Hornales v.

NLRC
GR No. 118943
September 10, 2001
FACTS:

Hornales (petitioner) filed with the POEA: a complaint for

non-payment of wages and recovery of damages against
JEAC International Management & Contractor Services (JEAC)
and its owner, Jose Cayanan (respondents).
On October 8, 1991, JEAC sent Hornales, together with other
Filipinos, to Singapore.
At their departure, they were advised that someone would
meet them in Singapore. They were welcomed by Victor Lim,
the owner of Step-Up Employment Agency (Step-Up
Agency).
He informed them that they would be working as fishermen
with a monthly salary of US $200.00 each. Thereafter, they
boarded Ruey Horn #3, a vessel owned by Min Fu Fishery
Co. Ltd. of Taiwan.
On board the vessel, Hornales was subjected to inhumane
work conditions, (inadequate supply of food and water,
maltreatment by the ship captain, and lack of medical
attendance) he was also required to work for twenty-two
hours a day without pay.
Unable to bear his situation any longer, he joined the other
Filipino workers in leaving the vessel while it was docked at
Mauritius Islands on July 15, 1992.
Upon his return to the Philippines, Hornales asked JEAC to
pay his salaries. Instead of doing so, JEAC required him to
surrender his passport promising that they would procure
another job for him. Later, JEAC gave him the amount of
five hundred pesos (P500.00).
JEACs Defense
JEAC, in their answer to the complaint, claimed that:
Hornales, Victor Lim and Min Fee Fishery Co. Ltd are all
total strangers to them.

This was claim was supported by:

o A Joint Affidavit of Efren Balucas and Alexander
Natura, Hornales co-workers in Singapore, stating:
that while they were in Singapore, Hornales admitted
to them that he did not apply in any agency in the
Philippines; that he came to Singapore merely as a
tourist; and that, he applied directly and personally
with Step-Up Agency and
o A Certification issued by Step-Up Agency,
corrobating such statements.
Hornales Supplemental Affidavit
On January 23, 1993, Hornales filed a Supplemental Affidavit
claiming that:
o He was not a total stranger to JEAC, and that, as a
matter of fact, he knew the owner of JEAC, Cayanan,
since 1990, when they used to go to the San Lazaro
Hippodrome to watch horse races.
o He also averred that while the vessel was docked at
Mauritius Islands, Canayan reminded him of his loan
obligations by sending him photocopies of the PNB
checks Canayan issued in his favour.
o And that Cayanan sent him agreements whereby
they authorized Victor Lim to deduct from their
salaries the amount of their loan obligations.
On January 5, 1994, the POEA rendered a decision in favor of
Hornales.
o Holding private respondents and Travelers Insurance
Corporation (repondents surety) jointly and severally
liable to Hornales.
However, on appeal, respondent NLRC vacated the decision
of the POEA and dismissed petitioners complaint mainly on
the ground that there was no employer-employee
relationship between the parties.
In reversing the POEAs finding, the NLRC gave considerable
weight to the Joint Affidavit
of
Natura and Balucas
(Hornales co-workers).
The NLRC ratiocinated as follows:
o

At the outset, we note that the record is bereft of any

showing that complainant applied with the respondent

agency as a job applicant and subsequently entered into

an overseas contract with the latter which was later
processed and approved by the POEA. X x x What appears
is that complainant used the agency as a stepping stone to
enter Singapore as a tourist and obtain employment
thereat on his own. This is evidenced by Annexes A-1 to
H of Complainants Reply (See pp. 65-72, record) which
purports to show that the batch of complainant was
obligated to pay back respondent Jose Cayanan the
expenses for their deployment. No less than the POEA
noted that the respondent agency is a service contractor
and is not authorized to deploy fishermen. Based on this
fact, the respondent agency could not have deployed
complainant as an overseas contract worker. What is
apparent is that it obtained a tourist passport and plane
ticket for complainant as a travel agent on a clearly fly
now pay later plan.

(Hi! Haba noh? O basta, summarizing what the NLRC

said:
o

Since POEA noted that JEAC is a service contractor

not authorized to deploy fishermen, JEAC, could not
have deployed Hornales as an overseas contract
worker.
What is apparent is that Hornales obtained a tourist
passport and plane ticket from JEAC as a travel agent
on a clearly fly now pay later plan) ~whuuuut~

NLRC: We cannot rely on the employment agreements and

checks presented by complainant to show proof of
employment relations considering that his name does not
appear in any of the documents, hence they are merely
hearsay.
Hornales filed a motion for reconsideration but was denied.
Hornales filed a petition for certiorari with the Supreme
Court, imputed grave abuse of discretion to public
respondent NLRC.
He asserts that JEAC and Cayanan were the ones who
deployed him to Singapore to work as fisherman; and that,
respondent NLRCs conclusion that respondent JEAC was a

mere travel agency and Hornales, a mere tourist, has no

basis in fact and in law.
On the other hand, JEAC and Cayanan maintain that
respondent NLRC did not commit grave abuse of discretion
when it set aside the decision of the POEA, on the ground
that Hornales failed to show any POEA record or document
to prove that they deployed him to work in Singapore.
Neither did he present a Special Power of Attorney to prove
that Step-Up Agency authorized private respondents to
recruit and deploy contract workers in its behalf nor an
Affidavit of Responsibility to show that they (JEAC and
Cayanan and Step-Up Agency) assumed solidary liability to
Hornales. JEAC and Cayanan likewise insist that the
photocopies of the PNB checks and agreements are hearsay
and inadmissible in evidence.
The Solicitor General, in his comment, joins Hornales in
assailing the decision of NLRC as baseless and erroneous.
o According to him, the conclusion of respondent NLRC
directly contradicts JEAC and Cayanans defense that
Hornales was a total stranger. Further, he contends
that the Joint Affidavit of Balucas and Natura are
hearsay.

ISSUE:
(1) WON JEAC and Canayan were responsible for Hornales
recruitment and deployment to Singapore? YES
(2) Is the absence of an employment contract a valid defense in
a case of illegal recruitment? NO
HELD:
NLRC Decision Set Aside. POEA Decision Reinstated.

Hornales v NLRC
G.R. No. 118943; Sept. 10, 2001; Sandoval-Gutierrez, J.
Digest prepared by Jackie Canlas
FACTS

Mario Hornales, together with other Filipinos, were sent

to Singapore by JEAC International Management &
Contractor Services. Upon arrival, they were met the
owner of Step-Up Employment Agency Victor Lim, and
were told that there would be working as fishermen.
On board the vessel, Hornales and the others were
subjected to inhuman working conditions, such as
inadequate supply of food and water, maltreatment by
the captain, and lack of medical attendance. They
were also required to work for 22 hours a day without
pay. Unable to bear the situation, Hornales and some
other Filipinos left the vessel while it was docked at
Mauritius Islands.
Upon return to the Philippines, Hornales asked JEAC to
pay his salaries. In turn, JEAC required him to
surrender his passport promising that they would
procure another job for him, and later gave him P500.
Hornales filed with POEA a complaint for non-payment
of wages and recovery of damages against JEAC, its
owner Canayan, and Country Bankers Insurance
Corporation, its surety.
JEAC-Canayans defense: Hornales, Lim, and Min
Fee Fishery Ltd are total strangers to them. This was
supported by a
(1) Joint Affidavit of Hornales co-workers in
Singapore, stating that Hornales admitted to
them that he didnt apply to any agency , that
he went to Singapore as a tourist, and that he
applied directly to Step-Up Agency; and by a
(2)
Certification
from
Step-Up
Agency
corroborating the statements in the Joint
Affidavit.
Supplemental Affidavit of Hornales:
(1) He claimed he knew Canayan since 1990.
(2) While the vessel was docked at Mauritius
Islands, Canayan reminded him of his loan
obligations by sending him photocopies of
the PNB checks Canayan issued in his
favour.
(3) Canayan also sent him agreements
whereby Victor Lim was authorized to deduct

from his salary the amount of his loan

obligations.
POEA in favour of Hornales
NLRC dimissed complaint; no employeeemployer relationship
o gave considerable weight to the Joint Affidavit
o Since POEA noted that JEAC is a service
contractor not authorized to deploy fishermen,
JEAC, could not have deployed Hornales as an
overseas contract worker.
o What is apparent is that Hornales obtained a
tourist passport and plane ticket from JEAC as a
travel agent on a clearly fly now pay later plan
(Note: If you didnt read the case in the original,
it didnt really say kung saang lupalop ng NLRC
napulot yang pananaw na yan.)

ISSUE/RULING:
WON JEAC and Canayan were responsible for Hornales
recruitment and deployment to Singapore?
YES. NLRC Decision Set Aside. POEA Decision
Reinstated.
RATIO:
The Court started by examining each piece of evidence
to arrive at its conclusion.
o Joint Affidavit It has no probative value because
Hornales wasnt able to cross-examine it and
affiants merely swore as to what Hornales told
them, but not as to the truth of the statements.
o Certification It was not sworn, and seemed like a
last ditch-effort of Step-Up to help JEAC.
o PNB Checks and agreements These strongly
disprove Canayans total strangers theory and
revealed a contract of agency.
The factual and legal bases of NLRCs conclusions are
bereft of substantial evidence the quantum of proof
in labor cases.
o There is nothing on record which shows that
JEAC is a mere travel agency. Even Canayan

consistently plead that JEAC is a licensed

recruitment agency authorized to recruit and
deploy Filipino contract workers.
o NLRC conveniently closed its eyes to the name
of Victor Lim, as mentioned in the agreements,
when it ruled that Lim and Ste-Up are indeed
total strangers to JEAC and Canayan.
POEAs decision was more convincing and supported
by substantial evidence:
o The PNB checks representing salaries from the
account
of
Canayan
evidences
latters
participation in Hornales recruitment and
deployment.
o Based from the agreements, the Court wonders
where Canayan got the name of Step-Up if the
same is not known to him.
o It is very unlikely for Hornales to go to Singapore
as a tourist and then land a job without knowing
anyone.
JEAC and Canayans last argument was that, they cant
be held liable because there was no employment

contract between him and and Step-Up Agency had

been approved by POEA. They also claim that the
absence of a (1) Special Power of Attorney and (2)
Affidavit of Responsibility, as required by the POEA
Rules and Regulations only proves that they did not
employ Hornales to Singapore.
To this, the Court said that the acts can be used as a
basis of absolving JEAC and Canayan. At most, theses
act of deploying Hornales to Singapore without
complying with the POEA requirements only made
them susceptible to cancellation of suspension of
license as provided by the POEA Rules and
Regulations. But of course, such violations should be
threshed out in a proper administrative proceeding.
RE JEACs surety: Its liability is also founded on the
POEA Rules and Regulations. Cash and surety bonds
are required precisely as a means of ensuring prompt
and effective recourse against such companies when
held liable for applicants or workers claims, as well as
for all valid and legal claims arising from labor
violations.