he is the husband of her sister. He said, "yes." The man had already paid at the
counter. He stood up and left the place. Lolita got her wallet and followed him. x x x Lolita told
her sister about her ordeal. She stayed at her sister’s house until July 22, 2005. On July 21,
2005 at 7:00 o’clock in the evening, a policeman went to her sisters house and asked if there is
a woman staying in the house without a passport. Her sister told the policeman that she will
send Lolita home on July 22. At dawn on July 22, Lolita and her brother-in-law took a taxi from
Sipangkot Felda to Mananamblas where Lolita will board a speedboat to Sibuto, Tawi-Tawi. x x
x
Upon arrival in Zamboanga City on July 24, 2005, Lolita went directly to the house of her eldest
sister Alejandra Plando Maywila at Sta. Catalina, Zamboanga City. She left her things at her
sister’s house and immediately went to the sister of Ronnie Aringoy in Tumaga. Ronnie was not
there. She asked Russel, niece of Ronnie, to call for the latter. Ronnie arrived and said to her,
"so you are here, you arrived already." He said he is not involved in what happened to her. Lolita
asked Ronnie to accompany her to the house of Nestor Relampagos because she has
something to get from him. Ronnie refused. He told Lolita not to let them know that she had
already arrived from Malaysia.
Lolita was advised to file a complaint with the police regarding her ordeal in Malaysia. On August
2, 2005, at past 9:00 o’clock in the morning, Lolita Plando went to Zamboanga Police Office at
Gov. Lim Avenue to file her complaint. x x x
In her Counter-Affidavit (Exh. "1"; "1-A"-Lalli), Hadja Jarma Lalli admitted that she met Lolita
Plando on June 6, 2005 on board M/V Mary Joy while the said vessel was at sea on its way to
Sandakan, Malaysia. The meeting was purely coincidental. By coincidence also, Hadja Jarma,
Nestor Relampagos and Lolita Plando boarded the same van for Kota Kinabalu, Malaysia. Upon
arrival, they parted ways. They did not see each other anymore at Kota Kinabalu, Malaysia. She
did not know what happened to them. She went to Kota Kinabalu to visit his son-in-law. She
denied having recruited Lolita Plando for employment abroad (Exh. "1"; "1-A"). x x x
In his Counter-Affidavit (Exh. "1"-Aringoy), Ronnie Aringoy affirmed that he personally knows
Lolita Plando since she was a teenager and he knows for a fact that her name is Cristine and not
Marife "as she purports it to appear." Sometime in the first week of June 2005, Lolita borrowed
₱1,000.00 from Ronnie because she wanted to go to Malaysia to work as a guest relation officer
(GRO). Ronnie lent her ₱1,000.00. He told her that he knows "a certain Hadja Jarma Lalli,
distant neighbor, who frequents to Malaysia and with whom she can ask pertinent information on
job opportunities." The entries in Philippine Passport No. MM401136 issued to Hadja Jarma Lalli
on January 29, 2004 (Exh. "2"; "2-A" to "2-Q") showed that she traveled to Malaysia no less than
nine (9) times within the period from March 2004 to June 2005.
xxx
Nora Mae Adling, ticketing clerk of Aleson Shipping Lines, owner of the vessel M/V Mary Joy 2
plying Zamboanga City to Sandakan, Malaysia route and of M/V Kristel Jane 3, testified that
Hadja Jarma Lalli bought passenger tickets for her travel to Sandakan, not only for herself but
also for other women passengers.
xxx
Ronnie Aringoy submitted the Affidavit of his witness Rachel Cañete (Exh. "2") and the Joint
Affidavits of witnesses Mercedita Salazar and Estrella Galgan. Rachel Canete declared that
Lolita Plando whom she knows as Cristine Plando worked as a GRO (guest relation officer) and
massage attendant at Magic 2 Videoke and Massage Parlor, that Lolita Plando has four children
sired by different men; and that she knows for a fact that Lolita Plando has been going to and
from Malaysia to work in bars. When she testified in court, Rachel did not present other evidence
to substantiate her allegations. Mercedita Salazar and Estrella Galgan declared in their Joint
Affidavit that Lolita Plando who is known to them as Marife Plando was their co-worker as
massage attendant and GRO (guest relation officer) at Magic 2 Massage Parlor and Karaoke
bar where she used the names Gina Plando and Cristine Plando. She worked in the said
establishment for nine months from February to October 2002. She has four children from four
different men. No other evidence was submitted in court to prove their assertions.4
The Decision of the Trial Court
The Regional Trial Court rendered its Decision on 29 November 2005, with its dispositive portion
declaring:
WHEREFORE, the Court finds accused HADJA JARMA LALLI y PURIH and RONNIE
ARINGOY y MASION GUILTY beyond reasonable doubt in Criminal Case No. 21908 of the
Crime of Trafficking in Persons defined in Section 3(a) and penalized under Section 10(c) in
relation to Sections 4(a) and 6(c) of Republic Act No. 9208 known as the "Anti-Trafficking in
Persons Act of 2003" and in Criminal Case No. 21930 of the crime of Illegal Recruitment defined
in Section 6 and penalized under Section 7(b) of Republic Act No. 8042 known as the "Migrant
Workers and Overseas Filipinos Act of 1995" and SENTENCES each of said accused:
1. In Criminal Case No. 21908, to suffer the penalty of LIFE IMPRISONMENT and to
pay a fine of ₱2,000,000.00 pesos;
2. In Criminal Case No. 21930, to suffer the penalty of LIFE IMPRISONMENT and to
pay a fine of ₱500,000.00 pesos;
3. To pay the offended party Lolita Plando y Sagadsad, jointly and severally, the sum
of ₱50,000.00 as moral damages, and ₱50,000.00 as exemplary damages; and
4. To pay the costs.
SO ORDERED.5
The trial court did not find credible the denials of the accused-appellants over the candid,
positive and convincing testimony of complainant Lolita Plando (Lolita). The accused, likewise,
tried to prove that Lolita was a Guest Relations Officer (GRO) in the Philippines with four
children fathered by four different men. However, the trial court found these allegations irrelevant
and immaterial to the criminal prosecution. These circumstances, even if true, would not exempt
or mitigate the criminal liability of the accused. The trial court found that the accused, without a
POEA license, conspired in recruiting Lolita and trafficking her as a prostitute, resulting in crimes
committed by a syndicate.6 The trial court did not pronounce the liability of accused-at-large
Nestor Relampagos (Relampagos) because jurisdiction was not acquired over his person.
The Decision of the Court of Appeals
On 26 February 2010, the Court of Appeals affirmed in toto the RTC Decision and found
accused-appellants guilty beyond reasonable doubt of the crimes of Illegal Recruitment and
Trafficking in Persons.
The Issue
The only issue in this case is whether the Court of Appeals committed a reversible error in
affirming in toto the RTC Decision.
The Ruling of this Court
We dismiss the appeal for lack of merit.
We modify and increase the payment of damages in the crime of Trafficking in Persons from
₱50,000 to ₱500,000 for moral damages and ₱50,000 to ₱100,000 for exemplary damages.
Grounds for Appeal
In his Appeal Brief,7 Ronnie Aringoy (Aringoy) admits that he referred Lolita to a certain Hadja
Jarma Lalli (Lalli), Aringoy’s neighbor who frequents Malaysia and from whom Lolita could ask
pertinent information on job opportunities.8 Aringoy claims that he learned later that Lolita left for
Malaysia.9 He denies knowing Relampagos to whom Lolita paid ₱28,000 as placement fee for
finding her work in Malaysia.10
Aringoy presented three witnesses: his niece Rachel Aringoy Cañete (Rachel), Mercedita
Salazar (Mercedita), and Estrella Galgan (Estrella). In her testimony, Rachel declared that: (1)
Lolita is a GRO and Massage Attendant at Magic 2 Videoke and Massage Parlor; (2) Lolita has
four children sired by different men; and (3) Lolita has been travelling to Malaysia to work in
bars. Mercedita and Estrella, on the other hand, declared in their testimonies that Lolita was their
co-worker as Massage Attendant and GRO in Magic 2 Massage Parlor and Karaoke Bar from
February to October 2002.11
Aringoy assailed the credibility of Lolita’s testimony because of inconsistencies with regard to:
(1) Lolita’s grandfather’s status and name; (2) the persons (Ronnie and Rachel) who
approached Lolita to talk about the job opportunity in Malaysia; (3) certain statements in Lolita’s
testimony that were not alleged in her Sworn Statement; (4) payment of placement fee of ₱
28,000; and (5) names of the other female recruits who were with Lolita in the boat going to
Sandakan and Kota Kinabalu.12 Aringoy likewise claims that he was never included in the initial
complaint filed by Lolita, and Lolita’s statements about her meetings with him, Lalli and
Relampagos on 3, 4, 5 and 6 June 2005 were not corroborated by any witness.13
On the other hand, in her Appeal Brief, 14 Lalli claims that she simply met Lolita on 6 June 2005
on board the ship M/V Mary Joy bound for Sandakan, Malaysia. 15 Lalli denies having met Lolita
prior to their meeting on board M/V Mary Joy. 16 Lalli claims she was going to Malaysia to visit her
daughter and son-in-law who was a Malaysian national.17 Lalli further claims that she only spoke
to Lolita aboard the ship for idle conversation to pass away the time.18 In this conversation, she
learned that Lolita was with a party of girls accompanied by Relampagos, and the latter was
bringing them to Malaysia to work as sales ladies.19 Lalli admits that Lolita, Relampagos and the
other girls rode in Lalli’s van in Sandakan, driven by a friend of Lalli’s son-in-law.20 They all rode
together because Relampagos talked to the van driver, requesting if he and his party of girls
could board the van and pay their fare when they reach the city proper of Kota Kinabalu.21 Lalli
boarded the van with Lolita, Relampagos and their companions.22 Upon reaching her destination,
Lalli got off the van, leaving Lolita, Relampagos and their other companions to continue their
journey towards the city proper of Kota Kinabalu. 23 After spending several days in Malaysia with
her daughter and son-in-law, Lalli went to Brunei to visit a cousin on 12 June 2005, and headed
back to Malaysia on 14 June 2005.24
Lalli assails the credibility of Lolita due to inconsistencies in her testimony with regard to: (1)
Lolita not being in Southcom Village on 5 June 2005 at 6:00 p.m., as she claimed, but in
Buenavista Village; and (2) Lolita’s claim that Lalli and Relampagos on 12 June 2005 brought
the girls to Labuan, when in fact, Lalli was already in Brunei on 12 June 2005, as evidenced by
the stamp in her passport.25
Credibility of Testimonies
Both Aringoy and Lalli, in their respective Appeal Briefs, assail the testimony of Lolita due to its
alleged inconsistency on immaterial facts, such as the status of Lolita’s grandfather, the name of
the village she was in, the date she was brought to Labuan, Malaysia, and the like. In a long line
of cases, the Court has ruled that inconsistencies pointed out by the accused in the testimony of
prosecution witnesses relating to minor details do not destroy the credibility of witnesses.26 On
the contrary, they indicate that the witnesses were telling the truth and not previously
rehearsed.27
The clear material inconsistency in this case, however, lies in the testimonies of accused
Aringoy and Lalli. Aringoy admitted that he referred Lolita to a certain Hadja Jarma Lalli, his
neighbor who frequents Malaysia and with whom Lolita could ask pertinent information on job
opportunities.28 Lalli, on the other hand, denies having met Lolita prior to their meeting on board
M/V Mary Joy on 6 June 2005,29 and claims that her meeting with Lolita was purely
coincidental.30 Lalli admits that, even if she met Relampagos, Lolita and their companions only
on that day on board M/V Mary Joy, she allowed these people to ride with her in Malaysia using
the van driven by the friend of Lalli’s son-in-law.31 Lastly, Lalli claims that she often goes to
Malaysia to visit her daughter and son-in-law.32 However, this does not explain why Lalli
purchased boat tickets, not only for herself, but for the other women passengers going to
Malaysia.33 From March 2004 to June 2005, Lalli traveled to Malaysia no less than nine (9)
times.34 Nora Mae Adling, ticketing clerk of Aleson Shipping Lines, owner of the vessel M/V Mary
Joy 2 plying Zamboanga City to Sandakan, Malaysia route and of M/V Kristel Jane 3, testified in
open court that "Hadja Jarma Lalli bought passenger tickets for her travel to Sandakan, not only
for herself but also for other women passengers." 35 Clearly, it is not Lolita’s testimony that is
materially inconsistent, but the testimonies of Lalli and Aringoy.
Aringoy presented his witnesses Rachel, Mercedita and Estrella to impeach the credibility of
Lolita by alleging that Lolita was a Massage Attendant and GRO in a massage parlor and
videoke bar. His witness Rachel further declared that Lolita, at the young age of 23 years,
already had four children sired by four different men, and had been previously travelling to
Malaysia to work in bars. These bare allegations were not supported by any other evidence.
Assuming, for the sake of argument, that Lolita previously worked in a Karaoke Bar and
Massage Parlor and that she had four children from different men, such facts cannot constitute
exempting or mitigating circumstances to relieve the accused from their criminal liabilities. It
does not change the fact that the accused recruited Lolita to work in Malaysia without the
requisite POEA license, thus constituting the crime of illegal recruitment. Worse, the accused
deceived her by saying that her work in Malaysia would be as restaurant entertainer, when in
fact, Lolita would be working as a prostitute, thus, constituting the crime of trafficking.
The facts found by the trial court, as affirmed in toto by the Court of Appeals, are, as a general
rule, conclusive upon this Court, in the absence of any showing of grave abuse of
discretion.36 The Court, however, may determine the factual milieu of cases or controversies
under specific circumstances, such as:
(1) when the inference made is manifestly mistaken, absurd or impossible;
(2) when there is a grave abuse of discretion;
(3) when the finding is grounded entirely on speculations, surmises or conjectures;
(4) when the judgment of the Court of Appeals is based on 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 (₱500,000.00)
same is contrary to the admissions of both appellant and appellee;
(7) when the findings of the Court of Appeals are contrary to those of the trial court;
(8) when the findings of fact are conclusions without citation of specific evidence on which t
based;
(9) when the Court of Appeals manifestly overlooked certain relevant facts not disputed
parties and which, if properly considered, would justify a different conclusion; and
(10) when the findings of fact of the Court of Appeals are premised on the absence of eviden
are contradicted by the evidence on record.37
In this case, none of these exceptions to the general rule on conclusiveness of facts are
applicable. The Court gives weight and respect to the trial court’s findings in criminal prosecution
because the latter is in a better position to decide the question, having heard the witnesses in
person and observed their deportment and manner of testifying during the trial. 38 For this reason,
the Court adopts the findings of fact of the trial court, as affirmed in toto by the Court of Appeals,
there being no grave abuse of discretion on the part of the lower courts.
Criminal Case No. 21930 (Illegal Recruitment)
Section 6 of Republic Act No. 8042 (RA 8042) defines illegal recruitment, as follows:
[I]llegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers and includes referring, contact 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.
xxx
Illegal recruitment when committed by a syndicate or in large scale shall be considered an
offense involving economic sabotage.
xxx
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. (Emphasis supplied)
Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of
the Philippines, defines "authority" as follows:
"Authority" means a document issued by the Department of Labor authorizing a person or
association to engage in recruitment and placement activities as a private recruitment entity.
Section 7 of RA 8042 provides for the penalty of illegal recruitment committed by a syndicate
(which constitutes economic sabotage), as follows:
(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand pesos
and the nor more than One million pesos (₱1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined therein.
It is clear that a person or entity engaged in recruitment and placement activities without the
requisite authority from the Department of Labor and Employment (DOLE), whether for profit or
not, is engaged in illegal recruitment. 39 The Philippine Overseas Employment Administration
(POEA), an agency under DOLE created by Executive Order No. 797 to take over the duties of
the Overseas Employment Development Board, issues the authority to recruit under the Labor
Code. The commission of illegal recruitment by three or more persons conspiring or
confederating with one another is deemed committed by a syndicate and constitutes economic
sabotage,40 for which the penalty of life imprisonment and a fine of not less than ₱ 500,000 but
not more than ₱ 1,000,000 shall be imposed.41
The penalties in Section 7 of RA 8042 have already been amended by Section 6 of Republic Act
No. 10022, and have been increased to a fine of not less than ₱ 2,000,000 but not more than ₱
5,000,000. However, since the crime was committed in 2005, we shall apply the penalties in the
old law, RA 8042.
In People v. Gallo,42 the Court enumerated the elements of syndicated illegal recruitment, to wit:
1. the offender undertakes either any activity within the meaning of "recruitment and
placement" defined under Article 13(b), or any of the prohibited practices enumerated
under Art. 34 of the Labor Code;
2. he has no valid license or authority required by law to enable one to lawfully engage
in recruitment and placement of workers; and
3. the illegal recruitment is committed by a group of three (3) or more persons
conspiring or confederating with one another.43
Article 13(b) of the Labor Code of the Philippines defines recruitment and placement as "any act
of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers,
and includes referrals, contract services, promising or advertising for employment, locally or
abroad, whether for profit or not, provided, that any person or entity which, in any manner, offers
or promises for a fee, employment to two or more persons shall be deemed engaged in
recruitment and placement."
Clearly, given the broad definition of recruitment and placement, even the mere act of referring
someone for placement abroad can be considered recruitment. Such act of referral, in
connivance with someone without the requisite authority or POEA license, constitutes illegal
recruitment. In its simplest terms, illegal recruitment is committed by persons who, without
authority from the government, give the impression that they have the power to send workers
abroad for employment purposes.44
In this case, the trial court, as affirmed by the appellate court, found Lalli, Aringoy and
Relampagos to have conspired and confederated with one another to recruit and place Lolita for
work in Malaysia, without a POEA license. The three elements of syndicated illegal recruitment
are present in this case, in particular: (1) the accused have no valid license or authority required
by law to enable them to lawfully engage in the recruitment and placement of workers; (2) the
accused engaged in this activity of recruitment and placement by actually recruiting, deploying
and transporting Lolita to Malaysia; and (3) illegal recruitment was committed by three persons
(Aringoy, Lalli and Relampagos), conspiring and confederating with one another.
Aringoy claims and admits that he only referred Lolita to Lalli for job opportunities to Malaysia.
Such act of referring, whether for profit or not, in connivance with someone without a POEA
license, is already considered illegal recruitment, given the broad definition of recruitment and
placement in the Labor Code.
Lalli, on the other hand, completely denies any involvement in the recruitment and placement of
Lolita to Malaysia, and claims she only met Lolita for the first time by coincidence on board the
ship M/V Mary Joy. Lalli’s denial does not deserve credence because it completely conflicts with
the testimony of Aringoy who claims he referred Lolita to Lalli who had knowledge of the job
opportunities in Malaysia.
The conflicting testimonies of Lalli and Aringoy on material facts give doubt to the truth and
veracity of their stories, and strengthens the credibility of the testimony of Lolita, despite
allegations of irrelevant inconsistencies.
No improper motive could be imputed to Lolita to show that she would falsely testify against the
accused. The absence of evidence as to an improper motive entitles Lolita’s testimony to full
faith and credit.45
Aringoy claims that no conspiracy existed in illegal recruitment, as he denies even knowing
Relampagos, who is currently at-large. Lalli denies any involvement in the illegal recruitment,
and claims that she only met Relampagos through Lolita on board the ship M/V Mary Joy on 6
June 2005, and learned that Relampagos was bringing Lolita and their other girl companions to
Malaysia to work as sales ladies.
Under Article 8 of the Revised Penal Code, there is conspiracy "when two or more persons
come to an agreement concerning the commission of a felony and decide to commit it."
In People v. Lago,46 the Court discussed conspiracy in this wise:
The elements of conspiracy are the following: (1) two or more persons came to an agreement,
(2) the agreement concerned the commission of a felony, and (3) the execution of the felony was
decided upon. Proof of the conspiracy need not be based on direct evidence, because it may be
inferred from the parties’ conduct indicating a common understanding among themselves with
respect to the commission of the crime. Neither is it necessary to show that two or more persons
met together and entered into an explicit agreement setting out the details of an unlawful
scheme or objective to be carried out. The conspiracy may be deduced from the mode or
manner in which the crime was perpetrated; it may also be inferred from the acts of the accused
evincing a joint or common purpose and design, concerted action and community of interest. 47
In this case, Lolita would not have been able to go to Malaysia if not for the concerted efforts of
Aringoy, Lalli and Relampagos. First, it was Aringoy who knew Lolita, since Aringoy was a
neighbor of Lolita’s grandfather. It was Aringoy who referred Lolita to Lalli, a fact clearly admitted
by Aringoy. Second, Lolita would not have been able to go to Malaysia if Lalli had not purchased
Lolita’s boat ticket to Malaysia. This fact can be deduced from the testimony of Nora Mae Adling
(Nora), ticketing clerk of Aleson Shipping Lines, owner of the vessel M/V Mary Joy 2 plying
Zamboanga City to Sandakan, Malaysia route and of M/V Kristel Jane 3. Nora testified in open
court that "Hadja Jarma Lalli bought passenger tickets for her travel to Sandakan, not only for
herself but also for other women passengers." Lalli’s claim that she only goes to Malaysia to visit
her daughter and son-in-law does not explain the fact why she bought the boat tickets of the
other women passengers going to Malaysia. In fact, it appears strange that Lalli visited Malaysia
nine (9) times in a span of one year and three months (March 2004 to June 2005) just to visit her
daughter and son-in-law. In Malaysia, it was Relampagos who introduced Lolita and her
companions to a Chinese Malay called "Boss" as their first employer. When Lolita and her
companions went back to the hotel to tell Relampagos and Lalli that they did not want to work as
prostitutes, Relampagos brought Lolita and the girls on board a van to Sangawan China Labuan,
where they stayed in a room for one night. The next day, they were picked up by a van and
brought to Pipen Club, where Lolita and her companions worked as prostitutes. To date,
accused Relampagos is at large and has not been brought under the jurisdiction of the courts for
his crimes.
Flight in criminal law is the evading of the course of justice by voluntarily withdrawing oneself in
order to avoid arrest or detention or the institution or continuance of criminal proceedings. 48 The
unexplained flight of an accused person may as a general rule be taken into consideration as
evidence having a tendency to establish his guilt.49 Clearly, in this case, the flight of accused
Relampagos, who is still at-large, shows an indication of guilt in the crimes he has been
charged.
It is clear that through the concerted efforts of Aringoy, Lalli and Relampagos, Lolita was
recruited and deployed to Malaysia to work as a prostitute. Such conspiracy among Aringoy,
Lalli and Relampagos could be deduced from the manner in which the crime was perpetrated –
each of the accused played a pivotal role in perpetrating the crime of illegal recruitment, and
evinced a joint common purpose and design, concerted action and community of interest.
For these reasons, this Court affirms the CA Decision, affirming the RTC Decision, declaring
accused Ronnie Aringoy y Masion and Hadja Jarma Lalli y Purih guilty beyond reasonable doubt
of the crime of illegal recruitment committed by a syndicate in Criminal Case No. 21930, with a
penalty of life imprisonment and a fine of ₱ 500,000 imposed on each of the accused.
Criminal Case No. 21908 (Trafficking in Persons)
Section 3(a) of Republic Act No. 9208 (RA 9208), otherwise known as the Anti-Trafficking in
Persons Act of 2003, defines Trafficking in Persons, as follows:
Trafficking in Persons – refers to the recruitment, transportation, transfer or harboring, or receipt
of persons with or without the victim’s consent or knowledge, within or across national
borders by means of threat or use of force, or other forms of coercion, abduction, fraud,
deception, abuse of power or of position, taking advantage of the vulnerability of the person, or,
the giving or receiving of payments or benefits to achieve the consent of a person having control
over another person for the purpose of exploitation which includes at a minimum, the exploitation
or the prostitution of others or other forms of sexual exploitation, forced labor or services,
slavery, servitude or the removal or sale of organs. x x x (Emphasis supplied)
Section 4 of RA 9208 enumerates the prohibited acts of Trafficking in Persons, one of which is:
(a) To recruit, transport, transfer, harbor, provide, or receive a person by any means, including
those done under the pretext of domestic or overseas employment or training or apprenticeship,
for the purpose of prostitution, pornography, sexual exploitation, forced labor, slavery,
involuntary servitude or debt bondage.
The crime of Trafficking in Persons is qualified when committed by a syndicate, as provided in
Section 6(c) of RA 9208:
(c) When the crime is committed by a syndicate, or in large scale. Trafficking 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.
Section 10(c) of RA 9208 provides for the penalty of qualified trafficking:
(c) Any person found guilty of qualified trafficking under Section 6 shall suffer the penalty of life
imprisonment and a fine of not less than Two million pesos (₱2,000,000.00) but not more than
Five million pesos (₱5,000,000.00).
The Anti-Trafficking in Persons Act is a new law passed last 26 May 2003, designed to
criminalize the act of trafficking in persons for prostitution, sexual exploitation, foced labor and
slavery, among others.
In this case, Aringoy claims that he cannot be convicted of the crime of Trafficking in Persons
because he was not part of the group that transported Lolita from the Philippines to Malaysia on
board the ship M/V Mary Joy. In addition, he presented his niece, Rachel, as witness to testify
that Lolita had been travelling to Malaysia to work in bars. On the other hand, Lalli denies any
involvement in the recruitment and trafficking of Lolita, claiming she only met Lolita for the first
time on board M/V Mary Joy going to Malaysia.
The testimony of Aringoy’s niece, Rachel, that Lolita had been travelling to Malaysia to work in
bars cannot be given credence. Lolita did not even have a passport to go to Malaysia and had to
use her sister’s passport when Aringoy, Lalli and Relampagos first recruited her. It is
questionable how she could have been travelling to Malaysia previously without a passport, as
Rachel claims. Moreover, even if it is true that Lolita had been travelling to Malaysia to work in
bars, the crime of Trafficking in Persons can exist even with the victim’s consent or knowledge
under Section 3(a) of RA 9208.
Trafficking in Persons under Sections 3(a) and 4 of RA 9208 is not only limited to transportation
of victims, but also includes the act of recruitment of victims for trafficking. In this case, since it
has been sufficiently proven beyond reasonable doubt, as discussed in Criminal Case No.
21930, that all the three accused (Aringoy, Lalli and Relampagos) conspired and confederated
with one another to illegally recruit Lolita to become a prostitute in Malaysia, it follows that they
are also guilty beyond reasonable doubt of the crime of Qualified Trafficking in Persons
committed by a syndicate under RA 9208 because the crime of recruitment for prostitution also
constitutes trafficking.
When an act or acts violate two or more different laws and constitute two different offenses, a
prosecution under one will not bar a prosecution under the other. 50 The constitutional right
against double jeopardy only applies to risk of punishment twice for the same offense, or for an
act punished by a law and an ordinance.51 The prohibition on double jeopardy does not apply to
an act or series of acts constituting different offenses.
DAMAGES
Lolita claimed actual damages of ₱ 28,000, which she allegedly paid to the accused as
placement fee for the work of restaurant entertainer in Malaysia. The trial court did not award
this amount to Lolita. We agree and affirm the trial court’s non-award due to Lolita’s inconsistent
statements on the payment of placement fee. In her sworn statement, Lolita alleged that she
paid ₱ 28,000 as placement fee to Lalli.52 On cross-examination, however, she admitted that she
never paid ₱ 28,000 to the accused.53
We, however, modify and increase the payment of damages in the crime of Trafficking in
Persons from ₱ 50,000 to ₱ 500,000 as moral damages and ₱ 50,000 to ₱ 100,000 as
exemplary damages.
The Civil Code describes moral damages in Article 2217:
Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be recovered if they are the
proximate result of the defendant’s wrongful act for omission.1avvphi1
Exemplary damages, on the other hand, are awarded in addition to the payment of moral the crime of Trafficking in Persons was aggravated, being committed by a syndicate, the award
damages, by way of example or correction for the public good, as stated in the Civil Code: of exemplary damages is likewise justified.

Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for
the public good, in addition to the moral, temperate, liquidated or compensatory damages.
Art. 2230. In criminal offenses, exemplary damages as a part of the civil liability may be imposed
when the crime was committed with one or more aggravating circumstances. Such damages are
separate and distinct from fines and shall be paid to the offended party.
The payment of ₱ 500,000 as moral damages and ₱ 100,000 as exemplary damages for the
crime of Trafficking in Persons as a Prostitute finds basis in Article 2219 of the Civil Code, which
states:
Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
WHEREFORE, we AFFIRM the Decision of the Court of Appeals dated 26 February 2010,
affirming the Decision of the Regional Trial Court of Zamboanga City dated 29 November 2005,
finding accused Lalli and Aringoy guilty beyond reasonable doubt of the crimes of Illegal
Recruitment and Trafficking in Persons committed by a syndicate, with the
following MODIFICATIONS:
1. In Criminal Case No. 21908, each of the accused is sentenced to suffer the penalty
of LIFE IMPRISONMENT and to pay a fine of ₱ 2,000,000;
2. In Criminal Case No. 21930, each of the accused is sentenced to suffer the penalty
of LIFE IMPRISONMENT and to pay a fine of ₱ 500,000;
3. Each of the accused is ordered to pay the offended party Lolita Plando y Sagadsad,
jointly and severally, the sum of ₱ 500,000 as moral damages, and ₱ 100,000 as
exemplary damages for the crime of Trafficking in Persons; and to pay the costs.

(2) Quasi-delicts causing physical injuries;

The Court cannot pronounce the liability of accused-at-large Nestor Relampagos as jurisdiction
over his person has not been acquired.
(3) Seduction, abduction, rape, or other lascivious acts;
SO ORDERED.
(4) Adultery or concubinage;
ANTONIO T. CARPIO
(5) Illegal or arbitrary detention or arrest; Associate Justice
WE CONCUR:
(6) Illegal search; ARTURO D. BRION
Associate Justice
(7) Libel, slander or any other form of defamation; MARIA LOURDES P. A. SERENO BIENVENIDO L. REYES
Associate Justice Associate Justice
(8) Malicious prosecution; ESTELA M. PERLAS-BERNABE*
Associate Justice
(9) Acts mentioned in Article 309; ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. case was assigned to the writer of the opinion of the Court’s Division.
ANTONIO T. CARPIO
Associate Justice
The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this Chairperson
article, may also recover moral damages.
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s
The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned Attestation, I certify that the conclusions in the above Decision had been reached in consultation
in No. 9 of this article, in the order named. before the case was assigned to the writer of the opinion of the Court’s Division.
RENATO C. CORONA
The criminal case of Trafficking in Persons as a Prostitute is an analogous case to the crimes of Chief Justice
seduction, abduction, rape, or other lascivious acts. In fact, it is worse. To be trafficked as a Footnotes
prostitute without one’s consent and to be sexually violated four to five times a day by different
strangers is horrendous and atrocious. There is no doubt that Lolita experienced physical * Designated Acting Member per Special Order No. 1114 dated 3 October 2011.
1
suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings,  CA rollo, pp. 40-58.
moral shock, and social humiliation when she was trafficked as a prostitute in Malaysia. Since 2
 Id. at 209-222.
3
 Id. at 224-225, 255-256.
4 46
 Id. at 42-53.  411 Phil. 52 (2001).
5 47
 Id. at 58. Id. at 59, citing People v. Fegidiro, 392 Phil. 36 (2000) and People v. Francisco, 388
6
 Id. at 53-57. Phil. 94 (2000).
48
7
 Id. at 167-179.  United States v. Alegado, 25 Phil. 510, 511 (1913).
49
8
 Id. at 171.  Id.
50
9
 Id. at 172.  People v. Tac-an, 261 Phil. 728, 746 (1990).
51
10
 Id.  Section 21, Article III, 1987 Philippine Constitution.
52
11
 Id.  CA rollo, p. 174.
53
12
 Id. at 173-174.  Id.
13
 Id. at 175.
14
 Id. at 64-85. G.R. No. 131656. October 12, 1998
15
 Id. at 77.
16
 Id. ASIAN CENTER FOR CAREER AND EMPLOYMENT SYSTEM AND SERVICES, INC.
17 (ACCESS), Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION and IBNO
 Id.
MEDIALES, Respondents.
18
 Id. at 78.
19
 Id.
DECISION
20
 Id. at 79.
21
 Id.
PUNO, J.:
22
 Id.
23
 Id.
In this petition for certiorari, petitioner ASIAN CENTER FOR CAREER & EMPLOYMENT
24
 Id. SYSTEM & SERVICES, INC. (ACCESS) seeks to modify the monetary awards against it in the
25
 Id. at 80-83. Decision of respondent National Labor Relations Commission (NLRC), dated October 14, 1997,
26
 People v. Martinada, G.R. Nos. 66401-03, 13 February 1991, 194 SCRA 36, 44. a case for illegal dismissal.
27
 Id.
28
 CA rollo, p. 171. The records disclose that petitioner hired respondent IBNO MEDIALES to work as a mason in
29 Jeddah, Saudi Arabia, with a monthly salary of 1,200 Saudi Riyals (SR). The term of his
 Id. at 77. contract was two (2) years, from February 28, 1995 until February 28, 1997.
30
 Id. at 78.
31
 Id. at 79. On May 26, 1996, respondent applied with petitioner for vacation leave with pay which he
32
 Id. at 77. earned after working for more then a year. His application for leave was granted. While en route
33
 Id. at 52. to the Philippines, his co-workers informed him that he has been dismissed from service. The
34
 Id. at 51. information turned out to be true.
35
 Id. at 52.
36
Cosmos Bottling Corporation v. Nagrama, Jr., G.R. No. 164403, 4 March 2008, On June 17, 1996, respondent filed a complaint with the labor arbiter for illegal dismissal, non-
547 SCRA 571, 584, citing The Philippine American Life and General Insurance Co. v. payment of overtime pay, refund of transportation fare, illegal deductions, non-payment of
Gramaje, 484 Phil. 880 (2004). 13th month pay and salary for the unexpired portion of his employment contract.
37
 Reyes v. Court of Appeals (Ninth Division), 328 Phil. 171, 180 (1996) citing Floro v.
Llenado, 314 Phil. 715 (1995). On March 17, 1997, the labor arbiter found petitioner guilty of illegal
38
 Supra note 26 at 41. dismissal.1 The dispositive portion reads:
39
 Section 6, Republic Act No. 8042.
40
 Id. IN VIEW OF THE FOREGOING, judgment is hereby rendered declaring the
41
illegality of complainants dismissal and ordering the respondent ACCESS and/or
 Section 7, Republic Act No. 10022. ABDULLAH LELINA to pay the complainant the amount of SR 13,200 representing
42
 G.R. No. 187730, 29 June 2010, 622 SCRA 439. complainants payment for the unexpired portion of his contract and refund of
43
Id. at 451, citing People v. Soliven, 418 Phil. 777 (2001) and People v. Buli-e, 452 the illegality deducted amount less P5,000.00, the legally allowed placement fee.
Phil. 129 (2003).
44
Respondent are further ordered to pay attorneys fees equivalent to ten percent
 People v. Lapis, 439 Phil. 729, 740 (2002). (10%) of the judgment award or the amount of SR 1,320, within ten (10) days
45
 People v. Bodozo, G.R. No. 96621, 21 October 1992, 215 SCRA 33, 37, from receipt hereof.
citing Araneta, Jr. v. Court of Appeals, G.R. No. L-43527, 3 July 1990, 187 SCRA 123.
All other issues are dismissed for lack of merit.
 SO ORDERD. (emphasis supplied)
It is noteworthy, however, that in the body of his decision, the labor arbiter applied Section 10
R.A. 8042,2 the law relative to the protection of Filipino overseas-workers, and computed private
respondents salary for the unexpired portion of his contract as follows: SR1,200 x 3 months
= SR3,600.
On appeal by petitioner, the NLRC affirmed the factual findings of the labor arbiter but modified
the appealed decision by deleting the order of refund of excessive placement fee for lack of
jurisdiction.3cräläwvirtualibräry
Petitioner moved for reconsideration with respect to the labor arbiters award of SR13,200 in the
dispositive portion of the decision, representing respondents salary for the unexpired portion of
his contract. invoking Section 10 R.A. 8042. Petitioner urged that its liability for respondents
salary is for only three (3) months. Petitioner claimed that it should pay only SR 3.600 (SR 1,200
x 3 months) for the unexpired portion of respondents employment and SR360 (10% of SR3,600)
for attorneys fees.4cräläwvirtualibräry
The NLRC denied petitioners motion. It ruled that R.A. 8042 does not apply as respondents
employment which started in February 1995 occurred prior to its effectivity on July 15,
1995.5cräläwvirtualibräry
Hence, this petition for certiorari.
In the case at bar, petitioners illegal dismissal from service is no longer disputed. Petitioner
merely impugns the monetary awards granted by the NLRC to private respondent. It submits
that although the unexpired portion of private respondents employment contract is eight (8)
months,6 it is liable to pay respondent only three (3) months of his basic salary, pursuant to
Section 10 of R.A. 8042, or SR1,200 (monthly salary) multiplied by 3 months, for a total of
SR3,600. Petitioner claims that the NLRC erred in ruling that as private respondents
employment started only on February 28, 1995, R.A. 8042, which took effect on July 15, 1995,
would not apply to his case. Petitioner argues that it is not the date of employment but the date
of dismissal which should be considered in determining the applicability of R.A. 8042. Petitioner
prays that the award in the NLRC Decision dated October 14, 1997, be changed to
SR3,600 instead of 13,200 and that the award of attorneys fees be deleted.
We affirm with modifications.
As a rule, jurisdiction is determined by the law at the time of the commencement of the
action.7 In the case at bar, private respondents cause of action did not accrue on the date of his
date of his employment or on February 28, 1995. His cause of action arose only from the-time
he was illegally dismissed by petitioner from service in June 1996, after his vacation leave
expired. It is thus clear that R.A. 8042 which took effect a year earlier in July 1995 applies
to the case at bar.
Under Section 10 of R.A. 8042, a worker dismissed from overseas employment without just,
valid or authorized cause is entitled to his salary for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less.
In the case at bar, the unexpired portion of private respondents employment contract is eight (8)
months. Private respondent should therefore be paid his basic salary corresponding to
three (3) months or a total of SR3,600.8cräläwvirtualibräry
We note that this same computation was made by the labor arbiter in the body of his
decision.9 Despite said computation in the body of the decision, however, the labor arbiter
awarded higher sum (SR13,200) in the dispositive portion.
The general rule is that where there is a conflict between the dispositive portion or the fallo and
thebody of the decision, the fallo controls. This rule rests on the theory that the fallo is the final
order while the opinion in the body is merely a statement ordering nothing. However, where the
inevitable conclusion from the body of the decision is so clear as to show that there was
a mistake in the dispositive portion, the body of the decision will
prevail.10cräläwvirtualibräry
We find that the labor arbiters award of a higher amount in the dispositive portion was clearly an
error for there is nothing in the text of the decision which support the award of said higher
amount. We reiterate that the correct award to private respondent for the unexpired portion of his
employment contract is SR3,600.
We come now to the award of attorneys fees in favor of private respondent. Article 2208 of the
Civil Code allows attorneys fees to be awarded when its claimant is compelled to litigate with
third persons or to incur expenses to protect his interest by reason of an unjustified act or
omission of the party for whom it is sought. Moreover, attorneys fees are recoverable when there
is sufficient showing of bad faith.11 The Labor Code,12 on the other hand, fixes the attorneys fees
that may be recovered in an amount which should not exceed 10% of the total amount of wages
awarded.
In the case at bar, petitioners bad faith in dismissing private respondent is manifest.
Respondent was made to believe that he would be temporarily leaving Jeddah, Kingdom of
Saudi Arabia, for a 30-day vacation leave with pay. However, while on board the plane back to
the Philippines, his co-employees told him that he has been dismissed from his job as he was
given only a one-way plane ticket by petitioner. True enough, private respondent was not
allowed to return to his jobsite in Jeddah after his vacation leave. Thus, private respondent
was compelled to file an action for illegal dismissal with the labor arbiter and hence
entitled to an award of attorneys fees.
IN VIEW OF THE FOREGOING, the decision of the public respondent National Labor Relations
Commission, dated October 14, 1997, is AFFIRMED with modifications: petitioner is ordered to
pay private respondent IBNO MEDIALES the peso equivalent of the amounts of SR3,600 for
the unexpired portion of his employment contract, and SR360 for attorneys fees. No costs.
SO ORDERED.
Regalado,(Chairman), Melo, Mendoza, and Martinez, JJ., concur.
Endnotes:
1
 Decision, Rollo, pp. 11-20.
2
 Entitled: Migrant Workers and Overseas Filipinos Act of 1995.
3
 NLRC Decision, dated August 18, 1997; Rollo, pp. 26-32.
4
 Motion for Reconsideration, Rollo, pp. 33-35.

5
 Decision, dated October 14, 1997; Rollo, pp. 36-38.

6
 Respondent was dismissed from service in June 1996 (after his vacation leave), while his
employment contract was supposed to end on February 28, 1997.

7
 Erectors, Inc. vs. NLRC, 256 629, 637, [1996], citing Philippine-Singapore Ports.
Corp. vs. NLRC, 218 SRA 77 [1993].

8
 Computed as follows: monthly salary of SR1,200 x 3 months.

9
 Supra.
G.R. No. 76633 October 18, 1988
10
 Olac, vs. Court of Appeals, 213 SCRA 321, 328 [1992], citing Aguirre vs. Aguirre, 58 SCRA
EASTERN SHIPPING LINES, INC., petitioner,
461 [1974] and Magdalena Estate, Inc. vs. Calauag, 11 SCRA 333 [1964].
vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR
11
 Tumbiga v. National Labor Relations Commission, 274 SCRA 338, 349 [1997]. AND EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D.
SACO, respondents.
12
 Article 111, Chapter III, Title II, Book Three
Jimenea, Dala & Zaragoza Law Office for petitioner.

The Solicitor General for public respondent.

Dizon Law Office for respondent Kathleen D. Saco.

CRUZ, J.:

The private respondent in this case was awarded the sum of P192,000.00 by the Philippine
Overseas Employment Administration (POEA) for the death of her husband. The decision is
challenged by the petitioner on the principal ground that the POEA had no jurisdiction over the
case as the husband was not an overseas worker.

Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in
Tokyo, Japan, March 15, 1985. His widow sued for damages under Executive Order No. 797
and Memorandum Circular No. 2 of the POEA. The petitioner, as owner of the vessel, argued
that the complaint was cognizable not by the POEA but by the Social Security System and
should have been filed against the State Insurance Fund. The POEA nevertheless assumed
jurisdiction and after considering the position papers of the parties ruled in favor of the
complainant. The award consisted of P180,000.00 as death benefits and P12,000.00 for burial
expenses.

The petitioner immediately came to this Court, prompting the Solicitor General to move for
dismissal on the ground of non-exhaustion of administrative remedies.

Ordinarily, the decisions of the POEA should first be appealed to the National Labor Relations
Commission, on the theory inter alia that the agency should be given an opportunity to correct
the errors, if any, of its subordinates. This case comes under one of the exceptions, however, as
the questions the petitioner is raising are essentially questions of law. 1 Moreover, the private
respondent himself has not objected to the petitioner's direct resort to this Court, observing that
the usual procedure would delay the disposition of the case to her prejudice.
The Philippine Overseas Employment Administration was created under Executive Order No.
797, promulgated on May 1, 1982, to promote and monitor the overseas employment of Filipinos
and to protect their rights. It replaced the National Seamen Board created earlier under Article
20 of the Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA is
vested with "original and exclusive jurisdiction over all cases, including money claims, involving
employee-employer relations arising out of or by virtue of any law or contract involving Filipino
contract workers, including seamen." These cases, according to the 1985 Rules and Regulations
on Overseas Employment issued by the POEA, include "claims for death, disability and other
benefits" arising out of such employment. 2
The petitioner does not contend that Saco was not its employee or that the claim of his widow is
not compensable. What it does urge is that he was not an overseas worker but a 'domestic
employee and consequently his widow's claim should have been filed with Social Security
System, subject to appeal to the Employees Compensation Commission.
We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an
overseas employee of the petitioner at the time he met with the fatal accident in Japan in 1985.
Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is
defined as "employment of a worker outside the Philippines, including employment on board
vessels plying international waters, covered by a valid contract. 3 A contract worker is described
as "any person working or who has worked overseas under a valid employment contract and
shall include seamen" 4 or "any person working overseas or who has been employed by another
which may be a local employer, foreign employer, principal or partner under a valid employment
contract and shall include seamen." 5 These definitions clearly apply to Vitaliano Saco for it is not
disputed that he died while under a contract of employment with the petitioner and alongside the
petitioner's vessel, the M/V Eastern Polaris, while berthed in a foreign country. 6
It is worth observing that the petitioner performed at least two acts which constitute implied or
tacit recognition of the nature of Saco's employment at the time of his death in 1985. The first is
its submission of its shipping articles to the POEA for processing, formalization and approval in
the exercise of its regulatory power over overseas employment under Executive Order NO.
797. 7 The second is its payment 8 of the contributions mandated by law and regulations to the
Welfare Fund for Overseas Workers, which was created by P.D. No. 1694 "for the purpose of
providing social and welfare services to Filipino overseas workers."
Significantly, the office administering this fund, in the receipt it prepared for the private
respondent's signature, described the subject of the burial benefits as "overseas contract worker
Vitaliano Saco." 9 While this receipt is certainly not controlling, it does indicate, in the light of the
petitioner's own previous acts, that the petitioner and the Fund to which it had made
contributions considered Saco to be an overseas employee.
The petitioner argues that the deceased employee should be likened to the employees of the
Philippine Air Lines who, although working abroad in its international flights, are not considered
overseas workers. If this be so, the petitioner should not have found it necessary to submit its
shipping articles to the POEA for processing, formalization and approval or to contribute to the
Welfare Fund which is available only to overseas workers. Moreover, the analogy is hardly
appropriate as the employees of the PAL cannot under the definitions given be considered
seamen nor are their appointments coursed through the POEA.
The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by
the POEA pursuant to its Memorandum Circular No. 2, which became effective on February 1,
1984. This circular prescribed a standard contract to be adopted by both foreign and domestic
shipping companies in the hiring of Filipino seamen for overseas employment. A similar contract
had earlier been required by the National Seamen Board and had been sustained in a number of
cases by this Court. 10 The petitioner claims that it had never entered into such a contract with
the deceased Saco, but that is hardly a serious argument. In the first place, it should have done
so as required by the circular, which specifically declared that "all parties to the employment of
any Filipino seamen on board any ocean-going vessel are advised to adopt and use this
employment contract effective 01 February 1984 and to desist from using any other format of
employment contract effective that date." In the second place, even if it had not done so, the
provisions of the said circular are nevertheless deemed written into the contract with Saco as a
postulate of the police power of the State. 11
But the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the
principle of non-delegation of legislative power. It contends that no authority had been given the
POEA to promulgate the said regulation; and even with such authorization, the regulation
represents an exercise of legislative discretion which, under the principle, is not subject to
delegation.
The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order
No. 797, reading as follows:
... The governing Board of the Administration (POEA), as hereunder
provided shall promulgate the necessary rules and regulations to govern the
exercise of the adjudicatory functions of the Administration (POEA).
Similar authorization had been granted the National Seamen Board, which, as earlier observed,
had itself prescribed a standard shipping contract substantially the same as the format adopted
by the POEA.
The second challenge is more serious as it is true that legislative discretion as to the substantive
contents of the law cannot be delegated. What can be delegated is the discretion to
determine how the law may be enforced, not what the law shall be. The ascertainment of the
latter subject is a prerogative of the legislature. This prerogative cannot be abdicated or
surrendered by the legislature to the delegate. Thus, in Ynot v. Intermediate Apellate
Court 12 which annulled Executive Order No. 626, this Court held:
We also mark, on top of all this, the questionable manner of the disposition
of the confiscated property as prescribed in the questioned executive order.
It is there authorized that the seized property shall be distributed to
charitable institutions and other similar institutions as the Chairman of the
National Meat Inspection Commission may see fit, in the case of carabaos.'
(Italics supplied.) The phrase "may see fit" is an extremely generous and
dangerous condition, if condition it is. It is laden with perilous opportunities
for partiality and abuse, and even corruption. One searches in vain for the
usual standard and the reasonable guidelines, or better still, the limitations
that the officers must observe when they make their distribution. There is
none. Their options are apparently boundless. Who shall be the fortunate
beneficiaries of their generosity and by what criteria shall they be chosen?
Only the officers named can supply the answer, they and they alone may
choose the grantee as they see fit, and in their own exclusive discretion.
Definitely, there is here a 'roving commission a wide and sweeping authority
that is not canalized within banks that keep it from overflowing,' in short a
clearly profligate and therefore invalid delegation of legislative powers.
There are two accepted tests to determine whether or not there is a valid delegation of
legislative power, viz, the completeness test and the sufficient standard test. Under the first test,
the law must be complete in all its terms and conditions when it leaves the legislature such that
when it reaches the delegate the only thing he will have to do is enforce it. 13 Under the sufficient
standard test, there must be adequate guidelines or stations in the law to map out the
boundaries of the delegate's authority and prevent the delegation from running riot. 14
Both tests are intended to prevent a total transference of legislative authority to the delegate,
who is not allowed to step into the shoes of the legislature and exercise a power essentially
legislative.
The principle of non-delegation of powers is applicable to all the three major powers of the
Government but is especially important in the case of the legislative power because of the many
instances when its delegation is permitted. The occasions are rare when executive or judicial
powers have to be delegated by the authorities to which they legally certain. In the case of the
legislative power, however, such occasions have become more and more frequent, if not
necessary. This had led to the observation that the delegation of legislative power has become
the rule and its non-delegation the exception.
The reason is the increasing complexity of the task of government and the growing inability of
the legislature to cope directly with the myriad problems demanding its attention. The growth of
society has ramified its activities and created peculiar and sophisticated problems that the
legislature cannot be expected reasonably to comprehend. Specialization even in legislation has
become necessary. To many of the problems attendant upon present-day undertakings, the
legislature may not have the competence to provide the required direct and efficacious, not to
say, specific solutions. These solutions may, however, be expected from its delegates, who are
supposed to be experts in the particular fields assigned to them.
The reasons given above for the delegation of legislative powers in general are particularly
applicable to administrative bodies. With the proliferation of specialized activities and their
attendant peculiar problems, the national legislature has found it more and more necessary to
entrust to administrative agencies the authority to issue rules to carry out the general provisions
of the statute. This is called the "power of subordinate legislation."
With this power, administrative bodies may implement the broad policies laid down in a statute
by "filling in' the details which the Congress may not have the opportunity or competence to
provide. This is effected by their promulgation of what are known as supplementary regulations,
such as the implementing rules issued by the Department of Labor on the new Labor Code.
These regulations have the force and effect of law.
Memorandum Circular No. 2 is one such administrative regulation. The model contract
prescribed thereby has been applied in a significant number of the cases without challenge by
the employer. The power of the POEA (and before it the National Seamen Board) in requiring
the model contract is not unlimited as there is a sufficient standard guiding the delegate in the
exercise of the said authority. That standard is discoverable in the executive order itself which, in
creating the Philippine Overseas Employment Administration, mandated it to protect the rights of
overseas Filipino workers to "fair and equitable employment practices."
Parenthetically, it is recalled that this Court has accepted as sufficient standards "Public interest"
in People v. Rosenthal 15 "justice and equity" in Antamok Gold Fields v. CIR 16 "public
convenience and welfare" in Calalang v. Williams 17 and "simplicity, economy and efficiency"
in Cervantes v. Auditor General, 18 to mention only a few cases. In the United States, the "sense
and experience of men" was accepted in Mutual Film Corp. v. Industrial Commission, 19 and
"national security" in Hirabayashi v. United States. 20
It is not denied that the private respondent has been receiving a monthly death benefit pension
of P514.42 since March 1985 and that she was also paid a P1,000.00 funeral benefit by the
Social Security System. In addition, as already observed, she also received a P5,000.00 burial
gratuity from the Welfare Fund for Overseas Workers. These payments will not preclude
allowance of the private respondent's claim against the petitioner because it is specifically
reserved in the standard contract of employment for Filipino seamen under Memorandum
Circular No. 2, Series of 1984, that—
Section C. Compensation and Benefits.—
1. In case of death of the seamen during the term of his Contract, the
employer shall pay his beneficiaries the amount of:
a. P220,000.00 for master and chief engineers
b. P180,000.00 for other officers, including radio
operators and master electrician
c. P 130,000.00 for ratings.
2. It is understood and agreed that the benefits mentioned above shall be
separate and distinct from, and will be in addition to whatever benefits which
the seaman is entitled to under Philippine laws. ...
3. ...
c. If the remains of the seaman is buried in the
Philippines, the owners shall pay the beneficiaries of
the seaman an amount not exceeding P18,000.00 for
burial expenses.
The underscored portion is merely a reiteration of Memorandum Circular No. 22, issued by the
National Seamen Board on July 12,1976, providing an follows:
Income Benefits under this Rule Shall be Considered Additional Benefits.—
All compensation benefits under Title II, Book Four of the Labor Code of the
Philippines (Employees Compensation and State Insurance Fund) shall be
granted, in addition to whatever benefits, gratuities or allowances that the
seaman or his beneficiaries may be entitled to under the employment
contract approved by the NSB. If applicable, all benefits under the Social
Security Law and the Philippine Medicare Law shall be enjoyed by the
seaman or his beneficiaries in accordance with such laws.
The above provisions are manifestations of the concern of the State for the working class,
consistently with the social justice policy and the specific provisions in the Constitution for the
protection of the working class and the promotion of its interest.
One last challenge of the petitioner must be dealt with to close t case. Its argument that it has
been denied due process because the same POEA that issued Memorandum Circular No. 2 has
also sustained and applied it is an uninformed criticism of administrative law itself. Administrative
agencies are vested with two basic powers, the quasi-legislative and the quasi-judicial. The first 20 320 U.S. 99.
enables them to promulgate implementing rules and regulations, and the second enables them 21 69 Phil. 635.
to interpret and apply such regulations. Examples abound: the Bureau of Internal Revenue
adjudicates on its own revenue regulations, the Central Bank on its own circulars, the Securities
and Exchange Commission on its own rules, as so too do the Philippine Patent Office and the
Videogram Regulatory Board and the Civil Aeronautics Administration and the Department of
Natural Resources and so on ad infinitum on their respective administrative regulations. Such an
arrangement has been accepted as a fact of life of modern governments and cannot be
considered violative of due process as long as the cardinal rights laid down by Justice Laurel in
the landmark case of Ang Tibay v. Court of Industrial Relations 21 are observed.

Whatever doubts may still remain regarding the rights of the parties in this case are resolved in
favor of the private respondent, in line with the express mandate of the Labor Code and the
principle that those with less in life should have more in law.

When the conflicting interests of labor and capital are weighed on the scales of social justice, the
heavier influence of the latter must be counter-balanced by the sympathy and compassion the
law must accord the underprivileged worker. This is only fair if he is to be given the opportunity
and the right to assert and defend his cause not as a subordinate but as a peer of management,
with which he can negotiate on even plane. Labor is not a mere employee of capital but its active
and equal partner.
WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary
restraining order dated December 10, 1986 is hereby LIFTED. It is so ordered.
Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.
G.R. No. 154213               August 23, 2012
EASTERN MEDITERRANEAN MARITIME LTD. AND AGEMAR MANNING AGENCY,
INC., Petitioners,
vs.
EST ANISLAO SURIO, FREDDIE PALGUIRAN, GRACIANO MORALES, HENRY CASTILLO,
ARISTOTLE ARREOLA, ALEXANDER YGOT, ANRIQUE BA TTUNG, GREGORIO
ALDOVINO, NARCISO FRIAS, VICTOR FLORES, SAMUEL MARCIAL, CARLITO
PALGUIRAN, DUQUE VINLUAN, .JESUS MENDEGORIN, NEIL FLORES, ROMEO
MANGALIAG, JOE GARFIN and SALESTINO SUSA, Respondents.

*PEREZ
Footnotes

DECISION
1 Bagatsing v. Ramirez, 74 SCRA 306; Del Mar v. Phil. Veterans
Administration, 51 SCRA 340; Aguilar v. Valencia, 40 SCRA 210; Begosa v.
PVA 32 SCRA 446; Tapales v. President and Board of Regents, 7 SCRA BERSAMIN, J.:
553; Pascual v. Nueva Ecija Provincial Board, 106 Phil. 466; Mondano v.
Silvosa 97 Phil. 143. On appeal is the decision the Court of Appeals (CA) promulgated on December 21, 2001
2 Sec. I (d), Rule I, Book VI (1985 Rules). affirming the resolution of the National Labor Relations Commission (NLRC) declaring itself to be
3 Sec. 1 x Rule 11, Book I (1985 Rules). without appellate jurisdiction to review the decision of the Philippine Overseas Employment
4 Sec. l(g), Rule II, Book I (1985 Rules). Administration (POEA) involving petitioners’ complaint for disciplinary action against
5 Sec. 1 (g), Rule 11, Book I (1984 Rules). respondents.1
6 Rollo, p. 171 (POEA Decision, p. 8).
7 Ibid., pp. 169-170 (POEA Decision, pp. 6-7).
8 Rollo, pp. 213-217. Respondents were former crewmembers of MT Seadance, a vessel owned by petitioner Eastern
9 Annex "A" of Private Respondent's Comment (Rollo, p. 230). Mediterranean Maritime Ltd. and manned and operated by petitioner Agemar Manning Agency,
10 Bagong Filipinas Overseas Corp. v. NLRC, 135 SCRA 278; Virgen v. Inc. While respondents were still on board the vessel, they experienced delays in the payment of
NLRC, 125 SCRA 577; orse Management v. NSB, et al., 117 SCRA 486; their wages and in the remittance of allotments, and were not paid for extra work and extra
Virgen v. NLRC, 115 SCRA 347. overtime work. They complained about the vessel’s inadequate equipment, and about the failure
11 Stone v. Mississippi, 101 US 814, of the petitioners to heed their repeated requests for the improvement of their working
12 148 SCRA 669. conditions. On December 19, 1993, when MT Seadance docked at the port of Brofjorden,
Sweden to discharge oil, representatives of the International Transport Federation (ITF) boarded
13 People v. Vera 65 Phil. 56.
the vessel and found the wages of the respondents to be below the prevailing rates. The
14 Cervantes v. Auditor General, 91 Phil. 359; People v. Rosen that 68 Phil.
ensuing negotiations between the ITF and the vessel owner on the increase in respondents’
328.
wages resulted in the payment by the vessel owner of wage differentials and the immediate
15 Supra.
repatriation of respondents to the Philippines.
16 70 Phil. 340.
17 70 Phil. 726.
18. Supra. Subsequently, on December 23, 1993, the petitioners filed against the newly-repatriated
19 236 U.S. 247. respondents a complaint for disciplinary action based on breach of discipline and for the
reimbursement of the wage increases in the Workers Assistance and Adjudication Office of the
POEA.
During the pendency of the administrative complaint in the POEA, Republic Act No. 8042
(Migrant Workers and Overseas Filipinos Act of 1995) took effect on July 15, 1995. Section 10 of
Republic Act No. 8042 vested original and exclusive jurisdiction over all money claims arising
out of employer-employee relationships involving overseas Filipino workers in the Labor Arbiters,
to wit:
Section 10. Money Claims. – Notwithstanding any provision of law to the contrary, the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the
complaint, the claims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages.
The jurisdiction over such claims was previously exercised by the POEA under the POEA Rules
and Regulations of 1991 (1991 POEA Rules).
On May 23, 1996, the POEA dismissed the complaint for disciplinary action. Petitioners received
the order of dismissal on July 24, 1996.2
Relying on Section 1, Rule V, Book VII of the 1991 POEA Rules, petitioners filed a partial appeal
on August 2, 1996 in the NLRC, still maintaining that respondents should be administratively
sanctioned for their conduct while they were on board MT Seadance.
On March 21, 1997, the NLRC dismissed petitioners’ appeal for lack of jurisdiction,3 thus:
We dismiss the partial appeal.
The Commission has no jurisdiction to review cases decided by the POEA Administrator
involving disciplinary actions. Under the Migrant Workers and Overseas Filipinos Act of 1995,
the Labor Arbiter shall have jurisdiction over money claims involving employer-employee
relationship (sec. 10, R.A. 8042). Said law does not provide that appeals from decisions arising
from complaint for disciplinary action rest in the Commission.
PREMISES CONSIDERED, instant appeal from the Order of May 23, 1996 is hereby
DISMISSED for lack of jurisdiction.
SO ORDERED.
Not satisfied, petitioners moved for reconsideration, but the NLRC denied their motion. They
received the denial on July 8, 1997.4
Petitioners then commenced in this Court a special civil action for certiorari and mandamus.
Citing St. Martin Funeral Homes v. National Labor Relations Commission, 5 however, the Court
referred the petition to the CA on November 25, 1998.
Petitioners contended in their petition that:
THE NLRC GRAVELY ABUSED ITS DISCRETION AND/OR GRAVELY ERRED IN
DISMISSING PETITIONERS’ APPEAL AND MOTION FOR RECONSIDERATION WHEN IT
REFUSED TO TAKE COGNIZANCE OF PETITIONERS’ APPEAL DESPITE BEING
EMPOWERED TO DO SO UNDER THE LAW.6
On December 21, 2001, the CA dismissed the petition for certiorari and mandamus, holding that
the inclusion and deletion of overseas contract workers from the POEA blacklist/watchlist were
within the exclusive jurisdiction of the POEA to the exclusion of the NLRC, and that the NLRC
had no appellate jurisdiction to review the matter, viz:
Section 10 of RA 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of
1995, provides that:
"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.
xxxx
Likewise, the Rules and Regulations implementing RA 8042 reiterate the jurisdiction of POEA,
thus:
"Section 28. Jurisdiction of the POEA. – The POEA shall exercise original and exclusive
jurisdiction to hear and decide:
a) All cases, which are administrative in character, involving or arising out of violations of rules
and regulations relating to licensing and registration of recruitment and employment agencies or
entities; and
b) Disciplinary action cases and other special cases, which are administrative in character,
involving employers, principals, contracting partners and Filipino migrant workers."
Further, Sections 6 and 7 Rule VII, Book VII of the POEA Rules & Regulations (1991) provide:
"Sec. 6. Disqualification of Contract Workers. Contract workers, including seamen, against
whom have been imposed or with pending obligations imposed upon them through an order,
decision or resolution shall be included in the POEA Blacklist Workers shall be disqualified from
overseas employment unless properly cleared by the Administration or until their suspension is
served or lifted.
Sec. 7. Delisting of the Contract Worker’s Name from the POEA Watchlist. The name of an
overseas worker may be excluded, deleted and removed from the POEA Watchlist only after
disposition of the case by the Administration."
Thus, it can be concluded from the afore-quoted law and rules that, public respondent has no
jurisdiction to review disciplinary cases decided by the POEA involving contract workers. Clearly,
the matter of inclusion and deletion of overseas contract workers in the POEA Blacklist/Watchlist
is within the exclusive jurisdiction of the POEA to the exclusion of the public respondent. Nor has
the latter appellate jurisdiction to review the findings of the POEA involving such cases.
xxx
In fine, we find and so hold, that, no grave abuse of discretion can be imputed to the public
respondent when it issued the assailed Decision and Order, dated March 21, 1997 and June 13,
1997, respectively, dismissing petitioners’ appeal from the decision of the POEA.
WHEREFORE, finding the instant petition not impressed with merit, the same is hereby DENIED
DUE COURSE. Costs against petitioners.
7 the POEA in disciplinary cases involving overseas contract workers.
SO ORDERED.
Issue
Petitioners still appeal, submitting to the Court the sole issue of:
WHETHER OR NOT THE NLRC HAS JURISDICTION TO REVIEW ON APPEAL CASES
DECIDED BY THE POEA ON MATTERS PERTAINING TO DISCIPLINARY ACTIONS
AGAINST PRIVATE RESPONDENTS.
They contend that both the CA and the NLRC had no basis to rule that the NLRC had no
jurisdiction to entertain the appeal only because Republic Act No. 8042 had not provided for its
retroactive application.
Respondents counter that the appeal should have been filed with the Secretary of Labor who
had exclusive jurisdiction to review cases involving administrative matters decided by the POEA.
Ruling
The petition for review lacks merit.
Petitioners’ adamant insistence that the NLRC should have appellate authority over the POEA’s
decision in the disciplinary action because their complaint against respondents was filed in 1993
was unwarranted. Although Republic Act No. 8042, through its Section 10, transferred the
original and exclusive jurisdiction to hear and decide money claims involving overseas Filipino
workers from the POEA to the Labor Arbiters, the law did not remove from the POEA the original
and exclusive jurisdiction to hear and decide all disciplinary action cases and other special cases
administrative in character involving such workers. The obvious intent of Republic Act No. 8042
was to have the POEA focus its efforts in resolving all administrative matters affecting and
involving such workers. This intent was even expressly recognized in the Omnibus Rules and
Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995 promulgated
on February 29, 1996, viz:
Section 28. Jurisdiction of the POEA. – The POEA shall exercise original and exclusive
jurisdiction to hear and decide:
(a) all cases, which are administrative in character, involving or arising out of violations or rules
and regulations relating to licensing and registration of recruitment and employment agencies or
entities; and
(b) disciplinary action cases and other special cases, which are administrative in character,
involving employers, principals, contracting partners and Filipino migrant workers.
Section 29. Venue – The cases mentioned in Section 28(a) of this Rule, may be filed with the
POEA Adjudication Office or the DOLE/POEA regional office of the place where the complainant
applied or was recruited, at the option of the complainant. The office with which the complaint
was first filed shall take cognizance of the case.
Disciplinary action cases and other special cases, as mentioned in the preceding Section, shall
be filed with the POEA Adjudication Office.
It is clear to us, therefore, that the NLRC had no appellate jurisdiction to review the decision of
Petitioners’ position that Republic Act No. 8042 should not be applied retroactively to the review
of the POEA’s decision dismissing their complaint against respondents has no support in
jurisprudence. Although, as a rule, all laws are prospective in application unless the contrary is
expressly provided,8 or unless the law is procedural or curative in nature, 9 there is no serious
question about the retroactive applicability of Republic Act No. 8042 to the appeal of the POEA’s
decision on petitioners’ disciplinary action against respondents. In a way, Republic Act No. 8042
was a procedural law due to its providing or omitting guidelines on appeal. A law is procedural,
according to De Los Santos v. Vda. De Mangubat,10 when it –
Refers to the adjective law which prescribes rules and forms of procedure in order that courts
may be able to administer justice. Procedural laws do not come within the legal conception of a
retroactive law, or the general rule against the retroactive operation of statues ― they may be
given retroactive effect on actions pending and undetermined at the time of their passage and
this will not violate any right of a person who may feel that he is adversely affected, insomuch as
there are no vested rights in rules of procedure.
Republic Act No. 8042 applies to petitioners’ complaint by virtue of the case being then still
pending or undetermined at the time of the law’s passage, there being no vested rights in rules
of procedure.11 They could not validly insist that the reckoning period to ascertain which law or
rule should apply was the time when the disciplinary complaint was originally filed in the POEA
in 1993. Moreover, Republic Act No. 8042 and its implementing rules and regulations were
already in effect when petitioners took their appeal. A statute that eliminates the right to appeal
and considers the judgment rendered final and unappealable only destroys the right to appeal,
but not the right to prosecute an appeal that has been perfected prior to its passage, for, at that
stage, the right to appeal has already vested and cannot be impaired.12 Conversely and by
analogy, an appeal that is perfected when a new statute affecting appellate jurisdiction comes
into effect should comply with the provisions of the new law, unless otherwise provided by the
new law. Relevantly, petitioners need to be reminded that the right to appeal from a decision is a
privilege established by positive laws, which, upon authorizing the taking of the appeal, point out
the cases in which it is proper to present the appeal, the procedure to be observed, and the
courts by which the appeal is to be proceeded with and resolved. 13 This is why we consistently
hold that the right to appeal is statutory in character, and is available only if granted by law or
statute.14
When Republic Act No. 8042 withheld the appellate jurisdiction of the NLRC in respect of cases
decided by the POEA, the appellate jurisdiction was vested in the Secretary of Labor in
accordance with his power of supervision and control under Section 38(1), Chapter 7, Title II,
Book III of the Revised Administrative Code of 1987, to wit:
Section 38. Definition of Administrative Relationship. – Unless otherwise expressly stated in the
Code or in other laws defining the special relationships of particular agencies, administrative
relationships shall be categorized and defined as follows:
Supervision and Control. – Supervision and control shall include authority to act directly Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions
whenever a specific function is entrusted by law or regulation to a subordinate; direct the in the above decision had been reached in consultation before the case was assigned to the
performance of duty; restrain the commission of acts; review, approve, reverse or modify acts writer of the opinion of the Court's Division.
and decisions of subordinate officials or units; determine priorities in the execution of plans and
programs. Unless a different meaning is explicitly provided in the specific law governing the
ANTONIO T. CARPIO
relationship of particular agencies, the word "control" shall encompass supervision and control
Senior Associate Justice
as defined in this paragraph. xxx.
(Per Section 12, R.A. 296,
The Judiciary Act of 1948, as amended)
Thus, Section 1, Part VII, Rule V of the 2003 POEA Rules and Regulations specifically provides,
as follows:
Footnotes

Section 1. Jurisdiction. – The Secretary shall have the exclusive and original jurisdiction to act
* Vice Associate Justice Mariano C. Del Castillo, who penned the decision of the Court
on appeals or petition for review of disciplinary action cases decided by the Administration.
of Appeals under review, per the raffle of July 25, 2012.

In conclusion, we hold that petitioners should have appealed the adverse decision of the POEA 1 
Rollo, pp. 19-26; penned by Associate Justice Mariano C. Del Castillo (now a
to the Secretary of Labor instead of to the NLRC. Consequently, the CA, being correct on its
Member of the Court), and concurred in by Associate Justice Ruben T. Reyes (later
conclusions, committed no error in upholding the NLRC.
Presiding Justice and a Member of the Court, but already retired) and Associate
Justice Renato C. Dacudao (retired).
WHEREFORE, we AFFIRM the decision promulgated on December 21, 2001 by the Court of
Appeals; and ORDER the petitioners to pay the costs of suit. 2 
Id., at 35.

SO ORDERED. 3 
Id., at 31-33.

LUCAS P. BERSAMIN 4 
Id., at 6.
Associate Justice
5 
Id., at 58.
WE CONCUR:
6 
Id., at 119.
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
Acting Chairperson, First Division 7 
Id., at 22-26.

8 
MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ The Civil Code provides:
Associate Justice Associate Justice
Article 4. Laws shall have no retroactive effect, unless the contrary is provided.

ESTELA M. PERLAS-BERNABE 9 
Agpalo, Statutory Construction (2003), p. 370.
Associate Justice
10 
G.R. No. 149508, October 10, 2007, 535 SCRA 411, 422.
ATTESTATION
11 
Fil-Estate Properties, Inc. v. Homena-Valencia, G.R. No. 173942, June 25, 2008,
I attest that the conclusions in the above Decision had been reached in consultation before the
555 SCRA 345, 349; Pfizer, Inc. v. Galan, G.R. No. 143389, May 25, 2001, 358 SCRA
case was assigned to the writer of the opinion of the Court's Division.
240, 246.

TERESITA J. LEONARDO-DE CASTRO 12 

Agpalo, supra at note 10, p. 386, citing Pavon v. Phil. Island Telephone & Telegraph
Associate Justice
Co., 9 Phil. 247 (1907), Priolo v. Priolo, 9 Phil. 566, 567 (1908) and Un Pak Lieng v.
Acting Chairperson, First Division
Nigorra, 9 Phil. 486, 489 (1908).

CERTIFICATION 13 
Aragon v. Araullo, 11 Phil. 7, 9 (1908).
14 
Aris (Phil.) Inc. v. NLRC, G.R. No. 90501, August 5, 1991, 200 SCRA 246, 253.

[G.R. NO. 151158 : August 17, 2007]

JOEL B. DE JESUS, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION and

PACIFIC OCEAN MANNING, INC., Respondents.

DECISION

NACHURA, J.:

Petitioner Joel B. De Jesus appeals by certiorari under Rule 45 of the Rules of Court the
September 28, 2001 Decision1 of the Court of Appeals (CA) in CA-G.R. SP. No. 58241, and the
December 12, 2001 Resolution2 denying its reconsideration.

On November 20, 1996, De Jesus applied for shipboard employment with respondent Pacific
Ocean Manning, Inc. (POMI), a domestic corporation duly licensed by the Philippine Overseas
Employment Administration (POEA) to operate as a manning agency. As a standard operating
procedure, POMI directed De Jesus to undergo the pre-employment medical examination at the
Our Lady of Fatima Medical Clinic, its accredited clinic. On the query pertaining to his medical
history, specifically as to whether he was suffering from or had been told that he had any
disease or ailment, including stomach pain or ulcer, De Jesus answered in the negative. After
the examination, he was reported fit for work.3

De Jesus was then hired as 4th Engineer by POMI, for and in behalf of its principal Celtic Pacific
Ship Management Ltd. (Celtic), on board the ocean-going vessel M/V Author on March 26, 1997.
The employment contract4 stipulated that he would work for a period of nine (9) months with a
monthly salary of US$824.00 and a fixed overtime rate of US$459.00. De Jesus also signed the
Standard Employment Contract Addendum,5 barring alcohol, drugs, and any medication on
board without written permission from the master of the vessel. The use of drugs not prescribed
by a medical doctor on board or ashore was prohibited and considered a fundamental breach of
the contract of employment. It was also provided that any prescribed drug should be kept at the
vessel's hospital, and used only with the approval and supervision of the captain. Any seafarer
taking any medication prescribed by a medical doctor was further required to inform the
company master manning agent or drug and alcohol test collector of this fact.

De Jesus departed from the Philippines on March 28, 1997 and embarked on M/V Author the
following day. Early in his stint on board M/V Author, De Jesus experienced stomach pains,
which became unbearable during the second month of his stay, especially when his captain
required him to work even during meal hours. His condition worsened and he severely lost
weight. Thus, when the ship docked in Hamburg, Germany, De Jesus requested for medical
treatment. The ship captain referred him to Dr. Jan-Gerd H. Hagelstein. De Jesus was
diagnosed to be suffering from relapse of gastric ulcer and was advised to sign off for thorough
diagnostic examination and treatment. He was declared fit for repatriation.6
De Jesus was repatriated to the Philippines on June 19, 1997. Upon his arrival, he went to POMI
and requested financial assistance and medical treatment for his illness. POMI, however,
refused. De Jesus was constrained to seek medical treatment from Bataan Doctor's Hospital at
his own expense. He sought reimbursement from POMI, but again it was refused because De
Jesus allegedly concealed his previous history of ulcer. POMI, likewise, disallowed De Jesus'
claim for unpaid salary, on the ground that the amount had already been applied to the cost of
his repatriation.7 Thus, De Jesus filed a complaint 8 for the recovery of unpaid wages, sickwage
allowance and medical expenses.
POMI, on the other hand, had a different story. According to POMI, De Jesus committed
misrepresentation when he concealed in his medical history that he suffered from ulcer two (2)
years ago; that he breached his employment contract when he brought on board his medicines
for ulcer without the ship captain's permission; and that De Jesus admitted having deliberately
brought pieces of Cimetidine for fear that his ulcer might recur on board. POMI posited that De
Jesus was validly discharged, and ultimately prayed for the denial of the claims.9
By Decision10 of August 28, 1998, the Labor Arbiter declared that De Jesus' misrepresentation
cannot be made basis for the denial of his claims. According to the Labor Arbiter, De Jesus
underwent a thorough medical examination before his deployment and was reported fit to work
by POMI's accredited clinic. POMI cannot now be heard to claim otherwise. Besides, POMI was
aware that De Jesus had been discharged on November 29, 1994 due to illness while on board
M/V Oriental Venus. It was, thus, expected that POMI would conduct, as it, in fact, conducted a
thorough medical examination in determining De Jesus' state of health before his deployment.
He concluded that De Jesus' illness was work-related or at least work-aggravated. He also ruled
that POMI failed to convincingly establish that De Jesus violated his employment contract.
The Labor Arbiter, thus, disposed:
WHEREFORE, premises considered, judgment is hereby entered in favor of complainant and
against the [respondent] ordering the latter, jointly and severally, to pay the sum of US$2,735.15
as unpaid salaries and medical allowance for 59 days or its present peso equivalent in the sum
of P118,705.51 plus another sum of P5,000.00 as medical benefits or reimbursement of medical
expenses of complainant.
SO ORDERED.11
POMI appealed to the National Labor Relations Commission (NLRC), claiming that there
was prima facie abuse of discretion on the part of the Labor Arbiter in granting the claims of De
Jesus. The NLRC granted the appeal. It found De Jesus guilty of unauthorized possession of
medicines on board M/V Author, justifying his discharge. Likewise, it denied the claim for
medical and sickness allowance, stating that a relapse of ulcer was not work - related, as the
illness already existed when De Jesus applied with POMI, but the former intentionally concealed
it so he could be hired. Such misrepresentation disqualified De Jesus from claiming employment
benefits under the contract. Finally, the NLRC sustained POMI in applying De Jesus' unpaid
salaries to the cost of his repatriation.12 Hence, it reversed the decision of the Labor Arbiter, viz.:
WHEREFORE, premises considered, the appeal is hereby GRANTED. Accordingly, the
Decision appealed from is totally REVERSED and SET ASIDE and a new one [is] entered
DISMISSING the instant case for lack of merit.
SO ORDERED.13
De Jesus' motion for reconsideration having been denied by the Resolution14 of July 30, 2001,
he elevated the case to the Court of Appeals on petition for certiorari .
In its Decision15 of September 28, 2001, the Court of Appeals affirmed the NLRC. It agreed with
the NLRC that De Jesus' misrepresentation disqualified him from employment, benefits and
claims. The appellate court added that De Jesus did not categorically deny the charge of
unauthorized possession of Cimetidine, in violation of the Standard Employment Contract
Addendum. The CA concluded that POMI was justified in discharging him from M/V Author, and
the NLRC, thus, acted well within its discretion in reversing the findings of the Labor Arbiter.
De Jesus filed a Motion for Reconsideration, 16 but the Court of Appeals denied it on December
12, 2001.17
Aggrieved by the Resolutions of the Court of Appeals, De Jesus comes to this Court positing
these issues:
I
WHETHER OR NOT PETITIONER SHALL (sic) BE AWARDED HIS UNPAID SALARIES,
MEDICAL ALLOWANCE AND REIMBURSEMENT OF HIS MEDICAL EXPENSES.
II
WHETHER PETITIONER SHALL (sic) BEAR THE COST OF HIS REPATRIATION.18
It is a settled rule that under Rule 45 of the Rules of Court, only questions of law may be raised
before this Court. Judicial review by this Court does not extend to a re-evaluation of the
sufficiency of the evidence upon which the proper labor tribunal has based its determination.
Firm is the doctrine that this Court is not a trier of facts, and this applies with greater force in
labor cases.19 However, factual issues may be considered and resolved when the findings of
facts and conclusions of law of the Labor Arbiter are inconsistent with those of the NLRC and the
Court of Appeals,20 as in this case.
De Jesus insists on reimbursement for his medical expenses and entitlement to sickness
allowance and his unpaid salaries. POMI, on the other hand, counters that De Jesus committed
misrepresentation and breach of contract. The Labor Arbiter lent credence to De Jesus' posture
and granted his claims, but the NLRC and Court of Appeals reversed the Arbiter's findings.
Thus, a review of the records of the case, with an assessment of the facts, is necessary.
The evidence shows that De Jesus previously suffered from ulcer but he ticked "NO" in his
medical history. De Jesus, therefore, committed misrepresentation. Nonetheless, he passed the
pre-employment medical examination, was reported fit to work, and was suffered to work on
board M/V Author for more than two (2) months, until his repatriation on June 19, 1997.
The rule is that an ailment contracted even prior to his employment, does not detract from the
compensability of the disease. It is not required that the employment be the sole factor in the
growth, development or acceleration of the illness to entitle the claimant to the benefits incident
thereto. It is enough that the employment had contributed, even in a small measure, to the
development of the disease.21
In this case, POMI failed to rebut De Jesus' claim that he was required to work even during
mealtime and that the meals served on board did not fit the dietary preference of the Filipinos.
Such plight took a toll on De Jesus' health and surely contributed, even in a slight degree, to the
relapse of his illness.
In OSM Shipping Philippines, Inc. v. Dela Cruz,22 this Court, in granting similar claims, held:
Labor contracts are impressed with public interest and the provisions of the POEA Standard
Employment Contract must be construed fairly, reasonably and liberally in favor of Filipino
seamen in the pursuit of their employment on board ocean-going vessels. Despite his
misrepresentation, Arbit underwent and passed the required pre-medical examination, was
declared fit to work, and was suffered to work by petitioner. Upon repatriation, he complied with
the required post-employment medical examination.
Under the beneficent provisions of the Contract, it is enough that the work has contributed, even
in a small degree, to the development of the disease and in bringing about his death. Strict proof
of causation is not required.23
De Jesus' misrepresentation cannot, therefore, be made basis by POMI for the denial of his
claims under the contract.
Apparently realizing the folly of the denial grounded solely on the employee's misrepresentation,
POMI then asserted that De Jesus breached his employment contract. It alleged that De Jesus
was caught in possession of several pieces of Cimetidine, without the ship captain's permission,
and that therefore, he was discharged for a just cause.
Indeed, possession of medicines on board without the ship captain's permission was a violation
of the Standard Employment Contract Addendum and would entitle POMI to dismiss the erring
crew member but only after compliance with the procedure provided in the contract. 24 Section 17
of the Revised Standard Employment Terms and Conditions Governing the Employment of
Filipino Seafarers on Board Ocean-Going Vessels supplies the disciplinary procedure against an
erring seafarer:
SECTION 17. DISCIPLINARY PROCEDURES:
The Master shall furnish the seafarer with the following disciplinary procedure against an erring
seafarer:
A. The master shall furnish the seafarer with a written notice containing the following:
1. Grounds for the charges as listed in Section 31 of this Contract.
2. Date, time and place for a formal investigation of the charges against the seafarer concerned.
B. The Master or his authorized representative shall conduct the investigation or hearing, giving
the seafarer the opportunity to explain or defend himself against the charges. An entry on the
investigation shall be entered into the ship's logbook.
C. If after the investigation or hearing, the Master is convinced that imposition of a penalty is
justified, the Master shall issue a written notice of penalty and the reasons for it to the seafarer,
which copies shall be furnished to the Philippine Agent.
D. Dismissal for just cause may be effected by the master without furnishing the seafarer with
notice of dismissal if doing so will prejudice the safety of the crew or the vessel. This information
shall be entered in the ship's logbook. The Master shall send a complete report to the manning
agency substantiated by the witnesses, testimonies and any other documents in support thereof.
In this case, there was no showing that Celtic complied with the foregoing procedure, thus,
casting a serious doubt on the validity of De Jesus' discharge.
Likewise, neither the ship's logbook nor the report sent to POMI as Celtic's manning agent was
presented in the proceedings a quo to establish the breach committed by De Jesus. The pieces
of evidence submitted before the Labor Arbiter in support of De Jesus' discharge zeroed in on
the alleged misrepresentation, which, as mentioned, cannot be a valid basis for the denial of De
Jesus' claims.
Settled is the rule that in termination cases, the burden of proof rests upon the employer to show
that the dismissal is for a just and valid cause. The case of the employer must stand or fall on its
own merits and not on the weakness of the employee's defense. 25 In this case, no convincing
proof was offered to prove POMI's allegation. All that we have is its self-serving assertion that
De Jesus violated his employment contract. There is no proof that the prescribed disciplinary
procedure was followed. We, therefore, agree with the Labor Arbiter's finding that POMI utterly
failed to establish its claim of valid dismissal. Accordingly, the NLRC and Court of Appeals erred
in reversing the said finding.
It is clear from the records that De Jesus disembarked for a medical reason. Hence, the cost of
De Jesus' repatriation should be borne by Celtic and POMI, pursuant to the provisions of Section
20(B)(4) of the Standard Employment Contract:
4. Upon sign-off of the seafarer from the vessel for medical treatment. The employer shall bear
the full cost of repatriation in the event the seafarer is declared (1) fit for repatriation; or (2) fit to
work but the employer is unable to find employment for the seafarer on board his former vessel
or another vessel of the employer despite earnest efforts.
The cost of repatriation should not be deducted from De Jesus' unpaid salaries of US$911.00.
Likewise, records show that De Jesus immediately reported to POMI for post-employment
medical examination and treatment, but the latter adamantly refused to extend him medical
assistance. He was constrained to seek medical attention from Bataan Doctor's Hospital at his
own expense. Celtic and POMI should, therefore, reimburse De Jesus for his medical expenses.
Finally, De Jesus is entitled to his sickness allowance for fifty-nine (59) days from June 19, 1998
until August 16, 1998, when he was declared fit to work. Section 20(B)(3) of the Contract
governs the contractual liability of an employer to pay sickness allowance to a seafarer who
suffered illness or injury during the term of his contract viz.:
 8
SECTION 20. COMPENSATION AND BENEFITS  Id. at 48.

9
xxx  Id. at 65-74.

10
B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS  Id. at 76-81.

11
xxx  Id. at 81.

12
3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness  Id. at 113-132.
allowance equivalent to his basic wage until he is declared fit to work or the degree of
permanent disability has been assessed by the company-designated physician but in no case 13
 Id. at 132.
shall this period exceed one hundred twenty (120) days.
14
 Id. at 138-139.
For this purpose, the seafarer shall submit himself to a post-employment medical examination by
a company-designated physician within three working days upon his return except when he is
physically incapacitated to do so, in which case a written notice to the agency within the same 15
 Id. at 165-174.
period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting
requirement shall result in the forfeiture of his right to claim the above benefits x x x.chanrobles 16
 Id. at 175-179.
virtual law library

17
 Id. at 181.
In fine, we affirm the Labor Arbiter's Decision granting De Jesus' claims for unpaid salary of
US$911.00, sickness allowance for fifty-nine (59) days, and reimbursement of his medical
expenses. 18
 Id. at 233.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP. 19
 PCL Shipping Philippines, Inc. v. National Labor Relations Commission, G.R. No. 153031,
No. 58241, and its Resolution dated December 21, 2001, are REVERSED and SET ASIDE. The December 14, 2006.
Decision dated August 28, 1998 of the Labor Arbiter is REINSTATED.
20
 Lopez Sugar Corporation v. Franco, G.R. No. 148195, May 16, 2005, 458 SCRA 515, 528.
SO ORDERED.
21
 Wallem Maritime Services, Inc. v. National Labor Relations Commission, 376 Phil. 738, 747
Endnotes: (1999); More Maritime Agencies, Inc. v. National Labor Relations Commission, 366 Phil. 646,
654 (1999).

22
 G.R. No. 159146, January 28, 2005, 449 SCRA 525.
1
 Rollo, pp. 165-174. 23
 Id. at 542.
2
 Id. at 181. 24
 Id. at 103.
3
 Id. at 101. 25
 PCL Shipping Philippines, Inc. v. National Labor Relations Commission, supra note 19.
4
 Id. at 102.

5
 Id. at 103.

6
 Id. at 65-74.

7
 Id.
[G.R. NO. 165389 : October 17, 2008]

NFD International Manning Agents and A/S VULCANUS OSLO, Petitioners, v. NATIONAL

LABOR RELATIONS COMMISSION, JOSE I. ILAGAN, JR. and CONSTANTINO CO,
JR., Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Assailed in the present Petition for Review on Certiorari under Rule 45 of the Rules of Court is
the June 21, 2004 Decision1 and September 14, 2004 Resolution2 of the Court of Appeals (CA)
in CA-G.R. SP No. 78870.

The facts of the case are as follows:

Jose I. Ilagan, Jr. and Constantino Co, Jr. (private respondents) were among 21 Filipino seamen
hired by herein petitioner NFD International Manning Agents, Inc. (NFD) to work on board the
chemical tanker M/T Lady Helene, a vessel owned and operated by petitioner A/S Vulcanus
Oslo (Vulcanus), NFD's foreign principal.

On February 11, 1997, while M/T Lady Helene was at Island View Port, Durban, South Africa,
Ship Master Captain Steiner Andersen dismissed the 21 Filipino seamen, including herein
private respondents, from their employment. They were subsequently repatriated, arriving in the
Philippines on February 15, 1997.

On March 3, 1997, NFD filed before the Adjudication Office of the Philippine Overseas
Employment Administration (POEA), a disciplinary complaint against the 21 seamen alleging
that they were guilty of mutiny, insubordination, desertion/attempting to desert the vessel and WHEREFORE, the assailed decision is set aside. The respondents [herein petitioners] are
conspiracy. Subsequently, in an Order3 dated October 12, 1999, the POEA Adjudication Office directed to jointly and severally pay the appellants complainants[herein private respondents and
dismissed the disciplinary complaint filed by NFD, ordering that the names of the 21 seamen be their companions] their wages for the payment of the unexpired portion of their respective
removed from the POEA watchlist. contracts, and unpaid wages including moral and exemplary damages of P50,000.00 each and
ten percent (10%) attorney's fees of the total amount awarded. The complaint of Alcesar
Baylosis is hereby dismissed in view of the settlement of the monetary claims effected on July
Meanwhile, on May 6, 1997, private respondents, together with eight (complainants) of the 21
17, 1997.
seamen whose employments were terminated, filed with the National Labor Relations
Commission (NLRC), National Capital Region in Quezon City, a Complaint 4 for wrongful breach
of contract, illegal dismissal and damages against NFD and Vulcanus, contending that: they SO ORDERED.12
were summarily dismissed from their employment without just and valid cause and in gross
violation of the terms of their employment contracts; they were forcibly disembarked from the
Herein petitioners then filed a Motion for Reconsideration. 13 On April 9, 2002, the NLRC came up
vessel; at the time of their discharge, and up to the filing of their complaint, they had not been
with the herein assailed Resolution 14 which granted petitioners' motion and reinstated the
paid their accrued salaries, guaranteed overtime pay and leave pay; for their summary
Decision dated January 30, 1998 of the LA in their favor.
dismissal, forcible disembarkation and subsequent repatriation, they seek recovery of their
unpaid wages and other benefits as well as moral and exemplary damages and attorney's fees.
Complainants filed a Motion for Reconsideration15 but it was denied by the NLRC in its
Order16 promulgated on June 16, 2003.
In their Position Paper,5 NFD and Vulcanus (petitioners) contended: The complainants were
validly and lawfully dismissed from their employment for their acts of "mutiny, insubordination,
desertion/attempting to desert the vessel and conspiracy among themselves together with the Thereafter, five out of the ten original complainants, to wit: Jose I. Ilagan, Jr. (herein private
other Filipino seamen in refusing and or failing to join M/T Lady Helene in its next trip or respondent), Reynaldo G. Digma, Francisco C. Octavio, Constantino D. Co, Jr. (herein private
destination to Mauritius without just and valid cause"; contrary to complainants' claim, they were respondent) and Jesus G. Domingo filed a special civil action for certiorari with the CA assailing
not forcibly disembarked from the vessel; four out of the ten complainants had already withdrawn the April 9, 2002 Resolution and the June 16, 2003 Order of the NLRC.17
their complaints; out of the remaining six complainants, five were given the option to return
to M/T Lady Helene and rejoin it in its next trip to Mauritius; the filing of the complaint was merely
On September 17, 2003, the CA issued a Resolution 18 denying due course to and dismissing the
an afterthought of the complainants after NFD filed cases for disciplinary action against them;
Petition for Certiorari on the ground that only one out of the five petitioners therein signed the
complainants were not entitled to any of the amounts which they sought to recover, instead, they
verification and certificate against forum-shopping attached to the petition without any showing
should reimburse NFD for the expenses incurred by the latter in connection with their valid
that such petitioner was duly authorized to sign for and in behalf of the other petitioners.
dismissal and subsequent repatriation to the Philippines.

On October 3, 2002, herein private respondents filed a Motion for Reconsideration with Motion
In their Reply to Respondents' Position Paper, 6 complainants averred that no single specific act
to Exclude Reynaldo G. Digma, Francisco C. Octavio and Jesus G. Domingo as petitioners on
of insubordination, desertion or attempt to desert the vessel or refusal to sail with the vessel was
the ground that the above-named seamen were still abroad by reason of their employment.19
attributed to them; the Filipino crewman who reportedly instigated the alleged mutiny was among
those absolved of any liability by petitioners in exchange for a waiver or quitclaim which he may
have had against the latter; the disciplinary cases filed against them was a tactical move In a Resolution20 dated October 16, 2003, the CA reinstated the petition insofar as herein private
resorted to by herein petitioners to preempt complainants from filing a complaint for illegal respondents were concerned.
dismissal; nothing was alleged and no evidence was presented to prove that complainants were
accorded the benefit of due process before they were terminated from their employment.
On June 21, 2004, the CA promulgated the presently assailed Decision in favor of private
respondents, the dispositive portion of which reads:
In their Rejoinder,7 private respondents contended that the Affidavit 8 of Anselmo V. Rodriguez,
NFD President and General Manager, contained several attachments proving the illegal acts of
the complainants; that it was an act of desperation on the part of complainants to put color to the WHEREFORE, premises considered, the petition is GRANTED. The resolution and order dated
action of NFD in promptly reporting to the POEA the illegal acts committed by the latter; that, on April 9, 2002 and June 16, 2003 of the NLRC are hereby ANNULLED and SET ASIDE. The
the contrary, the complaint for illegal dismissal, which was filed three months after their NLRC decision dated August 30, 2001 is hereby REINSTATED.
termination from employment took place, was the complainants' belated move to serve as a
smokescreen for their illegal acts. SO ORDERED.21 (Underscoring supplied)cralawlibrary

On January 30, 1998, the Labor Arbiter (LA) rendered judgment dismissing the Complaint on the Herein petitioners filed a Motion for Reconsideration 22 but the CA denied it in its Resolution of
ground that the complainants were lawfully dismissed for just cause.9 September 14, 2004.

Complainants filed an appeal with the NLRC.10 Hence, the present petition with the following assignment of errors:

On August 30, 2001, the NLRC promulgated a Decision,11 the dispositive portion of which reads I.
as follows:
THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DISREGARDING THE
FINDINGS OF THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS
COMMISSION, WHICH FINDINGS ARE SUPPORTED BY SUBSTANTIAL EVIDENCE.
II.
THE COURT OF APPEALS COMMITTED GRAVE ERROR IN HOLDING THAT PETITIONERS
FAILED TO PRESENT SUBSTANTIAL EVIDENCE PROVING THAT RESPONDENTS WERE
DISMISSED FOR JUST AND VALID CAUSE.
THE EVIDENCE ON RECORD PROVES THAT RESPONDENTS WERE GUILTY OF MUTINY,
INSUBORDINATION, DESERTION/ATTEMPTING TO DESERT THE VESSEL AND
CONSPIRACY WITH THE OTHER FILIPINO SEAFARERS IN REFUSING AND/OR FAILING
TO JOIN M/T LADY HELENE IN ITS NEXT TRIP OR DESTINATION.
III.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT [RESPONDENTS']
TERMINATION WAS EFFECTED WITHOUT DUE PROCESS OF LAW.
IV.
THE HONORABLE COURT COMMITTED GRAVE ERROR IN HOLDING THAT
[RESPONDENTS'] TERMINATION WAS ATTENDED BY BAD FAITH OR DONE CONTRARY
TO MORALS, GOOD CUSTOMS OR PUBLIC POLICY.23
The petition has no merit.
The basic issue to be resolved in the instant case is whether private respondents' termination
from their employment was valid.
There are two requisites which must be complied with by an employer for a valid dismissal of
employees, to wit: (1) the dismissal must be for a just or authorized cause; and (2) the employee
must be afforded due process, i.e., he must be given opportunity to be heard and to defend
himself.24
Anent the first requisite, it is a basic principle that in the dismissal of employees, the burden of
proof rests upon the employer to show that the dismissal is for a just and valid cause and failure
to do so would necessarily mean that the dismissal is not justified. 25 This is in consonance with
the guarantee of security of tenure in the Constitution and in the Labor Code. A dismissed
employee is not required to prove his innocence of the charges leveled against him by his
employer.26 The determination of the existence and sufficiency of a just cause must be exercised
with fairness and in good faith and after observing due process.27
The Court is not persuaded by petitioners' contentions in its first and second assigned errors that
the CA should have accorded respect and finality to the findings of fact and conclusions of the
LA as these are supported by substantial evidence; that petitioners, in fact, were able to present
substantial evidence to prove that private respondents were guilty of mutiny, insubordination,
desertion/attempt to desert their vessel and conspiracy with the other Filipino seamen in refusing
to join said vessel in its next trip.
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. However,
the rule is not without exceptions, one of which is when the findings of fact of the labor officials
on which the conclusion is based are not supported by substantial evidence. 28 Another exception
is when it is perceived that far too much is concluded, inferred or deduced from bare facts
adduced in evidence.29 Moreover, when the findings of the LA and the NLRC are inconsistent
with that of the CA, as in the instant case, there is a need to review the records to determine
which of them should be preferred as more conformable to evidentiary facts. 30 The Court finds
that the present case falls under the above-mentioned exceptions.
After a review of the arguments and evidence of the parties, the Court sustains the findings and
conclusions of the CA, the same being in accord with the facts and law of the case.
The Court agrees with the following findings and conclusion of the CA, to wit:
[Herein petitioners] charged [herein private respondents] for mutiny, insubordination, desertion
and conspiracy in refusing to join the vessel in its next trip. However, except for the
disagreement between Capt. Andersen and Engine Fitter Castillo, when the latter refused to
resume his work in the Engine Room wherein the other Filipino crew sided with Castillo, there is
no proof showing the alleged mutinous and concerted actions of the [private respondents]
against Capt. Andersen. There is also the glaring absence of corroborative statements of other
officers or crew on board attesting that [private respondents] participated directly or indirectly to
any wrong doing, or even intervened in the quarrel between Andersen and Castillo. The records
fail to establish clearly the commission of any threat, or any serious misconduct which would
justify [private respondents'] dismissal.31
which affirmed the earlier finding of the NLRC in its August 30, 2001 Decision, thus:
We also noted that [herein petitioners'] various charges against the [private respondents] were
bereft of factual details showing the alleged mutinous and concerted actions of herein [private
respondents] against the ship captain. The absence of competent evidence or corroborative
statements of other officers or crew on board attesting to the fact that complainants have
participated directly or indirectly, to any wrongdoing or intervened in the quarrel of the Ship
Captain with Fitter Bautista32 deters us in considering the said charges with probity.33
Moreover, the above-quoted findings of the CA and the NLRC are consistent with the findings of
the POEA in its October 12, 1999 Order dismissing the disciplinary complaint filed by NFD
against herein private respondents and their companions. Pertinent portions of the POEA Order
reads:
Aside from telexes and telefax messages exchanged between complainant NFD International
Manning Agents, Inc. and its principal AS Vulcanus which are all self-serving in nature, no other
proof, such as official logbook extracts, was adduced in support of the complaint. Had
respondents committed the offense charged, this should at least deserve attention, entry and/or
proper documentation in the vessel's logbook/journal.
Inciting mutiny, being a serious offense, and punishable under the "Table of Offense and
Corresponding Administrative Penalties of the Standard Employment Contract Governing
Employment of All Filipino Seamen on Board Ocean Going Vessels" for two to three year
suspension, must be established by clear, strong, and incontrovertible pieces of evidence. In the
absence of substantial evidence, such as in the instant case, the charge of inciting
mutiny/refusal to sail cannot be given credence.34
Indeed, there is no record in the logbook or journal of the ship to indicate that the 21 Filipino himself established that private respondents and 12 of their companions were not guilty of
seamen, including herein private respondents who were terminated from their employment, mutiny as, in fact, they were given the option to return to the vessel if they wished to. Third, the
threatened to cease and desist from working and to abandon their vessel as a result of the letter-complaint filed by NFD with the POEA was later found baseless as the POEA, in its Order
misunderstanding that happened between the Ship Master and a Filipino crew member. dated October 12, 1999, dismissed the complaint of NFD.

Petitioners' claim that private respondents and their fellow Filipino seamen were guilty of
conspiracy in committing mutiny, insubordination, attempting to desert their vessel and refusing
to sail with the vessel is not supported by substantial evidence. Aside from the communications,
through telex messages, sent by representatives of petitioner Vulcanus and the President and
General Manager of NFD, no competent documentary proof was presented to substantiate the
charges against private respondents and the other Filipino seamen. No record of any hearing or
investigation was presented. Moreover, petitioners did not present the Ship Master or any
member of the ship's crew in order to validate or verify the truth regarding the charge against the
21 Filipino seamen. All that were presented by petitioners were allegations which they claimed to
have gathered from information provided by the Ship Master that herein private respondents and
their fellow Filipino seamen were guilty of the various acts of which they were accused to have
committed.
Even the NLRC, in its subsequent Resolution dated April 9, 2002, subject of herein petition,
wherein it set aside its August 30, 2001 Decision and reinstated the LA's Decision, did not cite
any specific evidence as basis for adopting the factual findings of the LA.
The Court also finds that in their pleadings before the LA, the NLRC, the CA and this Court,
petitioners failed to cite any direct and substantial evidence to support their claim that private
respondents and their companions were guilty of mutiny and conspiracy.
Hence, the CA was correct in reinstating the NLRC August 30, 2001 Decision finding that
petitioners failed to discharge their burden of proving that the dismissal of private respondents
was for a just and valid cause.

Petitioners insist that the findings and conclusions of the LA should be respected. However, the The next question is whether there was compliance with the second requisite of a valid dismissal
Court finds that the LA failed to cite substantial evidence to support his conclusions. It is not which is due process.
enough for the LA to declare in his Decision that "the established facts of the case, however,
reveal that complainant[s] were lawfully dismissed for just cause"; or that "records show that
The Court does not agree with petitioners' asseverations in their third assigned error that in
complainants were discharged from their employment for committing acts of mutiny,
dismissing respondents from their employment, the Ship Master simply acted within his
insubordination and desertion and/or attempting to desert the vessel as well as conspiracy
management rights in order to protect the safety of the vessel and its crew, which act, according
among themselves in refusing to join M/T Lady Helene in its next trip to Mauritius without just
to petitioners, is recognized under the provisions of the POEA Standard Employment Contract.
and valid cause x x x" without specifying the evidence upon which he derived his conclusions.

The minimum requirement of due process in termination proceedings, which must be complied
It is true that the LA cited documents consisting of the following: (1) telex message, dated
with even with respect to seamen on board a vessel, consists of notice to the employees
February 11, 1997, sent by a certain Marianne D. Hovland whose connection with or position at
intended to be dismissed and the grant to them of an opportunity to present their own side on
Vulcanus was not indicated, informing NFD that there had been no solution to their problems;
the alleged offense or misconduct, which led to the management's decision to terminate.40 To
and that a Filipino crewman named Castillo has not left the vessel; and that "some other crew"
meet the requirements of due process, the employer must furnish the worker sought to be
have communicated their intention to leave if Castillo would leave;35 (2) telex message, dated
dismissed with two written notices before termination of employment can be legally effected, i.e.,
February 11, 1997, from the NFD President and General Manager addressed to all NFD officers
(1) a notice which apprises the employee of the particular acts or omissions for which his
and crew warning them of the possible consequences, should they decide to leave their vessel
dismissal is sought; and (2) the subsequent notice after due hearing which informs the employee
to accompany Castillo, and advising them to refrain from refusing to work and to treat their
of the employers' decision to dismiss him.41
problem intelligently and not to involve others; 36 (3) telex message, dated February 12, 1997,
from a Captain Helge Grotle whose position at Vulcanus was also not indicated, informing NFD
that the Ship Master of M/T Lady Helene decided to dismiss its crew for refusal to go to sea with Petitioner maintains that the Ship Master is allowed to dismiss an erring seafarer without notice
the vessel, and that according to Grotle, the act of the crew constituted mutiny;37 (4) telex under Section 17, paragraph D of the Revised Standard Employment Terms and Conditions
message, dated February 12, 1997, from Captain Andersen informing NFD of his decision to Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels42 issued by the
give 14 of the Filipino seamen, which included herein petitioners, the option to return to the Philippine Overseas Employment Administration (POEA).
vessel on the ground that these seamen were not involved in the alleged mutiny;38 (5) letter from
the NFD President and General Manager, dated February 28, 1997, informing the POEA about
the dismissal of the 21 Filipino seamen on grounds of mutiny and conspiracy for their concerted Section 17 sets forth the disciplinary procedures against erring seafarers, to wit:
refusal to work and join the vessel in going to its next destination.39
Section 17. DISCIPLINARY PROCEDURES
However, these documents, standing alone and uncorroborated by any other competent
evidence, do not constitute substantial proof that herein private respondents are indeed guilty of The Master shall comply with the following disciplinary procedures against an erring seafarer:
mutiny. On the contrary, it proves their innocence. First, the evidence consisting of the telex
messages from supposed representatives of Vulcanus and NFD are hearsay because they did
not come directly from the Ship Master or officer of M/T Lady Helene. The information contained A. The Master shall furnish the seafarer with a written notice containing the following:
in these communications were merely based on the alleged report or message which came from
the Ship Master. However, petitioners failed to present any telex message, testimony or even an 1. Grounds for the charges as listed in Section 31 of this Contract.
affidavit of the Ship Master or any other crew member or officer of the subject vessel to prove
that private respondents and their companions were guilty of the acts with which they were
charged. Second, the telex message dated February 12, 1997 which came from the Ship Master
2. Date, time and place for a formal investigation of the charges against the seafarer
concerned.
B. The Master or his authorized representative shall conduct the investigation or hearing, giving
the seafarer the opportunity to explain or defend himself against the charges. An entry on the
investigation shall be entered into the ship's logbook.
C. If, after the investigation or hearing, the Master is convinced that imposition of a penalty is
justified, the Master shall issue a written notice of penalty and the reasons for it to the seafarer,
with copies furnished to the Philippine agent.
D. Dismissal for just cause may be effected by the Master without furnishing the seafarer
with a notice of dismissal if doing so will prejudice the safety of the crew or the vessel.
This information shall be entered in the ship's logbook. The Master shall send a complete
report to the manning agency substantiated by witnesses, testimonies and any other
documents in support thereof. (Emphasis supplied)cralawlibrary
Under paragraph D, Section 17 of the Revised Standard Employment Terms and Conditions
Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels, the Ship
Master is excused from furnishing a seafarer with the required notice of dismissal if doing so will
prejudice the safety of the crew and the vessel, as in cases of mutiny.
Explaining the notice requirements under Section 17, this Court held in Skippers Pacific, Inc. v.
Mira,43 that :
x x x under Section 17 of what is termed the Standard Format, the "two-notice rule" is indicated.
An erring seaman is given a written notice of the charge against him and is afforded an
opportunity to explain or defend himself. Should sanctions be imposed, then a written notice of
penalty and the reasons for it shall be furnished the erring seafarer. It is only in the
exceptional case of clear and existing danger to the safety of the crew or vessel that the
required notices are dispensed with; but just the same, a complete report should be sent
to the manning agency, supported by substantial evidence of the findings. 44 (Emphasis
supplied)cralawlibrary
However, in the instant case, petitioners failed to establish that private respondents and their
companions were guilty of mutiny or that, in any other manner, they posed a clear and present
danger to the vessel and its crew which would have justified the Ship Master in dispensing with
the required notices. Even if the Ship Master was justified in dispensing with the notice
requirements, still, it was essential that his decision to dismiss the Filipino seamen should have
been entered in the ship's logbook; and that a complete report, substantiated by witnesses,
testimonies and any other documents in support thereof, duly sent to the manning agency. The
record of this case is bereft of any such entry in the ship's logbook or journal and of any report
and supporting documents. Instead, respondents and the other Filipino seamen were verbally
ordered to disembark from the vessel and were repatriated to the Philippines without being given
written notice of the reasons why.
There being no mutiny, petitioners should have complied with Section 17A quoted above.
The records reveal that Section 17A was not complied with by the Ship Master. Petitioners failed
to present evidence to prove that private respondents and their fellow complainants were served
written notices stating the particular acts or omissions constituting the grounds for their
termination. Neither was there evidence to show that private respondents and their companions
were given opportunity to answer the charges against them.
Thus, the Court sustains the findings of the CA that private respondents and the other
complainants were not given the benefit of procedural due process before they were terminated
from their employment.
Anent the last assigned error. While the Court agrees with petitioners that there is no evidence
to prove that force, violence or intimidation was employed to effect the disembarkation of the
Filipino seamen, the Court still sustains the finding of the CA that the dismissal of private
respondents and their companions was done in bad faith, contrary to morals, good customs or
public policy, arbitrary and oppressive to labor, thus entitling them to the award of moral and
exemplary damages. Moral damages are recoverable where the dismissal of the employee was
attended by bad faith or fraud or constituted an act oppressive to labor, or was done in a manner
contrary to morals, good customs or public policy. 45 On the other hand, exemplary damages are
proper when the dismissal was effected in a wanton, oppressive or malevolent manner, and
public policy requires that these acts must be suppressed and discouraged. 46 In the instant case,
it is undisputed that respondents and the other Filipino seamen were actually engaged in the
performance of their assigned tasks aboard M/T Lady Helene and were even rendering overtime
work when they were unceremoniously directed to disembark from their vessel. Moreover, the
total absence of any prior written notice of the charges against them, the opportunity to defend
themselves against such charges and a written notice of the subsequent decision of the Ship
Master to terminate their employment establish the arbitrary and oppressive character of the
dismissal from employment of private respondents and their companions.
WHEREFORE, the instant Petition is DENIED for lack of merit. The Decision and Resolution of
the Court of Appeals dated June 21, 2004 and September 14, 2004 in CA-G.R. SP No. 78870
are AFFIRMED.
SO ORDERED.
Endnotes:
*
 In lieu of Justice Ruben T. Reyes, per Raffle dated October 6, 2008.
1
 Penned by Justice Eliezer R. de los Santos with the concurrence of Justices Ruben T. Reyes
and Arturo D. Brion (now both members of this Court), rollo, p. 72.
2
 CA rollo, p. 341.
3
 CA rollo, p. 151.
4
 Id. at 21-29.
5
 CA rollo, pp. 68-83.
6
 Id. at 84-94.
7 28
 Id. at 95-97.  Felix v. National Labor Relations Commission, G.R. No. 148256, November 17, 2004, 442
SCRA, 465, 477.
8
 Annex "F", rollo, p. 85.
29
 Felix v. National Labor Relations Commission, supra note 28, at 477.
9
 See Labor Arbiter's Decision, CA rollo, pp. 98-113.
30
 Portuguez v. GSIS Family Bank (Comsavings Bank), G.R. No. 169570, March 2, 2007, 517
10 SCRA 309, 319; Macahilig v. National Labor Relations Commission, G.R. No. 158095,
 Id. at 114-125.
November 23, 2007, 538 SCRA 375, 383.
11
 Id. at 163-186. 31
 CA rollo, p. 296.
12
 Id. at 185-186. 32
 Should be "Castillo" per records.
13
 Id. at 188-201. 33
 Id. at 180.
14
 Id. at 202-210. 34
 CA rollo, pp. 156-157.
15
 CA rollo, pp. 211-219. 35
 CA rollo, p. 273.
16
 Id. at 220-221. 36
 Id. at 274.
17
 Id. at 2-20. 37
 CA rollo, p. 275.
18
 Id. at 224. 38
 Id. at 276.
19
 Id. at 225. 39
 Id. at 278.
20
 Id. at 233. 40
 Skippers United Pacific, Inc. v. Maguad, supra note 24, at 663.
21
 CA rollo, p. 297. 41
 Skippers United Pacific, Inc. v. Maguad, supra note 24, at 663.
22
 Id. at 308-318. 42
 POEA Memorandum Circular No. 055-96 made effective on January 1, 1997.
23
 Rollo, pp. 35-36. 43
 G.R. No. 144314, November 21, 2002, 392 SCRA 371.
24
 Skippers United Pacific, Inc. v. Maguad, G.R. No. 166363, August 15, 2006, 498 SCRA 639, 44
 Id. at 382.
658.
45
25  De Guzman v. National Labor Relations Commission, G.R. No. 167701, December 12. 2007,
 De Jesus v. National Labor Relations Commission, G.R. No. 151158, August 17, 2007, 530
540 SCRA 21, 37; Aguilar v. Burger Machine Holdings, Corporation, G.R. No. 172062, October
SCRA 489, 498; Ranises v. National Labor Relations Commission, G.R. No. 111914, September
30, 2006, 506 SCRA 266, 278.
24, 1996, 262 SCRA 371, 376.
46
26  Id.
 Philippine Transmarine Carriers, Inc. v. Carilla, G.R. No. 157975, June 26, 2007, 525 SCRA
586, 594.

27
 Id.
January 18, 2017

G.R. No. 205727

RUTCHER T. DAGASDAS, Petitioner,
vs.
GRAND PLACEMENT AND GENERAL SERVICES CORPORATION, Respondent.

DECISION

DEL CASTILLO, J.:

Before us is a Petition for Review on Certiorari assailing the September 26, 2012 Decision1 of
the Court of Appeals (CA) in CA-G.R. SP No. 115396, which annulled and set aside the March
29, 20102 and June 2, 20103 Resolutions of the National Labor Relations Commission (NLRC) in
NLRC LAC OFW-L-02-000071-10, and concomitantly reinstated the November 27, 2009
Decision4 of the Labor Arbiter (LA) dismissing the Complaint for lack of merit.

Also challenged is the January 28, 2013 Resolution 5 denying the Motion for Reconsideration
filed by Rutcher T. Dagasdas (Dagasdas ).
Factual Antecedents
Grand Placement and General Services Corp. (GPGS) is a licensed
recruitment or placement agency in the Philippines while Saudi Aramco (Aramco) is its
counterpart in Saudi Arabia. On the other hand, Industrial & Management Technology Methods
Co. Ltd. (ITM) is the principal of GPGS, a company existing in Saudi Arabia. 6
In November 2007, GPGS, for and on behalf of ITM, employed Dagasdas as Network
Technician. He was to be deployed in Saudi Arabia under a one-year contract 7 with a monthly
salary of Saudi Riyal (SR) 5,112.00. Before leaving the Philippines, Dagasdas underwent skill
training8 and pre-departure orientation as Network Technician.9 Nonetheless, his Job
Offer10 indicated that he was accepted by Aramco and ITM for the position of "Supt."
Dagasdas contended that although his position under his contract was as a Network Technician,
he actually applied for and was engaged as a Civil Engineer considering that his transcript of
records, 11 diploma 12 as well as his curriculum vitae 13 showed that he had a degree in Civil
Engineering, and his work experiences were all related to this field. Purportedly9 the position of
Network Technician was only for the purpose of securing a visa for Saudi Arabia because ITM
could not support visa application for Civil Engineers. 14
On February 8, 2008, Dagasdas arrived in Saudi Arabia. 15 Thereafter, he signed with ITM a new
employment contract16 which stipulated that the latter contracted him as Superintendent or in
any capacity within the scope of his abilities with salary of SR5,112.00 and allowance of
SR2,045.00 per month. Under this contract, Dagasdas shall be placed under a three-month
probationary period; and, this new contract shall cancel all contracts prior to its date from any
source.
On February 11, 2008, Dagasdas reported at ITM's worksite in Khurais, Saudi Arabia. 17 There,
he was allegedly given tasks suited for a Mechanical Engineer, which were foreign to the job he
applied for and to his work experience. Seeing that he would not be able to perform well in his
work, Dagasdas raised his conce1n to his Supervisor in the Mechanical Engineering
Department. Consequently, he was transferred to the Civil Engineering Department, was
temporarily given a position as Civil Construction Engineer, and was issued anidentification card
good for one month. Dagasdas averred that on March 9, 2008, he was directed to exit the
worksite but Rashid H. Siddiqui (Siddiqui), the Site Coordinator Manager, advised him to remain
in the premises, and promised to secure him the position he applied for. However, before
Dagasdas' case was investigated, Siddiqui had severed his employment with ITM. 18
In April 2008, Dagasdas returned to Al-Khobar and stayed at the ITM Office. 19 Later, 11M gave
him a termination notice 20 indicating that his last day of work was on April 30, 2008, and he was
dismissed pursuant to clause 17.4.3 of his contract, which provided that ITM reserved the right
to terminate any employee within the three-month probationary period without need of any notice
to the employee.21
Before his repatriation, Dagasdas signed a Statement of Quitclaim 22 with Final
Settlement23 stating that ITM paid him all the salaries and benefits for his services from February
11, 2008 to April 30, 2008 in the total amow1t of SR7,156.80, and ITM was relieved from all
financial obligations due to Dagasdas.
On June 24, 2008, Dagasdas returned to the Philippines.24 Thereafter, he filed an illegal
dismissal case against GPGS, ITM, and Aramco.
Dagasdas accused GPGS, ITM, and Aramco of misrepresentation, which resulted in the
mismatch in the work assigned to him. He contended that such claim was supported by
exchanges of electronic mail (e-mail) establishing that GPGS, ITM, and Aramco were aware of
the job 1nismatch that had befallen him. 25 He also argued that although he was engaged as a
project employee, he was still entitled to security of tenure for the duration of his contract. He
maintained that GPGS, ITM, and Aramco merely invented "imaginary cause/s" to terminate him.
Thus, he claimed that he was dismissed without cause and due process of law.26
GPGS, ITM, and Aramco countered that Dagasdas was legally dismissed. They explained that
Dagasdas was aware that he was employed as Network Technician but he could not perform his
work in accordance with the standards of his employer. They added that Dagasdas was
informed of his poor performance, and he conformed to his termination as evidenced by his
quitclaim. 27 They also stressed that Dagasdas was only a probationary employee since he
worked for ITM for less than three months.28
Ruling of the Labor Arbiter
On November 27, 2009, the LA dismissed the case for lack of merit. The LA pointed out that
when Dagasdas signed his new employment contract in Saudi Arabia, he accepted its
stipulations, including the fact that he had to undergo probationary status. She declared that this
new contract was more advantageous for Dagasdas as his position was upgraded to that of a
Superintendent, and he was likewise given an allowance ofSR2,045.00 aside from his salary of
SR5,112.00 per month. According to the LA, for being more favorable, this new contract was not
prohibited by law. She also decreed that Dagasdas fell short of the expected work performance;
as such, his employer dismissed him as part of its management prerogative.
Consequently, Dagasdas appealed to the NLRC.
Ruling of the National Labor Relations Commission
On March 29, 2010, the NLRC issued a Resolution finding Dagasdas' dismissal illegal. The
decretal portion of the NLRC Resolution reads:
WHEREFORE, the decision appealed from is hereby REVERSED, and the respondent[s] are
hereby ordered to pay the complainant the salaries corresponding to the unexpired p01tion of
his contract amounting to SR46,008 (SR5112 x 9 months, or from May 1, 2008 to January 31,
2009), plus ten percent (10%) thereof as attorney's foes. The respondents are jointly and
severally liable for the judgment awards, which are payable in Philippine currency converted on
the basis of the exchange rate prevailing at the time of actual payment.
SO ORDERED.29
The NLRC stated that Dagasdas, who was a Civil Engineering graduate, was "recruited on
paper" by GPGS as Network Technician but the real understanding between the parties was to
hire him as Superintendent. It held that GPGS erroneously recruited Dagasdas, and failed to
inform him that he was hired as a "Mechanical Superintendent" meant for a Mechanical
Engineer. It declared that while ITM has the prerogative to continue the employment of
individuals only if they were qualified, Dagasdas' dismissal amounted to illegal termination since
the mismatch between his qualifications and the job given him was no fault of his.
The NLRC added that Dagasdas should not be made to suffer the consequences of the
miscommunication between GPGS and ITM considering that the government obligates
employment agencies recruiting Filipinos for overseas work to "select only medically and
technically qualified recruits."30
On June 2, 2010, the NLRC denied the Motion for Reconsideration of its Resolution dated March
29, 2010.
Undeterred, GPGS filed a Petition for Certiorari with the CA ascribing grave abuse of discretion
on the part of the NLRC in ruling that Dagasdas was illegally dismissed.
Ruling of the Court of Appeals
On September 26, 2012, the CA set aside the NLRC Resolutions and reinstated the LA Decision
dismissing the case for lack of merit.
The CA could not accede to the conclusion that the real agreement between the parties was to
employ Dagasdas as Superintendent. It stressed that Dagasdas left the Philippines pursuant to
his employment contract indicating that he was to work as a Network Technician; when he
arrived in Saudi Arabia and signed a new contract for the position of a Superintendent, the
agreement was with no participation of GPGS, and said new contract was only between
Dagasdas and ITM. It emphasized that after commencing work as Superintendent, Dagasdas
realized that he could not perform his tasks, and "[s]eemingly, it was [Dagasdas] himself who
voluntarily withdrew from his assigned work for lack of competence."31 It faulted the NLRC for
falling to consider that Dagasdas backed out as Superintendent on the excuse that the same
required the skills of a Mechanical Engineer.
In holding that Dagasdas' dismissal was legal, the CA gave credence to Dagasdas' Statement of
Quitclaim and Final Settlement. It ruled that for having voluntarily accepted money from his
employer, Dagasdas accepted his termination and released his employer from future financial
obligations arising from his past employment with it.
On January 28, 2013, the CA denied Dagasdas' Motion for Reconsideration.
Hence, Dagasdas filed this Petition raising these grounds:
[1] THE HONORABLE COURT OF APPEALS COMMITIED A REVERSIBLE ERROR
WHEN TT Rt. VERSED THE FACTUAL FINDINGS OF THE NATIONAL LABOR
RELATION’S COMMISSION.32
[2] THE HONORABLE COURT OF APPEALS PATENTLY ERRED WITH ITS
FINDINGS THAT THE CONTRACT SIGNED BY DAGASDAS IN ALKHOBAR IS
MORE ADVANTAGEOUS TO THE LATTER AND THAT IT WAS [H]IS PERSONAL
ACT OR DECISION [TO SIGN] THE SAME.33
[3] THE HONORABLE COURT OF APPEALS ALSO GRAVELY ERRED IN
FAULTING THE NLRC FOR ITS FAILURE TO INVALIDATE OR DISCUSS THE
FINAL SETTLEMENT AND STATEMENT OF QUITCLAIM SIGNED BY
[DAGASDAS].34
Dagasdas reiterates that he was only recruited "on paper" as a Network Technician but the real
agreement between him and his employer was to engage him as Superintendent in t'1e field of
Civil Engineering, he being a Civil Engineering graduate with vast experience in said field. He
stresses that he was terminated because of a "discipline mismatch" as his employer actually
needed a Mechanical (Engineer) Superintendent, not a Civil Engineer.
In addition, Dagasdas insists that he did not voluntarily back out from his work. If not for the
discipline mismatch, he could have performed his job as was expected of him. He also denies
that the new employment contract he signed while in Saudi Arabia was more advant1geous to
him since the basic salary and allowance stipulated therein are just the same with that in his Job
Offer. He argues that the new contract was even disadvantageous because it was inserted
therein that he still had to undergo probationary status for three months.
Finally, Dagasdas contends that the new contract he signed while in Saudi Arabia was void
because it was not approved by the Philippine Overseas Employment Administration (POEA).
He also claims that CA should have closely examined his quitclaim because he only signed it to
afford his plane ticket for his repatriation.
On the other hand, G PGS maintains that Dagasdas was fully aware that he applied for and was
accepted as Network Technician. It also stresses that it was Dagasdas himself who decided to
accept from ITM a new job offer when he arrived in Saudi Arabia. It further declares that
Dagasdas' quitclaim is valid as there is no showing that he was compelled to sign it.
Issue
Was Dagasdas validly dismissed from work?
Our Ruling
The Petition is with merit.
As a rule, only questions of law may be raised in a petition under Rule 45 of the Rules of Court.
However, this rule allows certain exceptions, including a situation where the findings of fact of
the courts or tribunals below are conflicting. 35 In this case, the CA and the NLRC arrived at
divergent factual findings anent Dagasdas' termination. As such, the Court deems it necessary
to re-examine these findings and detemline whether the CA has sufficient basis to annul the
NLRC Decision, and set aside its finding that Dagasdas was illegally dismissed from work.
Moreover, it is well-settled that employers have the prerogative to impose standards on the work
quantity and quality of their employees and provide measures to ensure compliance therewith.
Non-compliance with work standards may thus be a valid cause for dismissing an employee.
Nonetheless, to ensure that employers will not abuse their prerogatives, the same is tempered
by security of tenure whereby the employees are guaranteed substantive and procedural due
process before they are dismissed from work. 36
Security of tenure remains even if employees, particularly the overseas Filipino workers (OFW),
work in a different jurisdiction. Since the employment contracts of OFWs are perfected in the
Philippines, and following the principle of lex loci contractus (the law of the place where the
contract is made), these contracts are governed by our laws, prin1arily the Labor Code of the
Philippines and its implementing rules and regulations. 37 At the same time, our laws generally
apply even to employment contracts of OFWs as our Constitution explicitly provides that the
State shall afford full protection to labor, whether local or overseas. 38 Thus, even if a Filipino is
employed abroad, he or she is entitled to security of tenure, among other constitutional rights.39
In this case, prior to his deployment and while still in the Philippines, Dagasdas was made to
sign a POEA-approved contract with GPGS, on behalf of ITM; and, upon arrival in Saudi Arabia,
ITM made him sign a new employment contract. Nonetheless, this new contract, which was
used as basis for dismissing Dagasdas, is void.
First, Dagasdas' new contract is in clear violation of his right to security of tenure.
Under the Labor Code of the Philippines the following are the just causes for dismissing an
employee:
ARTICLE 297. [282] Termination by Employer. - An employer may terminate an employment for
any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.40
However, per the notice of termination given to Dagasdas, ITM terminated him for violating
clause 17.4.3 of his new contract, viz.:
17.4 The Company reserves the right to terminate this agreement without serving any notice to
the Consultant in the following cases:
xxxx
17.4.3 If the Consultant is terminated by company or its client within the probation period of 3
months.41
Based on the foregoing, there is no clear justification for the dismissal of Dagasdas other than
the exercise of ITM's right to terminate him within the probationary period. While our Civil Code
recognizes that parties may stipulate in their contracts such terms and conditions as they may
deem convenient, these terms and conditions must not be contrary to law, morals, good
customs, public order or policy. 42 The above-cited clause is contrary to law because as
discussed, our Constitution guarantees that employees, local or overseas, are entitled to
security of tenure. To allow employers to reserve a right to terminate employees without cause is
violative of this guarantee of security of tenure.
Moreover, even assuming that Dagasdas was still a probationary employee when he was
terminated, his dismissal must still be with a valid cause. As regards a probationary employee,
his or her dismissal may be allowed only if there is just cause or such reason to conclude that
the employee fails to qualify as regular employee pursuant to reasonable standards made
known to the employee at the time of engagement.43
Here, ITM failed to prove that it informed Dagasdas of any predetermined
standards from which his work will be gauged. 44 In the contract he signed while still in the
Philippines, Dagsadas was employed as Network Technician; on the other hand, his new
contract indicated that he was employed as Superintendent. However, no job description - or
such duties and responsibilities attached to either position - was adduced in evidence. It thus
means that the job for which Dagasdas was hired was not definite from the beginning.
Indeed, Dagasdas was not sufficiently informed of the work standards for which his performance
will be measured. Even his position based on the job title given him was not fully explained by
his employer. Simply put, ITM failed to show that it set and communicated work standards for
Dagasdas to follow, and on which his efficiency (or the lack thereof) may be determined.
Second, the new contract was not shown to have been processed through the POEA. Under our
Labor Code, employers hiring OFWs may only do so through entities authorized by the
Secretary of the Department of Labor and Employment. 45 Unless the employment contract of an
OFW is processed through the POEA, the same does not bind the concerned OFW because if
the contract is not reviewed by the POEA, certainly the State has no means of determining the
suitability of foreign laws to our overseas workers. 46
This new contract also breached Dagasdas' original contract as it was entered into even before
the expiration of the original contract approved by the POEA. Therefore, it cannot supersede the
original contract; its terms and conditions, including reserving in favor of the employer the right to
terminate an employee without notice during the probationary period, are void.47
Third, under this new contract, Dagasdas was not afforded procedural due process when he was
dismissed from work.
As cited above, a valid dismissal requires substantive and procedural due process. As regards
the latter, the employer must give the concerned employee at least two notices before his or her
tem1ination. Specifically, the employer must inform the employee of the cause or causes for his
or her termination, and thereafter, the employer's decision to dismiss him. Aside from the notice
requirement, the employee must be accorded the opportunity to be heard.48
Here, no prior notice of purported infraction, and such opportunity to explain on any accusation
against him was given to Dagasdas.1âwphi1 He was simply given a notice of termination. In
fact, it appears that ITM intended not to comply with the twin notice requirement. As above-
quoted, under the new contract, ITM reserved in its favor the right to terminate the contract
without serving any notice to Dagasdas in specified cases, which included such situation where
the employer decides to dismiss the employee within the probationary period. Without doubt,
ITM violated the due process requirement in dismissing an employee.
Lastly, while it is shown that Dagasdas executed a waiver in favor of his employer, the same
does not preclude him from filing this suit.
Generally, the employee's waiver or quitclaim cannot prevent the employee from demanding
benefits to which he or she is entitled, and from filing an illegal dismissal case. This is because
waiver or quitclaim is looked upon with disfavor, and is frowned upon for being contrary to public
policy. Unless it can be established that the person executing the waiver voluntarily did so, with
full understanding of its contents, and with reasonable and credible consideration, the same is
not a valid and binding undertaking. Moreover, the burden to prove that the waiver or quitclaim
was voluntarily executed is with the employer.49
 1
In this case, however, neither did GPGS nor its principal, ITM, successfully discharged its  CA rollo, pp. 312-320; penned by Associate Justice Manuel M. Barrios and
burden. GPGS and/or ITM failed to show that Dagasdas indeed voluntarily waived his claims concurred in by Associate Justices Remedios A. Salazar-Fernando and Normandie B.
against the employer. Pizarro.

2
Indeed, even if Dagasdas signed a quitclaim, it does not necessarily follow that he freely and  Id. at 128-135; penned by Commissioner Napoleon M. Menese and concurred in by
voluntarily agreed to waive all his claims against his employer.1âwphi1 Besides, there was no Presiding Commissioner Raul T. Aquino and Commissioner Teresita D. Castillon-Lora.
reasonable consideration stipulated in said quitclaim considering that it only determined the
actual payment due to Dagasdas from February 11, 2008 to April 30, 2008. Verily, this quitclaim, 3
 Id. at 145-146.
under the semblance of a final settlement, cannot absolve GPGS nor ITM from liability arising
from the employment contract of Dagasdas.50
4
 Id. at 103-108; penned by Labor Arbiter Virginia T. Luyas-Azarraga.
All told, the dismissal of Dagasdas was without any valid cause and due process of law. Hence,
the NLRC properly ruled that Dagasdas was illegally dismissed. Evidently, it was an error on the 5
 Id. at 353-355.
part of the CA to hold that the NLRC committed grave abuse of discretion amounting to lack or
excess of jurisdiction when the NLRC ruled for Dagasdas. 6
 Id. at 21, 38.

WHEREFORE, the Petition is GRANTED. The Decision dated September 26, 2012 and 7
 Id. at 62-65.
Resolution dated January 28, 2013 of the Court of Appeals in CA-G.R. SP No. 115396
are REVERSED and SET ASIDE. Accordingly, the March 29, 2010 and June 2, 2010
Resolutions of the National Labor Relations Commission in NLRC LAC OFW-L-02-000071-10 8
 Id. at 66.
are REINSTATED.
9
 Id. at 67.
SO ORDERED.
10
 Id. at 60-61.
MARIANO C. DEL CASTILLO
Associate Justice 11
 Id. at 54-57.

WE CONCUR: 12
 Id. at 58.

MARIA LOURDES P.A. SERENO 13

Chief Justice  Id. at 49-52.
Chairperson
14
 Id. at 39.
TERESITA J. LEONARDO-DE CASTRO ESTELA M. PERLAS-BERNABE
15
Associate Justice Associate Justice  Id. at 75.

16
 Id. at 68-72.
ALFREDO BENJAMIN S. CAGUIOA
Associate Justice 17
 Id. at 75.

CERTIFICATION 18
 Id. at 39-40.

Pursuant to the Section 13, Article VIII of the Constitution, I certify that the conclusions in the 19
 Id. at 40.
above Decision had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
20
 Id. at 81.
MARIA LOURDES P.A. SERENO
Chief Justice 21
 Id. at 70.

Footnotes 22
 Id. at 82.
23
 Id. at 83-84. convenient, provided they are not contrary to law, morals, good customs, public order,
or public policy. (l255a)
24
 Id. at 21.
43
 Sameer Overseas Placement Agency, Inc, v. Cabiles, supra note 36 at 46.
25
 Id. at 92-93.
44
 Id.
26
 Id. at42.
45
 Article 18. Ban on Direct-Hiring. - No employer may hire a Filipino worker for
27 overseas employment except through the Boards and entities authorized by the
 Id. at 22-24.
Secretary of Labor. Direct-hiring by members of the diplomatic corps, international
organizations and such other employers as may be allowed by the Secretary of Labor
28
 Id. at 88. is exempted from this provision. (Labor Code of the Philippines, Amended &
Renumbered, July 21, 2015.)
29
 Id. at 134.
46
Industrial Personnel & Management Services, Inc. v. De Vera, supra note 39.
30
 Id. at 133.
47
 Datuman v. First Cosmopolitan Manpower and Promotion Services, Inc., 591 Phil.
31 662, 673-674 (2008).
 Id. at 318.
48
32  EDI-Staffbuilders International, Inc. v. National Labor Relations Commission, 563
 Rollo, p. 26. Phil. 1, 28-29 (2007).

33
 Id. at 29. 49
 Universal Staffing Services, Inc. v. National Labor Relations Commission, 581 Phil.
199, 209-210 (2008).
34
 Id. at 32.
50
 Id.
35
 Unicol Management Services, Inc. v. Malipot, G.R. No. 206562, January 21, 2015,
747 SCRA 191, 202-203.

36
 Sameer Overseas Placement Agency, Inc. v. Cabiles, G.R. No. 170139, August 5,
2014, 732 SCRA 22, 41-42.

37
 Id. at 42.

38
 CONSTITUTION, Article XIII.

Section 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment G.R. No. L-50734-37 February 20, 1981
opportunities for all.
WALLEM PHILIPPINES SHIPPING, INC., petitioner,
39
 Industrial Personnel & Management Services, Inc. v. De Vera, G.R. No. 205703, vs.
March 7, 2016. THE HON. MINISTER OF LABOR, in his capacity as Chairman of the National Seamen
Board Proper, JAIME CAUNCA, ANTONIO CABRERA, EFREN GARCIA, JOSE OJEDA and
RODOLFO PAGWAGAN, respondents.
40
 LABOR CODE OF THE PHILIPPINES, Amended and Renumbered, July 21, 2015.

41
 CA rollo, p. 70.

42
DE CASTRO, J.:
 CIVIL CODE OF THE PHILIPPINES. Article 1306. The contracting parties may
establish such stipulations, clauses, terms and conditions as they may deem
Petition for certiorari with preliminary injunction with prayer that the Orders dated December 19,
1977 and April 3, 1979 of the National Seamen Board (NSB) be declared null and void. Private
respondents were hired by petitioner sometime in May 1975 to work as seamen for a period of
ten months on board the M/V Woermann Sanaga, a Dutch vessel owned and operated by
petitioner's European principals. While their employment contracts were still in force, private
respondents were dismissed by their employer, petitioner herein, and were discharged from the
ship on charges that they instigated the International Transport Federation (ITF) to demand the
application of worldwide ITF seamen's rates to their crew.
Private respondents were repatriated to the Philippines on October 27, 1975 and upon their
arrival in Manila, they instituted a complaint against petitioner for illegal dismissal and recovery
of wages and other benefits corresponding to the five months' unexpired period of their
shipboard employment contract.
In support of their complaint, private respondents submitted a Joint Affidavit 1 stating the
circumstances surrounding their employment and subsequent repatriation to the Philippines,
material averments of which are herein below reproduced:
JOINTAFFIDAVIT
xxx xxx xxx
5. That aside from our basic monthly salary we are entitled to two (2)
months vacation leave, daily subsistence allowance of US$8.14 each, daily
food allowance of US$2.50. as well as overtime pay which we failed to
receive because our Shipboard Employment Contract was illegally
terminated;
11. That while we were in the Port Dubai, Saudi Arabia, we were not
receiving our pay, since the Ship's Captain refused to implement the world-
wide rates and insisted on paying us the Far East Rate;
12. That the Port Dubai is one that is within the Worldwide rates sphere.
13. That on October 22, 1975, Mr. Greg Nacional Operation Manager of
respondent corporation, arrived in Dubai Saudi Arabia and boarded our
ship;
14. That on October 23, 1975, Mr. Nacional called all the crew members,
including us to a meeting at the Mess Hall and there he explained that the
Company cannot accept the worldwide rate. The Special Agreement signed
by Mr. Ogle in behalf of the Company is nothing but a scrap of paper. Mr.
Jaime Caunca then asked Mr. Nacional, in view of what he was saying,
whether the Company will honor the Special Agreement and Mr. Nacional
answered "Yes". That we must accept the Far East Rates which was put to
a vote. Only two voted for accepting the Far East Rates;
15. That immediately thereafter Mr. Nacional left us;
16. That same evening, Mr. Nacional returned and threatened that he has
received a cable from the Home Office that if we do not accept the Far East
Rate, our services will be terminated and there will be a change in crew;
17. That when Mr. Nacional left, we talked amongst ourselves and decided
to accept the Far East Rates;

6. That while we were in Rotterdam, on or about July 9, 1975,

18. That in the meeting that evening because of the threat we informed Mr.
representative of the ITF boarded our vessel and talked with the Ship's
Nacional we were accepting the Far East Rate and he made us sign a
Captain;
document to that effect;

7. That the following day, the representatives of the ITF returned and was
19. That we the complainants with the exception of Leopoldo Mamaril and
followed by Mr. M.S.K. Ogle who is the Company's Administrative Manager,
Efren Garcia, were not able to sign as we were at the time on work
again went to see the Captain;
schedules, and Mr. Nacional did not bother anymore if we signed or not;

8. That at around 7:00 in the evening all the crew members were called in
the Mess Hall where the ITF representatives informed us that they have just
entered into a "Special Agreement" with the Wallem Shipping Management,
Ltd., represented by Mr. M.S.K. Ogle, Administrative Manager, wherein new
salary rates was agreed upon and that we were going to be paid our salary
differentials in view of the new rates;
9. That in the same meeting, Mr. M.S.K. Ogle also spoke where he told that
a Special Agreement has been signed and that we will be receiving new pay
rate and enjoined us to work hard and be good boys;
10. That the same evening we received our salary differentials based on the
new rates negotiated for us by the ITF.
20. That after the meeting Mr. Nacional cabled the Home Office, informing
them that we the complainants with the exception of Messrs. Mamaril and
Garcia were not accepting the Far East Rates;
21. That in the meeting of October 25, 1975, Mr. Nacional signed a
document whereby he promised to give no priority of first preference in
"boarding a vessel and that we are not blacklisted";
22. That in spite of our having accepted the Far East Rate, our services
were terminated and advised us that there was a change in crew;
23. That on October 27, 1975, which was our scheduled flight home,
nobody attended us, not even our clearance for our group travel and
consequently we were not able to board the plane, forcing us to sleep on
the floor at the airport in the evening of October 27, 1975;
 24. That the following day we went back to the hotel in Dubai which was a
two hours ride from the airport, where we were to await another flight for
home via Air France;
25. That we were finally able to leave for home on November 2, 1975
arriving here on the 3rd of November;
26. That we paid for all excess baggages;
27. That Mr. Nacional left us stranded, since he went ahead on October 27,
1975;
28. That immediately upon arriving in Manila, we went to respondent
Company and saw Mr. Nacional, who informed us that we were not
blacklisted, however, Mr. Mckenzie, Administrative Manager did inform us
that we were all blacklisted;
29. That we were asking from the respondent Company our leave pay,
which they refused to give, if we did not agree to a US$100.00 deduction;
30. That with the exception of Messrs. Jaime Caunca Amado Manansala
and Antonio Cabrera, we received our leave pay with the US$100.00
deduction;
31. That in view of the written promise of Mr. Nacional in Dubai last October
23, 1975 to give us priority and preference in boarding a vessel and that we
were not blacklisted we have on several occasions approached him
regarding his promise, which up to the present he has refused to honor.
xxx xxx xxx
Answering the complaint, petitioner countered that when the vessel was in London, private
respondents together with the other crew insisted on worldwide ITF rate as per special
agreement; that said employees threatened the ship authorities that unless they agreed to the
increased wages the vessel would not be able to leave port or would have been picketed and/or
boycotted and declared a hot ship by the ITF; that the Master of the ship was left with no
alternative but to agree; that upon the vessel's arrival at the Asian port of Dubai on October 22,
1975, a representative of petitioner went on board the ship and requested the crew together with
private respondents to desist from insisting worldwide ITF rate and instead accept the Far East
rate; that said respondents refused to accept Far East ITF rates while the rest of the Filipino
crew members accepted the Far East rates; that private respondents were replaced at the
expense of petitioner and it was prayed that respondents be required to comply with their
obligations under the contract by requiring them to pay their repatriation expenses and all other
incidental expenses incurred by the master and crew of the vessel.
After the hearing on the merits, the hearing Officer of the Secretariat rendered a decision 2 on
March 14, 1977 finding private respondents to have violated their contract of employment when
they accepted salary rates different from their contract verified and approved by the National
Seamen Board. As to the issue raised by private respondents that the original contract has been
novated, it was held that:
xxx xxx xxx
For novation to be a valid defense, it is a legal requirement that all parties to
the contract should give their consent. In the instant case only the
complainants and respondents gave their consent. The National Seamen
Board had no participation in the alleged novation of the previously
approved employment contract. It would have been different if the consent
of the National Seamen Board was first secured before the alleged novation
of the approved contract was undertaken, hence, the defense of novation is
not in order.
xxx xxx xxx
The Hearing Officer likewise rules that petitioner violated the contract when its representative
signed the Special Agreement and he signed the same at his own risk and must bear the
consequence of such act, and since both parties are in paridelicto, complaint and counterclaim
were dismissed for lack of merit but petitioner was ordered to pay respondents Caunca and
Cabrera their respective leave pay for the period that they have served M/V Woermann Sanaga
plus attorney's fees.
Private respondents filed a motion for reconsideration with the Board which modified the
decision of the Secretariat in an Order 3 of December 19, 1977 and ruled that petitioner is liable
for breach of contract when it ordered the dismissal of private respondents and their subsequent
repatriation before the expiration of their respective employment contracts. The Chairman of the
Board stressed that "where the contract is for a definite period, the captain and the crew
members may not be discharged until after the contract shall have been performed" citing the
case of Madrigal Shipping Co., Inc. vs. Ogilvie, et al. (104 Phil. 748). He directed petitioner to
pay private respondents the unexpired portion of their contracts and their leave pay, less the
amount they received as differentials by virtue of the special agreements entered in Rotterdam,
and ten percent of the total amounts recovered as attorney's fees.
Petitioner sought clarification and reconsideration of the said order and asked for a confrontation
with private respondents to determine the specific adjudications to be made. A series of
conferences were conducted by the Board. It was claimed by petitioner that it did not have in its
possession the records necessary to determine the exact amount of the judgment since the
records were in the sole custody of the captain of the ship and demanded that private
respondents produce the needed records. On this score, counsel for respondents manifested
that to require the master of the ship to produce the records would result to undue delay in the
disposition of the case to the detriment of his clients, some of whom are still unemployed.
Under the circumstances, the Board was left with no alternative but to issue an Order dated April
3, 1979 4 fixing the amount due private respondents at their three (3) months' salary equivalent
without qualifications or deduction. Hence,the instant petition before Us alleging grave abuse of
discretion on the part of the respondent official as Chairman of the Board, in issuing said order
which allegedly nullified the findings of the Secretariat and premised adjudication on imaginary
conditions which were never taken up with full evidence in the course of hearing on the merits.
The whole controversy is centered around the liability of petitioner when it ordered the dismissal
of herein private respondents before the expiration of their respective employment contracts.
In its Order of December 19, 1977 5 the Board, thru its Chairman, Minister Blas F. Ople, held that
there is no showing that the seamen conspired with the ITF in coercing the ship authorities to
grant salary increases, and the Special Agreement was signed only by petitioner and the ITF
without any participation from the respondents who, accordingly, may not be charged as they
were, by the Secretariat, with violation of their employment contract. The Board likewise
stressed that the crew members may not be discharged until after the expiration of the contract
which is for a definite period, and where the crew members are discharged without just cause
before the contract shall have been performed, they shall be entitled to collect from the owner or Footnotes
agent of the vessel their unpaid salaries for the period they were engaged to render the services,
applying the case of Madrigal Shipping Co., Inc. vs. Jesus Ogilivie et al. 6
1 pp. 17-20, Rollo.

The findings and conclusion of the Board should be sustained. As already intimated above, there
2 pp- 16-26, Rollo.
is no logic in the statement made by the Secretariat's Hearing Officer that the private
respondents are liable for breach of their employment contracts for accepting salaries higher
than their contracted rates. Said respondents are not signatories to the Special Agreement, nor 3 pp. 28-32, Rollo.
was there any showing that they instigated the execution thereof. Respondents should not be
blamed for accepting higher salaries since it is but human for them to grab every opportunity
4 pp. 33-40, Rollo.
which would improve their working conditions and earning capacity. It is a basic right of all
workingmen to seek greater benefits not only for themselves but for their families as well, and
this can be achieved through collective bargaining or with the assistance of trade unions. The 5 Order of December 19, 1977, pp, 29-32, Rollo.
Constitution itself guarantees the promotion of social welfare and protection to labor. It is
therefore the Hearing Officer that gravely erred in disallowing the payment of the unexpired
portion of the seamen's respective contracts of employment. 6 104 Phil. 748.

Petitioner claims that the dismissal of private respondents was justified because the latter
threatened the ship authorities in acceeding to their demands, and this constitutes serious
misconduct as contemplated by the Labor Code. This contention is not well-taken. The records
fail to establish clearly the commission of any threat. But even if there had been such a threat,
respondents' behavior should not be censured because it is but natural for them to employ some
means of pressing their demands for petitioner, who refused to abide with the terms of the
Special Agreement, to honor and respect the same. They were only acting in the exercise of
their rights, and to deprive them of their freedom of expression is contrary to law and public
policy. There is no serious misconduct to speak of in the case at bar which would justify
respondents' dismissal just because of their firmness in their demand for the fulfillment by
petitioner of its obligation it entered into without any coercion, specially on the part of private
respondents.

On the other hand, it is petitioner who is guilty of breach of contract when they dismissed the
respondents without just cause and prior to the expiration of the employment contracts. As the
records clearly show, petitioner voluntarily entered into the Special Agreement with ITF and by
virtue thereof the crew men were actually given their salary differentials in view of the new rates.
It cannot be said that it was because of respondents' fault that petitioner made a sudden turn-
about and refused to honor the special agreement.

In brief, We declare petitioner guilty of breach of contract and should therefore be made to
comply with the directives contained in the disputed Orders of December 19, 1977 and April 3,
1979.

WHEREFORE, premises considered, the decision dated March 14, 1977 of the Hearing Officer
is SET ASIDE and the Orders dated December 19, 1977 and April 3, 1979 of the National
Seamen Board are AFFIRMED in toto. This decision is immediately executory. Without costs.

SO ORDERED.

Makasiar, Fernandez, Guerrero and Melencio-Herrera, JJ., concur. G.R. No. 109808 March 1, 1995

Teehankee (Chairman), J., concur in the result. 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).
3
(sgd. by petitioner)
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 . . .
Under the prevailing circumstances of this case, it is outside the regulatory
powers of the Administration to rule on the liability of respondent Jaz
Talents Promotions, if any, (it) not being a licensed private agency but a
promotion which trains entertainers for abroad.
x x x           x x x          x x x
(Citations omitted.)
On appeal, the NLRC upheld the Decision, thus:
 We fail to see any conspiracy that the complainant (petitioner herein)
imputes to the respondents. She has, to put it bluntly, not 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 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.)
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.
Narvasa, C.J., Bidin, Regalado and Mendoza, JJ., concur.
 
Footnotes
1 Through its Second Division, composed of public respondents Presiding
Commissioner Edna Bonto-Perez, Commissioner Rogelio I. Rayala,
( ponente), and Commissioner Domingo H. Zapanta.
2 Owned and operated by Iwata International Management Co., Ltd.
3 Exh. "C" of Petition; Rollo, p. 17.
4 The Second Division also denied petitioner's Motion for Reconsideration in
a minute resolution, dated March 23, 1993.
5 See Petition, pp. 5-6; Rollo, pp. 6-7.

6 Exh. "A" of Petition, p. 1; Rollo, p. 10.

7 La Campana Food Products, Inc. v. Court of Appeals, 223 SCRA 151

(1993); Radio Communications of the Philippines, Inc. v. National Labor
Relations Commission, 223 SCRA 656 (1993); Marcelino v. Court of
Appeals, 210 SCRA 444 (1992).

8 Bergado v. Court of Appeals, 173 SCRA 497 (1989).

9 See Donato v. Court of Appeals, 217 SCRA 196 (1993).

10 Bergado v. Court of Appeals, op cit.

11 Jimenez v. Fernandez, 184 SCRA 190 (1990).

12 Art. 291. Money claims. — All money claims arising from employer-
employee relations accruing during the effectivity of this code shall be filed
within three (3) years from the time the cause of action accrued; otherwise,
they shall be forever barred. . . .

13 Exh. "A" of Petition, p. 4; Rollo, p. 13.

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, 5. Verdelina Belgira 2,000.00
DIGNA PANAGUITON, VERONICA BAYOGOS, JULIANITA ARANADOR, LEONORA
CABALLERO, NANCY BOLIVAR, NIMFA BUCOL, ZITA GALINDO, ESTELITA BIOCOS,
6. Elma Flores 2,500.00
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. 7. Ramona Liturco 2,500.00

8. Grace Sabando 3,500.00

ROMERO, J.: 9. Gloria Palma 1,500.00

The issue presented in the case at bar is whether or not the Secretary of Labor and Employment 10. Avelyn Alvarez 1,500.00
has jurisdiction to cancel or revoke the license of a private fee-charging employment agency.
11. Candelaria Nono 1,000.00
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
12. Nita Bustamante 5,000.00
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 fees ranging from P1,000.00 to P14,000.00, but petitioner failed to deploy them. Their 13. Cynthia Arandillo 1,000.00
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.
14. Sandie Aguilar 3,000.00

Petitioner denied having received the amounts allegedly collected from respondents, and
15. Digna Panaguiton 2,500.00
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 16. Veronica Bayogos 2,000.00
respondents not to give any money to unauthorized individuals.
17. Sony Jamuat 4,500.00
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 18. Irma Sobrequil 2,000.00
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 19. Elsie Penarubia 2,000.00
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. 20. Antonia Navarro 2,000.00

On April 5, 1991, then Labor Undersecretary Nieves R. Confesor rendered the assailed order, 21. Selfa Palma 3,000.00
the dispositive portion of which reads:
22. Lenirose Abangan 13,300.00
WHEREFORE, respondents are hereby ordered to pay, jointly and
severally, the following claims: 23. Paulina Cordero 1,400.00

1. Rosele Castigador P14,000.00 24. Nora Maquiling 2,000.00

2. Josefina Mamon 3,000.00 25. Rosalie Sondia 2,000.00

3. Jenelyn Casa 3,000.00 26. Ruby Sepulvida 3,500.00

4. Peachy Laniog 13,500.00 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
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
Respondent agency is liable for twenty eight (28) counts of violation of
Article 32 and five (5) counts of Article 34 (a) with a corresponding
suspension in the aggregate period of sixty six (66) months. Considering
however, that under the schedule of penalties, any suspension amounting to
a period of 12 months merits the imposition of the penalty of
cancellation, the license of respondent TRANS ACTION OVERSEAS
CORPORATION to participate in the overseas placement and recruitment of
workers is hereby ordered CANCELLED, effective immediately.
SO ORDERED.2 (Emphasis supplied)
On April 29, 1991, petitioner filed its Motion for Temporary Lifting of Order of Cancellation
alleging, among other things, that to deny it the authority to engage in placement and
recruitment activities would jeopardize not only its contractual relations with its foreign principals,
but also the welfare, interests, and livelihood of recruited workers scheduled to leave for their
respective assignments. Finally, it manifested its willingness to post a bond to insure payment of
the claims to be awarded, should its appeal or motion be denied.
Finding the motion to be well taken, Undersecretary Confesor provisionally lifted the cancellation
of petitioner's license pending resolution of its Motion for Reconsideration filed on May 6, 1991.
On January 30, 1992, however, petitioner's motion for reconsideration was eventually denied for
lack of merit, and the April 5, 1991, order revoking its license was reinstated.
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
to 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 Footnotes
including —
1 "Art. 32. Fees to be paid by workers. — Any person applying with a private
1) the imposition or acceptance, directly or indirectly, of any amount of fee-charging employment agency for employment assistance shall not be
money, goods or services, or any fee or bond in excess of what is charged any fee until he has obtained employment through its efforts or has
prescribed by the Administration, and actually commenced employment. Such fee shall be always covered with
the appropriate receipt clearly showing the amount paid. The Secretary of
Labor shall promulgate a schedule of allowable fees."
2) any other violation of pertinent provisions of the Labor Code and other
relevant laws, rules and regulations.7
"Art. 34. Prohibited practices. — It shall be unlawful for any individual, entity,
licensee, or holder of authority:
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 (a) To charge or accept, directly or indirectly, any amount greater than that
thereof." 8 (Emphasis supplied) specified in the schedule of allowable fees prescribed by the Secretary of
Labor, or to make a worker pay any amount greater than that actually
received by him as a loan or advance; . . ."
This power conferred upon the Secretary of Labor and Employment was echoed in People
v. Diaz,9 viz.:
2 Rollo, pp. 43-44.
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 3 Creating the POEA.
recruitment and placement by the Secretary of Labor, or whose license or
authority has been suspended, revoked or cancelled by the POEA or the
4 Reorganizing the POEA and for other purposes.
Secretary. (Emphasis supplied)

5 181 SCRA 110 (1990).

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. 6 Sec. 1, Rule II, Book VI of the New Rules on Overseas Employment.

As regards petitioner's alternative argument that the non-filing of the 1987 POEA Schedule of 7 Ibid., Sec. 2 (t).
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:
8 Id., Sec. 12.

On the other hand, the POEA Revised Rules on the Schedule of Penalties
9 259 SCRA 441 (1996).
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 10 Rollo, pp. 27-28.
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.

Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.

G.R. No. 103144            April 4, 2001
PHILSA INTERNATIONAL PLACEMENT and SERVICES CORPORATION, petitioner,
vs.
THE HON. SECRETARY OF LABOR AND EMPLOYMENT, VIVENCIO DE MESA, RODRIGO
MIKIN and CEDRIC LEYSON, respondents.
GONZAGA-REYES, J.:
This is a petition for certiorari from the Order dated November 25, 1991 issued by public
respondent Secretary of Labor and Employment. The November 25, 1991 Order affirmed in
toto the August 29, 1988 Order of the Philippine Overseas Employment Administration
(hereinafter the "POEA") which found petitioner liable for three (3) counts of illegal exaction, two
(2) counts of contract substitution and one count of withholding or unlawful deduction from
salaries of workers in POEA Case No. (L) 85-05-0370.
Petitioner Philsa International Placement and Services Corporation (hereinafter referred to as
"Philsa") is a domestic corporation engaged in the recruitment of workers for overseas
employment. Sometime in January 1985, private respondents, who were recruited by petitioner
for employment in Saudi Arabia, were required to pay placement fees in the amount of
P5,000.00 for private respondent Rodrigo L. Mikin and P6,500.00 each for private respondents
Vivencio A. de Mesa and Cedric P. Leyson.1
After the execution of their respective work contracts, private respondents left for Saudi Arabia
on January 29, 1985. They then began work for Al-Hejailan Consultants A/E, the foreign
principal of petitioner.
While in Saudi Arabia, private respondents were allegedly made to sign a second contract on
February 4, 1985 which changed some of the provisions of their original contract resulting in the
reduction of some of their benefits and privileges. 2 On April 1, 1985, their foreign employer
allegedly forced them to sign a third contract which increased their work hours from 48 hours to
60 hours a week without any corresponding increase in their basic monthly salary. When they
refused to sign this third contract, the services of private respondents were terminated by Al-
Hejailan and they were repatriated to the Philippines.3
Upon their arrival in the Philippines, private respondents demanded from petitioner Philsa the
return of their placement fees and for the payment of their salaries for the unexpired portion of
their contract. When petitioner refused, they filed a case before the POEA against petitioner
Philsa and its foreign principal, Al-Hejailan., with the following causes of action:
1. Illegal dismissal;
2. Payment of salary differentials;
3. Illegal deduction/withholding of salaries;
4. Illegal exactions/refund of placement fees; and
5. Contract substitution. 4
The case was docketed as POEA Case No. (L) 85-05 0370.
Under the rules of the POEA dated May 21, 1985, complaints involving employer-employee
relations arising out of or by virtue of any law or contract involving Filipino workers for overseas
employment, including money claims, are adjudicated by the Workers' Assistance and
Adjudication Office (hereinafter the "WAAO") thru the POEA Hearing Officers.5 On the other
hand, complaints involving recruitment violations warranting suspension or cancellation of the
license of recruiting agencies are cognizable by the POEA thru its Licensing and Recruitment
Office (hereinafter the "LRO"). 6 In cases where a complaint partakes of the nature of both an
employer-employee relationship case and a recruitment regulation case, the POEA Hearing
Officer shall act as representative of both the WAAO and the LRO and both cases shall be heard
simultaneously. In such cases, the Hearing Officer shall submit two separate recommendations
for the two aspects of the case. 7
In the case at bench, the first two causes of action were in the nature of money claims arising
from the employer-employee relations and were properly cognizable by the WAAO. The last two
causes of action were in the nature of recruitment violations and may be investigated by the
LRO. The third cause of action, illegal deduction/withholding of salary, is both a money claim
and a violation of recruitment regulations and is thus under the investigatory jurisdiction of both
the WAAO and the LRO.
Several hearings were conducted before the POEA Hearing Officer on the two aspects of private
respondents' complaint. During these hearings, private respondents supported their complaint
with the presentation of both documentary and testimonial evidence. When it was its turn to
present its evidence, petitioner failed to do so and consequently, private respondents filed a
motion to decide the case on the basis of the evidence on record. 8
On the aspects of the case involving money claims arising from the employer-employee relations
and illegal dismissal, the POEA rendered a decision dated August 31, 1988 9 , the dispositive
portion of which reads:
"CONFORMABLY TO THE FOREGOING, judgment is hereby rendered ordering
respondent PHILSA INTERNATIONAL PLACEMENT AND SERVICE CORPORATION
to pay complainants, jointly and severally with its principal Al-Hejailan, the following
amounts, to wit:
1. TWO THOUSAND TWO HUNDRED TWENTY FIVE SAUDI RIYALS (SR2,225.00)
to each complainant, representing the refund of their unpaid separation pay;
2. ONE THOUSAND SAUDI RIYALS (SR1,000.00) for V.A. de Mesa alone,
representing the salary deduction from his March salary;
3. TWO THOUSAND SAUDI RIYALS (SR2,000.00) each for R.I. Mikin and C.A.P.
Leyson only, representing their differential pay for the months of February and March,
1985; and
4. Five percent (5%) of the total awards as and by way of attorney's fees.
All payments of the abovestated awards shall be made in Philippine Currency
equivalent to the prevailing exchange rate according to the Central Bank at the time of
payment.
All other claims of complainants as well as the counterclaims of respondent are
dismissed for lack of merit.
 SO ORDERED." 10 Under the POEA Rules and Regulations, the decision of the POEA thru the LRO suspending or
canceling a license or authority to act as a recruitment agency may be appealed to the Ministry
(now Department) of Labor and Employment. 15 Accordingly, after the denial of its motion for
Under the Rules and Regulations of the POEA, the decision of the POEA-Adjudication Office on
reconsideration, petitioner appealed the August 21, 1988 Order to the Secretary of Labor and
matters involving money claims arising from the employer-employee relationship of overseas
Employment. However, in an Order dated September 13, 1991, 16 public respondent Secretary of
Filipino workers may be appealed to the National Labor Relations Commission (hereinafter the
Labor and Employment affirmed in toto the assailed Order. Petitioner filed a Motion for
"NLRC)11 . Thus, as both felt aggrieved by the said POEA Decision, petitioner and private
Reconsideration but this was likewise denied in an Order dated November 25, 1991.
respondents filed separate appeals from the August 31, 1988 POEA Decision to the NLRC.

In a decision dated July 26, 1989 12 , the NLRC modified the appealed decision of the POEA
Adjudication Office by deleting the award of salary deductions and differentials. These awards to
private respondents were deleted by the NLRC considering that these were not raised in the
complaint filed by private respondents. The NLRC likewise stated that there was nothing in the
text of the decision which would justify the award.
Private respondents filed a Motion for Reconsideration but the same was denied by the NLRC in
a Resolution dated October 25; 1989.
Private respondents then elevated the July 26, 1989 decision of the NLRC to the Supreme Court
in a petition for review for certiorari where it was docketed as G.R. No. 89089. However, in a
Resolution dated October 25, 1989, the petition was dismissed outright for "insufficiency in form
and substance, having failed to comply with the Rules of Court and Circular No. 1-88 requiring
submission of a certified true copy of the questioned resolution dated August 23, 1989." 13
Almost simultaneous with the promulgation of the August 31, 1988 decision of the POEA on
private respondents' money claims, the POEA issued a separate Order dated August 29,
1988 14 resolving the recruitment violations aspect of private respondents' complaint. In this
Order, the POEA found petitioner guilty of illegal exaction, contract substitution, and unlawful
deduction. The dispositive portion of this August 29, 1988 POEA Order reads:
Hence, the instant Petition for Certiorari where petitioner raises the following grounds for the
reversal of the questioned Orders:
I
THE PUBLIC RESPONDENT HAS ACTED WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION IN HOLDING
PETITIONER GUILTY OF ILLEGAL EXACTIONS. THE FINDING IS NOT
SUPPORTED BY EVIDENCE AND IN ANY EVENT, THE LAW ON WHICH THE
CONVICTION IS BASED IS VOID.
II
THE PUBLIC RESPONDENT HAS ACTED WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION IN PENALIZING
PETITIONER WITH CONTRACT SUBSTITUTION. IN THE PREMISES, THE
CONTRACT SUBSTITUTION IS VALID AS IT IMPROVED THE TERMS AND
CONDITIONS OF PRIVATE RESPONDENTS' EMPLOYMENT.
III.

"WHEREFORE, premises considered, this Office finds herein respondent PHILSA

THE PUBLIC RESPONDENT HAS ACTED WITHOUT OR IN EXCESS OF
International Placement and Services Corporation liable for three (3) counts of illegal
JURISDICTION, OR WITH GRAVE ABUSE OF DISCRETION IN HOLDING
exaction, two (2) counts of contract substitution and one count of withholding or
PETITIONER LIABLE FOR ILLEGAL DEDUCTIONS/WITHHOLDING OF SALARIES
unlawful deduction from salaries of workers.
FOR THE SUPREME COURT ITSELF HAS ALREADY ABSOLVED PETITIONER
FROM THIS CHARGE.
Accordingly, respondent is hereby ordered to refund the placement fees in the amount
of P2,500.00 to Rodrigo L. Mikin, P4,000.00, each, to Vivencio A. de Mesa and Cedric
With respect to the first ground, petitioner would want us to overturn the findings of the POEA,
A.P. Leyson plus restitution of the salaries withheld in the amount of SR1,000.00 to
subsequently affirmed by the Secretary of the Department of Labor and Employment, that it is
Vivencio A. de Mesa.
guilty of illegal exaction committed by collecting placement fees in excess of the amounts
allowed by law. This issue, however, is a question of fact which cannot be raised in a petition for
Moreover, respondent's license is hereby suspended for eight (8) months to take certiorari under Rule 65. 17 As we have previously held:
effect immediately and to remain as such until full refund and restitution of the above-
stated amounts have been effected or in lieu thereof, it is fined the amount of SIXTY
"It should be noted, in the first place, that the instant petition is a special civil action for
THOUSAND (P60,000.00) PESOS plus restitution.
certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its
use is available only and restrictively in truly exceptional cases wherein the action of
SO ORDERED." an inferior court, board or officer performing judicial or quasi-judicial acts is challenged
for being wholly void on grounds of jurisdiction. The sole office of the writ of certiorari
is the correction of errors of jurisdiction including the commission of grave abuse of
In line with this August 29, 1988 Order, petitioner deposited the check equivalent to the claims of
discretion amounting to lack or excess of jurisdiction. It does not include correction of
private respondents and paid the corresponding fine under protest. From the said Order,
public respondent NLRC's evaluation of the evidence and factual findings based
petitioner filed a Motion for Reconsideration which was subsequently denied in an Order dated
thereon, which are generally accorded not only great respect but even finality." 18
October 10, 1989.

The question of whether or not petitioner charged private respondents placement fees in excess
of that allowed by law is clearly a question of fact which is for public respondent POEA, as a trier
of facts, to determine. As stated above, the settled rule is that the factual findings of quasi-
judicial agencies like the POEA, which have acquired expertise because their jurisdiction is
confined to specific matters, are generally accorded not only respect, but at times even finality if
such findings are supported by substantial evidence. 19
On this point, we have carefully examined the records of the case and it is clear that the ruling of
public respondent POEA that petitioner is guilty of illegal exaction is supported by substantial
evidence. Aside from the testimonial evidence offered by private respondents, they also
presented documentary evidence consisting of receipts issued by a duly authorized
representative of petitioner which show the payment of amounts in excess of those allowed by
the POEA. In contrast, petitioner did not present any evidence whatsoever to rebut the claims of
private respondents despite the many opportunities for them to do so.
Petitioner insists, however, that it cannot be held liable for illegal exaction as POEA
Memorandum Circular No. 11, Series of 1983, which enumerated the allowable fees which may
be collected from applicants, is void for lack of publication.
There is merit in the argument.
In Tañada vs. Tuvera 20 , the Court held, as follows:
"We hold therefore that all statutes, including those of local application and private
laws, shall be published as a condition for their effectivity, which shall begin fifteen
days after publication unless a different effectivity date is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers whenever the same are validly
delegated by the legislature or, at present, directly conferred by the Constitution:
Administrative rules and regulations must also be published if their purpose is to
enforce or implement existing law pursuant to a valid delegation.
Interpretative regulations and those merely internal in nature, that is, regulating only
the personnel of the administrative agency and the public, need not be published.
Neither is publication required of the so-called letter of instructions issued by the
administrative superiors concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties."
Applying this doctrine, we have previously declared as having no force and effect the following
administrative issuances: a) Rules and Regulations issued by the Joint Ministry of Health-
Ministry of Labor and Employment Accreditation Committee regarding the accreditation of
hospitals, medical clinics and laboratories; 21 b) Letter of Instruction No. 416 ordering the
suspension of payments due and payable by distressed copper mining companies to the
national government; 22 c) Memorandum Circulars issued by the POEA regulating the recruitment
of domestic helpers to Hong Kong; 23 d) Administrative Order No. SOCPEC 89-08-01 issued by
the Philippine International Trading Corporation regulating applications for importation from the
People's Republic of China;24 and e) Corporate Compensation Circular No. 10 issued by the
Department of Budget and Management discontinuing the payment of other allowances and
fringe benefits to government officials and employees. 25 In all these cited cases, the
administrative issuances questioned therein were uniformly struck down as they were not
published or filed with the National Administrative Register as required by the Administrative
Code of 1987. 26
POEA Memorandum Circular No. 2, Series of 1983 must likewise be declared ineffective as the
same was never published or filed with the National Administrative Register.
POEA Memorandum Order No. 2, Series of 1983 provides for the applicable schedule of
placement and documentation fees for private employment agencies or authority holders. Under
the said Order, the maximum amount which may be collected from prospective Filipino overseas
workers is P2,500.00. The said circular was apparently issued in compliance with the provisions
of Article 32 of the Labor Code which provides, as follows:
"ARTICLE 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." (italic supplied)
It is thus clear that the administrative circular under consideration is one of those issuances
which should be published for its effectivity, since its purpose is to enforce and implement an
existing law pursuant to a valid delegation. 27 Considering that POEA Administrative Circular No.
2, Series of 1983 has not as yet been published or filed with the National Administrative
Register, the same is ineffective and may not be enforced.
The Office of the Solicitor General argues however that the imposition of administrative
sanctions on petitioner was based not on the questioned administrative circular but on Article 32
and Article 34 (a) 28 of the Labor Code.
The argument is not meritorious. The said articles of the Labor Code were never cited, much
less discussed, in the body of the questioned Orders of the POEA and Secretary of Labor and
Employment. In fact, the said Orders were consistent in mentioning that petitioner's violation of
Administrative Circular No. 2, Series of 1983 was the basis for the imposition of administrative
sanctions against petitioner. Furthermore, even assuming that petitioner was held liable under
the said provisions of the Labor Code, Articles 32 and 34 (a) of the Labor Code presupposes the
promulgation of a valid schedule of fees by the Department of Labor and Employment.
Considering that, as, previously discussed, Administrative Circular No. 2, Series of 1983
embodying such a schedule of fees never took effect, there is thus no basis for the imposition of
the administrative sanctions against petitioner. Moreover, under Book VI, Chapter II, Section 3 of
the Administrative Code of 1987, "(r)ules in force on the date of the effectivity of this Code which
are not filed within three (3) months from that date shall not thereafter be the basis of any
sanction against any party or persons." Considering that POEA Administrative Circular No. 2
was never filed with the National Administrative Register, the same cannot be used as basis for
the imposition of administrative sanctions against petitioner.
The Office of the Solicitor General likewise argues that the questioned administrative circular is
not among those requiring publication contemplated by Tañada vs. Tuvera as it is addressed
only to a specific group of persons and not to the general public.
Again, there is no merit in this argument.
The fact that the said circular is addressed only to a specified group, namely private employment
agencies or authority holders, does not take it away from the ambit of our ruling in Tañada vs.
Tuvera. In the case of Phil. Association of Service Exporters vs. Torres,29 the administrative
circulars questioned therein were addressed to an even smaller group, namely Philippine and
Hong Kong agencies engaged in the recruitment of workers for Hong Kong, and still the Court
ruled therein that, for lack of proper publication, the said circulars may not be enforced or
implemented.
Our pronouncement in Tañada vs. Tuvera is clear and categorical. Administrative rules and
regulations must be published if their purpose is to enforce or implement existing law pursuant to
a valid delegation., The only exceptions are interpretative regulations, those merely internal in
nature, or those so-called letters of instructions issued by administrative superiors concerning
the rules and guidelines to be followed by their subordinates in the performance of their duties.
Administrative Circular No. 2, Series of 1983 has not been shown to fall under any of these
exceptions.
In this regard, the Solicitor General's reliance on the case of Yaokasin vs. Commissioner of
Customs 30 is misplaced. In the said case, the validity of certain Customs Memorandum Orders
were upheld despite their lack of publication as they were addressed to a particular class of
persons, the customs collectors, who were also the subordinates of the Commissioner of the
Bureau of Customs. As such, the said Memorandum Orders clearly fall under one of the
exceptions to the publication requirement, namely those dealing with instructions from an
administrative superior to a subordinate regarding the performance of their duties, a
circumstance which does not obtain in the case at bench.
With respect to the second ground, petitioner would want us to review the findings of fact of the
POEA regarding the two counts of alleged contract substitution. Again, this is a question of fact
which may not be disturbed if the same is supported by substantial evidence. A reading of the
August 29, 1988 Order of the POEA shows that, indeed, the ruling that petitioner is guilty of two
(2) counts of prohibited contract substitution is supported by substantial evidence. Thus:
"2. As admitted by respondent, there was definitely a contract of substitution in the first
count. The first contract was duly approved by the Administration and, therefore, the
parties are bound by the terms and condition thereof until its expiration. The mere
intention of respondents to increase the number of hours of work, even if there was a
corresponding increase in wage is clear violation of the contract as approved by the
Administration, and notwithstanding the same, the amendment is evidently contrary to
law, morals, good customs and public policy and hence, must be shunned (Art. 1306,
Civil Code of the Philippines, Book III, Title I, Chapter 1, Article 83, Labor Code of the
Philippines, as amended). Moreover, it would appear that the proposed salary
increase corresponding to the increase in number of work bonus may just have been a
ploy as complainant were (sic) thereafter not paid at the increased rate.
As to contract substitution in the second part, a third contract was emphatically
intended by respondent to be signed by complainants which, however, was not
consummated due to the adamant refusal of complainants to sign thereon. Mere
intention of the respondent to commit contract substitution for a second time should
not be left unpunished. It is the duty of this Office to repress such acts by teaching
agencies a lesson to avoid repetition of the same violation." 31
With respect to the third ground, petitioner argues that the public respondent committed grave
abuse of discretion in holding petitioner liable for illegal deductions/withholding of salaries
considering that the Supreme Court itself has already absolved petitioner from this charge.
Petitioner premises its argument on the fact that the July 26, 1989 Decision of the NLRC
absolving it from private respondent de Mesa's claim for salary deduction has already attained
finality by reason of the dismissal of private respondents' petition for certiorari of the said NLRC
decision by the Supreme Court.
Petitioner is correct in stating that the July 26, 1989 Decision of the NLRC has attained finality by
reason of the dismissal of the petition for certiorari assailing the same. However, the said NLRC
Decision dealt only with the money claims of private respondents arising from employer-
employee relations and illegal dismissal and as such, it is only for the payment of the said
money claims that petitioner is absolved. The administrative sanctions, which are distinct and
separate from the money claims of private respondents, may still be properly imposed by the
POEA. In fact, in the August 31, 1988 Decision of the POEA dealing with the money claims of
private respondents, the POEA Adjudication Office precisely declared that "respondent's liability
for said money claims is without prejudice to and independent of its liabilities for the recruitment
violations aspect of the case which is the subject of a separate Order." 32
The NLRC Decision absolving petitioner from paying private respondent de Mesa's claim for
salary deduction based its ruling on a finding that the said money claim was not raised in the
complaint. 33 While there may be questions regarding such finding of the NLRC, the finality of the
said NLRC Decision prevents us from modifying or reviewing the same. But the fact that the
claim for salary deduction was not raised by private respondents in their complaint will not bar
the POEA from holding petitioner liable for illegal deduction or withholding of salaries as a
ground for the suspension or cancellation of petitioner's license.
Under the POEA Rules and Regulations, the POEA, on its own initiative, may conduct the
necessary proceeding for the suspension or cancellation of the license of any private placement
agency on any of the grounds mentioned therein. 34 As such, even without a written complaint
from an aggrieved party, the POEA can initiate proceedings against an erring private placement
agency and, if the result of its investigation so warrants, impose the corresponding
administrative sanction thereof. Moreover, the POEA, in an investigation of an employer-
employee relationship case, may still hold a respondent liable for administrative sanctions if, in
the course of its investigation, violations of recruitment regulations are uncovered. 35 It is thus
clear that even if recruitment violations were not included in a complaint for money claims
initiated by a private complainant, the POEA, under its rules, may still take cognizance of the
same and impose administrative sanctions if the evidence so warrants.
As such, the fact that petitioner has been absolved by final judgment for the payment of the
money claim to private respondent de Mesa does not mean that it is likewise absolved from the
administrative sanctions which may be imposed as a result of the unlawful deduction or
withholding of private respondents' salary. The POEA thus committed no grave abuse of
discretion in finding petitioner administratively liable of one count of unlawful
deduction/withholding of salary.
To summarize, petitioner should be absolved from the three (3) counts of illegal exaction as
POEA Administrative Circular No. 2, Series of 1983 could not be the basis of administrative
sanctions against petitioner for lack of publication. However, we affirm the ruling of the POEA
and the Secretary of Labor and Employment that petitioner should be held administratively liable
for two (2) counts of contract substitution and one (1) count of withholding or unlawful deduction
of salary.
Under the applicable schedule of penalties imposed by the POEA, the penalty for each count of
contract substitution is suspension of license for two (2) months or a fine of P10,000.00 while the
penalty for withholding or unlawful deduction of salaries is suspension of license for two (2)
months or fine equal to the salary withheld but not less than P10,000.00 plus restitution of the
amount in both instances. 36 Applying the said schedule on the instant case, the license of
petitioner should be suspended for six (6) months or, in lieu thereof, it should be ordered to pay
fine in the amount of P30,000.00. Petitioner should likewise pay the amount of SR1,000.00 to
private respondent Vivencio A. de Mesa as restitution for the amount withheld from his salary.
WHEREFORE, premises considered, the September 13, 1991 and November 25, 1991 Orders
of public respondent Secretary of Labor and Employment are hereby MODIFIED. As modified,
the license of private respondent Philsa International Placement and Services Corporation is
hereby suspended for six (6) months or, in lieu thereof, it is hereby ordered to pay the amount of
P30,000.00 as fine. Petitioner is likewise ordered to pay the amount of SR1,000.00 to private
respondent Vivencio A. de Mesa. All other monetary awards are deleted.
 19 
SO ORDERED. San Miguel Corp. vs. Ernesto Javate, et al., January 27, 1992; GRF Shipping
Agency, Inc. vs. NLRC, 190 SCRA 418.
Melo, Vitug, Panganiban and Sandoval-Gutierrez, JJ ., concur
20 
136 SCRA 27.

21 
Joint Ministry of Health-Ministry of Labor and Employment Accreditation Committee
vs. Court of Appeals, 196 SCRA 263.

Footnotes 22 
Caltex Philippines, Inc. vs. Court of Appeals, 208 SCRA 726.

1 
Rollo, p. 24. 23 
Phil. Association of Service Exporters vs. Torres, 212 SCRA 298.

2 
Rollo, p. 25. 24 
Philippine International Trading Corporation vs. Angeles, 263 SCRA 421.

3 
Ibid. 25 
De Jesus vs. Commission on Audit, 294 SCRA 152.

4 
Rollo, p. 87. 26 
Administrative Code of 1987, Book VII, Chapter 2, Section 3.

5
 POEA Rules and Reg. (1985), Book VI, Rule II, Sections 2 and 4. 27 
Philippine International Trading Corporation vs. Angeles, supra.

6
 POEA Rules and Reg. (1985), Book II, Rule VI Section 3. 28 
"Labor Code. Article 34. Prohibited Practices — It shall be unlawful for any
individual, entity, licensee or holder of authority: .
7
 POEA Rules and Reg. (1985), Book VI, Rule VI, Section 1.
(a) To charge or accept directly or indirectly, any amount greater than that specified in
8
 Rollo, p. 144. 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
9
advance."29. 212 SCRA 298.
 Annex "A" of Petition; Rollo, pp. 24-31.
30 
10 
180 SCRA 599.
Rollo, p. 31.
31 
11 
Rollo, p. 44.
POEA Rules and Reg. (1985), Book VI, Rule V, Section 2.
32 
12 
Rollo, p. 30.
Annex "B" of Petition; Rollo, pp. 32-38.
33 
13 
Rollo, p. 37.
Annex "F' of Comment of Private Respondents; Rollo, R. 188-189.
34 
14 
POEA Rules and Reg. (1985). Book II, Rule VI, Section 3.
Annex "C" of Petition; Rollo, pp. 39-46.
35 
15 
POEA Rules and Reg. (1985), Book VI, Rule VI, Section 1.
POEA Rules and Reg. (1985). Book II, Rule VI, Section 18.
36 
16 
Rollo, p. 45.
Annex "D" of Petition, Rollo, pp. 47-51.

17 
Building Care Corp. vs. NLRC, February 26, 1997.

18 
Flores vs. NLRC, 253 SCRA 494.
 On 30 May 1989, the POEA Administrator issued an Order which, in its dispositive portion, said:

WHEREFORE, premises considered, respondents are hereby ordered to

pay jointly and severally complainants' claims as follows:
G.R. No. 90273-75 November 15, 1989
1. William Inocencio P6,000 .00
FINMAN GENERAL ASSURANCE CORP., petitioner,
vs. 2. Perfecto Palero, Sr. P5,500 .00
WILLIAM INOCENCIO, ET AL. AND EDWIN CARDONES, THE ADMINISTRATOR,
PHILIPPINE OVERSEAS AND EMPLOYMENT ADMINISTRATION, THE SECRETARY OF
3. Edwin Cardones P2,000 .00
LABOR AND EMPLOYMENT, respondents.

Respondent agency is ordered to release Cardones' passport, the expenses

David I. Unay, Jr. for petitioner.
or obtaining the same of which (sic) shall be deducted from the amount of
P2,000.00 as it appears that it was respondent agency who applied for the
RESOLUTION processing thereof. The claim of Edwin Hernandez is dismissed without
prejudice.
 
For the established violations respondent agency is hereby imposed a
penalty fine in the amount of P60,000.00. Further, the ban earlier imposed
FELICIANO, J.:
upon it is herein reiterated.

Pan Pacific Overseas Recruiting Services, Inc. ("Pan Pacific") is a private, fee-charging,
SO ORDERED.
recruitment and employment agency. T in accordance with the requirements of Section 4, Rule
II, Book II of the Rules and Regulations of the Philippine Overseas Employment Administration
(POEA), Pan Pacific posted a surety bond issued by petitioner Finman General Assurance Petitioner Finman went on appeal to the Secretary of Labor insisting that: (1) the POEA had no
Corporation ("Finman") and was granted a license to operate by the POEA. authority to implead petitioner as party respondent in the proceedings before the POEA; and that
(2) the POEA had no authority to enforce directly the surety bond against petitioner. In an Order
dated 3 August 1989, the Secretary of Labor upheld the POEA Order appealed from and denied
Private respondents William Inocencio, Perfecto Palero, Jr., Edwin Cardones and one Edwin
the appeal for lack of merit.
Hernandez filed with the POEA separate complaints against Pan Pacific for violation of Articles
32 and 34 (a) of the Labor Code, as amended and for refund of placement fees paid to Pan
Pacific. The complainants alleged that Pan Pacific charged and collected such fees from them Petitioner Finman now comes before this Court on a Petition for certiorari with prayer for
but did not secure employment for them. preliminary injunction or temporary restraining order, raising much the same issues it had
already ventilated before the POEA and the Secretary of Labor. It is contended once again by
petitioner Finman that the POEA had no authority to implead petitioner in the proceedings
Acting on the complaints, the POEA Administrator motu proprio impleaded petitioner Finman as
commenced by private respondents: and that the POEA was not authorized to require, in those
party respondent in its capacity as surety for Pan Pacific. Separate summonses were served
same proceedings, petitioner to pay private respondents' claims for refund against Pan Pacific
upon Finman and Pan Pacific. The return of the summons served on Pan Pacific at its official
on the basis of the surety bond issued by petitioner.
address registered in the POEA records, showed that Pan Pacific had moved out therefrom; no
prior notice of transfer or change of address was furnished by Pan Pacific to the POEA as
required under POEA rules. The POEA considered that constructive service of the complaints Petitioner's contentions are interrelated and will be dealt with together. They are, however, quite
had been effected upon Pan Pacific and proceeded accordingly. bereft of merit and must be rejected.

For its part, petitioner Finman filed an answer denying liability and pleading, by way of special Petitioner cannot seriously dispute the direct and solidary nature of its obligations under its own
and affirmative defenses, that: (1) the POEA had no "jurisdiction over surety bonds," that surety bond. Under Section 176 of the Insurance Code, as amended, the liability of a surety in a
jurisdiction being vested in the Insurance Commission or the regular courts; (2) it (Finman) had surety bond is joint and several with the principal obligor. Petitioner's bond was posted by Pan
not violated Articles 32 and 34 (a) of the Labor Code and complainants' claims had accrued Pacific in compliance with the requirements of Article 31 of the Labor Code, which states that —
during the suspension of the principal obligor, Pan Pacific; (3) complainants had no cause of
action against Finman, since it was not privy to the transactions between them and Pan Pacific
Art. 31. Bonds. — All applicants for license or authority shall post such cash
and had not received any moneys from them; and (4) the amounts claimed by complainants had
and surety bonds as determined by the Secretary of Labor to guarantee
been paid by them as deposits and not as placement fees.
compliance with prescribed recruitment procedures, rules and regulations,
and terms and, conditions of employment as appropriate.
A hearing was held by the POEA on 14 April 1988, at which time complainants presented their
evidence. Petitioner Finman, though notified of this hearing, did not appear.
 The Secretary of Labor shall have the exclusive power to determine, decide,
order or direct payment from, or application of, the cash and surety bond for
any claim or injury covered and guaranteed by the bonds. (Emphasis
supplied).
The tenor and scope of petitioner Finman's obligations under the bond it issued are set out in
broad ranging terms by Section 4, Rule II, Book I of the POEA Rules and Regulations:
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. 1 (Emphasis supplied).
While petitioner Finman has refrained from attaching a copy of the bond it had issued to its
Petition for Certiorari, there can be no question that the conditions of the Finman surety bond
Pan Pacific had posted with the POEA include the italicized portions of Section 4, Rule 11, Book
I quoted above. It is settled doctrine that the conditions of a bond specified and required in the
provisions of the statute or regulation providing for the submission of the bond, are incorporated
or built into all bonds tendered under that statute or regulation, even though not there set out in
printer's ink. 2
In the case at bar, the POEA held, and the Secretary of Labor affirmed, that Pan Pacific had
violated Article 32 of the Labor Code, as amended
Article 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. (Emphasis supplied).
as well as Article 34 (a) of the same Code:
Article 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 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. (Emphasis supplied)
There is, hence, no question that, both under the Labor Code 3 and the POEA Rules and
Regulations, 4 Pan Pacific had violated at least one of the conditions for the grant and continued
use of the recruitment license granted to it. There can, similarly, be no question that the POEA
Administrator and the Secretary of Labor are authorized to require Pan Pacific to refund the
placement fees it had charged private respondents without securing employment for them and to
impose the fine of P60,000.00 upon Pan Pacific. Article 36 of the Labor Code authorizes the
Secretary of Labor "to restrict and regulate" the recruitment and placement activities of agencies
like Pan Pacific and "to issue orders and promulgate rules and regulations to carry out the
objectives and implement the provisions of [Title I on "Recruitment and Placement of Workers],"
including of course, Article 32 on "Fees to be paid by workers," quoted earlier. Upon the other
hand, Section 13 of Rule VI, Book I of the POEA Rules and Regulations expressly authorize the
POEA Administrator or the Secretary of Labor to impose fines "in addition to or in lieu of the
penalties of suspension or cancellation" of the violator recruitment agency's license.
If Pan Pacific is liable to private respondents for the refunds claimed by them and to the POEA
for the fine of P60,000.00, and if petitioner Finman is solidarily liable with Pan Pacific under the
operative terms of the bond, it must follow that Finman is liable both to the private respondents
and to the POEA. Petitioner Finman asserts, however, that the POEA had no authority to
implead it in the proceedings against Pan Pacific.
We are not persuaded by this assertion. Clearly, petitioner Finman is a party-in-interest in,
certainly a proper party to, the proceedings private respondents had initiated against Pan Pacific
the principal obligor. Since Pan Pacific had thoughtfully refrained from notifying the POEA of its
new address and from responding to the complaints, petitioner Finman may well I be regarded
as an indispensable party to the proceedings before the POEA. Whether Finman was an
indepensable or merely a proper party to the proceedings, we believe and so hold that the
POEA could properly implead it as party respondent either upon the request of the private
respondents or, as it happened, motu propio. Such is the situation under the Revised Rules of
Court 5 and the application thereof, directly or by analogy, by the POEA can certainly not be
regarded as arbitrary, oppressive or capricious.
The fundamental argument of Finman is that its liability under its own bond must be determined
and enforced, not by the POEA or the Secretary of Labor, but rather by the Insurance
Commission or by the regular courts. Once more, we are not moved by petitioner's argument.
There appears nothing so special or unique about the determination of a surety's liability under
its bond as to restrict that determination to the Office of the Insurance Commissioner and to the
regular courts of justice exclusively. The exact opposite is strongly stressed by the second
paragraph of Article 31 of the Labor Code:
Art. 31. Bonds. — ... ...
The secretary of Labor shall have the exclusive power to determine, decide,
order or direct payment from, or application of, the cash or surety bond for
any claim or injury covered and guaranteed by the bonds. (Emphasis
supplied)
We believe and so hold that to compel the POEA and private respondents the beneficiaries of
Finman's bond-to go to the Insurance Commissioner or to a regular court of law to enforce that
bond, would be to collide with the public policy which requires prompt resolution of claims
against private recruitment and placement agencies. The Court will take judicial notice of the
appealing frequency with which some, perhaps many, of such agencies have cheated workers
avid for overseas employment by, e.g., collecting placement fees without securing employment
for them at all, extracting exorbitant fees or "kickbacks" from those for whom employment is
actually obtained, abandoning hapless and unlettered workers to exploitative foreign principals,
and so on. Cash and surety bonds are required by the POEA and its predecessor agencies from
recruitment and employment companies precisely as a means of ensuring prompt and effective
recourse against such companies when held liable for applicants or workers' claims. Clearly that
public policy will be effectively negated if POEA and the Department of Labor and Employment (5) shall assume full and complete responsibility for all acts of its officials,
were held powerless to compel a surety company to make good on its solidary undertaking in employees and representatives done in connection with recruitment and
the same quasi-judicial proceeding where the liability of the principal obligor, the recruitment or placement.
employment agency, is determined and fixed and where the surety is given reasonable
opportunity to present any defenses it or the principal obligor may be entitled to set up. Petitioner
Also: Section 2, Rule VI, Book II:
surety whose liability to private respondents and the POEA is neither more nor less than that of
Pan Pacific, is not entitled to another or different procedure for determination or fixing of that
liability than that which Pan Pacific is entitled and subject to. Section 2. Grounds for Suspension, Cancellation or Revocation. — A
license or authority shall be cancelled, suspended or revoked on any of the
following grounds, among others:
WHEREFORE, the Petition for certiorari with prayer for preliminary injunction or temporary
restraining order is hereby DISMISSED for lack of merit. Costs against petitioner. This
Resolution is immediately executory. (a) Imposing or accepting directly or indirectly any amount of money, goods
or services, or any fee or bond in excess of what is prescribed by the
Administration;
Fernan, C.J., Gutierrez, Jr., Bidin and Cortes, JJ., concur.

xxxxxxxxx
 

(w) Violation of other pertinent provisions of the Labor Code and other
Footnotes
relevant laws, rules and regulations."

1 See also Section 4, Rule V, Book I of the Omnibus Rules Implementing

5 See Sections 6, 7, 8 and 11, Rule 3, Revised Rules of Court.
the Labor Code.

2 Thomas Yang v. Hon. Marcelino Valdez, et al., G.R. No. 73317,

promulgated August 31,1989; and Luzon T.J. Company v. Quebral, 127
SCRA 295 (1984).

3 Art 35. Suspension and/or Cancellation of License or 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 Minister of Labor, the Overseas Employment
Development Board, and the National Seamen Board, or for violations of the
provisions of this and other applicable laws, General Orders and Letters of
Instructions.

4 Section 1, (d) (2) and (5), Rule II, Book II:

Section 1. Requirements for Issuance of License and Authority. — Every

applicant for license or authority to operate a private employment agency,
private recruitment entity or manning agency shall submit a written
application together with the following requirements:

xxxxxxxxx

(d) A verified undertaking stating that the applicant:

xxxxxxxxx

(2) shall assume full and complete responsibility for all claims and liabilities
which may arise in connection with the use of license;

xxxxxxxxx

G.R. No. 170139               August 5, 2014
SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner,
vs.
JOY C. CABILES, Respondent.
DECISION
LEONEN, J.:
This case involves an overseas Filipino worker with shattered dreams. It is our duty, given the
facts and the law, to approximate justice for her.
We are asked to decide a petition for review 1 on certiorari assailing the Court of Appeals’
decision2 dated June 27, 2005. This decision partially affirmed the National Labor
RelationsCommission’s resolution dated March 31, 2004, 3 declaring respondent’s dismissal
illegal, directing petitioner to pay respondent’s three-month salary equivalent to New Taiwan
Dollar (NT$) 46,080.00, and ordering it to reimburse the NT$3,000.00 withheld from respondent,
and pay her NT$300.00 attorney’s fees.4
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement
agency.5 Responding to an ad it published, respondent, Joy C. Cabiles, submitted her
application for a quality control job in Taiwan.6
Joy’s application was accepted.7 Joy was later asked to sign a oneyear employment contract for
a monthly salary of NT$15,360.00.8 She alleged that Sameer Overseas Agency required her to
pay a placement fee of ₱70,000.00 when she signed the employment contract.9
Joy was deployed to work for TaiwanWacoal, Co. Ltd. (Wacoal) on June 26, 1997. 10 She alleged
that in her employment contract, she agreed to work as quality control for one year. 11 In Taiwan,
she was asked to work as a cutter.12
Sameer Overseas Placement Agencyclaims that on July 14, 1997, a certain Mr. Huwang from
Wacoal informedJoy, without prior notice, that she was terminated and that "she should
immediately report to their office to get her salary and passport." 13 She was asked to "prepare for
immediate repatriation."14
Joy claims that she was told that from June 26 to July 14, 1997, she only earned a total of
NT$9,000.15 According to her, Wacoal deducted NT$3,000 to cover her plane ticket to Manila.16
On October 15, 1997, Joy filed a complaint 17 with the National Labor Relations Commission
against petitioner and Wacoal. She claimed that she was illegally dismissed.18 She asked for the
return of her placement fee, the withheld amount for repatriation costs, payment of her salary for
23 months as well as moral and exemplary damages.19 She identified Wacoal as Sameer
Overseas Placement Agency’s foreign principal.20
Sameer Overseas Placement Agency alleged that respondent's termination was due to her
inefficiency, negligence in her duties, and her "failure to comply with the work requirements [of]
her foreign [employer]."21 The agency also claimed that it did not ask for a placement fee of
₱70,000.00.22 As evidence, it showedOfficial Receipt No. 14860 dated June 10, 1997, bearing
the amount of ₱20,360.00.23 Petitioner added that Wacoal's accreditation with petitioner had
already been transferred to the Pacific Manpower & Management Services, Inc. (Pacific) as of
August 6, 1997.24 Thus, petitioner asserts that it was already substituted by Pacific Manpower.25
Pacific Manpower moved for the dismissal of petitioner’s claims against it.26 It alleged that there
was no employer-employee relationship between them. 27 Therefore, the claims against it were
outside the jurisdiction of the Labor Arbiter.28 Pacific Manpower argued that the employment
contract should first be presented so that the employer’s contractual obligations might be
identified.29 It further denied that it assumed liability for petitioner’s illegal acts.30
On July 29, 1998, the Labor Arbiter dismissed Joy’s complaint. 31 Acting Executive Labor Arbiter
Pedro C.Ramos ruled that her complaint was based on mereallegations. 32 The Labor Arbiter
found that there was no excess payment of placement fees, based on the official receipt
presented by petitioner.33 The Labor Arbiter found unnecessary a discussion on petitioner’s
transfer of obligations to Pacific34 and considered the matter immaterial in view of the dismissal
of respondent’s complaint.35
Joy appealed36 to the National Labor Relations Commission.
In a resolution37 dated March 31, 2004, the National Labor Relations Commission declared that
Joy was illegally dismissed.38 It reiterated the doctrine that the burden of proof to show that the
dismissal was based on a just or valid cause belongs to the employer. 39 It found that Sameer
Overseas Placement Agency failed to prove that there were just causes for termination. 40 There
was no sufficient proofto show that respondent was inefficient in her work and that she failed to
comply with company requirements.41 Furthermore, procedural dueprocess was not observed in
terminating respondent.42
The National Labor Relations Commission did not rule on the issue of reimbursement of
placement fees for lack of jurisdiction.43 It refused to entertain the issue of the alleged transfer of
obligations to Pacific.44 It did not acquire jurisdiction over that issue because Sameer Overseas
Placement Agency failed to appeal the Labor Arbiter’s decision not to rule on the matter.45
The National Labor Relations Commission awarded respondent only three (3) months worth of
salaryin the amount of NT$46,080, the reimbursement of the NT$3,000 withheld from her, and
attorney’s fees of NT$300.46
The Commission denied the agency’s motion for reconsideration47 dated May 12, 2004 through a
resolution48 dated July 2, 2004.
Aggrieved by the ruling, Sameer Overseas Placement Agency caused the filing of a petition 49 for
certiorari with the Court of Appeals assailing the National Labor Relations Commission’s
resolutions dated March 31, 2004 and July 2, 2004.
The Court of Appeals50 affirmed the decision of the National Labor Relations Commission with
respect to the finding of illegal dismissal, Joy’s entitlement to the equivalent of three months
worth of salary, reimbursement of withheld repatriation expense, and attorney’s fees.51 The Court
of Appeals remanded the case to the National Labor Relations Commission to address the
validity of petitioner's allegations against Pacific.52 The Court of Appeals held, thus: Although the
public respondent found the dismissal of the complainant-respondent illegal, we should point out
that the NLRC merely awarded her three (3) months backwages or the amount of
NT$46,080.00, which was based upon its finding that she was dismissed without due process, a This prerogative, however, should not be abused. It is "tempered with the employee’s right to
finding that we uphold, given petitioner’s lack of worthwhile discussion upon the same in the security of tenure."63 Workers are entitled to substantive and procedural due process before
proceedings below or before us. Likewise we sustain NLRC’s finding in regard to the termination. They may not be removed from employment without a validor just cause as
reimbursement of her fare, which is squarely based on the law; as well as the award of determined by law and without going through the proper procedure.
attorney’s fees.
Security of tenure for labor is guaranteed by our Constitution.64
But we do find it necessary to remand the instant case to the public respondent for further
proceedings, for the purpose of addressing the validity or propriety of petitioner’s third-party
Employees are not stripped of their security of tenure when they move to work in a different
complaint against the transferee agent or the Pacific Manpower & Management Services, Inc.
jurisdiction. With respect to the rights of overseas Filipino workers, we follow the principle of lex
and Lea G. Manabat. We should emphasize that as far as the decision of the NLRC on the
loci contractus.Thus, in Triple Eight Integrated Services, Inc. v. NLRC,65 this court noted:
claims of Joy Cabiles, is concerned, the same is hereby affirmed with finality, and we hold
petitioner liable thereon, but without prejudice to further hearings on its third party complaint
against Pacific for reimbursement. Petitioner likewise attempts to sidestep the medical certificate requirement by contending that
since Osdana was working in Saudi Arabia, her employment was subject to the laws of the host
country. Apparently, petitioner hopes tomake it appear that the labor laws of Saudi Arabia do not
WHEREFORE, premises considered, the assailed Resolutions are hereby partly AFFIRMED in
require any certification by a competent public health authority in the dismissal of employees due
accordance with the foregoing discussion, but subject to the caveat embodied inthe last
to illness.
sentence. No costs.

Again, petitioner’s argument is without merit.

SO ORDERED.53

Dissatisfied, Sameer Overseas Placement Agency filed this petition.54
We are asked to determine whether the Court of Appeals erred when it affirmed the ruling of the
National Labor Relations Commission finding respondent illegally dismissed and awarding her
three months’ worth of salary, the reimbursement of the cost ofher repatriation, and attorney’s
fees despite the alleged existence of just causes of termination.
First, established is the rule that lex loci contractus (the law of the place where the contract is
made) governs in this jurisdiction. There is no question that the contract of employment in this
case was perfected here in the Philippines. Therefore, the Labor Code, its implementing rules
and regulations, and other laws affecting labor apply in this case.Furthermore, settled is the rule
that the courts of the forum will not enforce any foreign claim obnoxious to the forum’s public
policy. Herein the Philippines, employment agreements are more than contractual in nature. The
Constitution itself, in Article XIII, Section 3, guarantees the special protection of workers, to wit:

Petitioner reiterates that there was just cause for termination because there was a finding of The State shall afford full protection to labor, local and overseas, organized and unorganized,
Wacoal that respondent was inefficient in her work.55 and promote full employment and equality of employment opportunities for all.

Therefore, it claims that respondent’s dismissal was valid.56 It shall guarantee the rights of all workers to selforganization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with
law. They shall be entitled to security of tenure, humane conditions of work, and a living wage.
Petitioner also reiterates that since Wacoal’s accreditation was validly transferred to Pacific at
Theyshall also participate in policy and decision-making processes affecting their rights and
the time respondent filed her complaint, it should be Pacific that should now assume
benefits as may be provided by law.
responsibility for Wacoal’s contractual obligations to the workers originally recruited by
petitioner.57
....
Sameer Overseas Placement Agency’spetition is without merit. We find for respondent.
This public policy should be borne in mind in this case because to allow foreign employers to
determine for and by themselves whether an overseas contract worker may be dismissed on the
I
ground of illness would encourage illegal or arbitrary pretermination of employment
contracts.66 (Emphasis supplied, citation omitted)
Sameer Overseas Placement Agency failed to show that there was just cause for causing Joy’s
dismissal. The employer, Wacoal, also failed to accord her due process of law.
Even with respect to fundamental procedural rights, this court emphasized in PCL Shipping
Philippines, Inc. v. NLRC,67 to wit:
Indeed, employers have the prerogative to impose productivity and quality standards at
work.58 They may also impose reasonable rules to ensure that the employees comply with these
Petitioners admit that they did notinform private respondent in writing of the charges against him
standards.59 Failure to comply may be a just cause for their dismissal. 60 Certainly, employers
and that they failed to conduct a formal investigation to give him opportunity to air his side.
cannot be compelled to retain the services of anemployee who is guilty of acts that are inimical
However, petitioners contend that the twin requirements ofnotice and hearing applies strictly only
to the interest of the employer.61 While the law acknowledges the plight and vulnerability of
when the employment is within the Philippines and that these need not be strictly observed in
workers, it does not "authorize the oppression or self-destruction of the
cases of international maritime or overseas employment.
employer."62 Management prerogative is recognized in law and in our jurisprudence.
The Court does not agree. The provisions of the Constitution as well as the Labor Code which
afford protection to labor apply to Filipino employees whether working within the Philippines or
abroad. Moreover, the principle of lex loci contractus (the law of the place where the contract is
made) governs in this jurisdiction. In the present case, it is not disputed that the Contract of
Employment entered into by and between petitioners and private respondent was executed here
in the Philippines with the approval of the Philippine Overseas Employment Administration
(POEA). Hence, the Labor Code together with its implementing rules and regulations and other
laws affecting labor apply in this case.68 (Emphasis supplied, citations omitted)
By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or authorized
cause and after compliance with procedural due process requirements.
Article 282 of the Labor Code enumerates the just causes of termination by the employer. Thus:
Art. 282. Termination by employer. An employer may terminate an employment for any of the
following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and
(e) Other causes analogous to the foregoing.
Petitioner’s allegation that respondentwas inefficient in her work and negligent in her
duties69 may, therefore, constitute a just cause for termination under Article 282(b), but only if
petitioner was able to prove it.
The burden of proving that there is just cause for termination is on the employer. "The employer
must affirmatively show rationally adequate evidence that the dismissal was for a justifiable
cause."70 Failure to show that there was valid or just cause for termination would necessarily
mean that the dismissal was illegal.71
To show that dismissal resulting from inefficiency in work is valid, it must be shown that: 1) the
employer has set standards of conduct and workmanship against which the employee will be
judged; 2) the standards of conduct and workmanship must have been communicated tothe
employee; and 3) the communication was made at a reasonable time prior to the employee’s
performance assessment.
This is similar to the law and jurisprudence on probationary employees, which allow termination
ofthe employee only when there is "just cause or when [the probationary employee] fails to
qualify as a regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of his [or her] engagement."72
However, we do not see why the application of that ruling should be limited to probationary
employment. That rule is basic to the idea of security of tenure and due process, which are
guaranteed to all employees, whether their employment is probationary or regular.
The pre-determined standards that the employer sets are the bases for determining the
probationary employee’s fitness, propriety, efficiency, and qualifications as a regular employee.
Due process requires that the probationary employee be informed of such standards at the time
of his or her engagement so he or she can adjusthis or her character or workmanship
accordingly. Proper adjustment to fit the standards upon which the employee’s qualifications will
be evaluated will increase one’s chances of being positively assessed for regularization by his or
her employer.
Assessing an employee’s work performance does not stop after regularization. The employer, on
a regular basis, determines if an employee is still qualified and efficient, based on work
standards. Based on that determination, and after complying with the due process requirements
of notice and hearing, the employer may exercise its management prerogative of terminating the
employee found unqualified.
The regular employee must constantlyattempt to prove to his or her employer that he or she
meets all the standards for employment. This time, however, the standards to be met are set for
the purpose of retaining employment or promotion. The employee cannot be expected to meet
any standard of character or workmanship if such standards were not communicated to him or
her. Courts should remain vigilant on allegations of the employer’s failure to communicatework
standards that would govern one’s employment "if [these are] to discharge in good faith [their]
duty to adjudicate."73
In this case, petitioner merely alleged that respondent failed to comply with her foreign
employer’s work requirements and was inefficient in her work. 74 No evidence was shown to
support such allegations. Petitioner did not even bother to specify what requirements were not
met, what efficiency standards were violated, or what particular acts of respondent constituted
inefficiency.
There was also no showing that respondent was sufficiently informed of the standards against
which her work efficiency and performance were judged. The parties’ conflict as to the position
held by respondent showed that even the matter as basic as the job title was not clear.
The bare allegations of petitioner are not sufficient to support a claim that there is just cause for
termination. There is no proof that respondent was legally terminated.
Petitioner failed to comply with
the due process requirements
Respondent’s dismissal less than one year from hiring and her repatriation on the same day
show not onlyfailure on the partof petitioner to comply with the requirement of the existence of
just cause for termination. They patently show that the employersdid not comply with the due
process requirement.
A valid dismissal requires both a valid cause and adherence to the valid procedure of
dismissal.75 The employer is required to give the charged employee at least two written notices
before termination.76 One of the written notices must inform the employee of the particular acts
that may cause his or her dismissal.77 The other notice must "[inform] the employee of the
employer’s decision."78 Aside from the notice requirement, the employee must also be given "an
opportunity to be heard."79
Petitioner failed to comply with the twin notices and hearing requirements. Respondent started
working on June 26, 1997. She was told that she was terminated on July 14, 1997 effective on
the same day and barely a month from her first workday. She was also repatriated on the same
day that she was informed of her termination. The abruptness of the termination negated any
finding that she was properly notified and given the opportunity to be heard. Her constitutional
right to due process of law was violated.
II
Respondent Joy Cabiles, having been illegally dismissed, is entitled to her salary for the
unexpired portion ofthe employment contract that was violated together with attorney’s fees and
reimbursement of amounts withheld from her salary.
Section 10 of Republic Act No. 8042,otherwise known as the Migrant Workers and Overseas
Filipinos Act of1995, states thatoverseas workers who were terminated without just, valid, or
authorized cause "shall be entitled to the full reimbursement of his placement fee with interest of
twelve (12%) per annum, plus his salaries for the unexpired portion of his employment contract
or for three (3) months for every year of the unexpired term, whichever is less."
Sec. 10. MONEY CLAIMS. – Notwithstanding any provision of law to the contrary, the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after filing of the
complaint, the claims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages.
The liability of the principal/employer and the recruitment/placement agency for any and all
claims under this section shall be joint and several. This provisions [sic] shall be incorporated in
the contract for overseas employment and shall be a condition precedent for its approval. The
performance bond to be filed by the recruitment/placementagency, as provided by law, shall be
answerable for all money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and directors and
partners as the case may be, shall themselves be jointly and solidarily liable with the corporation
orpartnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period or duration of the employment contract and
shall not be affected by any substitution, amendment or modification made locally or in a foreign
country of the said contract.
Any compromise/amicable settlement or voluntary agreement on money claims inclusive of
damages under this section shall be paid within four (4) months from the approval of the
settlement by the appropriate authority.
In case of termination of overseas employment without just, valid or authorized cause as defined
by law or contract, the workers shall be entitled to the full reimbursement of his placement fee
with interest of twelve (12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the unexpired term, whichever is
less.
....
(Emphasis supplied)
Section 15 of Republic Act No. 8042 states that "repatriation of the worker and the transport of
his [or her] personal belongings shall be the primary responsibility of the agency which recruited
or deployed the worker overseas." The exception is when "termination of employment is due
solely to the fault of the worker,"80 which as we have established, is not the case. It reads: SEC.
15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND. – The repatriation
of the worker and the transport of his personal belongings shall be the primary responsibility of
the agency which recruited or deployed the worker overseas. All costs attendant to repatriation
shall be borne by or charged to the agency concerned and/or its principal. Likewise, the
repatriation of remains and transport of the personal belongings of a deceased worker and all
costs attendant thereto shall be borne by the principal and/or local agency. However, in cases
where the termination of employment is due solely to the fault of the worker, the
principal/employer or agency shall not in any manner be responsible for the repatriation of the
former and/or his belongings.
....
The Labor Code81 also entitles the employee to 10% of the amount of withheld wages as
attorney’s feeswhen the withholding is unlawful.
The Court of Appeals affirmedthe National Labor Relations Commission’s decision to award
respondent NT$46,080.00 or the threemonth equivalent of her salary, attorney’s fees of
NT$300.00, and the reimbursement of the withheld NT$3,000.00 salary, which answered for her
repatriation.
We uphold the finding that respondent is entitled to all of these awards. The award of the three-
month equivalent of respondent’s salary should, however, be increased to the amount equivalent
to the unexpired term of the employment contract.
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., 82 this court ruled
that the clause "or for three (3) months for every year of the unexpired term, whichever is
less"83 is unconstitutional for violating the equal protection clause and substantive due process.84
A statute or provision which was declared unconstitutional is not a law. It "confers no rights; it
imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has not
been passed at all."85
We are aware that the clause "or for three (3) months for every year of the unexpired term,
whichever is less"was reinstated in Republic Act No. 8042 upon promulgation of Republic Act
No. 10022 in 2010. Section 7 of Republic Act No. 10022 provides:
Section 7.Section 10 of Republic Act No. 8042, as amended, is hereby amended to read as
follows:
SEC. 10. Money Claims.– Notwithstanding any provision of law to the contrary, the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the
complaint, the claims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damage. Consistent with this mandate, the NLRC shall endeavor
to update and keep abreast with the developments in the global services industry.
The liability of the principal/employer and the recruitment/placement agency for any and all
claims under this section shall be joint and several. This provision shall be incorporated in the
contract for overseas employment and shall be a condition precedent for its approval. The However, we are confronted with a unique situation. The law passed incorporates the exact
performance bond to de [sic] filed by the recruitment/placement agency, as provided by law, clause already declared as unconstitutional, without any perceived substantial change in the
shall be answerable for all money claims or damages that may be awarded to the workers. If the circumstances.
recruitment/placement agency is a juridical being, the corporate officers and directors and
partners as the case may be, shall themselves be jointly and solidarily liable with the corporation
This may cause confusion on the part of the National Labor Relations Commission and the Court
or partnership for the aforesaid claims and damages.
of Appeals.At minimum, the existence of Republic Act No. 10022 may delay the execution of the
judgment in this case, further frustrating remedies to assuage the wrong done to petitioner.
Such liabilities shall continue during the entire period or duration of the employment contract and
shall not be affected by any substitution, amendment or modification made locally or in a foreign
Hence, there is a necessity to decide this constitutional issue.
country of the said contract.

Moreover, this court is possessed with the constitutional duty to "[p]romulgate rules concerning
Any compromise/amicable settlement or voluntary agreement on money claims inclusive of
the protection and enforcement of constitutional rights." 87 When cases become mootand
damages under this section shall be paid within thirty (30) days from approval of the settlement
academic, we do not hesitate to provide for guidance to bench and bar in situations where the
by the appropriate authority.
same violations are capable of repetition but will evade review. This is analogous to cases where
there are millions of Filipinos working abroad who are bound to suffer from the lack of protection
In case of termination of overseas employment without just, valid or authorized cause as defined because of the restoration of an identical clause in a provision previously declared as
by law or contract, or any unauthorized deductions from the migrant worker’s salary, the worker unconstitutional.
shall be entitled to the full reimbursement if [sic] his placement fee and the deductions made with
interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his
In the hierarchy of laws, the Constitution is supreme. No branch or office of the government may
employment contract or for three (3) months for every year of the unexpired term, whichever is
exercise its powers in any manner inconsistent with the Constitution, regardless of the existence
less.
of any law that supports such exercise. The Constitution cannot be trumped by any other law. All
laws must be read in light of the Constitution. Any law that is inconsistent with it is a nullity.
In case of a final and executory judgement against a foreign employer/principal, it shall be
automatically disqualified, without further proceedings, from participating in the Philippine
Thus, when a law or a provision of law is null because it is inconsistent with the Constitution,the
Overseas Employment Program and from recruiting and hiring Filipino workers until and unless it
nullity cannot be cured by reincorporation or reenactment of the same or a similar law or
fully satisfies the judgement award.
provision. A law or provision of law that was already declared unconstitutional remains as such
unless circumstances have sochanged as to warrant a reverse conclusion.
Noncompliance with the mandatory periods for resolutions of case providedunder this section
shall subject the responsible officials to any or all of the following penalties:
We are not convinced by the pleadings submitted by the parties that the situation has so
changed so as to cause us to reverse binding precedent.
(a) The salary of any such official who fails to render his decision or resolution within
the prescribed period shall be, or caused to be, withheld until the said official complies
Likewise, there are special reasons of judicial efficiency and economy that attend to these
therewith;
cases. The new law puts our overseas workers in the same vulnerable position as they were
prior to Serrano. Failure to reiterate the very ratio decidendi of that case will result in the same
(b) Suspension for not more than ninety (90) days; or untold economic hardships that our reading of the Constitution intended to avoid. Obviously, we
cannot countenance added expenses for further litigation thatwill reduce their hardearned wages
as well as add to the indignity of having been deprived of the protection of our laws simply
(c) Dismissal from the service with disqualification to hold any appointive public office
because our precedents have not been followed. There is no constitutional doctrine that causes
for five (5) years.
injustice in the face of empty procedural niceties. Constitutional interpretation is complex, but it is
never unreasonable.
Provided, however,That the penalties herein provided shall be without prejudice to any liability
which any such official may have incured [sic] under other existing laws or rules and regulations
Thus, in a resolution88 dated October 22, 2013, we ordered the parties and the Office of the
as a consequence of violating the provisions of this paragraph. (Emphasis supplied)
Solicitor General to comment on the constitutionality of the reinstated clause in Republic Act No.
10022.
Republic Act No. 10022 was promulgated on March 8, 2010. This means that the reinstatement
of the clause in Republic Act No. 8042 was not yet in effect at the time of respondent’s
In its comment,89 petitioner argued that the clause was constitutional.90 The legislators intended
termination from work in 1997. 86 Republic Act No. 8042 before it was amended byRepublic Act
a balance between the employers’ and the employees’ rights by not unduly burdening the local
No. 10022 governs this case.
recruitment agency.91 Petitioner is also of the view that the clause was already declared as
constitutional in Serrano.92
When a law is passed, this court awaits an actual case that clearly raises adversarial positions in
their proper context before considering a prayer to declare it as unconstitutional.
The Office of the Solicitor General also argued that the clause was valid and
constitutional.93 However, since the parties never raised the issue of the constitutionality of the
clause asreinstated in Republic Act No. 10022, its contention is that it is beyond judicial review.94
On the other hand, respondentargued that the clause was unconstitutional because it infringed
on workers’ right to contract.95
We observe that the reinstated clause, this time as provided in Republic Act. No. 10022, violates
the constitutional rights to equal protection and due process. 96 Petitioner as well as the Solicitor
General have failed to show any compelling changein the circumstances that would warrant us
to revisit the precedent.
We reiterate our finding in Serrano v. Gallant Maritime that limiting wages that should be
recovered by anillegally dismissed overseas worker to three months is both a violation of due
process and the equal protection clauses of the Constitution.
Equal protection of the law is a guarantee that persons under like circumstances and falling
within the same class are treated alike, in terms of "privileges conferred and liabilities
enforced."97 It is a guarantee against "undue favor and individual or class privilege, as well as
hostile discrimination or the oppression of inequality."98
In creating laws, the legislature has the power "to make distinctions and classifications."99
In exercising such power, it has a wide discretion.100
101
The equal protection clause does not infringe on this legislative power.  A law is void on this
basis, only if classifications are made arbitrarily.102 There is no violation of the equal protection
clause if the law applies equally to persons within the same class and if there are reasonable
grounds for distinguishing between those falling within the class and those who do not fall within
the class.103 A law that does not violate the equal protection clause prescribesa reasonable
classification.104
A reasonable classification "(1) must rest on substantial distinctions; (2) must be germane to the
purposes of the law; (3) must not be limited to existing conditions only; and (4) must apply
equally to all members of the same class."105
The reinstated clause does not satisfy the requirement of reasonable classification.
In Serrano, we identified the classifications made by the reinstated clause. It distinguished
between fixed-period overseas workers and fixedperiod local workers. 106 It also distinguished
between overseas workers with employment contracts of less than one year and overseas
workers with employment contracts of at least one year. 107 Within the class of overseas workers
with at least one-year employment contracts, there was a distinction between those with at least
a year left in their contracts and those with less than a year left in their contracts when they were
illegally dismissed.108
The Congress’ classification may be subjected to judicial review. In Serrano, there is a
"legislative classification which impermissibly interferes with the exercise of a fundamental right
or operates to the peculiar disadvantage of a suspect class."109
Under the Constitution, labor is afforded special protection.110 Thus, this court in Serrano,
"[i]mbued with the same sense of ‘obligation to afford protection to labor,’ . . . employ[ed] the
standard of strict judicial scrutiny, for it perceive[d] in the subject clause a suspect classification
prejudicial to OFWs."111
We also noted in Serranothat before the passage of Republic Act No. 8042, the money claims of
illegally terminated overseas and local workers with fixed-term employment werecomputed in the
same manner.112 Their money claims were computed based onthe "unexpired portions of their
contracts."113 The adoption of the reinstated clause in Republic Act No. 8042 subjected the
money claims of illegally dismissed overseas workers with an unexpired term of at least a year
to a cap of three months worth of their salary. 114 There was no such limitation on the money
claims of illegally terminated local workers with fixed-term employment.115
We observed that illegally dismissed overseas workers whose employment contracts had a term
of less than one year were granted the amount equivalent to the unexpired portion of their
employment contracts.116 Meanwhile, illegally dismissed overseas workers with employment
terms of at least a year were granted a cap equivalent to three months of their salary for the
unexpired portions of their contracts.117
Observing the terminologies used inthe clause, we also found that "the subject clause creates a
sub-layer of discrimination among OFWs whose contract periods are for more than one year:
those who are illegally dismissed with less than one year left in their contracts shall be entitled to
their salaries for the entire unexpired portion thereof, while those who are illegally dismissed with
one year or more remaining in their contracts shall be covered by the reinstated clause, and their
monetary benefits limited to their salaries for three months only."118
We do not need strict scrutiny to conclude that these classifications do not rest on any real or
substantial distinctions that would justify different treatments in terms of the computation of
money claims resulting from illegal termination.
Overseas workers regardless of their classifications are entitled to security of tenure, at least for
the period agreed upon in their contracts. This means that they cannot be dismissed before the
end of their contract terms without due process. If they were illegally dismissed, the workers’
right to security of tenure is violated.
The rights violated when, say, a fixed-period local worker is illegally terminated are neither
greater than norless than the rights violated when a fixed-period overseas worker is illegally
terminated. It is state policy to protect the rights of workers withoutqualification as to the place of
employment.119 In both cases, the workers are deprived of their expected salary, which they
could have earned had they not been illegally dismissed. For both workers, this deprivation
translates to economic insecurity and disparity. 120 The same is true for the distinctions between
overseas workers with an employment contract of less than one year and overseas workers with
at least one year of employment contract, and between overseas workers with at least a year left
in their contracts and overseas workers with less than a year left in their contracts when they
were illegally dismissed.
For this reason, we cannot subscribe to the argument that "[overseas workers] are contractual
employeeswho can never acquire regular employment status, unlike local workers"121 because it
already justifies differentiated treatment in terms ofthe computation of money claims.122
Likewise, the jurisdictional and enforcement issues on overseas workers’ money claims do not
justify a differentiated treatment in the computation of their money claims.123 If anything, these
issues justify an equal, if not greater protection and assistance to overseas workers who
generally are more prone to exploitation given their physical distance from our government.
We also find that the classificationsare not relevant to the purpose of the law, which is to
"establish a higher standard of protection and promotion of the welfare of migrant workers, their
families and overseas Filipinos in distress, and for other purposes." 124 Further, we find specious
the argument that reducing the liability of placement agencies "redounds to the benefit of the
[overseas] workers."125
Putting a cap on the money claims of certain overseas workers does not increase the standard
of protection afforded to them. On the other hand, foreign employers are more incentivizedby the
reinstated clause to enter into contracts of at least a year because it gives them more flexibility
to violate our overseas workers’ rights. Their liability for arbitrarily terminating overseas workers
is decreased at the expense of the workers whose rights they violated. Meanwhile, these
overseas workers who are impressed with an expectation of a stable job overseas for the longer
contract period disregard other opportunities only to be terminated earlier. They are left with
claims that are less than what others in the same situation would receive. The reinstated clause,
therefore, creates a situation where the law meant to protect them makes violation of rights
easier and simply benign to the violator.
As Justice Brion said in his concurring opinion in Serrano:
Section 10 of R.A. No. 8042 affects these well-laid rules and measures, and in fact provides a
hidden twist affecting the principal/employer’s liability. While intended as an incentive accruing to
recruitment/manning agencies, the law, as worded, simply limits the OFWs’ recovery in
wrongfuldismissal situations. Thus, it redounds to the benefit of whoever may be liable, including
the principal/employer – the direct employer primarily liable for the wrongful dismissal. In this
sense, Section 10 – read as a grant of incentives to recruitment/manning agencies – oversteps
what it aims to do by effectively limiting what is otherwise the full liability of the foreign
principals/employers. Section 10, in short, really operates to benefit the wrong party and allows
that party, without justifiable reason, to mitigate its liability for wrongful dismissals. Because of
this hidden twist, the limitation ofliability under Section 10 cannot be an "appropriate" incentive,
to borrow the term that R.A. No. 8042 itself uses to describe the incentive it envisions under its
purpose clause.
What worsens the situation is the chosen mode of granting the incentive: instead of a grant that,
to encourage greater efforts at recruitment, is directly related to extra efforts undertaken, the law
simply limits their liability for the wrongful dismissals of already deployed OFWs. This is
effectively a legally-imposed partial condonation of their liability to OFWs, justified solely by the
law’s intent to encourage greater deployment efforts. Thus, the incentive,from a more practical
and realistic view, is really part of a scheme to sell Filipino overseas labor at a bargain for
purposes solely of attracting the market. . . .
The so-called incentive is rendered particularly odious by its effect on the OFWs — the benefits
accruing to the recruitment/manning agencies and their principals are takenfrom the pockets of
the OFWs to whom the full salaries for the unexpired portion of the contract rightfully belong.
Thus, the principals/employers and the recruitment/manning agencies even profit from their
violation of the security of tenure that an employment contract embodies. Conversely, lesser
protection is afforded the OFW, not only because of the lessened recovery afforded him or her
by operation of law, but also because this same lessened recovery renders a wrongful dismissal
easier and less onerous to undertake; the lesser cost of dismissing a Filipino will always bea
consideration a foreign employer will take into account in termination of employment
decisions. . . .126
Further, "[t]here can never be a justification for any form of government action that alleviates the
burden of one sector, but imposes the same burden on another sector, especially when the
favored sector is composed of private businesses suchas placement agencies, while the
disadvantaged sector is composed ofOFWs whose protection no less than the Constitution
commands. The idea thatprivate business interest can be elevated to the level of a compelling
state interest is odious."127
Along the same line, we held that the reinstated clause violates due process rights. It is arbitrary
as it deprives overseas workers of their monetary claims without any discernable valid
purpose.128
Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her contract, in
accordance with Section 10 of Republic Act No. 8042. The award of the three-month
equivalence of respondent’s salary must be modified accordingly. Since she started working on
June 26, 1997 and was terminated on July 14, 1997, respondent is entitled to her salary from
July 15, 1997 to June 25, 1998. "To rule otherwise would be iniquitous to petitioner and other
OFWs, and would,in effect, send a wrong signal that principals/employers and
recruitment/manning agencies may violate an OFW’s security of tenure which an employment
contract embodies and actually profit from such violation based on an unconstitutional provision
of law."129
III
On the interest rate, the Bangko Sentral ng Pilipinas Circular No. 799 of June 21, 2013, which
revised the interest rate for loan or forbearance from 12% to 6% in the absence of
stipulation,applies in this case. The pertinent portions of Circular No. 799, Series of 2013, read:
The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the following
revisions governing the rate of interest in the absence of stipulation in loan contracts, thereby
amending Section 2 of Circular No. 905, Series of 1982:
Section 1. The rate of interest for the loan or forbearance of any money, goods or credits and the
rate allowed in judgments, in the absence of an express contract as to such rateof interest, shall
be six percent (6%) per annum.
Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations for Banks and
Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank Financial
Institutions are hereby amended accordingly.
This Circular shall take effect on 1 July 2013.
Through the able ponencia of Justice Diosdado Peralta, we laid down the guidelines in
computing legal interest in Nacar v. Gallery Frames:130
II. With regard particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money,
i.e., a loan or forbearance of money, the interest due should be that which may have
been stipulated in writing. Furthermore, the interest due shall itself earn legal interest
from the time it is judicially demanded. In the absence of stipulation, the rate of
interest shall be 6% per annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached,
an interest on the amount of damages awarded may be imposed at the discretion of
the court at the rate of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages, except when or until the demand can be established
with reasonable certainty. Accordingly, where the demand is established with
reasonable certainty, the interest shall begin to run from the time the claim is made
 judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be Finally, we clarify the liabilities ofWacoal as principal and petitioner as the employment agency
so reasonably established at the time the demand is made, the interest shall begin to that facilitated respondent’s overseas employment.
run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The
Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 provides that the foreign
actual base for the computation of legal interest shall, in any case, be on the amount
employer and the local employment agency are jointly and severally liable for money claims
finally adjudged. 3. When the judgment of the court awarding a sum of money
including claims arising out of an employer-employee relationship and/or damages. This section
becomes final and executory, the rate of legal interest, whether the case falls under
also provides that the performance bond filed by the local agency shall be answerable for such
paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its
money claims or damages if they were awarded to the employee.
satisfaction, this interim period being deemed to be by then an equivalent to a
forbearance of credit.
This provision is in line with the state’s policy of affording protection to labor and alleviating
workers’ plight.136
And, in addition to the above, judgments that have become final and executory prior to July 1,
2013, shall not be disturbed and shall continue to be implemented applying the rate of interest
fixed therein.131 In overseas employment, the filing of money claims against the foreign employer is attended by
practical and legal complications.1âwphi1 The distance of the foreign employer alonemakes it
difficult for an overseas worker to reach it and make it liable for violations of the Labor Code.
Circular No. 799 is applicable only in loans and forbearance of money, goods, or credits, and in
There are also possible conflict of laws, jurisdictional issues, and procedural rules that may be
judgments when there is no stipulation on the applicable interest rate. Further, it is only
raised to frustrate an overseas worker’sattempt to advance his or her claims.
applicable if the judgment did not become final and executory before July 1, 2013.132

It may be argued, for instance, that the foreign employer must be impleaded in the complaint as
We add that Circular No. 799 is not applicable when there is a law that states otherwise. While
an indispensable party without which no final determination can be had of an action.137
the Bangko Sentral ng Pilipinas has the power to set or limit interest rates,133 these interest rates
do not apply when the law provides that a different interest rate shall be applied. "[A] Central
Bank Circular cannot repeal a law. Only a law can repeal another law."134 The provision on joint and several liability in the Migrant Workers and Overseas Filipinos Act of
1995 assures overseas workers that their rights will not be frustrated with these complications.
The fundamental effect of joint and several liability is that "each of the debtors is liable for the
For example, Section 10 of Republic Act No. 8042 provides that unlawfully terminated overseas
entire obligation."138 A final determination may, therefore, be achieved even if only oneof the joint
workers are entitled to the reimbursement of his or her placement fee with an interest of 12% per
and several debtors are impleaded in an action. Hence, in the case of overseas employment,
annum. Since Bangko Sentral ng Pilipinas circulars cannotrepeal Republic Act No. 8042, the
either the local agency or the foreign employer may be sued for all claims arising from the
issuance of Circular No. 799 does not have the effect of changing the interest on awards for
foreign employer’s labor law violations. This way, the overseas workers are assured that
reimbursement of placement fees from 12% to 6%. This is despite Section 1 of Circular No. 799,
someone — the foreign employer’s local agent — may be made to answer for violationsthat the
which provides that the 6% interest rate applies even to judgments.
foreign employer may have committed.

Moreover, laws are deemed incorporated in contracts. "The contracting parties need not repeat
The Migrant Workers and Overseas Filipinos Act of 1995 ensures that overseas workers have
them. They do not even have to be referred to. Every contract, thus, contains not only what has
recourse in law despite the circumstances of their employment. By providing that the liability of
been explicitly stipulated, but the statutory provisions that have any bearing on the
the foreign employer may be "enforced to the full extent" 139 against the local agent,the overseas
matter."135 There is, therefore, an implied stipulation in contracts between the placement agency
worker is assured of immediate and sufficientpayment of what is due them.140
and the overseasworker that in case the overseas worker is adjudged as entitled to
reimbursement of his or her placement fees, the amount shall be subject to a 12% interest per
annum. This implied stipulation has the effect of removing awards for reimbursement of Corollary to the assurance of immediate recourse in law, the provision on joint and several
placement fees from Circular No. 799’s coverage. liability in the Migrant Workers and Overseas Filipinos Act of 1995 shifts the burden of going
after the foreign employer from the overseas worker to the local employment agency. However,
it must be emphasized that the local agency that is held to answer for the overseas worker’s
The same cannot be said for awardsof salary for the unexpired portion of the employment
money claims is not leftwithout remedy. The law does not preclude it from going after the foreign
contract under Republic Act No. 8042. These awards are covered by Circular No. 799 because
employer for reimbursement of whatever payment it has made to the employee to answer for the
the law does not provide for a specific interest rate that should apply.
money claims against the foreign employer.

In sum, if judgment did not become final and executory before July 1, 2013 and there was no
stipulation in the contract providing for a different interest rate, other money claims under
Section 10 of Republic Act No. 8042 shall be subject to the 6% interest per annum in
accordance with Circular No. 799.
This means that respondent is also entitled to an interest of 6% per annum on her money claims
from the finality of this judgment.
IV
A further implication of making localagencies jointly and severally liable with the foreign
employer is thatan additional layer of protection is afforded to overseas workers. Local agencies,
which are businesses by nature, are inoculated with interest in being always on the lookout
against foreign employers that tend to violate labor law. Lest they risk their reputation or
finances, local agenciesmust already have mechanisms for guarding against unscrupulous
foreign employers even at the level prior to overseas employment applications.
With the present state of the pleadings, it is not possible to determine whether there was indeed
a transfer of obligations from petitioner to Pacific. This should not be an obstacle for the
respondent overseas worker to proceed with the enforcement of this judgment. Petitioner is
possessed with the resources to determine the proper legal remedies to enforce its rights SO ORDERED.
against Pacific, if any.
MARVIC MARIO VICTOR F. LEONEN
V Associate Justice

Many times, this court has spoken on what Filipinos may encounter as they travel into the WE CONCUR:
farthest and mostdifficult reaches of our planet to provide for their families. In Prieto v. NLRC:141
(On Leave)
The Court is not unaware of the many abuses suffered by our overseas workers in the foreign MARIA LOURDES P. A. SERENO*
land where they have ventured, usually with heavy hearts, in pursuit of a more fulfilling future. Chief Justice
Breach of contract, maltreatment, rape, insufficient nourishment, sub-human lodgings, insults
and other forms of debasement, are only a few of the inhumane acts towhich they are subjected
by their foreign employers, who probably feel they can do as they please in their own country. ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.
Whilethese workers may indeed have relatively little defense against exploitation while they are Acting Chief Justice Associate Justice
abroad, that disadvantage must not continue to burden them when they return to their own
territory to voice their muted complaint. There is no reason why, in their very own land, the
protection of our own laws cannot be extended to them in full measure for the redress of their
grievances.142 TERESITA J. LEONARDO-DE See: Concur/Dissenting Opn.
CASTRO ARTURO D. BRION
Associate Justice Associate Justice
But it seems that we have not said enough.

We face a diaspora of Filipinos. Their travails and their heroism can be told a million times over;
DIOSDADO M. PERALTA LUCAS P. BERSAMIN
each of their stories as real as any other. Overseas Filipino workers brave alien cultures and the
heartbreak of families left behind daily. They would count the minutes, hours, days, months, and Associate Justice Associate Justice
years yearning to see their sons and daughters. We all know of the joy and sadness when they
come home to see them all grown up and, being so, they remember what their work has cost
them. Twitter accounts, Facetime, and many other gadgets and online applications will never MARIANO C. DEL CASTILLO MARTIN S. VILLARAMA, JR.
substitute for their lost physical presence. Associate Justice Associate Justice

Unknown to them, they keep our economy afloat through the ebb and flow of political and
economic crises. They are our true diplomats, they who show the world the resilience, patience, JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA
and creativity of our people. Indeed, we are a people who contribute much to the provision of Associate Justice Associate Justice
material creations of this world.

This government loses its soul if we fail to ensure decent treatment for all Filipinos. We default BIENVENIDO L. REYES ESTELA M. PERLAS-BERNABE
by limiting the contractual wages that should be paid to our workers when their contracts are Associate Justice Associate Justice
breached by the foreign employers. While we sit, this court will ensure that our laws will reward
our overseas workers with what they deserve: their dignity.

Inevitably, their dignity is ours as weil. CERTIFICATION

WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is AFFIRMED with I certify that the conclusions in the above Decision had been reached in consultation before the
modification. Petitioner Sameer Overseas Placement Agency is ORDERED to pay respondent case was assigned to the writer of the opinion of the court.
Joy C. Cabiles the amount equivalent to her salary for the unexpired portion of her employment
contract at an interest of 6% per annum from the finality of this judgment. Petitioner is also
ANTONIO T. CARPIO
ORDERED to reimburse respondent the withheld NT$3,000.00 salary and pay respondent
Acting Chief Justice
attorney's fees of NT$300.00 at an interest of 6% per annum from the finality of this judgment.

Footnotes
The clause, "or for three (3) months for every year of the unexpired term, whichever is less" in
* On Leave.
Section 7 of Republic Act No. 10022 amending Section 10 of Republic Act No. 8042 is declared 1
 Rollo, pp. 3–29.
unconstitutional and, therefore, null and void. 2
 Id. at 32–44.
3
 Id. at 125–131.
4 60
 Id. at 131.  Id.
5 61
 Id. at 3.  San Miguel Corporation v. Ubaldo, G.R. No. 92859, February 1, 1993, 218 SCRA
6
 Id. at 126. 293, 301 [Per J. Campos, Jr., Second Division].
62
7
 Id. at 102.  Id.
63
8
 Id.  Bascon v. Court of Appeals, 466 Phil. 719, 732 (2004) [Per J. Quisumbing, Second
9
 Id. Division].
64
10
 Id. at 54 and 102.  CONST., art. XIII, sec. 3.
65
11
 Id. at 6–7 and 195–196.  359 Phil. 955 (1998) [Per J. Romero, Third Division].
66
12
 Id. at 36.  Id. at 968–969.
67
13
 Id.  540 Phil. 65 (2006) [Per J. Austria-Martinez, First Division].
68
14
 Id.  Id. at 80–81.
69
15
 Id. at 127.  Rollo, p. 11.
70
16
 Id.  Hilton Heavy Equipment Corporation v. Dy, G.R. No. 164860, February 2, 2010, 611
17
 Id. at 53. SCRA 329, 338 [Per J. Carpio, Second Division], citing Dizon v. NLRC, 259 Phil. 523,
18
 Id. 529 (1989) [Per J. Feliciano, Third Division].
71
19
 Id. at 33, 53, and 54.  Skippers United Pacific, Inc. v. National Labor Relations Commission, 527 Phil. 248,
20
 Id. 257 (2006) [Per J. Austria-Martinez, First Division].
72
21
 Id. at 11.  LABOR CODE, art. 281; See also Tamson’s Enterprises, Inc. v. Court of Appeals,
22
 Id. at 56. G.R. No. 192881, November 16, 2011, 660 SCRA 374, 383 [Per J. Mendoza, Third
23
 Id. at 56 and 62. Division].
73
24
 Id. at 57.  Seedissenting opinion of J. Brion in Abbott Laboratories Philippines v. Alcaraz, G.R.
25
 Id. No. 192571, July 23, 2013, 701 SCRA 682, 752 [Per J. Perlas-Bernabe, En Banc].
26
 Id. at 107. This ponencia joined J. Brion.
74
27
 Id.  Rollo, p. 129.
75
28
 Id.  Skippers United Pacific, Inc. v. Doza, et al., G.R. No. 175558, February 8, 2012, 665
29
 Id. at 108. SCRA 412, 426 [Per J. Carpio, Second Division].
76
30
 Id.  Id.
77
31
 Id. at 101–112.  Id.
78
32
 Id. at 108–110.  Id.
79
33
 Id. at 110.  Id.
80
34
 Id. at 111–112.  Rep. Act. No. 8042 (1995), sec. 15.
81
35
 Id.  Article 111. Attorney’s Fees – (a) In cases of unlawful withholding of wages, the
36
 Id. at 113–123. culpable party may be assessed attorney’s fees equivalent to ten percent of the
37
 Id. at 125–131. amount of wages recovered.
82
38
 Id. at 131.  601 Phil. 245 (2009) [Per J. Austria-Martinez, En Banc].
83
39
 Id. at 129.  Rep. Act. No. 8042 (1995), sec. 10, par. 5.
84
40
 Id.  Serrano v. Gallant Maritime Services, Inc., 601 Phil. 245, 302 and 304 (2009) [Per J.
41
 Id. Austria-Martinez, En Banc].
85
42
 Id at 130.  Yap v. Thenamaris Ship’s Management, G.R. No. 179532, May 30, 2011, 649
43
 Id. SCRA 369, 380 [Per J. Nachura, Second Division].
86
44
 Id. at 131.  See also Skippers United Pacific, Inc. v. Doza, et al., G.R. No. 175558, February 8,
45
 Id. 2012, 665 SCRA 430 [Per J. Carpio, Second Division].
87
46
 Id.  CONST., art. VIII, sec. 5(5).
88
47
 Id. at 132–137.  Rollo, pp. 266–267.
89
48
 Id. at 139–141.  Id. at 309–328.
90
49
 Id. at 142–153.  Id. at 311.
91
50
 Thirteenth Division, decision penned by Associate Justice Renato C.Dacudao with  Id.
92
Associate Justices Edgardo F. Sundiam and Japar B. Dimaampao concurring.  Id.
93
51
 Rollo, pp. 43–44.  Id. at 364–371.
94
52
 Id.  Id. at 371.
95
53
 Id.  Id. at 304.
96
54
 Id. at 3–29.  CONST., art. III, sec. 1. No person shall be deprived of life, liberty, or property
55
 Id. at 11. without due process of law, nor shall any person be denied the equal protection of the
56
 Id. laws.
97
57
 Id. at 9–11.  Ichong v. Hernandez, 101 Phil. 1155, 1164 (1957) [Per J. Labrador, En Banc].
98
58
 Leonardo v. National Labor Relations Commission, 389 Phil. 118, 126–127 (2000)  Id. at 1164.
99
[Per J. De Leon, Jr., Second Division].  Id. at 1177.
100
59
 Id.  Id.
101
 Id. at 1164 and 1177.
102
 Id. at 1165 and 1177.
103
 Id. at 1164.
104
 People v. Cayat, 68 Phil. 12, 18 (1939) [Per J. Moran, En Banc].
105
 Id. at 18.
106
 Serrano v. Gallant Maritime Services, Inc., 601 Phil. 245, 294–298 (2009) [Per J.
Austria-Martinez, En Banc].
107
 Id. at 287–292.
108
 Id. at 292–294.
109
 Id. at 282.
110
 CONST., art. XIII, sec. 3.
111
 Serrano v. Gallant Maritime Services, Inc., 601 Phil. 245, 286 (2009) [Per J.
Austria-Martinez, En Banc].
112
 Id. at 297–298.
113
 Id. at 298.
114
 Id.
115
 Id.
116
 Id. at 287–292.
117
 Id.
118
 Id. at 293.
119
 Id. at 281.
120
 Id.
121
 Id. at 277.
122
 Id.
123
 Id. at 276–277.
124
 Rep. Act. No. 8042 (1995); See alsoRep. Act No. 10022 (2010).
125
 Serrano v. Gallant Maritime Services, Inc., 601 Phil. 245, 277 (2009) [Per J.
Austria-Martinez, En Banc].
126
 Seeconcurring opinion of J. Brion in Serrano v. Gallant Maritime Services, Inc., 601
Phil. 245, 319–321 (2009) [Per J. Austria-Martinez, En Banc].
127
 Id. at 301.
128
 Id. at 304.
129
 Yap v. Thenamaris Ship’s Management, G.R. No. 179532, May 30, 2011, 649
SCRA 369, 381 [Per J. Nachura, Second Division].
130
 G.R. No. 189871, August 13, 2013, 703 SCRA 439 [Per J. Peralta, En Banc].
131
 Id. at 457–458. This court modified the guidelines laid down in Eastern Shipping
Lines v. Court of Appeals, G.R. No. 97412, July 12, 1994, 234 SCRA 78, 97[Per J.
Vitug, En Banc] to embody Bangko Sentral ng Pilipinas Circular No. 799.
132
 Nacar v. Gallery Frames, G.R. No. 189871, August 13, 2013, 703 SCRA 439, 457
[Per J. Peralta, En Banc].
133
 Id.
134
 Palanca v. Court of Appeals, G.R. No. 106685, December 2, 1994,238 SCRA 593,
601 [Per J. Quiason, En Banc].
135
 Maritime Company of the Philippines v. Reparations Commission, 148-B Phil. 65,
70 (1971) [Per J. Fernando, En Banc].
136
 ATCI Overseas Corporation v. Echin,G.R. No. 178551, October 11, 2010, 632
SCRA 528, 533 [Per J. Carpio-Morales, Third Division], citing Datuman v. First
Cosmopolitan Manpower and Promotion Services, Inc., 591 Phil. 662, 673 (2008) [Per
J. Leonardo-De Castro, First Division]; Migrant Workers and Overseas Filipinos Act of
1995, sec. 2(b).
137
 RULES OF COURT, Rule 3, sec. 7.
138
 PH Credit Corporation v. Court of Appeals, 421 Phil. 821, 832 (2001) [Per J.
Panganiban, Third Division].
139
 See alsoC. A. AZUCENA, JR., EVERYONE’S LABOR CODE29 (5th ed., 2007).
140
 Id.
141
 G..R. No. 93699, September 10, 1993, 226 SCRA 232 [Per J. Cruz, First Division].
142
 Id. at 239–240, also cited in Triple Eight Integrated Services v. NLRC, 359 Phil.
955, 968 (1998) [Per J. Romero, Third Division].
 As narrated by respondent Secretary of Labor, the facts are as follows: 3
G.R. No. L-79436-50               January 17, 1990
EASTERN ASSURANCE & SURETY CORPORATION, petitioner,
vs.
SECRETARY OF LABOR, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION,
ELVIRA VENTURA, ESTER TRANGUILLAN, et al., respondents.
Tanjuatco, Oreta, Tanjuatco, Berenguer & San Vicente for petitioner.
NARVASA, J.:
In connection with the application with the Philippine Overseas Employment Administration
(POEA) of J & B Manpower Specialist, Inc. for a license to engage in business as a recruitment
agency, a surety bond was filed on January 2, 1985 by the applicant and the Eastern Assurance
and Surety Corporation, herein petitioner, in virtue of which they both held themselves —
. . . firmly bound unto (said) Philippine Overseas Employment Administration, Ministry
of Labor in the penal sum of PESOS ONE HUNDRED FIFTY THOUSAND ONLY . . .
(Pl50,000.00) for the payment of which will and truly to be made, . . . (they bound
themselves, their) heirs, executors, administrators, successors and assigns, jointly
and severally . .
The bond stipulated that:
a) it was "conditioned upon the true and faithful performance and observance of the . . . principal
(J & B Manpower Specialist, Inc.) of its duties and obligations in accordance with all the rules
and regulations promulgated by the Ministry of Labor Philippine Overseas Employment
Administration and with the terms and conditions stipulated in the License;
b) the liability of the . . . Surety (petitioner) shall in no case exceed the sum of PESOS ONE
HUNDRED FIFTY THOUSAND (P150,000.00) ONLY, PHILIPPINE CURRENCY; 1
c) notice to the Principal is also a notice to the Surety; and
d) LIABILITY of the surety . . . shall expire on JANUARY 02, 1986 and this bond shall be
automatically cancelled ten (10) days after its expiration and the surety shall not be liable for any
claim not discovered and presented to it in writing within said period of . . . from expiration and
the obligee hereby expressly waives the rights to file any court action against the Surety after
termination of said period of . . . . above cited. 2
From June 1983 to December 1985 . . . thirty three (33) . . . (persons) applied for
overseas employment with . . . (J & B). In consideration of promised deployment,
complainants paid respondent various amounts for various fees. Most of' the receipts
issued were sighed by Mrs. Baby Bundalian, Executive Vice-President of . . . (J & B).
Because of non-deployment . . . (the applicants) filed separate complaints with the
Licensing and Regulation Office of POEA against . . . (J & B) for violation of Articles 32
and 34 (a) of the Labor Code between the months of April to October 1985.
Despite summons/notices of hearing,, . . . (J & B) failed to file Answer nor appear in
the hearings conducted.
In its separate Answer, . . . EASCO essentially disclaimed liability on the ground that
the claims were not expressly covered by the bond, that POEA had no jurisdiction to
order forfeiture of the bond, that some of the claims were paid beyond or prior to the
period of effectivity of the bond.
On September 8, 1986, the POEA Administrator issued the Order in favor of
complainants ruling thus:
After careful evaluation, we find that the receipts and testimonies of
complainants, in the absence of controverting evidence substantially
establish that respondent charged and collected fees from them in amounts
exceeding what is prescribed by this Administration. Complainants' non-
deployment strongly indicates that there was no employment obtained for
them. Hence, violation of Articles 32 and 34 (a) of the Labor Code, as
amended, is established against respondent. The claims of complainants
having arose (arisen) out of acts of the principal covered under the surety
(bond), the respondent surety is equally liable therefor.
Except for complainants Ramos, Samson, de Leon and Rizada, whose claims were
transacted prior to the effectivity of the bond, . . . EASCO was declared jointly and
severally liable with . . . (J & B) to twenty-nine (29) complainants.
(The dispositive portion of the POEA Administrator's Order also contained the
following statement and direction, viz.:
Respondent was suspended on May 23, 1985, June 26, 1985 and January
17, 1986 all for illegal exaction. Considering its track record of illegal
exaction activities and considering further the gross violation of recruitment
rules and regulations established against it in the instant cases, and the
expiration of its license on February 15, 1985, it is hereby forever banned
from participation in the overseas employment program. It is ordered to
cease and desist from further engaging in recruitment activities otherwise it
shall be prosecuted for illegal recruitment.')
(J & B filed a motion for reconsideration). On December 19, 1986, the then deputy
Minister of Labor and Employment denied the . . . Motion for Reconsideration for lack
of merit and affirmed the findings in the Order of the POEA Administrator finding no
reversible error therein.
On appeal by EASCO — J & B having as aforestated taken no part in the proceeding despite
due service of summons — the judgment was modified by the Secretary of Labor, by Order
dated July 1, 1987, disposing as follows: 4
WHEREFORE, in view of the foregoing, the Resolution of the then Deputy Minister of
Labor dated December 19, 1986 affirming the Order of the POEA Administrator dated
September 8, 1986 is hereby MODIFIED. Respondent J & B Manpower Specialist is
directed to refund all thirty-three (33) complainants as listed in the Order of September
8, 1986 in the amounts listed thereto with the modification that complainants Lucena
Cabasal and Felix Rivero are both entitled only to P15,980 and not P15,980
each. Respondent Eastern Assurance and Surety Corporation is hereby found jointly
and severally liable with respondent J & B Manpower Specialist to refund nineteen
(19) complainants in the modified amounts . . . (particularly specified).
The other findings in the Order of the POEA Administrator dated September 8, 1986
affirmed in the Resolution of the then Deputy Minister . . . are also hereby AFFIRMED.
This Order is FINAL. No further Motion for Reconsideration hereof shall be
entertained.
It is noteworthy that EASCO's liability for the refund, jointly and severally with its principal, was
limited to 19 named complainants (in contrast to verdicts of the POEA and the Deputy Minister
which both ordered payment to no less than 33 complainants) and was correspondingly reduced
from P308,751.75 and US $ 400.00 5 to the aggregate amount of P 140,817.75. 6
The special civil action of certiorari at bar was thereafter instituted by EASCO 7 praying for the
nullification of the POEA Administrator's Order of September 8, 1986, the Resolution of the
Deputy Minister of Labor of' December 19, 1986, and the Order of the Secretary of Labor of July
1, 1987, It theorizes that:
1) the POEA had no jurisdiction over the claims for refund filed by non-employees;
2) neither did the Secretary of Labor have jurisdiction of the claims;
3) assuming they had jurisdiction, both the POEA and Secretary of Labor also
committed legal errors and acted with grave abuse of discretion when they ruled that
petitioner is liable on the claims.
EASCO contends that the POEA had no "adjudicatory jurisdiction" over the monetary claims in
question because the same "did not arise from employer-employee relations." Invoked in
support of the argument is Section 4 (a) of EO 797 providing in part 8 that the POEA has —
. . . original and exclusive jurisdiction over all cases, including money claims, involving
employer-employee relations arising out of or by virtue of any law or contract involving
Filipino workers for overseas employment including seamen . . .
The complaints are however for violation of Articles 32 and 34 a) of the Labor Code. Article 32
and paragraph (a) of Article 34 read as follows:
Art. 32. Fees to be paid by workers.—Any person applying with a private fee-charging
employment agency for employment assistance shall not be charged any fee until he
has obtained employment through its efforts or has actually commenced employment.
Such fee shall be always covered with the approved receipt clearly showing the
amount paid. The Secretary of Labor shall promulgate a schedule of allowable fees.
Art. 34. Prohibited practices.—It shall be unlawful for any individual, entity, licensee, or
holder of authority:
a) To charge or accept, directly or indirectly, any amount greater than that specified in
the schedule of allowable fees prescribed by the Secretary of Labor, or to make a
worker pay any amount greater than actually received by him as a loan or
advance; . . .
The penalties of suspension and cancellation of license or authority are prescribed for violations
of the above quoted provisions, among others. And the Secretary of Labor has the power under
Section 35 of the law to apply these sanctions, as well as the authority, conferred by Section 36,
not only, to "restrict and regulate the recruitment and placement activities of all agencies," but
also to "promulgate rules and regulations to carry out the objectives and implement the
provisions" governing said activities. Pursuant to this rule-making power thus granted, the
Secretary of Labor gave the POEA 9 "on its own initiative or upon filing of a complaint or report or
upon request for investigation by any aggrieved person, . . . (authority to) conduct the necessary
proceedings for the suspension or cancellation of the license or authority of any agency or entity"
for certain enumerated offenses including —
1) the imposition or acceptance, directly or indirectly, of any amount of money, goods or
services, or any fee or bond in excess of what is prescribed by the Administration, and
2) any other violation of pertinent provisions of the Labor Code and other relevant laws, rules
and regulations. 10
The Administrator was also given the power to "order the dismissal of the case or the
suspension of the license or authority of the respondent agency or contractor or
recommend to the Minister the cancellation thereof." 11
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:
3 Rollo, pp. 48-49; parenthetical statements supplied.
4 Emphasis supplied.
5 Rollo, pp. 41-42 being pp. 1 and 2 of the Resolution of the Deputy Minister dated
Dec. 19, 1986, in which are enumerated the complainants entitled to refund the
amounts individually due to them.
6 The list of complainants entitled to refund and the amounts respectively due them
are set forth at pages 10 and 11 of the Order of the respondent Secretary: Rollo, pp.
54-55.

. . . While it may be true that respondent EASCO received notice of their claims after 7 Id., pp. 9-34. The petition is dated September 12, 1987.
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
8 Emphasis supplied.
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 9 Sec. 3 of Rule VI, Book II of the New Rules on Overseas Employment
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 10 Sec. 2 (a) and (2), id.
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 11 Sec. 10, id.
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). 12 Underscoring in quotation, in original.

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.

Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Footnotes

1 This limitation is stated no less than three (3) times in the surety bond.

2 The blanks were not filed up by the parties.


G.R. No. 98273 October 28, 1991
CLARITA V. CRUZ, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION (POEA), EMS MANPOWER & PLACEMENT SERVICE
(PHIL.), ABDUL KARIM AL YAHYA, and TRAVELLERS INSURANCE, respondents.
Public Attorney's Office for petitioner.
Manuel T. Collado for private respondent.
CRUZ, J.:
Clarita V. Cruz** went abroad pursuant to an employment contract that she hoped would
improve her future. Although a high school graduate, she agreed to work as a domestic helper in
Kuwait in consideration of an attractive salary and vacation leave benefits she could not expect
to earn in this country. But her foreign adventure proved to be a bitter disappointment. On March
18,1988, after completing her two-year engagement, she was back home in the Philippines with
her dead dreams and an angry grievance.
On March 23,1988, she filed a complaint against EMS Manpower and Placement Services
(Phil.) and its foreign principal, Abdul Karim Al Yahya, for underpayment of her salary and non-
payment of her vacation leave. She also claimed that she was charged a placement fee of
P7,000.00 instead of the legal maximum of only P5,000.00. She alleged that her foreign
employer treated her as a slave and required her to work 18 hours a day. She was beaten up
and suffered facial deformity, head trauma and decreased sensation in the right portion of her
body. On top of all this, she was paid only $120 per month and her total salaries were given to
her only three hours before her flight back to Manila. This was after the plane she was supposed
to take had left and she had to stay in the airport for 24 hours before her employer finally heard
her pleas and delivered her passport and ticket to her.
In its answer and position paper, the private respondent raised the principal defense of
settlement as evidenced by the Affidavit of Desistance executed by the complainant on June 21,
1988. In this document, she declared inter alia that —
x x x           x x x          x x x
2. Thereafter going thoroughly over the facts of the case by reconciling our records,
we came to discover that it was only a plain case of misunderstanding on our part, and
that we have already settled our differences;
3. That I am no longer interested in further continuance of the above case against
EMS Manpower & Placement Services either criminal, civil or administrative or
whatever nature as I hereby desist now and hereafter;
4. That I am executing this affidavit of desistance to attest to the truth of the foregoing
facts and circumstances and for the purpose of asking the dismissal of my said
complaint against EMS Manpower & Placement Services.
On the basis of this affidavit, the Philippine Overseas Employment Administration (POEA)
dismissed her complaint in a decision dated May 16, 1989. This was affirmed by the National
Labor Relations Commission (NLRC) in its resolution dated December 28, 1990, reconsideration
of which was denied on February 21, 1991.
The petition now before us faults the POEA and the NLRC with grave abuse of discretion for
having upheld the Affidavit of Desistance. Cruz rejects the settlement as having been obtained
from her under duress and false pretenses and insists on her original claim for the balance of
her salaries and vacation- leave pay at the agreed rate of P250.00 per month.
Her contention is that she was inveigled into signing the Affidavit of Desistance without the
assistance of counsel. The "Attorney" Alvarado who assisted her was not really a lawyer but only
a helper in the Overseas Workers Welfare Administration. Atty. Biolena, on the other hand,
merely acknowledged the document. Moreover, when she signed the affidavit, she was under
the impression when she was agreeing to settle only her claim for one month unpaid vacation
leave, as the wording of the receipt she issued on the same date showed, to wit:
June 21, 1988
Receipt
This is to certify that I received the amount of P2,400.00 from EMS Manpower & Placement
Services in settlement of 1 month unpaid vacation leave.
(Sgd.) CLARITA V. CRUZ
IN THE PRESENCE OF:
(Sgd.) O.G. ALVARADO
OWWA Legal Dept.
For its part, the private respondent argues that the petitioner is bound by her Affidavit of
Desistance, which she freely and knowingly executed. After all, she was not an ignorant and
illiterate person but a high school graduate who understood what she was signing. The due
execution of the instrument must also be sustained on the basis of the presumptions of regularity
of official functions and of good faith.
Significantly, neither the private respondent nor the Solicitor General refuted the petitioner's
submission that the person who allegedly assisted her in the execution of the Affidavit of
Desistance and explained to her its content and meaning was not a lawyer but a mere employee
in the OWWA. His status was merely assumed but not established by the respondents although
 companions in her misery. She usually broods alone. There is no one to turn to for help. That is why we must carefully listen to her when she is finally able to complain
it was directly questioned. The comments of the public and private respondents did not meet this
against those who would rob her of her just rewards and even of her dignity as a human being.
challenge squarely.

WHEREFORE, the resolutions of the NLRC dated December 28, 1990, and February 21, 1991, are SET ASIDE, and the Affidavit of Desistance is DECLARED null and
It is no less noteworthy that the receipt the petitioner issued on the same day was only for
void. POEA Case No. 88-03-255 is REMANDED to the POEA for further proceedings and expeditious resolution.
"P2,400.00 . . . in settlement of 1 month unpaid vacation." This clearly shows that she was not
waiving the rest of her demands in exchange for that measly amount (which did not even really
represent the commutable value of the 1 month vacation leave at the rate of $250.00). In fact, SO ORDERED.
the total claim of the petitioner is for P88,840.00, itemized as follows:
Narvasa, Griño-Aquino and Medialdea, JJ., concur.
a) P84,240.00, representing the salary differentials of $130 for 24 months (US
$3,120.00 x P27.00).
 

b) P2,600.00, representing the balance of her vacation leave pay.

# Footnotes

c) P2,000.00, representing her excess placement fee.

* Not related to the ponente.

1 this Court held:

In Principe v. Philippine-Singapore Transport Service, Inc., 
1 176 SCRA 514.

Even assuming for the sake of argument that the quitclaim had foreclosed petitioner's right over the death benefits of her husband,  the fact that the
consideration given in exchange thereof was very much less than the amount petitioner is claiming renders the quitclaim null and void for being 2 186 SCRA 724.
contrary to public policy. The State must be firm in affording protection to labor. The quitclaim wherein the consideration is scandalously low and
inequitable cannot be an obstacle to petitioner's pursuing her legitimate claim. Equity dictates that the compromise agreement should be voided in this

instance. (Emphasis supplied.)

G.R. No. 121777       January 24, 2001

The following guidelines were likewise set in Periquet v. NLRC: 2

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable
CAROL M. DELA PIEDRA, accused-appellant.
settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the
waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to

annul the questionable transaction. (Emphasis supplied.) KAPUNAN, J.:

The Court is convinced that the petitioner was not fully aware of the import and consequences of the Affidavit of Desistance when she executed it, allegedly with the Accused-appellant Carol M. dela Piedra questions her conviction for illegal recruitment in large
assistance of counsel. Except for the disputable presumptions invoked by the private respondent, such assistance has not been established against the petitioner's scale and assails, as well, the constitutionality of the law defining and penalizing said crime.
allegation that the "Attorney" Alvarado who supposedly counseled her was not even a lawyer. Indeed, even assuming that such assistance had been duly given, there is
still the question of the intrinsic validity of the quitclaim in view of the gross disparity between the amount of the settlement and the petitioner's original claim. It is difficult

to believe that the petitioner would agree to waive her total claim of P88,840.00 for the unseemly settlement of only P2,400.00. And even if she did, the waiver would still
The Court affirms the constitutionality of the law and the conviction of the accused, but reduces
be null and void as violative of public policy.
the penalty imposed upon her.

It remains to state that, contrary to the contention of the private respondent in the proceedings below that it has no privity of contract with the petitioner, we have held in
The accused was charged before the Regional Trial Court of Zamboanga City in an information
a long line of cases that the local recruiter is solidarily liable with the foreign principal for all damages sustained by the overseas worker in connection with his contract of
alleging:
employment. Such liability is provided for in Section 1, Rule II, Book II, of the POEA Rules and Regulations, which we have consistently sustained.

That on or about January 30, 1994, in the City of Zamboanga, Philippines, and within the
This decision demonstrates once again the tenderness of the Court toward the worker subjected to the lawless exploitation and impositions of his employer. The
jurisdiction of this Honorable Court, the above-named accused, without having previously
protection of our overseas workers is especially necessary because of the inconveniences and even risks they have to undergo in their quest for a better life in a foreign
obtained from the Philippine Overseas Employment Administration, a license or authority to
land away from their loved ones and their own government.
engage in recruitment and overseas placement of workers, did then and there, wilfully,
unlawfully and feloniously, offer and promise for a fee employment abroad particularly in
Singapore thus causing Maria Lourdes Modesto [y] Gadrino, Nancy Araneta y Aliwanag and
The domestic helper is particularly susceptible to abuse because she usually works only by herself in a private household unlike other workers employed in an open Jennelyn Baez y Timbol, all qualified to apply, in fact said Maria Lourdes Modesto had already
business concern who are able to share and discuss their problems and bear or solve them together. The domestic helper is denied that comfort. She has no advanced the amount of P2,000.00 to the accused for and in consideration of the promised
employment which did not materialized [sic] thus causing damage and prejudice to the latter in
the said sum; furthermore, the acts complained of herein tantamount [sic] to economic sabotage
in that the same were committed in large scale.1
Arraigned on June 20, 1994, the accused pleaded not guilty2 to these charges.
At the trial, the prosecution presented five (5) witnesses, namely, Erlie Ramos, SPO2 Erwin
Manalopilar, Eileen Fermindoza, Nancy Araneta and Lourdes Modesto. The succeeding
narration is gathered from their testimonies:
On January 30, 1994, at exactly 10:00 in the morning, Erlie Ramos, Attorney II of the Philippine
Overseas Employment Agency (POEA), received a telephone call from an unidentified woman
inquiring about the legitimacy of the recruitment conducted by a certain Mrs. Carol Figueroa.
Ramos, whose duties include the surveillance of suspected illegal recruiters, immediately
contacted a friend, a certain Mayeth Bellotindos, so they could both go to No. 26-D, Tetuan
Highway, Sta. Cruz, Zamboanga City, where the recruitment was reportedly being undertaken.
Upon arriving at the reported area at around 4:00 p.m., Bellotindos entered the house and
pretended to be an applicant. Ramos remained outside and stood on the pavement, from where
he was able to see around six (6) persons in the house's sala. Ramos even heard a woman,
identified as Carol Fegueroa, talk about the possible employment she has to provide in
Singapore and the documents that the applicants have to comply with. Fifteen (15) minutes later,
Bellotindos came out with a bio-data form in hand.
On February 1, 1994, Ramos conferred with a certain Capt. Mendoza of the Criminal
Investigation Service (CIS) to organize the arrest of the alleged illegal recruiter. Also present
were other members of the CIS, including Col. Rodolfo Almonte, Regional Director of the PNP-
CIS for Region IX, Eileen Fermindoza, and a certain SPO3 Santos. The group planned to entrap
the illegal recruiter the next day by having Fermindoza pose as an applicant.3
On February 2, 1994, at around 8:00 p.m., Col. Almonte directed the case to SPO2 Erwin
Manalopilar, a member of the Philippine National Police who was assigned as an investigator of
the CIS, to conduct a surveillance of the area to confirm the report of illegal recruitment.
Accordingly, he, along with Eileen Fermindoza, immediately proceeded to Tetuan Highway. The
two did not enter the house where the recruitment was supposedly being conducted, but
Fermindoza interviewed two people who informed them that some people do go inside the
house. Upon returning to their office at around 8:30 a.m., the two reported to Capt. Mendoza
who organized a team to conduct the raid.
The raiding team, which included Capt. Mendoza, SPO2 Manalopilar, Fermindoza and a certain
Oscar Bucol, quickly set off and arrived at the reported scene at 9:30 that morning. There they
met up with Erlie Ramos of the POEA. Fermindoza then proceeded to enter the house while the
rest of the team posted themselves outside to secure the area. Fermindoza was instructed to
come out after she was given a bio-data form, which will serve as the team's cue to enter the
house.4
Fermindoza introduced herself as a job applicant to a man and a woman, apparently the owners
of the house, and went inside. There, she saw another woman, later identified as Jasmine,
coming out of the bathroom. The man to whom Fermindoza earlier introduced herself told
Jasmine that Fermindoza was applying for a position. Jasmine, who was then only wearing a
towel, told her that she would just get dressed. Jasmine then came back and asked Fermindoza
what position she was applying for. Fermindoza replied that she was applying to be a babysitter
or any other work so long as she could go abroad. Jasmine then gave her an application form.
A few minutes later, a certain Carol arrived. Jasmine informed Carol that Fermindoza was an
applicant. Fermindoza asked Carol what the requirements were and whether she (Fermindoza)
was qualified. Carol told Fermindoza that if she had a passport, she could fill up the application
papers. Fermindoza replied that she had no passport yet. Carol said she need not worry since
Jasmine will prepare the passport for her. While filling up the application form, three women who
appeared to be friends of Jasmine arrived to follow up the result of their applications and to give
their advance payment. Jasmine got their papers and put them on top of a small table.
Fermindoza then proceeded to the door and signaled to the raiding party by raising her hand.
Capt. Mendoza asked the owners of the house, a married couple, for permission to enter the
same. The owners granted permission after the raiding party introduced themselves as
members of the CIS. Inside the house, the raiding party saw some supposed applicants.
Application forms, already filled up, were in the hands of one Mrs. Carol Figueroa. The CIS
asked Figueroa if she had a permit to recruit. Figueroa retorted that she was not engaged in
recruitment. Capt. Mendoza nevertheless proceeded to arrest Figueroa. He took the application
forms she was holding as the raiding party seized the other papers5 on the table.6
The CIS team then brought Figueroa, a certain Jasmine Alejandro, and the three women
suspected to be applicants, to the office for investigation.7
In the course of their investigation, the CIS discovered that Carol Figueroa had many aliases,
among them, Carol Llena and Carol dela Piedra. The accused was not able to present any
authority to recruit when asked by the investigators. 8 A check by Ramos with the POEA revealed
that the acused was not licensed or authorized to conduct recruitment. 9 A certification10 dated
February 2, 1994 stating thus was executed by Renegold M. Macarulay, Officer-in-Charge of the
POEA.
The CIS likewise interviewed the supposed applicants, Lourdes Modesto, Nancy Araneta and
Jennelyn Baez, all registered nurses working at the Cabato Medical Hospital, who executed their
respective written statements.11
At the trial, Nancy Araneta, 23, recounted that she was at Jasmine Alejandro's house in the
afternoon of January 30, 1994. Araneta had learned from Sandra Aquino, also a nurse at the
Cabato Medical Hospital, that a woman was there to recruit job applicants for Singapore.
Araneta and her friends, Jennelyn Baez and Sandra Aquino, arrived at Jasmine's house at
around 4:30 p.m. Jasmine welcomed them and told them to sit down. They listened to the
"recruiter" who was then talking to a number of people. The recruiter said that she was
"recruiting" nurses for Singapore. Araneta and her friends then filled up bio-data forms and were
required to submit pictures and a transcript of records. They were also told to pay P2,000, and
"the rest will be salary deduction." Araneta submitted her bio-data form to Carol that same
afternoon, but did not give any money because she was "not yet sure."
On the day of the raid on February 2, 1994, Araneta was again at the Alejandro residence to
submit her transcript of records and her picture. She arrived at the house 30 minutes before the
raid but did not witness the arrest since she was at the porch when it happened.12
Maria Lourdes Modesto, 26, was also in Jasmine Alejandro's house on January 30, 1994. A
friend of Jasmine had informed her that there was someone recruiting in Jasmine's house. Upon
arriving at the Alejandro residence, Lourdes was welcomed by Jasmine.1âwphi1.nêt
Lourdes recalled that Carol Figueroa was already briefing some people when she arrived. Carol
Figueroa asked if they would like a "good opportunity" since a hospital was hiring nurses. She
gave a breakdown of the fees involved: P30,000 for the visa and the round trip ticket, and
P5,000 as placement fee and for the processing of the papers. The initial payment was P2,000,
while P30,000 will be by salary deduction.
Lourdes filled up the application form and submitted it to Jasmine. After the interview, she gave
the initial payment of P2,000 to Jasmine, who assured Lourdes that she was authorized to
receive the money. On February 2, 1994, however, Lourdes went back to the house to get back
the money. Jasmine gave back the money to Lourdes after the raid.13
Denial comprised the accused's defense.
Carol dela Piedra, 37, is a housewife and a resident of Cebu City. Her husband is a
businessman from Cebu, the manager of the Region 7 Branch of the Grollier International
Encyclopedia. They own an apartment in Cebu City, providing lodging to students.
The accused claimed that she goes to Singapore to visit her relatives. She first traveled to
Singapore on August 21, 1993 as a tourist, and came back to the Philippines on October 20 of
the same year. Thereafter, she returned to Singapore on December 10, 1993.
On December 21, 1993, while in Singapore, the accused was invited to a Christmas party
sponsored by the Zamboanga City Club Association. On that occasion, she met a certain Laleen
Malicay, who sought her help. A midwife, Malicay had been working in Singapore for six (6)
years. Her employer is a certain Mr. Tan, a close friend of Carol.
According to the accused, Malicay sent P15,000 home for her father who was then seriously ill.
Malicay was not sure, however, whether her father received the money so she requested the
accused to verify from her relatives receipt thereof. She informed the accused that she had a
cousin by the name of Jasmine Alejandro. Malicay gave the accused Jasmine's telephone
number, address and a sketch of how to get there.
The accused returned to the country on January 21, 1994. From Cebu City, the accused flew to
Zamboanga City on January 23, 1994 to give some presents to her friends.
On January 30, 1994, the accused called up Jasmine Alejandro, Laleen Malicay's cousin, to
inform her that she would be going to her house. At around noon that day, the accused,
accompanied by her friend Hilda Falcasantos, arrived at the house where she found Jasmine
entertaining some friends. Jasmine came down with two of her friends whom she introduced as
her classmates. Jasmine told them that the accused was a friend of Laleen Malicay.
The accused relayed to Jasmine Malicay's message regarding the money the latter had sent.
Jasmine assured her that they received the money, and asked Carol to tell Malicay to send more
money for medicine for Malicay's mother. Jasmine also told her that she would send something
for Malicay when the accused goes back to Singapore. The accused replied that she just
needed to confirm her flight back to Cebu City, and will return to Jasmine's house. After the
meeting with Jasmine, the accused went shopping with Hilda Falcasantos. The accused was in
the house for only fifteen (15) minutes.
On February 2, 1994, the accused went to the Philippine Airlines office at 7:30 in the morning to
confirm her 5:30 p.m. flight to Cebu City. She then proceeded to Jasmine's residence, arriving
there at past 8 a.m.
Inside the house, she met a woman who asked her, "Are you Carol from Singapore?" The
accused, in turn, asked the woman if she could do anything for her. The woman inquired from
Carol if she was recruiting. Carol replied in the negative, explaining that she was there just to
say goodbye to Jasmine. The woman further asked Carol what the requirements were if she (the
woman) were to go to Singapore. Carol replied that she would need a passport.
Two (2) minutes later, three (3) girls entered the house looking for Jasmine. The woman Carol
was talking with then stood up and went out. A minute after, three (3) members of the CIS and a
POEA official arrived. A big man identified himself as a member of the CIS and informed her that
they received a call that she was recruiting. They told her she had just interviewed a woman
from the CIS. She denied this, and said that she came only to say goodbye to the occupants of
the house, and to get whatever Jasmine would be sending for Laleen Malicay. She even showed
them her ticket for Cebu City.
Erlie Ramos then went up to Jasmine's room and returned with some papers. The accused said
that those were the papers that Laleen Malicay requested Jasmine to give to her (the accused).
The accused surmised that because Laleen Malicay wanted to go home but could not find a
replacement, one of the applicants in the forms was to be her (Malicay's) substitute. Ramos told
the accused to explain in their office.
The accused denied in court that she went to Jasmine's residence to engage in recruitment. She
claimed she came to Zamboanga City to visit her friends, to whom she could confide since she
and her husband were having some problems. She denied she knew Nancy Araneta or that she
brought information sheets for job placement. She also denied instructing Jasmine to collect
P2,000 from alleged applicants as processing fee.14
The accused presented two witnesses to corroborate her defense.
The first, Jasmine Alejandro, 23, testified that she met the accused for the first time only on
January 30, 1994 when the latter visited them to deliver Laleen Malicay's message regarding the
money she sent. Carol, who was accompanied by a certain Hilda Falcasantos, stayed in their
house for 10 to 15 minutes only. Carol came back to the house a few days later on February 2 at
around 8:00 in the morning to "get the envelope for the candidacy of her daughter." Jasmine did
not elaborate.
Jasmine denied that she knew Nancy Araneta or Lourdes Modesto. She denied that the accused
conducted recruitment. She claimed she did not see Carol distribute bio-data or application
forms to job applicants. She disclaimed any knowledge regarding the P2,000 application fee.15
The other defense witness, Ernesto Morales, a policeman, merely testified that the accused
stayed in their house in No. 270 Tugbungan, Zamboanga City, for four (4) days before her
arrest, although she would sometimes go downtown alone. He said he did not notice that she
conducted any recruitment.16
On May 5, 1995, the trial court rendered a decision convicting the accused, thus:
WHEREFORE, in view of all the foregoing consideration[s][,] this Court finds the
accused Carol dela Piedra alias Carol Llena and Carol Figueroa guilty beyond
reasonable doubt of Illegal Recruitment committed in a large scale and hereby
sentences her to suffer the penalty of LIFE IMPRISONMENT and to pay a fine of
P100,000.00, and also to pay the costs.
Being a detention prisoner, the said accused is entitled to the full time of the period of
her detention during the pendency of this case under the condition set forth in Article
29 of the Revised Penal Code.
SO ORDERED.17
The accused, in this appeal, ascribes to the trial court the following errors:
I
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING SEC. 13 (B)
OF P.D. 442[,] AS AMENDED[,] OTHERWISE KNOWN AS [THE] ILLEGAL
RECRUITMENT LAW UNCONSTITUTIONAL.
II
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT HOLDING THAT THE
APPREHENDING TEAM COMPOSED OF POEA AND CIS REPRESENTATIVES
ENTERED INTO [sic] THE RESIDENCE OF JASMIN[E] ALEJANDRO WITHOUT ANY
SEARCH WARRANT IN VIOLATION OF ARTICLE III, SECTION 2 OF THE
PHILIPPINE CONSTITUTION, AND ANY EVIDENCE OBTAINED IN VIOLATION
THEREOF, SHALL BE INADMISSIBLE FOR ANY PURPOSE IN ANY PROCEEDING
AS PROVIDED UNDER ARTICLE III, SECTION 3, (2) OF THE SAME
CONSTITUTION;
III
WITH DUE RESPECT, THE LOWER COURT ERRED IN IGNORING THAT WHEN
SPO2 [sic] EILE[E]N FERMINDOZA ENTERED THE RESIDENCE OF JASMIN[E]
ALEJANDRO, THERE WAS NO CRIME COMMITTED WHATSOEVER, HENCE THE
ARREST OF THE ACCUSED-APPELLANT WAS ILLEGAL;
[IV]
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT DISCOVERING THAT
SPO2 [sic] EILE[E]N FERMINDOZA WAS NOT ILLEGALLY RECRUITED BY THE
ACCUSED-APPELLANT, HENCE, ACCUSED-APPELLANT SHOULD BE
ACQUITTED;
V Appellant submits that Article 13 (b) of the Labor Code defining "recruitment and placement" is
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT DETECTING THAT
NANCY ARANETA WAS NOT ILLEGALLY RECRUITED BY THE ACCUSED-
APPELLANT, HENCE, ACCUSED SHOULD BE EXONERATED;
VI
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT REALIZING THAT
MARIA LOURDES MODESTO WAS NOT ILLEGALLY RECRUITED BY THE
ACCUSED-APPELLANT, HENCE, ACCUSED-APPELLANT SHOULD BE
EXCULPATED;
VII
WITH DUE RESPECT, THE LOWER COURT ERRED IN FINDING THAT THE
ACCUSED-APPELLANT WAS CHARGED WITH LARGE SCALE ILLEGAL
RECRUITMENT ON JANUARY 30, 1994, THE DATE STATED IN THE
INFORMATION AS THE DATE OF THE CRIME, BUT ACCUSED WAS ARRESTED
ON FEB. 2, 1994 AND ALL THE EVIDENCES [sic] INDICATED [sic] THAT THE
ALLEGED CRIME WERE [sic] COMMITTED ON FEB. 2, 1994, HENCE, THE
INFORMATION IS FATALLY DEFECTIVE;
VIII
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING THAT THE
ALLEGED CRIME OF ILLEGAL RECRUITMENT WAS COMMITTED NOT ON [sic]
LARGE SCALE, HENCE, THE PENALTY SHOULD NOT BE LIFE IMPRISONMENT;
IX
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING THAT
THOSE EVIDENCES [sic] SEIZED AT THE HOUSE OF JASMIN[E] ALEJANDRO
AND PRESENTED TO THE COURT WERE PLANTED BY A BOGUS ATTORNEY[,]
ERLIE S. RAMOS OF THE POEA;
X
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT DISCOVERING THAT
ACCUSED-APPELLANT DID NOT RECEIVE ANY PAYMENT EVEN A SINGLE
CENTAVO FROM THE ALLEGED VICTIMS WHO DID NOT SUFFER DAMAGE IN
ANY MANNER, YET SHE WAS CONVICTED TO SERVE HER ENTIRE LIFE
BEHIND PRISON BARS. SUCH PUNISHMENT WAS CRUEL AND UNUSUAL,
HENCE, A WANTON VIOLATION OF THE CONSTITUTION.18
In the first assigned error, appellant maintains that the law defining "recruitment and placement"
violates due process. Appellant also avers, as part of her sixth assigned error, that she was
denied the equal protection of the laws.
We shall address the issues jointly.
void for vagueness and, thus, violates the due process clause.19
Due process requires that the terms of a penal statute must be sufficiently explicit to inform
those who are subject to it what conduct on their part will render them liable to its penalties. 20 A
criminal statute that "fails to give a person of ordinary intelligence fair notice that his
contemplated conduct is forbidden by the statute," or is so indefinite that "it encourages arbitrary
and erratic arrests and convictions," is void for vagueness.21 The constitutional vice in a vague or
indefinite statute is the injustice to the accused in placing him on trial for an offense, the nature
of which he is given no fair warning.22
We reiterated these principles in People vs. Nazario:23
As a rule, a statute or act may be said to be vague when it lacks comprehensible standards that
men "of common intelligence must necessarily guess at its meaning and differ as to its
application." It is repugnant to the Constitution in two respects: (1) it violates due process for
failure to accord persons, especially the parties targeted by it, fair notice of the conduct to avoid;
and (2) it leaves law enforcers unbridled discretion in carrying out its provisions and become an
arbitrary flexing of the Government muscle.
We added, however, that:
x x x the act must be utterly vague on its face, that is to say, it cannot be clarified by
either a saving clause or by construction. Thus, in Coates v. City of Cincinnati, the
U.S. Supreme Court struck down an ordinance that had made it illegal for "three or
more persons to assemble on any sidewalk and there conduct themselves in a
manner annoying to persons passing by." Clearly, the ordinance imposed no standard
at all "because one may never know in advance what 'annoys some people but does
not annoy others.'"
Coates highlights what has been referred to as a "perfectly vague" act whose
obscurity is evident on its face. It is to be distinguished, however, from legislation
couched in imprecise language—but which nonetheless specifies a standard though
defectively phrased—in which case, it may be "saved" by proper construction.
Here, the provision in question reads:
ART. 13. Definitions.—(a) x x x.
(b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for profit
or not: Provided, That any person or entity which, in any manner, offers or promises
for a fee employment to two or more persons shall be deemed engaged in recruitment
and placement.
(b) Any licensee or holder of authority found violating or causing another to violate any
provision of this Title or its implementing rules and regulations, shall upon conviction
thereof, suffer the penalty of imprisonment of not less than five years or a fine of not
less than P10,000 nor more than P50,000 or both such imprisonment and fine, at the
discretion of the court;
(c) Any person who is neither a licensee nor a holder of authority under this Title found
violating any provision thereof or its implementing rules and regulations shall, upon
conviction thereof, suffer the penalty of imprisonment of not less than four years nor
more than eight years or a fine of not less than P20,000 nor more than P100,000 or
both such imprisonment and fine, at the discretion of the court;
x x x.
In support of her submission that Article 13 (b) is void for vagueness, appellant invokes People
vs. Panis,24 where this Court, to use appellant's term, "criticized" the definition of "recruitment
and placement" as follows:
It is unfortunate that we can only speculate on the meaning of the questioned provision for lack
of records of debates and deliberations that would otherwise have been available if the Labor
Code had been enacted as a statute rather than a presidential decree is that they could be, and
sometimes were, issued without previous public discussion or consultation, the promulgator
heeding only his own counsel or those of his close advisers in their lofty pinnacle of power. The
not infrequent results are rejection, intentional or not, of the interest of the greater number and,
as in the instant case, certain esoteric provisions that one cannot read against the background
facts usually reported in the legislative journals.

x x x.
If the Court in Panis "had to speculate on the meaning of the questioned provision," appellant
asks, what more "the ordinary citizen" who does not possess the "necessary [legal] knowledge?"
When undertaken by non-licensees or non-holders of authority, recruitment activities are
punishable as follows:
Appellant further argues that the acts that constitute "recruitment and placement" suffer from
overbreadth since by merely "referring" a person for employment, a person may be convicted of
ART. 38. Illegal Recruitment. — (a) Any recruitment activities, including the prohibited illegal recruitment.
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
These contentions cannot be sustained.
Article 39 of this Code. The Ministry of Labor and Employment or any law enforcement
officer may initiate complaints under this Article.
Appellant's reliance on People vs. Panis is misplaced. The issue in Panis was whether, under
the proviso of Article 13 (b), the crime of illegal recruitment could be committed only "whenever
(b) Illegal recruitment when committed by a syndicate or in large scale shall be
two or more persons are in any manner promised or offered any employment for a fee." The
considered an offense involving economic sabotage and shall be penalized in
Court held in the negative, explaining:
accordance with Article 39 hereof.

As we see it, the proviso was intended neither to impose a condition on the basic rule nor to
Illegal recruitment is deemed committed by a syndicate if carried out by a group of
provide an exception thereto but merely to create a presumption. The presumption is that the
three (3) or more persons conspiring and/or confederating with one another in carrying
individual or entity is engaged in recruitment and placement whenever he or it is dealing with two
out any unlawful or illegal transaction, enterprise or scheme defined under the first
or more persons to whom, in consideration of a fee, an offer or promise of employment is made
paragraph hereof. Illegal recruitment is deemed committed in large scale if committed
in the course of the "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
against three (3) or more persons individually or as a group.
(of) workers."

x x x.
Art. 39. Penalties. – (a) The penalty of life imprisonment and a fine of One Hundred
Thousand Pesos (P100,000) shall be imposed if illegal recruitment constitutes
economic sabotage as defined herein:
The number of persons dealt with is not an essential ingredient of the act of recruitment and
placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute
recruitment and placement even if only one prospective worker is involved. The proviso merely
lays down a rule of evidence that where a fee is collected in consideration of a promise or offer
of employment to two or more prospective workers, the individual or entity dealing with them
shall be deemed to be engaged in the act of recruitment and placement. The words "shall be
deemed" create that presumption.
This is not unlike the presumption in article 217 of the Revised Penal Code, for example,
regarding the failure of a public officer to produce upon lawful demand funds or property
entrusted to his custody. Such failure shall be prima facie evidence that he has put them to
personal use; in other words, he shall be deemed to have malversed such funds or property. In
the instant case, the word "shall be deemed" should by the same token be given the force of a
disputable presumption or of prima facie evidence of engaging in recruitment and placement.
It is unfortunate that we can only speculate on the meaning of the questioned provision for lack
of records of debates and deliberations that would otherwise have been available if the Labor
Code had been enacted as a statute rather than a presidential decree is that they could be, and
sometimes were, issued without previous public discussion or consultation, the promulgator
heeding only his own counsel or those of his close advisers in their lofty pinnacle of power. The
not infrequent results are rejection, intentional or not, of the interest of the greater number and,
as in the instant case, certain esoteric provisions that one cannot read against the background
facts usually reported in the legislative journals.
At any rate, the interpretation here adopted should give more force to the campaign against
illegal recruitment and placement, which has victimized many Filipino workers seeking a better
life in a foreign land, and investing hard-earned savings or even borrowed funds in pursuit of
their dream, only to be awakened to the reality of a cynical deception at the hands of their own
countrymen.
Evidently, therefore, appellant has taken the penultimate paragraph in the excerpt quoted above
out of context. The Court, in Panis, merely bemoaned the lack of records that would help shed
light on the meaning of the proviso. The absence of such records notwithstanding, the Court was
able to arrive at a reasonable interpretation of the proviso by applying principles in criminal law
and drawing from the language and intent of the law itself. Section 13 (b), therefore, is not a
"perfectly vague act" whose obscurity is evident on its face. If at all, the proviso therein is merely
couched in imprecise language that was salvaged by proper construction. It is not void for
vagueness.
An act will be declared void and inoperative on the ground of vagueness and uncertainty, only
upon a showing that the defect is such that the courts are unable to determine, with any
reasonable degree of certainty, what the legislature intended. x x x. In this connection we cannot
pretermit reference to the rule that "legislation should not be held invalid on the ground of
uncertainty if susceptible of any reasonable construction that will support and give it effect. An
Act will not be declared inoperative and ineffectual on the ground that it furnishes no adequate
means to secure the purpose for which it is passed, if men of common sense and reason can
devise and provide the means, and all the instrumentalities necessary for its execution are within
the reach of those intrusted therewith."25
That Section 13 (b) encompasses what appellant apparently considers as customary and
harmless acts such as " labor or employment referral" ("referring" an applicant, according to
appellant, for employment to a prospective employer) does not render the law overbroad.
Evidently, appellant misapprehends concept of overbreadth.
A statute may be said to be overbroad where it operates to inhibit the exercise of individual
freedoms affirmatively guaranteed by the Constitution, such as the freedom of speech or
religion. A generally worded statute, when construed to punish conduct which cannot be
constitutionally punished is unconstitutionally vague to the extent that it fails to give adequate
warning of the boundary between the constitutionally permissible and the constitutionally
impermissible applications of the statute.26
In Blo Umpar Adiong vs. Commission on Elections,27 for instance, we struck down as void for
overbreadth provisions prohibiting the posting of election propaganda in any place – including
private vehicles – other than in the common poster areas sanctioned by the COMELEC. We held
that the challenged provisions not only deprived the owner of the vehicle the use of his property
but also deprived the citizen of his right to free speech and information. The prohibition
in Adiong, therefore, was so broad that it covered even constitutionally guaranteed rights and,
hence, void for overbreadth. In the present case, however, appellant did not even specify what
constitutionally protected freedoms are embraced by the definition of "recruitment and
placement" that would render the same constitutionally overbroad.
Appellant also invokes the equal protection clause28 in her defense. She points out that although
the evidence purportedly shows that Jasmine Alejandro handed out application forms and even
received Lourdes Modesto's payment, appellant was the only one criminally charged. Alejandro,
on the other hand, remained scot-free. From this, appellant concludes that the prosecution
discriminated against her on grounds of regional origins. Appellant is a Cebuana while Alejandro
is a Zamboangueña, and the alleged crime took place in Zamboanga City.
The argument has no merit.
At the outset, it may be stressed that courts are not confined to the language of the statute under
challenge in determining whether that statute has any discriminatory effect. A statute
nondiscriminatory on its face may be grossly discriminatory in its operation. 29 Though the law
itself be fair on its face and impartial in appearance, yet, if it is applied and administered by
public authority with an evil eye and unequal hand, so as practically to make unjust and illegal
discriminations between persons in similar circumstances, material to their rights, the denial of
equal justice is still within the prohibition of the Constitution.30
The prosecution of one guilty person while others equally guilty are not prosecuted, however, is
not, by itself, a denial of the equal protection of the laws.31 Where the official action purports to
be in conformity to the statutory classification, an erroneous or mistaken performance of the
statutory duty, although a violation of the statute, is not without more a denial of the equal
protection of the laws.32 The unlawful administration by officers of a statute fair on its face,
resulting in its unequal application to those who are entitled to be treated alike, is not a denial of
equal protection unless there is shown to be present in it an element
of intentional or purposeful discrimination. This may appear on the face of the action taken with
respect to a particular class or person, or it may only be shown by extrinsic evidence showing a
discriminatory design over another not to be inferred from the action itself. But a discriminatory
purpose is not presumed, there must be a showing of "clear and intentional
discrimination."33 Appellant has failed to show that, in charging appellant in court, that there
was a "clear and intentional discrimination" on the part of the prosecuting officials.
The discretion of who to prosecute depends on the prosecution's sound assessment whether the
evidence before it can justify a reasonable belief that a person has committed an offense.34 The
presumption is that the prosecuting officers regularly performed their duties, 35 and this
presumption can be overcome only by proof to the contrary, not by mere speculation. Indeed,
appellant has not presented any evidence to overcome this presumption. The mere allegation
that appellant, a Cebuana, was charged with the commission of a crime, while a
Zamboangueña, the guilty party in appellant's eyes, was not, is insufficient to support a
conclusion that the prosecution officers denied appellant equal protection of the laws.
There is also common sense practicality in sustaining appellant's prosecution.
While all persons accused of crime are to be treated on a basis of equality before the law, it
does not follow that they are to be protected in the commission of crime. It would be
unconscionable, for instance, to excuse a defendant guilty of murder because others have
murdered with impunity. The remedy for unequal enforcement of the law in such instances does Appellant attempts to cast doubt on the prosecution's case by claiming in her ninth assigned
not lie in the exoneration of the guilty at the expense of society x x x. Protection of the law will be error that Erlie Ramos of the POEA supposedly "planted" the application forms. She also assails
extended to all persons equally in the pursuit of their lawful occupations, but no person has the his character, alleging that he passed himself off as a lawyer, although this was denied by
right to demand protection of the law in the commission of a crime.36 Ramos.

Likewise,
[i]f the failure of prosecutors to enforce the criminal laws as to some persons should be
converted into a defense for others charged with crime, the result would be that the trial of the
district attorney for nonfeasance would become an issue in the trial of many persons charged
with heinous crimes and the enforcement of law would suffer a complete breakdown.37
We now come to the third, fourth and fifth assigned errors, all of which involve the finding of guilt
by the trial court.
The claim of "frame-up," like alibi, is a defense that has been invariably viewed by the Court with
disfavor for it can easily be concocted but difficult to prove. 43 Apart from her self-serving
testimony, appellant has not offered any evidence that she was indeed framed by Ramos. She
has not even hinted at any motive for Ramos to frame her. Law enforcers are presumed to have
performed their duties regularly in the absence of evidence to the contrary.44
Considering that the two elements of lack of license or authority and the undertaking of an
activity constituting recruitment and placement are present, appellant, at the very least, is liable
for "simple" illegal recruitment. But is she guilty of illegal recruitment in large scale? We find that
she is not.

Illegal recruitment is committed when two elements concur. First, the offender has no valid
A conviction for large scale illegal recruitment must be based on a finding in each case of illegal
license or authority required by law to enable one to lawfully engage in recruitment and
recruitment of three or more persons whether individually or as a group. 45 In this case, only two
placement of workers. Second, he or she undertakes either any activity within the meaning of
persons, Araneta and Modesto, were proven to have been recruited by appellant. The third
"recruitment and placement" defined under Article 13 (b), or any prohibited practices
person named in the complaint as having been promised employment for a fee, Jennelyn Baez,
enumerated under Article 34 of the Labor Code. 38 In case of illegal recruitment in large scale, a
was not presented in court to testify.
third element is added: that the accused commits said acts against three or more persons,
individually or as a group.39
It is true that law does not require that at least three victims testify at the trial; nevertheless, it is
necessary that there is sufficient evidence proving that the offense was committed against three
In this case, the first element is present. The certification of POEA Officer-in-Charge Macarulay
or more persons.46 In this case, evidence that appellant likewise promised her employment for a
states that appellant is not licensed or authorized to engage in recruitment and placement.
fee is sketchy. The only evidence that tends to prove this fact is the testimony of Nancy Araneta,
who said that she and her friends, Baez and Sandra Aquino, came to the briefing and that they
The second element is also present. Appellant is presumed engaged in recruitment and (she and her "friends") filled up application forms.
placement under Article 13 (b) of the Labor Code. Both Nancy Araneta and Lourdes Modesto
testified that appellant promised them employment for a fee. Their testimonies corroborate each
The affidavit47 Baez executed jointly with Araneta cannot support Araneta's testimony. The
other on material points: the briefing conducted by appellant, the time and place thereof, the fees
affidavit was neither identified, nor its contents affirmed, by Baez. Insofar as it purports to prove
involved. Appellant has not shown that these witnesses were incited by any motive to testify
that appellant recruited Baez, therefore, the affidavit is hearsay and inadmissible.48 In any case,
falsely against her. The absence of evidence as to an improper motive actuating the principal
hearsay evidence, such as the said affidavit, has little probative value.49
witnesses of the prosecution strongly tends to sustain that no improper motive existed and that
their testimony is worthy of full faith and credence.40
Neither can appellant be convicted for recruiting CIS agent Eileen Fermindoza or even the other
persons present in the briefing of January 30, 1994. Appellant is accused of recruiting only the
Appellant's denials cannot prevail over the positive declaration of the prosecution witnesses.
three persons named in the information — Araneta, Modesto and Baez. The information does
Affirmative testimony of persons who are eyewitnesses of the fact asserted easily overrides
not include Fermindoza or the other persons present in the briefing as among those promised or
negative testimony.41
offered employment for a fee. To convict appellant for the recruitment and placement of persons
other than those alleged to have been offered or promised employment for a fee would violate
That appellant did not receive any payment for the promised or offered employment is of no her right to be informed of the nature and cause of the accusation against her.50
moment. From the language of the statute, the act of recruitment may be "for profit or not;" it
suffices that the accused "promises or offers for a fee employment" to warrant conviction for
In any event, the purpose of the offer of the testimonies of Araneta, Morales and Fermindoza,
illegal recruitment.
respectively, was limited as follows:

The testimonies of Araneta and Modesto, coming as they do from credible witnesses, meet the
FISCAL BELDUA:
standard of proof beyond reasonable doubt that appellant committed recruitment and placement.
We therefore do not deem it necessary to delve into the second and third assigned errors
assailing the legality of appellant's arrest and the seizure of the application forms. A warrantless Your Honor please, we are offering the oral testimony of the witness, as one
arrest, when unlawful, has the effect of invalidating the search incidental thereto and the articles of those recruited by the accused, and also to identify some exhibits for the
so seized are rendered inadmissible in evidence.42 Here, even if the documents seized were prosecution and as well as to identify the accused.51
deemed inadmissible, her conviction would stand in view of Araneta and Modesto's testimonies.
xxx
 FISCAL BELDUA:
We are offering the oral testimony of the witness, Your Honor, to testify on
the fact about her recruitment by the accused and immediately before the
recruitment, as well as to identify some exhibits for the prosecution, and
also the accused in this case, Your Honor.52
xxx
FISCAL BELDUA:
WHEREFORE, the decision of the regional trial court is MODIFIED. Appellant is hereby declared
guilty of illegal recruitment on two (2) counts and is sentenced, for each count, to suffer the
penalty of four (4) to six (6) years of imprisonment and to pay a fine of P30,000.00.1âwphi1.nêt
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.
Footnotes
1 Records, p. 1.1

2 Id., at 28.2

3 TSN, July 11, 1994, pp. 3-13, 26-39.

This witness is going to testify that at around that date Your Honor, she was
connected with the CIS, that she was instructed together with a companion
to conduct a surveillance on the place where the illegal recruitment was
supposed to be going on, that she acted as an applicant, Your Honor, to
ascertain the truthfulness of the illegal recruitment going on, to identify the
accused, as well as to identify some exhibits for the prosecution.53
4 TSN, July 12, 1994, pp. 7-14, 35-56, 82-88, 102-110.
5 The documents seized include: Exhibit "C," the application form of one Josilyn Villa, consisting of four (4) pages; Exhibit "D," the application form of
one Shirley Estrada, consisting of nine (9) pages; Exhibit "E," the application form of one Cora Iglesia, with an annex of nine (9) pages; Exhibit "F," the
application form of Jocelyn Santos. Exhibit "G," the application form of Jennifer Alejandro; Exhibit "H," the application form of one Geraldine Reyes;
Exhibit "I," the application form of Lilibeth Estrada, consisting of six (6) pages; Exhibit "J," is the application form of Geraldine Sunga; Exhibit "K," is the
diploma of Shirley Estrada, together with a photocopy of her passport; Exhibit "L," a certification that Jasmine Alejandro rendered services as Staff
Nurse with the Camp Navarro General Hospital.

xxx 6 TSN, July 12, 1994, pp. 88-101, 110-124.

7 TSN, July 12, 1994, pp. 28-34.

8 TSN, July 11, 1994, pp. 18-19; TSN, July 12, 1994, p. 18.
Courts may consider a piece of evidence only for the purpose for which it was offered, 54 and the 9 TSN, July 11, 1994, pp. 21-22.
purpose of the offer of their testimonies did not include the proving of the purported recruitment 10 Exhibit "A."
of other supposed applicants by appellant. 11 Exhibits "M" and "N." Araneta and Baez executed a "Joint Affidavit."

12 TSN, August 15, 1994, pp. 4-18.

Appellant claims in her seventh assigned error that the information is fatally defective since it 13 Id., at 21-35.

charges her with committing illegal recruitment in large scale on January 30, 1994 while the 14 TSN, September 19, 1994, pp. 5-39.

prosecution evidence supposedly indicates that she committed the crime on February 2, 1994. 15 TSN, September 28, 1994, pp. 4-8.

16 TSN, October 13, 1994, pp. 2-7.

17 Decision of the Regional Trial Court, p. 24.

We find that the evidence for the prosecution regarding the date of the commission of the crime
does not vary from that charged in the information. Both Nancy Araneta and Lourdes Modesto
testified that on January 30, 1994, while in the Alejandro residence, appellant offered them
employment for a fee. Thus, while the arrest was effected only on February 2, 1994, the crime
had already been committed three (3) days earlier on January 30, 1994.
18 Brief for the Accused-Appellant, pp. 1-4.
19 Constitution, Article III, Section 1.
20 Connally v. General Construction Co., 269 US 385, 70 L Ed 322 46 S Ct 126 (1926).
21 Colautti v. Franklin, 439 US 379, 58 L Ed 2d 596, 99 S Ct 675 (1979).
22 American Communications Asso. v. Douds, 339 US 382, 94 L Ed 925, 70 S Ct 674 (1950).

23 165 SCRA 186 (1988).

The eighth and tenth assigned errors, respectively, pertain to the penalty of life imprisonment 24 142 SCRA 664 (1986).

imposed by the trial court as well as the constitutionality of the law prescribing the same, 25 People vs. Rosenthal and Osmeña, 68 Phil. 328 (1939).

appellant arguing that it is unconstitutional for being unduly harsh. 55 Section 19 (1), Article III of 26 Wright vs. Georgia, 373 US 284, 10 L Ed 2d 349, 83 S Ct 1240 (1963).

the Constitution states: "Excessive fines shall not be imposed, nor cruel, degrading or inhuman 27 207 SCRA 712 (1992).

punishment inflicted." 28 Constitution, Article III, Section 1.

29 American Motorists Ins. Co. v. Starnes, 425 US 637, 48 L Ed 2d 263, 96 S Ct 1800 (1976).

30 Yick Wo v. Hopkins, 118 US 356, 30 L Ed 1012, 18 S Ct 583 (1886), cited in Genaro Reyes Construction, Inc.  vs. Court of Appeals, 234 SCRA 16
The penalty of life imprisonment imposed upon appellant must be reduced. Because the (1994).
prosecution was able to prove that appellant committed recruitment and placement against two 31 Application of Finn, 356 P.2d 685 (1960).
persons only, she cannot be convicted of illegal recruitment in large scale, which requires that 32 Snowden v. Hughes, 321 US 1, 88 L Ed 497, 64 S Ct 397 (1943).
recruitment be committed against three or more persons. Appellant can only be convicted of two 33 Ibid.
counts of "simple" illegal recruitment, one for that committed against Nancy Araneta, and 34 Tan, Jr. vs. Sandiganbayan  (Third Division), 292 SCRA 452 (1998).
another count for that committed against Lourdes Modesto. Appellant is sentenced, for each 35 Rules Of Court, Rule 131, Sec. 5 (m).
count, to suffer the penalty of four (4) to six (6) years of imprisonment and to pay a fine of 36 People v. Montgomery, 117 P.2d 437 (1941).
P30,000.00. This renders immaterial the tenth assigned error, which assumes that the proper 37 State v. Hicks, 325 P.2d 794 (1958).
imposable penalty upon appellant is life imprisonment. 38 Abaca vs. Court of Appeals, 290 SCRA 657 (1998); Darvin vs. Court of Appeals, 292 SCRA 534 (1998); People vs. Juego, 298 SCRA 22 (1998).

39 People vs. Benedictus, 288 SCRA 319 (1998); People vs. Sadiosa, 290 SCRA 92 (1998); People vs. Sanchez, 291 SCRA 333 (1998); People vs.

Saley, 291 SCRA 715 (1998); People vs. Ganaden, 299 SCRA 433 (1998).

40  People vs. Badozo, 215 SCRA 33 (1992).

41 People vs. Santos, 276 SCRA 329 (1997).

42 E.g., Espano vs. Court of Appeals, 288 SCRA 558 (1998)

43 Espano vs. Court of Appeals, supra; People vs. Alegro, 275 SCRA 216 (1997).

44 Marco vs. Court of Appeals, 273 SCRA 276 (1997).

45 People vs. Reyes, 242 SCRA 264 (1995).

46 People vs. Ortiz-Miyake, 279 SCRA 180 (1997).

47 Exhibit "N."

48 See People vs. Manhuyod, Jr., 290 SCRA 257 (1998); and People vs. Quidato, Jr., 297 SCRA 1 (1998).

49 Salonga vs. Paño, 134 SCRA 438 (1985).

50 Constitution, Article III, Section 14 (1); Rules of Court, Rule 115, Section 1 (b).

51 TSN, August 15, 1994, p. 3.

52 Id., at 20.

53 TSN, July 12, 1994, pp. 79-80.

54 People vs. Lapay, 298 SCRA 62 (1998).

[G.R. NO. 155903 : September 14, 2007]

C.F. SHARP CREW MANAGEMENT, INC., Petitioner, v. HON. UNDERSECRETARY JOSE M. that C.F. Sharp violated Section 29 of the Labor Code when it designated officers and agents
ESPANOL, JR., HON. SECRETARY LEONARDO A. QUISUMBING and RIZAL without prior approval of the POEA.10
INTERNATIONAL SHIPPING SERVICES, Respondents.
Thus, the Administrator disposed:
DECISION
WHEREFORE, premises considered, the respondent CF Sharp Agency is as it is hereby
NACHURA, J.: ordered suspended for a period of six (6) months or in lieu thereof, it is ordered to pay a fine
of P50,000.00 for violation of Art. 29 of the Labor Code, as amended in relation to Sec. 6(b),
Rule II, Book II of the Rules and Regulations Governing Overseas Employment in accordance
The petitioner C.F. Sharp Crew Management, Inc. (C.F. Sharp) appeals by certiorari the April
with the schedule of penalties.
30, 2002 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 53747 and the November 5,
2002 Resolution2 denying its reconsideration.
Further, the respondent CF Sharp is as it is hereby ordered suspended for another period of
[eighteen] (18) months or to pay the fine of P180,000.00 for committing 9 counts of violation of
In 1991, Louis Cruise Lines (LCL), a foreign corporation duly organized and existing under the
Article 29 of the Labor Code as amended in relation to Sec. 2(k), Rule I, Book VI of the Rules
laws of Cyprus, entered into a Crewing Agreement3 with Papadopolous Shipping, Ltd.
and Regulations governing Overseas Employment.
(PAPASHIP). PAPASHIP in turn appointed private respondent Rizal International Shipping
Services (Rizal) as manning agency in the Philippines, recruiting Filipino seamen for LCL's
vessel. The period of suspension shall be served cummulatively (sic).

On October 3, 1996, LCL terminated the Crewing Agreement with PAPASHIP to take effect on The charges of violation of Sec. 6(b) of RA 8042 are hereby referred to the Anti-Illegal
December 31, 1996. It then appointed C.F. Sharp as crewing agent in the Philippines. C.F. Recruitment Branch for appropriate action.
Sharp requested for accreditation as the new manning agency of LCL with the Philippine
Overseas Employment Administration (POEA), but Rizal objected on the ground that its
SO ORDERED.11
accreditation still existed and would only expire on December 31, 1996.

C.F. Sharp elevated the Administrator's ruling to the Department of Labor and Employment
Pending approval of the accreditation, Theodoros Savva and Adrias Tjiakouris of LCL arrived in
(DOLE). On December 19, 1997, the then Secretary of Labor, Leonardo A. Quisumbing, 12 issued
the Philippines and conducted a series of interviews for seafarers at C.F. Sharp's office. Rizal
an Order,13 ruling that:
reported LCL's recruitment activities to the POEA on December 9, 1996, and requested an
ocular inspection of C.F. Sharp's premises.
WHEREFORE, except as above MODIFIED, the Order dated March 13, 1997 of the POEA
Administrator is AFFIRMED.
On December 17, 1996, POEA representatives conducted an inspection and found Savva and
Tjiakouris at C.F. Sharp interviewing and recruiting hotel staffs, cooks, and chefs for M/V
Cyprus, with scheduled deployment in January 1997.4 The Inspection Report5 signed by Accordingly, the C.F. Sharp Crew Management, Inc. is hereby found guilty of having violated
Corazon Aquino of the POEA and countersigned by Mr. Reynaldo Banawis of C.F. Sharp was Sec. 6, R.A. 8042 in relation to Article 13 (b) and (f), and Article 16 of the Labor Code as
thereafter submitted to the POEA. amended; Rule II (jj), Book I and Sec 1 and 6, Rule I, Book II, POEA Rules and Regulations
Governing Overseas Employment, for having conspired and confederated with the [Louis] Cruise
Lines, Theodorus Savva and Andrias (sic) Tjiakouris in the recruitment of seafarers for LCL's
On January 2, 1997, Rizal filed a complaint6 for illegal recruitment, cancellation or revocation of
ships, before it was duly accredited by POEA as the manning agency of LCL, thus a non-holder
license, and blacklisting against LCL and C.F. Sharp with the POEA, docketed as POEA Case
of authority at the time. The penalty imposed against it of suspension of its license for six (6)
No. RV-97-01-004. Then, on January 31, 1997, Rizal filed a Supplemental Complaint7 adding
months or in lieu thereof, to pay a fine of Fifty Thousand Pesos (P50,000.00), is AFFIRMED.
violation of Section 29 of the Labor Code of the Philippines, for designating and/or appointing
agents, representatives and employees, without prior approval from the POEA.
Further, C.F. Sharp Crew Management, Inc. is hereby found guilty of one (1) count of violation of
Art. 29 of the Labor Code in relation to Sec. 2 (k), Rule I, Book VI of the Rules and Regulations
For its part, C.F. Sharp admitted that Savva and Tjiakouris conducted interviews at C.F. Sharp's
Governing Overseas Employment, and is imposed the penalty of two (2) months suspension of
office, but denied that they were for recruitment and selection purposes. According to C.F.
its license or in lieu thereof, to pay a fine of P20,000.00.
Sharp, the interviews were held for LCL's ex-crew members who had various complaints against
Rizal. It belittled the inspection report of the POEA inspection team claiming that it simply stated
that interviews and recruitment were undertaken, without reference to who were conducting the The penalties of suspension for both violations shall be served cumulatively.
interview and for what vessels.8 C.F. Sharp also averred that Rizal was guilty of forum shopping,
and prayed for the dismissal of the complaint on this ground and for its lack of merit.9
Out of the P230,000.00 cash supersedeas bond posted by the petitioner-appellant, let the
amount of P160,000.00 be released and refunded to it, retaining P70,000.00 to be applied to the
The POEA Administrator was not persuaded and found C.F. Sharp liable for illegal recruitment. payment of the fines as imposed above, should the petitioner opt to pay the fine instead of
According to the Administrator, the inspection report of Ms. Aquino established that Savva and undergoing suspension of its license. However, the suspension shall remain in force until such
Tjiakouris had conducted, and, at the time of the inspection, had been conducting interviews, fine is paid, or in the event that the petitioner-appellant further appeals this Order.
selection and hiring for LCL, without any authority from the POEA. The Administrator also held
The charge and finding of violation of Sec. 6 (b) of R.A. 8042 are hereby referred to the Anti- The general rule is that when a judgment has been satisfied, it passes beyond review,
Illegal Recruitment Branch for appropriate action. satisfaction being the last act and the end of the proceedings, and payment or satisfaction of the
obligation thereby established produces permanent and irrevocable discharge; hence, a
judgment debtor who acquiesces to and voluntarily complies with the judgment is estopped from
SO ORDERED.14
taking an appeal therefrom.21

C.F. Sharp's motion for reconsideration having been denied on February 5, 1999 by the then
In holding C.F. Sharp in estoppel, the CA apparently relied on the April 15, 1999 Order of the
Undersecretary, Jose M. Espanol, Jr.,15 it elevated the case to this Court on Petition
POEA, and, thus, declared:
for Certiorari, with the case docketed as G.R. No. 137573. But, in the June 16, 1999 Resolution,
this Court referred the petition to the CA.
[P]etitioner C.F. Sharp had already manifested its option to have the cash bond posted as an
answer for the alternative fines imposed in the Orders dated December 19, 1997 as stated in the
In the meantime, on April 15, 1999, C.F. Sharp requested the lifting of the suspension decreed
Order dated April 15, 1999 of the POEA, Adjudication Office x x x. Thus, for voluntary execution
by the Secretary of Labor in his December 19, 1997 Order, 16 which was granted by Deputy
of the Order of the Secretary of DOLE dated December 19, 1997 by paying the adjudged fines,
Administrator for Licensing and Adjudication Valentin C. Guanio. C.F. Sharp was allowed to
the petitioner was then estopped from assailing such Order before Us by way of petition
deploy seafarers for its principals.
for certiorari . Where a party voluntarily executes, partially or totally a judgment or acquiesces or
ratifies the execution of the same, he is estopped from appealing therefrom. x x x.22
Consequently, on April 30, 2002, the CA denied C.F. Sharp's Petition for Certiorari,17 holding that
C.F. Sharp was already estopped from assailing the Secretary of Labor's ruling because it had
The April 15, 1999 Order of Deputy Commissioner Valentin C. Guanio reads:
manifested its option to have the cash bond posted answer for the alternative fines imposed
upon it. By paying the adjudged fines, C.F. Sharp effectively executed the judgment, having
acquiesced to, and ratified the execution of the assailed Orders of the Secretary of Labor. The Respondent C.F. Sharp Crew Management, Inc., thru counsel having manifested its option to
CA also agreed with the POEA Administrator and the Secretary of Labor that Savva and have the cash bond posted answer for the alternative fines imposed in the above-entitled case;
Tjiakouris of LCL, along with C.F. Sharp, undertook recruitment activities on December 7, 9 to the alternative suspension imposed in the Order of the Secretary dated December 19, 1997 is
12, 1996, sans any authority. Finally, it affirmed both labor officials' finding that C.F. Sharp hereby Lifted.
violated Article 29 of the Labor Code and Section 2(k), Rule I, Book VI of the POEA Rules when
it appointed Henry Desiderio as agent, without prior approval from the POEA. Thus, the
SO ORDERED.23
appellate court declared that the Secretary of Labor acted well within his discretion in holding
C.F. Sharp liable for illegal recruitment.
This Order was issued in response to C.F. Sharp's request to lift the suspension decree of the
18 19 Secretary of Labor. The request stated, viz.:
C.F. Sharp filed a motion for reconsideration,  but the CA denied it on November 25, 2002.

[W]e write in behalf of our client, C.F. Sharp Crew Management Inc., regarding the Advice To
Hence, this appeal, positing these issues:
Operating Units dated April 15, 1999, which arose from the Decision of the Office of the
Secretary of Labor in the case entitled C.F. Sharp Crew Management, Inc. v. Rizal Shipping and
A. WHETHER OR NOT THE COURT OF APPEALS PATENTLY ERRED IN RULING THAT docketed as RV 97-01-004.
PETITIONER IS IN ESTOPPEL IN QUESTIONING THE ORDER DATED DECEMBER 19, 1997
AND THE RESOLUTION DATED FEBRUARY 5, 1999.
In this connection, we would like to express our option to have the cash bond posted by us in the
case entitled C.F. Sharp Crew Management, Inc. v. Rizal Shipping and docketed as RV 97-01-
B. WHETHER OR NOT THE COURT OF APPEALS PATENTLY ERRED WHEN IT RULED 044 to answer for any fine that the Supreme Court may finally decide that our client should
THAT PETITIONER IS LIABLE FOR VIOLATION OF SECTION 6[,] R.A. NO. 8042 IN pay in the Case entitled, C.F. Sharp Crew Management, Inc. v. Secretary Leonardo Quisumbing
RELATION TO ARTICLE 13 (b) and (f) AND ARTICLE 66 (sic) OF THE LABOR CODE AS and Rizal International Shipping Services and docketed as G.R. No. 137573.
AMENDED; RULE II (jj) BOOK I; AND SECTIONS 1 AND 6, RULE I, BOOK III POEA RULES
AND REGULATIONS GOVERNING OVERSEAS EMPLOYMENT.
Under the circumstances, it is most respectfully requested that the aforesaid advice be
RECALLED and that a clearance be issued in favor of our client, C.F. Sharp Crew Management,
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT Inc.
PETITIONER IS LIABLE FOR VIOLATION OF ARTICLE 29 OF THE LABOR CODE, AS
AMENDED, IN RELATION TO SECTION II (k)[,] RULE I, BOOK VI OF THE RULES AND
Hoping for your immediate and favorable action on the matter.24 (Emphasis
REGULATIONS GOVERNING OVERSEAS EMPLOYMENT.20
supplied)cralawlibrary

C.F. Sharp faults the CA for ruling that petitioner is estopped from questioning the resolutions of
C.F. Sharp's letter was explicit that the cash bond posted would be answerable for any fine that
the Secretary of Labor. It denied that it voluntarily executed, or acquiesced to, the assailed
it may ultimately be held liable to pay by virtue of a final decision. In fact, on March 25, 1999,
resolutions of the Secretary.
prior to the filing of the above-quoted letter-request, C.F. Sharp had already filed a Petition
for Certiorari assailing the Orders of the Secretary of Labor. Furthermore, there is no showing
that the assailed Order of then Secretary Quisumbing was indeed executed to warrant the
appellate court's conclusion that C.F. Sharp was estopped from assailing the said Order. Clearly,
there is no basis for the CA to rule that C.F. Sharp voluntarily executed, or acquiesced to, the
execution of the unfavorable ruling of the Secretary of Labor.
The first issue having been settled, we now resolve whether C.F. Sharp is liable for illegal
recruitment.
C.F. Sharp denies committing illegal recruitment activities in December 1996. It posits that the
interviews undertaken by Savva and Tjiakouris do not amount to illegal recruitment under
Section 6 of Republic Act No. 8042 or the Migrants Workers Act. Further, it contends that the
interviews conducted were not for selection and recruitment purposes, but were in connection
with the seamen's past employment with Rizal, specifically, their complaints for non-remittance
of SSS premiums, withholding of wages, illegal exactions from medical examinations and
delayed allotments. It claims that it was only upon approval of its application for accreditation
that the employment contracts were entered into and actual deployment of the seamen was
made. C.F. Sharp, thus, concludes that it cannot be held liable for illegal recruitment.
The reasoning is specious.
Undoubtedly, in December 1996, LCL had no approved POEA license to recruit. C.F. Sharp's
accreditation as LCL's new manning agency was still pending approval at that time. Yet Savva
and Tjiakouris, along with C.F. Sharp, entertained applicants for LCL's vessels, and conducted
preparatory interviews.
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: 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 basis of this definition - and contrary to what C.F. Sharp wants to portray - the conduct of
preparatory interviews is a recruitment activity.
The fact that C.F. Sharp did not receive any payment during the interviews is of no moment.
From the language of Article 13(b), the act of recruitment may be "for profit or not." Notably, it is
the lack of the necessary license or authority, not the fact of payment, that renders the
recruitment activity of LCL unlawful.
C.F. Sharp's claim that the interviews were not for selection and recruitment purposes does not
impress. As the Secretary of Labor aptly said:
This Office cannot conceive of a good reason why LCL/Savva/Tjiakouris should be interested at
the time in unearthing alleged violations committed by Rizal Shipping whose representative
status as manning agency was to be terminated in just a few weeks thereafter, spending
valuable time and money in the process. They stood to gain nothing from such taxing exercise
involving several hundreds of ex-crew members, which could be handled by government
agencies like the POEA, NLRC, SSS. The observation of the POEA Administrator that the
complaints of the crewmen were filed only after Rizal Shipping filed its complaints with the POEA
merely to bolster the defense of CF Sharp/LCL/Savva and Tjiakouris, is telling.
Upon the other hand, it was more to LCL'S gain to interview, select and recruit the disembarking
crewmen previously recruited by Rizal Shipping, using CF Sharp's facilities, as this would result
in less recruitment time and cost.
Finally, the claim of Savva and Tjiakouris that Savva "talked to the POEA representative during
their visit" about these interviews and the violations which were confirmed, is just an afterthought
to support their defense; there is no entry in the Inspection Report confirming such claim. If such
claim were true, then the "able officer" of CF Sharp (LCL's Attorney-in fact) who signed his
conformity on the 4th page of the report, and put his initial on the last page of the report
containing the handwritten findings of the inspectors on the selection and recruitment activities of
Savva and Tjiakouris, would have insisted that an entry be made thereon about what Savva told
the inspectors, or he could simply himself have written thereon that the two LCL officials merely
conducted interviews on the violations committed by Rizal Shipping. However, the report is
bereft of anything to that effect. More significant is the fact that the inspectors, in their
Memorandum dated December 11, 1996 (the very same day they conducted the inspection),
stated that they "approached said persons" (referring to Banawis, Savva and Tjiakouris) "and
told us that they were doing interview to select applicants' to complement the crew of a
passenger ship for [LOUIS] CRUISE LINES."25
Indeed, it was Savva and Tjiakouris that conducted the interviews, and undertook selection and
hiring. However, C.F. Sharp cannot steer clear of liability for it conspired with LCL in committing
illegal recruitment activities. As the Secretary of Labor had taken pains to demonstrate:
x x x [T]here is substantial evidence on record that as alleged by Rizal Shipping, CF Sharp
conspired with LCL and its officers Savva and Tjiakouris to conduct recruitment activities in its
offices, at a time when LCL was not yet its POEA-accredited principal, in violation of Sec. 6, R.A.
8042 in relation to Article 13(b) and (f) and Article 16 of the Labor Code as amended; Rule II(jj)
Book I, and Sec. 1 and 6, Rule I, Book III, all of the POEA Rules and Regulations Governing
Overseas Employment.
Indeed, C.F. Sharp was aware of these violations when it alleged in its Petition for Review that:
" in any and all events, the findings relied upon by the Public Respondent show, at best, that
the parties responsible for the alleged acts of illegal recruitment are LCL and its officers alone,
or at worst, LCL and its officers, in conspiracy with petitioner. Yet, it is petitioner alone, who is
severely punished and penalized." (underscoring supplied)
xxx
The intention, agreement and both common design of both LCL and CF Sharp to engage in
recruitment of crewmen for LCL's ships had already been made manifest when LCL through
Savva had instructed, in the October 14, 1996 letter to disembarking crewmembers, for the latter
to report to CF Sharp for processing of their papers. This was followed by the execution by LCL
on October 17, 1996 of a Special Power of Attorney in favor of CF Sharp as new manning agent
and attorney-in-fact of LCL, with authority, among others, "to sign, authenticate and deliver all
documents necessary to complete any transaction related to the recruitment and hiring of
Filipino seamen including the necessary steps to facilitate the departure of recruited seamen";
"to assume, on our behalf and for our account, any liability that may arise in connection with the
recruitment of seamen and/or implementation of the employment contract of said seamen." And
on November 8, 1996, CF Sharp applied for accreditation as manning agent of LCL for the
latter's five named vessels. The discovery by the POEA inspectors of the selection and
recruitment activities undertaken by Savva and Tjiakouris at CF Sharp's offices on December 11,
1996, followed. The interviews by Savva and Tjiakouris at CF Sharp's offices on December 7,
1996 with around 300 crewmen, as sworn to by 98 crewmen (their affidavits were submitted in
evidence by CF Sharp); the interviews for selection and recruitment from December 9 to 12,
1996 as found by the POEA inspectors; and the immediate deployment of 154 crewmen for LCL
right after [the] POEA approval of accreditation of LCL as principal of CF Sharp, could not have
been undertaken without the assistance and cooperation of CF Sharp, even before such transfer
of accreditation was granted by POEA.
The petitioner-appellant must be reminded that prior to approval of the transfer of accreditation,
no recruitment or deployment may be made by the principal by itself or through the would-be
transferee manning agency, or by the latter, as this would constitute illegal recruitment by a non-
holder of authority under Sec. 6, R.A. 8042 in relation to Article 13(b) and (f) and Article 16 of the
Labor Code as amended; Rule II(jj), Book I, and Sec. 1 and 6, Rule 1, Book III, POEA Rules and
Regulations Governing Overseas Employment.
The petitioner-appellant alleges that "there is no need for a license to enable LCL's officers to
conduct their alleged activities of interviewing, selecting and hiring crewmen. Indeed, LCL's
officers could have conducted these activities without a license."
Such claim is without legal basis, as direct hiring by employers of Filipino workers for overseas
employment is banned; they can only do so through, among others, licensed private recruitment
and shipping/mining agencies (Art. 18, Labor Code as amended; Sec. 1, Rule 1, Book II, POEA
Rules and Regulations Governing Overseas Employment).26
We need not say more.
C.F. Sharp also denies violating Article 29 of the Labor Code. It insists that Henry Desiderio was
neither an employee nor an agent of C.F. Sharp. Yet, except for its barefaced denial, no proof
was adduced to substantiate it.
Desiderio's name does not appear in the list of employees and officials submitted by C.F. Sharp
to the POEA. However, his name appeared as the contact person of the applicants for the
position of 2nd and 3rd assistant engineers and machinist/fitter in C.F Sharp's advertisement in
the February 2, 1997 issue of The Bulletin Today.27
Article 29 of the Labor Code is explicit, viz.:
Art. 29. NON-TRANSFERABILITY OF LICENSE OR AUTHORITY
No license or authority shall be used directly or indirectly by any person other than the one in
whose favor it was issued or at any place other than that stated in the license or authority, nor
may such license or authority be transferred, conveyed or assigned to any other person or entity.
Any transfer of business address, appointment or designation of any agent or representative
including the establishment of additional offices anywhere shall be subject to the prior approval
of the Department of Labor. (Emphasis ours)
Thus, Section 2(k), Rule 1, Book VI of the POEA Rules Governing Overseas
Employment provides:
Section 2. Grounds for Suspension/Cancellation of License.
xxx
k. Appointing or designating agents, representatives or employees without prior approval from
the Administration.
The appointment or designation of Desiderio as an employee or agent of C.F. Sharp, without
prior approval from the POEA, warrants administrative sanction. The CA, therefore, correctly
rejected C.F. Sharp's posture.
Apparently, realizing the folly of its defenses, C.F. Sharp assails the admissibility of the
Memorandum and Inspection Report of the POEA. It contends that these are patently
inadmissible against C.F. Sharp for it was not given an opportunity to cross'examine the POEA
inspectors regarding the report.
The argument does not deserve even a short shrift. First, C.F. Sharp did not raise it before the
POEA and Secretary of Labor. The issue was raised for the first time in its Petition
for Certiorari with the CA, where the jurisdiction of the appellate court is limited to issues of
jurisdiction and grave abuse of discretion. On numerous occasions, we have made it clear that
to allow fresh issues at this stage of the proceedings is violative of fair play, justice and due
process.28
Second, jurisprudence is replete with rulings that administrative bodies are not bound by the
technical niceties of law and procedure and the rules obtaining in the courts of law. 29 Hence,
whatever merit C.F. Sharp's argument might have in the context of ordinary civil actions, where
the rules of evidence apply with greater rigidity, disappears when adduced in connection with
labor cases.
The claim of denial of due process on the part of C.F. Sharp must also be rejected. The essence
of due process lies in the reasonable opportunity afforded a party to be heard and to submit any
evidence in support of its defense. What is vital is not the opportunity to cross-examine an
adverse witness, but an opportunity to be heard.30
In this case, C.F. Sharp was given ample opportunity to be heard, to adduce evidence in support
of its version of the material occurrences, and to controvert Rizal's allegation and the Inspection
Report. It submitted its position paper with supporting affidavits and documents, and additionally
pleaded its causes on appeal before the Secretary of Labor. Under the circumstances, a claim of
denial of due process on C.F. Sharp's part is completely unavailing.
C.F. Sharp next impugns the probative value given by the Administrator and the Secretary of
Labor to the Inspection Report. It alleges that the POEA Administrator, the Labor Secretary and
the CA relied only on the Inspection Report and gave very little or no probative value to the
affidavits that it submitted in support of its claim.
C.F. Sharp would have us re-evaluate the factual veracity and probative value of the evidence
submitted in the proceedings a quo. C.F. Sharp may well be reminded that it is not our function
to review, examine, and evaluate or weigh the evidence adduced by the parties. Elementary is
the principle that this Court is not a trier of facts. Judicial review of labor cases does not go
beyond the evaluation of the sufficiency of the evidence upon which the labor officials' findings
rest. Hence, where the factual findings of the labor tribunals or agencies conform to, and are
affirmed by, the CA, the same are accorded respect and finality, and are binding upon this Court.
It is only when the findings of the labor agencies and the appellate court are in conflict that this
Court will review the records to determine which findings should be upheld as being more in
conformity with the evidentiary facts. Where the CA affirms the labor agencies on review and
there is no showing whatsoever that said findings are patently erroneous, this Court is bound by
the said findings.31
 17
Although the rule admits of several exceptions, none of them are in point in this case. In any  Id. at 35-49.
event, we have carefully examined the factual findings of the CA and found the same to be
borne out of the record and sufficiently anchored on the evidence presented. 18
 Id. at 53-61.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in 19
 Id. at 51-52.
CA-G.R. SP. No. 53747 are AFFIRMED.
20
 Id. at 898.
SO ORDERED.
21
 Vital-Gozon v. Court of Appeals, G.R. No. 101428, August 5, 1992, 212 SCRA 235, 256.
Ynares-Santiago, J., Chairperson, Austria-Martinez, Chico-Nazario, Reyes, JJ., concur.
22
 Rollo, p. 41.
Endnotes:
23
 Id. at 746.

24
 POEA record.
1
 Rollo, pp. 35-49.
25
 Rollo, p. 110.
2
 Id. at 51-52.
26
 Id. at 112-114.
3
 Id. at 146-148.
27
 Id. at 283.
4
 Id. at 154-158.
28
 Gualberto v. Go, G.R. No. 139843, July 21, 2005, 463 SCRA 671, 678; Philippine National
5
 Id. Construction Corporation (PNCC) v. National Labor Relations Commission, 315 Phil. 746, 756
(1995).
6
 Id. at 126-128.
29
 China Banking Corporation v. Borromeo, G.R. No. 156515, October 19, 2004, 440 SCRA 621,
7 635; Bantolino v. Coca-Cola Bottlers Philippines, 451 Phil. 839, 846 (2003); Rabago v. National
 Id. at 194-205. Labor Relations Commission, G.R. No. 82868 and G.R No. 82932, August 5, 1991, 200 SCRA
158, 165.
8
 Id. at 133-143.
30
 Shoemart, Inc. v. National Labor Relations Commission, G.R. NOS. 90795-96 & 91125-26,
9
 Id. at 206-225. August 13, 1993, 225 SCRA 311, 320.

31
10
 Id. at 557-572.  Falco v. Mercury Freight International, G.R. No. 153824, August 9, 2006.

11
 Id. at 572.

12
 Now Associate Justice of this Court.

13
 Rollo, pp. 103-121.

14
 Id. at 120-121.

15
 Id. at 123-125.

16
 Id. at 746.
 QUISUMBING, J.:

On appeal is the Decision1 dated June 28, 2007, of the Court of Appeals in CA-G.R. CR-H.C.
No. 01902, affirming the Decision2 dated May 2, 2005, of the Regional Trial Court (RTC) of
Pasay City, Branch 118 in Criminal Cases Nos. 03-2700 and 03-2701. The RTC convicted
appellant of the crimes of syndicated illegal recruitment constituting economic sabotage
and estafa.

On November 12, 2003, the Office of the City Prosecutor of Pasay filed before the RTC two
Informations3 against appellant Nida Adeser y Rico, Lourdes Chang, and the spouses Roberto
and Mel Tiongson. The Informations read as follows:

Criminal Case No. 03-2700

That on or about and sometime in the month of May, 2003, in Pasay City, Metro Manila,
Philippines and within the jurisdiction of this Honorable Court, the above-named accused,
conspiring and confederating together and mutually helping one another, by means of false
representation and fraudulent allegation to the effect that they could secure employment abroad
for complainant JOSEPHINE R. PALO, did then and there wilfully, unlawfully and feloniously
recruit for a fee aforesaid person without the corresponding license from the Philippine Overseas
Employment Administration, a syndicated illegal recruitment involving economic sabotage.

Contrary to law.4

Criminal Case No. 03-2701

That on or about and sometime in the month of May, 2003, in Pasay City, Metro Manila,
Philippines and within the jurisdiction of this Honorable Court, the above-named accused,
conspiring and confederating together and mutually helping one another, defrauded private
complainant JOSEPHINE R. PALO, in the following manner to wit: that said accused, by means
of false representations and fraudulent allegations that they could facilitate private complainant's
working and travel papers, did then and there wilfully, unlawfully, and feloniously ask, demand
and receive from the said complainant the amount of P80,000.00 as placement fee for the
latter's supposed deployment to Australia as "Apple Picker/Office Worker"; and said private
complainant carried away by said misrepresentations, in fact gave and delivered to said accused
the amount of P80,000.00, which amount accused in turn misapplied, misappropriated and
converted to their own personal use and benefit, failing, however, to deploy private complainant
to Australia, and despite repeated demands accused failed and refused to do so, or account for
the said amount, to the damage and prejudice of the said private complainant in the aforesaid
amount of P80,000.00.

Contrary to law.5

Upon arraignment, appellant pleaded not guilty6 to both charges while her co-accused remained
at large. Trial on the merits thereafter ensued.

Private complainant Josephine R. Palo and her sister Teresa Caraig testified that sometime in
[G.R. NO. 179931 : October 26, 2009]
November 2002, the spouses Roberto and Mel Tiongson, agents of Naples Travel and Tours,
introduced Palo to appellant, owner and general manager of Naples, to discuss employment
PEOPLE OF THE PHILIPPINES, Appellee, v. NIDA ADESER y RICO, Appellant. opportunities in Australia. During their meeting held at the Naples office in Villaruel Tower,
Villaruel Street, Pasay City, appellant and the spouses Tiongson informed Palo that for a
placement fee of P80,000, she can work as an apple picker in Australia with a monthly salary of
DECISION
$1,400.
Thus, on November 8, 2002, Palo and Caraig went to the Naples office and gave Roberto
Tiongson and Lourdes Chang, operations manager of Naples, P15,000 as first installment for
the placement fee. Palo was issued a voucher 7 signed by Roberto and Chang stating therein
that the P15,000 was for Palo's visa application.
On November 11, 2002, Palo and Caraig returned to the Naples office and paid P58,500. She
was again issued a voucher8 signed by Roberto and Chang stating therein that the amount paid
was for Palo's visa application. Palo insisted that the voucher should indicate that her payments
were for "placement fees" but they were able to convince her that it is not necessary because
they know her.
After making her payments, she was required to submit her resume and pictures and was
promised that she would be employed within three months.
More than three months passed, however, but Palo was not deployed to Australia. Neither did
she get her Australian visa.
In May 2003, she learned from the National Bureau of Investigation (NBI) that Naples had closed
down. NBI likewise informed her that Naples had no license to operate and deploy workers
abroad. Upon advice of the NBI, Palo filed a complaint9 against appellant, the spouses Tiongson
and Chang.
Appellant on the other hand denied the charges against her. She admitted that she was the
owner and general manager of Naples which was a travel agency that offered visa assistance,
ticketing, documentation, airport transfer and courier services, but denied having engaged in
recruitment. She claimed that she cannot remember meeting Palo in her office and asserted that
she met her for the first time only at the fiscal's office when Palo was already claiming for a
refund. She testified that Roberto, to whom Palo claims to have given her payment, was neither
her employee nor her agent but was only her driver's brother. Based on her records, Roberto
endorsed to her office P30,000 from Palo for tourist visa assistance. Appellant also admitted that
she and Roberto offered to settle the P30,000 but not the amount claimed by Palo per vouchers
issued to her.
On May 2, 2005, the trial court rendered a Decision finding appellant guilty of both charges. The
dispositive portion reads:
WHEREFORE, all the foregoing considered NIDA ADESER is hereby found GUILTY beyond
reasonable doubt of the crime of Syndicated Illegal Recruitment constituting Economic Sabotage
in Criminal Case No. 03-2700 and Estafa in Criminal Case No. 03-2701. Accordingly, she is
hereby sentenced to suffer the following penalties:
1. In Criminal Case No. 3-2700 - LIFE IMPRISONMENT and a FINE of Five Hundred Thousand
Pesos (P500,000.00), and
2. In Criminal Case No. 03-2701 - Indeterminate imprisonment of six (6) years of prision
correccional, as minimum, to 13 years of reclusion temporal, as maximum, and to indemnify
Josephine R. Palo the sum of Eighty Thousand Pesos (P80,000.00) with legal interest from the
time of the filing of the information.
Cost against the accused.
SO ORDERED.10
Appellant appealed her conviction but the same was affirmed by the Court of Appeals in its
Decision dated June 28, 2007. The appellate court did not give credence to appellant's denials
and found that the prosecution evidence fully supports the finding that appellant and her co-
accused engaged in recruitment and placement as defined under the Labor Code despite having
no authority to do so. It likewise held that the same evidence proving the commission of the
crime of illegal recruitment also established that appellant and her co-accused acted in unity in
defrauding Palo and in misrepresenting to her that upon payment of the placement fee, they
could obtain employment abroad for her. The appellant's act of deception and the resultant
damage suffered by Palo render appellant guilty of estafa.
In this appeal, appellant raises the following lone assignment of error:
THE [APPELLATE] COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT
OF THE CRIME CHARGED DESPITE THE FAILURE OF THE PROSECUTION TO PROVE
HER GUILT BEYOND REASONABLE DOUBT.11
Essentially, the issue is whether appellant's guilt for the crimes of syndicated illegal recruitment
and estafa was proven beyond reasonable doubt.
Appellant argues that she was able to prove that she was not part of the group that defrauded
Palo. She points out that as can be gleaned from the facts established and even from Palo's
testimony, she was not involved in the evil scheme orchestrated by Roberto and Chang as her
signature did not even appear on the vouchers issued to Palo.
Appellant likewise contends that the elements of the crime of illegal recruitment were not
established with moral certainty. Naples was never into recruitment as it was only engaged in
the business of assisting clients procure passports and visas. She argues that it should be
Roberto and Chang who should be convicted as she had no hand in recruiting Palo.
Appellant's arguments are bereft of merit.
Illegal recruitment is committed when these two elements concur: (1) the offenders have no valid
license or authority required by law to enable them to lawfully engage in the recruitment and
placement of workers, and (2) the offenders undertake any activity within the meaning of
recruitment and placement defined in Article 13(b) or any prohibited practices enumerated in
Article 34 of the Labor Code. Under Article 13(b), recruitment and placement refers to "any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers and includes
referrals, contract services, promising or advertising for employment, locally or abroad, whether
for profit or not." In the simplest terms, illegal recruitment is committed by persons who, without
authority from the government, give the impression that they have the power to send workers
abroad for employment purposes. 12 The law imposes a higher penalty when the crime is
committed by a syndicate as it is considered as an offense involving economic sabotage. Illegal
recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first paragraph of Article 38 of the Labor
Code.13
Undoubtedly, what transpired in the instant case is illegal recruitment by a syndicate. As
categorically testified by Palo and Caraig, appellant, together with her co-accused, made
representations to Palo that they could send her to Australia to work as an apple picker. There is
no denying that they gave Palo the distinct impression that they had the power or ability to send
her abroad for work such that the latter was convinced to part with a huge amount of money as
placement fee in order to be employed. And this act was committed by appellant and her co-
accused even if they did not have the required license to do so. Appellant herself admitted that
Naples, the travel agency which she owned and managed, only offered visa assistance,
ticketing, documentation, airport transfer and courier services. Clearly, neither she nor her
agents had a license to recruit Palo to work abroad. It is the lack of the necessary license or
authority that renders the recruitment unlawful or criminal.14
As appellant was found guilty of syndicated illegal recruitment constituting economic sabotage,
she was aptly meted out the penalty of life imprisonment and to pay a fine of P500,000.
With respect to the estafa case, Article 315 of the Revised Penal Code reads:

Thus, as against the positive and categorical testimonies of Palo and Caraig, appellant's denials
ART. 315. Swindling (estafa). - Any person who shall defraud another by any of the means
cannot prevail.15 Moreover, there is no reason to overturn the trial and appellate courts' findings
mentioned hereinbelow shall be punished by:
on the credibility of the prosecution witnesses as there is no showing that any of them had ill
motives against appellant or her co-accused and especially since it appears they were motivated
solely by the desire to bring appellant and her co-accused to justice for the crimes they have 1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum
committed.16 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
Neither can this Court sustain appellant's contention that her participation in the recruitment is
which may be imposed shall not exceed twenty years. In such cases, and in connection with the
negated by the fact that her signature does not even appear on the vouchers issued to Palo.
accessory penalties which may be imposed and for the purpose of the other provisions of this
Even if Palo did not present receipts signed by appellant, this would not rule out the fact that
Code, the penalty shall be termed prision mayor or reclusion temporal, as the case may be;
appellant did receive the money. This Court has consistently ruled that absence of receipts as to
the amounts delivered to a recruiter does not mean that the recruiter did not accept or receive
such payments. Neither in the Statute of Frauds nor in the rules of evidence is the presentation xxx
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 credible
Considering that the total amount paid by Palo is P73,500 or P51,500 in excess of the P22,000
testimonies of witnesses17 as in the case at bar.
limit, an additional sentence of five years should be imposed based on the above-quoted
provision. Thus, appellant was correctly meted the maximum penalty of 13 years of reclusion
We likewise uphold appellant's conviction for estafa. A person who is convicted of illegal temporal.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
recruitment may also be convicted of estafa under Article 315(2) (a) of the Revised Penal Code
provided the elements of estafa are present. Estafa under Article 315, paragraph 2(a) of the
As to the amount to be indemnified to Palo, contrary to the findings of the trial and appellate
Revised Penal Code is committed by any person who defrauds another by using a fictitious
courts, Palo's testimony and the vouchers she presented establish that the total amount she paid
name, or falsely pretends to possess power, influence, qualifications, property, credit, agency,
is only P73,50020 and not the P80,000 quoted as placement fee. Thus, she should only be
business or imaginary transactions, or by means of similar deceits executed prior to or
indemnified the said amount, plus legal interest of 12% per annum from the time of filing of the
simultaneously with the commission of the fraud. The offended party must have relied on the
information.21
false pretense, fraudulent act or fraudulent means of the accused and as a result thereof, the
offended party suffered damage.18
WHEREFORE, the appeal is DENIED. The Decision dated June 28, 2007 of the Court of
Appeals in CA-G.R. CR-H.C. No. 01902 is hereby AFFIRMED with MODIFICATION. The
Such is the case before us. Palo parted with her money upon the prodding and enticement of
amount to be indemnified to private complainant Josephine R. Palo is reduced to Seventy-Three
appellant and her co-accused on the false pretense that they had the capacity to deploy her for
Thousand Five Hundred Pesos (P73,500) with legal interest of 12% per annum from the time of
employment in Australia. Unfortunately, however, Palo was not able to work abroad nor get her
filing of the information until fully paid.
Australian visa. Worse, she did not get her money back.

No pronouncement as to costs.
As to the penalties, Section 7 of Republic Act No. 8042 19 or the Migrant Workers' Act of 1995
provides the penalties for illegal recruitment:
SO ORDERED.
SEC. 7. Penalties. -
Endnotes:
(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not
less than six (6) years and one (1) day but not more than twelve (12) years and a fine not less
than Two hundred thousand pesos (P200,000.00) nor more than Five hundred thousand pesos
(P500,000.00).
*
 Additional member per Special Order No. 757.
(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand pesos
(P500,000.00) nor more than One million pesos (P1,000,000.00) shall be imposed if illegal 1
 Rollo, pp. 2-15. Penned by Associate Justice Romeo F. Barza, with Associate Justices Mariano
recruitment constitutes economic sabotage as defined herein. (Emphasis supplied.) C. Del Castillo (now a member of this Court) and Arcangelita M. Romilla-Lontok concurring.

xxx 2
 CA rollo, pp. 61-72. Penned by Judge Pedro B. Corales.
3
 Records, Vol. 1, pp. 1-2; Records, Vol. 2, pp. 1-2. DECISION

4
 Records, Vol. 1, p. 1. PANGANIBAN, J.:

5
 Records, Vol. 2, p. 1. Illegal recruiters prey on our gullible and impoverished people by inveigling them with false or
fraudulent promises of attractive employment in foreign shores. Such vultures deserve the full
6 sanction of the law.
 Records, Vol. 1, p. 20; Records, Vol. 2, p. 23.

7 The Case
 Records, Vol. 1. p. 9.

8 Vicenta Medina Lapis and Angel Mateo appeal the March 6, 2000 Joint Decision1 of the
 Id.
Regional Trial Court (RTC) of Makati City (Branch 138), finding them guilty beyond reasonable
doubt of illegal recruitment and estafa. The dispositive portion of the Decision reads as follows:
9
 Records, Vol. 2, p. 8.
WHEREFORE, the Court rules
10
 CA rollo, pp. 71-72.
1. In Criminal Case No. 99-1112[,] accused Vicenta Medina Lapis and Angel Mateo are
11
 Id. at 48. pronounced guilty of violating Section 6, of Republic Act No. 8042, the Migrant Workers and
Overseas Filipinos Act of 1995 and they are both sentenced to suffer life imprisonment.
12 Pursuant to the last paragraph of Section 7, Republic Act No. 8042, considering that both
 People v. Lapis, G.R. NOS. 145734-35, October 15, 2002, 391 SCRA 131, 141-142. accused are non-licensers or non-holders of authority, they are both sentenced to pay fines of
One Million Pesos (P1,000,000.00) each. Both accused are ordered to indemnify both
13
 People v. Hernandez, G.R. NOS. 141221-36, March 7, 2002, 378 SCRA 593, 610. complainants jointly and severally of the amount of P118,000.00, the net amount after deducting
the recovery of P40,000.00. They are likewise ordered to pay both complainants jointly and
14
severally the amounts of P24,000.00 as reimbursement for traveling expenses; P4,000.00 as
 People v. Borromeo, G.R. No. 117154, March 25, 1999, 305 SCRA 180, 202, citing People v. rental for boarding house, and P100,000.00 as unrealized income;
Señoron, G.R. No. 119160, January 30, 1997, 267 SCRA 278, 286.

15
2. In Criminal Case No. 99-1113[,] accused Vicenta Medina Lapis and Angel Mateo are guilty of
 People v. Mercado, G.R. NOS. 108440-42, March 11, 1999, 304 SCRA 504, 527. violating Article 315 (2) (a) of the Revised Penal Code and they are both sentenced to suffer
imprisonment of twenty (20) years of reclusion temporal.
16
 People v. Sagaydo, G.R. NOS. 124671-75, September 29, 2000, 341 SCRA 329, 337.
No civil liability need be imposed considering that in Criminal Case No. 99-1112 the same was
17
 People v. Alvarez, G.R. No. 142981, August 20, 2002, 387 SCRA 448, 464-465, citing People already provided.
v. Pabalan, G.R. NOS. 115350 and 117819-21, September 30, 1996, 262 SCRA 574, 585.
Let the case as against Jane Am-amlao and Aida de Leon be sent to the archives to be revived
18
 People v. Hernandez, supra note 13, at 611. upon arrest, surrender or acquisition of jurisdiction over their person.

19
 An Act to Institute the Policies of Overseas Employment and Establish a Higher Standard of SO ORDERED.2cräläwvirtualibräry
Protection and Promotion of the Welfare of Migrant Workers, Their Families and Overseas
Filipinos in Distress, and for Other Purposes, approved on June 7, 1995. Two separate Informations,3 both dated April 20, 1999, charged appellants with syndicated
illegal recruitment under Republic Act (RA) 8042 4 and estafa under paragraph 2 (a) of Article
20
 Records, Vol. 1, p. 9. 315 of the Revised Penal Code.5cräläwvirtualibräry

21
 People v. Billaber, G.R. NOS. 114967-68, January 26, 2004, 421 SCRA 27, 43-44. In Criminal Case No. 99-1112, they were charged as follows:

G.R. Nos. 145734-35. October 15, 2002
PEOPLE OF THE PHILIPPINES, Appellee, v. VICENTA MEDINA LAPIS, ANGEL MATEO,
AIDA DE LEON (at large) and JEAN AM-AMLAW (at large), appellants.
That on or about March, 1998 and thereafter in Makati City, Metro Manila, Philippines, and within
the jurisdiction of this Honorable Court, the above-named accused, conspiring and confederating
with each other, did then and there willfully, unlawfully and feloniously recruit the herein
complainants, MELCHOR F. DEGSI and PERPETUA L. DEGSI for employment as an office
worker and as a cook or mechanic in Japan, for and in consideration thereof, they were required
to pay the amount of P158,600.00 as alleged placement and processing fees, which the
complainants delivered and paid the amount of P158,600.00 Philippine Currency, without the
accused having deployed the complainants despite the lapse of several months, to their damage
and prejudice.6cräläwvirtualibräry
In Criminal Case No. 99-1113, the Information reads:
That on or about March, 1998 and thereafter in Makati City, Metro Manila, Philippines, and within
the jurisdiction of this Honorable Court, the above-named accused, conspiring and confederating
with each other, did then and there, willfully, unlawfully and feloniously recruit and promise
employment to spouses MELCHOR and PERPETUA DEGSI in Japan for a total consideration of
one hundred fifty eight thousand and six hundred pesos (P158,600.00) as placement and
processing fees, knowing that they have no capacity whatsoever and with no intention to fulfill
their promise, but merely as a pretext, scheme or excuse to get or exact money from said
complainant as they in fact collected and received the amount of P158,600.00 from said
MELCHOR and PERPETUA DEGSI to their damage, loss and prejudice for the aforesaid
amount.7cräläwvirtualibräry
With the assistance of their counsel de oficio,8 appellants pleaded not guilty to the charges
during their arraignment on July 27, 1999.9
The Facts
Version of the Prosecution
The Office of the Solicitor General (OSG) relates how appellants, despite their lack of authority
or license, represented themselves as persons who had the capacity to send the victims abroad
for employment. We quote its version of the facts as follows:
The prosecution presented three witnesses, namely, Melchor Degsi and Perpetua Degsi
(Complainants for brevity) and Priscilla Marreo (or Priscilla Marelo).
The prosecution and appellants stipulated that appellants are not licensed or authorized to
recruit workers for employment abroad, in lieu of the testimony of Senior Labor Researcher
Johnson Bolivar of the Philippine Overseas Employment Administration (POEA).
Complainants are husband and wife, residents of Baguio City. They made a living earning an
average of P20,000.00 a month by selling fish and vegetables in a rented stall in said City, at
least until March 24, 1998 when they closed shop for reasons of attending to the demands of the
promised jobs for them in Japan. Both categorically identified Jane Am-amlao (or Jean Am-
amlaw), their co-vendor in Baguio City Market, as the person who approached them and
assured them that she knew a legal recruiter, an ex-POEA employee, who had the capacity to
send them both abroad. Jane Am-amlaw (or Am-amlaw for brevity) recruited complainants and
personally accompanied them on March 24, 1998 to meet the person she earlier referred to, or
Aida de Leon (or Alma de Leon), in the latters apartment at No. 7280 J. Victor St., Pio del Pilar,
Makati.
Complainants likewise categorically identified Aida de Leon (de leon for brevity) as the person
who arranged a meeting in her apartment on March 24, 1998 between complainants and
appellant Angel Mateo (Mateo for brevity) whom de Leon introduced as their contact person for
Japan-bound workers. In said meeting, Mateo represented himself as having the capacity to
send people abroad and showed complainants various documents to convince them of his
legitimate recruitment operations. Convinced that Mateo had indeed the capacity to facilitate
their employment as an office worker and as a cook or mechanic in Japan, complainants, on that
same day, handed Mateo P15,000.00 which Mateo required them to pay for their processing
fees. This was to be the first of a series of sums of money to be extracted from complainants.
Complainants were able to positively identify Mateo in court as the contact person of de Leon
and who collected from them, from March 24, 1998 to June 23, 1998, sums of money for the
alleged necessary expenses relative to the promised jobs awaiting them in Japan in the total
amount of P158,600.00. Complainants likewise categorically identified Mateo as the same
person whose authorization was needed for the recovery of P40,000.00 of the P45,000.00 they
gave Mateo who in turn deposited it to Sampaguita Travel Agency under his own name.
Complainants likewise positively identified appellant Vicenta Vicky Lapis (Lapis for brevity) in
Court as the person introduced to them by Mateo as his wife on April 29, 1998 at Maxs
Restaurant in Makati when Lapis required complainants to pay P49,240.00 for their plane tickets
and travel taxes. Lapis is, in fact, only the live-in partner of Mateo. Lapis told complainants that
she was helping to speed up the process[ing] of their papers relative to the promised jobs
awaiting them in Japan. Complainants met again Lapis, who was with Mateo on May 2, 1998 at
the Makati Restaurant, annex of Maxs Restaurant, when Lapis assured them that Mateo could
really send them abroad and even wrote in a piece of paper appellants address at Phase I, Lot
14, Blk 13 Mary Cris Subd., Imus, Cavite. On May 17, 1998, complainants once more met Lapis
who was with Mateo, de Leon and de Leons husband in Baguio City at the house of Priscilla
Marreos daughter. Both appellants updated complainant as to the status of their paper and
reiterated their promise that complainants would soon be leaving for Japan, then collected from
complainants unreceipted amount of P20,000.00. Complainants met again with Lapis, who was
again with Mateo, on May 19, 1998 at the Sampaguita Travel Agency. Mateo
extracted P45,000.00 from complainants and deposited it under his name. On that occasion,
Perpetua wanted to ask from the Sampaguita Travel Agencys employees where to pay
the P45,000.00 but failed to do so because Lapis took her attention away from asking while
Mateo asked Melchor to hand over to him said sum.
Priscilla Marreo (Priscilla for brevity) is the sister of Melchor who loaned complainants part of
the P158,000.00 which appellants extracted from complainant[s]. Thus, she made herself
present in most of the meetings between complainants and appellants together with the two
other accused where she witnessed the assurances and promises made by appellants relative
to complainants immediate departure for Japan and their corresponding demands of sums of
money. The testimony of Priscilla underscored the testimony of complainants showing that Am-
amlaw, de Leon, Lapis and Mateo indeed corroborated and confederated in the commission of
illegal recruitment.
The prosecution presented documentary evidence, such as varied unofficial receipts all bearing
the signature of Mateo; Sinumpaang Salaysay of Perpetua L. Degsi executed on July 21, 1998;
Affidavit executed by complainants on July 21, 1998; Requirement for Guarantee Letter of Visa
bearing the names of both private complainants; Request for Certification of POEA-CIDG, Team
to Mr. Hermogenes Mateo, Director II, Licensing Branch of POEA as represented by Johnson
Bolivar, Senior Labor Researcher of POEA, and the various documents that complainants
alleged to have been shown to them by Mateo to prove the legality of his recruitment
operations.10 (Citations omitted)
Version of the Defense
For their part, appellants deny that they were engaged in recruitment activities, and that they
promised foreign employment to the victims. Below is the version of the facts presented by the
defense:
VICENTA MEDINA LAPIS testified that she is the live-in partner of her co-accused Mateo. They
have been living together for almost three (3) years. According to her, she first met both
complainants at Maxs Restaurant in Makati when they talked to accused Mateo. She was there about the capacity to secure employment. The Court believes that conspiracy was established
only to accompany her live-in partner. The subject of the conversation between the complainants beyond reasonable doubt. Her defense of ignorance of the transaction cannot be considered
and accused Mateo was a contract in Baguio City. She did not see complainant deliver money to given the positive evidence presented by the prosecution which should prevail over her plain
accused Mateo while they were in that meeting. She also has no knowledge about the denial.12cräläwvirtualibräry
transaction between complainant and accused Mateo. She admitted that she went to Baguio
City together with accused Mateo to talk to the City Mayor. She likewise admitted that the
Hence, this appeal.13
handwriting appearing in Exhibit F is hers but the reason why she gave it was only to comply to
the request of the complainant Perpetua Degsi regarding a matter to be followed up at the
National Bureau of Investigation (NBI). The result of her follow-up rendered was that The Issues
complainant Perpetua Degsi has a pending case of estafa.
In their Brief, appellants interpose the following assignment of errors:
ANGEL MATEO averred that he is engaged in the importation of heavy equipment and
containers but he has never been engaged in recruitment. To prove that he was really engaged
I
in the delivery of heavy equipment, he presented a document of Import Service signed by a
certain Alexander Arcilla addressed to Honorable Timoteo Encar Jr., City Mayor, Cavite City
dated March 14, 1997 and were marked as Exhibit 1 and 1-a. He also presented another The court a quo gravely erred in finding accused-appellants guilty beyond reasonable doubt of
document of Import Services issued by the Department of Trade and Industry addressed to violations of Republic Act No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995)
Honorable Mayor Maliksi as Municipal Mayor of Imus, Cavite; a photocopy of a Bill of Lading committed by a syndicate and Article 315 paragraph 2(a) of the Revised Penal Code.
from Trade Bulk cargoes by Eastern Shipping Lines, Inc.; and Invoice of used vehicles,
airconditioners and washing machines and the packing list which were all marked as Exhibits 3
to 5. Sometime in March 24, 1998, he met the complainants at Pio del Pilar, in Makati City at the II
apartment of accused Aida de Leon. He went there to follow-up their transaction about heavy
equipment with Mayor Binay because, it was accused de Leon who entered the transaction with The court a quo gravely erred in finding accused-appellant Vicenta Medina Lapis guilty beyond
Mayor Binay. While he was there, the complainants were introduced to him by accused de Leon. reasonable doubt of illegal recruitment and estafa.
He admitted meeting the complainants on April 29, 1998 at Maxs Restaurant but the reason was
for him to meet Mrs. Marero in person and also because complainant Perpetua Degsi has a
pending case for large scale estafa and she needed a clearance. He denied having signed III
Exhibit B. He further claimed that the topic of their meeting was to supply heavy equipment in
Baguio City. He denied having asked for P50,000.00 on May 6, 1999. He likewise denied signing The court a quo gravely erred in finding accused-appellants guilty beyond reasonable doubt of
the receipt showing the total amount of P158,600.00.11 illegal recruitment committed by a syndicate.

The Trial Courts Ruling IV

The trial court held that the evidence for the prosecution sufficiently established the criminal
liability of appellants for the crimes charged. It ruled in this manner:
Evidence for the prosecution clearly established that both complainants were enticed by
accused Mateo and were led to believe that the latter has the capacity to send them for
employment to Japan. Complainant Melchor Degsi and his wife Perpetua Degsi both testified to
this fact. Acting on their belief that indeed accused Mateo can deploy them to Japan, amounts
were disbursed by both complainants to accused Mateo to cover the processing and placement
fees. x x x The Court finds the evidence presented by the prosecution sufficient to establish that
accused Mateo violated Section 6 of Republic Act No. 8042 when he demanded amounts for
placement and processing fees but he failed to deploy both complainants. The Court has a
similar conclusion insofar as the accusation for estafa is concerned as the evidence shows
accused Mateo knew beforehand that he has no capacity to deploy both complainants abroad
and that the enticement to work abroad was merely a scheme or plan to exact money from both
complainants. Deception was proven.
Insofar as the accused Lapis is concerned it is to be noted that the theory of the prosecution is
that she acted in conspiracy with her co-accused Mateo who is her live-in partner. Evidence for
the prosecution shows that at least on three (3) occasions accused Lapis was present when
accused Mateo asked and received money from complainants in connection with their intended
employment in Japan. x x x The Court conclude[d] that accused Lapis has knowledge of the
intention of her co-accused Mateo in asking for money from both complainants. There was
active participation on her part in the recruitment of both complainants and in deceiving them
The court a quo gravely erred in finding accused-appellants guilty beyond reasonable doubt of
the crime of estafa defined and penalized under Article 315 par. 2(a) of the Revised Penal Code
as amended.14
The Courts Ruling
The appeal has no merit.
First Issue:
Syndicated Illegal Recruitment
Appellants aver that the finding of syndicated illegal recruitment by the lower court was
erroneous; its conclusion that the offense was committed by three (3) or more persons had no
factual or legal basis. Allegedly, without sufficient evidence, the trial court wrongfully presumed
that all of them had acted in conspiracy. According to them, the prosecution failed to prove
beyond reasonable doubt that they had conspired and confederated in illegally recruiting
complainants. Appellants conclude that, if at all, they could only be held liable for illegal
recruitment in its simple form. We disagree.
Illegal recruitment is committed when these two elements concur: (1) the offenders have no valid Complainant Perpetua Degsi testified on the devious trail of transactions with all of the accused
license or authority required by law to enable them to lawfully engage in the recruitment and as follows:
placement of workers, and (2) the offenders undertake any activity within the meaning
of recruitment and placement15 defined in Article 13(b) or any prohibited practices enumerated in
Q How did you come to know the accused in this case?
Article 34 of the Labor Code.16cräläwvirtualibräry

A They were introduced to me by one Aida de Leon and Jane Am-Amlao.

Under Article 13(b), recruitment and placement refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers[;] and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for profit or not. In Q Who is this Jane Am-Amlao you are referring to?
the simplest terms, illegal recruitment is committed by persons who, without authority from the
government, give the impression that they have the power to send workers abroad for
A She is our co-member in Baguio.
employment purposes.17cräläwvirtualibräry

Q What is she in relation to your recruitment by Angel Mateo and Vicenta Lapis?
We believe that the prosecution was able to establish the elements of the offense sufficiently.
The case records reveal that appellants did in fact engage in recruitment and placement
activities by promising complainants employment in Japan. Undisputed is the fact that the former A She was the first one who mentioned to us that she knows somebody who has the capacity to
did not have any valid authority or license to engage in recruitment and placement activities. send us abroad.
Moreover, the pieces of testimonial and documentary evidence presented by the prosecution
clearly show that, in consideration of their promise of foreign employment, they indeed received
various amounts of money from complainants totalling P158,600. Q When was this?

Where appellants made misrepresentations concerning their purported power and authority to A March, 1998.
recruit for overseas employment, and in the process, collected from complainants various
amounts in the guise of placement fees, the former clearly committed acts constitutive of illegal Q When Jane Am-Amlao told you that she knows somebody who has the capacity to send you
recruitment.18 In fact, this Court held that illegal recruiters need not even expressly represent abroad what happened next?
themselves to the victims as persons who have the ability to send workers abroad. It is enough
that these recruiters give the impression that they have the ability to enlist workers for job
placement abroad in order to induce the latter to tender payment of fees.19cräläwvirtualibräry A On March 24, 1998 Jane accompanied us here in Manila.

It is also important to determine whether illegal recruitment committed by appellants can be Q Where in Manila particularly?
qualified as a syndicated illegal recruitment or an offense involving economic sabotage.
A At No. 72 J. Victor Street, Pio del Pilar, Makati in the apartment of Aida de Leon.
Section 6 of RA 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of
1995, provides that illegal recruitment shall be considered an offense involving economic Q So what happened at the apartment of Aida de Leon?
sabotage when it is committed by a syndicate or carried out by a group of three or more persons
conspiring and confederating with one another.
A Jane told us that Aida de Leon was an ex-employee of POEA and she was able to send many
workers abroad.
In several cases, illegal recruitment has been deemed committed by a syndicate if carried out by
a group of three or more persons conspiring and/or confederating with each other in carrying out
any unlawful or illegal transaction, enterprise or scheme defined under Article 38(b) of the Labor Q Were you able to meet Aida de Leon?
Code.20cräläwvirtualibräry
A Yes, maam.
In this case, it cannot be denied that all four (4) accused -- Jane Am-amlaw, Aida de Leon, Angel
Mateo and Vicenta Medina Lapis participated in a network of deception. Verily, the active Q What happened when you met her?
involvement of each in the various phases of the recruitment scam formed part of a series of
machinations. Their scheme was to lure complainants to Manila and to divest them of their hard-
earned money on the pretext of guaranteed employment abroad. The prosecution evidence A Aida called us by phone and according to her she has the contact person who can explain [to]
shows that complainants were convinced by Jane Am-amlaw to go to Manila to meet someone us the details on how to be able to work abroad.
who could find employment for them abroad. Upon reaching the city, they were introduced to
Aida de Leon and Angel Mateo; Mateo claimed to have the contacts, the resources and the Q After Aida called you up on the phone what happened next?
capacity to employ them overseas. After that initial meeting, complainants made several
payments to him, supposedly for the processing requirements of their deployment to Japan.
Later on, they met Vicenta Medina Lapis who volunteered her assistance in the processing of A We waited because according to her, that person is coming over to the house.
their employment papers and assured them that Mateo could easily send them abroad.
Q A[fter] waiting what happened after that?
A ANGEL MATEO arrived and he was introduced to me as the contact person and we could ask
him how we could work abroad.
Q Who is this siya, you are referring to?
A ANGEL MATEO.
Q Who introduced you to ANGEL MATEO?
A AIDA DE LEON.
Q After introducing you to ANGEL MATEO what happened?
A ANGEL MATEO showed us some documents AND HE WAS ABLE TO convince us that he
has the capacity to send us abroad.
Q What documents were shown to you?
A Incorporation documents of two companies one, Philippine company and one is Japan
company and some other documents they made in order to send workers abroad.
Q After convincing you that he can send you abroad what happened after that?
A He asked for a processing fee and I asked him how much.
Q What did he tell you?
A He told me that he does not know because AIDA DE LEON will be the one to give us the
price.
Q After that what happened?
A I asked AIDA how much and she answered, twenty thousand pesos.
Q After telling you that the amount is P20,000.00 what happened next?
A We went to the bank to withdraw P20,000.00 but we were only able to withdraw P15,000.00
and then we handed the P15,000.00 to ANGEL MATEO, in front of Jane Am-Amlaw.
Q After receiving said amount from you by ANGEL MATEO what happened next?
A We parted ways.
Q Was there anything else that happened after that?
A Before we parted ways, [he] asked from us other documents like ID, birth certificate, marriage
contract in order for him to begin processing our papers.
Q After that what happened next?
A On March 31, we went back to [him] and we gave [him] the other documents needed and we
also gave [him] the balance for the processing fee.
Q Who is this niya or he you are referring to?
A Angel Mateo.
Q Where did you meet?
A [He] called me and we met in the apartment of AIDA.
Q Were you able to meet ANGEL MATEO in the apartment of AIDA DE LEON?
A Yes.
Q What happened there?
A We gave [him] the documents and we started processing the documents
Q What are those documents that you gave to ANGEL MATEO?
A Birth certificate authenticated, marriage contract and passport IDs and then we went to Pasay
City to start the processing of the passport.
Q You told us that ANGEL MATEO asked for the balance of P5,000.00, were you able to pay the
said amount to ANGEL MATEO?
A Yes, maam.
xxx
Q After receiving said amount of P5,000.00 what happened?
A After that meeting at Pasay City we parted ways but [he] did not issue us any receipt so on
April 15, [he] again called us up and told me that he needs NBI clearance so we processed our
NBI clearance.
Q You told us that ANGEL MATEO called you, where were you at that time?
A Baguio City.
Q Were you able to come here in Manila?
A Yes maam, we met in Quiapo. The foregoing testimony very clearly demonstrates that the individual actuations of all four (4)
accused were directed at a singular criminal purpose -- to delude complainants into believing
that they would be employed abroad. The nature and the extent of the formers interactions
Q Were you able to meet ANGEL MATEO in QUIAPO?
among themselves as well as with the latter clearly show unity of action towards a common
undertaking. Certainly, complainants would not have gone to Manila to meet Aida de Leon and
A [He] did not arrive in Quiapo. Angel Mateo without the prodding of Am-amlaw. They would not have made various payments
for their travel and employment papers without the fraudulent representations of Mateo De Leon.
Moreover, they would not have complied with further instructions and demands of Mateo without
Q So what did you do? the repeated assurances made by Lapis.

A We proceeded [to] the NBI and we called up AIDA and asked her why ANGEL MATEO did not Even assuming that the individual acts of the accused were not necessarily indispensable to the
arrive and whom did AIDA talk to. commission of the offense, conspiracy would have still been present. Their actions, when viewed
in relation to one another, showed a unity of purpose towards a common criminal enterprise and
Q What was the reply of AIDA DE LEON? a concurrence in their resolve to commit it.

A She told me that whatever ANGEL MATEO would tell us, thats what we should follow.
Q After that what happened?
A The processing of our NBI clearance did not finish so on April 15 ANGEL MATEO asked
for P2,000.00 in order to help us process the NBI.
Q After calling you on April 15, what happened next?
A On April 29, 1998 me, my sister, Melchor, and Melchors sister together with ANGEL MATEO
met at Maxs Restaurant in Makati.
xxx
In People v. Gamboa,22 the Court had occasion to discuss the nature of conspiracy in the
context of illegal recruitment as follows:
Conspiracy to defraud aspiring overseas contract workers was evident from the acts of the
malefactors whose conduct before, during and after the commission of the crime clearly
indicated that they were one in purpose and united in execution. Direct proof of previous
agreement to commit a crime is not necessary as it may be deduced from the mode and manner
in which the offense was perpetrated or inferred from the acts of the accused pointing to a joint
purpose and design, concerted action and community of interest. As such, all the accused,
including accused-appellant, are equally guilty of the crime of illegal recruitment since in a
conspiracy the act of one is the act of all.23 (Emphasis supplied)
To establish conspiracy, it is not essential that there be actual proof that all the conspirators took
a direct part in every act. It is sufficient that they acted in concert pursuant to the same
objective.24cräläwvirtualibräry

Q Were you able to meet ANGEL MATEO?
A Yes maam, they arrived together with somebody whom [she] introduced to us as [his] wife.
Q Who is this wife you are referring to?
A She is Vicky Lapis, and later on we found out that she is Vicenta Medina Lapis.
Conspiracy is present when one concurs with the criminal design of another, indicated by the
performance of an overt act leading to the crime committed.25cräläwvirtualibräry
The OSG avers, as an incident to this issue, and in line with People v. Yabut,26 that
complainants are entitled to recover interest on the amount of P118,000, which the trial court
awarded from the time of the filing of the Information until fully paid. We agree with the OSGs
observation and hereby grant the legal interest on the amount prayed for.

In a number of cases,27 this Court has affirmed the trial courts finding that victims of illegal
Q What was this meeting all about? recruitment are entitled to legal interest on the amount to be recovered as indemnity, from the
time of the filing of the information until fully paid.
A We were updated on what was happening on our papers and then ANGEL MATEO AND
VICENTA LAPIS asked for a plane ticket. Second Issue:

Q What was the update for the processing of your papers? Appellants Liability for Estafa

xxx
A Vicenta Lapis told us that she is just helping to speed up the processing of papers so that we
could be sent abroad immediately and she even showed us some documents and I even told her
that I could help them in typing those documents.21cräläwvirtualibräry
Appellants argue that in a prosecution for estafa under Article 315, paragraph 2(a) of the
Revised Penal Code, it is indispensable that the element of deceit, consisting of fraudulent
representations or false statements of the accused, be made prior to or simultaneous with the
delivery of the thing; and that such misrepresentations or false statements induce the
complainants to part with the object of the crime. The former allege that the prosecution failed to
point out with certainty whether their misrepresentations or false statements were made prior to
or at least simultaneous with the latters delivery of the money.
Under the cited provision of the Revised Penal Code, estafa is committed by any person who
defrauds another by using a fictitious name; or by falsely pretending to possess power,
influence, qualifications, property, credit, agency, business; by imaginary transactions or similar
forms of deceit executed prior to or simultaneous with the fraud.28 Moreover, these false
pretenses should have been the very reason that motivated complainants to deliver property or
pay money to the perpetrators of the fraud. While appellants insist that these constitutive
elements of the crime were not sufficiently shown by the prosecution, the records of the case
prove otherwise.
During almost all of their meetings, complainants paid various amounts of money to appellants
only after hearing the feigned assurances proffered by the latter regarding the formers
employment prospects in Japan. Even as early as their first meeting in the house of Aida de
Leon, the payment by complainants of the initial amount of P15,000 was immediately preceded
by an onslaught of promises. These enticing, albeit empty, promises were made by Angel
Mateo, who even showed them documents purportedly evincing his connections with various
foreign companies. Equally important, they relied on such misrepresentations, which convinced
them to pay the initial amount as processing fees. Complainant Melchor Degsi testified on the
matter in this wise:
Prosecutor Ong:
So when Angel Mateo arrived at the apartment of Aida de Leon, what did he do, if any?
Witness:
He introduced himself to us and told us that he can easily send us to Japan because he knows
many Japanese employers and he also showed us some documents, maam. (Nagpakilala siya
at ang sabi niya ay kayang-kaya niya kaming padalhin sa Japan dahil marami siyang
kilalang Japanese employer at may ipinakita siyang mga dokumento, maam).
Q What are these documents, if you remember, that were shown to you?
A Papers of Japanese companies, Clean Supplies Co. Ltd., Arabian Boy Express
Corporation and that is the reason why we were convinced, maam.
Q So, after being convinced that Angel Mateo can send you abroad, what did you do after
that?
A Nakumbinsi nga po kami at pagkatapos noon ay nag-usap-usap silang tatlo nina Jean
Am-amlaw at humihingi na sila ng processing fee na P20,000, maam.
Q So what did you do when they were already asking for the amount of P20,000 from you
as processing fee?
A We told them that we do not have any money that time and we have to withdraw from
the bank and then we went to Pasay and we withdrew the amount of P15,000.00 so that
was the only amount we were able to give them that time, maam.
Q Who were with you when you withdrew the said amount from the bank in Pasay?
A Jean Am-amlaw and Angel Mateo, maam.
Q Who received the amount of P15,000?
A Angel Mateo in front of Jean Am-amlaw, maam.29 (Emphasis supplied)
From the foregoing, it is evident that the false statements that convinced complainants of the
authenticity of the transaction were made prior to their payment of the various fees. Indubitably,
the requirement that the fraudulent statements should have been made prior to or simultaneous
with the actual payment was satisfied.
Verily, by their acts of falsely representing themselves as persons who had the power and the
capacity to recruit workers for abroad, appellants induced complainants to pay the required
fees.30 There is estafa if, through insidious words and machinations, appellants deluded
complainants into believing that, for a fee, the latter would be provided overseas
jobs.31cräläwvirtualibräry
Although we agree with the ruling of the RTC convicting appellants of estafa, we note that it
failed to apply the Indeterminate Sentence Law in imposing the penalty. Under Section 1 of that
law, the maximum term of the indeterminate sentence shall be the penalty properly imposed,
considering the attending circumstances; while the minimum term shall be within the range of
the penalty next lower than that prescribed by the Code. 32 Hence, pursuant to the Indeterminate
Sentence Law, the trial court should have fixed the minimum and the maximum
penalties.33cräläwvirtualibräry
The Revised Penal Code provides the penalties for estafa as follows:
Art. 315. Swindling (estafa). -- Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:
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 12,000.00 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 and for the purpose of the other provisions of this
Code, the penalty shall be termed prision mayor or reclusion temporal, as the case may be.
(Italics supplied)
Considering that complainants were defrauded in excess of the P22,000 limit fixed by law, the
maximum penalty of prision mayor should be imposed in its minimum period, or six (6) years and
one (1) day to eight (8) years, plus one (1) year for each additional P10,000 in excess of
the P22,000 limit. The total amount defrauded from the complainants was P158,600 --
or P136,600 in excess of P22,000, which translates to an additional prison sentence of thirteen
(13) years based on the aforementioned computation. Accordingly, the maximum penalty to be
imposed should be nineteen (19) years and one (1) day to twenty-one (21) years, thus raising
the penalty to reclusion temporal. However, the penal provisions for the crime of estafa provide
that the total penalty to be imposed should not in any case exceed twenty (20) years
imprisonment.
In Criminal Case No. 99-1113 for estafa, consonant with the Indeterminate Sentence Law,
appellants should thus be sentenced to an indeterminate penalty of twelve (12) years of prision
mayor which is the penalty next lower than that prescribed by the Code for the offense to twenty
(20) years of reclusion temporal. Indeed, the expression the penalty next lower to that prescribed
by said Code for the offense, used in Section 1 of the Indeterminate Sentence Law, means the
penalty next lower than that determined by the court in the case before it as the maximum.34
Third Issue:
A: Para sigurado raw kami na hindi sila illegal kaya ibinigay niya ang address nila,
maam.35 (Emphasis supplied)
Once conspiracy is established, the act of one becomes the act of all regardless of the degree of
individual participation.36 Moreover, the precise modality or extent of participation of each
individual conspirator becomes merely a secondary consideration.37 Notwithstanding
nonparticipation in every detail of the execution of the crime, the culpability of the accused still
exists.38cräläwvirtualibräry

Liability as Co-conspirator WHEREFORE, the appealed Decision is hereby AFFIRMEDwith the

following MODIFICATIONS:
Finally, appellants contend that the trial court should not have convicted Vicenta Medina Lapis
because the prosecution evidence did not sufficiently prove her participation in the conspiracy to 1. In Criminal Case No. 99-1112, appellants are ordered to pay legal interest on the amount
defraud the victims. They maintain that she merely accompanied Angel Mateo during his of P118,000 from the time of the filing of the Information until fully paid.
meetings with complainants and that she had no knowledge of the intentions of her co-accused.
They add that mere knowledge, acquiescence or agreement to cooperate is not enough to
2. In Criminal Case No. 99-1113, appellants are sentenced to an indeterminate penalty of twelve
constitute one as a co-conspirator.
(12) years of prision mayor as minimum to twenty (20) years of reclusion temporal as maximum.

We are not persuaded. As discussed earlier, Lapis not only knew of the conspiracy, but she also
SO ORDERED.
offered her assistance in the processing of the employment requirements of complainants.
Contrary to her claim that she was merely an unknowing spectator in the underhanded
transactions, she deliberately inveigled them into pursuing the promise of foreign employment. Puno, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.
The records clearly belie her claim of innocence and indicate that her participation in the criminal
scheme transcends mere knowledge or acquiescence. Complainant Melchor Degsi describes
one of the many instances of how deeply involved Lapis was in the whole recruitment charade:

Endnotes:
Prosecutor Ong: 1
 Rollo, pp. 20-27; records, Vol. 1, pp. 321-328; penned by Judge Sixto Marella Jr.
2
 Id., pp. 26-27 & 327-328.
Mr. Witness, you testified a while ago that you were at Max Restaurant together with Vicenta 3
 Both Informations were signed by State Prosecutor Jocelyn Ong.
Lapis and Angel Mateo? 4
 Rollo, pp. 8-9; records, Vol. 1, pp. 2-3.
5
 Id., pp. 10-11 & 6-7.
6
Witness:  Id., pp. 8 & 2.
7
 Id., pp. 10 & 6.
8
 Atty. Lody Tancioco.
Yes, maam. 9
 Records, Vol. 1, p. 121.
10
 Appellees Brief, pp. 8-14; rollo, pp. 96-102. This was signed by Asst. Solicitors Carlos N.
Q: Could you remember what Vicenta Medina [Lapis] said to you? Ortega and Cecilio O. Estoesta and Associate Solicitor Rebecca S. Dacanay.
11
 Appellants Brief, pp. 11-13; rollo, pp. 54-56. This was signed by Attys. Amelia Garchitorena,
Elpidio C. Bacuyag and Pastor A.P. Morales of the Public Attorneys Office.
A: She promised that we will be sent to Japan sooner as OCW, maam. 12
 Decision, pp. 6-7; rollo, pp. 25-26; records, Vol. 1, pp. 326-327.
13
 This case was deemed submitted for decision on April 24, 2002 upon receipt by this Court of
Q: Could you recall how she said it? appellees Brief. Appellants Brief was received by this Court on November 28, 2001.
14
 Appellants Brief, pp. 1-2; rollo, pp. 44-45. Original in upper case.
15
 People v. Alvares, GR No. 142981, August 20, 2002, pp. 11-12; People v. Ordoo, 335 SCRA
A: She said Sigurado kay, makakapunta kayo ng Japan, maam. 331, July 10, 2000; People v. Diaz, 259 SCRA 441, 450, July 26, 1996; People v. Seoron, 267
SCRA 278, 284, January 30, 1997; People v. Gabres, 267 SCRA 581, 594, February 6, 1997.
16
 People v. Ordoo, supra.
Q: During that time that she was telling you sigurado kay makakapunta kayo ng Japan, did she 17
show you anything?  People v. Alvarez, supra, p. 11; People v. Diaz, supra, p. 456.
18
 People v. Ong, 322 SCRA 38, January 18, 2000.
19
 People v. Gamboa, 341 SCRA 451, September 29, 2000.
A: Tinanong namin ang address nila at kusang loob na ibinigay ni Vicenta Medina [Lapis] sa 20
 People v. Alvarez, supra; People v. Hernandez, GR No. 141221-36, March 7, 2002; People v.
amin ang address at direksyon para makapunta kami sa Imus, Cavite, maam. Ordoo, supra.
21
 TSN, September 14, 1999, pp. 6-13.
22
Q: What was the reason why Vicenta Medina Lapis gave you the address?  Note at 19.
23
 Id., p. 459.
24
 Fortuna v. People, 348 SCRA 360, December 15, 2000.
25
 People v. Bato, 348 SCRA 253, December 15, 2000.
26
 316 SCRA 237, October 5, 1999.
27
 People v. Maozca, 269 SCRA 513, March 13, 1997; Abaca v. Court of Appeals, 290 SCRA
657, June 5, 1998; People v. Ong, 322 SCRA 38, January 18, 2000.
28
 People v. Sagaydo, 341 SCRA 329, September 29, 2000; People v. Meris, 329 SCRA 33, [G.R. Nos. 138535-38. April 19, 2001.]
March 28, 2000.
29
 TSN, September 21, 1999, pp. 6-7. PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. LUZ GONZALES-FLORES, Accused-
30
 People v. Ladera, 344 SCRA 647, November 15, 2000. Appellant.
31
 People v. Ganaden, 299 SCRA 433, November 27, 1998.
32
 People v. Meris, 329 SCRA 33, March 28, 2000; Jacobo v. Court of Appeals, 270 SCRA 270, DECISION
March 21, 1997.
33
 Mari v. Court of Appeals, 332 SCRA 475, May 31, 2000.
34
 Application of the Indeterminate Sentence Law by Prof. Esteban B. Bautista, Annotation, 78 MENDOZA, J.:
SCRA 54, July 28, 1977.
35
 TSN, September 21, 1999, pp. 41-42.
36
 People v. Sumalpong, 284 SCRA 464, January 20, 1998.
37
 People v. Lising, 285 SCRA 595, January 30, 1998. This is an appeal from the decision 1 of the Regional Trial Court, Branch 77, Quezon City,
38
 Marcelo v. Court of Appeals, 348 SCRA 740, December 27, 2000. finding accused-appellant Luz Gonzalez-Flores guilty of illegal recruitment in large scale and of
three counts of estafa against Felixberto Leongson, Jr., Ronald Frederizo, 2 and Larry Tibor and
sentencing her to suffer four prison terms and to pay indemnity and damages to
complainants.chanrob1es virtua1 1aw 1ibrary

In Criminal Case No. Q-94-59470, the information for estafa against accused-appellant
alleged:chanrob1es virtual 1aw library

That on or about the month of August, 1994, in Quezon City, Philippines, the said accused,
conspiring together, confederating with several persons whose true names and true identities
have not as yet been ascertained, and helping one another, did then and there wilfully,
unlawfully and feloniously defraud FELIXBERTO LEONGSON, JR. y CASTAÑEDA in the
following manner, to wit: the said accused, by means of false manifestations and fraudulent
representation which she made to said complainant to the effect that they had the power and
capacity to recruit and employ complainant abroad as [a] seaman and could facilitate the
processing of the requirements thereof, and by means of other similar deceits, induced and
succeeded in inducing said complainant to give and deliver, as in fact he gave and delivered to
said accused the amount of P45,000.00 on the strength of said manifestations and
representations, said accused well knowing that the same were false and fraudulent and were
made solely to obtain, as in fact they did obtain the amount of P45,000.00, which amount once
in possession, with intent to defraud FELIXBERTO LEONGSON, JR. wilfully, unlawfully and
feloniously misappropriated, misapplied and converted to their own personal use and benefit, to
the damage and prejudice of said complainant in the aforesaid amount of P45,000.00, Philippine
Currency.

CONTRARY TO LAW. 3

In Criminal Case No. Q-94-59471, also for estafa, the information charged:chanrob1es virtual
1aw library

That on or about the month of August, 1994, in Quezon City, Philippines, the said accused
conspiring together, confederating with several persons whose true names and true identities
have not as yet been ascertained and helping one another did then and there wilfully, unlawfully
and feloniously defraud RONALD F[R]EDERI[Z]O Y HUSENIA in the following manner, to wit:
the said accused, by means of false manifestations and fraudulent representations which they
made to said complainant to the effect that they had the power and capacity to recruit and
employ complainant abroad as [a] seaman and could facilitate the processing of the pertinent
papers if given the necessary amount to meet the requirements thereof, and by means of other
similar deceits, induced and succeeded in inducing said RONALD F[R]EDERI[Z]O Y HUSENIA
to give and deliver, as in fact gave and delivered to said accused the amount of P45,000.00 on The evidence for the prosecution is as follows:chanrob1es virtual 1aw library
the strength of said manifestations and representations, said accused well knowing that the
same were false and fraudulent and were made solely to obtain, as in fact they did obtain the On August 6, 1994, at around 1:00 p.m., complainant Felixberto Leongson, Jr. chanced upon his
amount of P45,000.00 which amount once in possession, with intent to defraud complainant neighbors, Cloyd Malgapo, Jojo Bumatay, and accused-appellant, who were talking in front of
wilfully, unlawfully and feloniously misappropriated, misapplied and converted to their own his house at 68-C East Riverside, Bgy. Paltok, San Francisco del Monte, Quezon City.
personal use and benefit, to the damage and prejudice of said RONALD F[RE]DERI[Z]O Y Complainant was asked by accused-appellant if he was interested to work as a seaman in
HUSENIA in the aforesaid amount of P45,000.00, Philippine Currency. Miami, Florida, United States of America. He replied that he was interested to work abroad but
he had doubts regarding his qualification for the job. Accused-appellant assured him that this
CONTRARY TO LAW. 4 was not a problem because she could fix his application. All he had to do was pay P45,000.00
as processing fee. Accused-appellant told him that Jojo and Cloyd were departing soon.
In Criminal Case No. Q-94-59472, another case for estafa, the information averred:chanrob1es Complainant told accused-appellant that he would consider the offer.
virtual 1aw library
That night, Accused-appellant came to see Felixberto and reiterated her proposal. Felixberto
That on or about the month of August, 1994, in Quezon City, Philippines, the said accused, said he wanted the job but he only had P10,000.00. Accused-appellant told him the amount
conspiring together, confederating with several persons whose true names and whereabouts would be sufficient as an initial payment.
have not as yet been ascertained and helping one another, did then and there wilfully, unlawfully
and feloniously defraud LARRY TIBOR Y MABILANGAN in the following manner, to wit: the said Accused-appellant came back with Joseph Mendoza, whose brother-in-law, Engr. Leonardo
accused, by means of false manifestations and fraudulent representations which they made to Domingo, according to accused-appellant, was recruiting seamen. Thereafter, Accused-
said complainant to the effect that they had the power and capacity to recruit and employ appellant and Mendoza took complainant, Cloyd, and Jojo’s wife, Clarita, to a house on Second
complainant abroad as [a] seaman and could facilitate the processing of the pertinent papers if Street, near Camp Crame in Quezon City, where the latter were introduced to Andy Baloran. 7
given the necessary amount to meet the requirements thereof, and by means of other similar Complainant and his companions were told that Baloran was an employee of the National
deceits, induced and succeeded in inducing said complainant to give and deliver, as in fact gave Bureau of Investigation and he would take care of processing the applications for employment.
and delivered to said accused the amount of P38,000.00 on the strength of said manifestations Baloran told complainant and the other job applicants that those who would be employed would
and representations, said accused well knowing that the same were false and fraudulent and be paid a monthly salary of US$1,000.00, plus tips, and given vacation leaves of 45 days with
were made solely to obtain, as in fact they did obtain the amount of P38,000.00 which amount pay. Baloran asked complainant to submit his picture, bio-data, and birth certificate, which
once in possession, with intent to defraud LARRY TIBOR Y MABILANGAN wilfully, unlawfully complainant later did. Accused-appellant then asked complainant to give her the P10,000.00 as
and feloniously misappropriated, misapplied and converted to their own personal use and initial payment. Complainant handed her the money and asked for a receipt, but accused-
benefit, to the damage and prejudice of said complainant in the amount of P38,000.00, appellant told him not to worry and assured him that she would be responsible if anything
Philippine Currency.cralaw : red untoward happened. Complainant, therefore, did not insist on asking accused-appellant for a
receipt. Accused-appellant said she gave the money to Baloran.
CONTRARY TO LAW. 5
Two days later, Baloran and Domingo went to the compound where Felixberto and accused-
On the other hand, in Criminal Case No. Q-94-59473, the information for illegal recruitment in appellant were residing and called Felixberto, Cloyd, and Jojo to a meeting. Domingo told the
large scale charged:chanrob1es virtual 1aw library applicants that he was the chief engineer of the luxury ocean liner where they would embark and
repeated to them the salaries and other benefits which they would receive. He told them not to
That on or about the month of August, 1994, in Quezon City, Philippines, the said accused, get impatient.
conspiring together, confederating with several persons whose true names and whereabouts
have not as yet been ascertained and helping one another, did then and there, wilfully, Accused-appellant later saw complainant to collect the balance of P35,000.00. Complainant was
unlawfully and feloniously canvass, enlist, contract and promise employment to the following told to give the money to accused-appellant at Wendy’s in Cubao, Quezon City on August 12,
persons, to wit:chanrob1es virtual 1aw library 1994.

1. RONALD F[R]EDERI[Z]O Y HUSENIA At the appointed date and place, complainant and his wife delivered the amount to accused-
appellant who, in turn, handed it to Baloran. No receipt was, however, issued to Felixberto.
2. LARRY TIBOR Y MABILANGAN
Another meeting was held on August 16, 1994 at the Mandarin Hotel in Makati City by accused-
3. FELIXBERTO LEONGSON, JR. Y CASTAÑEDA appellant, Domingo, Baloran, Mendoza, the Leongson spouses, the Malgapo spouses, and Jojo
Bumatay. The applicants were told by Domingo that they would be employed as waiters and
after requiring them to submit certain documentary requirements and exacting from them the attendants in the luxury liner and asked them again to wait a while.chanrob1es virtua1 1aw
total amount of P128,000.00, Philippine Currency, as recruitment fees, such recruitment 1ibrary
activities being done without the required license or authority from the Department of Labor.
On August 18, 1994, Accused-appellant saw complainant again to collect the P25,000.00
That the crime described above is committed in large scale as the same was perpetrated against balance. Felixberto paid the amount to accused-appellant four days later. As in the case of the
three (3) or more persons individually or as group as penalized under Articles 38 and 39, as first two payments, no receipt was given for the P25,000.00. Accused-appellant told him that she
amended by P.D. 2018, of the Labor Code. 6 would turn over the amount to Baloran. Although complainant regularly followed up his
application with accused-appellant, he was told each time to have patience and to just wait for
When arraigned, Accused-appellant pleaded not guilty to the criminal charges, whereupon the the call from Domingo or from Baloran. But Felixberto never heard from either one of these two.
cases were jointly tried. 8
Felixberto’s testimony was corroborated by his wife, Maria Luz, who said that accused-appellant
claimed she could help her husband get a job as a seamen despite the latter’s lack of formal
training. She knew of the three payments made to accused-appellant, totalling P45,000.00, and
witnessed the last two payments of P10,000.00 at Wendy’s, Cubao, and P25,000.00 at accused-
appellant’s residence. Maria Luz said she met Baloran, Mendoza, and Domingo and discussed
with them the job offered to her husband and the salaries and benefits appurtenant thereto. 9
Complainant Ronald Frederizo, a resident of 68-A East Riverside, San Francisco del Monte,
Quezon City, also testified. According to him, in the morning of August 10, 1994, he received a
call from his sister, Elsa Cas, at Far East Bank, Binondo Branch, Manila, asking him to go home
because accused-appellant, their neighbor, was in his house recruiting seaman for employment
abroad. Ronald said that when he arrived home, he was told by accused-appellant that he had
to pay P10,000.00 as initial payment for the processing of his application. Ronald withdrew the
amount from Elsa’s account. Then, Ronald went with accused-appellant to a house on Second
Street near Camp Crame in Quezon City. On the way to that place, Accused-appellant assured
him that he would receive a salary of US$1,000.00. At an apartment on Second Street, Ronald
saw his neighbors, complainant Felixberto, Jojo, and Cloyd. Baloran and Mendoza were also
there. Accused-appellant introduced Baloran to Ronald, Cloyd, and Jojo. She told them that
Baloran was going to take care of their applications and that he could pull strings at the NBI.
Ronald paid accused-appellant P10,000.00 for which no receipt was issued. He was assured by
accused-appellant that he would be able to leave for his job abroad in one or two weeks. He was
told to be ready with the balance of P35,000.00 for the plane ticket on August 12, 1994.
Hence, on August 15, 1994, Ronald mortgaged his land in Batangas just so he could pay the
P35,000.00 remaining balance. Accused-appellant went to Ronald’s house to meet him.
Thereafter, Ronald, Elsa, and accused-appellant took a cab to Mandarin Hotel in Makati City.
Accused-appellant told Ronald to have no fear because the persons whom he was dealing with
were her relatives. Elsa gave the P35,000.00 to Accused-Appellant. Ronald no longer asked for
a receipt because he trusted Accused-Appellant. At the hotel were Felixberto and his wife,
Baloran, and Domingo. Domingo showed Ronald and Felixberto his identification card and said
that he was the captain of a ship. He told them that they would receive a salary of US$1,000.00
plus other benefits. He also assured them that he would inform them of developments in their
applications through Accused-Appellant. After the meeting, Ronald went to his office and
tendered his resignation. Ronald followed up his application almost every week but every time
he was told by accused-appellant to be patient 10 because Domingo had not yet called.
Complainant Larry Tibor said that on August 10, 1994, he went to the house of his cousin, Elsa
Cas, at 68-A East Riverside, Bgy. Paltok, San Francisco del Monte, Quezon City, because
accused-appellant was there recruiting seamen to work abroad. Larry was then looking for a job.
Accused-appellant introduced herself and told him that she could get him a job abroad if he had
the necessary documents and P45,000.00. Larry said he had only P3,000.00. He was told by
accused-appellant to bring the amount the next day for his fare and certification. As instructed,
Larry paid the amount in the presence of his sister, Junet. He asked for a receipt, but accused-
appellant told him to trust her. Accused-appellant instructed Larry to prepare extra money as his
initial payment was insufficient. Larry left for the province to get a loan. He went to accused-
appellant’s house on August 15, 1994 and paid her an additional amount of P35,000.00. Again,
no receipt was issued to him. Thereafter, Accused-appellant took him to Mandarin Hotel where
he was introduced to Baloran and Domingo. Larry kept waiting for a call, but none came. He was
later told by accused-appellant that he could not leave yet because Baloran was sick and he had
to postpone his trip. 11
Junet T. Lim, Larry’s sister, testified that she was present her when brother paid P3,000.00 to
accused-appellant, although no receipt was issued. She stated that she asked accused-
appellant questions to make sure she could help Larry get a job abroad as a seaman. Janet said
accused-appellant was able to convince her that she could do so. Junet also testified that she
accompanied her brother in following up his job application for about three months until
November 1994, when they realized they had been defrauded by accused-appellant, Domingo,
and Baloran. 12
Realizing that they had been deceived, complainants went to the Baler Police Station 2 in
Quezon City on November 11, 1994 to file their complaints for illegal recruitment and estafa
against accused-appellant, Baloran, Domingo, and Mendoza. Felixberto executed his sworn
statement 13 on the same day, while Ronald and Larry gave their respective statements 14 on
November 12, 1994.
On November 14, 1994, complainants went to the Philippine Overseas Employment
Administration (POEA) and discovered that accused-appellant and her companions did not have
any license or authority to engage in any recruitment activity.chanrob1es virtua1 1aw 1ibrary
Felixberto and Ronald asked the court to order accused-appellant to pay them back the
placement fees of P45,000.00 which each of them had paid and moral damages of P200,000.00
for each of them for the shame, anxiety, and loss of jobs they suffered. They also sought the
reimbursement for litigation expenses they each incurred, amounting to P20,000.00 as
attorney’s fees and P500.00 per court appearance. Larry, on the other hand, sought the
recovery of the total amount of P150,000.00 for placement fee, travelling expenses from the
province to Manila to follow up his application, and the anguish and shame he suffered. 15
In her defense, Accused-appellant Luz Gonzales-Flores, a resident of 68-B East Riverside, San
Francisco del Monte, Quezon City, testified that she knew Felixberto Leongson, Jr., who was her
neighbor and a nephew of the owner of the house in which they were staying. She came to know
Ronald Frederizo and Larry Tibor through Elsa Cas. Accused-appellant denied having promised
complainants overseas employment and having collected money from them. According to her,
she came to know Andy Baloran and Engr. Leonardo Domingo through Joseph Mendoza, who
referred her and her son, Noli, to them in connection with their own applications for overseas
employment. She came to know Joseph Mendoza through Elsa Cas and Felixberto Leongson,
Jr.
Accused-appellant claimed that she and Noli agreed to pay Baloran, Domingo, and Mendoza the
total sum of P90,000.00 for their application fees. Since she did not have enough money to
cover the amount, she asked her neighbors and friends to help her get a loan. Felixberto and his
wife offered help and introduced her to Jenny Tolentino, from whom she got a loan of
P15,000.00 guaranteed by Felixberto’s wife. Accused-appellant said she used the amount to pay
for her and her son’s recruitment fees. Accused-appellant claimed that she paid the total amount
of P46,500.00 for her recruitment fee in three installments, i.e., P10,000.00 to Mendoza at her
house, P10,000.00, and P16,500.00 to Baloran at the Mandarin Hotel. She alleged that she also
gave them several pieces of jewelry worth P10,000.00. According to her, no receipts were
issued for the money and jewelry she gave.
Accused-appellant said that because Domingo, Baloran, and Mendoza did not make good their
promises, Accused-appellant filed a complaint for illegal recruitment and estafa against them on
November 7, 1994 in the NBI, including as her co-complainants Felixberto Leongson, Jr., Ronald
Frederizo, Larry Tibor, Eduardo Sibbalucas, Har Taccad, Romeo Gallardo, Joseph Mendoza,
and her son, Noli Flores. 16
Accused-appellant was investigated by the Baler Police Station 2 on November 11, 1994 as a
result of the complaints filed against her by Felixberto, Ronald and Larry. Thereafter, she was
detained. 17
On November 24, 1994, she appeared before the NBI accompanied by a policewoman to
comply with the subpoena 18 issued regarding her complaint. According to NBI Agent Jesus
Manapat, Accused-appellant’s complaint was dismissed for lack of merit. 19
Based on the evidence presented, the trial court rendered its assailed decision on November 23,
1998, the dispositive portion of which reads:chanrob1es virtual 1aw library
WHEREFORE, the guilt of the accused for illegal recruitment in large scale and estafa in three
(3) counts having been proved beyond reasonable doubt, she is hereby convicted of said crimes as referring to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
and is sentenced:chanrob1es virtual 1aw library procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not. The same article further states that any
(1) To suffer the penalty of life imprisonment and pay a fine of P100,000 in Criminal Case No. Q- person or entity which, in any manner, offers or promises for a fee employment to two or more
94-59473; persons shall be deemed engaged in recruitment and placement.25cralaw:red

(2) To suffer the penalty of imprisonment ranging from FOUR (4) YEARS AND THREE (3) The evidence for the prosecution shows that accused-appellant sought out complainants and
MONTHS of prision correccional, as minimum, and up to TEN (10) YEARS of prision mayor, as promised them overseas employment. Despite their initial reluctance because they lacked the
maximum, and to pay the costs in Criminal Case No. Q-94-59470; technical skills required of seamen, complainants were led to believe by accused-appellant that
she could do something so that their applications would be approved. Thus, because of
(3) To suffer the penalty of imprisonment ranging from FOUR (4) YEARS AND THREE (3) accused-appellant’s misrepresentations, complainants gave her their moneys. Accused-
MONTHS of prision correccional, as minimum, and up to TEN (10) YEARS of prision mayor, as appellant’s companions, Domingo, Baloran, and Mendoza, made her ploy even more plausible.
maximum, and to pay the costs in Criminal Case No. Q-94-59471; and
Accused-appellant contends that all she did was to refer complainants to Domingo, Baloran, and
(4) To suffer the penalty of imprisonment ranging FOUR (4) YEARS AND THREE (3) MONTHS Mendoza. However, under Art. 13 (b) of the Labor Code, recruitment includes "referral," which is
of prision correccional, as minimum, and up to NINE (9) YEARS of prision mayor, as maximum, defined as the act of passing along or forwarding an applicant for employment after initial
and to pay the costs in Criminal Case No. Q-94-59472. interview of a selected applicant for employment to a selected employer, placement officer, or
bureau. 26 In these cases, Accused-appellant did more than just make referrals. She actively
The accused is also directed to pay: (a) Ronald Federi[z]o, the amount of P45,000.00 as and by and directly enlisted complainants for supposed employment abroad, even promising them jobs
way of actual damages; (b) Felixberto Leongson, Jr. P45,000.00 as and by way of actual as seamen, and collected moneys from them.
damages; and (c) Larry Tibor, P38,000.00 as and by way of actual damages.
The failure of complainants to present receipts to evidence payments made to accused-
The accused is further directed to pay to the said private complainants moral damages in the appellant is not fatal to the prosecution case. The presentation of the receipts of payments is not
sum of TWENTY THOUSAND PESOS (P20,000.00) each. necessary for the conviction of Accused-Appellant. As long as the prosecution is able to
establish through credible testimonies and affidavits that the accused-appellant was involved in
SO ORDERED. 20 the prohibited recruitment, a conviction for the offense can very well be justified. 27 In these
cases, complainants could not present receipts for their payment because accused-appellant
Hence, this appeal. Accused-appellant contends that — assured them she would take care of their money.

I. THE LOWER COURT ERRED IN RELYING UPON THE JURISPRUDENCE AND
AUTHORITIES CITED, I.E., PEOPLE VS. COMIA, PEOPLE VS. MANOZCA, PEOPLE VS.
HONRADA, PEOPLE VS. TAN TIONG MENG, PEOPLE VS. VILLAS AND PEOPLE VS.
SENDON BECAUSE, WITH DUE RESPECT, THE FACTS AND CIRCUMSTANCES AVAILING
IN SAID CASES ARE DIFFERENT AS IN THE PRESENT CASE; ANDchanrob1es virtua1 1aw
1ibrary
II. [THE LOWER COURT] ERRED IN HOLDING THE ACCUSED GUILTY BEYOND
REASONABLE DOUBT ON THE BASIS OF THE EVIDENCE ADDUCED BY THE
PROSECUTION TAKEN IN THE LIGHT OF THE UNREBUTTED EVIDENCE OF THE
ACCUSED ON VERY MATERIAL POINTS. 21
The contentions are without merit.
In Criminal Case No. Q-94-59473, Accused-appellant was charged with illegal recruitment in
large scale, the essential elements of which are: (1) that the accused engages in acts of
recruitment and placement of workers defined under Art. 13 (b) or in any of the prohibited
activities under Art. 34 of the Labor Code; (2) that the accused has not complied with the
guidelines issued by the Secretary of Labor and Employment, particularly with respect to the
securing of a license or an authority to recruit and deploy workers, either locally or overseas; and
(3) that the accused commits the unlawful acts against three or more persons, individually or as
a group. 22
It must be remembered that the trial court’s appreciation of complainants’ testimonies deserves
the highest respect since it was in a better position to assess their credibility. 28 In these cases,
complainants’ testimonies, to the effect that they paid money to accused-appellant and her
companions, Domingo and Baloran, because the latter promised them overseas employment,
were positive, straightforward, and categorical. They maintained their testimonies despite the
lengthy and gruelling cross-examination by the defense counsel. They have not been shown to
have any ill motive to falsely testify against Accused-Appellant. Naive, simple-minded, and even
gullible as they may have been, it is precisely for people like complainants that the law was
made. Accordingly, their testimonies are entitled to full faith and credit. 29
In contrast, Accused-appellant’s defense is merely denial. Time and again, this Court has ruled
that denial, being negative evidence which is self-serving in nature, cannot prevail over the
positive identification of prosecution witnesses. 30 Here, complainants positively identified
accused-appellant as one of those who represented that they could be deployed for overseas
work upon payment of the fees.
Accused-appellant claims that she herself had to borrow P15,000.00 from Jenny Tolentino,
guaranteed by Maria Luz Leongson, to defray her own and her son’s application expenses. The
claim has no merit. Maria Luz Leongson, who is Felixberto’s wife, testified that accused-
appellant sought her help to guarantee a loan to pay the tuition fees of her daughter and the rent
of the apartment in which she and her family were staying, 31 and not to finance her and her
son’s overseas job applications.chanrob1es virtua1 1aw 1ibrary

In these cases, according to the certification of the POEA, Accused-appellant had no license or Accused-appellant likewise testified that she paid in cash a total of P36,500.00 in three
authority to engage in any recruitment activities. 23 In fact, this was stipulated at the trial. 24 installments, i.e., P10,000.00 to Mendoza at her house, and P10,000.00 and P16,500.00 to
Accused-appellant claims, however, that she herself was a victim of illegal recruitment and that Baloran, at the Mandarin Hotel. This testimony cannot be deemed worthy of belief. When cross-
she simply told complainants about job opportunities abroad. examined, Accused-appellant could not remember the dates when she allegedly made these
payments. For someone who was jobless 32 and looking for employment, it is very doubtful that
The allegation is untenable. Art. 13 (b) of the Labor Code defines "recruitment and placement" she would pay considerable sums of money to strangers without even remembering at least the
month or the year when the same were supposed to have been paid. Revised Penal Code.

Accused-appellant further contends that if she was indeed a conspirator in the illegal recruitment
transactions with complainants, she would not have filed a complaint 33 in the NBI against
Domingo and Baloran. The complaint was, as already stated, dismissed and it is apparent that
accused-appellant filed the complaint only to make it appear that she herself had been the victim
of swindling and illegal recruitment. First, the complaint shows that it was filed on November 7,
1994, even before she was detained at the Baler Police Station 2 upon the sworn statements of
complainants. Complainants were included as complainants in a complaint filed by Accused-
Appellant. Yet, the complainants were never told, nor did they ever knew, of the complaint until
the trial of these cases. Second, Accused-appellant could have easily told them at least of the
complaint because Felixberto Leongson, Jr., Ronald Frederizo and Elsa Cas, a relative of
complainant Larry Tibor, were her immediate neighbors. Third, it is also noteworthy that despite
her claim that she paid P10,000.00 to Mendoza, Accused-appellant made the latter a co-
complainant in the complaint she filed with the NBI.
More importantly, Accused-appellant’s defense is uncorroborated. Not one of the persons she
included in her complaint to the NBI was ever presented in her defense in these cases. Nor did
she present Domingo, Baloran, or Mendoza to corroborate her statements. It is probable that
had she presented any of these persons, their testimonies would have been adverse
to Accused-Appellant. 34
Direct proof of previous agreement to commit a crime is not necessary as it may be deduced
from the mode in which the offense was perpetrated, or inferred from the acts of the accused
which point to a joint purpose and design. 35 In these cases, the fact is that there was
conspiracy among accused-appellant, Domingo, and Baloran in recruiting complainants for
employment overseas. The evidence shows that each had a role in that conspiracy. Domingo
posed as a representative of the luxury liner in recruiting crew for the vessel. Baloran
represented himself as the person who would actually process complainants’ travel documents,
while accused-appellant acted as a scout for job applicants and a collector of their payments. It
was only Mendoza who did not misrepresent himself as someone capable of helping
complainants go abroad nor collect money from them. 36
In Criminal Case Nos. Q-94-59470 and Q-94-59471, the amounts involved are both P45,000.00,
as testified to by complainants Felixberto Leongson, Jr. and Ronald Frederizo. Pursuant to Art.
315, par. 1 of the Revised Penal Code, the Indeterminate Sentence Law, and the ruling in
People v. Gabres, 39 the trial court correctly meted accused-appellant the maximum penalty of
ten (10) years of prision mayor in each case. This is so considering that the maximum penalty
prescribed by law for the felony is six (6) years, eight (8) months, and 21 days to eight (8) years
of prision mayor. The amounts involved in these cases exceed P22,000.00 by at least
P20,000.00, necessitating an increase of one (1) year for every P10,000.00. Applying the
Indeterminate Sentence Law, the minimum of the sentence is thus from six (6) months and one
(1) day to four (4) years and two (2) months of prision correccional. The trial court can exercise
its discretion only within this period. Thus, the minimum penalty imposed by the trial court should
be reduced to four (4) years and two (2) months of prision correccional.
In Criminal Case No. Q-94-59472, where the amount involved is P38,000.00, the indeterminate
sentence which should be imposed on accused-appellant should range from four (4) years and
two (2) months of prision correccional, as minimum, to nine (9) years of prision mayor as
maximum.
In accordance with the ruling in People v. Mercado, 40 the fact that no receipts were presented
to prove the amounts paid by complainants to accused-appellant does not prevent an award of
actual damages in view of the fact that complainants were able to prove by their respective
testimonies and affidavits that accused-appellant was involved in the recruitment process and
succeeded in inveigling them to give their money to her. The award of moral damages should
likewise be upheld as it was shown to have factual basis.chanrob1es virtua1 1aw 1ibrary
WHEREFORE, the decision of the Regional Trial Court, Branch 77, Quezon City, finding
accused-appellant guilty of illegal recruitment in large scale and estafa against complainants
Felixberto Leongson, Jr., Ronald Frederizo, and Larry Tibor is AFFIRMED, with the
MODIFICATIONS that, in the cases for estafa, Accused-appellant is sentenced:chanrob1es
virtual 1aw library

In sum, we are of the opinion that the trial court correctly found accused-appellant guilty of illegal (1) In Criminal Case No. Q-94-59470, to suffer a prison term ranging from four (4) years and two
recruitment in large scale. The imposition on accused-appellant of the penalty of life (2) months of prision correccional, as minimum, to ten (10) years of prision mayor, as maximum;
imprisonment and a fine of P100,000.00 is thus justified.
(2) In Criminal Case No. Q-94-59471, to suffer a prison term ranging from four (4) years and two
Accused-appellant was likewise found guilty of estafa under Art. 315 (2) (a) of the Revised Penal (2) months of prision correccional, as minimum, to 10 years of prision mayor, as maximum; and
Code committed —
(3) In Criminal Case No. Q-94-59472, to suffer a prison term ranging from four (4) years and two
By means of any of the following false pretenses or fraudulent acts executed prior to or (2) months of prision correccional, as minimum, to nine (9) years of prision mayor, as maximum.
simultaneously with the commission of the fraud:chanrob1es virtual 1aw library
SO ORDERED.
(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications,
property, credit, agency, business or imaginary transactions, or by means of other similar Bellosillo, Quisumbing, Buena and De Leon, Jr., JJ., concur.
deceits.
Endnotes:
Both elements of the crime were established in these cases, namely, (a) accused-appellant
defrauded complainant by abuse of confidence or by means of deceit and (b) complainant
suffered damage or prejudice capable of pecuniary estimation as a result. 37 Complainants
parted with their money upon the prodding and enticement of accused-appellant on the false
1. Per Judge Vivencio S. Baclig.
pretense that she had the capacity to deploy them for employment abroad. In the end,
complainants were neither able to leave for work overseas nor did they get their money back,
2. Also referred to in the records as Ronald Federico and Ronald Federizo.
thus causing them damage and prejudice. 38
3. Rollo, p. 15.
The issues that misappropriation on the part of accused-appellant of the money paid by
complainants and their demand for the same were not sufficiently established are immaterial and
4. Id., p. 17.
irrelevant, conversion and demand not being elements of estafa under Art. 315 (2) (a) of the
5. Id., p. 19. 33. Exh. 4.

6. Records, p. 19. 34. RULES ON EVIDENCE, RULE 131, §3(e); People v. Enriquez, 306 SCRA 739 (1999).

7. Also referred to in the records as Andres Baloran and Andres Baluran. 35. People v. Ariola, 318 SCRA 206 (1999).

8. TSN, pp. 2-9, Feb. 1, 1995; TSN, pp. 2-15, June 14, 1995; TSN, pp. 5-11, Aug. 14, 1996; 36. People v. Mercado de Arabia, G.R. No. 128112, May 12, 2000.
TSN, pp. 2-17, Jan. 14, 1997.
37. Id.
9. TSN, pp. 8-23, Aug. 18, 1997.
38. People v. Sagaydo, G.R. Nos. 124671-75, Sept. 29, 2000.
10. TSN, pp. 4-18, May 20, 1997; TSN, pp. 2-10, July 8, 1997; TSN, p. 6, Aug. 18, 1997.
39. 267 SCRA 581 (1997).
11. TSN, pp. 18-23, Jan. 14, 1997; TSN, pp. 9-10, Mar. 4, 1997.
40. 304 SCRA 504 (1999).
12. TSN, pp. 5-21, Apr. 7, 1997.
[G.R. No. 183879 : April 14, 2010]
13. Exh. B.
ROSITA SY, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT.
14. Exhs. D and C, respectively.
RESOLUTION
15. TSN, pp. 10-12, Feb. 1, 1995; TSN, pp. 18-23, May 20, 1997; TSN, pp. 23-28, Jan. 14,
NACHURA, J.:
1997.
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court,
16. Exh. 4.
assailing the Decision [1] dated July 22, 2008 of the Court of Appeals (CA) in CA-G.R. CR No.
30628.
17. TSN, pp. 8-22, Feb. 4, 1998; TSN, pp. 5-17, Mar. 3, 1998.
Rosita Sy (Sy) was charged with one count of illegal recruitment in Criminal Case No. 02-0537
18. Exh. 3.
and one count of estafa in Criminal Case No. 02-0536. In a joint decision of the Regional Trial
Court (RTC), Sy was exonerated of the illegal recruitment charge. However, she was convicted
19. Exh. 5, TSN, pp. 3-14, July 1, 1998.
of the crime of estafa. Thus, the instant appeal involves only Criminal Case No. 02-0536 for the
crime of estafa.
20. Rollo, pp. 51-52.
The Information[2] for estafa reads:
21. Id., p. 87.

22. People v. Ong, 322 SCRA 38 (2000). That sometime in the month of March 1997, in the City of Las Piñas, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, did, then and there willfully,
23. Exh. A. unlawfully and feloniously defraud Felicidad Mendoza-Navarro y Landicho in the following
manner, to wit: the said accused by means of false pretenses and fraudulent representation
24. TSN, p. 29, Jan. 14, 1997. which she made to the said complainant that she can deploy her for employment in Taiwan, and
complainant convinced by said representations, gave the amount of P120,000.00 to the said
25. People v. Mercado, 304 SCRA 504 (1999). accused for processing of her papers, the latter well knowing that all her representations and
manifestations were false and were only made for the purpose of obtaining the said amount, but
26. People v. Ordoño, G.R. Nos. 129593 & 143533-35, July 10, 2000. once in her possession[,] she misappropriated, misapplied and converted the same to her own
personal use and benefit, to the damage and prejudice of Felicidad Mendoza-Navarro y
27. People v. Yabut, 316 SCRA 237 (1999). Landicho in the aforementioned amount of P120,000.00.

28. Id. CONTRARY TO LAW.[3]

29. People v. Lumacang, 324 SCRA 254 (2000). On May 27, 2007, Sy was arraigned and pleaded not guilty to the crimes charged. Joint trial
ensued thereafter.
30. People v. Nicolas, 324 SCRA 748 (2000).
As summarized by the CA, the facts of the case are as follows:
31. TSN, pp. 12-13, Sept. 1, 1997.

32. TSN, pp. 3, 6, Feb. 4, 1998. Version of the Prosecution

Sometime in March 1997, appellant, accompanied by Corazon Miranda (or "Corazon"), went to

the house of Corazon's sister, Felicidad Navarro (or "Felicidad"), in Talisay, Batangas to (Php60,000.00) to the private complainant.
convince her (Felicidad) to work abroad. Appellant assured Felicidad of a good salary and
entitlement to a yearly vacation if she decides to take a job in Taiwan. On top of these perks, she SO ORDERED.[6]
shall receive compensation in the amount of Php120,000.00. Appellant promised Felicidad that
she will take care of the processing of the necessary documents, including her passport and
Aggrieved, Sy filed an appeal for her conviction of estafa. On July 22, 2008, the CA rendered a
visa. Felicidad told appellant that she will think about the job offer.
Decision,[7] affirming with modification the conviction of Sy, viz.:
Two days later, Felicidad succumbed to appellant's overseas job solicitation. With Corazon in
tow, the sisters proceeded to appellant's residence in Better Homes, Moonwalk, Las Piñas WHEREFORE, with the MODIFICATION sentencing accused-appellant to suffer the
City. Thereat, Felicidad handed to appellant the amount of Php60,000.00. In the third week of indeterminate penalty of four (4) years and two (2) months of prision correccional, as minimum,
March 1997, Felicidad returned to appellant's abode and paid to the latter another to seventeen (17) years of reclusion temporal, as maximum, the appealed decision is
Php60,000.00. The latter told her to come back the following day. In both instances, no receipt AFFIRMED in all other respects.
was issued by appellant to acknowledge receipt of the total amount of Php120,000.00 paid by
Felicidad. SO ORDERED.[8]

Hence, this petition.

On Felicidad's third trip to appellant's house, the latter brought her to Uniwide in Sta. Cruz,
Manila, where a male person showed to them the birth certificate that Felicidad would use in The sole issue for resolution is whether Sy should be held liable for estafa, penalized under
applying for a Taiwanese passport. The birth certificate was that of a certain Armida Lim, born to Article 315, paragraph 2(a) of the Revised Penal Code (RPC).[9]
Margarita Galvez and Lim Leng on 02 June 1952. Felicidad was instructed on how to write
Armida Lim's Chinese name. Swindling or estafa is punishable under Article 315 of the RPC. There are three ways of
committing estafa, viz.: (1) with unfaithfulness or abuse of confidence; (2) by means of false
Subsequently, appellant contacted Felicidad and thereafter met her at the Bureau of Immigration pretenses or fraudulent acts; or (3) through fraudulent means. The three ways of
office. Thereat, Felicidad, posing and affixing her signature as Armida G. Lim, filled out the committing estafa may be reduced to two, i.e., (1) by means of abuse of confidence; or (2) by
application forms for the issuance of Alien Certificate of Registration (ACR) and Immigrant means of deceit.
Certificate of Registration (ICR). She attached to the application forms her own photo. Felicidad
agreed to use the name of Armida Lim as her own because she already paid to appellant the The elements of estafa in general are the following: (a) that an accused defrauded another by
amount of Php120,000.00. abuse of confidence, or by means of deceit; and (b) that damage and prejudice capable of
pecuniary estimation is caused the offended party or third person.
In December 1999, appellant sent to Felicidad the birth certificate of Armida Lim, the Marriage
Contract of Armida Lim's parents, ACR No. E128390, and ICR No. 317614. These documents The act complained of in the instant case is penalized under Article 315, paragraph 2(a) of the
were submitted to and eventually rejected by the Taiwanese authorities, triggering the filing of RPC, wherein estafa is committed by any person who shall defraud another by false pretenses
illegal recruitment and estafa cases against appellant. or fraudulent acts executed prior to or simultaneously with the commission of the fraud. It is
committed by using fictitious name, or by pretending to possess power, influence, qualifications,
Version of the Defense property, credit, agency, business or imaginary transactions, or by means of other similar
deceits.
Appellant denied offering a job to Felicidad or receiving any money from her. She asserted that
when she first spoke to Felicidad at the latter's house, she mentioned that her husband and The elements of estafa by means of deceit are the following, viz.: (a) that there must be a false
children freely entered Taiwan because she was a holder of a Chinese passport. Felicidad pretense or fraudulent representation as to his power, influence, qualifications, property, credit,
commented that many Filipino workers in Taiwan were holding Chinese passports. agency, business or imaginary transactions; (b) that such false pretense or fraudulent
representation was made or executed prior to or simultaneously with the commission of the
Three weeks later, Felicidad and Corazon came to her house in Las Piñas and asked her if she fraud; (c) that the offended party relied on the false pretense, fraudulent act, or fraudulent means
knew somebody who could help Felicidad get a Chinese ACR and ICR for a fee. and was induced to part with his money or property; and (d) that, as a result thereof, the
offended party suffered damage.[10]
Appellant introduced a certain Amelia Lim, who, in consideration of the amount of
Php120,000.00, offered to Felicidad the use of the name of her mentally deficient sister, Armida In the instant case, all the foregoing elements are present. It was proven beyond reasonable
Lim. Felicidad agreed. On their second meeting at appellant's house, Felicidad paid doubt, as found by the RTC and affirmed by the CA, that Sy misrepresented and falsely
Php60,000.00 to Amelia Lim and they agreed to see each other at Uniwide the following day. pretended that she had the capacity to deploy Felicidad Navarro (Felicidad) for employment in
That was the last time appellant saw Felicidad and Amelia Lim.[4] Taiwan. The misrepresentation was made prior to Felicidad's payment to Sy of One Hundred
Twenty Thousand Pesos (P120,000.00). It was Sy's misrepresentation and false pretenses that
On January 8, 2007, the RTC rendered a decision,[5] the dispositive portion of which reads: induced Felicidad to part with her money. As a result of Sy's false pretenses and
misrepresentations, Felicidad suffered damages as the promised employment abroad never
materialized and the money she paid was never recovered.
WHEREFORE, premises considered the court finds the accused Rosita Sy NOT GUILTY of the
crime of Illegal Recruitment and she is hereby ACQUITTED of the said offense. As regards the
The fact that Felicidad actively participated in the processing of the illegal travel documents will
charge of Estafa, the court finds the accused GUILTY thereof and hereby sentences her to an
not exculpate Sy from liability. Felicidad was a hapless victim of circumstances and of fraud
indeterminate penalty of four (4) years of prision correctional as minimum to 11 years of prision
committed by Sy. She was forced to take part in the processing of the falsified travel documents
mayor, as maximum. The accused is ordered to reimburse the amount of sixty-thousand
because she had already paid P120,000.00. Sy committed deceit by representing that she could
secure Felicidad with employment in Taiwan, the primary consideration that induced the latter to WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals dated July 22,
part with her money. Felicidad was led to believe by Sy that she possessed the power and 2008 in CA-G.R. CR No. 30628, sentencing petitioner Rosita Sy to an indeterminate penalty of
qualifications to provide Felicidad with employment abroad, when, in fact, she was not licensed four (4) years and two (2) months of prision correccional, as minimum, to seventeen (17) years
or authorized to do so. Deceived, Felicidad parted with her money and delivered the same to of reclusion temporal, as maximum, is hereby AFFIRMED. We, however, MODIFY the CA
petitioner. Plainly, Sy is guilty of estafa. Decision as to the amount of civil indemnity, in that Sy is ordered to reimburse the amount of
One Hundred Twenty Thousand Pesos (P120,000.00) to private complainant Felicidad Navarro.
Illegal recruitment and estafa cases may be filed simultaneously or separately. The filing of
charges for illegal recruitment does not bar the filing of estafa, and vice versa. Sy's acquittal in SO ORDERED.
the illegal recruitment case does not prove that she is not guilty of estafa. Illegal recruitment
and estafa are entirely different offenses and neither one necessarily includes or is necessarily Corona, (Chairperson), Velasco, Jr., Peralta, and Mendoza, JJ., concur.
included in the other. A person who is convicted of illegal recruitment may, in addition, be
convicted of estafa under Article 315, paragraph 2(a) of the RPC.[11] In the same manner, a
Endnotes:
person acquitted of illegal recruitment may be held liable for estafa. Double jeopardy will not set
in because illegal recruitment is malum prohibitum, in which there is no necessity to prove
criminal intent, whereas estafa is malum in se, in the prosecution of which, proof of criminal
intent is necessary.[12] [1]
 Penned by Associate Justice Rebecca de Guia-Salvador, with Associate Justices Vicente S.E.
Veloso and Ricardo R. Rosario, concurring; rollo, pp. 21-37.
The penalty prescribed for estafa under Article 315 of the RPC is prision correccional in its
maximum period to prision mayor in its minimum period, if the amount defrauded is over Twelve [2]
 Rollo, p. 48.
Thousand Pesos (P12,000.00) but does not exceed Twenty-two Thousand Pesos (P22,000.00),
and if such amount exceeds the latter sum, the penalty shall be imposed in its maximum period, [3]
 Id.
adding one year for each additional Ten Thousand Pesos (P10,000.00); but the total penalty that
may be imposed shall not exceed twenty years. In such cases, and in connection with the [4]
 Id. at 22-25.
accessory penalties that may be imposed under the provisions of this Code, the penalty shall be
termed prision mayor or reclusion temporal, as the case may be. [5]
 Penned by Judge Erlinda Nicolas-Alvaro, RTC, Branch 198, Las Piñas City; id. at 39-44.
The addition of one year imprisonment for each additional P10,000.00, in excess of P22,000.00, [6]
 Id. at 44.
is the incremental penalty. The incremental penalty rule is a mathematical formula for computing
the penalty to be actually imposed using the prescribed penalty as the starting point. This special [7]
 Supra note 1.
rule is applicable in estafa and in theft.[13]
[8]
 Id. at 36.
In estafa, the incremental penalty is added to the maximum period of the penalty prescribed, at
the discretion of the court, in order to arrive at the penalty to be actually imposed, which is the [9]
 Petitioner assigned the following errors in the CA Decision:
maximum term within the context of the Indeterminate Sentence Law (ISL).[14] Under the ISL,
attending circumstances in a case are applied in conjunction with certain rules of the Code in
order to determine the penalty to be actually imposed based on the penalty prescribed by the I
Code for the offense. The circumstance is that the amount defrauded exceeds P22,000.00, and
the incremental penalty rule is utilized to fix the penalty actually imposed. [15] THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT
PETITIONER OFFERED OVERSEAS JOB TO PRIVATE RESPONDENT.
To compute the incremental penalty, the amount defrauded shall be subtracted by P22,000.00,
and the difference shall be divided by P10,000.00, and any fraction of P10,000.00 shall be II
discarded.[16]
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT
In the instant case, prision correccional in its maximum period to prision mayor in its minimum PETITIONER MISREPRESENTED AND FALSELY PRETENDED TO RESPONDENT THAT
period is the imposable penalty. The duration of prision correccional in its maximum period is SHE HAD THE POWER AND CAPACITY TO DEPLOY HER FOR A WORK IN TAIWAN.
from four (4) years, two (2) months and one (1) day to six (6) years; while prision mayor in its
minimum period is from six (6) years and one (1) day to eight (8) years. The incremental penalty III
for the amount defrauded would be an additional nine years imprisonment, to be added to the
maximum imposable penalty of eight years. Thus, the CA committed no reversible error in THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT
sentencing Sy to an indeterminate penalty of four (4) years and two (2) months of prision PETITIONER'S MISREPRESENTATION AND FALSE PRETENSES WAS WHAT INDUCED
correccional, as minimum, to seventeen (17) years of reclusion temporal, as maximum. RESPONDENT TO PART WITH HER MONEY. (Rollo, p. 13).
As to the amount that should be returned or restituted by Sy, the sum that Felicidad gave to
Sy, i.e., P120,000.00, should be returned in full. The fact that Felicidad was not able to produce
[10]
receipts is not fatal to the case of the prosecution since she was able to prove by her positive  R.R. Paredes v. Calilung, G.R. No. 156055, March 5, 2007, 517 SCRA 369; Cosme, Jr. v.
testimony that Sy was the one who received the money ostensibly in consideration of an People, G.R. No. 149753, November 27, 2006, 508 SCRA 190; Jan-Dec Construction
overseas employment in Taiwan.[17] Corporation v. CA, G.R. No. 146818, February 6, 2006, 481 SCRA 556.
[11]
 People v. Billaber, 465 Phil. 726 (2004).
[12]
 Id.
[13]
 People v. Temporada, G.R. No. 173473, December 17, 2008, 574 SCRA 258.
[14]
 Under the ISL, in imposing a prison sentence for an offense punished by the Revised Penal
Code, or its amendments, the court shall sentence an 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.
[15]
 People v. Temporada, supra note 13, at 263-264.
[16]
 Id. at 260.
[17]
 People v. Gonzales-Flores, 408 Phil. 855 (2001); People v. Mercado, 364 Phil. 148 (1999).
[G.R. No. 81510. March 14, 1990.]

HORTENCIA SALAZAR, Petitioner, v. 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.

SYLLABUS

1. CONSTITUTIONAL LAW; WARRANTS OF SEARCH AND ARREST; MAY BE ISSUED ONLY

BY A JUDGE; EXCEPTION. — 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. It is only judges, and no other, who may issue warrants of arrest and search. 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.

2. ID.; ID.; SECRETARY OF LABOR; NO LONGER AUTHORIZED TO ISSUE WARRANT. —

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.

3. ID.; ID.; IDENTIFY CLEARLY THE THINGS TO BE SEIZED. — We have held that a warrant
must identify clearly the things to be seized, otherwise, it is null and void, thus: . . .Another factor
which makes the search warrants under consideration constitutionally objectionable is that they
are in the nature of general warrants. . . . 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 Pursuant to the powers vested in me under Presidential Decree No. 1920 and Executive Order
articles sought to be seized under the search warrants in question cannot be characterized No. 1022, I hereby order the CLOSURE of your recruitment agency being operated at No. 615
differently. . . . 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 —
DECISION
(1) No valid license or authority from the Department of Labor and Employment to recruit and
deploy workers for overseas employment;

SARMIENTO, J.: (2) Committed/are committing acts prohibited under Article 34 of the New Labor Code in relation
to Article 38 of the same code.

This concerns the validity of the power of the Secretary of Labor to issue warrants of arrest and This ORDER is without prejudice to your criminal prosecution under existing laws.
seizure under Article 38 of the Labor Code, prohibiting illegal
recruitment.chanrobles.com:cralaw:red Done in the City of Manila, this 3th day of November, 1987."cralaw virtua1aw library

The facts are as follows:chanrob1es virtual 1aw library 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.
x       x       x 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
1. On October 21, 1987, Rosalie Tesoro of 177 Tupaz Street, Leveriza, Pasay City, in a sworn operating Hannalie Dance Studio. Before entering the place, the team served said Closure and
statement filed with the Philippine Overseas Employment Administration (POEA for brevity) Seizure order on a certain Mrs. Flora Salazar who voluntarily allowed them entry into the
charged petitioner Hortencia Salazar, viz:jgc:chanrobles.com.ph 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
"04. T: Ano ba ang dahilan at ikaw ngayon ay narito at nagbibigay ng salaysay. 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
S: Upang ireklamo sa dahilan ang akmg PECC Card ay ayaw ibigay sa akin ng dati kong costumes which were duly receipted for by Mrs. Asuncion Maguelan and witnessed by Mrs.
manager. — Horty Salazar — 615 R.O. Santos, Mandaluyong, Mla. Flora Salazar.chanrobles virtual lawlibrary
05. T: Kailan at saan naganap and ginawang panloloko sa iyo ng tao/mga taong inireklamo mo? 6. On January 28, 1988, petitioner filed with POEA the following letter:jgc:chanrobles.com.ph
S: Sa bahay ni Horty Salazar. "Gentlemen:chanrob1es virtual 1aw library
06. T: Paano naman naganap ang pangyayari? 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
S: Pagkagaling ko sa Japan ipinatawag niya ako. Kinuha ang PECC Card ko at sinabing immediately returned on the ground that said seizure was contrary to law and against the will of
hahanapan ako ng booking sa Japan. Mag-9 month’s na ako sa Phils. ay hindi pa niya ako the owner thereof Among our reasons are the following:chanrob1es virtual 1aw library
napa-alis. So lumipat ako ng ibang company pero ayaw niyang ibigay and PECC Card ko.
1. Our client has not been given any prior notice or hearing, hence the Closure and Seizure
2. On November 3, 1987, public respondent Atty. Ferdinand Marquez to whom said complaint Order No. 1205 dated November 3, 1987 violates "due process of law" guaranteed under Sec. 1,
was assigned, sent to the petitioner the following telegram:jgc:chanrobles.com.ph Art. III, of the Philippine Constitution.
"YOU ARE HEREBY DIRECTED TO APPEAR BEFORE FERDIE MARQUEZ POEA ANTI 2. Your acts also violate Sec. 2, Art. III of the Philippine Constitution which guarantees right of
ILLEGAL RECRUITMENT UNIT 6TH FLR. POEA BLDG. EDSA COR. ORTIGAS AVE. the people "to be secure in their persons, houses, papers, and effects against unreasonable
MANDALUYONG MM ON NOVEMBER 6, 1987 AT 10 AM RE CASE FILED AGAINST YOU. searches and seizures of whatever nature and for any purpose."cralaw virtua1aw library
FAIL NOT UNDER PENALTY OF LAW."cralaw virtua1aw library
3. The premises invaded by your Mr. Ferdi Marquez and five (5) others (including 2 policemen)
4. On the same day, having ascertained that the petitioner had no license to operate a are the private residence of the Salazar family, and the entry, search as well as the seizure of
recruitment agency, public respondent Administrator Tomas D. Achacoso issued his challenged the personal properties belonging to our client were without her consent and were done with
CLOSURE AND SEIZURE ORDER NO. 1205 which reads:jgc:chanrobles.com.ph 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.
"HORTY SALAZAR
Unless said personal properties worth around TEN THOUSAND PESOS (P10,000.00) in all (and
No. 615 R.O. Santos St. 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
Mandaluyong, Metro Manila.
client’s interests.
Section 38, paragraph (c), of the Labor Code, as now written, was entered as an amendment by
We trust that you will give due attention to these important matters."cralaw virtua1aw library 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
7. On February 2, 1988, before POEA could answer the letter, petitioner filed the instant petition; of the 1973 Constitution. Under the latter, the then Minister of Labor merely exercised
on even date, POEA filed a criminal complaint against her with the Pasig Provincial Fiscal, recommendatory powers:chanrobles.com.ph : virtual law library
docketed as IS-88-836. 1
(c) The Minister of Labor or his duly authorized representative shall have the power to
On February 2, 1988, the petitioner filed this suit for prohibition. Although the acts sought to be recommend the arrest and detention of any person engaged in illegal recruitment. 6
barred are already faith accompli, thereby making prohibition too late, we consider the petition
as one for certiorari in view of the grave public interest involved. 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
The Court finds that a lone issue confronts it: May the Philippine Overseas Employment Minister of Labor arrest and closure powers:chanrob1es virtual 1aw library
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 (b) The Minister of Labor and Employment shall have the power to cause the arrest and
Court’s resolution. 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
Under the new Constitution, which states:chanrob1es virtual 1aw library 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
. . . no search warrant or warrant of arrest shall issue except upon probable cause to be employment, without having been licensed or authorized to do so. 7
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 On January 26, 1986, he, Mr. Marcos, promulgated Presidential Decree No. 2018, giving the
searched and the persons or things to be seized. 2 Labor Minister search and seizure powers as well:chanrob1es virtual 1aw library

it is only a judge who may issue warrants of search and arrest. 3 In one case was declared that
mayors may not exercise this power:chanrob1es virtual 1aw library
x       x       x
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 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 undesirable alien) ordered by the President or his duly authorized representatives, in order to
Neither may it be done by a mere prosecuting body:chanrob1es virtual 1aw library
(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 end 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
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

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
x       x       x
The State has the inherent power to deport undesirable aliens (Chuoco Tiaco v. 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 v. Chuoco Tiaco and Crossfield, 16 Phil. 534,
568, 569; In re McCulloch Dick, 38 Phil 41).chanroblesvirtualawlibrary 5) TOYOTA Hi-Lux, pick-up truck with Plate No. NGV 472 with marking ‘Bagong Silang.’"

"The right of a country to expel or deport aliens because their continued presence is detrimental In Stanford v. State of Texas, the search warrant which authorized the search for `books,
to public welfare is absolute and unqualified" (Tiu Chun Hai and Go Tam v. Commissioner of records, pamphlets, cards, receipts, lists, memoranda, pictures, recordings and other written
Immigration and the Director of NBI, 104 Phil. 949, 956.) 12 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
The power of the President to order the arrest of aliens for deportation is, obviously, exceptional. manner, directions to ‘seize any evidence in connection with the violation of SDC 13-3703 or
It (the power to order arrests) can not be made to extend to other cases, like the one at bar. otherwise" have been held too general, and that portion of a search warrant which authorized
Under the Constitution, it is the sole domain of the courts. 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
Moreover, the search and seizure order in question, assuming, ex gratia argumenti, that it was warrant, and therefore invalid. The description of the articles sought to be seized under the
validly issued, is clearly in the nature of a general warrant:chanrob1es virtual 1aw library search warrants in question cannot be characterized differently.chanrobles law library : red

Pursuant to the powers vested in me under Presidential Decree No. 1920 and Executive Order In the Stanford case, the U.S. Supreme court calls to mind a notable chapter in English history;
No. 1022, I hereby order the CLOSURE of your recruitment agency being operated at No. 615 the era of disaccord between the Tudor Government and the English Press, when "Officers of
R.O. Santos St., Mandaluyong, Metro Manila and the seizure of the documents and the Crown were given roving commissions to search where they pleased in order to suppress
paraphernalia being used or intended to be used as the means of committing illegal recruitment, and destroy the literature of dissent both Catholic and Puritan." Reference herein to such
it having verified that you have — 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
(1) No valid license or authority from the Department of Labor and Employment to recruit and imminent danger to state security. 14
deploy workers for overseas employment;
For the guidance of the bench and the bar, we reaffirm the following principles:chanrob1es
(2) Committed/are committing acts prohibited under Article 34 of the New Labor Code in relation virtual 1aw library
to Article 38 of the same code.
1. Under Article III, Section 2 , of the 1987 Constitution, it is only judges, and no other, who may
This ORDER is without prejudice to your criminal prosecution under existing laws. 13 issue warrants of arrest and search;

We have held that a warrant must identify clearly the things to be seized, otherwise, it is null and 2. The exception is in cases of deportation of illegal and undesirable aliens, whom the President
void, thus:chanrob1es virtual 1aw library or the Commissioner of Immigration may order arrested, following a final order of deportation, for
the purpose of deportation.
x       x       x
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
Another factor which makes the search warrants under consideration constitutionally materials seized as a result of the implementation of Search and Seizure Order No.
objectionable is that they are in the nature of general warrants. The search warrants describe 1205.chanrobles virtual lawlibrary
the articles sought to be seized in this wise:jgc:chanrobles.com.ph
No costs.
"1) All printing equipment, paraphernalia, paper, ink, photo equipment, typewriters, cabinets,
tables, communications/recording equipment, tape recorders, dictaphone and the like used an/or SO ORDERED.
connected in the printing of the ‘WE FORUM’ newspaper and any and all
documents/communications, letters and facsimile of prints related to the ‘WE FORUM’ Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco,
newspaper. Padilla, Bidin, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

2) Subversive documents, pamphlets, leaflets, books, and other publications to promote the Endnotes:
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; 1. Rollo, 19-24; emphases in the original.

2) DATSUN, pick-up colored white with Plate No. NKV 969; 2. CONST., art. III, sec. 2.

3) A delivery truck with Plate No. NBS 542; 3. See Ponsica v. Ignalaga, No. 72301, July 31, 1987, 152 SCRA 647; Presidential Anti-Dollar
Salting Task Force v. Court of Appeals, G.R. No. 83578, March 16, 1989.
4) TOYOTA-TAMARAW, colored white with Plate No. PBP 665; and
4. Ponsica, supra, 662-663.
5. Presidential Anti-Dollar Salting Task Force, supra, 21.

6. Pres. Decree No. 1693, "FURTHER AMENDING ARTICLE 38 OF THE LABOR CODE BY
MAKING ILLEGAL RECRUITMENT A CRIME OF ECONOMIC SABOTAGE."cralaw virtua1aw
library

7. Supra, sec. 1.

8. Pres. Decree No. 2018, "FURTHER AMENDING ARTICLES 38 AND 39 OF THE LABOR
CODE BY MAKING ILLEGAL RECRUITMENT A CRIME OF ECONOMIC SABOTAGE AND
PUNISHABLE WITH IMPRISONMENT."cralaw virtua1aw library

9. No. L-22196, June 30, 1967, 20 SCRA 562.

10. Qua Chee Gan v. Deportation Board, No. L-10280, September 30, 1963, 9 SCRA 27; Vivo v.
Montesa, No. L-24576, 24 SCRA 155.

11. Go Tek v. Deportation Board, No. L-23846, September 9, 1977, 79 SCRA 17.

12. Supra, 21-22.

13. Rollo, id., 15.

14. Burgos, Sr. v. Chief of Staff, AFP No. 64261, December 26, 1984, 133 SCRA 800, 814-816. G.R. No. L-2216             January 31, 1950

DEE C. CHUAN & SONS, INC., petitioner,

vs.
THE COURT OF INDUSTRIAL RELATIONS, CONGRESS OF LABOR ORGANIZATIONS
(CLO), KAISAHAN NG MGA MANGGAGAWA SA KAHOY SA PILIPINAS and JULIAN
LUMANOG AND HIS WORK-CONTRACT LABORERS, respondents.

Quisumbing, Sycip and Quisumbing for petitioner.

Lazatin and Caballero for respondents.
Arsenio I. Martinez for the Court of Industrial Relations.

TUASON, J.:

Dee C. Chuan & Sons, Inc. assails the validity of an order of the Court of Industrial Relations.
The order made upon petitioner's request for authority to hire" about twelve(12) more laborers
from time to time and on a temporary basis," contains the proviso that "the majority of the
laborers to be employed should be native." The petition was filed pending settlement by the
court of a labor dispute between the petitioner and Kaisahan Ng Mga Manggagawa sa Kahoy sa
Pilipinas.

At the outset, the appellant takes exception to the finding of the court below that Dee C. Chuan
& Sons, Inc. is capitalized with foreign descent. This question has little or no bearing on the case
and may well be passed over except incidentally as a point of argument in relation to the
material issues.

It is next said that "The Court of Industrial Relations cannot intervene in questions of selection of
employees and workers so as to impose unconstitutional restrictions," and that "The restrictions
of the number of aliens that nay be employed in any business, occupation, trade or profession of
any kind, is a denial of the equal protection of the laws." Although the brief does not name the
persons who are supposed to be denied the equal protection of the laws, it is clearly to be
inferred that aliens in general are in petitioner's mind. certainly, the order does not, directly or
indirectly, immediately or remotely, discriminate against the petitioner on account of race or
citizenship. The order could have been issued in a case in which the employer was a Filipino. As
a matter of fact the petitioner insists that 75 % of its shares of stock are held by Philippine
citizens, a statement which is here assumed to be correct.
But is petitioner entitled to challenge the constitutionality of a law or an order which does not
adversely affect it, in behalf of aliens who are prejudiced thereby? The answer is not in doubt.
An alien may question the constitutionality of a statute (or court order) only when and so far as it
is being, or is about to be, applied to his disadvantage. (16 C.J.S. 157 et seq.) The prospective
employees whom the petitioner may contemplate employing have not come forward to seek
redress; their identity has not even been revealed. Clearly the petitioner has no case in so far as
it strives to protect the rights of others, much less others who are unknown and undetermined.
U.S. vs. Wong Ku Ark, 169 U.S. 649; Truax vs. Reich, 239 U.S. 39 60 Law ed., 131., and other
American decisions cited do not support the petitioner for the very simple reasons that in those
cases it was the persons themselves whose rights and immunities under the constitution were
being violated that invoked the protection of the courts.
The petitioner is within its legitimate sphere of interest when it complains that the appealed order
restrains it in its liberty to engage the men it pleases. This complaint merits a more detailed
examination.
That the employer's right to hire labor is not absolute has to be admitted. "This privilege of hiring
and firing ad libitum is, of course, being subjected to restraints today." Statutes are cutting in on
it. And so does Commonwealth Act No. 103. The regulations of the hours of labor of employees
and of the employment of women and children are familiar examples of the limitation of the
employer's right in this regard. The petitioner's request for permission to employ additional;
laborers is an implicit recognition of the correctness of the proposition. The power of the
legislature to make regulations is subject only to the condition that they should be affected with
public interest and reasonable under the circumstances. The power may be exercised directly by
the law-making body or delegated by appropriate rules to the courts or administrative agencies.
We are of the opinion that the order under consideration meets the test of reasonableness and
public interest. The passage of Commonwealth Act No. 103 was "in conformity with the
constitutional objective and . . . the historical fact that industrial and agricultural disputes have
given rise to disquietude, bloodshed and revolution in our country." (Antamok Goldfields Mining
Co. vs. Court of Industrial Relations, 40 Off. Gaz., 8th Supp., 173.) 1 "Commonwealth Act No. 103
has precisely vested the Court of Industrial Relations with authority to intervene in all disputes
between employees or strikes arising from the difference as regards wages, compensation, and
other labor conditions which it may take cognizance of." (Central Azucarera de Tarlac vs. Court
of Industrial Relations, 40 Off. Gaz., 3rd Supp., 319, 324.) 2 Thus it has jurisdiction to determine
the number of men to be laid off during off-seasons. By the same token, the court may specify
that a certain proportion of the additional laborers to be employed should be Filipinos, if such
condition, in the court's opinion, "is necessary or expedient for the purpose of settling disputes or
doing justice to the parties."
The order in question has that specific end in view. In parallel view the court observed:
"Undoubtedly, without the admonition of the Court, nothing could prevent petitioner from hiring
purely alien laborers, and there is no gainsaying the fact that further conflict or dispute would
naturally ensue. To cope with this contingency, and acting within the powers granted by the
organic law, the court, believing in the necessity and expediency of making patent its desire to
avoid probable and possible further misunderstanding between the parties, issued the order."
We are not prepared to declare that the order is not conducive to the aim pursued. The question
is a practical one depending on facts with which the court is best familiar. The fact already noted
should not be lost sight of — that there is a pending strike and besides, that the employment of
temporary laborers was opposed by the striking employees and was the subject of a protracted
hearing.
We can not agree with the petitioner that the order constitutes an unlawful intrusion into the
sphere of legislation, by attempting to lay down a public policy of the state or to settle a political
question. In the first place, we believe, as we have already explained, that the court's action falls
within the legitimate scope of its jurisdiction. In the second place, the order does not formulate a
policy and is not political in character. It is not a permanent, all-embracing regulation. It is a
compromise and emergency measure applicable only in this case and calculated to bridge a
temporary gap and to adjust conflicting interests in an existing and menacing controversy. The
hiring of Chinese laborers by the petitioner was rightly considered by the court likely to lead the
parties away from the reconciliation which it was the function of the court to effectuate.
As far as the petitioner is concerned, the requirement that majority of the laborers to be
employed should be Filipinos is certain not arbitrary, unreasonable or unjust. The petitioner's
right to employ labor or to make contract with respect thereto is not unreasonably curtailed and
its interest is not jeopardized. We take it that the nationality of the additional laborers to be taken
in is immaterial to the petitioner. In its application for permission to employ twelve temporary
laborers it expressly says that these could be Filipinos or Chinese. On the face of this statement,
assuming the same to be sincere, the petitioner objection to the condition imposed by the court
would appear to be academic and a trifle.
We should not close without adverting to the fact that the petitioner does not so much as pretend
that the hiring of additional laborers is its prerogative as a matter of right. It seems to be
conceded that during the pendency of the dispute the petitioner could employ temporary
laborers only with the permission of the Court of Industrial Relations. The granting of the
application thus lies within the sound judgment of the court, and if the court could turn it down
entirely, as we think it could, its authority to quality the permission should be undeniable,
provided only that the qualification is not arbitrary, against law, morals, or established public
policy, which it is not; it is an expedient and emergency step designed to relieve petitioner's own
difficulties. Also important to remember is that it is not compulsory on petitioner's part to take
advantage of the order. Being a permute petitioner is the sole judge of whether it should take the
order as it is, or leave it if it does not suit its interest to hire new laborers other than Chinese.
The order appealed from is affirmed with costs to this appeal against the petitioner-appellant.
Moran, C.J., Pablo, Padilla, and Torres, JJ., concur.
Separate Opinions
OZAETA, J., with whom concur PARAS, MONTEMAYOR, and REYES, JJ., dissenting:
During the trial of an industrial dispute between the petitioner and the respondent labor union,
the former applied to the Court of Industrial Relations for authority "to hire about twelve more
laborers from time to time and on a temporary basis, to be chosen by the petitioner from either
Filipinos or Chinese." the court granted the authority applied for but imposed as a condition that
the majority of the twelve new laborers to be hired "should be native and only a nominal
percentage thereof alien." In imposing such condition the court said:
 The hiring of laborers who are not native or Filipino should be discouraged, as it is
being discouraged by this court. In these critical moments of unemployment, any
competition of alien and native labor would be destructive of our Nation that is in the
making. By the act of God, this nation is the Philippines, her soil is the patrimony of
the Filipino people, and in this Philippine soil the Filipino laborers must have priority
and preference. No capitalistic management can violate this written law, unless it
wants to court trouble and conflict. In the hiring, therefore, of laborers, it is the opinion
of this court that management, in employing aliens, should be prudent and cautious
and should, as much as possible, employ only a small percentage thereof limited to
those absolutely necessary and confidential.
The power of the Court of Industrial Relations to impose such condition as to limit the authority
of the employer to hire laborers than Filipinos is challenged by the petitioner. "The petitioner is
within its legitimate sphere of interest when it complains that the appealed order restrains it in
liberty to engage the men it pleases," says the majority opinion, and we add — "regardless of
race or nationality." It is true that no alien laborer who may be adversely affected by the order
has been made a party herein. Under the circumstances of the case he could not be expected to
have intervened in the incident which gave rise to the order complained of. But his intervention is
not necessary in order to determine whether or not the Court of Industrial Relations is
empowered by law to impose the condition above mentioned. If the court has no power to
discriminate against a certain class of laborers on account of their race or nationality, it has no
power to impose the condition in question, and the employer has legitimate right to complain
against such imposition.
The Court of Industrial Relations impliedly admits the nonexistence of any statue providing that
Filipino laborers must be preferred over aliens; but it claims or adopts an "unwritten law" to that
effect and says that "no capitalistic management can violate this unwritten law, unless it wants to
court trouble and conflict." Who made such unwritten law? Certainly the Congress of the
Philippines, the only entity authorized by the Constitution to make laws, and which does not
promulgate unwritten laws, did not do so. The court, therefore, cannot take cognizance of, and
much less apply, such supposed unwritten law.
It is sheer usurpation of legislative power for the court to enact or make laws. Its power is
confined to interpreting and applying the laws enacted by the legislature.
The case of Truax vs. Reich (600 law. ed., 131), which was decided by the Supreme Court of
the United States on November 1, 1915, is of pertinent and persuasive application to the
question at issue in that, in our opinion, it emphasizes the utter lack of power of the court to
impose the condition here complained of; for in said case Supreme Court of the United States
ruled that the Legislature of the State of Arizona could not validly enact a law similar to the
supposed unwritten law which the Court of Industrial Relations has conceived and has tried to
enforce. The law involved in said case pertinently reads as follows:
SEC. 1. Any company, corporation, partnership, association or individual who is, may
hereafter become, an employer of more than five (5) workers at any one time, in the
state of Arizona, regardless of kind or class of work, or sex of workers, shall employ
not less than (80) per cent qualified electors or native-born citizens of the United
States or some subdivision thereof.
SEC. 2. Any company, corporation, partnership, association or individual, their agent
or agents, found guilty of violating any of the provisions of this act shall be subject to a
fine of not less than one hundred ($100) dollars, and imprisoned for not less than thirty
(30) days.
Mike Raich, a native of Austria and an inhabitant of the State of Arizona, but not a qualified
elector, was employed as a cook by William Truax in his restaurant, where he had nine
employees, of whom seven were neither native-born citizens of the United States nor qualified
electors. After the passage of said law Raich was informed by his employer that because of its
requirements and because of the fear of the penalties that would be incurred in case of its
violation, he would be discharged. Thereupon Raich sued Truax and the Attorney General of
Arizona to enjoin them from enforcing the law on the ground that it was unconstitutional because
it denied him the equal protection of the laws. Both the District Court and the Supreme Court of
the United States upheld his contention. The court said that the complainant was entitled under
the Fourteenth Amendment to the equal protection of the laws of Arizona. "These provisions,"
said the court, "are universal in their application, to all person within the territorial jurisdiction,
without regard to any differences of race, of color, or of nationality; and the equal laws. . . . The
discrimination defined by the act does not pertain to the regulation or distribution of the public
domain, or of the common property or resources of the people of the state, the enjoyment of
which may be limited to its citizens as against both aliens and the citizens of other states." The
court said further:
It is sought to justify this act as an exercise of the power of the state to make
reasonable classifications in legislating to promote the health, safety, morals, and
welfare of those within its jurisdiction. But this admitted authority, with the broad range
of legislative discretion that it implies, does not go so far as to make it possible for the
state to deny to lawful inhabitants, because of their race or nationality, the ordinary
means of earning a livelihood. It requires no argument to show that the right to work
for a living in the common occupations of the community is of the very essence of the
personal freedom and opportunity that it was the purpose of the Amendment to
secure. . . . If this could be refused solely upon the ground of race or nationality, the
prohibition of the denial to any person of the equal protection of the laws would be a
barren form of words. It is no answer to say, as it is argued, that the act proceeds
upon the assumption that 'the employment of aliens, unless restrained, was a peril to
the public welfare. The discrimination against aliens in the wide range of employments
to which the acts relates is made an end in itself, and thus the authority to deny to
aliens, upon the mere fact of their alienage, the right to obtain support in the ordinary
fields of labor, is necessarily involved.
Our own Constitution contains a provision similar to the Fourteenth Amendment to the
Constitution of the United States. Section 1 of Article III provides:
No person shall be deprived of life, liberty, or property without due process of law, nor
shall any person be denied the equal protection of the laws.
It is patent that if the lawmaking body itself cannot validly enact the supposed unwritten law
conceived or adopted by the lower court, much less could the latter do so.
Section 13 of Commonwealth Act No. 103, invoked by the trial court and by majority of this court
as authorizing the imposition of the discriminatory condition contained in the order appealed
from, reads as follows:
SEC. 13. Character of the award. — In making an award, order or decision, under the
provision of section four of this Act, the Court shall not be restricted to the specific
relief claimed or demands made by the parties to the industrial or agricultural dispute,
but may include in the award, order or decision any matter or determination which may
be deemed necessary or expedient for the purpose of setting the dispute or of
preventing further industrial or agricultural dispute.
As correctly stated by Judge Lanting of the lower court in his dissenting opinion:
 2
The reference in the resolution of the majority to section 13 of Commonwealth Act No.  69 Phil., 289.
103, authorizing this Court to include in its awards, orders or decisions "any matter or
determination which may be deemed necessary or expedient for the purpose of
OZAETAJ., concurring
setting the dispute or of preventing further . . . disputes", is farfetched. This provision
certainly does not authorize this Court to go beyond its prescribed powers and issue
an order which grossly violates the fundamental law. More specifically, it cannot make 1
 69 Phil., 485.
any ruling which will produce the effect of discriminating against and oppressing a
person or class of persons and deny them the equal protection of the laws, aside from 2
 70 Phil., 12.
curtailing their individual freedom and their right to live.

3
 68 Phil., 541.
As matter of fact the respondent labor union "manifested its conformity to the hiring of additional
laborers, provided that it be consulted by the petitioner and that it be given the privilege of
recommending the twelve new laborers that are to be hired." And Judge Roldan in his order
overruled that proposition by saying : "The stand taken by the respondent labor union is not
correct, because it attempts to encroach upon the prerogative of the company to determine and
adopt its own policy in the selection of its employees and workers, and the Court should only
intervene in questions of this nature when there is discrimination or retaliation on the part of the
company, which has not been proven or even alleged in the case bar (Manila Trading & Supply
Co. vs. Judge Francisco Zulueta et al., G. R. No. 46853; 1 Manila Chauffeurs
League vs. Bachrach Motor Co., G. R. No. 49138; 2 Pampanga Bus Co. vs. Pampanga Bus Co.
Employees' Union, G. R. No. 46739;3 National Labor Union vs. San Miguel Brewery, CIR case
No. 26-V, June 12, 1947)."

Thus the Court of Industrial Relations itself correctly held that the respondent labor union has no
right to encroach upon the prerogative of the company to determine and adopt its own policy in
the selection of its employees and workers, and that the court itself should not intervene in such
selection because there was no proof of discrimination or retaliation on the part of the company.
Yet in the dispositive part of its order the court not only intervenes in such selection but compels
the company to discriminate against a certain class of laborers. The inconsistency and illegality
of the order appealed from are too patent fro argument. G.R. No. 93666             April 22, 1991

To hold that the Court of Industrial Relations may, under section 13, impose any condition in its GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners,
order or award in order to prevent further industrial disputes, regardless of whether or not such vs.
condition is in violation of law or of the Constitution, is, in our opinion, thinkable. It goes without HON. RUBEN D. TORRES, in his capacity as Secretary of Labor and Employment, HON.
saying that industrial dispute must be settled in accordance with law and justice. Suppose that BIENVENIDO E. LAGUESMA, in his capacity as Acting Secretary of Labor and
the members of a labor union should demand of an employer that 80 per cent of the new Employment, and BASKETBALL COACHES ASSOCIATION OF THE
laborers the latter may hire should be Filipinos, or that all of them should be Tagalogs or PHILIPPINES, respondents.
Ilocanos, and should threaten to declare a strike unless such demand be complied with; would
the court be justified in granting such demand under section 13 on the ground that by doing so it
would prevent a or strike or lockout and settle an industrial dispute? The negative answer can Sobrevinas, Diaz, Hayudini & Bodegon Law Office for petitioners.
hardly be disputed, since unreasonableness or illegal demands should not be countenanced by Rodrigo, Cuevas & De Borja for respondent BCAP.
the court. Yet the affirmance by this Court of the order appealed from in effect authorizes the
Court of Industrial Relations hereafter to commit such arbitrariness. RESOLUTION

For the foregoing reasons, we vote to modify the appealed order by eliminating therefrom the FELICIANO, J.:
discriminatory condition in question.

On 1 May 1989, the National Capital Region of the Department of Labor and Employment issued
Alien Employment Permit No. M-0689-3-535 in favor of petitioner Earl Timothy Cone, a United
States citizen, as sports consultant and assistant coach for petitioner General Milling
Corporation ("GMC").
Footnotes
On 27 December 1989, petitioners GMC and Cone entered into a contract of employment
1
whereby the latter undertook to coach GMC's basketball team.
 70 Phil., 340.
On 15 January 1990, the Board of Special Inquiry of the Commission on Immigration and
Deportation approved petitioner Cone's application for a change of admission status from
temporary visitor to pre-arranged employee.
On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien employment
permit. GMC also requested that it be allowed to employ Cone as full-fledged coach. The DOLE
Regional Director, Luna Piezas, granted the request on 15 February 1990.
On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25 December
1990, was issued.
"non-resident alien" and its obverse "resident alien," here must be given their technical
connotation under our law on immigration.
Neither can petitioners validly claim that implementation of respondent Secretary's decision
would amount to an impairment of the obligations of contracts. The provisions of the Labor Code
and its Implementing Rules and Regulations requiring alien employment permits were in
existence long before petitioners entered into their contract of employment. It is firmly settled
that provisions of applicable laws, especially provisions relating to matters affected with public
policy, are deemed written into contracts. 2 Private parties cannot constitutionally contract away
the otherwise applicable provisions of law.

Petitioners' contention that respondent Secretary of Labor should have deferred to the findings
Private respondent Basketball Coaches Association of the Philippines ("BCAP") appealed the
of Commission on Immigration and Deportation as to the necessity of employing petitioner Cone,
issuance of said alien employment permit to the respondent Secretary of Labor who, on 23 April
is, again, bereft of legal basis. The Labor Code itself specifically empowers respondent
1990, issued a decision ordering cancellation of petitioner Cone's employment permit on the
Secretary to make a determination as to the availability of the services of a "person in the
ground that there was no showing that there is no person in the Philippines who is competent,
Philippines who is competent, able and willing at the time of application to perform the services
able and willing to perform the services required nor that the hiring of petitioner Cone would
for which an alien is desired."3
redound to the national interest.

In short, the Department of Labor is the agency vested with jurisdiction to determine the question
Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental Motions for
of availability of local workers. The constitutional validity of legal provisions granting such
Reconsideration but said Motions were denied by Acting Secretary of Labor Bienvenido E.
jurisdiction and authority and requiring proof of non-availability of local nationals able to carry out
Laguesma in an Order dated 8 June 1990.
the duties of the position involved, cannot be seriously questioned.

Petitioners are now before the Court on a Petition for Certiorari, dated 14 June 1990, alleging
Petitioners apparently also question the validity of the Implementing Rules and Regulations,
that:
specifically Section 6 (c), Rule XIV, Book I of the Implementing Rules, as imposing a condition
not found in the Labor Code itself. Section 6 (c), Rule XIV, Book I of the Implementing Rules,
1. respondent Secretary of Labor gravely abused his discretion when he revoked provides as follows:
petitioner Cone's alien employment permit; and
Section 6. Issuance of Employment Permit –– the Secretary of Labor may issue an
2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor Code employment permit to the applicant based on:
is null and void as it is in violation of the enabling law as the Labor Code does not
empower respondent Secretary to determine if the employment of an alien would
a) Compliance by the applicant and his employer with the requirements of Section 2
redound to national interest.
hereof;

Deliberating on the present Petition for Certiorari, the Court considers that petitioners have failed
b) Report of the Bureau Director as to the availability or non-availability of any person
to show any grave abuse of discretion or any act without or in excess of jurisdiction on the part
in the Philippines who is competent and willing to do the job for which the services of
of respondent Secretary of Labor in rendering his decision, dated 23 April 1990, revoking
the applicant are desired.
petitioner Cone's Alien Employment Permit.

(c) His assessment as to whether or not the employment of the applicant will redound
The alleged failure to notify petitioners of the appeal filed by private respondent BCAP was
to the national interest;
cured when petitioners were allowed to file their Motion for Reconsideration before respondent
Secretary of Labor.1
(d) Admissibility of the alien as certified by the Commission on Immigration and
Deportation;
Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative has no legal
basis at all. Under Article 40 of the Labor Code, an employer seeking employment of an alien
must first obtain an employment permit from the Department of Labor. Petitioner GMC's right to (e) The recommendation of the Board of Investments or other appropriate government
choose whom to employ is, of course, limited by the statutory requirement of an alien agencies if the applicant will be employed in preferred areas of investments or in
employment permit. accordance with the imperative of economic development;

Petitioners will not find solace in the equal protection clause of the Constitution. As pointed out x x x           x x x          x x x
by the Solicitor-General, no comparison can be made between petitioner Cone and Mr. Norman
Black as the latter is "a long time resident of the country," and thus, not subject to the provisions
(Emphasis supplied)
of Article 40 of the Labor Code which apply only to "non-resident aliens." In any case, the term
Article 40 of the Labor Code reads as follows: Petitioners have very recently manifested to this Court that public respondent Secretary of Labor
has reversed his earlier decision and has issued an Employment Permit to petitioner Cone.
Petitioners seek to withdraw their Petition for Certiorari on the ground that it has become moot
Art. 40. Employment per unit of non-resident aliens. –– Any alien seeking admission to
and academic.
the Philippines for employment purposes and any domestic or foreign employer who
desires to engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor. While ordinarily this Court would dismiss a petition that clearly appears to have become moot
and academic, the circumstances of this case and the nature of the questions raised by
petitioners are such that we do not feel justified in leaving those questions unanswered.4
The employment permit may be issued to a non-resident alien or to the applicant
employer after a determination of the non-availability of a person in the Philippines
who is competent, able and willing at the time of application to perform the services for Moreover, assuming that an alien employment permit has in fact been issued to petitioner Cone,
which the alien is desired. the basis of the reversal by the Secretary of Labor of his earlier decision does not appear in the
record. If such reversal is based on some view of constitutional law or labor law different from
those here set out, then such employment permit, if one has been issued, would appear open to
For an enterprise registered in preferred areas of investments, said employment
serious legal objections.
permit may be issued upon recommendation of the government agency charged with
the supervision of said registered enterprise. (Emphasis supplied)
ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack of merit.
Costs against petitioners.
Petitioners apparently suggest that the Secretary of Labor is not authorized to take into account
the question of whether or not employment of an alien applicant would "redound to the national
interest" because Article 40 does not explicitly refer to such assessment. This argument (which Fernan, C.J., Bidin and Davide, Jr., JJ., concur.
seems impliedly to concede that the relationship of basketball coaching and the national interest Gutierrez, Jr., J., in the result.
is tenuous and unreal) is not persuasive. In the first place, the second paragraph of Article 40
says: "[t]he employment permit may be issued to a non-resident alien or to the applicant
Footnotes
employer after a determination of the non-availability of a person in the Philippines who is
competent, able and willing at the time of application to perform the services for which the alien
is desired." The permissive language employed in the Labor Code indicates that the authority 1
 De Leon v. Commission on Elections, 129 SCRA 117 (1984).
granted involves the exercise of discretion on the part of the issuing authority. In the second 2
 E.g., Pakistan International Airways Corporation v. Hon. Blas F. Ople et al., G.R. No.
place, Article 12 of the Labor Code sets forth a statement of objectives that the Secretary of 61594, 28 September 1990; Commissioner of Internal Revenue v. United States Lines
Labor should, and indeed must, take into account in exercising his authority and jurisdiction Co., 5 SCRA 175 (1962).
granted by the Labor Code, 3
 Article 40 of the Labor Code.
4
 Cf Javier v. Commission on Elections, 144 SCRA 194 (1986).
Art. 12. Statement of Objectives. –– It is the policy of the State:

a) To promote and maintain a state of full employment through improved manpower

training, allocation and utilization; G.R. No. 100641 June 14, 1993

x x x           x x x          x x x FARLE P. ALMODIEL, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), RAYTHEON PHILS.,
c) To facilitate a free choice of available employment by persons seeking work in
INC., respondents.
conformity with the national interest;

Apolinario Lomabao, Jr. for petitioner.

d) To facilitate and regulate the movement of workers in conformity with the national
interest;
Vicente A. Cruz, Jr., for private respondent.
e) To regulate the employment of aliens, including the establishment of a registration
and/or work permit system;

x x x           x x x          x x x NOCON, J.:

Thus, we find petitioners' arguments on the above points of constitutional law too insubstantial to Subject of this petition for certiorari is the decision dated March 21, 1991 of the National Labor
require further consideration.1avvphi1 Relations Commission in NLRC Case No.
00-00645-89 which reversed and set aside the Labor Arbiter's decision dated September 27,
1989 and ordered instead the payment of separation pay and financial assistance of
P100,000.00. Petitioner imputes grave abuse of discretion on the part of the Commission and
prays for the reinstatement of the Labor Arbiter's decision which declared his termination on the
ground of redundancy illegal.
Petitioner Farle P. Almodiel is a certified public accountant who was hired in October, 1987 as
Cost Accounting Manager of respondent Raytheon Philippines, Inc. through a reputable
placement firm, John Clements Consultants, Inc. with a starting monthly salary of P18,000.00.
Before said employment, he was the accounts executive of Integrated Microelectronics, Inc. for
several years. He left his lucrative job therein in view of the promising career offered by
Raytheon. He started as a probationary or temporary employee. As Cost Accounting Manager,
his major duties were: (1) plan, coordinate and carry out year and physical inventory; (2)
formulate and issue out hard copies of Standard Product costing and other cost/pricing analysis
if needed and required and (3) set up the written Cost Accounting System for the whole
company. After a few months, he was given a regularization increase of P1,600.00 a month. Not
long thereafter, his salary was increased to P21,600.00 a month.
On August 17, 1988, he recommended and submitted a Cost Accounting/Finance
Reorganization, affecting the whole finance group but the same was disapproved by the
Controller. However, he was assured by the Controller that should his position or department
which was apparently a one-man department with no staff becomes untenable or unable to
deliver the needed service due to manpower constraint, he would be given a three (3) year
advance notice.
In the meantime, the standard cost accounting system was installed and used at the Raytheon
plants and subsidiaries worldwide. It was likewise adopted and installed in the Philippine
operations. As a consequence, the services of a Cost Accounting Manager allegedly entailed
only the submission of periodic reports that would use computerized forms prescribed and
designed by the international head office of the Raytheon Company in California, USA.
On January 27, 1989, petitioner was summoned by his immediate boss and in the presence of
IRD Manager, Mr. Rolando Estrada, he was told of the abolition of his position on the ground of
redundancy. He pleaded with management to defer its action or transfer him to another
department, but he was told that the decision of management was final and that the same has
been conveyed to the Department of Labor and Employment. Thus, he was constrained to file
the complaint for illegal dismissal before the Arbitration Branch of the National Capital Region,
NLRC, Department of Labor and Employment.
On September 27, 1989, Labor Arbiter Daisy Cauton-Barcelona rendered a decision, the
dispositive portion of which reads as follows:
WHEREFORE, judgment is hereby rendered declaring that complainant's
termination on the ground of redundancy is highly irregular and without legal
and factual basis, thus ordering the respondents to reinstate complainant to
his former position with full backwages without lost of seniority rights and
other benefits. Respondents are further ordered to pay complainant
P200,000.00 as moral damages and P20,000.00 as exemplary damages,
plus ten percent (10%) of the total award as attorney's fees.1
Raytheon appealed therefrom on the grounds that the Labor Arbiter committed grave abuse of
discretion in denying its rights to dismiss petitioner on the ground of redundancy, in relying on
baseless surmises and self-serving assertions of the petitioner that its act was tainted with
malice and bad faith and in awarding moral and exemplary damages and attorney's fees.
On March 21, 1991, the NLRC reversed the decision and directed Raytheon to pay petitioner the
total sum of P100,000.00 as separation pay/financial assistance. The dispositive portion of which
is hereby quoted as follows:
WHEREFORE, the appealed decision is hereby set aside. In its stead,
Order is hereby issued directing respondent to pay complainant the total
separation pay/financial assistance of One Hundred Thousand Pesos
(P100,000.00).
SO ORDERED.2
From this decision, petitioner filed the instant petition averring that:
The public respondent committed grave abuse of discretion amounting to
(lack of) or in excess of jurisdiction in declaring as valid and justified the
termination of petitioner on the ground of redundancy in the face of clearly
established finding that petitioner's termination was tainted with malice, bad
faith and irregularity.3
Termination of an employee's services because of redundancy is governed by Article 283 of the
Labor Code which provides as follows:
Art. 283. Closure of establishment and reduction of personnel. — The
employer may also terminate the employment of any employee due to
installation of labor-saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the worker and the
Department of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to installation of labor-
saving devices or redundancy, the worker affected thereby shall be entitled
to a separation pay equivalent to at least one (1) month pay for every year
of service, whichever is higher. In case of retrenchment to prevent losses
and in cases of closure or cessation of operations of establishment or
undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to at least one (1) month pay or at least
one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered as one (1) whole year.
There is no dispute that petitioner was duly advised, one (1) month before, of the termination of
his employment on the ground of redundancy in a written notice by his immediate superior, Mrs.
Magdalena B.D. Lopez sometime in the afternoon of January 27, 1989. He was issued a check
for P54,863.00 representing separation pay but in view of his refusal to acknowledge the notice
and the check, they were sent to him thru registered mail on January 30, 1989. The Department
of Labor and Employment was served a copy of the notice of termination of petitioner in
accordance with the pertinent provisions of the Labor Code and the implementing rules.
The crux of the controversy lies on whether bad faith, malice and irregularity crept in the
abolition of petitioner's position of Cost Accounting Manager on the ground of redundancy.
Petitioner claims that the functions of his position were absorbed by the Payroll/Mis/Finance
Department under the management of Danny Ang Tan Chai, a resident alien without any
working permit from the Department of Labor and Employment as required by law. Petitioner
relies on the testimony of Raytheon's witness to the effect that corollary functions appertaining to
cost accounting were dispersed to other units in the Finance Department. And granting that his
department has to be declared redundant, he claims that he should have been the Manager of
the Payroll/Mis/Finance Department which handled general accounting, payroll and encoding.
As a B. S. Accounting graduate, a CPA with M.B.A. units, 21 years of work experience, and a
natural born Filipino, he claims that he is better qualified than Ang Tan Chai, a B.S. Industrial
Engineer, hired merely as a Systems Analyst Programmer or its equivalent in early 1987,
promoted as MIS Manager only during the middle part of 1988 and a resident alien.
On the other hand, Raytheon insists that petitioner's functions as Cost Accounting Manager had
not been absorbed by Ang Tan Chai, a permanent resident born in this country. It claims to have
established below that Ang Tan Chai did not displace petitioner or absorb his functions and
duties as they were occupying entirely different and distinct positions requiring different sets of
expertise or qualifications and discharging functions altogether different and foreign from that of
petitioner's abolished position. Raytheon debunks petitioner's reliance on the testimony of Mr.
Estrada saying that the same witness testified under oath that the functions of the Cost
Accounting Manager had been completely dispensed with and the position itself had been totally
abolished.
Whether petitioner's functions as Cost Accounting Manager have been dispensed with or merely
absorbed by another is however immaterial. Thus, notwithstanding the dearth of evidence on the
said question, a resolution of this case can be arrived at without delving into this matter. For
even conceding that the functions of petitioner's position were merely transferred, no malice or
bad faith can be imputed from said act. A survey of existing case law will disclose that
in Wiltshire File Co., Inc. v. NLRC,4 the position of Sales Manager was abolished on the ground
of redundancy as the duties previously discharged by the Sales Manager simply added to the
duties of the General Manager to whom the Sales Manager used to report. In adjudging said
termination as legal, this Court said that redundancy, for purposes of our Labor Code, exists
where the services of an employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise. The characterization of an employee's services as no longer
necessary or sustainable, and therefore, properly terminable, was an exercise of business
judgment on the part of the employer. The wisdom or soundness of such characterization or
decision was not subject to discretionary review on the part of the Labor Arbiter nor of the NLRC
so long, of course, as violation of law or merely arbitrary and malicious action is not shown.
In the case of International Macleod, Inc. v. Intermediate Appellate Court,5 this Court also
considered the position of Government Relations Officer to have become redundant in view of
the appointment of the International Heavy Equipment Corporation as the company's dealer with
the government. It held therein that the determination of the need for the phasing out of a
department as a labor and cost saving device because it was no longer economical to retain
said services is a management prerogative and the courts will not interfere with the exercise
thereof as long as no abuse of discretion or merely arbitrary or malicious action on the part of
management is shown.
In the same vein, this Court ruled in Bondoc v. People's Bank and Trust Co., 6 that the bank's
board of directors possessed the power to remove a department manager whose position
depended on the retention of the trust and confidence of management and whether there was
need for his services. Although some vindictive motivation might have impelled the abolition of
his position, this Court expounded that it is undeniable that the bank's board of directors
possessed the power to remove him and to determine whether the interest of the bank justified
the existence of his department.
indispensable and were actually dispersed to another department. What these indispensable
functions that were dispersed, he failed however, to specify and point out. Besides, the fact that
the functions of a position were simply added to the duties of another does not affect the
legitimacy of the employer's right to abolish a position when done in the normal exercise of its
prerogative to adopt sound business practices in the management of its affairs.
Considering further that petitioner herein held a position which was definitely managerial in
character, Raytheon had a broad latitude of discretion in abolishing his position. An employer
has a much wider discretion in terminating employment relationship of managerial personnel
compared to rank and file employees. 7 The reason obviously is that officers in such key positions
perform not only functions which by nature require the employer's full trust and confidence but
also functions that spell the success or failure of an enterprise.
Likewise destitute of merit is petitioner's imputation of unlawful discrimination when Raytheon
caused corollary functions appertaining to cost accounting to be absorbed by Danny Ang Tan
Chai, a resident alien without a working permit. Article 40 of the Labor Code which requires
employment permit refers to non-resident aliens. The employment permit is required for entry
into the country for employment purposes and is issued after determination of the non-
availability of a person in the Philippines who is competent, able and willing at the time of
application to perform the services for which the alien is desired. Since Ang Tan Chai is a
resident alien, he does not fall within the ambit of the provision.
Petitioner also assails Raytheon's choice of Ang Tan Chai to head the Payroll/Mis/Finance
Department, claiming that he is better qualified for the position. It should be noted, however, that
Ang Tan Chai was promoted to the position during the middle part of 1988 or before the abolition
of petitioner's position in early 1989. Besides the fact that Ang Tan Chai's promotion thereto is a
settled matter, it has been consistently held that an objection founded on the ground that one
has better credentials over the appointee is frowned upon so long as the latter possesses the
minimum qualifications for the position. In the case at bar, since petitioner does not allege that
Ang Tan Chai does not qualify for the position, the Court cannot substitute its discretion and
judgment for that which is clearly and exclusively management prerogative. To do so would take
away from the employer what rightly belongs to him as aptly explained in National Federation of
Labor Unions v. NLRC:8
It is a well-settled rule that labor laws do not authorize interference with the
employer's judgment in the conduct of his business. The determination of
the qualification and fitness of workers for hiring and firing, promotion or
reassignment are exclusive prerogatives of management. The Labor Code
and its implementing Rules do not vest in the Labor Arbiters nor in the
different Divisions of the NLRC (nor in the courts) managerial authority. The
employer is free to determine, using his own discretion and business
judgment, all elements of employment, "from hiring to firing" except in cases
of unlawful discrimination or those which may be provided by law. There is
none in the instant case.
Finding no grave abuse of discretion on the part of the National Labor Relations Commission in
reversing and annulling the decision of the Labor Arbiter and that on the contrary, the
termination of petitioner's employment was anchored on a valid and authorized cause under
Article 283 of the Labor Code, the instant petition for certiorari must fail.

Indeed, an employer has no legal obligation to keep more employees than are necessary for the
SO ORDERED.
operation of its business. Petitioner does not dispute the fact that a cost accounting system was
installed and used at Raytheon subsidiaries and plants worldwide; and that the functions of his
position involve the submission of periodic reports utilizing computerized forms designed and Narvasa, C.J., Padilla and Regalado, JJ., concur.
prescribed by the head office with the installation of said accounting system. Petitioner attempts
to controvert these realities by alleging that some of the functions of his position were still
 

# Footnotes

1 Rollo, p. 35.

2 Penned by Commissioner Romeo B. Putong and concurred in by

Presiding Commissioner Bartolome S. Carale and Commissioner Vicente
S.E. Veloso III, Rollo, pp. 21-22.

3 Rollo, p. 6.

4 G.R. No. 82249, February 7, 1991, 193 SCRA 665.

5 G.R. No. 73287, May 18, 1987, 149 SCRA 641.

6 G.R. No. 43835, March 31, 1981, 103 SCRA 599.

7 Coca-Cola Bottlers Phils., Inc. v. NLRC, et al., G.R. No. 82580, April 25,
1989, 172 SCRA 751; D.M. Consunji, Inc. vs. NLRC, G.R. No. 71459, July
30, 1986, 143 SCRA 204.

8 G.R. No. 90739, October 3, 1991, 202 SCRA 346.