G.R. No.

76633 166 SCRA 533 October 18, 1988

EASTERN SHIPPING LINES, INC., petitioner,

vs.

PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR AND

EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO, respondents.

Facts:

The petitioner challenge the decision of Philippine Overseas Employment Administration POEA on the
principal ground that the POEA had no jurisdiction over the case of Vitaliano Saco as he 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 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.

Moreover, 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.

Issues:

Whether or not Memorandum Circular No. 2 has violated the principle of non-delegation of legislative
power.
Discussions:

There are two accepted tests to determine whether or not there is a valid delegation of legislative
power:

Completeness 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.

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.

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.

Rulings:

No. There was no principles violated. The authority to issue the said regulation is clearly provided in
Section 4(a) of Executive Order No. 797. … “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).”

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.

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.
SOLID HOMES v. TERESITA PAYAWAL, GR No. 84811, 1989-08-29

Facts:

The complaint was filed on August 31, 1982, by Teresita Payawal against Solid Homes, Inc. before the
Regional Trial Court of Quezon City and docketed as Civil Case No. Q-36119.

The plaintiff alleged that... the defendant contracted to sell to her a subdivision lot in Marikina on June
9, 1975, for the agreed price of P28,080.00, and that by September 10, 1981, she had already paid the
defendant the total amount of P38,949.87 in monthly installments and... interests. Solid Homes
subsequently executed a deed of sale over the land but failed to deliver the corresponding certificate of
title despite her repeated demands because, as it appeared later, the defendant had mortgaged the
property in bad faith to a... financing company. The plaintiff asked for delivery of the title to the lot or,
alternatively, the return of all the amounts paid by her plus interest. She also claimed moral and
exemplary... damages, attorney's fees and the costs of the suit.

Solid Homes moved to dismiss the complaint on the ground that the court had no jurisdiction, this being
vested in the National Housing Authority under PD No. 957. The motion was denied. The defendant...
repleaded the objection in its answer, citing Section 3 of the said decree providing that "the National
Housing Authority shall have exclusive jurisdiction to regulate the real estate trade and business in
accordance with the provisions of this Decree." After... trial, judgment was rendered in favor of the
plaintiff and the defendant was ordered to deliver to her the title to the land or, failing this, to refund to
her the sum of P38,949.87 plus interest from 1975 and until the full amount was paid. She... was also
awarded P5,000.00 moral damages, P5,000.00 exemplary damages, P10,000.00 attorney's fees, and the
costs of the suit.

Solid Homes appealed but the decision was affirmed by the respondent court,[2] which also berated the
appellant for its obvious efforts to evade a legitimate obligation, including its dilatory tactics during... the
trial. The petitioner was also reproved for its "gall" in collecting the further amount of P1,238.47 from
the plaintiff purportedly for realty taxes and registration expenses despite its inability to deliver the title
to the land.

In holding that the trial court had jurisdiction, the respondent court referred to Section 41 of PD No. 957
itself providing that:

SEC. 41. Other remedies. - The rights and remedies provided in this Decree shall be in addition to any
and all other rights and remedies that may be... available under existing laws.

and declared that "its clear and unambiguous tenor undermine (d) the (petitioner's) pretension that the
court a quo was bereft of jurisdiction." The decision also dismissed the contrary opinion of the Secretary
of Justice as impinging on the... authority of the courts of justice.
Issues:

jurisdictional issue.

Ruling:

The applicable law is PD No. 957, as amended by PD No. 1344, entitled "Empowering the National
Housing Authority to Issue Writs of Execution in the Enforcement of Its Decisions Under Presidential
Decree No. 957." Section 1 of the latter decree provides as... follows:

SECTION 1. In the exercise of its function to regulate the real estate trade and business and in addition
to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have...
exclusive jurisdiction to hear and decide cases of the following nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer
against the project owner, developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractual and statutory obligations filed by buyers of
subdivision lot or condominium unit against the owner, developer, dealer, broker or salesman.

The language of this section, especially the underscored portions, leaves no room for doubt that
"exclusive jurisdiction" over the case between the petitioner and the private respondent is vested not in
the Regional Trial Court but in the National Housing

Authority.[3]

The private respondent contends that the applicable law is BP No. 129, which confers on regional trial
courts jurisdiction to hear and decide cases mentioned in its Section 19, reading in part as follows:

SEC. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original jurisdiction:

(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;

(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein,
except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction...
over which is conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts

The fact that one law is special and the other general creates a presumption that the special act is to be
considered as remaining an exception of the general act, one as a general law of the land and the other
as the law of the... particular case.

It is obvious that the general law in this case is BP No. 129 and PD No. 1344 the special law.
On the competence of the Board to award damages, we find that this is part of the exclusive power
conferred upon it by PD No. 1344 to hear and decide "claims involving refund and any other claims filed
by subdivision lot or condominium unit buyers against... the project owner, developer, dealer, broker or
salesman." It was therefore erroneous for the respondent to brush aside the well-taken opinion of the
Secretary of Justice that ?

Such claim for damages which the subdivision/condominium buyer may have against the owner,
developer, dealer or salesman, being a necessary consequence of an adjudication of liability for non-
performance of contractual or statutory obligation, may be deemed... necessarily included in the phrase
"claims involving refund and any other claims" used in the aforequoted subparagraph C of Section 1 of
PD No. 1344. The phrase "any other claims" is, we believe, sufficiently broad to include any and all
claims... which are incidental to or a necessary consequence of the claims/cases specifically included in
the grant of jurisdiction to the National Housing Authority under the subject provisions.

The same may be said with respect to claims for attorney's fees which are recoverable either by
agreement of the parties or pursuant to Art. 2208 of the Civil Code (1) when exemplary damages are
awarded and (2) where the defendant acted in gross and evident bad faith... in refusing to satisfy the
plaintiff's plainly valid, just and demandable claim.

x x x

Besides, a strict construction of the subject provisions of PD No. 1344 which would deny the HSRC the
authority to adjudicate claims for damages and for damages and for attorney's fees would result in
multiplicity of suits in that the subdivision/condominium buyer... who wins a case in the HSRC and who
is thereby deemed entitled to claim damages and attorney's fees, would be forced to litigate in the
regular courts for the purpose, a situation which is obviously not in the contemplation of the law.

As a result of the growing complexity of the modern society, it has become necessary to create more
and more administrative bodies to help in the regulation of its ramified activities.

Statutes conferring powers on their administrative agencies must be liberally construed to enable them
to discharge their assigned duties in accordance with the legislative purpose.
Phil. Association of Service Exporters, Inc. vs. Torres, 212 SCRA 298; G.R. No. 101279, August 6, 1992
Posted by Pius Morados on November 13, 2011
(Admin Law, DOLE, quasi-legislative power)

Facts:
DOLE Dept. Order No. 16 temporarily suspends the recruitment by private employment agencies of
Filipino DH going to Hong Kong in view of the need to establish mechanisms that will enhance the
protection for the same.

The DOLE, through POEA took over the business of deploying such HK-bound workers. Pursuant to the
above order, POEA issued memorandum circular no. 30 providing guidelines on the government
processing and deployment of Filipino domestic helpers to HK and the accreditation of HK recruitment
agencies intending to hire Filipino domestic helpers, and the memorandum circular No. 30, pertaining to
the processing of employment contracts of domestic workers for HK.

Petitioner contends that respondents acted with grave abuse of discretion and/or in excess of their rule-
making authority in issuing said circulars.

Issue:
WON the take-over of the business deploying DH to HK by DOLE and POEA through an administrative
order and circular is valid.

Held:
Yes. Article 36 of the Labor Code grants the Labor Secretary the power to restrict and regulate
recruitment and placement activities. The challenge administrative issuance discloses that the same fall
within the administrative and police powers expressly or by necessary implication conferred upon the
respondents.
SSS Employees Association v Court of Appeals
Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISION T. BAYLON, RAMON

MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO ARANETA, PLACIDO
AGUSTIN, VIRGILIO MAGPAYO, petitioner,
vs.
THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C. PERALEJO, RTC, BRANCH 98,
QUEZON CITY, respondents.

G.R. No. 85279

July 28, 1989

Facts:

On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a complaint for damages
with a prayer for a writ of preliminary injunction against petitioners, alleging that on June 9, 1987, the
officers and members of SSSEA staged an illegal strike and baricaded the entrances to the SSS Building,
preventing non-striking employees from reporting for work and SSS members from transacting business
with the SSS; that the strike was reported to the Public Sector Labor - Management Council, which
ordered the strikers to return to work; that the strikers refused to return to work; and that the SSS
suffered damages as a result of the strike. The complaint prayed that a writ of preliminary injunction be
issued to enjoin the strike and that the strikers be ordered to return to work; that the defendants
(petitioners herein) be ordered to pay damages; and that the strike be declared illegal.

It appears that the SSSEA went on strike after the SSS failed to act on the union's demands, which
included: implementation of the provisions of the old SSS-SSSEA collective bargaining agreement (CBA)
on check-off of union dues; payment of accrued overtime pay, night differential pay and holiday pay;
conversion of temporary or contractual employees with six (6) months or more of service into regular
and permanent employees and their entitlement to the same salaries, allowances and benefits given to
other regular employees of the SSS; and payment of the children's allowance of P30.00, and after the
SSS deducted certain amounts from the salaries of the employees and allegedly committed acts of
discrimination and unfair labor practices.

Issue:

Whether or not employees of the Social Security System (SSS) have the right to strike.

Held:
The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that the State "shall
guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law" [Art. XIII, Sec. 31].
Resort to the intent of the framers of the organic law becomes helpful in understanding the meaning of
these provisions. A reading of the proceedings of the Constitutional Commission that drafted the 1987
Constitution would show that in recognizing the right of government employees to organize, the
commissioners intended to limit the right to the formation of unions or associations only, without
including the right to strike.
Considering that under the 1987 Constitution "the civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including government-owned or controlled
corporations with original charters" [Art. IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180 where the
employees in the civil service are denominated as "government employees"] and that the SSS is one
such government-controlled corporation with an original charter, having been created under R.A. No.
1161, its employees are part of the civil service [NASECO v. NLRC, G.R. Nos. 69870 & 70295, November
24,1988] and are covered by the Civil Service Commission's memorandum prohibiting strikes. This being
the case, the strike staged by the employees of the SSS was illegal.
DUTY FREE PHILIPPINES vs MOJICA Case Digest

[G.R. No. 166365   September 30, 2005]

DUTY FREE PHILIPPINES, Petitioner, vs. ROSSANO J. MOJICA, Respondent

FACTS

The Discipline Committee of petitioner Duty Free rendered a decision finding respondent Mojica
guilty Neglect of Duty by causing considerable damage to or loss of materials, assets and property
of Duty Free.  Thus, Mojica was considered forcibly resigned from the service with forfeiture of all
benefits except his salary and the monetary value of the accrued leave credits.

Mojica was formally informed of his forced resignation and thereupon, he filed a complaint for illegal
dismissal with prayer for reinstatement, payment of full back wages, damages, and attorney’s fees,
against DFP before the NLRC.

ISSUE

Whether or not NLRC has jurisdiction over the controversy.

HELD

The SC held that respondent Mojica is a civil service employee; therefore, jurisdiction is lodged not
with the NLRC, but with the Civil Service Commission.

Duty Free was created under Executive Order No. 46 on September 4, 1986 primarily to augment
the service facilities for tourists and to generate foreign exchange and revenue for the government. 
In order for the government to exercise direct and effective control and regulation over the tax and
duty free shops, their establishment and operation was vested in the Ministry, now Department of
Tourism, through its implementing arm, the Philippine Tourism Authority (PTA).  All the net profits
from the merchandising operations of the shops accrued to the DOT.

As provided under Presidential Decree (PD) No. 564, PTA is a corporate body attached to the DOT.  
As an attached agency, the recruitment, transfer, promotion and dismissal of all its personnel was
governed by a merit system established in accordance with the civil service rules.  In fact, all PTA
officials and employees are subject to the Civil Service rules and regulations.

Accordingly, since Duty Free is under the exclusive authority of the PTA, it follows that its officials
and employees are likewise subject to the Civil Service rules and regulations.  Clearly then, Mojica’s
recourse to the Labor Arbiter was not proper.  He should have followed the procedure laid down in
Duty Free’s merit system and the Civil Service rules and regulations.

The decision of the CA was set aside.

PALOMA VS. PAL AND NLRC DIGEST
DECEMBER 21, 2016 ~ VBDIAZ
RICARDO G. PALOMA, PETITIONER, VS. PHILIPPINE AIRLINES, INC. AND THE NATIONAL LABOR
RELATIONS COMMISSION, RESPONDENTS. G.R. No. 148415, July 14, 2008]

PHILIPPINE AIRLINES, INC., PETITIONER, VS. RICARDO G. PALOMA, RESPONDENT.

G.R. NO. 156764

FACTS:

Paloma worked with PAL from September 1957, rising from the ranks to retire, after 35 years of
continuous service, as senior vice president for finance. In March 1992, or 9 months before Paloma
retired on November 30, 1992, PAL was privatized.
By way of post-employment benefits, PAL paid Paloma the total amount of PhP 5,163,325.64 which
represented his separation/retirement gratuity and accrued vacation leave pay. The leave benefits
Paloma claimed being he is entitled to refer to his 450-day accrued sick leave credits which PAL allegedly
only paid the equivalent of 18 days. He anchored his entitlement on EO 1077 dated January 9, 1986, and
his having accumulated a certain number of days of sick leave credits, as acknowledged in a letter of
Alvia R. Leaño, then an administrative assistant in PAL. Leaño’s letter substantially states that Paloma
only acquired 230 days sick leave credit because it is the maximum days laid down in PAL’s policy. Had
there been no ceiling as mandated by Company policy, Paloma’s sick leave credits would have totaled
450 days to date.

Paloma filed before the Arbitration Branch of NLRC a Complaint for Commutation of Accrued Sick Leaves
Totaling 392 days. Paloma alleged having accrued sick leave credits of 450 days commutable upon his
retirement pursuant to EO 1077 which allows retiring government employees to commute, without
limit, all his accrued vacation and sick leave credits. And of the 450-day credit, Paloma added, he had
commuted only 58 days, leaving him a balance of 392 days of accrued sick leave credits for
commutation.

Labor Arbiter (LA) ordered PAL to pay Paloma, the sum of P675,000.00 representing 162 accumulated
sick leave credits, plus attorney’s fees . LA held that PAL is not covered by the civil service system and,
accordingly, its employees, like Paloma, cannot avail themselves of the beneficent provision of EO 1077.
This executive issuance applies only to government officers and employees covered by the civil service,
exclusive of the members of the judiciary whose leave and retirement system is covered by a special
law. However, the labor arbiter ruled that Paloma is entitled to a commutation of his alternative claim
for 202 accrued sick leave credits less 40 days for 1990 and 1991. Thus, the grant of commutation for
162 accrued leave credits.

Both parties appealed to NLRC.NLRC dismissed the appeal and affirmed the decision of the LA. Both
parties filed MR. NLRC, found Paloma to have accumulated sick leave credits of 230 days, modified its
earlier decision. PAL went to the CA on a petition for certiorari under Rule 65. CA favored PAL. Paloma
filed for MR, CA vacated and set aside its former decision. And reinstated NLRC decision with
modification that the sum granted to Paloma shall earn legal interest. But CA allowed a 230-day sick
leave commutation, up from the 162 days only.

Paloma and PAL appealed the CA’s Amended Decision to SC

ISSUE:
WON EO 1077, before PAL’s privatization, applies to its employees, and corollarily, whether or not
Paloma is entitled to a commutation of his accrued sick leave credits.

RULING:
No. EO 1077 (Revising the Computation of Creditable Vacation and Sick Leaves of Government Officers
and Employees), provides:

“Section 1. Any officer [or] employee of the government who retires or voluntary resigns or is separated
from the service through no fault of his own and whose leave benefits are not covered by special law,
shall be entitled to the commutation of all the accumulated vacation and/or sick leaves to his credit,
exclusive of Saturdays, Sundays, and holidays, without limitation as to the number of days of vacation
and sick leaves that he may accumulate.”
Contention of Paloma is without merit. PAL never ceased to be operated as a private corporation, and
was not subjected to the Civil Service Law

Through the years, PAL functioned as a private corporation and managed as such for profit. Their
personnel were never considered government employees. Civil service law and rules and regulations
have not been made to apply to PAL and its employees. Of governing application to them was the Labor
Code.

Paloma cannot be accorded the benefits of EO 1077 which was issued to narrow the gap between the
leave privileges between the members of the judiciary, on one hand, and other government officers and
employees in the civil service, on the other. It is the 1987 Constitution, which delimits the coverage of
the civil service, that should govern this case because it is the Constitution in place at the time the case
was decided, even if, incidentally, the cause of action accrued during the effectivity of the 1973
Constitution.

Paloma, while with PAL, was never a government employee covered by the civil service law. As such, he
did not acquire any vested rights on the retirement benefits accorded by EO 1077. What governs
Paloma’s entitlement to sick leave benefits and the computation and commutation of creditable
benefits is not EO 1077 but PAL’s company policy on the matter.
To elaborate the decision of the lower tribunals, the labor arbiter granted 162 days commutation, while
the NLRC allowed the commutation of the maximum 230 days. The CA, while seemingly affirming the
NLRC’s grant of 230 days commutation, actually decreed a 162-day commutation. These are all lacking
legal basis, for PAL’s company policy upon which either disposition was predicated did not provide for a
commutation of the first 230 days accrued sick leave credits employees may have upon their retirement.
NLRC and the CA, by their act of allowing commutation to cash, erred because they read in the policy
something not written or intended therein. Indeed, no law provides for commutation of unused or
accrued sick leave credits in the private sector. Commutation is allowed by way of voluntary endowment
by an employer through a company policy or by a CBA. None of such medium is present in the case at
bar and it would be inappropriate if the Court fills up the vacuum.
In the absence of any provision in the applicable company policy authorizing the commutation of the
230 days accrued sick leave credits existing upon retirement, Paloma may not, as a matter of
enforceable right, insist on the commutation of his sick leave credits to cash.

WHEREFORE, the petition under G.R. No. 148415 is hereby DISMISSED for lack of merit, while the
petition under G.R. No. 156764 is hereby GIVEN DUE COURSE.
212 Phil. 674

SECOND DIVISION
[ G.R. No. L-65428, February 20, 1984 ]
BAGUIO WATER DISTRICT, PETITIONER, VS. HON. CRESENCIANO B. TRAJANO IN HIS OFFICIAL CAPACITY
AS THE DIRECTOR OF THE BUREAU OF LABOR RELATIONS OF THE MINISTRY OF LABOR AND
EMPLOYMENT, AND BAGUIO WATER DISTRICT EMPLOYEES LABOR UNION, RESPONDENTS.

DECISION
ABAD SANTOS, J.:

This is a petition to review the decision of the public respondent which affirmed that of a Med-Arbiter
calling for a certification election among the regular rank and file employees of the Baguio Water District
(BWD).
The Baguio Water District was formed pursuant to Title II - Local Water District Law - of P.D. No. 198, as
amended. The BWD is by Sec. 6 of that decree "a quasi-public corporation performing public service and
supplying public wants"

A part of the public respondent's decision rendered in September, 1983, reads in part:

"We find the appeal [of the BWD] to be devoid of merit. The records show that the operation and
administration of BWD is governed arid regulated by special laws, that is, Presidential Decrees Nos. 198
and 1497 which created local water districts throughout the country. Section 25 of Presidential Decree
(PD) 198 clearly provides that the district and its employees shall be exempt from the provisions of the
Civil Service Law and that its personnel below supervisory level shall have the right to collectively
bargain. Contrary to appellant's claim, said provision has not been amended much more abrogated
expressly or impliedly by PD 1497 which does not make mention of any matter on Civil Service Law or
collective bargaining." (Rollo, p. 59.)

We grant the petition for the following reasons:

1. Section 25 of P.D. No. 198 was repealed by Sec. 3 of P.D. No 1479; Sec. 26 of P.D. No. 198 was
amended to read as Sec. 25 by Sec. 4 of P.D. No. 1479. The amendatory decree took effect on June 11,
1978.

Sec. 25 of P.D. No. 198 was originally written as follows:

"Sec. 25. Exemption from Civil Service. - The district and its employees, being engaged in a proprietary
function, are hereby exempt from the provisions of the Civil Service Law. Collective bargaining shall be
available only to personnel below supervisory levels: Provided, however, That the total of all salaries,
wages, emoluments, benefits or other compensation paid to all employees in any month shall not
exceed fifty percent (50%) of average net monthly revenue, said net revenue representing income from
water sales and sewerage service charges, less pro-rata share of debt service and expenses for fuel or
energy for pumping during the preceding fiscal year."

After P.D. No. 198 was amended by P.D. No. 1479, Sec. 25 now reads:
"Sec. 25. Authorization. - The district may exercise all the powers which are expressly granted by this
Title or which are necessarily implied from or incidental to the powers and purposes herein stated. For
the purpose of carrying out the objectives of this Act, a district is hereby granted the power of eminent
domain, the exercise thereof shall, however, be subject to review by the Administration."

It is obvious that the public respondent erred when he said: "Contrary to appellant's claim, said
provision has not been amended much more abrogated expressly or impliedly by PD 1497 which does
not make mention of any matter on Civil Service Law or collective bargaining."

2. The agencies of the Ministry of Labor and Employment do not compare notes.

In NLRC Case No. RAB-I-0053-82, Beneco Employees Labor Union, et al. vs. Baguio Water District, the
Second Division of the NLRC held:

"Upon absorption of herein complainant by BWD by virtue of the terms of the aforementioned
agreement, he automatically became a government employee. As such, his terms and conditions of
employment are governed by the Civil Service Law, rules and regulations and therefore any dispute or
controversy arising from such employment status is removed from the jurisdiction of the Labor Arbiter
and this Commission pursuant to Article 277 of the Labor Code, as amended, which We hereby
reproduce below:

'ART. 277. Government employees. - The terms and conditions of employment of all government
employees, including employees of government-owned and controlled corporations, shall be governed
by the Civil Service Law, rules and regulations. Their salaries shall be standardized by the National
Assembly as provided for in the New Constitution. However, there shall be no reduction of existing
wages, benefits and other terms and conditions of employment being enjoyed by them at the time of
the adoption of the Code.'

"As one of the issues raised before Us in this appeal is one of jurisdiction, We rule to dismiss the above-
entitled case based on the ground of lack of jurisdiction.

"WHEREFORE, the appealed Decision is hereby Reversed. Case dismissed for lack of jurisdiction." (Rollo,
p. 64.)

The Union appealed to this Court but in G.R. No. 63184 a resolution dated April 24, 1983, dismissed its
appeal for lack of merit.

3. The BWD is a corporation created pursuant to a special law - P.D. No. 198, as amended. As such its
officers and employees are part of the Civil Service. (Sec. 1, Art. XII-B, Constitution; P.D. No. 868.)

WHEREFORE, the petition is granted and the questioned decision of the public respondent is hereby set
aside. No costs.

SO ORDERED.

Aquino, Concepcion, Jr., Guerrero, De Castro, and Escolin, JJ., concur.

Makasiar, J., (Chairman), reserves his vote.

SEAFDEC-AQD vs NLRC, G.R. No. 86773, February 14, 1992

FACTS:
SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries
Development Center, organized through an agreement in 1967 by the governments of Malaysia,
Singapore, Thailand, Vietnam, Indonesia and the Philippines with Japan as the sponsoring country.

Juvenal Lazaga was employed as a Research Associate on a probationary basis by SEAFDEC-AQD.

Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to Lazaga informing him
that due to the financial constraints being experienced by the department, his services shall be
terminated. SEAFDEC-AQD's failure to pay Lazaga his separation pay forced him to file a case with the
NLRC. The Labor Arbiter and NLRC ruled in favor of Lazaga. Thus SEAFDEC-AQD appealed, claiming that
the NLRC has no jurisdiction over the case since it is immune from suit owing to its international
character and the complaint is in effect a suit against the State which cannot be maintained without its
consent.

ISSUES:

1. Does the NLRC have jurisdiction over SEAFDEC-AQD?

2. Is SEAFDEC-AQD estopped for its failure to raise the issue of jurisdiction at the first instance?

HELD:

1. SEAFDEC-AQD is an international agency beyond the jurisdiction of public respondent NLRC. Being an
intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional
independence and freedom from control of the state in whose territory its office is located.

Permanent international commissions and administrative bodies have been created by the agreement of
a considerable number of States for a variety of international purposes, economic or social and mainly
non-political. In so far as they are autonomous and beyond the control of any one State, they have a
distinct juridical personality independent of the municipal law of the State where they are situated. As
such, according to one leading authority "they must be deemed to possess a species of international
personality of their own."

One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that
it is immune from the legal writs and processes issued by the tribunals of the country where it is found.
The obvious reason for this is that the subjection of such an organization to the authority of the local
courts would afford a convenient medium thru which the host government may interfere in there
operations or even influence or control its policies and decisions of the organization; besides, such
subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities
impartially on behalf of its member-states.

2. Respondent Lazaga's invocation of estoppel with respect to the issue of jurisdiction is unavailing
because estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action.
Jurisdiction is conferred by law. Where there is none, no agreement of the parties can provide one.
Settled is the rule that the decision of a tribunal not vested with appropriate jurisdiction is null and void.
(SEAFDEC-AQD vs NLRC, G.R. No. 86773, February 14, 1992)
MATLING INDUSTRIAL VS COROS (G.R. NO. 157802 OCTOBER 13, 2010)
Matling Industrial and Commercial Corporation vs Coros
G.R. No. 157802 October 13, 2010

Facts:
After his dismissal by Matling as its Vice President for Finance and Administration, the respondent filed
on August 10, 2000 a complaint for illegal suspension and illegal dismissal against Matling and some of
its corporate officers (petitioners) in the NLRC, Sub-Regional Arbitration Branch XII, Iligan City. The
petitioners moved to dismiss the complaint, raising the ground, among others, that the complaint
pertained to the jurisdiction of the Securities and Exchange Commission (SEC) due to the controversy
being intracorporate inasmuch as the respondent was a member of Matlings Board of Directors aside
from being its Vice-President for Finance and Administration prior to his termination. The respondent
opposed the petitioners motion to dismiss, insisting that his status as a member of Matlings Board of
Directors was doubtful, considering that he had not been formally elected as such; that he did not own a
single share of stock in Matling, considering that he had been made to sign in blank an undated
indorsement of the certificate of stock he had been given in 1992; that Matling had taken back and
retained the certificate of stock in its custody; and that even assuming that he had been a Director of
Matling, he had been removed as the Vice President for Finance and Administration, not as a Director, a
fact that the notice of his termination dated April 10, 2000 showed. On October 16, 2000, the LA
granted the petitioners motion to dismiss, ruling that the respondent was a corporate officer because he
was occupying the position of Vice President for Finance and Administration and at the same time was a
Member of the Board of Directors of Matling; and that, consequently, his removal was a corporate act of
Matling and the controversy resulting from such removal was under the jurisdiction of the SEC, pursuant
to Section 5, paragraph (c) of Presidential Decree No. 902.

Issue: Whether or not the respondent is a corporate officer within the jurisdiction of the regular courts.

Held:
No. As a rule, the illegal dismissal of an officer or other employee of a private employer is properly
cognizable by the LA. This is pursuant to Article 217 (a) 2 of the Labor Code, as amended, which provides
as follows:

Article 217. Jurisdiction of the Labor Arbiters and the Commission. – (a) Except as otherwise provided
under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide,
within thirty (30) calendar days after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages,
rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee
relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of
strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all
other claims arising from employer-employee relations, including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos (P 5,000.00) regardless of
whether accompanied with a claim for reinstatement.

(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreements and
those arising from the interpretation or enforcement of company personnel policies shall be disposed of
by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may
be provided in said agreements.

Where the complaint for illegal dismissal concerns a corporate officer, however, the controversy falls
under the jurisdiction of the Securities and Exchange Commission (SEC), because the controversy arises
out of intra-corporate or partnership relations between and among stockholders, members, or
associates, or between any or all of them and the corporation, partnership, or association of which they
are stockholders, members, or associates, respectively; and between such corporation, partnership, or
association and the State insofar as the controversy concerns their individual franchise or right to exist
as such entity; or because the controversy involves the election or appointment of a director, trustee,
officer, or manager of such corporation, partnership, or association. Such controversy, among others, is
known as an intra-corporate dispute.

Effective on August 8, 2000, upon the passage of Republic Act No. 8799, otherwise known as The
Securities Regulation Code, the SECs jurisdiction over all intra-corporate disputes was transferred to the
RTC, pursuant to Section 5.2 of RA No. 8799.

Thus, pursuant to the above provision (Section 25 of the Corporation Code), whoever are the corporate
officers enumerated in the by-laws are the exclusive Officers of the corporation and the Board has no
power to create other Offices without amending first the corporate By-laws. However, the Board may
create appointive positions other than the positions of corporate Officers, but the persons occupying
such positions are not considered as corporate officers within the meaning of Section 25 of the
Corporation Code and are not empowered to exercise the functions of the corporate Officers, except
those functions lawfully delegated to them. Their functions and duties are to be determined by the
Board of Directors/Trustees.

Moreover, the Board of Directors of Matling could not validly delegate the power to create a corporate
office to the President, in light of Section 25 of the Corporation Code requiring the Board of Directors
itself to elect the corporate officers. Verily, the power to elect the corporate officers was a discretionary
power that the law exclusively vested in the Board of Directors, and could not be delegated to
subordinate officers or agents. The office of Vice President for Finance and Administration created by
Matlings President pursuant to By Law No. V was an ordinary, not a corporate, office.

The criteria for distinguishing between corporate officers who may be ousted from office at will, on one
hand, and ordinary corporate employees who may only be terminated for just cause, on the other hand,
do not depend on the nature of the services performed, but on the manner of creation of the office. In
the respondents case, he was supposedly at once an employee, a stockholder, and a Director of Matling.
The circumstances surrounding his appointment to office must be fully considered to determine
whether the dismissal constituted an intra-corporate controversy or a labor termination dispute. We
must also consider whether his status as Director and stockholder had any relation at all to his
appointment and subsequent dismissal as Vice President for Finance and Administration.
[G.R. No. 189262. July 6, 2015.]
GBMLT MANPOWER SERVICES, INC., petitioner, vs. MA. VICTORIA H. MALINAO, respondent.

NATURE: Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the CA
Decision.

The CA found grave abuse of discretion on the part of NLRC when the latter reversed the decision of
the LA, which granted respondent's money claims under her complaint for illegal dismissal against
petitioner. The CA Resolution denied petitioner's MR.

FACTS:

• In May 2005, respondent applied to petitioner for a job as teacher for deployment abroad. She
was interviewed by an Ethiopian university president and endorsed for the post of accounting lecturer
with a monthly salary of USD 900.
• Respondent paid petitioner the required fees, signed a POEA-approved Contract of Employment
for Foreign Academic Personnel covering a period of two academic years. Upon arrival in Ethiopia in
December 2005, she was informed that her credentials have to be re-evaluated because it appeared
that she did not have a master's degree. Respondent was given a new contract which she refused to
sign at first but upon reading it as a duplicate of the original contract signed the same.
• Respondent was assigned to teach at the Alemaya University but she decided on January 10,
2006 to discontinue teaching the cooperative accounting course assigned to her saying that auditing, not
accounting, was her specialization. Another lecturer took over the course and she spent the rest of the
semester without a teaching load.
• Alemaya University VP Alamirew circulated a memo on the Ministry of Education requirement
to evaluate the credentials of the Filipino teaching staff and suggest an academic rank for them pursuant
to the national norm. Another memo was issued lowering the ranks of most of the Filipino teaching staff
and asking them to sign a new contract reflecting a change in rank and salary. Respondent's designation
was lowered from lecturer to assistant lecturer with a USD 600 monthly salary.
• Respondent refused to sign a new contract and together with affected Filipino colleagues, she
went to the Ministry of Education to protest the re-ranking. She later requested in a letter to the VP to
issue a notice of termination to her "in order not to prolong [her] agony" after a misunderstanding with
the VP during a meeting following the protest.
• Respondent was again replaced by another instructor in Auditing II and left idle due to a
students' petition. Dean Kassa of the University questioned her qualification alluding to her bachelor's
degree. Respondent was offended insisted she was a CPA and law graduate. Her response stated that in
the Philippines, a person with a law degree and who passed the bar examinations has a degree more
than a master's, but less than a doctorate. She recognized the university’s right to terminate her at any
time, but insisted there was no need to discredit her.
• On 6 April 2006, VP Alamirew issued the notice of termination to respondent. The notice alluded
to the two instances when the Department of Accounting had to replace respondent in her course
assignments. She was said to be incompetent and have insulted students, the staff and the management
in particular and Ethiopians in general in the class. She was given three months advance notice as
regards the contract termination.
• Respondent replied with a letter stating that the last sentence on the notice of termination is
provocative, malicious and defamatory. While waiting for the three-month period to expire, respondent
was offered a post at the Internal Audit Department by the University President which she accepted the
job through a letter. However, she changed her mind and through a letter dated 27 April 2006
addressed to the President, respondent rejected the offer stating that she was treated rudely and
assigned to work under the acting head, a mere diploma holder making her feel insulted.
• Respondent was repatriated on 27 June 2006. She later signed a Quitclaim and Release dated 5
July 2006 in favor of petitioner.
• On 18 July 2006, respondent filed a complaint before the LA against petitioner as local agency
and Alemaya University as foreign principal seeking full payment of the unexpired portion of the two-
year contract, moral and exemplary damages, and attorney's fees.

Ruling of the Labor Arbiter

The LA found respondent to have been unduly repatriated in breach of the employment contract.
Petitioner and Alemaya University were ordered to pay her in solidum the amounts of USD 4,500 as
unrealized income - from which the amount paid to her under the Quitclaim and Release had already
been deducted - Php 30,000 as moral damages, Php 20,000 as exemplary damages, plus costs.

Respondent did not hide that she had no master's degree because she was a holder of a bachelor of
laws degree. Alemaya University should have allowed respondent to finish her two-year employment
contract instead of forcing her to sign a new contract with lower pay, just because she did not have a
master's degree.

The labor arbiter found that respondent had been constructively dismissed. She was supposedly forced
to quit because continued employment became unbearable, not only due to demotion in rank and
diminution in pay, but also due to the discrimination and disdain on the part of her employer. No
procedural due process was accorded to respondent because no panel of her peers was ever formed to
review her performance. The only basis for the charge of unsatisfactory teaching was the alleged
students' petition, which was found to be questionable.

Ruling of the NLRC

The NLRC issued a Decision dated 30 July 2008 dismissing respondent's complaint, because her claims
had been the subject of a valid release, waiver and quitclaim.

The NLRC ruled that respondent could no longer question the termination of her contract of
employment after her acceptance of the new offer of President Kassa to work at the Internal Audit
Department. When respondent later wrote to President Kassa that she did not want the new post after
all and requested to be repatriated, it was she who terminated the contract. Contrary to the LA’s ruling,
respondent was not constructively dismissed.

The NLRC also sustained the validity of the Quitclaim and Release. It held that respondent was a certified
public accountant and bachelor of laws graduate who could hardly be "duped into signing any document
that would be detrimental to her cause, if she was not willing [to agree] to the terms and conditions
[provided in] what she was signing [or] entering into."

After her MR was denied, respondent filed a petition before the CA ascribing grave abuse of discretion
on the part of the NLRC.

Ruling of the CA
The CA reinstated the LA’s Decision with modifications. The appellate court ordered petitioner and
Alemaya University to reimburse respondent for the full amount of the placement fee she had paid, with
interest at the rate of 12% per annum, as well as her airfare from Dire Dawa to Addis Ababa in Ethiopia.
The awards of moral and exemplary damages were both increased to Php 50,000, plus attorney's fees
equivalent to 10% of the monetary award.

The appellate court observed that while respondent accepted the offer of President Kassa to work at the
Internal Audit Department, such arrangement was in the purview of a new contract of employment. A
new contract was invalid without the approval of the POEA.

After its MR was denied, petitioner filed the instant petition.

ISSUES:

1. Whether respondent was illegally dismissed

2. Whether the Quitclaim and Release was valid

RULING:

1. NO. Respondent was not illegally dismissed.

Under Section 10 of R.A. 8042, workers who are illegally terminated are entitled to their salaries for the
unexpired portion of their employment contracts or for three months for every year of the unexpired
term, whichever is less, in addition to the reimbursement of their placement fee with interest at the rate
of 12% per annum.

This applies only to an illegally dismissed overseas contract worker or a worker dismissed from overseas
employment without just, valid or authorized cause as defined by law or contract. Respondent was not
illegally dismissed.

Article X of the POEA-approved Contract of Employment, as well as the second contract given to
respondent for signing upon her arrival in Ethiopia, provides: “This contract may be terminated by either
party, at any time and for no cause by giving three months notice to the other party. In such an event[,]
the Employee shall be entitled to his/her salary and allowances only up to the date of termination
specified in the said notice of termination. However, the employee shall be fully engaged in his/her duty
in the period notified and up to the last date of termination.”
Based on the provision, the Contract of Employment may be terminated by either party for cause or at
any time for no cause, as long as a three-month notice is given to the other party. Stipulations providing
that either party may terminate a contract even without cause are legitimate if exercised in good faith.
The misunderstanding on respondent’s master’s degree was not the result of bad faith on the part of
either party. The demotion did not materialize, and respondent maintained her salary and benefits until
she was repatriated.

The Court did not impute bad faith on the part of Alemaya University in the exercise of its right to
terminate the Contract of Employment at will.
It is well to note that the right to terminate the Contract of Employment at will was also available to
respondent, who exercised that right when she signified her change of mind and rejected the job at the
Internal Audit Department.

The NLRC was correct in finding that the logical conclusion is that the parties had agreed to let her
employment continue in the university under the Contract of Employment in a different capacity. When
respondent later decided that she did not want the new job for personal reasons, she exercised her right
to terminate the Contract of Employment.

2. YES. The Quitclaim and Release is valid.

Where a person executing a waiver or quitclaim has done so voluntarily with a full understanding of its
terms and conditions, coupled with the other person's payment of credible and reasonable
consideration, the transaction is valid and binding.

Respondent admits that she had a full understanding of the terms and conditions of the Quitclaim and
Release and voluntarily signed it. The bone of contention is the reasonableness of the amount of USD
900 as consideration for the waiver of all other purported claims against petitioner. Since respondent
was not illegally dismissed, she is not entitled to salaries in excess of the amount given.

CA decision and resolution were revered and set aside. NLRC decision reinstated.
MA. CONSOLACION NAHAS, doing business under the name and style PERSONNEL EMPLOYMENT AND
TECHNICAL RECRUITMENT AGENCY vs. JUANITA L. OLARTE
G.R. No. 169247; June 2, 2014
FACTS:
Olarte was deployed as a domestic helper to Hail, Saudi Arabia for a contract term of two years. On the
hands of her foreign employer, she was maltreated, deprived of her salaries, and contracted an illness
for which no medical attention was not even provided. Not able to endure the suffering much longer,
she found an opportunity to escape, sought refuge at the Philippine Embassy, and was eventually
brought home to thePhilippines. She filed a complaint for illegal dismissal, damages, attorney’s fees and
refund of placement fees against Fahad and Nahas/PETRA/Royal Dream (the recruitment agency). Olarte
alleged that she went to the office of PETRA/Royal Dream where she was met and interviewed by
Nahas, the manager and owner of said agencies, who instructed her to sign what appeared to be a
contract of employment. Nahas denies Olarte’sallegations. The Labor Arbiter ruled against PETRA/Royal
Dream/Nahas. On appeal to the NRLC, Nahas, to further avoid personal liability, made a new allegation
that if at all, her only involvement was that she interviewed Olarte when she was still connected with
Royal Dream as a mere employee. The NLRC was not persuaded and disposed of the case. Advancing the
same arguments she raised before the labor tribunals, Nahas went to the CA, but to no avail. The CA
ruled in part: “While Nahas claims that she is neither the proprietress nor one of the
officers of ROYAL at that time, her role or position with ROYAL was undeniably significant considering
that she took charge of interviewing Olarte and eventually made her sign the Contract of Employment.
xxx We xxxthus affirm Nahas’ liability in accordance with Section 64 of the
Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipino Act of 1995
(RA 9042),to wit: ‘Section 64. Solidary Liability - The liability of the principal/employer and the
recruitment placement agency on any and all claims under this Rule shall be joint and solidary. If the
recruitment/placement agency is a juridical being, the corporate officers and directors and partners as
the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for
the aforesaid claims and damages
xxx.”

ISSUE:

WON Nahas is solidarily liable with the recruitment agency for Olarte’s claims

RULING: YES.
It must be stressed, at the outset, that the Court is not a trier of facts. Factual findings of the labor
tribunals, when affirmed by the CA, are generally accorded not only respect, but even finality, and are
binding on this Court. In this case, the LA, the NLRC, and the CA are one in their factual conclusion that
Nahas, acting for and in bhelaf of PETRA and Royal Dream, interviewed Olarte, caused her to sign an
employment contract, and facilitated and made possible her deployment abroad. The Court is,
therefore, not duty-bound to inquire into the accuracy of this factual finding, particularly in this case
where there is no showing that it was arbitrary and bereft of any rational basis. As a final note, it is
worth stating that recruitment agencies, as part of their bounded duty to protect the welfare of the
Filipino workers sent abroad from whom they take their profit, should in conscience not add to the
misery of maltreated and abused Filipino workers by denying them the reparation to which they are
entitled.
Instead, they must “faithfully comply with their government prescribed responsibilities” and be the first
toensure the welfare of the very people upon whose patronage their industry thrives.
People of the Philippines vs. Domingo Panis
GR No. L–58674–77, July 11, 1990

FACTS:

On January 9, 1981, four information were filed in the in the Court of First Instance (CFI) of Zambales
and Olongapo City alleging that herein private respondent Serapio Abug, "without first securing a license
from the Ministry of Labor as a holder of authority to operate a fee-charging employment agency, did
then and there wilfully, unlawfully and criminally operate a private fee charging employment agency by
charging fees and expenses (from) and promising employment in Saudi Arabia" to four separate
individuals. Abug filed a motion to quash contending that he cannot be charged for illegal recruitment
because according to him, Article 13(b) of the Labor Code says there would be illegal recruitment only
"whenever two or more persons are in any manner promised or offered any employment for a fee.”

Denied at first, the motion to quash was reconsidered and granted by the Trial Court in its Orders dated
June 24, 1981, and September 17, 1981. In the instant case, the view of the private respondents is that
to constitute recruitment and placement, all the acts mentioned in this article should involve dealings
with two or more persons as an indispensable requirement. On the other hand, the petitioner argues
that the requirement of two or more persons is imposed only where the recruitment and placement
consists of an offer or promise of employment to such persons and always in consideration of a fee.

ISSUE:

Whether or not Article 13(b) of the Labor Code provides for the innocence or guilt of the private
respondent of the crime of illegal recruitment

COURT RULING:

The Supreme Court reversed the CFI’s Orders and reinstated all four information filed against private
respondent.

The Article 13(b) of the Labor Code was merely intended to create a presumption, and not to impose a
condition on the basic rule nor to provide an exception thereto.

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 the said presumption.
G.R. No. 113161, August 29, 1995
People of the Phil., plaintiff-appellee
vs Loma Goce, et. al., accused-appellant
Ponente: Regalado

Facts:
On January 1988, an information for illegal recruitment committed by a syndicate nd in large scale,
punishable under Articles 38 and 39 of the labor code as amended by PD 2018, filed against Dan and
Loma Goce and Nelly Agustin in the RTC of Manila, alleging that in or about during the period comprised
between May 1986 and June 25, 1987, both dates inclusive in the City of Manila, the accused conspired
and represent themsleves to have the capacity to recruit Filipino workers for employment abroad.

January 1987, a warrant of arrest was issued against the 3 accused bot none of them was arrested.
Hence, on February 1989, the RTC prdered the case archived but issued a standing warrant os arrest
against the accused.

Thereafter, knowing the whereabouts of the accused, Rogelio Salado requested for a copy of the
warrant of arrest and eventually Nelly Agustin was apprehended by the Paranaque Police. Agustin's
counsel filed a motion to revive the case and requested to set a hearing for purpose of due process and
for accused to immediately have her day in court. On the arraignment, Agustin pleaded not guilty and
the trial went on with four complainants testified for the prosecution and reciepts of the processing fees
they paid.

Agustin for the defense asserted that Goce couple were licensed recruiters but denied her participation
in the recruitment and denied knowledge of the receipts as well.

On November 1993, trial court rendered judgment finding that Agustin as a principal in the crime of
illegal recruitment in large scale with sentence of life imprisonment and pay P100,000.00.

Issues:
Agustin appealed witht the follwing arguments: (1) her act of introducing the complainants to the
couple does not fall within the meaning of illegal recruitment and placement under Article 13 in relation
to Article 34 of the labor code; (2) there is no proof of conspiracy and (3) there is no proof that appellant
offered/promised overseas employment to the complainants.

Ruling:

The testimonial evidence shows that Agustin indeed further committted acts constitutive of illegal
recruitment because, the complainants had a previous interview with Agustin (as employee of the Goce
couple) about fees and papers to submit that may constitute as referral. Agustin collected the payments
of the complainants as well as their passports, trainning fees, medical tests and other expenses.On the
issue of proof, the court held that the receipts exhibited by the claimants are clear enough to prove the
payments and transaction made.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY HONORABLE LOURDES M. TRASMONTE IN HER
CAPACITY AS UNDERSECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, AND
HONORABLE JENNIFER JARDIN-MANALILI, IN HER CAPACITY AS THEN PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATOR v. HUMANLINK MANPOWER CONSULTANTS, INC. (FORMERLY MHY
NEW RECRUITMENT INTERNATIONAL, INC.) G.R. No. 205188, April 22, 2015, VILLARAMA, JR., J. Aware
that overseas workers are vulnerable to exploitation, the State sought to protect the interests and
well-being of these workers with creation of specialized bodies such as the POEA under the direct
supervision of the DOLE Secretary.
Facts:
Renelson Carlos applied at Worldview Internation Services Corporation as a heavy equipment driver
with a salary of U$700 in Doha, Qatar. His recruiting agency Humanlink Manpower Consultants, Inc.
made him sign an employment contract stating that he was going to work as a duct man instead of the
position he applied for but he was told that this is only for purposes of entering the country. Humanlink
promised that he would work as a heavy equipment driver as applied for. However, upon his arrival in
Doha, he worked as a duct installer with a salary of U$400. Carlos filed a complaint with the Philippine
Overseas Labor Office but the complaint was not acted upon. This prompted him to speak with the
Qatar Labor Office where he discussed his grievance. Consequently, Carlos was informed that his visa
was cancelled and that he was being repatriated at his own expense. POEA Adjudication Office found
Carlos’ assertions credible. POEA cancelled Humanlink’s license and automatically disqualified it from
participating in any overseas employment program.
Issue: Whether the POEA can automatically disqualify officers and directors from participating in the
government's overseas employment program upon the cancellation of a license
Ruling: RECRUITMENT AND PLACEMENT LABOR LAW DIGESTS 2012-2017 Page 52 of 1699 Yes. One of
the roles of the POEA is the regulation and adjudication of private sector participation in the recruitment
and placement of overseas workers. Article 25 of the Labor Code, as amended, reads that pursuant to
national development objectives and in order to harness and maximize the use of private sector
resources and initiative in the development and implementation of a comprehensive employment
program, the private employment sector shall participate in the recruitment and placement of workers,
locally and overseas, under such guidelines, rules and regulations as may be issued by the Secretary of
Labor. This is echoed in Article 35 of the Labor Code, as amended, and Section 23(b.l), R.A. No. 8042 as
amended by R.A. No. 9422, where the legislature empowered the DOLE and POEA to regulate private
sector participation in the recruitment and overseas placement of workers, to wit: The Secretary of
Labor shall have the power to suspend or cancel any license or authority to recruit employees for
overseas employment for violation of rules and regulations issued by the Secretary of Labor, the
Overseas Employment Development Board, and the National Seamen Board, or for violation of the
provisions of this and other applicable laws, General Orders and Letters of Instruction. (Emphasis
supplied) Section 23 (b.1) states that the Philippine Overseas Employment Administration shall regulate
private sector participation in the recruitment and overseas placement of workers by setting up a
licensing and registration system. Sections 1 and 2, Rule I, Part II of the POEA Rules and Regulations
provide the qualifications and disqualifications for private sector participation in the overseas
employment program. Section 1 of this rule provides that for persons to participate in recruitment and
placement of land-based overseas Filipino workers, they must not possess any of the disqualifications as
provided in Section 2. xxx Section 2. Disqualification. The following are not qualified to engage in the
business of recruitment and placement of Filipino workers overseas. d. Persons, partnerships or
corporations which have derogatory records, such as but not limited to the following: xxx Those
agencies whose licenses have been previously revoked or cancelled by the Administration for violation
of RA 8042, PD 442 as amended and their implementing rules and regulations as well as these rules and
regulations. LABOR LAW DIGESTS 2012-2017 Page 53 of 1699 f. Persons or partners, officers and
Directors of corporations whose licenses have been previously cancelled or revoked for violation of
recruitment laws. (Emphases supplied) Thus, upon the cancellation of a license, persons, officers and
directors of the concerned corporations are automatically prohibited from engaging in recruiting and
placement of land-based overseas Filipino workers. The grant of a license is a privilege and not a right
thus making it a proper subject of its regulatory powers.
G.R. No. 179934 People vs. Abordo

May 21, 2009 ROSALIE SANTAJ. FLORENTIN

I, J. CARPIO FILRO: 009

FACTS:

From February to December 1994 at Brgy. Poblacion, Villasis, Pangasinan, accused

Erlinda Abordo and Vina Cabanlong recruited Jesus Rayray, Jaime Fernandez, Exequiel
Mendoza and Esmenia Carino for employment abroad without first securing the requisite
license or authority from DOLE. The complainants filed separate informations.

ISSUE:

Whether Abordo guilty of simple illegal recruitment or in a large scale.

LAW INVOLVED:

Article 13 (b) of the Labor Code.

RULING:

Since, the accused were prosecuted under several information for different
complainants, the penalty imposed should be for each information charged. To convict the
accused for illegal recruitment in large scale, there must be one information that must include
all the complainants. Hence, the accused were guilty of simple illegal recruitment.
Case Digest: PEOPLE OF THE PHILIPPINES vs. CAROL M. DELA PIEDRA

G.R. No. 121777 24 January 2001

FACTS:

Dela Piedra was charged with illegal recruitment in a large scale. In an information filed against her,
without any POEA license, she allegedly offered and promised for a fee employment in Singapore to
Modesto, Amanita and Timbol, such that Modesto had already advanced the amount of Php2,000.00.
Dela Piedra was arrested in her home after an investigation was made by Atty. Erlina Ramos, a lawyer of
the POEA, who pretended to be an applicant, which led to an entrapment operation of the PNP-CIS for
Region IX.

ISSUES:

Is Article 13(b) of the Labor Code defining recruitment and placement void for vagueness?
Whether herein appellant committed the crime of large scale illegal recruitment.

RULING:

NO. Section 13(b) is not overbroad. It encompasses what appellant apparently considers as customary
and harmless acts such as labor or employment referral.
NO. 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. In this case, only two persons,
Amanita and Modesto, were proven to have been recruited by the appellant.
VIR-JEN Shipping and Marine Services, Inc., vs. NLRC G.R. No. L-58011 & L-58012 November 18, 1983
EN BANC, GUTIERREZ, JR., J.:
Facts: Certain seamen entered into a contract of employment for a 12-month period. Some three
months after the commencement of their employment, the seamen demanded a 50 % increase of their
salaries and benefits. The seamen demanded this increase while their vessel was en route to a port in
Australia controlled by thye International Transport Workers’ Federation (ITF), a militant international
labor organization with affiliates in different ports of the world, which reputedly can tie a vessel in a port
by preventing its loading and unloading unless it paid its seamen their prescribed ITF rates. In reply, the
agent of the owner of the vessel agreed to pay a 25% increase, but when the vessel arrived in Japan
shortly afterwards, the seamen were repatriated to Manila and their contract terminated. There is no
showing that the Seamen were given the opportunity to at least comment for the cancellation of their
contracts, although they had served only three (3) out of the twelve (12) months' duration of their
contracts. The private respondents filed a complaint for illegal dismissal and non-payment of earned
wages with the National Seamen Board (NSB). The Vir-jen Shipping and Marine Services Inc. in turn filed
a complaint for breach of contract and recovery of excess salaries and overtime pay against the private
respondents. On July 2, 1980, the NSB rendered a decision declaring that the seamen breached their
employment contracts when they demanded and received from Virjen Shipping wages over and above
their contracted rates. The dismissal of the seamen was declared legal and the seamen were ordered
suspended. The seamen appealed the decision to the NLRC which reversed the decision of the on the
ground that the termination of the contract by the petitioner was without valid cause. Hence, the
petition.
Issue: Whether or not the findings of the NSB is more credible than the NLRC that the seamen did not
violate their contract. Held: The decision sought to be reconsidered appears to be a deviation from the
Court's decision, speaking through the First Division, in Wallem Shipping, Inc. v. Hon. Minister of Labor
(102 SCRA 835). Faced with two seemingly conflicting resolutions of basically the same issue by its two
Divisions, the Court. therefore, resolved to transfer the case to the Court en banc. We sustain the
decision of the respondent National labor Relations Commission. The contention that manning
industries in the Philippines would not survive if the instant case is not decided in favor of the petitioner
is not supported by evidence. The Wallem case was decided on February 20, 1981. There have been no
severe repercussions, no drying up of 58 employment opportunities for seamen, and none of the dire
consequences repeatedly emphasized by the petitioner. Why should Vir-jen be all exception? Filipino
seamen are admittedly as competent and reliable as seamen from any other country in the world.
Otherwise, there would not be so many of them in the vessels sailing in every ocean and sea on this
globe. It is competence and reliability, not cheap labor that makes our seamen so greatly in demand.
Filipino seamen have never demanded the same high salaries as seamen from the United States, the
United Kingdom, Japan and other developed nations. But certainly they are entitled to government
protection when they ask for fair and decent treatment by their employer.-, and when they exercise the
right to petition for improved terms of employment, especially when they feel that these are sub-
standard or are capable of improvement according to internationally accepted rules. In the domestic
scene, there are marginal employers who prepare two sets of payrolls for their employees — one in
keeping with minimum wages and the other recording the sub-standard wages that the employees
really receive, The reliable employers, however, not only meet the minimums required by fair labor
standards legislation but even go way above the minimums while earning reasonable profits and
prospering. The same is true of international employment. There is no reason why this Court and the
Ministry of Labor and. Employment or its agencies and commissions should come out with
pronouncements based on the standards and practices of unscrupulous or inefficient shipowners, who
claim they cannot survive without resorting to tricky and deceptive schemes, instead of Government
maintaining labor law and jurisprudence according to the practices of honorable, competent, and law-
abiding employers, domestic or foreign. Prescinding from the above, we now hold that neither the
National Seamen Board nor the National Labor Relations Commission should, as a matter of official
policy, legitimize and enforce cubious arrangements where shipowners and seamen enter into fictitious
contracts similar to the addendum agreements or side contracts in this case whose purpose is to
deceive. The Republic of the Philippines and its ministries and agencies should present a more
honorable and proper posture in official acts to the whole world, notwithstanding our desire to have as
many job openings both here and abroad for our workers. At the very least, such as sensitive matter
involving no less than our dignity as a people and the welfare of our workingmen must proceed from the
Batasang Pambansa in the form of policy legislation, not from administrative rule making or adjudication

Decision: WHEREFORE, the motions for reconsideration are hereby GRANTED. The petition is DISMISSED
for lack of merit. The decision of the National Labor Relations Commission is AFFIRMED. No costs. SO
ORDERED. Fernando, C.J., Guerrero, Abad Santos, Plana, Escolin and Relova, JJ., concur.
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. v. NATIONAL LABOR RELATIONS
COMMISSION et al.
480 SCRA 146 (2006)

FACTS:
Respondent Divina Montehermozo is a domestic helper deployed to Taiwan by Sunace International
Management Services (Sunace) under a 12-month contract. Such employment was made with the
assistance of Taiwanese broker Edmund Wang. After the expiration of the contract, Montehermozo
continued her employment with her Taiwanese employer for another 2 years.

When Montehermozo returned to the Philippines, she filed a complaint against Sunace, Wang, and her
Taiwanese employer before the National Labor Relations Commission (NLRC). She alleges that she was
underpaid and was jailed for three months in Taiwan. She further alleges that the 2-year extension of
her employment contract was with the consent and knowledge of Sunace. Sunace, on the other hand,
denied all the allegations.

The Labor Arbiter ruled in favor of Montehermozo and found Sunace liable thereof. The National Labor
Relations Commission and Court of Appeals affirmed the labor arbiter’s decision. Hence, the filing of this
appeal.

ISSUE: Whether or not the 2-year extension of Montehermozo’s employment was made with the
knowledge and consent of Sunace

HELD: There is an implied revocation of an agency relationship when after the termination of the
original employment contract, the foreign principal directly negotiated with the employee and entered
into a new and separate employment contract.

Contrary to the Court of Appeals finding, the alleged continuous communication was with the Taiwanese
broker Wang, not with the foreign employer.

The finding of the Court of Appeals solely on the basis of the telefax message written by Wang to
Sunace, that Sunace continually communicated with the foreign "principal" (sic) and therefore was
aware of and had consented to the execution of the extension of the contract is misplaced. The message
does not provide evidence that Sunace was privy to the new contract executed after the expiration on
February 1, 1998 of the original contract. That Sunace and the Taiwanese broker communicated
regarding Montehermozo’s allegedly withheld savings does not necessarily mean that Sunace ratified
the extension of the contract.

As can be seen from that letter communication, it was just an information given to Sunace that
Montehermozo had taken already her savings from her foreign employer and that no deduction was
made on her salary. It contains nothing about the extension or Sunace’s consent thereto.

Parenthetically, since the telefax message is dated February 21, 2000, it is safe to assume that it was
sent to enlighten Sunace who had been directed, by Summons issued on February 15, 2000, to appear
on February 28, 2000 for a mandatory conference following Montehermozo’s filing of the complaint on
February 14, 2000.
Respecting the decision of Court of Appeals following as agent of its foreign principal, [Sunace] cannot
profess ignorance of such an extension as obviously, the act of its principal extending [Montehermozo’s]
employment contract necessarily bound it, it too is a misapplication, a misapplication of the theory of
imputed knowledge.

The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal,
employer, not the other way around. The knowledge of the principal-foreign employer cannot,
therefore, be imputed to its agent Sunace.

There being no substantial proof that Sunace knew of and consented to be bound under the 2-year
employment contract extension, it cannot be said to be privy thereto. As such, it and its "owner" cannot
be held solidarily liable for any of Montehermozo’s claims arising from the 2-year employment
extension. As the New Civil Code provides, Contracts take effect only between the parties, their assigns,
and heirs, except in case where the rights and obligations arising from the contract are not transmissible
by their nature, or by stipulation or by provision of law. Furthermore, as Sunace correctly points out,
there was an implied revocation of its agency relationship with its foreign principal when, after the
termination of the original employment contract, the foreign principal directly negotiated with
Montehermozo and entered into a new and separate employment contract in Taiwan. Article 1924 of
the New Civil Code states that the agency is revoked if the principal directly manages the business
entrusted to the agent, dealing directly with third persons.
ROVELS ENTERPRISE, Inc. vs OCAMPO
FACTS:

> Rovels is a domestic corporation engaged in construction work wherein Tagaytay Taal Tourist Development
Corporation (TTTDC) was among its client.
> In payment for the services rendered by Rovels, the Board of Directors of TTTDC passed a Resolution on
December 29, 1975 providing as follows:
RESOLVED, as it is hereby resolved that payment for professional fees and services rendered by x x x Rovels
Enterprises x x x be made in cash if funds are available, or its equivalent number of shares of stock of the corporation
at par value, and should said creditors elect the latter mode of payment, it is further resolved that the President
and/or his Secretary be authorized as they are hereby authorized, to issue the corresponding unissued shares of
stock of the corporation.
> Resolution was signed by three of TTTDCs directors, but the signatures of the other two (2) TTTDC directors Jose
Silva, Jr. and Emmanuel Ocampo do not appear in the subject Resolution despite their presence in the December 29,
1975 Board meeting.
> On March 1, 1976, the TTTDC Board of Directors passed another Resolution repealing its Resolution of December
29, 1975, thus:
RESOLVED, as it is hereby resolved, that the Resolution of December 29, 1975 authorizing the payment of creditors
with unissued shares of the corporation be as it is hereby repealed: Resolved further that the matter as well as the
amount of the creditors claims be given adequate study and consideration by the Board.
> In view of the December 29, 1975 TTTDC Board Resolution transferring to Rovels the said shares of stock as
construction fee, TTTDC Directors Jose Silva, Jr. and Emmanuel Ocampo filed a complaint with the SEC against
Roberto Roxas, TTTDC President, and Eduardo Santos, Rovels President allegeing that there was no meeting of the
TTTDCs Board of Directors on December 29, 1975; that they did not authorize the transfer of TTTDCs shares of
stock to Rovels; that they never signed the alleged minutes of the meeting; and that the signatures of the other two
(2) Directors, Victoriano Leviste and Bienvenido Cruz, Jr., as well as that of TTTDCs Secretary Francisco Carreon,
Jr., were obtained through fraud and misrepresentation. They also alleged that the TTTDC Board Resolution dated
December 29, 1975 was repealed by the March 1, 1976 Resolution. They thus prayed that the transfer of TTTDCs
shares of stock to Rovels pursuant to Resolution dated December 29, 1975 be annulled.
> Commission finds and so holds that the purported board resolution of December 29, 1975, not having been
properly passed upon at a duly constituted board meeting, cannot be recognized as valid and hence, without legal
force and effect. Consequently, the issuance of shares of stock to corporate creditors of the Tagaytay Taal Tourist
Development Corporation is null and void.
> Subsequently, TTTDC, Jose Silva, Emmanuel Ocampo, et. al., and another stockholder of TTTDC, (the SILVA
GROUP, now respondents), filed with the SEC a petition against the SANTOS GROUP who were nominees of
Rovels by virtue of the shares of stock issued pursuant to the December 29, 1975 Resolution, proceeded to act as
directors and officers of TTTDC. In their petition, the SILVA GROUP prayed that they be declared the true and lawful
stockholders and incumbent directors and officers of TTTDC.
> SEC Hearing Officer rendered a Decision in favor of the SILVA GROUP and the decision became final and
executory as no appeal was interposed by either the SILVA GROUP or the SANTOS GROUP.
> However, Rovels, to whom the TTTDC shares of stock (worth P108,000.00) were transferred, claimed that it be
declared the majority stockholder of TTTDC as against SILVA GROUP.

ISSUE:

Whether or not ROVELS (corporation) can be bound by the decision of SEC and the court represented by its
corporate officers?

RULING:

YES. A reading of the above petition shows that Rovels prayer to be declared the majority stockholder of
TTTDC is anchored on the December 29, 1975 TTTDC Board Resolution transferring its shares of stock to Rovels as
construction fee. This Resolution could have vested in Rovels a right to be declared a stockholder of TTTDC.
However, the same petition concedes that the December 29, 1975 Resolution was repealed by the March 1, 1976
Resolution. The petition likewise alleges that there were prior interrelated cases filed with the SEC between the
SILVA and SANTOS GROUPS, namely: (1) SEC Case No. 1322 (wherein the SEC en banc in its Decision dated
September 2, 1982 nullified the TTTDC Board Resolution dated December 29, 1975, which Decision was affirmed
with finality by this Court in G.R. No. 61863) and (2) SEC Case No. 3806 (wherein the SEC declared the SILVA
GROUP as the legitimate stockholders of TTTDC, not Rovels nominees [the SANTOS GROUP]). Clearly, on the face
of its petition, Rovels cannot claim to be the majority stockholder of TTTDC.
Relative to the second assigned error, Rovels contends that it is not bound by the SEC Decision in SEC Case Nos.
1322 and 3806 and in G.R. No. 61863 as it was never a party in any of these cases.

Contrary to its claim, Rovels is bound by the previous SEC Decisions. It must be noted that Eduardo Santos,
President of Rovels, was one of the respondents in both SEC Case Nos. 1322 and 3806. Clearly, Rovels and
Eduardo Santos, being its President, share an identity of interests sufficient to make them privies-in-law, as correctly
found by the Court of Appeals in its assailed Decision.

In the case at bench, there can be no question that the rights claimed by petitioner and its
stockholders/directors/officers who were parties in SEC Case Nos. 1322 and 3806 are identical in that they are both
based on the December 29, 1975 Resolution. Stated differently, they shared an identity of interest from which flowed
an identity of relief sought, namely, to be declared owners of the stocks of TTTDC, premised on the same December
29, 1975 Resolution. x x x. This identity of interest is sufficient to make them privies-in-law, one to the other, and
meets the requisite of substantial identity of parties.

Rovels cannot take refuge in the argument that, as a corporation, it is imbued with personality separate and distinct
from that of the respondents in SEC Case Nos. 1322 and 3806. The legal fiction of separate corporate existence is
not at all times invincible and the same may be pierced when employed as a means to perpetrate a fraud, confuse
legitimate issues, or used as a vehicle to promote unfair objectives or to shield an otherwise blatant violation of the
prohibition against forum-shopping. While it is settled that the piercing of the corporate veil has to be done with
caution, this corporate fiction may be disregarded when necessary in the interest of justice.
SERRANO V. GALLANT MARITIME DIGEST
DECEMBER 20, 2016 ~ VBDIAZ
SERRANO V. GALLANT MARITIME SERVICES,INC.

By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the Decision and
Resolution of the Court of Appeals (CA).

FACTS:

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. (respondents)
under a Philippine Overseas Employment Administration (POEA)-approved Contract of Employment with
the following terms and conditions:

Duration of contract 12 months

Position Chief Officer

Basic monthly salary US$1,400.00

Hours of work 48.0 hours per week

Overtime US$700.00 per month

Vacation leave with pay 7.00 days per month

On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000.00, upon the
assurance and representation of respondents that he would be made Chief Officer by the end of April
1998.

Respondents did not deliver on their promise to make petitioner Chief Officer. Hence, petitioner refused
to stay on as Second Officer and was repatriated to the Philippines on May 26, 1998.

Petitioner’s employment contract was for a period of 12 months or from March 19, 1998 up to March
19, 1999, but at the time of his repatriation on May 26, 1998, he had served only two (2) months and
seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-three (23)
days.

Petitioner filed with the Labor Arbiter (LA) a Complaint against respondents for constructive dismissal
and for payment of his money claims in the total amount of US$26,442.73.

The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner illegal and awarding
him monetary benefits, to wit:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of the
complainant (petitioner) by the respondents in the above-entitled case was illegal and the respondents
are hereby ordered to pay the complainant [petitioner], jointly and severally, in Philippine Currency,
based on the rate of exchange prevailing at the time of payment, the amount of EIGHT THOUSAND
SEVEN HUNDRED SEVENTY U.S. DOLLARS (US $8,770.00), representing the complainant’s salary for three
(3) months of the unexpired portion of the aforesaid contract of employment.

The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack of
merit.

In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on the salary
period of three months only — rather than the entire unexpired portion of nine months and 23 days of
petitioner’s employment contract – applying the subject clause. However, the LA applied the salary rate
of US$2,590.00, consisting of petitioner’s “[b]asic salary, US$1,400.00/month + US$700.00/month, fixed
overtime pay, + US$490.00/month, vacation leave pay = US$2,590.00/compensation per month.”

Respondents appealed to the National Labor Relations Commission (NLRC) to question the finding of the
LA that petitioner was illegally dismissed.

The NLRC modified the LA Decision and corrected the LA’s computation of the lump-sum salary awarded
to petitioner by reducing the applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No.
8042 “does not provide for the award of overtime pay, which should be proven to have been actually
performed, and for vacation leave pay.

Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of
the subject clause. The NLRC denied the motion.

Petitioner filed a Petition for Certiorari with the CA, reiterating the constitutional challenge against the
subject clause. After initially dismissing the petition on a technicality, the CA eventually gave due course
to it, as directed by this Court in its Resolution which granted the petition for certiorari,filed by
petitioner.

The CA affirmed the NLRC ruling on the reduction of the applicable salary rate; however, the CA skirted
the constitutional issue raised by petitioner.

His Motion for Reconsideration having been denied by the CA, petitioner brings his cause to this Court
on the following grounds:

The Court of Appeals and the labor tribunals have decided the case in a way not in accord with
applicable decision of the Supreme Court involving similar issue of granting unto the migrant worker
back wages equal to the unexpired portion of his contract of employment instead of limiting it to three
(3) months.

Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042, the Court
of Appeals gravely erred in law in excluding from petitioner’s award the overtime pay and vacation pay
provided in his contract since under the contract they form part of his salary.

The Court now takes up the full merit of the petition mindful of the extreme importance of the
constitutional question raised therein.
ISSUES:

Whether Section 10 (par 5) of RA 8042 is unconstitutional

Proper computation of the Lump-sum salary to be awarded to petitioner by reason of his illegal
dismissal
Whether the overtime and leave pay should form part of the salary basis in the computation of his
monetary award

The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not disputed.
Likewise not disputed is the salary differential of US$45.00 awarded to petitioner in all three fora.

Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at the
monthly rate of US$1,400.00 covering the period of three months out of the unexpired portion of nine
months and 23 days of his employment contract or a total of US$4,200.00.

Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the
US$4,200.00 awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a total of
US$25,382.23, equivalent to his salaries for the entire nine months and 23 days left of his employment
contract, computed at the monthly rate of US$2,590.00.31

Arguments of the Petitioner

For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section 10,
Republic Act (R.A.) No. 8042, violates the OFWs’ constitutional rights in that it impairs the terms of their
contract, deprives them of equal protection and denies them due process.

The Arguments of Respondents

Respondents contend that the constitutional issue should not be entertained, for this was belatedly
interposed by petitioner in his appeal before the CA, and not at the earliest opportunity, which was
when he filed an appeal before the NLRC.40

The Arguments of the Solicitor General

The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its provisions
could not have impaired petitioner’s 1998 employment contract. Rather, R.A. No. 8042 having preceded
petitioner’s contract, the provisions thereof are deemed part of the minimum terms of petitioner’s
employment, especially on the matter of money claims, as this was not stipulated upon by the parties.
The Court’s Ruling:

First Issue

Does the subject clause violate Section 1, Article III of the Constitution, and Section 18, Article II and
Section 3, Article XIII on Labor as protected sector?

The answer is in the affirmative.

Section 1, Article III of the Constitution guarantees:

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 law.

Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without distinction
as to place of deployment, full protection of their rights and welfare.

To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to
economic security and parity: all monetary benefits should be equally enjoyed by workers of similar
category, while all monetary obligations should be borne by them in equal degree; none should be
denied the protection of the laws which is enjoyed by, or spared the burden imposed on, others in like
circumstances.

Imbued with the same sense of “obligation to afford protection to labor,” the Court in the present case
also employs the standard of strict judicial scrutiny, for it perceives in the subject clause a suspect
classification prejudicial to OFWs.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a
closer examination reveals that the subject clause has a discriminatory intent against, and an invidious
impact on OFWs

The subject clause does not state or imply any definitive governmental purpose; and it is for that precise
reason that the clause violates not just petitioner’s right to equal protection, but also her right to
substantive due process under Section 1, Article III of the Constitution.

Second Issue

It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired portions
thereof, were treated alike in terms of the computation of their monetary benefits in case of illegal
dismissal. Their claims were subjected to a uniform rule of computation: their basic salaries multiplied
by the entire unexpired portion of their employment contracts.

The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation of
the money claims of illegally dismissed OFWs based on their employment periods, in the process singling
out one category whose contracts have an unexpired portion of one year or more and subjecting them
to the peculiar disadvantage of having their monetary awards limited to their salaries for 3 months or
for the unexpired portion thereof, whichever is less, but all the while sparing the other category from
such prejudice, simply because the latter’s unexpired contracts fall short of one year.
Prior to R.A. No. 8042, a uniform system of computation of the monetary awards of illegally dismissed
OFWs was in place. This uniform system was applicable even to local workers with fixed-term
employment.

The subject clause does not state or imply any definitive governmental purpose; and it is for that precise
reason that the clause violates not just petitioner’s right to equal protection, but also her right to
substantive due process under Section 1, Article III of the Constitution.

The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired
period of nine months and 23 days of his employment contract, pursuant to law and jurisprudence prior
to the enactment of R.A. No. 8042.

Third Issue

Petitioner contends that his overtime and leave pay should form part of the salary basis in the
computation of his monetary award, because these are fixed benefits that have been stipulated into his
contract.

Petitioner is mistaken.

The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like petitioner,
DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in
which salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses;
whereas overtime pay is compensation for all work “performed” in excess of the regular eight hours,
and holiday pay is compensation for any work “performed” on designated rest days and holidays.

In the same vein, the claim for the day’s leave pay for the unexpired portion of the contract is
unwarranted since the same is given during the actual service of the seamen.

WHEREFORE, the Court GRANTS the Petition. The subject clause “or for three months for every year of
the unexpired term, whichever is less” in the 5th paragraph of Section 10 of Republic Act No. 8042 is
DECLARED UNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005 Resolution of the
Court of Appeals are MODIFIED to the effect that petitioner is AWARDED his salaries for the entire
unexpired portion of his employment contract consisting of nine months and 23 days computed at the
rate of US$1,400.00 per month.
CLAUDIO S. YAP v. THENAMARIS SHIP'S MANAGEMENT, GR No. 179532, 2011-05-30
Facts:
Yap was employed as electrician of the vessel, M/T SEASCOUT... by Intermare Maritime
Agencies, Inc. in behalf of its principal, Vulture Shipping Limited.  The contract of
employment... was for a duration of 12 months
Yap boarded M/T SEASCOUT and commenced his job as electrician.  However... the
vessel was sold.
Yap, along with the other crewmembers, was informed... that the same was sold and will be
scrapped.
Yap received his seniority bonus, vacation bonus, extra bonus along with the scrapping
bonus.  However, with respect to the payment of his wage, he refused to accept the
payment of one-month basic wage.
He insisted that he was entitled to the payment of the unexpired... portion of his contract
since he was illegally dismissed from employment.
He alleged that he opted for immediate transfer but none was made.
[Respondents], for their part, contended that
Yap's employment contract was validly terminated due to the sale of the vessel and no
arrangement was made for Yap's transfer to Thenamaris' other vessels.
Thus,... Yap... filed a complaint for Illegal Dismissal with Damages... before the Labor
Arbiter (LA).
laimed that he was entitled to the salaries corresponding to the unexpired portion of his
contract.
LA rendered a decision... in favor of petitioner... respondents sought recourse from the
NLRC.
In its decision
, the NLRC affirmed the LA's findings
Respondents filed a Motion for Partial Reconsideration... the NLRC reversed its earlier
Decision, holding that "there can be no choice to grant only three (3) months salary for
every year of the unexpired term because there is no full year of unexpired term which this
can be applied."
Hence -
CA affirmed the findings and ruling of the LA and the NLRC... petitioner posits that,
assuming said... provision of law is constitutional, the CA gravely abused its discretion when
it reduced petitioner's backwages from nine months to three months as his nine-month
unexpired term cannot accommodate the lesser relief of three months for every year of the
unexpired term.[24]
Issues:
Whether or not Section 10 of R.A. [No.] 8042, to the extent that it affords an illegally
dismissed migrant worker the lesser benefit of - "salaries for [the] unexpired portion of his
employment contract or for three (3) months for every... year of the unexpired term,
whichever is less" - is constitutional
Assuming that it is, whether or not the Court of Appeals gravely erred in granting petitioner
only three (3) months backwages when his unexpired term of 9 months is far short of the
"every year of the unexpired term" threshold.
Ruling:
the 5th paragraph of Section 10, R.A. No. 8042, is violative of Section 1,... Article III and
Section 3,... Article XIII of the
Constitution to the extent that it gives an erring employer the option to pay an illegally
dismissed migrant worker only three months for every year of the unexpired term of his
contract; that said provision of law has long been a source of abuse by callous employers
against... migrant workers
; and that said provision violates the equal protection clause under the Constitution
because, while illegally dismissed local workers are guaranteed under the Labor Code of
reinstatement with full backwages computed from the time compensation was withheld
from... them up to their actual reinstatement, migrant workers, by virtue of Section 10 of
R.A. No. 8042, have to waive nine months of their collectible backwages every time they
have a year of unexpired term of contract to reckon with.
The petition is impressed with merit
Veril... y, we have already declared in Serrano that the clause "or for three months for every
year of the unexpired term, whichever is less" provided in the 5th paragraph of Section 10 of
R.A. No. 8042 is unconstitutional for being violative of... the rights of Overseas Filipino
Workers (OFWs) to equal protection of the laws. In an exhaustive discussion of the
intricacies and ramifications of the said clause, this Court, in Serrano, pertinently held:
The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged,
it imposes a 3-month cap on the claim of OFWs with an unexpired portion of... one year or
more in their contracts, but none on the claims of other OFWs or local workers with fixed-
term employment. The subject clause singles out one classification of OFWs and burdens it
with a peculiar disadvantage.
As a general rule, an unconstitutional act is not a law; it confers no rights; it imposes no
duties; it affords no protection; it creates no office; it is inoperative as if it has not been
passed at all.
The doctrine of operative fact, as an exception to the general rule, only applies as a matter
of equity and fair play. It nullifies the effects of an unconstitutional law by recognizing that
the existence of a statute prior to a determination of unconstitutionality... is an operative fact
and may have consequences which cannot always be ignored.
The doctrine is applicable when a declaration of unconstitutionality will impose an undue
burden on those who have relied on the invalid law.
Following Serrano, we hold that this case should not be included in the aforementioned
exception. After all, it was not the fault of petitioner that he lost his job due to an act of illegal
dismissal committed by respondents.
To rule otherwise would be iniquitous to... petitioner and other OFWs, and would, in effect,
send a wrong signal that principals/employers and recruitment/manning agencies may
violate an OFW's security of tenure which an employment contract embodies and actually
profit from such violation based on an unconstitutional... provision of law.
WHEREFORE, the Petition is GRANTED.
petitioner is AWARDED his salaries for the entire unexpired portion of his employment...
contract consisting of nine months
General Milling Corporation vs. Torres
G.R No. 9366, April 22, 1991

FACTS:
Earl Timothy Cone is a US citizen, who was hired by General Milling as a sports consultant and assistant
coach.  He possessed an alien employment permit which was changed to pre-arranged employee by the
Board of Special Inquiry of the Commission on Immigration and Deportation. GMC requested that Cone’s
employment permit be changed to a full-fledged coach, which was contested by The Basketball Coaches
Association of the Philippines. Alleging that GMC failed to show that there is no competent person in the
Philippines to do the coaching job. Secretary of Labor cancelled Cone’s employment permit.

ISSUE:
Whether or not the Secretary of Labor act with grave abuse of discretion in revoking Cone’s Alien
Employment Permit?

HELD:
The Secretary of Labor did not act with grave abuse of discretion in revoking Cone’s Alien Employment
Permit. GMC’s claim that hiring of a foreign coach is an employer’s prerogative has no legal basis. Under
Section 40 of the Labor Code, an employer seeking employment of an alien must first obtain an
employment permit from the Department of labor. GMC’s right to choose whom to employ is limited by the
statutory requirement of an employment permit.

            The Labor Code empowers the Labor Secretary to determine as to the

availability of the services of a “person in the Philippines who is competent, able and
willing at the time of the application to perform the services for which an alien is
desired.”