Republic of the Philippines

Supreme Court
Manila
EN BANC
ANTONIO M. SERRANO,
Petitioner,

G.R. No. 167614

Present:

- versus -

PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
TINGA,
CHICO-NAZARIO,
VELASCO, Jr.,
NACHURA,
LEONARDO-DE CASTRO,
BRION, and
PERALTA, JJ.

GALLANT MARITIME SERVICES,

INC. and MARLOW NAVIGATION
CO., INC.,
Promulgated:
Respondents.
March 24, 2009
x----------------------------------------------------------x
Keyword: Illegal Dismissal, Protection of Labor,Equal Protection

DECISION

AUSTRIA-MARTINEZ, J.:

For decades, the toil of solitary migrants has helped lift entire families and
communities out of poverty. Their earnings have built houses, provided health care,
equipped schools and planted the seeds of businesses. They have woven together the world
by transmitting ideas and knowledge from country to country. They have provided the
dynamic human link between cultures, societies and economies. Yet, only recently have
we begun to understand not only how much international migration impacts
development, but how smart public policies can magnify this effect.
United Nations Secretary-General Ban Ki-Moon
Global Forum on Migration and Development
Brussels, July 10, 2007[1]

For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the
5 paragraph of Section 10, Republic Act (R.A.) No. 8042,[2] to wit:
th

Sec. 10. Money Claims. - x x x In case of termination of overseas employment

without just, valid or authorized cause as defined by law or contract, the workers shall be
entitled to the full reimbursement of his placement fee with interest of twelve percent
(12%) per annum, plus his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less.
x x x x (Emphasis and underscoring supplied)

does not magnify the contributions of overseas Filipino workers (OFWs) to national
development, but exacerbates the hardships borne by them by unduly limiting their
entitlement in case of illegal dismissal to their lump-sum salary either for the unexpired
portion of their employment contract or for three months for every year of the unexpired
term, whichever is less (subject clause). Petitioner claims that the last clause violates the
OFWs' constitutional rights in that it impairs the terms of their contract, deprives them of
equal protection and denies them due process.
By way of Petition for Review under Rule 45 of the Rules of Court, petitioner
assails the December 8, 2004 Decision[3] and April 1, 2005 Resolution[4] of the Court of
Appeals (CA), which applied the subject clause, entreating this Court to declare the subject
clause unconstitutional.

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
Position
Basic monthly salary
Hours of work
Overtime
Vacation leave with pay

12 months
Chief Officer
US$1,400.00
48.0 hours per week
US$700.00 per month
7.00 days per month[5]

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.[6]
Respondents did not deliver on their promise to make petitioner Chief Officer.
[7]
Hence, petitioner refused to stay on as Second Officer and was repatriated to
the Philippines on May 26, 1998.[8]
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 [9] against respondents for
constructive dismissal and for payment of his money claims in the total amount of
US$26,442.73, broken down as follows:
May 27/31, 1998 (5 days) incl. Leave pay
June 01/30, 1998
July 01/31, 1998
August 01/31, 1998
Sept. 01/30, 1998
Oct. 01/31,
1998
Nov.
1998
Dec.
1998
Jan. 01/31,

US$

413.90
2,590.00
2,590.00
2,590.00
2,590.00
2,590.00

01/30,

2,590.00

01/31,

2,590.00
2,590.00

1999
Feb.
1999
Mar.
pay

1/19,

1999

(19

days)

incl.

01/28,

2,590.00

leave

1,640.00
--------------------------------------------------------------------------------

25,382.23
Amount adjusted to chief mate's salary
(March
19/31,
1998
to
April
1998)
+

1,060.50[10]

1/30,

----------------------------------------------------------------------------------------------

TOTAL CLAIM

US$
26,442.73[11]

as well as moral and exemplary damages and attorney's fees.

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 $8,770.00), representing the complainants salary for three (3)
months of the unexpired portion of the aforesaid contract of employment.
The respondents are likewise ordered to pay the complainant [petitioner], jointly
and severally, in Philippine Currency, based on the rate of exchange prevailing at the time
of payment, the amount of FORTY FIVE U.S. DOLLARS (US$ 45.00), [12] representing
the complainants claim for a salary differential. In addition, the respondents are hereby
ordered to pay the complainant, jointly and severally, in Philippine Currency, at the
exchange rate prevailing at the time of payment, the complainants (petitioner's) claim for
attorneys fees equivalent to ten percent (10%) of the total amount awarded to the aforesaid
employee under this Decision.
The claims of the complainant for moral and exemplary damages are hereby
DISMISSED for lack of merit.
All other claims are hereby DISMISSED.
SO ORDERED.[13] (Emphasis supplied)

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.[14]
Respondents appealed[15] to the National Labor Relations Commission (NLRC) to
question the finding of the LA that petitioner was illegally dismissed.
Petitioner also appealed[16] to the NLRC on the sole issue that the LA erred in not
applying the ruling of the Court in Triple Integrated Services, Inc. v. National Labor
Relations Commission[17] that in case of illegal dismissal, OFWs are entitled to their
salaries for the unexpired portion of their contracts.[18]
In a Decision dated June 15, 2000, the NLRC modified the LA Decision, to wit:
WHEREFORE, the Decision dated 15 July 1999 is MODIFIED. Respondents are
hereby ordered to pay complainant, jointly and severally, in Philippine currency, at the
prevailing rate of exchange at the time of payment the following:
1.
2.
3.

Three (3) months salary

$1,400 x 3
Salary differential
US$4,245.00
10% Attorneys fees
TOTAL

US$4,200.00
45.00
424.50
US$4,669.50

The other findings are affirmed.

SO ORDERED.[19]

The NLRC 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.[20]
Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the
constitutionality of the subject clause.[21] The NLRC denied the motion.[22]

Petitioner filed a Petition for Certiorari[23] with the CA, reiterating the constitutional
challenge against the subject clause.[24] After initially dismissing the petition on a
technicality, the CA eventually gave due course to it, as directed by this Court in its
Resolution dated August 7, 2003which granted the petition for certiorari, docketed as
G.R. No. 151833, filed by petitioner.
In a Decision dated December 8, 2004, the CA affirmed the NLRC ruling on the
reduction of the applicable salary rate; however, the CA skirted the constitutional issue
raised by petitioner.[25]
His Motion for Reconsideration[26] having been denied
[27]
petitioner brings his cause to this Court on the following grounds:

by

the

CA,

I
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
II
In the alternative that the Court of Appeals and the Labor Tribunals were merely
applying their interpretation of Section 10 of Republic Act No. 8042, it is submitted that the
Court of Appeals gravely erred in law when it failed to discharge its judicial duty to decide
questions of substance not theretofore determined by the Honorable Supreme Court,
particularly, the constitutional issues raised by the petitioner on the constitutionality of said
law, which unreasonably, unfairly and arbitrarily limits payment of the award for back
wages of overseas workers to three (3) months.
III
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 petitioners
award the overtime pay and vacation pay provided in his contract since under the contract
they form part of his salary.[28]

On February 26, 2008, petitioner wrote the Court to withdraw his petition as he is
already old and sickly, and he intends to make use of the monetary award for his medical
treatment and medication.[29] Required to comment, counsel for petitioner filed a motion,

urging the court to allow partial execution of the undisputed monetary award and, at the
same time, praying that the constitutional question be resolved.[30]
Considering that the parties have filed their respective memoranda, the Court now
takes up the full merit of the petition mindful of the extreme importance of the
constitutional question raised therein.
On the first and second issues
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. What remains disputed is only the computation of
the lump-sum salary to be awarded to petitioner by reason of his illegal dismissal.
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]
The Arguments of Petitioner
Petitioner contends that the subject clause is unconstitutional because it unduly
impairs the freedom of OFWs to negotiate for and stipulate in their overseas employment
contracts a determinate employment period and a fixed salary package.[32] It also impinges
on the equal protection clause, for it treats OFWs differently from local Filipino workers
(local workers) by putting a cap on the amount of lump-sum salary to which OFWs are
entitled in case of illegal dismissal, while setting no limit to the same monetary award for
local workers when their dismissal is declared illegal; that the disparate treatment is not
reasonable as there is no substantial distinction between the two groups; [33] and that it

defeats Section 18,[34] Article II of the Constitution which guarantees the protection of the
rights and welfare of all Filipino workers, whether deployed locally or overseas.[35]
Moreover, petitioner argues that the decisions of the CA and the labor tribunals are
not in line with existing jurisprudence on the issue of money claims of illegally dismissed
OFWs. Though there are conflicting rulings on this, petitioner urges the Court to sort them
out for the guidance of affected OFWs.[36]
Petitioner further underscores that the insertion of the subject clause into R.A. No.
8042 serves no other purpose but to benefit local placement agencies. He marks the
statement made by the Solicitor General in his Memorandum, viz.:
Often, placement agencies, their liability being solidary, shoulder the payment of
money claims in the event that jurisdiction over the foreign employer is not acquired by the
court or if the foreign employer reneges on its obligation. Hence, placement agencies that
are in good faith and which fulfill their obligations are unnecessarily penalized for the acts
of the foreign employer. To protect them and to promote their continued helpful
contribution in deploying Filipino migrant workers, liability for money claims was
reduced under Section 10 of R.A. No. 8042. [37] (Emphasis supplied)

Petitioner argues that in mitigating the solidary liability of placement agencies, the
subject clause sacrifices the well-being of OFWs. Not only that, the provision makes
foreign employers better off than local employers because in cases involving the illegal
dismissal of employees, foreign employers are liable for salaries covering a maximum of
only three months of the unexpired employment contract while local employers are liable
for the full lump-sum salaries of their employees. As petitioner puts it:
In terms of practical application, the local employers are not limited to the amount
of backwages they have to give their employees they have illegally dismissed, following
well-entrenched and unequivocal jurisprudence on the matter. On the other hand, foreign
employers will only be limited to giving the illegally dismissed migrant workers the
maximum of three (3) months unpaid salaries notwithstanding the unexpired term of the
contract that can be more than three (3) months.[38]

Lastly, petitioner claims that the subject clause violates the due process clause, for it
deprives him of the salaries and other emoluments he is entitled to under his fixed-period
employment contract.[39]
The Arguments of Respondents

In their Comment and Memorandum, 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.[42]
Moreover, the OSG emphasizes that OFWs and local workers differ in terms of the
nature of their employment, such that their rights to monetary benefits must necessarily be
treated differently. The OSG enumerates the essential elements that distinguish OFWs
from local workers: first, while local workers perform their jobs within Philippine
territory, OFWs perform their jobs for foreign employers, over whom it is difficult for our
courts to acquire jurisdiction, or against whom it is almost impossible to enforce judgment;
and second, as held in Coyoca v. National Labor Relations Commission[43] and Millares v.
National Labor Relations Commission,[44] OFWs are contractual employees who can never
acquire regular employment status, unlike local workers who are or can become regular
employees. Hence, the OSG posits that there are rights and privileges exclusive to local
workers, but not available to OFWs; that these peculiarities make for a reasonable and
valid basis for the differentiated treatment under the subject clause of the money claims of
OFWs who are illegally dismissed. Thus, the provision does not violate the equal
protection clause nor Section 18, Article II of the Constitution.[45]
Lastly, the OSG defends the rationale behind the subject clause as a police power
measure adopted to mitigate the solidary liability of placement agencies for this redounds
to the benefit of the migrant workers whose welfare the government seeks to
promote. The survival of legitimate placement agencies helps [assure] the government
that migrant workers are properly deployed and are employed under decent and humane
conditions.[46]
The Court's Ruling

The Court sustains petitioner on the first and second issues.

When the Court is called upon to exercise its power of judicial review of the acts
of its co-equals, such as the Congress, it does so only when these conditions obtain: (1) that
there is an actual case or controversy involving a conflict of rights susceptible of judicial
determination;[47](2) that the constitutional question is raised by a proper party[48] and at the
earliest opportunity;[49] and (3) that the constitutional question is the very lis mota of the
case,[50] otherwise the Court will dismiss the case or decide the same on some other
ground.[51]
Without a doubt, there exists in this case an actual controversy directly involving
petitioner who is personally aggrieved that the labor tribunals and the CA computed his
monetary award based on the salary period of three months only as provided under the
subject clause.
The constitutional challenge is also timely. It should be borne in mind that the
requirement that a constitutional issue be raised at the earliest opportunity entails the
interposition of the issue in the pleadings before a competent court, such that, if the issue is
not raised in the pleadings before that competent court, it cannot be considered at the trial
and, if not considered in the trial, it cannot be considered on appeal. [52] Records disclose
that the issue on the constitutionality of the subject clause was first raised, not in petitioner's
appeal with the NLRC, but in his Motion for Partial Reconsideration with said labor
tribunal,[53] and reiterated in his Petition for Certiorari before the CA.[54] Nonetheless, the
issue is deemed seasonably raised because it is not the NLRC but the CA which has the
competence to resolve the constitutional issue. The NLRC is a labor tribunal that merely
performs a quasi-judicial function its function in the present case is limited to
determining questions of fact to which the legislative policy of R.A. No. 8042 is to be
applied and to resolving such questions in accordance with the standards laid down by the
law itself;[55] thus, its foremost function is to administer and enforce R.A. No. 8042, and
not to inquire into the validity of its provisions. The CA, on the other hand, is vested with
the power of judicial review or the power to declare unconstitutional a law or a provision
thereof, such as the subject clause.[56] Petitioner's interposition of the constitutional issue
before the CA was undoubtedly seasonable. The CA was therefore remiss in failing to
take up the issue in its decision.

The third condition that the constitutional issue be critical to the resolution of the
case likewise obtains because the monetary claim of petitioner to his lump-sum salary for
the entire unexpired portion of his 12-month employment contract, and not just for a period
of three months, strikes at the very core of the subject clause.
Thus, the stage is all set for the determination of the constitutionality of the subject
clause.
Does the subject clause violate Section 10,
Article III of the Constitution on non-impairment
of contracts?
The answer is in the negative.
Petitioner's claim that the subject clause unduly interferes with the stipulations in his
contract on the term of his employment and the fixed salary package he will receive [57] is
not tenable.
Section 10, Article III of the Constitution provides:
No law impairing the obligation of contracts shall be passed.

The prohibition is aligned with the general principle that laws newly enacted have
only a prospective operation,[58] and cannot affect acts or contracts already perfected;
[59]
however, as to laws already in existence, their provisions are read into contracts and
deemed a part thereof.[60] Thus, the non-impairment clause under Section 10, Article II is
limited in application to laws about to be enacted that would in any way derogate from
existing acts or contracts by enlarging, abridging or in any manner changing the intention
of the parties thereto.
As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded
the execution of the employment contract between petitioner and respondents in
1998. Hence, it cannot be argued that R.A. No. 8042, particularly the subject clause,
impaired the employment contract of the parties. Rather, when the parties executed their

1998 employment contract, they were deemed to have incorporated into it all the
provisions of R.A. No. 8042.
But even if the Court were to disregard the timeline, the subject clause may not be
declared unconstitutional on the ground that it impinges on the impairment clause, for the
law was enacted in the exercise of the police power of the State to regulate a business,
profession or calling, particularly the recruitment and deployment of OFWs, with the noble
end in view of ensuring respect for the dignity and well-being of OFWs wherever they
may be employed.[61] Police power legislations adopted by the State to promote the health,
morals, peace, education, good order, safety, and general welfare of the people are
generally applicable not only to future contracts but even to those already in existence, for
all private contracts must yield to the superior and legitimate measures taken by the State to
promote public welfare.[62]
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 a 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,[63] Article II and Section 3,[64] 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.[65]

Such rights are not absolute but subject to the inherent power of Congress to
incorporate, when it sees fit, a system of classification into its legislation; however, to be
valid, the classification must comply with these requirements: 1) it is based on substantial
distinctions; 2) it is germane to the purposes of the law; 3) it is not limited to existing
conditions only; and 4) it applies equally to all members of the class.[66]
There are three levels of scrutiny at which the Court reviews the constitutionality of
a classification embodied in a law: a) the deferential or rational basis scrutiny in which the
challenged classification needs only be shown to be rationally related to serving a
legitimate state interest;[67] b) the middle-tier or intermediate scrutiny in which the
government must show that the challenged classification serves an important state
interest and that the classification is at least substantially related to serving that
interest;[68] and c) strict judicial scrutiny[69] in which a legislative classification which
impermissibly interferes with the exercise of a fundamental right[70] or operates to the
peculiar disadvantage of a suspect class[71] is presumed unconstitutional, and the burden is
upon the government to prove that the classification is necessary to achieve acompelling
state interest and that it is the least restrictive means to protect such interest.[72]
Under American jurisprudence, strict judicial scrutiny is triggered by suspect
classifications[73] based on race[74] or gender[75] but not when the classification is drawn
along income categories.[76]
It is different in the Philippine setting. In Central Bank (now Bangko Sentral ng
Pilipinas) Employee Association, Inc. v. Bangko Sentral ng Pilipinas, [77] the
constitutionality of a provision in the charter of the Bangko Sentral ng Pilipinas (BSP), a
government financial institution (GFI), was challenged for maintaining its rank-and-file
employees under the Salary Standardization Law (SSL), even when the rank-and-file
employees of other GFIs had been exempted from the SSL by their respective
charters. Finding that the disputed provision contained a suspect classification based on
salary grade, the Court deliberately employed the standard of strict judicial scrutiny in its
review of the constitutionality of said provision. More significantly, it was in this case that
the Court revealed the broad outlines of its judicial philosophy, to wit:
Congress retains its wide discretion in providing for a valid classification, and its
policies should be accorded recognition and respect by the courts of justice except when

they run afoul of the Constitution. The deference stops where the classification violates a
fundamental right, or prejudices persons accorded special protection by the
Constitution. When these violations arise, this Court must discharge its primary role as the
vanguard of constitutional guaranties, and require a stricter and more exacting adherence to
constitutional limitations. Rational basis should not suffice.
Admittedly, the view that prejudice to persons accorded special protection by the
Constitution requires a stricter judicial scrutiny finds no support in American or English
jurisprudence. Nevertheless, these foreign decisions and authorities are not per
se controlling in this jurisdiction. At best, they are persuasive and have been used to
support many of our decisions. We should not place undue and fawning reliance upon them
and regard them as indispensable mental crutches without which we cannot come to our
own decisions through the employment of our own endowments. We live in a different
ambience and must decide our own problems in the light of our own interests and needs,
and of our qualities and even idiosyncrasies as a people, and always with our own concept
of law and justice. Our laws must be construed in accordance with the intention of our own
lawmakers and such intent may be deduced from the language of each law and the context
of other local legislation related thereto. More importantly, they must be construed to serve
our own public interest which is the be-all and the end-all of all our laws. And it need not
be stressed that our public interest is distinct and different from others.
xxxx
Further, the quest for a better and more equal world calls for the use of equal
protection as a tool of effective judicial intervention.
Equality is one ideal which cries out for bold attention and action in the
Constitution. The Preamble proclaims equality as an ideal precisely in protest against
crushing inequities in Philippine society. The command to promote social justice in Article
II, Section 10, in all phases of national development, further explicitated in Article XIII,
are clear commands to the State to take affirmative action in the direction of greater
equality. x x x [T]here is thus in the Philippine Constitution no lack of doctrinal support for
a more vigorous state effort towards achieving a reasonable measure of equality.
Our present Constitution has gone further in guaranteeing vital social and
economic rights to marginalized groups of society, including labor. Under the policy of
social justice, the law bends over backward to accommodate the interests of the working
class on the humane justification that those with less privilege in life should have more
in law. And the obligation to afford protection to labor is incumbent not only on the
legislative and executive branches but also on the judiciary to translate this pledge into a
living reality. Social justice calls for the humanization of laws and the equalization of
social and economic forces by the State so that justice in its rational and objectively
secular conception may at least be approximated.
xxxx

Under most circumstances, the Court will exercise judicial restraint in deciding
questions of constitutionality, recognizing the broad discretion given to Congress in
exercising its legislative power. Judicial scrutiny would be based on the rational basis
test, and the legislative discretion would be given deferential treatment.
But if the challenge to the statute is premised on the denial of a fundamental right,
or the perpetuation of prejudice against persons favored by the Constitution with special
protection, judicial scrutiny ought to be more strict. A weak and watered down view
would call for the abdication of this Courts solemn duty to strike down any law repugnant
to the Constitution and the rights it enshrines. This is true whether the actor committing the
unconstitutional act is a private person or the government itself or one of its
instrumentalities. Oppressive acts will be struck down regardless of the character or nature
of the actor.
xxxx
In the case at bar, the challenged proviso operates on the basis of the salary grade
or officer-employee status. It is akin to a distinction based on economic class and status,
with the higher grades as recipients of a benefit specifically withheld from the lower
grades. Officers of the BSP now receive higher compensation packages that are
competitive with the industry, while the poorer, low-salaried employees are limited to the
rates prescribed by the SSL. The implications are quite disturbing: BSP rank-and-file
employees are paid the strictly regimented rates of the SSL while employees higher in rank
- possessing higher and better education and opportunities for career advancement - are
given higher compensation packages to entice them to stay. Considering that majority, if
not all, the rank-and-file employees consist of people whose status and rank in life are
less and limited, especially in terms of job marketability, it is they - and not the officers who have the real economic and financial need for the adjustment . This is in accord
with the policy of the Constitution "to free the people from poverty, provide adequate social
services, extend to them a decent standard of living, and improve the quality of life for
all. Any act of Congress that runs counter to this constitutional desideratum deserves
strict scrutiny by this Court before it can pass muster. (Emphasis supplied)

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 at two levels:
First, OFWs with employment contracts of less than one year vis--vis OFWs
with employment contracts of one year or more;

Second, among OFWs with employment contracts of more than one year; and
Third, OFWs vis--vis local workers with fixed-period employment;

OFWs with employment contracts of less

than
one
year vis--vis OFWs
with
employment contracts of one year or more
As pointed out by petitioner,[78] it was in Marsaman Manning Agency, Inc. v.
National Labor Relations Commission[79] (Second Division, 1999) that the Court laid down
the following rules on the application of the periods prescribed under Section 10(5) of R.A.
No. 804, to wit:
A plain reading of Sec. 10 clearly reveals that the choice of which amount to
award an illegally dismissed overseas contract worker, i.e., whether his salaries for the
unexpired portion of his employment contract or three (3) months salary for every year
of the unexpired term, whichever is less, comes into play only when the employment
contract concerned has a term of at least one (1) year or more. This is evident from the
words for every year of the unexpired term which follows the words salaries x x x for
three months. To follow petitioners thinking that private respondent is entitled to three
(3) months salary only simply because it is the lesser amount is to completely disregard and
overlook some words used in the statute while giving effect to some. This is contrary to the
well-established rule in legal hermeneutics that in interpreting a statute, care should be
taken that every part or word thereof be given effect since the law-making body is
presumed to know the meaning of the words employed in the statue and to have used them
advisedly. Ut res magis valeat quam pereat.[80](Emphasis supplied)

In Marsaman, the OFW involved was illegally dismissed two months into his 10-month
contract, but was awarded his salaries for the remaining 8 months and 6 days of his
contract.
Prior to Marsaman, however, there were two cases in which the Court made
conflicting rulings on Section 10(5). One was Asian Center for Career and Employment
System and Services v. National Labor Relations Commission (Second Division, October
1998),[81] whichinvolved an OFW who was awarded a two-year employment contract, but
was dismissed after working for one year and two months. The LA declared his dismissal
illegal and awarded him SR13,600.00 as lump-sum salary covering eight months,
the unexpired portion of his contract. On appeal, the Court reduced the award to
SR3,600.00 equivalent to his three months salary, this being the lesser value, to wit:

Under Section 10 of R.A. No. 8042, a worker dismissed from overseas

employment without just, valid or authorized cause is entitled to his salary for the
unexpired portion of his employment contract or for three (3) months for every year of the
unexpired term, whichever is less.
In the case at bar, the unexpired portion of private respondents employment
contract is eight (8) months. Private respondent should therefore be paid his basic salary
corresponding to three (3) months or a total of SR3,600.[82]

Another was Triple-Eight Integrated Services, Inc. v. National Labor Relations

Commission (Third Division, December 1998),[83]which involved an OFW (therein
respondent Erlinda Osdana) who was originally granted a 12-month contract, which was
deemed renewed for another 12 months. After serving for one year and seven-and-a-half
months, respondent Osdana was illegally dismissed, and the Court awarded her salaries for
the entire unexpired portion of four and one-half months of her contract.
The Marsaman interpretation of Section 10(5) has since been adopted in the
following cases:

Case Title

Contract
Period

Period of
Service

Unexpired
Period

Period Applied in
the Computation of
the Monetary
Award

Skippers v.
Maguad[84]

6 months

2 months

4 months

4 months

Bahia Shippin
g v. Reynaldo
Chua[85]

9 months

8 months

4 months

4 months

Centennial
9 months
Transmarine v.
dela Cruz l[86]

4 months

5 months

5 months

Talidano v.
Falcon[87]

12 months

3 months

9 months

3 months

Univan v.
CA [88]

12 months

3 months

9 months

3 months

Oriental v.
CA [89]

12 months more than 2

months

10 months

3 months

PCL v.

12 months more than 2

more or less 9

3 months

NLRC[90]

months

months

Olarte v.
Nayona[91]

12 months

21 days

11 months and 9
days

3 months

JSS v.
Ferrer[92]

12 months

16 days

11 months and 24
days

3 months

Pentagon
v. 12 months
[93]
Adelantar

9 months and 2 months and 23

7 days
days

2 months and 23
days

Phil. Employ
v. Paramio,
et al.[94]

12 months

10 months

2 months

Unexpired portion

Flourish
Maritime v.
Almanzor [95]

2 years

26 days

23 months and 4
days

6 months or 3
months for each
year of contract

1 month

1 year, 9 months
and 28 days

6 months or 3
months for each
year of contract

Athenna
1 year, 10
Manpower v. months and
Villanos [96]
28 days

As the foregoing matrix readily shows, the subject clause classifies OFWs into two
categories. The first category includes OFWs with fixed-period employment contracts of
less than one year; in case of illegal dismissal, they are entitled to their salaries for the entire
unexpired portion of their contract. The second category consists of OFWs with fixedperiod employment contracts of one year or more; in case of illegal dismissal, they are
entitled to monetary award equivalent to only 3 months of the unexpired portion of their
contracts.
The disparity in the treatment of these two groups cannot be
discounted. In Skippers, the respondent OFW worked for only 2 months out of his 6month contract, but was awarded his salaries for the remaining 4 months. In contrast, the
respondent OFWs in Oriental and PCL who had also worked for about 2 months out of
their 12-month contracts were awarded their salaries for only 3 months of the unexpired
portion of their contracts. Even the OFWs involved in Talidano and Univan who
had worked for a longer period of 3 months out of their 12-month contracts before being
illegally dismissed were awarded their salaries for only 3 months.
To illustrate the disparity even more vividly, the Court assumes a hypothetical
OFW-A with an employment contract of 10 months at a monthly salary rate of
US$1,000.00 and a hypothetical OFW-B with an employment contract of 15 months with
the same monthly salary rate of US$1,000.00. Both commenced work on the same day

and under the same employer, and were illegally dismissed after one month of
work. Under the subject clause, OFW-A will be entitled to US$9,000.00, equivalent to his
salaries for the remaining 9 months of his contract, whereas OFW-B will be entitled to only
US$3,000.00, equivalent to his salaries for 3 months of the unexpired portion of his
contract, instead of US$14,000.00 for the unexpired portion of 14 months of his contract,
as the US$3,000.00 is the lesser amount.
The disparity becomes more aggravating when the Court takes into account
jurisprudence that, prior to the effectivity of R.A. No. 8042 on July 14, 1995,[97] illegally
dismissed OFWs, no matter how long the period of their employment contracts, were
entitled to their salaries for the entire unexpired portions of their contracts. The matrix
below speaks for itself:
Case Title

Contract
Period

Period of
Service

Unexpired
Period

Period Applied in the

Computation of the
Monetary Award

ATCI v. CA,
et al.[98]

2 years

2 months

22 months

22 months

Phil. Integrated
v. NLRC[99]

2 years

7 days

JGB v. NLC[100]

2 years

9 months

15 months

15 months

Agoy v.
NLRC[101]

2 years

2 months

22 months

22 months

EDI v. NLRC,
et al.[102]

2 years

5 months

19 months

19 months

Barros v.
NLRC, et al.[103]

12 months

4 months

8 months

8 months

Philippine
Transmarine v.
Carilla[104]

12 months

23 months and 23 months and 23 days

23 days

6 months and 5 months and 5 months and 18 days

22 days
18 days

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.
Among OFWs With Employment
Contracts of More Than One Year
Upon closer examination of the terminology employed in the subject clause, the
Court now has misgivings on the accuracy of theMarsaman interpretation.
The Court notes that the subject clause or for three (3) months for every year of the
unexpired term, whichever is less contains the qualifying phrases every year and
unexpired term. By its ordinary meaning, the word term means a limited or definite
extent of time.[105] Corollarily, that every year is but part of an unexpired term is
significant in many ways: first, the unexpired term must be at least one year,for if it
were any shorter, there would be no occasion for such unexpired term to be
measured by every year; and second, the original term must be more than one year, for
otherwise, whatever would be the unexpired term thereof will not reach even a
year. Consequently, the more decisive factor in the determination of when the subject
clause for three (3) months for every year of the unexpired term, whichever is less shall
apply is not the length of the original contract period as held in Marsaman,[106] but the
length of the unexpired portion of the contract period -- the subject clause applies in cases
when the unexpired portion of the contract period is at least one year, which arithmetically
requires that the original contract period be more than one year.
Viewed in that light, the subject clause creates a sub-layer of discrimination among
OFWs whose contract periods are for more than one year: those who are illegally
dismissed with less than one year left in their contracts shall be entitled to their salaries for
the entire unexpired portion thereof, while those who are illegally dismissed with one year
or more remaining in their contracts shall be covered by the subject clause, and their
monetary benefits limited to their salaries for three months only.

To concretely illustrate the application of the foregoing interpretation of the subject

clause, the Court assumes hypothetical OFW-C and OFW-D, who each have a 24-month
contract at a salary rate of US$1,000.00 per month. OFW-C is illegally dismissed on the
12th month, and OFW-D, on the 13th month. Considering that there is at least 12 months
remaining in the contract period of OFW-C, the subject clause applies to the computation
of the latter's monetary benefits. Thus, OFW-C will be entitled, not to US$12,000,00 or
the latter's total salaries for the 12 months unexpired portion of the contract, but to the
lesser amount of US$3,000.00 or the latter's salaries for 3 months out of the 12-month
unexpired term of the contract. On the other hand, OFW-D is spared from the effects of
the subject clause, for there are only 11 months left in the latter's contract period. Thus,
OFW-D will be entitled to US$11,000.00, which is equivalent to his/her total salaries for
the entire 11-month unexpired portion.
OFWs vis--vis Local Workers
With Fixed-Period Employment
As discussed earlier, 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.[107]
The earliest rule prescribing a uniform system of computation was actually Article
299 of the Code of Commerce (1888),[108] to wit:
Article 299. If the contracts between the merchants and their shop clerks and
employees should have been made of a fixed period, none of the contracting parties,
without the consent of the other, may withdraw from the fulfillment of said contract until
the termination of the period agreed upon.
Persons violating this clause shall be subject to indemnify the loss and damage
suffered, with the exception of the provisions contained in the following articles.

In Reyes v. The Compaia Maritima,[109] the Court applied the foregoing provision
to determine the liability of a shipping company for the illegal discharge of its managers
prior to the expiration of their fixed-term employment. The Court therein held the
shipping company liable for the salaries of its managers for the remainder of their fixedterm employment.

There is a more specific rule as far as seafarers are concerned: Article 605 of the
Code of Commerce which provides:
Article 605. If the contracts of the captain and members of the crew with the agent
should be for a definite period or voyage, they cannot be discharged until the fulfillment of
their contracts, except for reasons of insubordination in serious matters, robbery, theft,
habitual drunkenness, and damage caused to the vessel or to its cargo by malice or manifest
or proven negligence.

Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie,[110] in

which the Court held the shipping company liable for the salaries and subsistence
allowance of its illegally dismissed employees for the entireunexpired portion of their
employment contracts.
While Article 605 has remained good law up to the present,[111] Article 299 of the
Code of Commerce was replaced by Art. 1586 of the Civil Code of 1889, to wit:
Article 1586. Field hands, mechanics, artisans, and other laborers hired for a
certain time and for a certain work cannot leave or be dismissed without sufficient cause,
before the fulfillment of the contract. (Emphasis supplied.)

Citing Manresa, the Court in Lemoine v. Alkan[112] read the disjunctive "or" in
Article 1586 as a conjunctive "and" so as to apply the provision to local workers who are
employed for a time certain although for no particular skill. This interpretation of Article
1586 was reiterated inGarcia Palomar v. Hotel de France Company.[113] And in
both Lemoine and Palomar, the Court adopted the general principle that in actions for
wrongful discharge founded on Article 1586, local workers are entitled to recover damages
to the extent of the amount stipulated to be paid to them by the terms of their contract. On
the computation of the amount of such damages, the Court in Aldaz v. Gay[114] held:
The doctrine is well-established in American jurisprudence, and nothing has been
brought to our attention to the contrary under Spanish jurisprudence, that when an
employee is wrongfully discharged it is his duty to seek other employment of the same
kind in the same community, for the purpose of reducing the damages resulting from such
wrongful discharge. However, while this is the general rule, the burden of showing that he
failed to make an effort to secure other employment of a like nature, and that other
employment of a like nature was obtainable, is upon the defendant. When an employee is
wrongfully discharged under a contract of employment his prima facie damage is the
amount which he would be entitled to had he continued in such employment until the

termination of the period. (Howard vs. Daly, 61 N. Y., 362; Allen vs. Whitlark, 99 Mich.,
492; Farrell vs. School District No. 2, 98 Mich., 43.)[115] (Emphasis supplied)

On August 30, 1950, the New Civil Code took effect with new provisions on fixedterm employment: Section 2 (Obligations with a Period), Chapter 3, Title I, and Sections 2
(Contract of Labor) and 3 (Contract for a Piece of Work), Chapter 3, Title VIII, Book IV.
[116]
Much like Article 1586 of the Civil Code of 1889, the new provisions of the Civil
Code do not expressly provide for the remedies available to a fixed-term worker who is
illegally discharged. However, it is noted that in Mackay Radio & Telegraph Co., Inc. v.
Rich,[117] the Court carried over the principles on the payment of damages underlying
Article 1586 of the Civil Code of 1889 and applied the same to a case involving the illegal
discharge of a local worker whose fixed-period employment contract was entered into in
1952, when the new Civil Code was already in effect.[118]
More significantly, the same principles were applied to cases involving overseas
Filipino workers whose fixed-term employment contracts were illegally terminated, such
as in First Asian Trans & Shipping Agency, Inc. v. Ople,[119] involving seafarers who were
illegally discharged. In Teknika Skills and Trade Services, Inc. v. National Labor Relations
Commission,[120] an OFW who was illegally dismissed prior to the expiration of her fixedperiod employment contract as a baby sitter, was awarded salaries corresponding to the
unexpired portion of her contract. The Court arrived at the same ruling in Anderson v.
National Labor Relations Commission, [121] which involved a foreman hired in 1988 in
Saudi Arabia for a fixed term of two years, but who was illegally dismissed after only nine
months on the job -- the Court awarded him salaries corresponding to 15 months, the
unexpired portion of his contract. In Asia World Recruitment, Inc. v. National Labor
Relations Commission,[122] a Filipino working as a security officer in 1989 in Angola was
awarded his salaries for the remaining period of his 12-month contract after he was
wrongfully discharged. Finally, in Vinta Maritime Co., Inc. v. National Labor Relations
Commission,[123] an OFW whose 12-month contract was illegally cut short in the second
month was declared entitled to his salaries for the remaining 10 months of his contract.
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term
employment who were illegally discharged were treated alike in terms of the computation
of their money claims: they were uniformly entitled to their salaries for the entire
unexpired portions of their contracts. But with the enactment of R.A. No. 8042,
specifically the adoption of the subject clause, illegally dismissed OFWs with an unexpired

portion of one year or more in their employment contract have since been differently
treated in that their money claims are subject to a 3-month cap, whereas no such limitation
is imposed on local workers with fixed-term employment.
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.
There being a suspect classification involving a vulnerable sector protected by the
Constitution, the Court now subjects the classification to a strict judicial scrutiny, and
determines whether it serves a compelling state interest through the least restrictive means.
What constitutes compelling state interest is measured by the scale of rights and
powers arrayed in the Constitution and calibrated by history.[124] It is akin to the paramount
interest of the state[125] for which some individual liberties must give way, such as the
public interest in safeguarding health or maintaining medical standards, [126] or in
maintaining access to information on matters of public concern.[127]
In the present case, the Court dug deep into the records but found no compelling
state interest that the subject clause may possibly serve.
The OSG defends the subject clause as a police power measure designed to protect
the employment of Filipino seafarers overseas x x x. By limiting the liability to three
months [sic], Filipino seafarers have better chance of getting hired by foreign
employers. The limitation also protects the interest of local placement agencies, which
otherwise may be made to shoulder millions of pesos in termination pay.[128]
The OSG explained further:
Often, placement agencies, their liability being solidary, shoulder the payment of
money claims in the event that jurisdiction over the foreign employer is not acquired by the
court or if the foreign employer reneges on its obligation. Hence, placement agencies that
are in good faith and which fulfill their obligations are unnecessarily penalized for the acts
of the foreign employer. To protect them and to promote their continued helpful

contribution in deploying Filipino migrant workers, liability

are reduced under Section 10 of RA 8042.

for

money

This measure redounds to the benefit of the migrant workers whose welfare the
government seeks to promote. The survival of legitimate placement agencies helps [assure]
the government that migrant workers are properly deployed and are employed under
decent and humane conditions.[129] (Emphasis supplied)s

However, nowhere in the Comment or Memorandum does the OSG cite the source
of its perception of the state interest sought to be served by the subject clause.
The OSG locates the purpose of R.A. No. 8042 in the speech of Rep. Bonifacio
Gallego in sponsorship of House Bill No. 14314 (HB 14314), from which the law
originated;[130] but the speech makes no reference to the underlying reason for the adoption
of the subject clause. That is only natural for none of the 29 provisions in HB 14314
resembles the subject clause.
On the other hand, Senate Bill No. 2077 (SB 2077) contains a provision on money
claims, to wit:
Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after
the filing of the complaint, the claims arising out of an employer-employee relationship or
by virtue of the complaint, the claim arising out of an employer-employee relationship or
by virtue of any law or contract involving Filipino workers for overseas employment
including claims for actual, moral, exemplary and other forms of damages.
The liability of the principal and the recruitment/placement agency or any and all
claims under this Section shall be joint and several.
Any compromise/amicable settlement or voluntary agreement on any money
claims exclusive of damages under this Section shall not be less than fifty percent (50%) of
such money claims: Provided, That any installment payments, if applicable, to satisfy any
such compromise or voluntary settlement shall not be more than two (2) months. Any
compromise/voluntary agreement in violation of this paragraph shall be null and void.
Non-compliance with the mandatory period for resolutions of cases provided
under this Section shall subject the responsible officials to any or all of the following
penalties:

(1) The salary of any such official who fails to render his decision or
resolution within the prescribed period shall be, or caused to be, withheld
until the said official complies therewith;
(2) Suspension for not more than ninety (90) days; or
(3) Dismissal from the service with disqualification to hold any appointive
public office for five (5) years.
Provided, however, That the penalties herein provided shall be without prejudice to
any liability which any such official may have incurred under other existing laws or rules
and regulations as a consequence of violating the provisions of this paragraph.

But significantly, Section 10 of SB 2077 does not provide for any rule on the computation
of money claims.
A rule on the computation of money claims containing the subject clause was
inserted and eventually adopted as the 5th paragraph of Section 10 of R.A. No. 8042. The
Court examined the rationale of the subject clause in the transcripts of the Bicameral
Conference Committee (Conference Committee) Meetings on the Magna Carta on OCWs
(Disagreeing Provisions of Senate Bill No. 2077 and House Bill No. 14314). However,
the Court finds no discernible state interest, let alone a compelling one, that is sought to be
protected or advanced by the adoption of the subject clause.
In fine, the Government has failed to discharge its burden of proving the existence
of a compelling state interest that would justify the perpetuation of the discrimination
against OFWs under the subject clause.
Assuming that, as advanced by the OSG, the purpose of the subject clause is to
protect the employment of OFWs by mitigating the solidary liability of placement
agencies, such callous and cavalier rationale will have to be rejected. There can never be a
justification for any form of government action that alleviates the burden of one sector, but
imposes the same burden on another sector, especially when the favored sector is
composed of private businesses such as placement agencies, while the disadvantaged
sector is composed of OFWs whose protection no less than the Constitution
commands. The idea that private business interest can be elevated to the level of a
compelling state interest is odious.

Moreover, even if the purpose of the subject clause is to lessen the solidary liability
of placement agencies vis-a-vis their foreign principals, there are mechanisms already in
place that can be employed to achieve that purpose without infringing on the constitutional
rights of OFWs.

The POEA Rules and Regulations Governing the Recruitment and Employment of
Land-Based Overseas Workers, dated February 4, 2002, imposes administrative
disciplinary measures on erring foreign employers who default on their contractual
obligations to migrant workers and/or their Philippine agents. These disciplinary measures
range from temporary disqualification to preventive suspension. The POEA Rules and
Regulations Governing the Recruitment and Employment of Seafarers, dated May 23,
2003, contains similar administrative disciplinary measures against erring foreign
employers.
Resort to these administrative measures is undoubtedly the less restrictive means of
aiding local placement agencies in enforcing the solidary liability of their foreign
principals.
Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is
violative of the right of petitioner and other OFWs to equal protection.
Further, there would be certain misgivings if one is to approach the declaration of
the unconstitutionality of the subject clause from the lone perspective that the clause
directly violates state policy on labor under Section 3,[131] Article XIII of the Constitution.
While all the provisions of the 1987 Constitution are presumed self-executing, ,
[132]
there are some which this Court has declared not judicially enforceable, Article XIII
being one,[133] particularly Section 3 thereof, the nature of which, this Court, in Agabon
v. National Labor Relations Commission,[134] has described to be not self-actuating:
Thus, the constitutional mandates of protection to labor and security of tenure may
be deemed as self-executing in the sense that these are automatically acknowledged and
observed without need for any enabling legislation. However, to declare that the
constitutional provisions are enough to guarantee the full exercise of the rights embodied
therein, and the realization of ideals therein expressed, would be impractical, if not
unrealistic. The espousal of such view presents the dangerous tendency of being overbroad

and exaggerated. The guarantees of "full protection to labor" and "security of tenure", when
examined in isolation, are facially unqualified, and the broadest interpretation possible
suggests a blanket shield in favor of labor against any form of removal regardless of
circumstance. This interpretation implies an unimpeachable right to continued
employment-a utopian notion, doubtless-but still hardly within the contemplation of the
framers. Subsequent legislation is still needed to define the parameters of these guaranteed
rights to ensure the protection and promotion, not only the rights of the labor sector, but of
the employers' as well. Without specific and pertinent legislation, judicial bodies will be at a
loss, formulating their own conclusion to approximate at least the aims of the Constitution.
Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of
a positive enforceable right to stave off the dismissal of an employee for just cause owing
to the failure to serve proper notice or hearing. As manifested by several framers of the
1987 Constitution, the provisions on social justice require legislative enactments for their
enforceability.[135] (Emphasis added)

Thus, Section 3, Article XIII cannot be treated as a principal source of direct

enforceable rights, for the violation of which the questioned clause may be declared
unconstitutional. It may unwittingly risk opening the floodgates of litigation to every
worker or union over every conceivable violation of so broad a concept as social justice for
labor.
It must be stressed that Section 3, Article XIII does not directly bestow on the
working class any actual enforceable right, but merely clothes it with the status of a
sector for whom the Constitution urges protection through executive or legislative
action and judicial recognition. Its utility is best limited to being an impetus not just
for the executive and legislative departments, but for the judiciary as well, to protect the
welfare of the working class. And it was in fact consistent with that constitutional
agenda that the Court in Central Bank (now Bangko Sentral ng Pilipinas) Employee
Association, Inc. v. Bangko Sentral ng Pilipinas, penned by then Associate Justice now
Chief Justice Reynato S. Puno, formulated the judicial precept that when the challenge
to a statute is premised on the perpetuation of prejudice against persons favored by the
Constitution with special protection -- such as the working class or a section thereof -the Court may recognize the existence of a suspect classification and subject the same
to strict judicial scrutiny.
The view that the concepts of suspect classification and strict judicial scrutiny
formulated in Central Bank Employee Associationexaggerate the significance of Section 3,
Article XIII is a groundless apprehension. Central Bank applied Article XIII in

conjunction with the equal protection clause. Article XIII, by itself, without the application
of the equal protection clause, has no life or force of its own as elucidated inAgabon.
Along the same line of reasoning, the Court further holds that the subject clause
violates petitioner's right to substantive due process, for it deprives him of property,
consisting of monetary benefits, without any existing valid governmental purpose.[136]
The argument of the Solicitor General, that the actual purpose of the subject clause
of limiting the entitlement of OFWs to their three-month salary in case of illegal dismissal,
is to give them a better chance of getting hired by foreign employers. This is plain
speculation. As earlier discussed, there is nothing in the text of the law or the records of
the deliberations leading to its enactment or the pleadings of respondent that would indicate
that there is an existing governmental purpose for the subject clause, or even just a pretext
of one.
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,[137] 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.
On the 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.
By the foregoing definition alone, there is no basis for the automatic inclusion of
overtime and holiday pay in the computation of petitioner's monetary award, unless there is
evidence that he performed work during those periods. As the Court held in Centennial
Transmarine, Inc. v. Dela Cruz,[138]
However, the payment of overtime pay and leave pay should be disallowed in light
of our ruling in Cagampan v. National Labor Relations Commission, to wit:
The rendition of overtime work and the submission of sufficient proof
that said was actually performed are conditions to be satisfied before a seaman
could be entitled to overtime pay which should be computed on the basis of 30%
of the basic monthly salary. In short, the contract provision guarantees the right to
overtime pay but the entitlement to such benefit must first be established.
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.
No costs.
SO ORDERED.

SERRANO v. GALLANT MARITIME SERVICES INC. & MARLOWE NAVIGATION CO., INC.
G.R. No. 167614. March 24, 2009
Facts:

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co.,
Ltd. (respondents) under a POEA-approved Contract of Employment. 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. However, 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.

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. LA rendered the dismissal of
petitioner illegal and awarding him monetary benefits. Respondents appealed to the
NLRC to question the finding of the LA. Likewise, petitioner also appealed to the
NLRC on the sole issue that the LA erred in not applying the ruling of the Court in
Triple Integrated Services, Inc. v. National Labor Relations Commission that in case
of illegal dismissal, OFWs are entitled to their salaries for the unexpired portion of
their contracts. Petitioner also appealed to the NLRC on the sole issue that the LA
erred in not applying the ruling of the Court in Triple Integrated Services, Inc. v.
National Labor Relations Commission that in case of illegal dismissal, OFWs are
entitled to their salaries for the unexpired portion of their contracts. Petitioner filed
a Motion for Partial Reconsideration; he questioned the constitutionality of the
subject clause. Petitioner filed a Petition for Certiorari with the CA, reiterating the
constitutional challenge against the subject clause. CA affirmed the NLRC ruling on
the reduction of the applicable salary rate; however, the CA skirted the
constitutional issue raised by petitioner. The last clause in the 5th paragraph of
Section 10, Republic Act (R.A.) No. 8042, to wit: Sec. 10.
Money Claims . - x x x In case of termination of overseas employment without just,
valid or authorized cause as defined by law or contract, the workers shall be entitled
to the full reimbursement of his placement fee with interest of twelve percent (12%)
per annum, plus his salaries for the unexpired portion of his employment contract or
for three (3) months for every year of the unexpired term, whichever is less.
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$4,200.00awarded 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
Issue:
1.) Is petitioner entitled to his monetary claim which is the lump-sum salary for the
entire unexpired portion of his12-month employment contract, and not just for a
period of three months?
2.) Should petitioners overtime and leave pay 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?
Held: 1.) Yes. 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. The subject clause or for three months for
everyyear of the unexpired term, whichever is less in the 5th paragraph of Section
10 of Republic Act No. 8042 is declared unconstitutional.
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment
who were illegally discharged were treated alike in terms of the computation of their
money claims: they were uniformly entitled to their salaries for the entire unexpired
portions of their contracts.
But with the enactment of R.A. No. 8042, specifically the adoption of the subject
clause, illegally dismissed OFWs with an unexpired portion of one year or more in
their employment contract have since been differently treated in that their money
claims are subject to a 3-month cap, whereas no such limitation is imposed on local
workers with fixed-term employment.
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.
The Court further holds that the subject clause violates petitioner's right to
substantive due process, for it deprives him of property, consisting of monetary
benefits, without any existing valid governmental purpose. 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.
2.) No.
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. By the foregoing definition alone, there is no basis for the automatic
inclusion of overtime and holiday pay in the computation of petitioner's monetary
award; unless there is evidence that he performed work during those periods

BECMEN SERVICE EXPORTER

AND PROMOTION, INC.,
Petitioner,
- versus -

G.R. Nos. 182978-79

Present:
Ynares-Santiago, J.(Chairperson),
Carpio Morales,*
Chico-Nazario,
Nachura, and
Peralta, JJ.

SPOUSES SIMPLICIO and MILA

CUARESMA (for and in behalf of
their daughter, Jasmin G. Cuaresma),
WHITE FALCON SERVICES, INC.
and JAIME ORTIZ (President,
White Falcon Services, Inc.),
Respondents.
x ------------------------------------------------------ x
SPOUSES SIMPLICIO and MILA
CUARESMA (for and in behalf of
their daughter, Jasmin G. Cuaresma),
Petitioners,

G.R. Nos. 184298-99

- versus WHITE FALCON SERVICES, INC.

Promulgated:
and BECMEN SERVICE EXPORTER

AND PROMOTION, INC.,

Respondents.

April 7, 2009

x ---------------------------------------------------------------------------------------- x

KEYWORD:Nurse,solidary liability of employer, food

poisoning

DECISION
YNARES-SANTIAGO, J.:
These consolidated petitions assail the Amended Decision[1] of the Court of
Appeals dated May 14, 2008 in CA-G.R. SP No. 80619 and CA-G.R. SP No.
81030 finding White Falcon Services, Inc. and Becmen Service Exporter and
Promotion, Inc. solidarily liable to indemnify spouses Simplicio and Mila
Cuaresma the amount of US$4,686.73 in actual damages with interest.
On January 6, 1997, Jasmin Cuaresma (Jasmin) was deployed by Becmen
Service Exporter and Promotion, Inc.[2] (Becmen) to serve as assistant nurse in AlBirk Hospital in the Kingdom of Saudi Arabia (KSA), for a contract duration of
three years, with a corresponding salary of US$247.00 per month.
Over a year later, she died allegedly of poisoning.
Jessie Fajardo, a co-worker of Jasmin, narrated that on June 21, 1998,
Jasmin was found dead by a female cleaner lying on the floor inside her dormitory
room with her mouth foaming and smelling of poison.[3]
Based on the police report and the medical report of the examining physician
of the Al-Birk Hospital, who conducted an autopsy of Jasmins body, the likely
cause of her death was poisoning. Thus:
According to letter No. 199, dated 27.2.1419H, issued by Al-Birk Police
Station, for examining the corpse of Jasmin Cuaresma, 12.20 P.M. 27.2.1419H,
Sunday, at Al-Birk Hospital.
1. The Police Report on the Death
2. The Medical Diagnosis
Sex: Female

Age: 25 years Relg: Christian

The said person was brought to the Emergency Room of the hospital; time
12.20 P.M. and she was unconscious, blue, no pulse, no respiration and the
first aid esd undertaken but without success.

3. Diagnosis and Opinion: Halt in blood circulation respiratory system and

brain damage due to an apparent poisoning which is under
investigation.[4]
Name: Jasmin Cuaresma
Sex: Female
Marital Status: Single
Religion: Christian
Address: Al-Birk Genrl. Hospital

Nationality: Philipino (sic)

Profession: Nurse
Birth Place: The Philippines

On 27.2.1419H, Dr. Tariq Abdulminnem and Dr. Ashoki Komar, both have
examined the dead body of Jasmin Cuaresma, at 12.20 P.M., Sunday,
22.2.14189H, and the result was:
1. Report of the Police on the death
2. Medical Examination: Blue skin and paleness on the Extrimes (sic),
total halt to blood circulation and respiratory system and brain damage.
There were no external injuries. Likely poisoning by taking poisonous
substance, yet not determined. There was a bad smell in the mouth and
unknown to us.[5] (Emphasis supplied)

Jasmins body was repatriated to Manila on September 3, 1998. The

following day, the City Health Officer of Cabanatuan City conducted an autopsy
and the resulting medical report indicated that Jasmin died under violent
circumstances, and not poisoning as originally found by the KSA examining
physician. The City Health Officer found that Jasmin had abrasions at her inner lip
and gums; lacerated wounds and abrasions on her left and right ears; lacerated
wounds and hematoma (contusions) on her elbows; abrasions and hematoma on
her thigh and legs; intra-muscular hemorrhage at the anterior chest; rib fracture;
puncture wounds; and abrasions on the labia minora of the vaginal area.[6]
On March 11, 1999, Jasmins remains were exhumed and examined by the
National Bureau of Investigation (NBI). The toxicology report of the NBI,
however, tested negative for non-volatile, metallic poison and insecticides.[7]
Simplicio and Mila Cuaresma (the Cuaresmas), Jasmins parents and her
surviving heirs, received from the Overseas Workers Welfare Administration
(OWWA) the following amounts: P50,000.00 for death benefits; P50,000.00 for
loss of life; P20,000.00 for funeral expenses; and P10,000.00 for medical
reimbursement.

On November 22, 1999, the Cuaresmas filed a complaint against Becmen

and its principal in the KSA, Rajab & Silsilah Company (Rajab), claiming death
and insurance benefits, as well as moral and exemplary damages for Jasmins
death.[8]
In their complaint, the Cuaresmas claim that Jasmins death was workrelated, having occurred at the employers premises;[9]that under Jasmins contract
with Becmen, she is entitled to iqama insurance coverage; that Jasmin is entitled
to compensatory damages in the amount of US$103,740.00, which is the sum total
of her monthly salary of US$247.00 per month under her employment contract,
multiplied by 35 years (or the remaining years of her productive life had death not
supervened at age 25, assuming that she lived and would have retired at age 60).
The Cuaresmas assert that as a result of Jasmins death under mysterious
circumstances, they suffered sleepless nights and mental anguish. The situation,
they claim, was aggravated by findings in the autopsy and exhumation reports
which evidently show that a grave injustice has been committed against them and
their daughter, for which those responsible should likewise be made to pay moral
and exemplary damages and attorneys fees.
In their position paper, Becmen and Rajab insist that Jasmin committed
suicide, citing a prior unsuccessful suicide attempt sometime in March or April
1998 and relying on the medical report of the examining physician of the Al-Birk
Hospital. They likewise deny liability because the Cuaresmas already recovered
death and other benefits totaling P130,000.00 from the OWWA. They insist that
the Cuaresmas are not entitled to iqama insurance because this refers to the
issuance not insurance of iqama, or residency/work permit required in the
KSA. On the issue of moral and exemplary damages, they claim that the
Cuaresmas are not entitled to the same because they have not acted with fraud, nor
have they been in bad faith in handling Jasmins case.
While the case was pending, Becmen filed a manifestation and motion for
substitution alleging that Rajab terminated their agency relationship and had
appointed White Falcon Services, Inc. (White Falcon) as its new recruitment agent
in the Philippines. Thus, White Falcon was impleaded as respondent as well, and it

adopted and reiterated Becmens arguments in the position paper it subsequently

filed.
On February 28, 2001, the Labor Arbiter rendered a Decision [10] dismissing
the complaint for lack of merit. Giving weight to the medical report of the Al-Birk
Hospital finding that Jasmin died of poisoning, the Labor Arbiter concluded that
Jasmin committed suicide. In any case, Jasmins death was not service-connected,
nor was it shown that it occurred while she was on duty; besides, her parents have
received all corresponding benefits they were entitled to under the law. In regard
to damages, the Labor Arbiter found no legal basis to warrant a grant thereof.
On appeal, the National Labor Relations Commission (Commission)
reversed the decision of the Labor Arbiter. Relying on the findings of the City
Health Officer of Cabanatuan City and the NBI as contained in their autopsy and
toxicology report, respectively, the Commission, via its November 22, 2002
Resolution[11] declared that, based on substantial evidence adduced, Jasmin was the
victim of compensable work-connected criminal aggression. It disregarded the AlBirk Hospital attending physicians report as well as the KSA police report, finding
the same to be inconclusive. It declared that Jasmins death was the result of an
accident occurring within the employers premises that is attributable to her
employment, or to the conditions under which she lived, and thus arose out of and
in the course of her employment as nurse. Thus, the Cuaresmas are entitled to
actual damages in the form of Jasmins lost earnings, including future earnings, in
the total amount of US$113,000.00. The Commission, however, dismissed all
other claims in the complaint.
Becmen, Rajab and White Falcon moved for reconsideration, whereupon the
Commission issued its October 9, 2003 Resolution[12] reducing the award of
US$113,000.00 as actual damages to US$80,000.00.[13] The NLRC likewise
declared Becmen and White Falcon as solidarily liable for payment of the award.
Becmen and White Falcon brought separate petitions for certiorari to the
Court of Appeals.[14] On June 28, 2006, the appellate court rendered its Decision,
[15]
the dispositive portion of which reads, as follows:

WHEREFORE, the subject petitions are DENIED but in the execution of

the decision, it should first be enforced against White Falcon Services and then
against Becmen Services when it is already impossible, impractical and futile to
go against it (White Falcon).
SO ORDERED.[16]

The appellate court affirmed the NLRCs findings that Jasmins death was
compensable, the same having occurred at the dormitory, which was contractually
provided by the employer. Thus her death should be considered to have occurred
within the employers premises, arising out of and in the course of her
employment.
Becmen and White Falcon moved for reconsideration. On May 14, 2008,
the appellate court rendered the assailed Amended Decision, the dispositive portion
of which reads, as follows:
WHEREFORE, the motions for reconsideration are GRANTED.
Accordingly, the award of US$80,000.00 in actual damages is hereby reduced to
US$4,686.73 plus interest at the legal rate computed from the time it became due
until fully paid. Petitioners are hereby adjudged jointly and solidarily liable with
the employer for the monetary awards with Becmen Service Exporter and
Promotions, Inc. having a right of reimbursement from White Falcon Services,
Inc.
SO ORDERED.[17]

In the Amended Decision, the Court of Appeals found that although Jasmins
death was compensable, however, there is no evidentiary basis to support an award
of actual damages in the amount of US$80,000.00. Nor may lost earnings be
collected, because the same may be charged only against the perpetrator of the
crime or quasi-delict. Instead, the appellate court held that Jasmins beneficiaries
should be entitled only to the sum equivalent of the remainder of her 36-month
employment contract, or her monthly salary of US$247.00 multiplied by nineteen
(19) months, with legal interest.
Becmen filed the instant petition for review on certiorari (G.R. Nos. 18297879). The Cuaresmas, on the other hand, moved for a reconsideration of the

amended decision, but it was denied. They are now before us via G.R. Nos.
184298-99.
On October 6, 2008, the Court resolved to consolidate G.R. Nos. 184298-99
with G.R. Nos. 182978-79.
In G.R. Nos. 182978-79, Becmen raises the following issues for our
resolution:
(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT GAVE
MORE CREDENCE AND WEIGHT TO THE AUTOPSY REPORT
CONDUCTED BY THE CABANATUAN CITY HEALTH OFFICE THAN THE
MEDICAL AND POLICE REPORTS ISSUED BY THE MINISTRY OF
HEALTH OF KINGDOM OF SAUDI ARABIA AND AL-BIRK HOSPITAL.
(THE COURT OF APPEALS) GRAVELY ERRED WHEN ON THE
BASIS OF THE POSITION PAPERS AND ANNEXES THERETO INCLUDING
THE AUTOPSY REPORT, IT CONCLUDED THAT THE DEATH OF JASMIN
CUARESMA WAS CAUSED BY CRIMINAL AGGRESSION.
(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD
THAT THE DEATH OF JASMIN CUARESMA WAS COMPENSABLE
PURSUANT TO THE RULING OF THE SUPREME COURT IN TALLER VS.
YNCHAUSTI, G.R. NO. 35741, DECEMBER 20, 1932, WHICH IT FOUND TO
BE STILL GOOD LAW.
(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD
BECMEN LIABLE FOR THE DEATH OF JASMIN CUARESMA
NOTWITHSTANDING ITS ADMISSIONS THAT IQAMA INSURANCE
WAS A TYPOGRAPHICAL ERROR SINCE IQAMA IS NOT AN
INSURANCE.
(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT
CONCLUDED THAT THE DEATH OF JASMIN WAS WORK RELATED.
(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD
BECMEN LIABLE TO JASMINS BENEFICIARIES FOR THE REMAINDER
OF HER 36-MONTH CONTRACT COMPUTED IN THIS MANNER:
MONTHLY SALARY OF US$246.67 MULTIPLIED BY 19 MONTHS, THE
REMAINDER OF THE TERM OF JASMINS EMPLOYMENT CONTRACT,
IS EQUAL TO US$4,686.73.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD

BECMEN LIABLE TO PAY INTEREST AT THE LEGAL RATE FROM THE
TIME IT WAS DUE UNTIL FULLY PAID.
(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD
BECMEN AND WHITE FALCON JOINTLY AND SEVERALLY LIABLE
WITH THE EMPLOYER NOTWITHSTANDING THE ASSUMPTION OF
LIABILITY EXECUTED BY WHITE FALCON IN FAVOR OF BECMEN.

On the other hand, in G.R. Nos. 184298-99, the Cuaresmas raise the
following issues:
(THE COURT OF APPEALS) GRAVELY ERRED IN APPLYING THE
PROVISIONS OF THE CIVIL CODE CONSIDERED GENERAL LAW
DESPITE THE CASE BEING COVERED BY E.O. 247, R.A. 8042 AND
LABOR CODE CONSIDERED AS SPECIAL LAWS.
(THE COURT OF APPEALS) GRAVELY ERRED IN NOT APPLYING
THE DECEASEDS FUTURE EARNINGS WHICH IS (AN) INHERENT
FACTOR IN THE COMPUTATION OF DEATH BENEFITS OF OVERSEAS
FILIPINO CONTRACT WORKERS.
(THE COURT OF APPEALS) GRAVELY ERRED IN REDUCING THE
DEATH BENEFITS AWARDED BY NLRC CONSIDERED FINDINGS OF
FACT THAT CANNOT BE DISTURBED THROUGH CERTIORARI UNDER
RULE 65 OF THE RULES OF COURT.

The issue for resolution is whether the Cuaresmas are entitled to monetary
claims, by way of benefits and damages, for the death of their daughter Jasmin.
The terms and conditions of Jasmins 1996 Employment Agreement which
she and her employer Rajab freely entered into constitute the law between
them. As a rule, stipulations in an employment contract not contrary to statutes,
public policy, public order or morals have the force of law between the contracting
parties.[18] An examination of said employment agreement shows that it provides
for no other monetary or other benefits/privileges than the following:
1.
2.

1,300 rials (or US$247.00) monthly salary;

Free air tickets to KSA at the start of her contract and to the Philippines at
the end thereof, as well as for her vacation at the end of each twenty fourmonth service;

3.

Transportation to and from work;

4.

Free living accommodations;

5.

Free medical treatment, except for optical and dental operations, plastic
surgery charges and lenses, and medical treatment obtained outside of
KSA;

6.

Entry visa fees will be shared equally between her and her employer, but
the exit/re-entry visa fees, fees for Iqama issuance, renewal, replacement,
passport renewal, sponsorship transfer and other liabilities shall be borne
by her;

7.

Thirty days paid vacation leave with round trip tickets to Manila after
twenty four-months of continuous service;

8.
9.

Eight days public holidays per year;

The indemnity benefit due her at the end of her service will be calculated
as per labor laws of KSA.

Thus, the agreement does not include provisions for insurance, or for
accident, death or other benefits that the Cuaresmas seek to recover, and which the
labor tribunals and appellate court granted variably in the guise of compensatory
damages.
However, the absence of provisions for social security and other benefits
does not make Jasmins employment contract infirm. Under KSA law, her foreign
employer is not obliged to provide her these benefits; and neither is Jasmin entitled
to minimum wage unless of course the KSA labor laws have been amended to the
opposite effect, or that a bilateral wage agreement has been entered into.
Our next inquiry is, should Jasmins death be considered as work-connected
and thus compensable? The evidence indicates that it is not. At the time of her
death, she was not on duty, or else evidence to the contrary would have been
adduced. Neither was she within hospital premises at the time. Instead, she was at
her dormitory room on personal time when she died. Neither has it been shown,
nor does the evidence suggest, that at the time she died, Jasmin was performing an
act reasonably necessary or incidental to her employment as nurse, because she

was at her dormitory room. It is reasonable to suppose that all her work is
performed at the Al-birk Hospital, and not at her dormitory room.
We cannot expect that the foreign employer should ensure her safety even
while she is not on duty. It is not fair to require employers to answer even for their
employees personal time away from work, which the latter are free to spend of
their own choosing. Whether they choose to spend their free time in the pursuit of
safe or perilous undertakings, in the company of friends or strangers, lovers or
enemies, this is not one area which their employers should be made accountable
for. While we have emphasized the need to observe official work time strictly,
[19]
what an employee does on free time is beyond the employers sphere of inquiry.
While the employers premises may be defined very broadly not only to
include premises owned by it, but also premises it leases, hires, supplies or uses,
[20]
we are not prepared to rule that the dormitory wherein Jasmin stayed should
constitute employers premises as would allow a finding that death or injury
therein is considered to have been incurred or sustained in the course of or arose
out of her employment. There are certainly exceptions,[21] but they do not appear to
apply here. Moreover, a complete determination would have to depend on the
unique circumstances obtaining and the overall factual environment of the case,
which are here lacking.
But, did Jasmin commit suicide? Rajab, Becmen and White Falcon
vehemently insist that she did; thus, her heirs may not claim benefits or damages
based on criminal aggression. On the other hand, the Cuaresmas do not believe so.
The Court cannot subscribe to the idea that Jasmin committed suicide while
halfway into her employment contract. It is beyond human comprehension that a
25-year old Filipina, in the prime of her life and working abroad with a chance at
making a decent living with a high-paying job which she could not find in her own
country, would simply commit suicide for no compelling reason.
The Saudi police and autopsy reports which state that Jasmin is a likely/or
apparent victim of poisoning are patently inconclusive. They are thus
unreliable as evidence.

On the contrary, the autopsy report of the Cabanatuan City Health Officer
and the exhumation report of the NBI categorically and unqualifiedly show that
Jasmin sustained external and internal injuries, specifically abrasions at her inner
lip and gums;lacerated wounds and abrasions on her left and right
ears; lacerated wounds and hematoma (contusions) on her elbows;abrasions
and hematoma on her thigh and legs; intra-muscular hemorrhage at the
anterior chest; a fractured rib;puncture wounds; and abrasions on the labia
minora of the vaginal area. The NBI toxicology report came up negative on the
presence of poison.
All these show that Jasmin was manhandled and possibly raped prior to
her death.
Even if we were to agree with the Saudi police and autopsy reports that
indicate Jasmin was poisoned to death, we do not believe that it was selfinduced. If ever Jasmin was poisoned, the assailants who beat her up and
possibly raped her are certainly responsible therefor.
We are not exactly ignorant of what goes on with our OFWs. Nor is the rest
of the world blind to the realities of life being suffered by migrant workers in the
hands of some foreign employers. It is inconceivable that our Filipina women
would seek employment abroad and face uncertainty in a foreign land, only to
commit suicide for unexplained reasons. Deciding to leave their family, loved
ones, and the comfort and safety of home, to work in a strange land requires
unrivaled strength and courage. Indeed, many of our women OFWs who are
unfortunate to end up with undesirable employers have been there more times than
they care to, beaten up and broken in body yet they have remained strong in
mind, refusing to give up the will to live. Raped, burned with cigarettes, kicked in
the chest with sharp high-heeled shoes, starved for days or even weeks, stabbed,
slaved with incessant work, locked in their rooms, forced to serve their masters
naked, grossly debased, dehumanized and insulted, their spirits fought on and they
lived for the day that they would once again be reunited with their families and
loved ones. Their bodies surrendered, but their will to survive remained strong.
It is surprising, therefore, that Rajab, Becmen and White Falcon should
insist on suicide, without even lifting a finger to help solve the mystery of Jasmins

death. Being in the business of sending OFWs to work abroad, Becmen and White
Falcon should know what happens to some of our OFWs. It is impossible for them
to be completely unaware that cruelties and inhumanities are inflicted on OFWs
who are unfortunate to be employed by vicious employers, or upon those who
work in communities or environments where they are liable to become victims of
crime. By now they should know that our women OFWs do not readily succumb
to the temptation of killing themselves even when assaulted, abused, starved,
debased and, worst, raped.
Indeed, what we have seen is Rajab and Becmens revolting scheme of
conveniently avoiding responsibility by clinging to the absurd theory that Jasmin
took her own life. Abandoning their legal, moral and social obligation (as
employer and recruiter) to assist Jasmins family in obtaining justice for her death,
they immediately gave up on Jasmins case, which has remained under
investigation as the autopsy and police reports themselves indicate. Instead of
taking the cudgels for Jasmin, who had no relative or representative in the KSA
who would naturally demand and seek an investigation of her case, Rajab and
Becmen chose to take the most convenient route to avoiding and denying liability,
by casting Jasmins fate to oblivion. It appears from the record that to this date, no
follow up of Jasmins case was ever made at all by them, and they seem to have
expediently treated Jasmins death as a closed case. Despite being given the lead
via the autopsy and toxicology reports of the Philippine authorities, they failed and
refused to act and pursue justice for Jasmins sake and to restore honor to her
name.
Indeed, their nonchalant and uncaring attitude may be seen from how
Jasmins remains were repatriated. No official representative from Rajab or
Becmen was kind enough to make personal representations with Jasmins parents,
if only to extend their condolences or sympathies; instead, a mere colleague, nurse
Jessie Fajardo, was designated to accompany Jasmins body home.
Of all lifes tragedies, the death of ones own child must be the most painful
for a parent. Not knowing why or how Jasmins life was snuffed out makes the
pain doubly unbearable for Jasmins parents, and further aggravated by Rajab,
Becmen, and White Falcons baseless insistence and accusation that it was a selfinflicted death, a mortal sin by any religious standard.

Thus we categorically hold, based on the evidence; the actual experiences of

our OFWs; and the resilient and courageous spirit of the Filipina that transcends
the vilest desecration of her physical self, that Jasmin did not commit suicide but a
victim of murderous aggression.
Rajab, Becmen, and White Falcons indifference to Jasmins case has caused
unfathomable pain and suffering upon her parents. They have turned away from
their moral obligation, as employer and recruiter and as entities laden with social
and civic obligations in society, to pursue justice for and in behalf of Jasmin, her
parents and those she left behind. Possessed with the resources to determine the
truth and to pursue justice, they chose to stand idly for the sake of convenience and
in order that they may avoid pecuniary liability, turning a blind eye to the
Philippine authorities autopsy and toxicology reports instead of taking action upon
them as leads in pursuing justice for Jasmins death. They have placed their own
financial and corporate interests above their moral and social obligations, and
chose to secure and insulate themselves from the perceived responsibility of having
to answer for and indemnify Jasmins heirs for her death.
Under Republic Act No. 8042 (R.A. 8042), or the Migrant Workers and
Overseas Filipinos Act of 1995,[22] the State shall, at all times, uphold the dignity of
its citizens whether in country or overseas, in general, and Filipino migrant
workers, in particular.[23] The State shall provide adequate and timely social,
economic and legal services to Filipino migrant workers. [24] The rights and interest
of distressed[25] overseas Filipinos, in general, and Filipino migrant workers, in
particular, documented or undocumented, are adequately protected and
safeguarded.[26]
Becmen and White Falcon, as licensed local recruitment agencies, miserably
failed to abide by the provisions of R.A. 8042. Recruitment agencies are expected
to extend assistance to their deployed OFWs, especially those in distress. Instead,
they abandoned Jasmins case and allowed it to remain unsolved to further their
interests and avoid anticipated liability which parents or relatives of Jasmin would
certainly exact from them. They willfully refused to protect and tend to the
welfare of the deceased Jasmin, treating her case as just one of those unsolved
crimes that is not worth wasting their time and resources on. The evidence does

not even show that Becmen and Rajab lifted a finger to provide legal
representation and seek an investigation of Jasmins case. Worst of all, they
unnecessarily trampled upon the person and dignity of Jasmin by standing pat on
the argument that Jasmin committed suicide, which is a grave accusation given its
un-Christian nature.
We cannot reasonably expect that Jasmins parents should be the ones to
actively pursue a just resolution of her case in the KSA, unless they are provided
with the finances to undertake this herculean task. Sadly, Becmen and Rajab did
not lend any assistance at all in this respect. The most Jasmins parents can do is to
coordinate with Philippine authorities as mandated under R.A. 8042, obtain free
legal assistance and secure the aid of the Department of Foreign Affairs, the
Department of Labor and Employment, the POEA and the OWWA in trying to
solve the case or obtain relief, in accordance with Section 23 [27] of R.A. 8042. To
our mind, the Cuaresmas did all that was within their power, short of actually
flying to the KSA. Indeed, the Cuaresmas went even further. To the best of their
abilities and capacities, they ventured to investigate Jasmins case on their own:
they caused another autopsy on Jasmins remains as soon as it arrived to inquire
into the true cause of her death. Beyond that, they subjected themselves to the
painful and distressful experience of exhuming Jasmins remains in order to obtain
another autopsy for the sole purpose of determining whether or not their daughter
was poisoned. Their quest for the truth and justice is equally to be expected of all
loving parents. All this time, Rajab and Becmen instead of extending their full
cooperation to the Cuaresma family merely sat on their laurels in seeming
unconcern.
In Interorient Maritime Enterprises, Inc. v. NLRC,[28] a seaman who was
being repatriated after his employment contract expired, failed to make his
Bangkok to Manila connecting flight as he began to wander the streets of Bangkok
aimlessly. He was shot to death by Thai police four days after, on account of
running amuck with a knife in hand and threatening to harm anybody within
sight. The employer, sued for death and other benefits as well as damages,
interposed as defense the provision in the seafarer agreement which provides that
no compensation shall be payable in respect of any injury, incapacity, disability or
death resulting from a willful act on his own life by the seaman. The Court
rejected the defense on the view, among others, that the recruitment agency should

have observed some precautionary measures and should not have allowed the
seaman, who was later on found to be mentally ill, to travel home alone, and its
failure to do so rendered it liable for the seamans death. We ruled therein that
The foreign employer may not have been obligated by its contract to
provide a companion for a returning employee, but it cannot deny that it was
expressly tasked by its agreement to assure the safe return of said worker. The
uncaring attitude displayed by petitioners who, knowing fully well that its
employee had been suffering from some mental disorder, nevertheless still
allowed him to travel home alone, is appalling to say the least. Such attitude
harks back to another time when the landed gentry practically owned the
serfs, and disposed of them when the latter had grown old, sick or otherwise
lost their usefulness.[29] (Emphasis supplied)

Thus, more than just recruiting and deploying OFWs to their foreign
principals, recruitment agencies have equally significant responsibilities. In a
foreign land where OFWs are likely to encounter uneven if not discriminatory
treatment from the foreign government, and certainly a delayed access to language
interpretation, legal aid, and the Philippine consulate, the recruitment agencies
should be the first to come to the rescue of our distressed OFWs since they know
the employers and the addresses where they are deployed or stationed. Upon them
lies the primary obligation to protect the rights and ensure the welfare of our
OFWs, whether distressed or not. Who else is in a better position, if not these
recruitment agencies, to render immediate aid to their deployed OFWs abroad?
Article 19 of the Civil Code provides that every person must, in the exercise
of his rights and in the performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith. Article 21 of the Code states that any
person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the
damage. And, lastly, Article 24 requires that in all contractual, property or other
relations, when one of the parties is at a disadvantage on account of his moral
dependence, ignorance, indigence, mental weakness, tender age or other handicap,
the courts must be vigilant for his protection.
Clearly, Rajab, Becmen and White Falcons acts and omissions are against
public policy because they undermine and subvert the interest and general welfare
of our OFWs abroad, who are entitled to full protection under the law. They set an

awful example of how foreign employers and recruitment agencies should treat and
act with respect to their distressed employees and workers abroad. Their shabby
and callous treatment of Jasmins case; their uncaring attitude; their unjustified
failure and refusal to assist in the determination of the true circumstances
surrounding her mysterious death, and instead finding satisfaction in the
unreasonable insistence that she committed suicide just so they can conveniently
avoid pecuniary liability; placing their own corporate interests above of the welfare
of their employees all these are contrary to morals, good customs and public
policy, and constitute taking advantage of the poor employee and her familys
ignorance, helplessness, indigence and lack of power and resources to seek the
truth and obtain justice for the death of a loved one.
Giving in handily to the idea that Jasmin committed suicide, and adamantly
insisting on it just to protect Rajab and Becmens material interest despite
evidence to the contrary is against the moral law and runs contrary to the good
custom of not denouncing ones fellowmen for alleged grave wrongdoings that
undermine their good name and honor.[30]
Whether employed locally or overseas, all Filipino workers enjoy the
protective mantle of Philippine labor and social legislation, contract stipulations to
the contrary notwithstanding. This pronouncement is in keeping with the basic
public policy of the State to afford protection to labor, promote full employment,
ensure equal work opportunities regardless of sex, race or creed, and regulate the
relations between workers and employers. This ruling is likewise rendered
imperative by Article 17 of the Civil Code which states that laws which have for
their object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or conventions
agreed upon in a foreign country.[31]
The relations between capital and labor are so impressed with public
interest,[32] and neither shall act oppressively against the other, or impair the interest
or convenience of the public.[33] In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living for the laborer.
[34]

The grant of moral damages to the employee by reason of misconduct on the

part of the employer is sanctioned by Article 2219 (10) [35] of the Civil Code, which
allows recovery of such damages in actions referred to in Article 21.[36]
Thus, in view of the foregoing, the Court holds that the Cuaresmas are
entitled to moral damages, which Becmen and White Falcon are jointly and
solidarily liable to pay, together with exemplary damages for wanton and
oppressive behavior, and by way of example for the public good.
Private employment agencies are held jointly and severally liable with the
foreign-based employer for any violation of the recruitment agreement or contract
of employment. This joint and solidary liability imposed by law against
recruitment agencies and foreign employers is meant to assure the aggrieved
worker of immediate and sufficient payment of what is due him.[37] 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.[38]
White Falcons assumption of Becmens liability does not automatically
result in Becmens freedom or release from liability. This has been ruled in ABD
Overseas Manpower Corporation v. NLRC.[39] Instead, both Becmen and White
Falcon should be held liable solidarily, without prejudice to each having the right
to be reimbursed under the provision of the Civil Code that whoever pays for
another may demand from the debtor what he has paid.[40]
WHEREFORE, the Amended Decision of the Court of Appeals dated May
14, 2008 in CA-G.R. SP No. 80619 and CA-G.R. SP No. 81030 is SET
ASIDE. Rajab & Silsilah Company, White Falcon Services, Inc., Becmen
Service Exporter and Promotion, Inc., and their corporate directors and
officers are found jointly and solidarily liable and ORDERED to indemnify the
heirs of Jasmin Cuaresma, spouses Simplicio and Mila Cuaresma, the following
amounts:
1)

TWO MILLION FIVE HUNDRED

(P2,500,000.00) as moral damages;

THOUSAND

PESOS

2)

TWO MILLION FIVE HUNDRED

(P2,500,000.00) as exemplary damages;

THOUSAND

3)

Attorneys fees equivalent to ten percent (10%) of the total monetary

award; and,

4)

Costs of suit.

SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice

PESOS

WE CONCUR:

CONCHITA CARPIO MORALES

Associate Justice

MINITA V. CHICO-NAZARIO
Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

DIOSDADO M. PERALTA
Associate Justice

ATTESTATION
I attest that the conclusions in the above decision were reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, it is hereby certified that the conclusions in the above

Decision were reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice
Becmen Service Exporter & Promotion, Inc. v. CuaresmaG.R. Nos. 182978-79. April
7, 2009.
FACTS: Jasmin Cuaresma was deployed by Becmen Service Exporter and Promotion,
Inc. to serve assistant nurse in Al-Birk Hospital in the Kingdom of Saudi Arabia
(KSA), for a contract duration of 3 years, with a corresponding salary of US$247.00
per month. A year later, she was found dead in her dormitory room. The examining
physician of the Al-Birk Hospital concluded that the cause of her death was
poisoning. Her body was repatriated to Manila and the following day, the City Health
Officer of Cabanatuan City conducted an autopsy and found that Jasmin died of
violent circumstances due to lacerations and abrasions on various parts of her body
and not poisoning as found by the physician from KSA. The NBI also conducted
another autopsy andthe toxicology report tested negative for non-volatile, metallic
poison and insecticides. Jasmins parents received from the Overseas Workers
Welfare Administration(OWWA) amounts for death, funeral and medical
reimbursement benefits. The Cuaresmas filed a complaint against Becmen and its
principal in the KSA, Rajab & Silsilah Company, claiming death and insurance
benefits, as well as moral and exemplary damages for Jasmins death, claiming that
Jasmins death was work-related, having occurred at the employers premises.
Becmen and Rajab insist that Jasmin committed suicide, citing a prior unsuccessful
suicide attempt and relying on the medical report of the KSA physician. While the
case was pending, Becmen filed a manifestation and motion for substitution alleging
that Rajab terminated their agency relationship and had appointed White Falcon
Services, Inc. (White Falcon) as its new recruitment agent in the Philippines. Thus,
White Falcon was impleaded as respondent and it adopted and reiterate
Becmens arguments.
The LA dismissed the complaint for lack of merit, gave weight to the medical report
of the Al-Birk Hospital finding that Jasmin died of suicide through poisoning and held
that her death was not service-connected, nor did it occur while she was on duty.
The LA also noted that her parents have received all corresponding benefits they
were entitled to under the law. The NLRC reversed the same and held that Jasmins
death was the result of an accident occurring within the employers premises that

is attributable to her employment, or to the conditions under which she lived, and
thus arose out of and in the course of her employment as nurse. The CA affirmed
the decision of the NLRC but amended the same with respect to the monetary
award.

ISSUE; Whether or not Rajab & Silsilah Company, White Falcon Services, Inc.,
Becmen Service Exporter and Promotion, Inc. are liable for the death of Jasmin
Cuaresma.
RULING: They are liable. Under Republic Act No. 8042 (R.A.8042), or the Migrant
Workers and Overseas Filipinos Act of 1995, the State shall, uphold the dignity of its
citizens whether in country or overseas, and provide adequate and timely social,
economic and legal services to Filipino migrant workers. Recruitment agencies
should be the first to come to the rescue of our OFWs. Upon them lies the primary
obligation to protect the rights and ensure the welfare of our OFWs, whether
distressed or not. Private employment agencies are held jointly and severally liable
with the foreign-based employer for any violation of the recruitment agreement or
contract of employment. This joint and solidary liability imposed by law against
recruitment agencies and foreign employers is meant to assure the aggrieved
worker of immediate and sufficient payment of what is due him. 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
Becmen and White Falcon, as licensed local recruitment agencies, miserably failed
to abide by the provisions of R.A.8042.Recruitment agencies are expected to extend
assistance to their deployed OFWs, especially those in distress. The evidence does
not even show that Becmen and Rajab lifted finger to provide legal representation
and seek an investigation of Jasmins case. They even stood by the argument that
Jasmin committed suicide in order to render the case closed and place their own
financial and corporate interests above their moral and social obligations, by
choosing to secure and insulate themselves from the perceived responsibility of
having to answer for and indemnify Jasmins heirs for her death. Clearly, Rajab,
Becmen and White Falcons acts and omissions are against public policy because
they undermine and subvert the interest and general welfare of our OFWs abroad,
who are entitled to full protection under the law. Their shabby and callous treatment
of Jasmins case; their uncaring attitude; their unjustified failure and refusal to assist
in the determination of the true circumstances surrounding her mysterious death,
and instead finding satisfaction in the unreasonable insistence that she committed
suicide just so they can conveniently avoid pecuniary liability; placing their own
corporate interests above of the welfare of their employees all these are contrary
to morals, good customs and public policy, and constitute taking advantage of the
poor employee and her familys ignorance, helplessness, indigence and lack of
power and resources.

THIRD DIVISION
SUNACE INTERNATIONAL
MANAGEMENT SERVICES, INC.
Petitioner,

G.R. No. 161757

Present:
QUISUMBING, J., Chairperson,
CARPIO,
CARPIO MORALES, and
TINGA, JJ.

- versus NATIONAL LABOR RELATIONS

COMMISSION,
Second
Division;HON.
ERNESTO
S.
DINOPOL, in his capacity as Labor
Arbiter, NLRC; NCR, Arbitration
Branch, Quezon City and DIVINA A.
MONTEHERMOZO,
Respondents.

Promulgated:
January 25, 2006

x - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
KEYWORD: Filipina maid complained vs Taiwanese employer for underpaid
salary, waiver of desistance, agency revoked, agency not solidary liable
DECISION
CARPIO MORALES, J.:
Petitioner, Sunace International Management Services (Sunace), a
corporation duly organized and existing under the laws of the Philippines,
deployed to Taiwan Divina A. Montehermozo (Divina) as a domestic helper under
a 12-month contract effectiveFebruary 1, 1997. The deployment was with the
assistance of a Taiwanese broker, Edmund Wang, President of Jet Crown
International Co., Ltd.
[1]

After her 12-month contract expired on February 1, 1998, Divina continued

working for her Taiwanese employer, Hang Rui Xiong, for two more years, after
which she returned to the Philippines on February 4, 2000.
Shortly after her return or on February 14, 2000, Divina filed a
complaint before the National Labor Relations Commission (NLRC) against
Sunace, one Adelaide Perez, the Taiwanese broker, and the employer-foreign
principal alleging that she was jailed for three months and that she was underpaid.
[2]

The following day or on February 15, 2000, Labor Arbitration Associate

Regina T. Gavin issued Summons to the Manager of Sunace, furnishing it with a
copy of Divinas complaint and directing it to appear for mandatory conference on
February 28, 2000.
[3]

The scheduled mandatory conference was reset. It appears to have been

concluded, however.
On April 6, 2000, Divina filed her Position Paper claiming that under her
original one-year contract and the 2-year extended contract which was with the
knowledge and consent of Sunace, the following amounts representing income tax
and savings were deducted:
[4]

Year

Deduction for
Income Tax

Deduction for Savings

1997
1998
1999

NT10,450.00
NT9,500.00
NT13,300.00

NT23,100.00
NT36,000.00
NT36,000.00;

[5]

and while the amounts deducted in 1997 were refunded to her, those deducted in
1998 and 1999 were not.
On even date, Sunace, by its Proprietor/General
Manager Maria Luisa Olarte, filed its Verified Answer and Position Paper,
claiming as follows, quotedverbatim:
[6]

COMPLAINANT IS NOT ENTITLED

FOR THE REFUND OF HER 24 MONTHS
SAVINGS

3. Complainant could not anymore claim nor entitled for the refund of her
24 months savings as she already took back her saving already last year and the
employer did not deduct any money from her salary, in accordance with
a Fascimile Message from the respondent SUNACEs employer, Jet Crown
International Co. Ltd., a xerographic copy of which is herewith attached
as ANNEX 2 hereof;
COMPLAINANT IS NOT ENTITLED
TO REFUND OF HER 14 MONTHS TAX
AND PAYMENT OF ATTORNEYS FEES
4. There is no basis for the grant of tax refund to the complainant as the
she finished her one year contract and hence, was not illegally dismissed by her
employer. She could only lay claim over the tax refund or much more be
awarded of damages such as attorneys fees as said reliefs are available only when
the dismissal of a migrant worker is without just valid or lawful cause as defined
by law or contract.
The rationales behind the award of tax refund and payment of attorneys
fees is not to enrich the complainant but to compensate him for actual injury
suffered. Complainant did not suffer injury, hence, does not deserve to be
compensated for whatever kind of damages.
Hence, the complainant has NO cause of action against respondent
SUNACE for monetary claims, considering that she has been totally paid of all
the monetary benefits due her under her Employment Contract to her full
satisfaction.
6. Furthermore, the tax deducted from her salary is in compliance with
the Taiwanese law, which respondent SUNACE has no control and complainant
has to obey and this Honorable Office has no authority/jurisdiction to intervene
because the power to tax is a sovereign power which the Taiwanese Government
is supreme in its own territory. The sovereign power of taxation of a state is
recognized under international law and among sovereign states.

7. That respondent SUNACE respectfully reserves the right to file

supplemental Verified Answer and/or Position Paper to substantiate its prayer for
the dismissal of the above case against the herein respondent. AND BY WAY OF
x x x x (Emphasis and underscoring supplied)

Reacting to Divinas Position Paper, Sunace filed on April 25, 2000 an

. . . ANSWER TO COMPLAINANTS POSITION PAPER alleging that Divinas 2-year
extension of her contract was without its knowledge and consent, hence, it had no
liability attaching to any claim arising therefrom, and Divina in fact executed a
Waiver/Quitclaim and Release of Responsibility and an Affidavit of Desistance,
copy of each document was annexed to said . . . ANSWER TO COMPLAINANTS
POSITION PAPER.
[7]

To Sunaces . . . ANSWER TO COMPLAINANTS POSITION PAPER, Divina filed

a 2-page reply, without, however, refuting Sunaces disclaimer of knowledge of
the extension of her contract and without saying anything about the Release,
Waiver and Quitclaim and Affidavit of Desistance.
[8]

The Labor Arbiter, rejected Sunaces claim that the extension of Divinas
contract for two more years was without its knowledge and consent in this wise:
We reject Sunaces submission that it should not be held
responsible for the amount withheld because her contract was extended for
2 more years without its knowledge and consent because as Annex
B shows, Sunace and Edmund Wang have not stopped communicating
with each other and yet the matter of the contracts extension and Sunaces
alleged non-consent thereto has not been categorically established.
[9]

What Sunace should have done was to write to POEA about the
extension and its objection thereto, copy furnished the complainant herself,
her foreign employer, Hang Rui Xiong and the Taiwanese broker, Edmund
Wang.
And because it did not, it is presumed to have consented to the
extension and should be liable for anything that resulted thereform (sic).
(Underscoring supplied)
[10]

The Labor Arbiter rejected too Sunaces argument that it is not liable on
account of Divinas execution of a Waiver and Quitclaim and an Affidavit of
Desistance. Observed the Labor Arbiter:
Should the parties arrive at any agreement as to the whole or any part of
the dispute, the same shall be reduced to writing and signed by the parties and
their respective counsel (sic), if any, before the Labor Arbiter.
The settlement shall be approved by the Labor Arbiter after being satisfied
that it was voluntarily entered into by the parties and after having explained to
them the terms and consequences thereof.

A compromise agreement entered into by the parties not in the presence of

the Labor Arbiter before whom the case is pending shall be approved by him, if
after confronting the parties, particularly the complainants, he is satisfied that they
understand the terms and conditions of the settlement and that it was entered into
freely voluntarily (sic) by them and the agreement is not contrary to law, morals,
and public policy.
And because no consideration is indicated in the documents, we
strike them down as contrary to law, morals, and public policy.
[11]

He accordingly decided in favor of Divina, by decision of October 9, 2000, the

dispositive portion of which reads:
[12]

Wherefore, judgment is hereby rendered ordering respondents SUNACE

INTERNATIONAL SERVICES and its owner ADELAIDA PERGE, both in their
personal capacities and as agent of Hang Rui Xiong/Edmund Wang to jointly and
severally pay complainant DIVINA A. MONTEHERMOZO the sum of
NT91,950.00 in its peso equivalent at the date of payment, as refund for the
amounts which she is hereby adjudged entitled to as earlier discussed plus 10%
thereof as attorneys fees since compelled to litigate, complainant had to engage
the services of counsel.
SO ORDERED.

[13]

(Underescoring supplied)

On appeal of Sunace, the NLRC, by Resolution of April 30, 2002, affirmed

the Labor Arbiters decision.
[14]

Via petition for certiorari, Sunace elevated the case to the Court of Appeals
which dismissed it outright by Resolution of November 12, 2002, the full text of
which reads:
[15]

[16]

The petition for certiorari faces outright dismissal.

The petition failed to allege facts constitutive of grave abuse of discretion
on the part of the public respondent amounting to lack of jurisdiction when the
NLRC affirmed the Labor Arbiters finding that petitioner Sunace International
Management Services impliedly consented to the extension of the contract of
private respondent Divina A. Montehermozo. It is undisputed that petitioner was
continually communicating with private respondents foreign employer (sic). As
agent of the foreign principal, petitioner cannot profess ignorance of such

extension
as
obviously, the
act
of
the
principal
extending
complainant (sic) employment contract necessarily bound it. Grave abuse of
discretion is not present in the case at bar.
ACCORDINGLY,
the
COURSE and DISMISSED.

petition

is

hereby DENIED

DUE

[17]

SO ORDERED.
(Emphasis on words in capital letters in the original; emphasis on words in
small letters and underscoring supplied)

Its Motion for Reconsideration having been denied by the appellate court by
Resolution of January 14, 2004, Sunace filed the present petition for review on
certiorari.
[18]

The Court of Appeals affirmed the Labor Arbiter and NLRCs finding that
Sunace knew of and impliedly consented to the extension of Divinas 2-year
contract. It went on to state that It is undisputed that [Sunace] was continually
communicating with [Divinas] foreign employer. It thus concluded that [a]s
agent of the foreign principal, petitioner cannot profess ignorance of such
extension as obviously, the act of the principal extending complainant (sic)
employment contract necessarily bound it.
Contrary to the Court of Appeals finding, the alleged continuous
communication was with the Taiwanese broker Wang, not with the foreign
employer Xiong.
The February 21, 2000 telefax message from the Taiwanese broker to
Sunace, the only basis of a finding of continuous communication, reads verbatim:
xxxx
Regarding to Divina, she did not say anything about her
saving in police station. As we contact with her employer, she
took back her saving already last years. And they did not deduct
any money from her salary. Or she will call back her employer to
check it again. If her employer said yes! we will get it back for
her.

Thank you and best regards.

(sgd.)
Edmund Wang
President
[19]

The finding of the Court of Appeals solely on the basis of the above-quoted
telefax message, that Sunace continually communicated with the foreign
principal (sic) and therefore was aware of and had consented to the execution of
the extension of the contract is misplaced. The message does not provide evidence
that Sunace was privy to the new contract executed after the expiration on
February 1, 1998 of the original contract. That Sunace and the
Taiwanese broker communicated regarding Divinas allegedly withheld savings
does not necessarily mean that Sunace ratified the extension of the contract. As
Sunace points out in its Reply filed before the Court of Appeals,
[20]

As can be seen from that letter communication, it was just an

information given to the petitioner that the private respondent had t[aken]
already her savings from her foreign employer and that no deduction was
made on her salary. It contains nothing about the extension or the
petitioners consent thereto.
[21]

Parenthetically, since the telefax message is dated February 21, 2000, it is

safe to assume that it was sent to enlighten Sunace who had been directed, by
Summons issued on February 15, 2000, to appear on February 28, 2000 for a
mandatory conference following Divinas filing of the complaint on February 14,
2000.
Respecting the Court of Appeals following dictum:
As agent of its foreign principal, [Sunace] cannot profess ignorance of
such an extension as obviously, the act of its principal extending [Divinas]
employment contract necessarily bound it,
[22]

it too is a misapplication, a misapplication of the theory of imputed knowledge.

The theory of imputed knowledge ascribes the knowledge of the agent,
Sunace, to the principal, employer Xiong, not the other way around. The
[23]

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
Divinas claims arising from the 2-year employment extension. As the New Civil
Code provides,
Contracts take effect only between the parties, their assigns, and
heirs, except in case where the rights and obligations arising from the
contract are not transmissible by their nature, or by stipulation or by
provision of law.
[24]

Furthermore, as Sunace correctly points out, there was an implied revocation

of its agency relationship with its foreign principal when, after the termination of
the original employment contract, the foreign principal directly negotiated with
Divina and entered into a new and separate employment contract in Taiwan.
Article 1924 of the New Civil Code reading
The agency is revoked if the principal directly manages the business
entrusted to the agent, dealing directly with third persons.

thus applies.
In light of the foregoing discussions, consideration of the validity of the
Waiver and Affidavit of Desistance which Divina executed in favor of Sunace is
rendered unnecessary.
WHEREFORE, the petition is GRANTED. The challenged resolutions of
the Court of Appeals are hereby REVERSEDand SET ASIDE. The complaint of
respondent Divina A. Montehermozo against petitioner is DISMISSED.
SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

ANTONIO T. CARPIO
Associate Justice

DANTE O. TINGA
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, and the Division
Chairmans Attestation, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the writer of
the opinion of the Court.

ARTEMIO V. PANGANIBAN
Chief Justice

SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. v. NLRC

G.R. No. 161757; January 25, 2006
Ponente: J. Carpio-Morales
FACTS:
Petitioner, Sunace International Management Services (Sunace), deployed to Taiwan
Divina A. Montehermozo (Divina) as a domestic helper under a 12-month contract
effective February 1, 1997. The deployment was with the assistance of a Taiwanese
broker, Edmund Wang, President of Jet Crown International Co., Ltd.
After her 12-month contract expired on February 1, 1998, Divina continued working
for her Taiwanese employer, Hang Rui Xiong, for two more years, after which she
returned to the Philippines on February 4, 2000.
Shortly after her return or on February 14, 2000, Divina filed a complaint before the
National Labor Relations Commission (NLRC) against Sunace, one Adelaide Perez,
the Taiwanese broker, and the employer-foreign principal alleging that she was
jailed for three months and that she was underpaid
Reacting to Divina's Position Paper, Sunace filed on April 25, 2000 an ". . . ANSWER
TO COMPLAINANT'S POSITION PAPER" alleging that Divina's 2-year extension of her
contract was without its knowledge and consent, hence, it had no liability attaching
to any claim arising therefrom, and Divina in fact executed a Waiver/Quitclaim and
Release of Responsibility and an Affidavit of Desistance, copy of each document was
annexed to said
The Labor Arbiter, rejected Sunace's claim that the extension of Divina's contract for
two more years was without its knowledge and consent.

ISSUE: Whether the act of the foreigner-principal in renewing the contract of Divina
be attributable to 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 Montehermozos 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 Sunaces 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 Montehermozos 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 [Montehermozos] 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 principalforeign 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
Montehermozos 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.

THIRD DIVISION
G.R. No. 77279 April 15, 1988
MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY, petitioners,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION and FRANCISCO D. REYES, respondents.
Demetria Reyes, Merris & Associates for petitioners.
The Solicitor General for public respondents.
Bayani G. Diwa for private respondent.

CORTES, J.:
Petitioner, in this special civil action for certiorari, alleges grave abuse of discretion on the part of the
National Labor Relations Commission in an effort to nullify the latters resolution and thus free
petitioner from liability for the disability suffered by a Filipino worker it recruited to work in Saudi
Arabia. This Court, however, is not persuaded that such an abuse of discretion was committed. This
petition must fail.
The facts of the case are quite simple.
Petitioner, a duly licensed recruitment agency, as agent of Ali and Fahd Shabokshi Group, a Saudi
Arabian firm, recruited private respondent to work in Saudi Arabia as a steelman.
The term of the contract was for one year, from May 15,1981 to May 14, 1982. However, the contract
provided for its automatic renewal:
FIFTH: The validity of this Contract is for ONE YEAR commencing from the date the
SECOND PARTY assumes hill port. This Contract is renewable automatically if
neither of the PARTIES notifies the other PARTY of his wishes to terminate the
Contract by at least ONE MONTH prior to the expiration of the contractual period.
[Petition, pp. 6-7; Rollo, pp. 7-8].
The contract was automatically renewed when private respondent was not repatriated by his Saudi
employer but instead was assigned to work as a crusher plant operator. On March 30, 1983, while
he was working as a crusher plant operator, private respondent's right ankle was crushed under the
machine he was operating.

On May 15, 1983, after the expiration of the renewed term, private respondent returned to the
Philippines. His ankle was operated on at the Sta. Mesa Heights Medical Center for which he
incurred expenses.
On September 9, 1983, he returned to Saudi Arabia to resume his work. On May 15,1984, he was
repatriated.
Upon his return, he had his ankle treated for which he incurred further expenses.
On the basis of the provision in the employment contract that the employer shall compensate the
employee if he is injured or permanently disabled in the course of employment, private respondent
filed a claim, docketed as POEA Case No. 84-09847, against petitioner with respondent Philippine
Overseas Employment Administration. On April 10, 1986, the POEA rendered judgment in favor of
private respondent, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the complainant and against
the respondent, ordering the latter to pay to the complainant:
1. SEVEN THOUSAND NINE HUNDRED EIGHTY-FIVE PESOS and 60/100
(P7,985.60), Philippine currency, representing disability benefits;
2. TWENTY-FIVE THOUSAND NINETY-SIX Philippine pesos and 20/100 (29,096.20)
representing reimbursement for medical expenses;
3. Ten percent (10%) of the abovementioned amounts as and for attorney's fees.
[NLRC Resolution, p. 1; Rollo, p. 16].
On appeal, respondent NLRC affirmed the decision of the POEA in a resolution dated December 12,
1986.
Not satisfied with the resolution of the POEA, petitioner instituted the instant special civil action for
certiorari, alleging grave abuse of discretion on the part of the NLRC.
1. Petitioner claims that the NLRC gravely abused its discretion when it ruled that petitioner was
liable to private respondent for disability benefits since at the time he was injured his original
employment contract, which petitioner facilitated, had already expired. Further, petitioner disclaims
liability on the ground that its agency agreement with the Saudi principal had already expired when
the injury was sustained.
There is no merit in petitioner's contention.
Private respondents contract of employment can not be said to have expired on May 14, 1982 as it
was automatically renewed since no notice of its termination was given by either or both of the
parties at least a month before its expiration, as so provided in the contract itself. Therefore, private
respondent's injury was sustained during the lifetime of the contract.
A private employment agency may be sued jointly and solidarily with its foreign principal for
violations of the recruitment agreement and the contracts of employment:
Sec. 10. Requirement before recruitment. Before recruiting any worker, the private
employment agency shall submit to the Bureau the following documents:

(a) A formal appointment or agency contract executed by a foreign-based employer

in favor of the license holder to recruit and hire personnel for the former ...
xxx xxx xxx
2. Power of the agency to sue and be sued jointly and solidarily with
the principal or foreign-based employer for any of the violations of the
recruitment agreement and the contracts of employment. [Section
10(a) (2) Rule V, Book I, Rules to Implement the Labor Code].
Thus, in the recent case of Ambraque International Placement & Services v. NLRC [G.R. No. 77970,
January 28,1988], the Court ruled that a recruitment agency was solidarily liable for the unpaid
salaries of a worker it recruited for employment in Saudi Arabia.
Even if indeed petitioner and the Saudi principal had already severed their agency agreement at the
time private respondent was injured, petitioner may still be sued for a violation of the employment
contract because no notice of the agency agreement's termination was given to the private
respondent:
Art 1921. If the agency has been entrusted for the purpose of contra with specified
persons, its revocation shall not prejudice the latter if they were not given notice
thereof. [Civil Code].
In this connection the NLRC elaborated:
Suffice it to state that albeit local respondent M. S. Catan Agency was at the time of
complainant's accident resulting in his permanent partial disability was (sic) no longer
the accredited agent of its foreign principal, foreign respondent herein, yet its
responsibility over the proper implementation of complainant's employment/service
contract and the welfare of complainant himself in the foreign job site, still existed,
the contract of employment in question not having expired yet. This must be so,
because the obligations covenanted in the recruitment agreement entered into by
and between the local agent and its foreign principal are not coterminus with the
term of such agreement so that if either or both of the parties decide to end the
agreement, the responsibilities of such parties towards the contracted employees
under the agreement do not at all end, but the same extends up to and until the
expiration of the employment contracts of the employees recruited and employed
pursuant to the said recruitment agreement. Otherwise, this will render nugatory the
very purpose for which the law governing the employment of workers for foreign jobs
abroad was enacted. [NLRC Resolution, p. 4; Rollo, p. 18]. (Emphasis supplied).
2. Petitioner contends that even if it is liable for disability benefits, the NLRC gravely abused its
discretion when it affirmed the award of medical expenses when the said expenses were the
consequence of private respondent's negligence in returning to work in Saudi Arabia when he knew
that he was not yet medically fit to do so.
Again, there is no merit in this contention.
No evidence was introduced to prove that private respondent was not medically fit to work when he
returned to Saudi Arabia. Exhibit "B", a certificate issued by Dr. Shafquat Niazi, the camp doctor, on
November 1, 1983, merely stated that private respondent was "unable to walk properly, moreover he

is still complaining [of] pain during walking and different lower limbs movement" [Annex "B", Reply;
Rollo, p. 51]. Nowhere does it say that he was not medically fit to work.
Further, since petitioner even assisted private respondent in returning to work in Saudi Arabia by
purchasing his ticket for him [Exhibit "E"; Annex "A", Reply to Respondents' Comments], it is as if
petitioner had certified his fitness to work. Thus, the NLRC found:
Furthermore, it has remained unrefuted by respondent that complainant's
subsequent departure or return to Saudi Arabia on September 9, 1983 was with the
full knowledge, consent and assistance of the former. As shown in Exhibit "E" of the
record, it was respondent who facilitated the travel papers of complainant. [NLRC
Resolution, p. 5; Rollo, p. 19].
WHEREFORE, in view of the foregoing, the petition is DISMISSED for lack of merit, with costs
against petitioner.
SO ORDERED.
Fernan, (Chairman), Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

CATAN vs. NLRC

Petitioner, a duly licensed recruitment agency, recruited private respondent to work
in Saudi Arabia as a steelman. The term of the contract provides for 1 year and with
automatic renewal. It was renewed when private respondent was not repatriated by
his Saudi employer but instead was assigned to work as a crusher plant operator
and crushed his ankle by the machine he was operating. After the expiration of the
renewed term, private respondent returned to the Philippines, had his ankle
operated and incurred expenses. After, he returned to Saudi Arabia to resume his
work and was repatriated. Upon his return, he had his ankle treated for which he
incurred further expenses.2.On the basis of the provision in the employment
contract that the employer shall compensate the employee if he is injured or
permanently disabled in the course of employment, private respondent filed a
claim, against petitioner with respondent Philippine Overseas Employment
Administration. The POEA rendered judgment in favor of private respondent. On
appeal, respondent NLRC affirmed the decision. Not satisfied with the resolution of
the POEA, petitioner instituted the instant special civil action for certiorari, alleging
grave abuse of discretion on the part of the NLRC.
RULING
1. The court said that there is no merit in petitioners contention .A private
employment agency may be sued jointly and solidarily with its foreign principal for
violations of the recruitment agreement and the contracts of employment.
2. Even if indeed petitioner and the Saudi principal had already severed their
agency agreement at the time private respondent was injured, petitioner may still

be sued for a violation of the employment contract because no notice of the agency
agreement's termination was given to the private respondent:
3. Petitioner contends that even if it is liable for disability benefits, the NLRC gravely
abused its discretion when it affirmed the award of medical expenses when the said
expenses were the consequence of private respondent's negligence in returning to
work in Saudi Arabia when he knew that he was not yet medically fit to do so.
4. The court said that theres No evidence introduced to prove that private
respondent was not medically fit to work when he returned to Saudi Arabia.
Nowhere does it say it the medical certificate issued by the camp doctor that he
was not medically fit to work.

FIRST DIVISION
EQUI-ASIA PLACEMENT, INC.,
Petitioner,
- versus -

G.R. No. 152214

Present:
PANGANIBAN, C.J.
Chairperson,
YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ.

DEPARTMENT OF FOREIGN
AFFAIRS (DFA) represented
by the HON. DOMINGO L.
SIAZON,
JR.,
SECRETARY,
DEPARTMENT OF LABOR AND
EMPLOYMENT
(DOLE),
Promulgated:
represented
by
HON.
BIENVENIDO LAGUESMA,
September 19, 2006
Responde
nts.
x----------------- --------------------------------x
DECISION
CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari of the Decision

dated 4 October 2001[1] and Resolution dated 18 February 2002of
the Court of Appeals in CA-G.R. SP No. 61904. The Decision
denied petitioners petition for certiorari while the Resolution
denied its Motion for Reconsideration.
The Court of Appeals summarized the facts of this case in
this wise:
On September 16, 2000, Manny dela Rosa Razon, a native
of Lemery, Batangas and an overseas Filipino worker, died of acute
cardiac arrest while asleep at the dormitory of the Samsong Textile
Processing Factory in South Korea. Informed thereof, the Philippine
Overseas Labor Office (POLO) at South Korea immediately relayed the
incident to the Philippine Embassy in South Korea. Forthwith, the
[Labor] Attach of the Philippine Embassy dispatched a letter
to Eleuterio N. Gardiner, administrator of the Overseas Workers Welfare
Administration (OWWA). The letter reads:
VERY URGENT, POLO has recently received a report that
OFW Manny dela Rosa RAZON, an undocumented worker,
died last Saturday, 16 September, from an apparent
pancreatic attack or bangungot.
According to the verbal reports of Moises and
Ronald Recarde, Mannys co-workers, he was found
already lifeless inside their quarters at around 11:00 in
the morning of the above date. They rushed him
to Uri Hospital where the Doctor declared him dead on
arrival.
Per information gathered, the deceased is single,
29 years old, from Bukal, Lemery, Batangas. His next-ofkins are
Mrs.
Rowena Razon (Auntie)
and
Mr. Razon (Uncle) with telephone number (043)411-2308.
POLO is awaiting signed statements from the
aforementioned workers who promised to send it by fax
this afternoon.
We are also coordinating with the deceaseds
employer for documentation requirements and financial
assistance for the repatriation of the remains.
We will highly appreciate if Home Office could
advise the next-of-kins of the urgent need to issue a

Special Power of Attorney (SPA) to

repatriation requirements of the subject.

facilitate

the

In anticipation of the next-of-kins likely move to

seek financial assistance from OWWA for the repatriation
of their loved [one], please be advised in advance that we
will need about US$4,000.00 to repatriate the cadaver (to
include hospital and morgue costs) to Manila. xxx
In turn, the OWWA, through Atty. Cesar L. Chavez, indorsed the
matter, for appropriate action, to Director R. Casco of the Welfare
Employment Office of the Philippine Overseas Employment
Administration (WEO-POEA).
Upon verification by the WEO-POEA on its data base, it was
discovered that Manny Razon was recruited and deployed by
petitioner Equi-Asia Placement, Inc., and was sent to South Korea on
April 3, 2000 to work-train at Yeongjin Machinery, Inc. Thereupon,
POEA addressed the herein first assailed telegram-directive
dated September 22, 2000 to the President/General Manager of the
petitioner. We quote the telegram:
PLEASE PROVIDE PTA [Prepaid Ticket Advice] FOR THE
REPATRIATION OF REMAINS AND BELONGINGS OF OFW
MANNY DELA ROSA RAZON AS PER REQUEST OF
PHILIPPINE EMBASSY, KOREA, YOU CAN COORDINATE
WITH YOUR FOREIGN EMPLOYER AND TO WAD/OWWA
(MLA) AS REGARDS TO THIS MATTER. YOU ARE GIVEN
TWO (2) DAYS FROM RECEIPT HEREOF WITHIN WHICH TO
PROVIDE SAID TICKET AND ASSISTANCE, KINDLY SUBMIT
YOUR REPORT TO ASSISTANCE AND WELFARE DIVISION
(AWD), 2/F POEA, FAILURE TO DO SO WILL CONSTRAIN US
TO IMPOSE APPROPRIATE SANCTION UNDER OUR RULES
Responding thereto, petitioner, thru its President Daniel Morga,
Jr., faxed on September 26, 2000 the following message to the
Assistance and Welfare Division of the POEA:
In connection with your telegram, dated 09/22/2000,
requiring us to report the circumstances surrounding the
death of OFW MANNY DELA ROSA RAZON in Korea and
requesting us to issue a PTA, etc., for the repatriation of
the remains of said OFW, this is to report to your good
office the following:
1.
The deceased was deployed by our agency
on April 3, 2000 to Yeongjin Machine Company in South
Korea;

2.
He
violated
his
employment/training/dispatching contracts on June 25,
2000 by unlawfully escaping/running away (TNT) from his
company assignment without prior KFSMB authorization
and working/staying in unknown company/place;
3.

He
allegedly
of bangungot thereafter;

died

In view thereof, we cannot heed your requests as

embodied in your telegram. However, his relatives can avail of
the benefits provided for by OWWA in cases involving
undocumented/illegal Filipino workers abroad.
Trusting for your kind understanding
On the same date September 26, 2000 Director
Ricardo R. Casco of the WEO-POEA sent to the petitioner the
herein second assailed letter-directive, which pertinently reads:
We have received a copy of your fax
message dated 26 September 2000 as regards to
your response to our request for PTA for aforesaid
deceased OFW. Nevertheless, may we remind you
that pursuant to Sections 52, 53, 54 and 55 of the
Implementing Rules Governing RA 8042, otherwise
known as the Migrant Workers and Overseas
Filipino Act of 1995, the repatriation of OFW, his/her
remains and transport of his personal effects is the
primary responsibility of the principal or agency
and to immediately advance the cost of plane
fare without prior determination of the cause of
workers repatriation. The Rules further provide for
the procedure to be followed in cases when the
foreign employer/agency fails to provide for the
cost of the repatriation, compliance of which is
punishable by suspension of the license of the
agency or such sanction as the Administration shall
deem proper. Hence, you are required to provide
the PTA for the deceased OFW in compliance with
the
requirement
in
accordance with
R.A. 8042. You are given forty-eight (48) hours
upon receipt hereof within which to provide said
ticket. Failure in this regard will constrain us to
impose the appropriate sanction under our rules.
On September 27, 2000, petitioner wrote back Director
Ricardo R. Casco, thus:

In connection with your fax letter dated

September 26, 2000, re: the repatriation of the
remains of the deceased, ex-trainee (OFW) MANNY
DELA ROSA RAZON, please be informed that the
provisions of Section 53 as well as, and in relation
to,
Section 55 of
the
Omnibus
Rules
and
Regulations Implementing the Migrant Workers and
Overseas Filipinos Act of 1995 on the matters
covering the following:
1. The responsibility of the agency to advance the
cost of plane fare without prior determination of the
cause of the deceased workers termination.
2. The recovery of the same costs from the estate
of the dead worker before the NLRC.
3.

The action to be imposed by POEA for noncompliance

therewith
within
48
hours
are violative of due process and/or the principle
on due delegation of power.

This is so because Sec. 15 of R.A. 8042

clearly contemplates prior notice and hearing
before
responsibilitythereunder could
be
established against the agency that sets up the
defense of sole fault in avoidance of said
responsibility -. Besides, the sections in question
unduly grant the powers to require advance
payment of the plane fare, to impose the
corresponding penalty of suspension in case of noncompliance therewith, within 48 hours and to
recover said advance payment from the dead
workers estate upon the return of his remains to
the country before the NLRC, when the law itself
does not expressly provide for the grant of such
powers.
xxx

xxx

x x x.

Please provide us immediately with the

death certificate/post mortem report/police report
pertinent to above as proof of death and cause
thereof.
Nonetheless,
and
apprehensive
of
the
adverse
repercussions which may ensue on account of its noncompliance with the directive, petitioner, on September 29,
2000, advanced under protest the costs for the repatriation of
the remains of the late Manny dela Rosa Razon.

Thereafter, petitioner went to this Court via the instant

petition for certiorari, posing, for Our consideration, the sole
issue of
WHETHER OR NOT SECTIONS 52, 53, 54
AND
55
OF
THE
OMNIBUS
RULES
AND
REGULATIONS
IMPLEMENTING
THE
MIGRANT
WORKERS AND OVERSEAS FILIPINOS ACT OF 1995
(R.A. 8042), ISSUED BY DFA AND POEA, WHICH
POEA
SUMMARILY
ORDERED
THE
HEREIN
PETITIONER TO COMPLY VIZ-A-VIZ THE PAYMENT IN
ADVANCE
OF
THE
EXPENSES
FOR
THE
REPATRIATION OF THE REMAINS OF A DECEASED
WORKER-TRAINEE WHO, AT THE TIME OF HIS
DEATH,
HAS
NO
EXISTING
EMPLOYMENT
(DISPATCHING) CONTRACT WITH EITHER SAID
PETITIONER OR HIS FOREIGN PRINCIPAL AND NO
VALID VISA OR IS NOT WORKING WITH THE
FOREIGN
PRINCIPAL TO
WHICH
PETITIONER
DEPLOYED HIM, IS ILLEGAL AND/OR VIOLATIVE OF
DUE PROCESS SUCH THAT POEA ACTED WITHOUT
[OR IN] EXCESS OF ITS JURISDICTION AND/OR IN
GRAVE ABUSE OF DISCRETION IN ISSUING SAID
ORDER TO PAY SAID EXPENSES.[2]

On 4 October 2001, the Court of Appeals rendered the

Decision which is now the subject of the present
petition. Thedispositive portion of the Court of Appeals Decision
states:
WHEREFORE, for lack of merit,
is DENIED and is accordingly DISMISSED.[3]

the

instant

petition

In dismissing the petition for certiorari, the Court of Appeals

stated that petitioner was mainly accusing the Philippine
Overseas Employment Administration (POEA) of grave abuse of
discretion when it ordered petitioner to pay, in advance, the costs
for the repatriation of the remains of the deceased
Manny dela Rosa Razon.

The Court of Appeals ruled that the POEA did not commit
any grave abuse of discretion as its directives to petitioner were
issued pursuant to existing laws and regulations. [4] It likewise
held that a petition for certiorari, which was the remedy availed of
by petitioner, is not the proper remedy as the same is only
available when there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law. [5] Section 62 of
the Omnibus Rules and Regulations Implementing the Migrant
Workers and Overseas Filipinos Act of 1995 or Republic Act 8042
(Omnibus Rules) states that the Labor Arbiters of NLRC shall
have the original and exclusive jurisdiction to hear and decide all
claims arising out of employer-employee relationship or by virtue
of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and
other forms of damages, subject to the rules and procedures of
the NLRC. There is, therefore, an adequate remedy available to
petitioner.
Lastly, the Court of Appeals declared that it could not strike
down as unconstitutional Sections 52, 53, 54, and 55 of the
Omnibus Rules as the unconstitutionality of a statute or rules may
not be passed upon unless the issue is directly raised in an
appropriate proceeding.[6]
In the present recourse, petitioner submits the following
issues for our consideration:
1.
The Court of Appeals erred in the appreciation of the issue as it
mistakenly considered, in dismissing the petition before it, that
petitioner is contesting the compliance and conformity of the POEA
directives with Sections 52, 53, 54, and 55 of the Omnibus Rules and
Regulations implementing in particular Section 15 of RA 8042;
2.
The Court of Appeals, in dismissing the petition, again erred in
ruling that constitutional questions cannot be passed upon and
adjudged in a special civil action for certiorari under Rule 65 of the
1997 Rules of Civil Procedure;

3.
The Court of Appeals erred in not holding that, under the facts
of the case that gave rise to the petition before it, the same sections of
the said rules and regulations are illegal, invalid and/or violative of the
right of petitioner to due process of law and, therefore, the POEA
directives issued pursuant thereto constitute acts committed without,
or in excess of, jurisdiction and/or in grave abuse of discretion. [7]

In Our Resolution of 20 November 2002, we gave due

course to the present petition and directed the parties to submit
their respective memoranda.[8] On 28 August 2006, we resolved
to dispense with the memorandum of the estate/heirs of
deceased Manny dela Rosa Razon.
At the center of this petition are the following provisions of
the omnibus rules:
Section 52. Primary Responsibility for Repatriation. The
repatriation of the worker, or his/her remains, and the transport of
his/her personal effects shall be the primary responsibility of the
principal or agency which recruited or deployed him/her abroad. All
costs attendant thereto shall be borne by the principal or the agency
concerned.
Section 53. Repatriation of Workers. The primary
responsibility to repatriate entails the obligation on the part of principal
or agency to advance the cost of plane fare and to immediately
repatriate the worker should the need for it arise, without a prior
determination of the cause of the termination of the workers
employment. However, after the worker has returned to the country,
the principal or agency may recover the cost of repatriation from the
worker if the termination of employment was due solely to his/her
fault.
Every contract for overseas employment shall provide for the
primary responsibility of agency to advance the cost of plane fare, and
the obligation of the worker to refund the cost thereof in case his/her
fault is determined by the Labor Arbiter.
Section 54. Repatriation Procedure. When a need for
repatriation arises and the foreign employer fails to provide for it cost,
the responsible personnel at site shall simultaneously notify OWWA
and the POEA of such need. The POEA shall notify the agency
concerned of the need for repatriation. The agency shall provide the
plane
ticket
or
the
prepaid
ticket
advice
(PTA)
to
the Filipinos Resource Center or to the appropriate Philippine Embassy;

and notify POEA of such compliance. The POEA shall inform OWWA of
the action of the agency.
Section 55. Action on Non-Compliance. If the employment
agency fails to provide the ticket or PTA within 48 hours from receipt of
the notice, the POEA shall suspend the license of the agency or impose
such sanctions as it may deem necessary. Upon notice from the POEA,
OWWA shall advance the costs of repatriation with recourse to the
agency or principal. The administrative sanction shall not be lifted
until the agency reimburses the OWWA of the cost of repatriation with
legal interest.

Said provisions, on the other hand, are supposed to

implement Section 15 of Republic Act No. 8042[9] which provides:
SEC. 15. Repatriation of Workers; Emergency Repatriation
Fund. The repatriation of the worker and the transport of his personal
belongings shall be the primary responsibility of the agency which,
recruited or deployed the worker overseas. All costs attendant to
repatriation shall be borne by or charged to the agency concerned
and/or its principal. Likewise, the repatriation of remains and transport
of the personal belongings of a deceased worker and all costs
attendant thereto shall be borne by the principal and/or the local
agency. However, in cases where the termination of employment is
due solely to the fault of the worker, the principal/employer or agency
shall not in any manner be responsible for the repatriation of the
former and/or his belongings.

Petitioner
contends
that
the
Court
of
Appeals misappreciated the issue it presented in its petition
for certiorari when, instead of resolving whether Sections 52, 53,
54, and 55 of the Omnibus Rules are illegal and violative of due
process, it merely confined itself to the question of whether or not
the POEA committed grave abuse of discretion in issuing its
directives of 22 September 2000 and 27 September 2000.
Petitioner also contends that, contrary to the finding of the
Court of Appeals, a special civil action for certiorari is the
appropriate remedy to raise constitutional issues.
Also, petitioner insists that the subject portions of the
omnibus rules are invalid on the ground that Section 15 of

Republic Act No. 8042 does not impose on a recruitment agency

the primary responsibility for the repatriation of a deceased
Overseas Filipino Worker (OFW), while Section 52 of the Omnibus
Rules unduly imposes such burden on a placement agency.
Moreover, petitioner argues that the word likewise at the
start of the third sentence of Section 15 of Republic Act No. 8042
is used merely as a connective word indicating the similarity
between a recruitment agencys financial obligation in the
repatriation of living and a deceased OFW. It does not, however,
necessarily make a placement agency primarily responsible for
the repatriation of a deceased OFW unlike in the case of an OFW
who is alive.
As for Section 53 of the Omnibus Rules, petitioner submits
that the same is invalid as Section 15 of Republic Act No. 8042
clearly states that a placement agency shall not in any manner be
responsible for the repatriation of the deceased OFW and his or
her belongings should the termination of the OFWs employment
be due to his or her fault. However, as Section 53 of the Omnibus
Rules stipulates that a placement agency or principal shall bear
the primary responsibility of repatriating an OFW and of
advancing the payment for his or her plane fare, the omibus rules,
as far as this section is concerned, is an invalid exercise of
legislative power by an administrative agency.
In addition, petitioner claims Section 53 of the Omnibus
Rules violates the due process clause of the constitution as it
deprives the deploying agency of the right to prior notice and
hearing through which it can prove that it should not bear the
burden of repatriating an OFW.
Finally, petitioner points out that it should be the Overseas
Workers Welfare Administration which should advance the costs of
repatriation of the deceased Razon with the resources coming out
of the emergency repatriation fund of said agency.

The Solicitor General for its part counters that Sections 52,
53, 54, and 55 of the Omnibus Rules are valid quasi-legislative
acts of respondents Department of Foreign Affairs and
Department of Labor and Employment. [10] Because of this, the
requirements
of
prior
notice
and
hearing
are
not
essential. Besides, there are cases where even in the exercise of
quasi-judicial power, administrative agencies are allowed, sans
prior notice and hearing, to effectuate measures affecting private
property, such as:
1) [F]or the summary abatement of nuisance per se which affects the
immediate safety of persons and property, or 2) in summary
proceedings ofdistraint and levy upon the property of delinquent
taxpayers in the collection of internal revenue taxes, fees or charges or
any increment thereto, or 3) in the preventive suspension of a public
officer pending investigation. x x x.[11]

The Solicitor General also adds that since petitioner is

engaged in the recruitment of Filipino workers for work abroad,
the nature of its business calls for the exercise of the states
police power in order to safeguard the rights and welfare of the
Filipino laborers. One such measure is the primary responsibility
imposed upon placement agencies with regard to the repatriation
of an OFW or of his remains.
The Solicitor General also argues that the wording of
Section 15 of Republic Act No. 8042 leaves no doubt that a
recruitment agency shall bear the primary responsibility for the
repatriation of an OFW whether the latter is dead or alive.
Lastly, the Solicitor General insists that actions assailing the
validity of implementing rules and regulations are within the
original jurisdiction of the regional trial courts.

We shall first address the procedural question involved in

the present petition.
There is no denying that regular courts have jurisdiction
over cases involving the validity or constitutionality of a rule or
regulation issued by administrative agencies. Such jurisdiction,
however, is not limited to the Court of Appeals or to this Court
alone for even the regional trial courts can take cognizance of
actions assailing a specific rule or set of rules promulgated by
administrative bodies. Indeed, the Constitution vests the power
of judicial review or the power to declare a law, treaty,
international or executive agreement, presidential decree, order,
instruction, ordinance, or regulation in the courts, including the
regional trial courts.[12]
Section 1, Rule 65 of the 1997 Rules of Civil Procedure
states:
SECTION 1. Petition for Certiorari. When any tribunal, board
or officer exercising judicial or quasi-judicial functions has acted
without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no
appeal, nor any plain, speedy, and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a verified petition in
the proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings of such
tribunal, board or officer, and granting such incidental reliefs as law
and justice may require.
The petition shall be accompanied by a certified true copy of
the judgment, order or resolution subject thereof, copies of all
pleadings and documents relevant and pertinent thereto, and a sworn
certification of non-forum shopping as provided in the third paragraph
of Section 3, Rule 46.

From this, it is clear that in order for a petition

for certiorari to prosper, the following requisites must be
present: (1) the writ is directed against a tribunal, a board or an
officer exercising judicial or quasi-judicial functions; (2) such

tribunal, board or officer has acted without or in excess of

jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction; and (3) there is no appeal or any plain,
speedy and adequate remedy in the ordinary course of law.
It bears emphasizing that administrative bodies are vested
with two basic powers, the quasi-legislative and the quasi-judicial.
[13]
In Abella, Jr. v. Civil Service Commission, [14] we discussed the
nature of these powers to be
In exercising its quasi-judicial function, an administrative body
adjudicates the rights of persons before it, in accordance with the
standards laid down by the law. The determination of facts and the
applicable law, as basis for official action and the exercise of judicial
discretion, are essential for the performance of this function. On these
considerations, it is elementary that due process requirements, as
enumerated in Ang Tibay, must be observed. These requirements
include prior notice and hearing.
On the other hand, quasi-legislative power is exercised by
administrative agencies through the promulgation of rules and
regulations within the confines of the granting statute and the doctrine
of non-delegation of certain powers flowing from the separation of the
great branches of the government. Prior notice to and hearing of every
affected party, as elements of due process, are not required since
there is no determination of past events or facts that have to be
established or ascertained. As a general rule, prior notice and hearing
are not essential to the validity of rules or regulations promulgated to
govern future conduct.

In this case, petitioner assails certain provisions of the

Omnibus Rules. However, these rules were clearly promulgated by
respondents Department of Foreign Affairs and Department of
Labor and Employment in the exercise of their quasi-legislative
powers
or
the
authority
to
promulgate
rules
and
regulations. Because of this, petitioner was, thus, mistaken in
availing himself of the remedy of an original action
for certiorari as obviously, only judicial or quasi-judicial acts are
proper subjects thereof. If only for these, the petition deserves
outright dismissal. Be that as it may, we shall proceed to resolve
the substantive issues raised in this petition for review in order to

finally remove the doubt over the validity of Sections 52, 53, 54,
and 55 of the Omnibus Rules.
It is now well-settled that delegation of legislative power to
various specialized administrative agencies is allowed in the face
of increasing complexity of modern life. Given the volume and
variety of interactions involving the members of todays society, it
is doubtful if the legislature can promulgate laws dealing with the
minutiae aspects of everyday life. Hence, the need to delegate to
administrative bodies, as the principal agencies tasked to execute
laws with respect to their specialized fields, the authority to
promulgate rules and regulations to implement a given statute
and effectuate its policies.[15] All that is required for the valid
exercise of this power of subordinate legislation is that the
regulation must be germane to the objects and purposes of the
law; and that the regulation be not in contradiction to, but in
conformity with, the standards prescribed by the law. [16] Under
the first test or the so-called 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 to enforce it. [17] The second test or the
sufficient standard test, mandates that there should be adequate
guidelines or limitations in the law to determine the boundaries of
the delegates authority and prevent the delegation from running
riot.[18]
We resolve that the questioned provisions of the Omnibus
Rules meet these requirements.
Basically, petitioner is impugning the subject provisions of
the Omnibus Rules for allegedly expanding the scope of Section
15 of Republic Act No. 8042 by: first, imposing upon it the primary
obligation
to
repatriate
the
remains
of
the
deceased Razon including the duty to advance the cost of the
plane fare for the transport of Razons remains; and second, by

ordering it to do so without prior determination of the existence of

employer-employee relationship between itself and Razon.
Petitioners argument that Section 15 does not provide that
it shall be primarily responsible for the repatriation of a deceased
OFW is specious and plain nitpicking. While Republic Act No. 8042
does not expressly state that petitioner shall be primarily
obligated to transport back here to the Philippines the remains of
the deceased Razon, nevertheless, such duty is imposed upon
him as the statute clearly dictates that the repatriation of
remains and transport of the personal belongings of a deceased
worker and all costs attendant thereto shall be borne by the
principal and/or the local agency. The mandatory nature of said
obligation is characterized by the legislatures use of the word
shall. That the concerned government agencies opted to
demand the performance of said responsibility solely upon
petitioner does not make said directives invalid as the law plainly
obliges a local placement agency such as herein petitioner to bear
the burden of repatriating the remains of a deceased OFW with or
without recourse to the principal abroad. In this regard, we see
no reason to invalidate Section 52 of the omnibus rules as
Republic Act No. 8042 itself permits the situation wherein a local
recruitment agency can be held exclusively responsible for the
repatriation of a deceased OFW.
Nor do we see any reason to stamp Section 53 of the
Omnibus Rules as invalid for allegedly contravening Section 15 of
the law which states that a placement agency shall not be
responsible for a workers repatriation should the termination of
the employer-employee relationship be due to the fault of the
OFW. To our mind, the statute merely states the general principle
that in case the severance of the employment was because of
the OFWs own undoing, it is only fair that he or she should
shoulder the costs of his or her homecoming. Section 15 of
Republic Act No. 8042, however, certainly does not preclude a
placement agency from establishing the circumstances

surrounding an OFWs dismissal from service in an appropriate

proceeding. As such determination would most likely take some
time, it is only proper that an OFW be brought back here in our
country at the soonest possible time lest he remains stranded in a
foreign land during the whole time that recruitment agency
contests its liability for repatriation. As aptly pointed out by the
Solicitor General
Such a situation is unacceptable.
24.
This is the same reason why repatriation is made by law
an obligation of the agency and/or its principal without the need of first
determining the cause of the termination of the workers
employment. Repatriation is in effect an unconditional responsibility of
the agency and/or its principal that cannot be delayed by an
investigation of why the worker was terminated from employment. To
be left stranded in a foreign land without the financial means to return
home and being at the mercy of unscrupulous individuals is a violation
of the OFWs dignity and his human rights. These are the same rights
R.A. No. 8042 seeks to protect.[19]

As for the sufficiency of standard test, this Court had, in the

past, accepted as sufficient standards the following: public
interest, justice and equity, public convenience and welfare,
and simplicity, economy and welfare. [20]
In this case, we hold that the legislatures pronouncements
that Republic Act No. 8042 was enacted with the thought of
upholding the dignity of the Filipinos may they be here or abroad
and that the State shall at all times afford full protection to labor,
both here and abroad, meet the requirement and provide enough
guidance for the formulation of the omnibus rules.
WHEREFORE, the Petition for Review is DENIED. The Court
of Appeals Decision dated 4 October 2001 and Resolution
dated 18 February 2002 are hereby AFFIRMED. With costs.
SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson

CONSUELO
YNARES-SANTIAGO
MARTINEZ
Associate Justice
Justice

MA.

ALICIA

AUSTRIA-

Associate

ROMEO J. CALLEJO, SR.

Associate Justice

CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is
hereby certified that the conclusions in the above Decision were
reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Chief Justice

Equi-Asia Placement, Inc. v. Department of Foreign Affairs and Department of Labor

and Employment GR 152214 September 19, 2006
OFW Manny dela Rosa Razon died of acute cardiac arrest while asleep at the
dormitory of the Samsong Textile Processing Factory in South Korea. As a result
thereof, the OWWA requested petitioner Equi-Asia, the agency responsible for
Razons recruitment and deployment, to provide for Prepaid Ticket Advice (PTA)and
assistance for the repatriation of Razons remains. Equi-Asia denied responsibility
for providing such assistance arguing that Razon violated his employment contract
by unlawfully escaping from his company assignment without prior authorization. In
lieu of such assistance, it suggested that Razons relatives can avail of the benefits
provided for by OWWA in cases involving undocumented/illegal Filipino workers
abroad. OWWA, in response to petitioners denials, invoked Sections 52 to 55 of the
Implementing Rules Governing RA 8042 providing that The repatriation of OFW,
his/her remains and transport of his personal effects is the primary responsibility of
the principal or agency and to immediately advance the cost of plane farewithout
prior determination of the cause of worker's repatriation
. In consequence thereof , Equi-Asia filed a petition for certiorari with the Court of
Appeals questioning the legality and constitutionality of said provisions in the
implementing rules on the ground that itexpanded Section 15 of RA 8042. It
contends thus - Sec. 152 of R.A. 8042 clearly contemplates prior notice and hearing
before responsibility there under could be established against the agency that sets
up the defense of sole fault in avoidance of said responsibility -.Besides, the
sections in question unduly grant the powers to require advance payment of the
plane fare, to impose the corresponding penalty of suspension in case of noncompliance therewith, within 48 hours and to recover said advance payment from
the dead worker's estate upon the return of his remains to the country before the
NLRC, when the law itself does not expressly provide for the grant of such powers.
Issue: Whether or not Sections 52, 53, 54 and 55 of the Omnibus Rules and
Regulations Implementing RA 8042,issued by DFA and POEA, is illegal and/or
violative of due process such that POEA acted without or in excess of its jurisdiction
and/or in grave abuse of discretion in issuing said order to pay said expenses.
Held: The petition of the petitioner should be dismissed on the following grounds:(
1) [Procedural] For a petition for certiorari to prosper, the writ must be directed
against a tribunal, a board or an officer exercising judicial or quasi-judicial
functions. Citing Abella, Jr. v. Civil Service Commission, the Court prefatorily
defined and distinguished between quasi-judicial and quasi-legislative powers
exercised by administrative agencies. In exercising its quasi-judicial function,
an administrative body adjudicates the rights of persons before it, in

accordance with the standards laid down by the law. The determination of
facts and the applicable law, as basis for official action and the exercise of
judicial discretion, are essential for the performance of this function. On these
considerations, it is elementary that due process requirements, must be
observed. Other hand, quasi-legislative power is exercised by administrative
agencies through the promulgation of rules and regulations within the
confines of the granting statute and the doctrine of non-delegation of certain
powers flowing from the separation of the great branches of the government.
Prior notice to and hearing of every affected party, as elements of due
process, are not required since there is no determination of past events or
facts that have to be established or ascertained. In this case, petitioner
assails certain provisions of the Omnibus Rules.
2) [Delegation of Administrative functions; Rationale] It is now well-settled that
delegation of legislative power to various specialized administrative agencies
is allowed in the face of increasing complexity of modern life. Given the
volume and variety of interactions involving the members of today's society,
it is doubtful if the legislature can promulgate laws dealing with the minutiae
aspects of everyday life. Hence, the need to delegate to administrative
bodies, as the principal agencies tasked to execute laws with respect to their
specialized fields, the authority to promulgate rules and regulations to
implement a given statute and effectuate its policies. All that is required for
the valid exercise of this power of subordinate legislation is that the
regulation must be germane to the objects and purposes of the law; and that
the regulation be not in contradiction to, but in conformity with, the standards
prescribed by the law. Under the first test or the so-called 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 to enforce it. The second test or the sufficient standard test,
mandates that there should be adequate guidelines or limitations in the law
to determine the boundaries of the delegate's authority and prevent the
delegation from running riot.
(3)[Compliance with test of delegation] Section 53 of the Omnibus Rules is
not invalid for contravening Section 15of the law which states that a
placement agency shall not be responsible for a worker's repatriation should
the termination of the employer-employee relationship be due to the fault of
the OFW. The statute merely states the general principle that in case the
severance of the employment was because of the OFW's own undoing, it is
only fair that he or she should shoulder the costs of his or her homecoming.
Section 15 of Republic Act No. 8042 however, certainly does not preclude a
placement agency from establishing the circumstances surrounding an OFW's
dismissal from service in an appropriate proceeding. As such determination
would most likely take sometime, it is only proper that an OFW be brought

back here in our country at the soonest possible time lest he remains
stranded in a foreign land during the whole time that recruitment agency
contests its liability for repatriation. Repatriation is in effect an unconditional
responsibility of the agency and/or its principal that cannot be delayed by an
investigation of why the worker was terminated from employment. To be left
stranded in a foreign land without the financial means to return home and
being at the mercy of unscrupulous individuals is a violation of the OFW's
dignity and his human rights. These are the same rights R.A. No. 8042 seeks
to protect.

FIRST DIVISION
[G.R. No. 129577-80. February 15, 2000]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. BULU

CHOWDURY, accused-appellant.
DECISION
PUNO, J.:
In November 1995, Bulu Chowdury and Josephine Ong were charged before the Regional Trial
Court of Manila with the crime of illegal recruitment in large scale committed as follows:
"That sometime between the period from August 1994 to October 1994 in the
City of Manila, Philippines and within the jurisdiction of this Honorable Court, the
above-named accused, representing themselves to have the capacity to contract,
enlist and transport workers for employment abroad, conspiring, confederating
and mutually helping one another, did then and there willfully, unlawfully and
feloniously recruit the herein complainants: Estrella B. Calleja, Melvin C. Miranda
and Aser S. Sasis, individually or as a group for employment in Korea without
first obtaining the required license and/or authority from the Philippine Overseas
Employment Administration."[1]
They were likewise charged with three counts of estafa committed against private complainants.
[2]
The State Prosecutor, however, later dismissed the estafa charges against Chowdury[3] and
filed an amended information indicting only Ong for the offense.[4]
Chowdury was arraigned on April 16, 1996 while Ong remained at large. He pleaded "not guilty"
to the charge of illegal recruitment in large scale.[5]
Trial ensued.

The prosecution presented four witnesses: private complainants Aser Sasis, Estrella Calleja and
Melvin Miranda, and Labor Employment Officer Abbelyn Caguitla.
Sasis testified that he first met Chowdury in August 1994 when he applied with Craftrade
Overseas Developers (Craftrade) for employment as factory worker in South Korea. Chowdury,
a consultant of Craftrade, conducted the interview. During the interview, Chowdury informed him
about the requirements for employment. He told him to submit his passport, NBI clearance,
passport size picture and medical certificate. He also required him to undergo a seminar. He
advised him that placement would be on a first-come-first-serve basis and urged him to
complete the requirements immediately. Sasis was also charged a processing fee
of P25,000.00. Sasis completed all the requirements in September 1994. He also paid a total
amount of P16,000.00 to Craftrade as processing fee. All payments were received by Ong for
which she issued three receipts.[6] Chowdury then processed his papers and convinced him to
complete his payment.[7]
Sasis further said that he went to the office of Craftrade three times to follow up his application
but he was always told to return some other day. In one of his visits to Craftrades office, he was
informed that he would no longer be deployed for employment abroad. This prompted him to
withdraw his payment but he could no longer find Chowdury. After two unsuccessful attempts to
contact him, he decided to file with the Philippine Overseas Employment Administration (POEA)
a case for illegal recruitment against Chowdury. Upon verification with the POEA, he learned
that Craftrade's license had already expired and has not been renewed and that Chowdury, in
his personal capacity, was not a licensed recruiter.[8]
Calleja testified that in June 1994, she applied with Craftrade for employment as factory worker
in South Korea. She was interviewed by Chowdury. During the interview, he asked questions
regarding her marital status, her age and her province. Toward the end of the interview,
Chowdury told her that she would be working in a factory in Korea. He required her to submit
her passport, NBI clearance, ID pictures, medical certificate and birth certificate. He also obliged
her to attend a seminar on overseas employment. After she submitted all the documentary
requirements, Chowdury required her to pay P20,000.00 as placement fee. Calleja made the
payment on August 11, 1994 to Ong for which she was issued a receipt.[9] Chowdury assured her
that she would be able to leave on the first week of September but it proved to be an empty
promise. Calleja was not able to leave despite several follow-ups. Thus, she went to the POEA
where she discovered that Craftrade's license had already expired. She tried to withdraw her
money from Craftrade to no avail. Calleja filed a complaint for illegal recruitment against
Chowdury upon advice of POEA's legal counsel.[10]
Miranda testified that in September 1994, his cousin accompanied him to the office of Craftrade
in Ermita, Manila and introduced him to Chowdury who presented himself as consultant and
interviewer. Chowdury required him to fill out a bio-data sheet before conducting the interview.
Chowdury told Miranda during the interview that he would send him to Korea for employment as
factory worker. Then he asked him to submit the following documents: passport, passport size
picture, NBI clearance and medical certificate. After he complied with the requirements, he was
advised to wait for his visa and to pay P25,000.00 as processing fee. He paid the amount
of P25,000.00 to Ong who issued receipts therefor.[11] Craftrade, however, failed to deploy him.
Hence, Miranda filed a complaint with the POEA against Chowdury for illegal recruitment.[12]
Labor Employment Officer Abbelyn Caguitla of the Licensing Branch of the POEA testified that
she prepared a certification on June 9, 1996 that Chowdury and his co-accused, Ong, were not,

in their personal capacities, licensed recruiters nor were they connected with any licensed
agency. She nonetheless stated that Craftrade was previously licensed to recruit workers for
abroad which expired on December 15, 1993. It applied for renewal of its license but was only
granted a temporary license effective December 16, 1993 until September 11, 1994. From
September 11, 1994, the POEA granted Craftrade another temporary authority to process the
expiring visas of overseas workers who have already been deployed. The POEA suspended
Craftrade's temporary license on December 6, 1994.[13]
For his defense, Chowdury testified that he worked as interviewer at Craftrade from 1990 until
1994. His primary duty was to interview job applicants for abroad. As a mere employee, he only
followed the instructions given by his superiors, Mr. Emmanuel Geslani, the agencys President
and General Manager, and Mr. Utkal Chowdury, the agency's Managing Director. Chowdury
admitted that he interviewed private complainants on different dates. Their office secretary
handed him their bio-data and thereafter he led them to his room where he conducted the
interviews. During the interviews, he had with him a form containing the qualifications for the job
and he filled out this form based on the applicant's responses to his questions. He then
submitted them to Mr. Utkal Chowdury who in turn evaluated his findings. He never received
money from the applicants. He resigned from Craftrade on November 12, 1994.[14]
Another defense witness, Emelita Masangkay who worked at the Accreditation Branch of the
POEA presented a list of the accredited principals of Craftrade Overseas Developers[15] and a list
of processed workers of Craftrade Overseas Developers from 1988 to 1994.[16]
The trial court found Chowdury guilty beyond reasonable doubt of the crime of illegal
recruitment in large scale. It sentenced him to life imprisonment and to pay a fine
of P100,000.00. It further ordered him to pay Aser Sasis the amount of P16,000.00, Estrella
Calleja, P20,000.00 and Melvin Miranda, P25,000.00. The dispositive portion of the decision
reads:
"WHEREFORE, in view of the foregoing considerations, the prosecution having
proved the guilt of the accused Bulu Chowdury beyond reasonable doubt of the
crime of Illegal Recruitment in large scale, he is hereby sentenced to suffer the
penalty of life imprisonment and a fine of P100,000.00 under Art. 39 (b) of the
New Labor Code of the Philippines. The accused is ordered to pay the
complainants Aser Sasis the amount of P16,000.00; Estrella Calleja the amount
of P20,000.00; Melvin Miranda the amount of P25,000.00."[17]
Chowdury appealed.
The elements of illegal recruitment in large scale are:
(1)
The accused undertook any recruitment activity defined under Article 13
(b) or any prohibited practice enumerated under Article 34 of the Labor Code;
(2)
He did not have the license or authority to lawfully engage in the
recruitment and placement of workers; and
(3)
He committed the same against three or more persons, individually or as a
group.[18]

The last paragraph of Section 6 of Republic Act (RA) 8042[19] states who shall be held liable for
the offense, thus:
"The persons criminally liable for the above offenses are the principals,
accomplices and accessories. In case of juridical persons, the officers having
control, management or direction of their business shall be liable."
The Revised Penal Code which supplements the law on illegal recruitment[20] defines who are
the principals, accomplices and accessories. The principals are: (1) those who take a direct part
in the execution of the act; (2) those who directly force or induce others to commit it; and (3)
those who cooperate in the commission of the offense by another act without which it would not
have been accomplished.[21] The accomplices are those persons who may not be considered as
principal as defined in Section 17 of the Revised Penal Code but cooperate in the execution of
the offense by previous or simultaneous act.[22] The accessories are those who, having
knowledge of the commission of the crime, and without having participated therein, either as
principals or accomplices, take part subsequent to its commission in any of the following
manner: (1) by profiting themselves or assisting the offenders to profit by the effects of the
crime; (2) by concealing or destroying the body of the crime, or the effects or instruments
thereof, in order to prevent its discovery; and (3) by harboring, concealing, or assisting in the
escape of the principal of the crime, provided the accessory acts with abuse of his public
functions or whenever the author of the crime is guilty of treason, parricide, murder, or an
attempt at the life of the chief executive, or is known to be habitually guilty of some other crime.
[23]

Citing the second sentence of the last paragraph of Section 6 of RA 8042, accused-appellant
contends that he may not be held liable for the offense as he was merely an employee of
Craftrade and he only performed the tasks assigned to him by his superiors. He argues that the
ones who should be held liable for the offense are the officers having control, management and
direction of the agency.
As stated in the first sentence of Section 6 of RA 8042, the persons who may be held liable for
illegal recruitment are the principals, accomplices and accessories. An employee of a company
or corporation engaged in illegal recruitment may be held liable as principal, together with his
employer,[24] if it is shown that he actively and consciously participated in illegal recruitment.
[25]
It has been held that the existence of the corporate entity does not shield from prosecution
the corporate agent who knowingly and intentionally causes the corporation to commit a crime.
The corporation obviously acts, and can act, only by and through its human agents, and it is
their conduct which the law must deter. The employee or agent of a corporation engaged in
unlawful business naturally aids and abets in the carrying on of such business and will be
prosecuted as principal if, with knowledge of the business, its purpose and effect, he
consciously contributes his efforts to its conduct and promotion, however slight his contribution
may be.[26] The law of agency, as applied in civil cases, has no application in criminal cases, and
no man can escape punishment when he participates in the commission of a crime upon the
ground that he simply acted as an agent of any party.[27] The culpability of the employee therefore
hinges on his knowledge of the offense and his active participation in its commission. Where it is
shown that the employee was merely acting under the direction of his superiors and was
unaware that his acts constituted a crime, he may not be held criminally liable for an act done
for and in behalf of his employer.[28]

The fundamental issue in this case, therefore, is whether accused-appellant knowingly and
intentionally participated in the commission of the crime charged.
We find that he did not.
Evidence shows that accused-appellant interviewed private complainants in the months of June,
August and September in 1994 at Craftrade's office. At that time, he was employed as
interviewer of Craftrade which was then operating under a temporary authority given by the
POEA pending renewal of its license.[29] The temporary license included the authority to recruit
workers.[30] He was convicted based on the fact that he was not registered with the POEA as
employee of Craftrade. Neither was he, in his personal capacity, licensed to recruit overseas
workers. Section 10 Rule II Book II of the Rules and Regulation Governing Overseas
Employment (1991) requires that every change, termination orappointment of officers,
representatives and personnel of licensed agencies be registered with the POEA. Agents or
representatives appointed by a licensed recruitment agency whose appointments are not
previously approved by the POEA are considered "non-licensee " or "non-holder of authority"
and therefore not authorized to engage in recruitment activity.[31]
Upon examination of the records, however, we find that the prosecution failed to prove that
accused-appellant was aware of Craftrade's failure to register his name with the POEA and that
he actively engaged in recruitment despite this knowledge. The obligation to register its
personnel with the POEA belongs to the officers of the agency.[32] A mere employee of the
agency cannot be expected to know the legal requirements for its operation. The evidence at
hand shows that accused-appellant carried out his duties as interviewer of Craftrade believing
that the agency was duly licensed by the POEA and he, in turn, was duly authorized by his
agency to deal with the applicants in its behalf. Accused-appellant in fact confined his actions to
his job description. He merely interviewed the applicants and informed them of the requirements
for deployment but he never received money from them. Their payments were received by the
agency's cashier, Josephine Ong. Furthermore, he performed his tasks under the supervision of
its president and managing director. Hence, we hold that the prosecution failed to prove beyond
reasonable doubt accused-appellant's conscious and active participation in the commission of
the crime of illegal recruitment. His conviction, therefore, is without basis.
This is not to say that private complainants are left with no remedy for the wrong committed
against them. The Department of Justice may still file a complaint against the officers having
control, management or direction of the business of Craftrade Overseas Developers (Craftrade),
so long as the offense has not yet prescribed. Illegal recruitment is a crime of economic
sabotage which need to be curbed by the strong arm of the law. It is important, however, to
stress that the government's action must be directed to the real offenders, those who perpetrate
the crime and benefit from it.
IN VIEW WHEREOF, the assailed decision of the Regional Trial Court is REVERSED and SET
ASIDE. Accused-appellant is hereby ACQUITTED. The Director of the Bureau of Corrections is
ordered to RELEASE accused-appellant unless he is being held for some other cause, and to
REPORT to this Court compliance with this order within ten (10) days from receipt of this
decision. Let a copy of this Decision be furnished the Secretary of the Department of Justice for
his information and appropriate action.
SO ORDERED.

Davide, Jr., C.J., (Chairman), Kapunan, Pardo, and Ynares-Santiago, JJ., concur.

People vs. Chowdury [G.R. No. 129577-80 February 15, 2000]

Facts: Bulu Chowdury was charged with the crime of illegal recruitment in large
scale by recruiting Estrella B. Calleja, Melvin C. Miranda and Aser S. Sasis for
employment in Korea. Evidence shows that accused appellant interviewed private
complainant in 1994 at Craftrades office. At that time, he was an interviewer of
Craftrade which was operating under temporary authority given by POEA pending
the renewal of license. He was charged based on the fact that he was not registered
with the POEA as employee of Craftrade and he is not in his personal capacity,
licensed to recruit overseas workers. The complainants also averred that during
their applications for employment for abroad, the license of Craftrade was already
expired.
For his defense Chowdury testified that he worked as interviewer at Craftrade from
1990 until 1994. His primary duty was to interview job applicants for abroad. As a
mere employee, he only followed the instructions given by his superiors, Mr.
Emmanuel Geslani, the agency's President and General Manager, and Mr. Utkal
Chowdury, the agency's Managing Director.
Issue: Whether or not accused-appellant knowingly and intentionally participated in
the commission of the crime charged.
Held: No, an employee of a company or corporation engaged in illegal recruitment
may be held liable as principal, together with his employer, if it is shown that he
actively and consciously participated in illegal recruitment. In this case, Chowdury
merely performed his tasks under the supervision of its president and managing
director. The prosecution failed to show that the accused-appellant is conscious and
has an active participation in the commission of the crime of illegal recruitment.
Moreover, accused-appellant was not aware of Craftrade's failure to register his
name with the POEA and the prosecution failed to prove that he actively engaged in
recruitment despite this knowledge. The obligation to register its personnel with the
POEA belongs to the officers of the agency. A mere employee of the agency cannot
be expected to know the legal requirements for its operation. The accused-appellant
carried out his duties as interviewer of Craftrade believing that the agency was duly
licensed by the POEA and he, in turn, was duly authorized by his agency to deal with
the applicants in its behalf. Accused-appellant in fact confined his actions to his job
description. He merely interviewed the applicants and informed them of the
requirements for deployment but he never received money from them. Chowdury
did not knowingly and intentionally participated in the commission of illegal
recruitment being merely performing his task and unaware of illegality of
recruitment.

FIRST DIVISION

[G.R. No. 148198 October 1, 2003]

PEOPLE OF THE PHILIPPINES, appellee, vs. ELIZABETH BETH

CORPUZ, appellant.
DECISION
YNARES-SANTIAGO, J.:

This is an appeal from the decision [1] of the Regional Trial Court of Manila, Branch 54, in
Criminal Case No. 99-176637 finding appellant Elizabeth Corpuz guilty beyond reasonable
doubt of Illegal Recruitment in Large Scale constituting economic sabotage under Sec. 6 (l) and
(m) in relation to Sec. 7(b) of R.A. No. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of l995, and sentencing her to life imprisonment and to pay a fine of
P500,000.00.
The Information against appellant reads as follows:

That sometime in July 1998 in the City of Manila and within the
jurisdiction of this Honorable Court, the above-named accused,
representing herself to have the capacity to contract, enlist and
transport workers abroad, did then and there willfully, unlawfully
and feloniously recruit for a fee the following persons, namely:
BELINDA CABANTOG, CONCEPCION SAN DIEGO, ERLINDA PASCUAL
AND RESTIAN SURIO for employment abroad without first obtaining
the required license and/or authority from the Philippine Overseas
Employment Administration and said accused failed to actually
deploy without valid reasons said complainants abroad and to
reimburse the expenses incurred by them in connection with their
documentation and processing for purposes of deployment abroad
to their damage and prejudice.
CONTRARY TO LAW.

[2]

When arraigned on March 21, 2000, appellant pleaded not guilty. Whereupon, trial on the
merits ensued.
The facts of the case are as follows:
In June 1998, private complainants Belinda Cabantog, Concepcion San Diego, Erlinda
Pascual and Restian Surio went to Alga-Moher International Placement Services Corporation at
1651 San Marcelino Street, Malate, Manila to apply for employment as factory workers in

Taiwan. They were accompanied by a certain Aling Josie who introduced them to the
agencys President and General Manager Mrs. Evelyn Gloria H. Reyes. [3] Mrs. Reyes asked
them to accomplish the application forms. Thereafter, they were told to return to the office with
P10,000.00 each as processing fee.[4]
On July 30, 1998, private complainants returned to the agency to pay the processing
fees. Mrs. Reyes was not at the agency that time, but she called appellant on the telephone to
ask her to receive the processing fees. Thereafter, appellant advised them to wait for the
contracts to arrive from the Taiwan employers.[5]
Two months later, nothing happened to their applications. Thus, private complainants
decided to ask for the refund of their money from appellant [6] who told them that the processing
fees they had paid were already remitted to Mrs. Reyes. When they talked to Mrs. Reyes, she
told them that the money she received from appellant was in payment of the latters debt. Thus,
on January 13, 1999, private complainants filed their complaint with the National Bureau of
Investigation[7] which led to the arrest and detention of appellant.
On March 23, 2000, while the case was before the trial court, private complainants received
the refund of their processing fees from appellants sister-in-law. Consequently, they executed
affidavits of desistance[8] from participation in the case against appellant.
For her part, appellant resolutely denied having a hand in the illegal recruitment and
claimed that she merely received the money on behalf of Mrs. Reyes, the President/General
Manager of Alga-Moher International Placement Services Corporation, where she had been
working as secretary for three months prior to July 30, 1998. On that day, Mrs. Reyes called her
on the telephone and told her to receive private complainants processing fees. In compliance
with the order of her employer and since the cashier was absent, she received the processing
fees of private complainants, which she thereafter remitted to Mrs. Reyes. She had no
knowledge that the agencys license was suspended by the POEA on July 29, 1998.[9]
On November 16, 2000, the trial court rendered the assailed decision, the dispositive
portion of which reads:

WHEREFORE, in view of the above observations and findings

accused Elizabeth Beth Corpuz is hereby found guilty of the
offense charged in the Information for violation of Sec. 6 (l), (m) in
relation to Sec. 7 (b) of R.A. 8042 without any mitigating nor
aggravating circumstances attendant to its commission, without
applying the benefit of the Indeterminate Sentence Law, Elizabeth
Beth Corpuz is hereby sentenced to suffer a life imprisonment and
to pay a fine of P500,000.00.
Her body is hereby committed to the custody of the Director of the
Bureau of Correction for Women, Mandaluyong City thru the City Jail
Warden of Manila. She shall be credited with the full extent of her
preventive imprisonment under Art. 29 of the Revised Penal Code.
No pronouncement of civil liability is hereby made since all the
complainants have been refunded of the fees.

SO ORDERED.

[10]

In this appeal, appellant raises the following assignment of errors:

THE TRIAL COURT ERRED IN CONVICTING THE ACCUSED IN THAT:

A.

THE PROSECUTION FAILED TO PROVE BEYOND

REASONABLE DOUBT THAT THE ACCUSED REPRESENTED
HERSELF TO HAVE THE CAPACITY TO CONTRACT, ENLIST
AND TRANSPORT WORKERS ABROAD, OR UNLAWFULLY
RECRUIT THE COMPLAINANTS FOR A FEE.

B.

THE PROSECUTION FAILED TO PROVE BEYOND

REASONABLE DOUBT THAT THE ACCUSED HAS
MANAGEMENT CONTROL OVER ALGA-MOHERs
RECRUITMENT BUSINESS.
[11]

The Information charged appellant for Illegal recruitment in large scale under Section 6 (l)
and (m) of R.A. No. 8042, otherwise known asMigrant Workers and Overseas Filipinos Act of
1995, which reads:

SECTION 6. Definition. For purposes of this Act, illegal recruitment

shall mean any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers and includes
referring, contract services, promising or advertising for
employment abroad, whether for profit or not, when undertaken by
a non-licensee or non-holder of authority contemplated under Article
13(f) of Presidential Decree No. 442, as amended, otherwise known
as the Labor Code of the Philippines: Provided, That any such nonlicensee or non-holder who, in any manner, offers or promises for a
fee employment abroad to two or more persons shall be deemed so
engaged. It shall likewise include the following acts, whether
committed by any person, whether a non-licensee, non-holder,
licensee or holder of authority:
xxx

xxx

xxx

(l)
Failure to actually deploy without valid reason as determined
by the Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the worker in
connection with his documentation and processing for purposes of

deployment, in cases where the deployment does not actually take

place without the worker's fault. Illegal recruitment when
committed by a syndicate or in large scale shall be considered an
offense involving economic sabotage.
xxx

xxx

xxx

Illegal recruitment is deemed committed by a syndicate if carried

out by a group of three (3) or more persons conspiring or
confederating with one another. It is deemed committed in large
scale if committed against three (3) or more persons individually or
as a group.
The persons criminally liable for the above offenses are the
principals, accomplices and accessories. In case of juridical persons,
the officers having control, management or direction of their
business shall be liable.
Appellant contends that she is not liable for the foregoing illegal recruitment activities
considering that she was merely an employee having no control over the recruitment business
of the Alga-Moher International Placement Services Corporation and that she did not actually
recruit the private complainants. Moreover, she did not appropriate for her own use the
processing fees she received and she had no knowledge that the agencys license was
suspended by the POEA.
The trial court convicted appellant based on its findings that despite the suspension of the
agencys license, appellant still convinced the applicants to give their money with the promise to
land a job abroad. Moreover, as the registered secretary of the agency she had management
control of the recruitment business.
It is axiomatic that findings of facts of the trial court, its calibration of the collective
testimonies of witnesses and probative weight thereof and its conclusions culled from said
findings are accorded by this Court great respect, if not conclusive effect, because of the unique
advantage of the trial court in observing and monitoring at close range, the conduct, deportment
and demeanor of the witnesses as they testify before the trial court. [12] However, this principle
does not apply if the trial court ignored, misunderstood or misconstrued cogent facts and
circumstances of substance which, if considered, would alter the outcome of the case. [13] The
exception obtains in this case.
The records of the case show that Alga-Moher International Placement Service Corporation
is a licensed land-based recruitment agency. Its license was valid until August 24, 1999.
[14]
Likewise, appellant was its registered secretary while Mrs. Evelyn Gloria H. Reyes is its
President/General Manager.[15] Part of its regular business activity is to accept applicants who
desire to work here or abroad. Appellant, as secretary of the agency, was in charge of the
custody and documentation of the overseas contracts.
On July 30, 1998, appellant received the processing fees of the private complainants since
the cashier was absent that day. Her receipt of the money was in compliance with the order of
her employer, Mrs. Reyes. She did not convince the applicants to give her their money since

they went to the agency precisely to pay the processing fees upon the earlier advice of Mrs.
Reyes. Private complainant Belinda Cabantog testified as follows:
FISCAL BALLENA:
Q. Please tell the Court how did it happen that you went to the said agency?
A.

When someone brought us there and introduced to the owner, Sir.

Q. And who is this friend or person you said you know who accompanied you?
A.

Aling Josie, Sir.

Q. What is her full name?

A.

I do not know, Sir.

Q. And who is this owner to whom you were introduced?

A.

Mrs. Evelyn Ty, Sir.

Q. And why do you know this Ty was the owner?

A.

Because she is the friend of Aling Josie, Sir.

Q. Now, after the introduction to this owner what happened?

A.

We were told to fill up the application form by Mrs. Evelyn Ty, Sir.

Q. And after filling up this application form, what did you do with the same?
A.

We went home and we were asked to come back, Sir.

Q. Now, did you come back?

A.

Yes, Sir.

Q. When did you come back?

A.

July 30, Sir.

COURT:
Q. What year?
A.

1998, Your Honor.

FISCAL BALLENA:
Q. What happened when you come back?
A.

When we came back we brought along the processing fee they needed, Sir.

Q. Why did you bring this processing fee?

A.

We were required to bring it for the smooth processing of the papers, Sir.

Q. Who required you to bring this processing fee?

A.

Mrs. Evelyn Ty, Sir.

Q. Now, when you came back what happened?

A.

She was not at the office so she called up by phone and told us to give the money,
Sir.

Q. And to whom did to give the money?

A.

Beth Corpuz, Sir.[16]

From the foregoing testimony, it is clear that all appellant did was receive the processing
fees upon instruction of Mrs. Reyes. She neither convinced the private complainants to give
their money nor promised them employment abroad.
Moreover, as stated in the last sentence of Section 6 of RA 8042, the persons who may be
held liable for illegal recruitment are the principals, accomplices and accessories. In case of
juridical persons, the officers having control, management or direction of their business shall be
liable.
In the case at bar, we have carefully reviewed the records of the case and found that the
prosecution failed to establish that appellant, as secretary, had control, management or direction
of the recruitment agency. Appellant started her employment with the agency on May 1, 1998
and she was tasked to hold and document employment contracts from the foreign employers.
[17]
She did not entertain applicants and she had no discretion over how the business was
managed.[18] The trial courts finding that appellant, being the secretary of the agency, had control
over its business, is not only non sequitur but has no evidentiary basis.
An employee of a company or corporation engaged in illegal recruitment may be held liable
as principal, together with his employer, if it is shown that he actively and consciously
participated in illegal recruitment. Settled is the rule that the existence of the corporate entity
does not shield from prosecution the corporate agent who knowingly and intentionally causes
the corporation to commit a crime. The corporation obviously acts, and can act, only by and
through its human agents, and it is their conduct which the law must deter. The employee or
agent of a corporation engaged in unlawful business naturally aids and abets in the carrying on
of such business and will be prosecuted as principal if, with knowledge of the business, its
purpose and effect, he consciously contributes his efforts to its conduct and promotion, however
slight his contribution may be. The law of agency, as applied in civil cases, has no application in
criminal cases, and no man can escape punishment when he participates in the commission of
a crime upon the ground that he simply acted as an agent of any party. The culpability of the
employee therefore hinges on his knowledge of the offense and his active participation in its
commission. Where it is shown that the employee was merely acting under the direction of his
superiors and was unaware that his acts constituted a crime, he may not be held criminally
liable for an act done for and in behalf of his employer.[19]
Anent the issue of whether or not appellant knowingly and intentionally participated in the
commission of the crime charged, we find that she did not.
In the appreciation of evidence in criminal cases, it is a basic tenet that the prosecution has
the burden of proof in establishing the guilt of the accused for the offense with which he is
charged.[20] Ei incumbit probation qui dicit non qui negat, i.e., he who asserts, not he who
denies, must prove.[21] The conviction of appellant must rest not on the weakness of his
defense, but on the strength of the prosecutions evidence.[22]
In the case at bar, the prosecution failed to adduce sufficient evidence to prove appellants
active participation in the illegal recruitment activities of the agency. As already established,
appellant received the processing fees of the private complainants for and in behalf of Mrs.
Reyes who ordered her to receive the same. She neither gave an impression that she had the
ability to deploy them abroad nor convinced them to part with their money. More importantly,

she had no knowledge that the license was suspended the day before she received the
money. Their failure to depart for Taiwan was due to the suspension of the license, an event
which appellant did not have control of. Her failure to refund their money immediately upon their
demand was because the money had been remitted to Mrs. Reyes on the same day she
received it from them.
While we strongly condemn the pervasive proliferation of illegal job recruiters and
syndicates preying on innocent people anxious to obtain employment abroad, nevertheless, we
find the pieces of evidence insufficient to prove the guilt of appellant beyond reasonable
doubt. They do not pass the requisite moral certainty, as they admit of the alternative inference
that other persons, not necessarily the appellant, may have perpetrated the crime. Where the
evidence admits of two interpretations, one of which is consistent with guilt, and the other with
innocence, the accused must be acquitted. Indeed, it would be better to set free ten men who
might be probably guilty of the crime charged than to convict one innocent man for a crime he
did not commit.[23]
WHEREFORE, in view of the foregoing, the decision of the Regional Trial Court Regional
Trial Court of Manila, Branch 54, in Criminal Case No. 99-176637 finding appellant Elizabeth
Corpuz guilty beyond reasonable doubt of Illegal Recruitment in Large Scale constituting
economic sabotage under Sec. 6 (l) and (m) in relation to Sec. 7(b) of R.A. No. 8042, is
REVERSED and SET ASIDE. Appellant Elizabeth Corpuz is ACQUITTED of the offense
charged on the ground of reasonable doubt. The Superintendent of the Correctional Institution
for Women is directed to cause the immediate release of appellant unless she is lawfully held
for another offense, and to inform this Court of the date of her release, or the ground for her
continued confinement, within ten days from notice.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, and Carpio, JJ., concur.
Azcuna, J., on leave.

PEOPLE OF THE PHILIPPINES vs. ELIZABETH BETH CORPUZG.R. No.

148198October 1, 2003
Facts:
In June 1998, private complainants Belinda Cabantog, Concepcion San Diego,
Erlinda Pascual and RestianSurio went to Alga-Moher International Placement
Services Corporation at 1651 San Marcelino Street, Malate, Manila to apply for
employment as factory workers in Taiwan.
They were accompanied by a certain Aling Josie who introduced them to the
agencys President and General Manager Mrs. Evelyn Gloria H. Reyes.
Mrs. Reyes asked them to accomplish the application forms. Thereafter, they were
told to return to the office with P10,000.00 each as processing fee.
On July 30, 1998, private complainants returned to the agency to pay the
processing fees.

Mrs. Reyes was not at the agency that time, but she called accused CORPUZ
(secretary on the telephone to ask her to receive the processing fees.
Thereafter, CORPUZ advised them to wait for the contracts to arrive from the Taiwan
employers.
Two months later, nothing happened to their applications.
Thus, private complainants decided to ask for the refund of their money from
CORPUZ who told them that the processing fees they had paid were already
remitted to Mrs. Reyes.
When they talked to Mrs. Reyes, she told them that the money she received from
CORPUZ was in payment of the latters debt.
On January 13, 1999, private complainants filed their complaint with the National
Bureau of Investigation which led to the arrest and detention of CORPUZ.
CORPUZ contends that she is not liable for the foregoing illegal recruitment
activities considering that she was merely an employee having no control over the
recruitment business of the Alga-Moher International Placement Services
Corporation and that she did not actually recruit the private complainants.
Moreover, she did not appropriate for her own use the processing fees she received
and she had no knowledge that the agencys license was suspended by the POEA.
Issue/s:
1.WON accused CORPUZ is criminally liable despite the fact that she was merely an
employee of the recruitment agency.
2.WON accused Corpuz knowingly and intentionally participated in the commission
of the crime charged.
Ratio:
1. NO.
From the testimonial evidence presented, it is clear that all appellant did was
receive the processing fees upon instruction of Mrs. Reyes. She neither convinced
the private complainants to give their money nor promised them employment
abroad.
Moreover, as stated in the last sentence of Section 6 of RA 8042, the persons who
may be held liable for illegal recruitment are the principals, accomplices and
accessories.
In case of juridical persons, the officers having control, management or direction of
their business shall be liable.

In the case at bar, we have carefully reviewed the records of the case and found
that the prosecution failed to establish that CORPUZ, as secretary, had control,
management or direction of the recruitment agency.
Appellant started her employment with the agency on May 1, 1998 and she was
tasked to hold and document employment contracts from the foreign employers.
She did not entertain applicants and she had no discretion over how the business
was managed The trial courts finding that CORPUZ, being the secretary of the
agency, had control over its business, is not only non sequitur but has no
evidentiary basis.
DOCTRINES used in the CASE
An employee of a company or corporation engaged in illegal recruitment may be
held liable asprincipal, together with his employer, if it is shown that he actively and
consciously participated inillegal recruitment. Settled is the rule that the existence
of the corporate entity does not shield from prosecution the corporate agent who
knowingly and intentionally causes the corporation to commit a crime. The
corporation obviously acts, and can act, only by and through its human agents, and
it is their conduct which the law must deter. The employee or agent of a corporation
engaged in unlawful business naturally aids and abets in the carrying on of such
business and will be prosecuted as principal if, with knowledge of the business, its
purpose and effect, he consciously contributes his efforts to its conduct and
promotion, however slight his contribution may be. The law of agency, as applied in
civic cases, has no application in criminal cases, and no man can escape
punishment when he participates in the commission of a crime upon the ground
that he simply acted as an agent of any party.
The culpability of the employee therefore hinges on his knowledge of the offense
and his active participation in its commission. Where it is shown that the employee
was merely acting under the direction of his superiors and was unaware that his
acts constituted a crime, he may not be held criminally liable for an act done for
and in behalf of his employer.
2. NO.
In the appreciation of evidence in criminal cases, it is a basic tenet that the
prosecution has the burden of proof in establishing the guilt of the accused for the
offense with which he is charged. In the case at bar, the prosecution failed to
adduce sufficient evidence to prove CORPUZ active participation in the illegal
recruitment activities of the agency. As already established, CORPUZ received the
processing fees of the private complainants for and in behalf of Mrs. Reyes who
ordered her to receive the same. She neither gave an impression that she had the
ability to deploy them abroad nor convinced them to part with their money. More

importantly, she had no knowledge that the license was suspended the day before
she received the money.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
PEOPLE OF
THE PHILIPPINES,
Petitioner,

G.R. No. 187730

Present:

- versus RODOLFO GALLO y GADOT,

AccusedAppellant,
FIDES PACARDO y JUNGCO
and PILAR MANTA y
DUNGO,
Accused.

CORONA, C.J.,
Chairperson,
VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.
Promulgated:
June 29, 2010

x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:

The Case
This is an appeal from the Decision [1] dated December 24,
2008 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 02764
entitled People of the Philippines v. Rodolfo Gallo y Gadot
(accused-appellant), Fides Pacardo y Jungco and Pilar Manta y
Dungo (accused), which affirmed the Decision[2] dated March 15,
2007 of the Regional Trial Court (RTC), Branch 30 in Manila which
convicted the accused-appellant Rodolfo Gallo y Gadot (accusedappellant) of syndicated illegal recruitment in Criminal Case No.
02-206293 and estafa in Criminal Case No. 02-206297.
The Facts
Originally, accused-appellant Gallo and accused Fides
Pacardo (Pacardo) and Pilar Manta (Manta), together with
Mardeolyn Martir (Mardeolyn) and nine (9) others, were charged
with syndicated illegal recruitment and eighteen (18) counts
ofestafa committed against eighteen complainants, including
Edgardo V. Dela Caza (Dela Caza), Sandy Guantero (Guantero)
and Danilo Sare (Sare). The cases were respectively docketed
as Criminal Case Nos. 02-2062936 to 02-206311. However,
records reveal that only Criminal Case No. 02-206293, which was
filed against accused-appellant Gallo, Pacardo and Manta for
syndicated illegal recruitment, and Criminal Case Nos. 02-206297,
02-206300 and 02-206308, which were filed against accusedappellant Gallo, Pacardo and Manta for estafa, proceeded to trial
due to the fact that the rest of the accused remained at large.
Further, the other cases, Criminal Case Nos. 02-206294 to 02206296, 02-206298 to 02-206299, 02-206301 to 02-206307 and
02-206309 to 02-206311 were likewise provisionally dismissed
upon motion of Pacardo, Manta and accused-appellant for failure
of the respective complainants in said cases to appear and testify
during trial.

It should also be noted that after trial, Pacardo and Manta

were acquitted in Criminal Case Nos. 02-206293, 02-206297, 02206300 and 02-206308 for insufficiency of evidence. Likewise,
accused-appellant Gallo was similarly acquitted in Criminal Case
Nos. 02-206300, the case filed by Guantero, and 02-206308, the
case filed by Sare. However, accused-appellant was found guilty
beyond reasonable doubt in Criminal Case Nos. 02-206293 and
02-206297, both filed by Dela Caza, for syndicated illegal
recruitment andestafa, respectively.
Thus, the present appeal concerns solely accusedappellants conviction for syndicated illegal recruitment in
Criminal Case No. 02-206293 and for estafa in Criminal Case No.
02-206297.
In Criminal Case No. 02-206293, the information charges the
accused-appellant, together with the others, as follows:
The undersigned accuses MARDEOLYN MARTIR, ISMAEL
GALANZA, NELMAR MARTIR, MARCELINO MARTIR, NORMAN MARTIR,
NELSON MARTIR, MA. CECILIA M. RAMOS, LULU MENDANES, FIDES
PACARDO y JUNGCO, RODOLFO GALLO y GADOT, PILAR MANTA y
DUNGO, ELEONOR PANUNCIO and YEO SIN UNG of a violation of
Section 6(a), (l) and (m) of Republic Act 8042, otherwise known as the
Migrant Workers and Overseas Filipino Workers Act of 1995, committed
by a syndicate and in large scale, as follows:
That in or about and during the period comprised between
November 2000 and December, 2001, inclusive, in the City of Manila,
Philippines, the said accused conspiring and confederating together
and helping with one another, representing themselves to have the
capacity to contract, enlist and transport Filipino workers for
employment abroad, did then and there willfully and unlawfully, for a
fee, recruit and promise employment/job placement abroad to
FERDINAND ASISTIN, ENTICE BRENDO, REYMOND G. CENA, EDGARDO
V. DELA CAZA, RAYMUND EDAYA, SANDY O. GUANTENO, RENATO V.
HUFALAR, ELENA JUBICO, LUPO A. MANALO, ALMA V. MENOR, ROGELIO
S. MORON, FEDILA G. NAIPA, OSCAR RAMIREZ, MARISOL L. SABALDAN,
DANILO SARE, MARY BETH SARDON, JOHNNY SOLATORIO and JOEL
TINIO in Korea as factory workers and charge or accept directly or
indirectly from said FERDINAND ASISTIN the amount of P45,000.00;
ENTICE BRENDO P35,000.00; REYMOND G. CENA P30,000.00;

EDGARDO V. DELA CAZA P45,000.00; RAYMUND EDAYA

P100,000.00; SANDY O. GUANTENO P35,000.00; RENATO V. HUFALAR
P70,000.00; ELENA JUBICO P30,000.00; LUPO A. MANALO
P75,000.00; ALMA V. MENOR P45,000.00; ROGELIO S. MORON
P70,000.00; FEDILA G. NAIPA P45,000.00; OSCAR RAMIREZ
P45,000.00; MARISOL L. SABALDAN P75,000.00; DANILO SARE
P100,000.00; MARY BETH SARDON P25,000.00; JOHNNY SOLATORIO
P35,000.00; and JOEL TINIO P120,000.00 as placement fees in
connection with their overseas employment, which amounts are in
excess of or greater than those specified in the schedule of allowable
fees prescribed by the POEA Board Resolution No. 02, Series 1998, and
without valid reasons and without the fault of the said complainants
failed to actually deploy them and failed to reimburse the expenses
incurred by the said complainants in connection with their
documentation and processing for purposes of their deployment.
[3]
(Emphasis supplied)

In Criminal Case No. 02-206297, the information reads:

That on or about May 28, 2001, in the City of Manila, Philippines,
the said accused conspiring and confederating together and helping
with [sic] one another, did then and there willfully, unlawfully and
feloniously defraud EDGARDO V. DELA CAZA, in the following manner,
to wit: the said accused by means of false manifestations and
fraudulent representations which they made to the latter, prior to and
even simultaneous with the commission of the fraud, to the effect that
they had the power and capacity to recruit and employ said EDGARDO
V. DELA CAZA in Korea as factory worker and could facilitate the
processing of the pertinent papers if given the necessary amount to
meet the requirements thereof; induced and succeeded in inducing
said EDGARDO V. DELA CAZA to give and deliver, as in fact, he gave
and delivered to said accused the amount of P45,000.00 on the
strength of said manifestations and representations, said accused well
knowing that the same were false and untrue and were made [solely]
for the purpose of obtaining, as in fact they did obtain the said amount
of P45,000.00 which amount once in their possession, with intent to
defraud said [EDGARDO] V. DELA CAZA, they willfully, unlawfully and
feloniously misappropriated, misapplied and converted the said
amount of P45,000.00 to their own personal use and benefit, to the
damage and prejudice of the said EDGARDO V. DELA CAZA in the
aforesaid amount of P45,000.00, Philippine currency.
CONTRARY TO LAW.[4]

When arraigned on January 19, 2004, accused-appellant

Gallo entered a plea of not guilty to all charges.

On March 3, 2004, the pre-trial was terminated and trial

ensued, thereafter.
During the trial, the prosecution presented as their
witnesses, Armando Albines Roa, the Philippine Overseas
Employment Administration (POEA) representative and private
complainants Dela Caza, Guanteno and Sare. On the other hand,
the defense presented as its witnesses, accused-appellant Gallo,
Pacardo and Manta.
Version of the Prosecution
On May 22, 2001, Dela Caza was introduced by Eleanor
Panuncio to accused-appellant Gallo, Pacardo, Manta, Mardeolyn,
Lulu Mendanes, Yeo Sin Ung and another Korean national at the
office of MPM International Recruitment and Promotion Agency
(MPM Agency) located in Malate, Manila.
Dela Caza was told that Mardeolyn was the President of MPM
Agency, while Nelmar Martir was one of the incorporators. Also,
that Marcelino Martir, Norman Martir, Nelson Martir and Ma.
Cecilia Ramos were its board members. Lulu Mendanes acted as
the cashier and accountant, while Pacardo acted as the agencys
employee who was in charge of the records of the applicants.
Manta, on the other hand, was also an employee who was tasked
to deliver documents to the Korean embassy.
Accused-appellant Gallo then introduced himself as a relative
of Mardeolyn and informed Dela Caza that the agency was able to
send many workers abroad. Together with Pacardo and Manta, he
also told Dela Caza about the placement fee of One Hundred Fifty
Thousand Pesos (PhP 150,000) with a down payment of Forty-Five
Thousand Pesos (PhP 45,000) and the balance to be paid through
salary deduction.

Dela Caza, together with the other applicants, were briefed

by Mardeolyn about the processing of their application papers for
job placement in Korea as a factory worker and their possible
salary. Accused Yeo Sin Ung also gave a briefing about the
business and what to expect from the company and the salary.
With accused-appellants assurance that many workers have
been sent abroad, as well as the presence of the two (2) Korean
nationals and upon being shown the visas procured for the
deployed workers, Dela Caza was convinced to part with his
money. Thus, on May 29, 2001, he paid Forty-Five Thousand Pesos
(PhP 45,000) to MPM Agency through accused-appellant Gallo
who, while in the presence of Pacardo, Manta and Mardeolyn,
issued and signed Official Receipt No. 401.
Two (2) weeks after paying MPM Agency, Dela Caza went
back to the agencys office in Malate, Manila only to discover that
the office had moved to a new location at Batangas Street,
Brgy. San Isidro, Makati. He proceeded to the new address and
found out that the agency was renamed to New Filipino Manpower
Development & Services, Inc. (New Filipino). At the new office,
he talked to Pacardo, Manta, Mardeolyn, Lulu Mendanes and
accused-appellant Gallo. He was informed that the transfer was
done for easy accessibility to clients and for the purpose of
changing the name of the agency.
Dela Caza decided to withdraw his application and recover
the amount he paid but Mardeolyn, Pacardo, Manta and Lulu
Mendanes talked him out from pursuing his decision. On the other
hand, accused-appellant Gallo even denied any knowledge about
the money.
After two (2) more months of waiting in vain to be deployed,
Dela Caza and the other applicants decided to take action. The

first attempt was unsuccessful because the agency again moved

to another place. However, with the help of the Office of
Ambassador Seeres and the Western Police District, they were
able to locate the new address at 500 Prudential Building,
Carriedo,Manila. The agency explained that it had to move in
order to separate those who are applying as entertainers from
those applying as factory workers. Accused-appellant Gallo,
together with Pacardo and Manta, were then arrested.
The testimony of prosecution witness Armando Albines Roa,
a POEA employee, was dispensed with after the prosecution and
defense stipulated and admitted to the existence of the following
documents:
1.

Certification issued by Felicitas Q. Bay, Director II, Licensing

Branch of the POEA to the effect that New Filipino Manpower
Development & Services, Inc., with office address at 1256 Batangas
St., Brgy. San Isidro, Makati City, was a licensed landbased agency
whose license expired on December 10, 2001 and was delisted from
the roster of licensed agencies on December 14, 2001. It further
certified that Fides J. Pacardo was the agencys Recruitment
Officer;

2.

Certification issued by Felicitas Q. Bay of the POEA to the effect

that MPM International Recruitment and Promotion is not licensed
by the POEA to recruit workers for overseas employment;

3.

Certified copy of POEA Memorandum Circular No. 14, Series of

1999 regarding placement fee ceiling for landbased workers.

4.

Certified copy of POEA Memorandum Circular No. 09, Series of

1998 on the placement fee ceiling for Taiwan and Korean markets,
and

5.

Certified copy of POEA Governing Board Resolution No. 02, series

of 1998.

Version of the Defense

For his defense, accused-appellant denied having any part in
the recruitment of Dela Caza. In fact, he testified that he also
applied with MPM Agency for deployment to Korea as a factory

worker. According to him, he gave his application directly with

Mardeolyn because she was his town mate and he was allowed to
pay only Ten Thousand Pesos (PhP 10,000) as processing fee.
Further, in order to facilitate the processing of his papers, he
agreed to perform some tasks for the agency, such as taking
photographs of the visa and passport of applicants, running
errands and performing such other tasks assigned to him, without
salary except for some allowance. He said that he only saw Dela
Caza one or twice at the agencys office when he applied for work
abroad. Lastly, that he was also promised deployment abroad but
it never materialized.
Ruling of the Trial Court
On March 15, 2007, the RTC rendered its Decision convicting
the accused of syndicated illegal recruitment and estafa. The
dispositive portion reads:
WHEREFORE, judgment is hereby rendered as follows:
I.

Accused FIDES PACARDO y JUNGO and PILAR MANTA y

DUNGO are hereby ACQUITTED of the crimes charged in
Criminal Cases Nos. 02-206293, 02-206297, 02-206300
and 02-206308;

II.

Accused RODOLFO GALLO y GADOT is found guilty

beyond reasonable doubt in Criminal Case No. 02-206293
of the crime of Illegal Recruitment committed by a
syndicate and is hereby sentenced to suffer the penalty of
life imprisonment and to pay a fine of ONE MILLION
(Php1,000,000.00) PESOS. He is also ordered to indemnify
EDGARDO DELA CAZA of the sum of FORTY-FIVE
THOUSAND (Php45,000.00) PESOS with legal interest from
the filing of the information on September 18, 2002 until
fully paid.

III.

Accused RODOLFO GALLO y GADOT in Criminal Case No.

02-206297 is likewise found guilty and is hereby
sentenced to suffer the indeterminate penalty of FOUR (4)
years of prision correccional as minimum to NINE (9)
years of prision mayor as maximum.

IV.

Accused RODOLFO GALLO y GADOT is hereby

ACQUITTED of the crime charged in Criminal Cases Nos.
02-206300 and 02-206308.

Let alias warrants for the arrest of the other accused be issued
anew in all the criminal cases. Pending their arrest, the cases are sent
to the archives.
The immediate release of accused Fides Pacardo and Pilar Manta
is hereby ordered unless detained for other lawful cause or charge.
SO ORDERED.[5]

Ruling of the Appellate Court

On appeal, the CA, in its Decision dated December 24,
2008, disposed of the case as follows:
WHEREFORE, the appealed Decision of the Regional Trial Court
of Manila, Branch 30, in Criminal Cases Nos. 02-206293 and 02206297, dated March 15, 2007, is AFFIRMED with the MODIFICATION
that in Criminal Case No. 02-206297, for estafa, appellant is sentenced
to four (4) years of prision correccional to ten (10) years of prision
mayor.
SO ORDERED.[6]

The CA held the totality of the prosecutions evidence

showed that the accused-appellant, together with others,
engaged in the recruitment of Dela Caza. His actions and
representations to Dela Caza can hardly be construed as the
actions of a mere errand boy.
As determined by the appellate court, the offense is
considered economic sabotage having been committed by more
than three (3) persons, namely, accused-appellant Gallo,
Mardeolyn, Eleonor Panuncio and Yeo Sin Ung. More importantly, a
personal found guilty of illegal recruitment may also be convicted
of estafa.[7] The same evidence proving accused-appellants

commission of the crime of illegal recruitment in large scale also

establishes his liability for estafa under paragragh 2(a) of Article
315 of the Revised Penal Code (RPC).
On January 15, 2009, the accused-appellant filed a timely
appeal before this Court.
The Issues
Accused-appellant interposes in the present appeal the
following assignment of errors:
I
The court a quo gravely erred in finding the accused-appellant guilty of
illegal recruitment committed by a syndicate despite the failure of the
prosecution to prove the same beyond reasonable doubt.
II
The court a quo gravely erred in finding the accused-appellant guilty
of estafa despite the failure of the prosecution to prove the same
beyond reasonable doubt.

Our Ruling
The appeal has no merit.
Evidence supports conviction
of the crime of Syndicated
Illegal Recruitment
Accused-appellant avers that he cannot be held criminally
liable for illegal recruitment because he was neither an officer nor
an employee of the recruitment agency. He alleges that the trial
court erred in adopting the asseveration of the private
complainant that he was indeed an employee because such was

not duly supported by competent evidence. According to him,

even assuming that he was an employee, such cannot warrant his
outright conviction sans evidence that he acted in conspiracy with
the officers of the agency.
We disagree.
To commit syndicated illegal recruitment, three elements
must be established: (1) the offender undertakes either any
activity within the meaning of recruitment and placement
defined under Article 13(b), or any of the prohibited practices
enumerated under Art. 34 of the Labor Code; (2) he has no valid
license or authority required by law to enable one to lawfully
engage in recruitment and placement of workers; [8] and (3) the
illegal recruitment is committed by a group of three (3) or more
persons conspiring or confederating with one another. [9] When
illegal recruitment is committed by a syndicate or in large
scale, i.e., if it is committed against three (3) or more persons
individually or as a group, it is considered an offense involving
economic sabotage.[10]
Under Art. 13(b) of the Labor Code, recruitment and
placement refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers,
and includes referrals, contract services, promising or advertising
for employment, locally or abroad, whether for profit or not.
After a thorough review of the records, we believe that the
prosecution was able to establish the elements of the offense
sufficiently. The evidence readily reveals that MPM Agency was
never licensed by the POEA to recruit workers for overseas
employment.

Even with a license, however, illegal recruitment could still

be committed under Section 6 of Republic Act No. 8042 (R.A.
8042), otherwise known as the Migrants and Overseas Filipinos
Act of 1995, viz:
Sec. 6. Definition. For purposes of this Act, illegal recruitment
shall mean any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers and includes referring, contract
services, promising or advertising for employment abroad, whether for
profit or not, when undertaken by a non-licensee or non-holder of
authority contemplated under Article 13(f) of Presidential Decree No.
442, as amended, otherwise known as the Labor Code of the
Philippines: Provided, That any such non-licensee or non-holder who, in
any manner, offers or promises for a fee employment abroad to two or
more persons shall be deemed so engaged. It shall, likewise, include
the following act, whether committed by any person, whether a nonlicensee, non-holder, licensee or holder of authority:
(a) To charge or accept directly or indirectly any amount greater
than that specified in the schedule of allowable fees
prescribed by the Secretary of Labor and Employment, or to
make a worker pay any amount greater than that actually
received by him as a loan or advance;
xxxx
(l) Failure to actually deploy without valid reason as determined
by the Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the worker in
connection with his documentation and processing for
purposes of deployment and processing for purposes of
deployment, in cases where the deployment does not
actually take place without the workers fault. Illegal
recruitment when committed by a syndicate or in large scale
shall be considered an offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate if
carried out by a group of three (3) or more persons conspiring or
confederating with one another. It is deemed committed in large scale
if committed against three (3) or more persons individually or as a
group.
The persons criminally liable for the above offenses are the
principals, accomplices and accessories. In case of juridical persons,
the officers having control, management or direction of their business
shall be liable.

In the instant case, accused-appellant committed the acts

enumerated in Sec. 6 of R.A. 8042. Testimonial evidence
presented by the prosecution clearly shows that, in consideration
of a promise of foreign employment, accused-appellant received
the amount of Php 45,000.00 from Dela Caza. When accusedappellant made misrepresentations concerning the agencys
purported power and authority to recruit for overseas
employment, and in the process, collected money in the guise of
placement fees, the former clearly committed acts constitutive of
illegal recruitment.[11] Such acts were accurately described in the
testimony of prosecution witness, Dela Caza, to wit:
PROS. MAGABLIN
Q:

How about this Rodolfo Gallo?

A:

He was the one who received my money.

Q:

Aside from receiving your money, was there any other

representations or acts made by Rodolfo Gallo?

A:

He introduced himself to me as relative of Mardeolyn

Martir and he even intimated to me that their agency has
sent so many workers abroad.
xxxx

PROS. MAGABLIN
Q:

A:

Mr. Witness, as you claimed you tried to withdraw your

application at the agency. Was there any instance that
you were able to talk to Fides Pacardo, Rodolfo Gallo and
Pilar Manta?
Yes, maam.

Q:

What was the conversation that transpired among you

before you demanded the return of your money and
documents?

A:

When I tried to withdraw my application as well as my

money, Mr. Gallo told me I know nothing about your
money while Pilar Manta and Fides Pacardo told me, why
should I withdraw my application and my money when I
was about to be [deployed] or I was about to leave.
xxxx

Q:

And what transpired at that office after this Panuncio

introduced you to those persons whom you just
mentioned?

A:

The three of them including Rodolfo Gallo told me that

the placement fee in that agency is Php 150,000.00 and
then I should deposit the amount of Php 45,000.00. After I
have deposited said amount, I would just wait for few
days
xxxx

Q:

They were the one (sic) who told you that you have to
pay Php 45,000.00 for deposit only?

A:

Yes, maam, I was told by them to deposit Php 45,000.00

and then I would pay the remaining balance of
Php105,000.00, payment of it would be through salary
deduction.

Q:

That is for what Mr. Witness again?

A:

For placement fee.

Q:

Now did you believe to (sic) them?

A:

Yes, maam.

Q:

Why, why did you believe?

A:

Because of the presence of the two Korean nationals and

they keep on telling me that they have sent abroad
several workers and they even showed visas of the
records that they have already deployed abroad.

Q:

Aside from that, was there any other representations

which have been made upon you or make you believe
that they can deploy you?

A:

At first I was adamant but they told me If you do not

want to believe us, then we could do nothing. But once
they showed me the [visas] of the people whom they
have deployed abroad, that was the time I believe them.

Q:

So after believing on the representations, what did you

do next Mr. Witness?

A:

That was the time that I decided to give the money.

xxxx

PROS. MAGABLIN
Q:

Do you have proof that you gave the money?

A:

Yes, maam.

Q:

Where is your proof that you gave the money?

A:

I have it here.

PROS. MAGABLIN:
Witness is producing to this court a Receipt dated May 28, 2001
in the amount of Php45,000.00 which for purposes of record Your

Honor, may I request that the same be marked in the evidence

as our Exhibit F.
xxxx
PROS. MAGABLIN
Q:

A:

There appears a signature appearing at the left bottom

portion of this receipt. Do you know whose signature is
this?
Yes, maam, signature of Rodolfo Gallo.

PROS. MAGABLIN
Q:
A:

Why do you say that that is his signature?

Rodolfo Gallos signature Your Honor because he was the
one who received the money and he was the one who
filled up this O.R. and while he was doing it, he was
flanked by Fides Pacardo, Pilar Manta and Mardeolyn
Martir.
xxxx

Q:

So it was Gallo who received your money?

A:

Yes, maam.

PROS. MAGABLIN
Q:

And after that, what did this Gallo do after he received

your money?

A:

They told me maam just to call up and make a follow up

with our agency.
xxxx

Q:

Now Mr. Witness, after you gave your money to the

accused, what happened with the application, with the
promise of employment that he promised?

A:

Two (2) weeks after giving them the money, they moved
to a new office in Makati, Brgy. San Isidro.
xxxx

Q:

And were they able to deploy you as promised by them?

A:

No, maam, they were not able to send us abroad. [12]

Essentially, Dela Caza appeared very firm and consistent in

positively identifying accused-appellant as one of those who
induced him and the other applicants to part with their money. His

testimony
showed
that
accused-appellant
made
false
misrepresentations and promises in assuring them that after they
paid the placement fee, jobs in Korea as factory workers were
waiting for them and that they would be deployed soon. In fact,
Dela Caza personally talked to accused-appellant and gave him
the money and saw him sign and issue an official receipt as proof
of his payment. Without a doubt, accused-appellants actions
constituted illegal recruitment.
Additionally, accused-appellant cannot argue that the trial
court erred in finding that he was indeed an employee of the
recruitment agency. On the contrary, his active participation in
the illegal recruitment is unmistakable. The fact that he was the
one who issued and signed the official receipt belies his
profession of innocence.
This Court likewise finds the existence of a conspiracy
between the accused-appellant and the other persons in the
agency who are currently at large, resulting in the commission of
the crime of syndicated illegal recruitment.
In this case, it cannot be denied that the accused-appellent
together with Mardeolyn and the rest of the officers and
employees of MPM Agency participated in a network of
deception. Verily, the active involvement of each in the
recruitment scam was directed at one single purpose to divest
complainants with their money on the pretext of guaranteed
employment abroad. The prosecution evidence shows that
complainants were briefed by Mardeolyn about the processing of
their papers for a possible job opportunity inKorea, as well as their
possible salary. Likewise, Yeo Sin Ung, a Korean national, gave a
briefing about the business and what to expect from the company.
Then, here comes accused-appellant who introduced himself as
Mardeolyns relative and specifically told Dela Caza of the fact
that the agency was able to send many workers abroad. Dela

Caza was even showed several workers visas who were already
allegedly deployed abroad. Later on, accused-appellant signed
and issued an official receipt acknowledging the down payment of
Dela Caza. Without a doubt, the nature and extent of the actions
of accused-appellant, as well as with the other persons in MPM
Agency clearly show unity of action towards a common
undertaking. Hence, conspiracy is evidently present.
In People v. Gamboa,[13] this Court discussed the nature of
conspiracy in the context of illegal recruitment, viz:
Conspiracy to defraud aspiring overseas contract workers was
evident from the acts of the malefactors whose conduct before, during
and after the commission of the crime clearly indicated that they were
one in purpose and united in its execution. Direct proof of previous
agreement to commit a crime is not necessary as it may be deduced
from the mode and manner in which the offense was perpetrated or
inferred from the acts of the accused pointing to a joint purpose and
design, concerted action and community of interest. As such, all the
accused, including accused-appellant, are equally guilty of the crime of
illegal recruitment since in a conspiracy the act of one is the act of all.

To reiterate, in establishing conspiracy, it is not essential that

there be actual proof that all the conspirators took a direct part in
every act. It is sufficient that they acted in concert pursuant to
the same objective.[14]
Estafa
The prosecution likewise established that accused-appellant
is guilty of the crime of estafa as defined under Article 315
paragraph 2(a) of the Revised Penal Code, viz:
Art. 315. Swindling (estafa). Any person who shall defraud
another by any means mentioned hereinbelow
xxxx

2. By means of any of the following false pretenses or fraudulent

acts executed prior to or simultaneously with the commission of the
fraud:
(a) By using fictitious name, or falsely pretending to possess
power, influence, qualifications, property, credit, agency,
business or imaginary transactions; or by means of other
similar deceits.

The elements of estafa in general are: (1) that the accused

defrauded another (a) by abuse of confidence, or (b) by means of
deceit; and (2) that damage or prejudice capable of pecuniary
estimation is caused to the offended party or third person.
[15]
Deceit is the false representation of a matter of fact, whether
by words or conduct, by false or misleading allegations, or by
concealment of that which should have been disclosed; and which
deceives or is intended to deceive another so that he shall act
upon it, to his legal injury.
All these elements are present in the instant case: the
accused-appellant, together with the other accused at large,
deceived the complainants into believing that the agency had the
power and capability to send them abroad for employment; that
there were available jobs for them in Korea as factory workers;
that by reason or on the strength of such assurance, the
complainants parted with their money in payment of the
placement fees; that after receiving the money, accusedappellant and his co-accused went into hiding by changing their
office locations without informing complainants; and that
complainants were never deployed abroad. As all these
representations of the accused-appellant proved false, paragraph
2(a), Article 315 of the Revised Penal Code is thus applicable.
Defense of Denial Cannot Prevail
over Positive Identification

Indubitably, accused-appellants denial of the crimes

charged crumbles in the face of the positive identification made
by Dela Caza and his co-complainants as one of the perpetrators
of the crimes charged. As enunciated by this Court in People v.
Abolidor,[16] [p]ositive identification where categorical and
consistent and not attended by any showing of ill motive on the
part of the eyewitnesses on the matter prevails over alibi and
denial.
The defense has miserably failed to show any evidence of ill
motive on the part of the prosecution witnesses as to falsely
testify against him.
Therefore, between the categorical statements of the
prosecution witnesses, on the one hand, and bare denials of the
accused, on the other hand, the former must prevail. [17]
Moreover, this Court accords the trial courts findings with
the probative weight it deserves in the absence of any compelling
reason to discredit the same. It is a fundamental judicial dictum
that the findings of fact of the trial court are not disturbed on
appeal except when it overlooked, misunderstood or misapplied
some facts or circumstances of weight and substance that would
have materially affected the outcome of the case. We find that
the trial court did not err in convicting the accused-appellant.

WHEREFORE, the appeal is DENIED for failure to

sufficiently show reversible error in the assailed decision. The
Decision dated December 24, 2008 of the CA in CA-G.R. CR-H.C.
No. 02764 is AFFIRMED.
No costs.

SO ORDERED.

G.R. No. 187730

People vs. Gallo June 29, 2010
FACTS:
Accused-appellant made false misrepresentations and promises in assuring Dela
Caza and the other victims that after they paid the placement fee, jobs in Korea as
factory workers were waiting for them and that they would be deployed soon. In
fact, Dela Caza personally talked to accused-appellant and gave him the money and
saw him sign and issue an official receipt as proof of his payment.
ISSUE:
Whether Gallo and others are guilty of syndicated illegal recruitment and estafa.
LAWS INVOLVED:
Articless 13 (b) and 34 of the Labor Code.
RULING:
In the instant case, accused-appellant committed the acts enumerated in Sec. 6 of
R.A. 8042. Testimonial evidence presented by the prosecution clearly shows that, in
consideration of a promise of foreign employment, accused-appellant received the
amount of Php 45,000.00 from Dela Caza. When accused-appellant made
misrepresentations concerning the agencys purported power and authority to
recruit for overseas employment, and in the process, collected money in the guise
of placement fees, the former clearly committed acts constitutive of illegal
recruitment.
In this case, it cannot be denied that the accused-appellent together with Mardeolyn
and the rest of the officers and employees of MPM Agency participated in a network
of deception. Verily, the active involvement of each in the recruitment scam was
directed a tone single purpose to divest complainants with their money on the
pretext of guaranteed employment abroad. The prosecution evidence shows that
complainants were briefed by Mardeolyn about the processing of their papers for a
possible job opportunity in Korea, as well as their possible salary. Likewise, Yeo Sin
Ung, a Korean national, gave a briefing about the business and what to expect from
the company. Then, here comes accused-appellant who introduced himself as
Mardeolyns relative and specifically told Dela Cazaof the fact that the agency was
able to send many workers abroad. Dela Cazawas even showed several workers

visas who were already allegedly deployed abroad. Later on, accused-appellant
signed and issued an official receipt acknowledging the down payment of Dela
Caza. Without a doubt, the nature and extent of the actions of accused-appellant, as
well as with the other persons in MPM Agency clearly show unity of action towards a
common undertaking. Hence, conspiracy is evidently present.

G.R. No. 97028 May 21, 1993

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ALICIA B. GAOAT, accused-appellant.
The Solicitor General for plaintiff-appellee.
Mauricio C. Ulep for accused-appellant.

NARVASA, C.J.:
On September 22, 1987, the appellant, Alicia B. Gaoat, and two (2) others Magdalena Abenir
Irons and Domingo B. Babol were charged before the Regional Trial Court of Manila with the
crime of violation of Article 38 (1) of Presidential Decree No. 1412 in relation to Article 13 (b) (c) of
the New Labor Code of the Philippines, as amended . . . " The case was docketed as Criminal Case
No. 87-57826.
The acts allegedly constituting the crime are set out in the information as follows:
That in or about and during the period comprised between June, 1986 and February,
1987, inclusive, in the City of Manila, . . . the said accused, conspiring and
confederating together and helping one another, willfully, unlawfully, and feloniously
defraud LUCIA BERNARDO, FROILAN BRIONES AND REYNALDO VALIDOR, who
are applicants for Stewardess, Utility Galley and Utility Man in Miami, Florida, U.S.A.,
by then and there collecting the sum of P15,300.00, P19,300.00 and P15,500.00,
respectively, which are P10,300, P14,300.00 and P10,000.00, respectively, more
than the maximum placement and documentation fees of P5,000.00 to cover all
costs and services relative to their recruitment pursuant to M.C. No. 5, Series of 1985
which is allowed by the POEA for them to collect from said LUCIA BERNARDO,
FROILAN BRIONES AND REYNALDO VALIDOR, to the damage and prejudice of
the said complainants inn the aforesaid amount of P10,300.00, P14,300.00 and
P10,000.00, respectively.
On the same day, September 22, 1987, three (3) other informations were separately filed against the
aforenamed individuals, Gaoat, Irons and Babol. These were docketed as Criminal cases Numbered
87-57827, 87-57828, and 87-57829. The indictments basically accused them of receiving money
from the same persons already named, Lucia Bernardo, Froilan Briones and Reynaldo Validor in
the amounts stated in the information just quoted upon the "false and fraudulent" representations
and assurances that "they had the power and capacity to recruit and employ said . . . (said persons)

and could facilitate the processing of the pertinent papers in connection therewith," which money
they did thereafter "misappropriate, misapply and convert to their own personal use and benefit to
the damage and prejudice of . . . (their victims) . . . ."
And in October, 1987, three (3) more informations were filed against Alicia B. Gaoat, charging her
with estafa, allegedly committed in conspiracy "with others whose true names, identities and present
whereabouts are still unknown." Specifically, she was charged with having, on different occasions in
1986, obtained money from Pricilla de Leon y Lautrizo, Reynaldo Singuya y Gabriel, and John
Fortes y Co thru "false manifestations and fraudulent representations that she had the power and
capacity to recruit and employ . . . (persons applying therefor) and could facilitate the processing of
the pertinent papers if given the necessary amount to meet the requirements thereof," but once in
possession of the money, she "feloniously misappropriated, misapplied and converted (it) to her own
personal use and benefit to the damage and prejudice of . . . (her victims)." The cases were
respectively docketed as criminal cases Numbered 87-58151, 87-58085, 87-58086.
Only Alicia B. Gaoat was arrested in connection with these seven (7) indictments. None of her coaccused was ever apprehended or brought to trial. As far as is known, her co-defendants have
remained at large to this day.
On being arraigned, Alicia Gaoat entered a plea of not guilty in relation to all the seven (7) cases
against her, with the assistance of counsel de parte. the cases were subsequently consolidated
before Branch 49 of the regional Trial Court of Manila 1 and, by agreement of the parties, a joint trial
was conducted.
On February 3, 1989, the trial Court rendered judgment the dispositive portion of which reads as
follows: 2
WHEREFORE, judgment is hereby rendered in the aforementioned cases, as
follows:
1. In Criminal Case No. 87-57826, the Court finds the accused Alicia Gaoat guilty
beyond reasonable doubt, as principal, for the crime of illegal recruitment, in a large
scale, defined in Article 39 in relation to Articles 32, 34 and 38 of the Labor code, as
amended, and in relation to memorandum Order No. 5, series of 1985 and Book I,
Rule II, Section 1 (cc) of the rules of the Philippines Overseas Employment
Administration and hereby imposes on her the penalty of LIFE IMPRISONMENT with
all the accessory penalties of the law and to pay a fine of P100,000.00, without
subsidiary imprisonment in case of insolvency.
2. Criminal Cases Nos. 87-57827 to 87-57829 are hereby dismissed only as against
the Accused Alicia Gaoat.
3. The Accused Alicia Gaoat is hereby acquitted of the crime charged in Criminal
Cases No. 87-58158, 87-58036 and 87-58085 for failure of the Prosecution to prove
the guilt of the Accused beyond reasonable doubt for said crime.
The Court cannot render judgment on the civil liability of the Accused in favor of the
Private Complainants because the Department of Labor and Employment has
already ordered Roan Philippines, Inc. and First Integrated Bonding and Insurance
Company, Inc., to pay, jointly and severally, the Private Complainants their monetary
claims against the said corporations (Exhibit "D").

Gaoat filed a motion for reconsideration of the verdict on February 20, 1989. The motion was denied.
hence, the appeal at bar, "only with respect to the order of conviction," as her counsel is careful to
point out. to gain acquittal, she strives to make the following points, to wit: 3
1) she was "only obeying and acting [on] the orders of her superiors (in Roan Philippines, Inc.);"
indeed, "she wanted to resign from the company but was overtaken by events beyond their control;"
2) being a mere cashier, she was never informed of the circular allegedly violated: "Memorandum
Circular No. 5 of the POEA (Re: Overcharging of Placement Fees)," and insofar as it is made to
apply to her, "the law is oppressive and unjust;"
3) assuming she is responsible for the crime charged, the milder form of responsibility should have
been imposed on her.
Alicia Gaoat was the cashier of Roan Philippines, Inc., 4 a recruitment or manning agency. the latter's
operations were suspended by the Philippine Overseas Employment Administration in the first quarter of
1987. 5 At that time, Gaoat was receiving a salary of P1,150.00 a month, as cashier. 6 Her superiors
later indicted with her as allegedly her co-conspirators were Magdalena Abenir Irons, the President of
the Company, 7 and Domingo B. Babol, the General Manager.8
Although no less than seven (7) crimes were attributed to her one for illegal recruitment, and six
(6) for estafa she was, to repeat, convicted of only one, the first, that for illegal recruitment.
Now, the information under which she was convicted, accused her of having, willfully, unlawfully and
feloniously and in conspiracy with her superiors, Irons (president of the corporation) and Babol
(general manager), collected from LUCIA BERNARDO, FROILAN BRIONES and REYNALDO
VALIDOR applicant's for stewardess, Utility Galley and Utility Man in Miami, Florida, U.S.A. the
sums of P15,300.00, P19,300.00 and P15,000.00, respectively, which amount are more than the
maximum placement and documentation fees of P5,000.00 allowed by the POEA pursuant to its
Memorandum Circle No. 5, Series of 1985 to cover all costs and services relative to their
recruitment.
Unfortunately for the prosecution, its evidence does not adequately show that Gaoat had any
knowing and wilfull participation in dealing with, and fixing and collecting fees from, the complaining
witnesses. There is no proof that she knew that the fees being collected were in excess of those
allowed by law or regulation or that she knew or had been advised of any such limits. There is no
proof that she had talked with any of the complainants about the amounts they would have to pay to
Roan Philippines, Inc.; in fact, she was absolved from the six (6) other accusations leveled against
her, that she had made "false and fraudulent" representations and assurances to the complaining
witnesses that she and her co-accused "had the power and capacity to recruit and employ said . . .
(said complainants) and could facilitate the processing of the pertinent papers in connection
therewith." 9 Neither is there any proof that she had converted or misappropriated any part of the money
coming into her hands as cashier. All that the State's evidence does show is that after Irons or Babol had
fixed the fees payable by complainants, they had turned over the money collected to Gaoat or
instructed her to receive the money directly from said complainants for recording (in index cards) and
subsequent deposit in the bank, as were her duties as company cashier, in line with normal practice and
usage. 10
The paucity of the prosecution evidence as regards the appellant's complicity in the crime charged is
evident, for instance, from the testimony of Lucia Bernardo, one of the complainants. Lucia Bernardo
testified pertinently as follows: 11

FISCAL FORMOSO:
When you went there in May, 1986, to whom did you talked with?
WITNESS:
To Mrs. Magdalena Iron, sir.
FISCAL FORMOSO:
What did she tell you?
WITNESS:
I was told to fill up an application form, sir.
FISCAL FORMOSO:
What else did she tell you?
WITNESS:
I was told to come back after a few days for my interview, sir.
FISCAL FORMOSO:
When you went there for the first time, were you able to talk to Mr.
Babol?
WITNESS:
Yes, sir.
FISCAL FORMOSO:
And what did Babol tell you?
WITNESS:
He told me that if I pass the interview I would be able to leave in a
period of six months, sir.
FISCAL FORMOSO:
Upon the filing of your application what were the requirement (sic)
asked of you?
WITNESS:

The Seaman's book, Medical certificate and the NBI Clearance, sir.
FISCAL FORMOSO:
Were you able to accomplish these requirements?
WITNESS:
Yes, sir.
FISCAL FORMOSO:
To whom did you submit?
WITNESS:
To Mr. Babol, sir.
FISCAL FORMOSO:
After that what did he tell you?
WITNESS:
I was asked to give them cash bond, sir.
FISCAL FORMOSO:
When you submitted those requirements to Babol, what did he tell
you?
WITNESS:
He told me to give a cash bond, sir.
FISCAL FORMOSO:
Were you able to give?
WITNESS:
Yes, sir.
FISCAL FORMOSO:
How much?
WITNESS:

P15,300.00, sir.
FISCAL FORMOSO:
What else?
WITNESS:
Fee for the plane ticket, sir.
FISCAL FORMOSO:
By the way, how much was the total amount that you were obliged to
pay in order that you could leave?
WITNESS:
P30,000.00 all in all, sir.
FISCAL FORMOSO:
And out of this P30,000.00, you were only able to pay P15,300.00?
WITNESS:
Yes, sir.
FISCAL FORMOSO:
To whom did you give this P15,300.00?
WITNESS:
I was informed by Mrs. Iron to give the money to Mrs. Alicia Gaoat,
their cashier, sir.
FISCAL FORMOSO:
When you delivered the P15,300.00 were the persons present?
WITNESS :
My companions who made payments also, sir.
FISCAL FORMOSO:
Now, was Mr. Babol present when you gave the P15,300.00?
WITNESS:

Yes, sir.
FISCAL FORMOSO:
What did he tell you, if any?
WITNESS:
That I would also give the money to Mrs. Alicia Gaoat, sir.
FISCAL FORMOSO:
Did you actually give the P15,300.00?
WITNESS:
Yes, sir.
xxx xxx xxx
Lucia Bernardo made clear that it was Babol and Irons who had assured her she would be able to
leave for her projected employment in Miami, Florida, U.S.A., and instructed her to pay the fees
required of her to Alicia Gaoat;12 and that she had spoken to the latter only after paying the amount fixed
by Irons and Babol. 13
Much the same thing may be said of the evidence given by other complainant, Froilan
Briones. 14 Froilan Briones' testimony is that it was only Ms. Irons, Mr. Babol, and a certain Ms. Robinson
who interviewed him and other applicants; that it was the first two, Irons and Babol, who asked that he put
up a cash bond; and that all that Gaoat did was to receive the money that he (Briones) was told by Irons
and Babol to pay. 15
Nor is there any evidence satisfactorily establishing that Gaoat had "conspired and confederated"
with her co-accused, apart from the implausibility on its face of the theory of conspiracy between a
mere clerk or cashier, on the one hand, and her superiors, the president and the general manager of
the company, on the other, because of the patent disparity in their status or rank. On this point, and
as regards Gaoat's failure to issue official receipts to the complainants, the Office of the solicitor
general makes the following persuasive observations: 16
. . . (T)he evidence thus far adduced is bereft of any showing of conspiracy among
the three (3) accused. Neither could it be inferred from the act of appellant in
receiving or accepting the money paid by private complainants since indubitably, she
was merely complying with the orders of her superiors. As established by the
evidence, appellant received said sums of money in her capacity as cashier of the
Roan Philippines, Inc. All transactions, insofar as she is concerned, were above
board. She had no inkling that the corporation would in the future, without her
knowledge, simply fold-up, leaving her and other co-employees to the wayside, so to
speak.
Proof beyond reasonable doubt is required to establish a finding of criminal
conspiracy (Castaneda vs. Sandiganbayan, 171 SCRA 263).

Granting that appellant was negligent in failing to issue receipts to private

complainants, such failure was sufficiently explained as having been omitted per
specific instruction of the president, Mrs.. Iron and/or the general manager, Mr.
Babol. There was, therefore, no concurrence by herein appellant with her superiors
in withholding issuance of receipts.
In analogy, "the concurrence of accused's negligence with the defalcation
perpetrated by his co-accused will not suffice to make him a co-conspirator" (Valdez
vs. People, 173 SCRA 1163).
The prosecution has thus failed to prove that appellant conspired with the other
accused in this case, clearly and convincingly as the commission of the crime itself
(Valdez vs. People, supra). The acts of appellant in receiving money from private
complainants far exceeding that required by law, in her official capacity as cashier is
not among acts enumerated in law as "recruitment and placement".
WHEREFORE, the decision of the Court a quo in Criminal Case No. 87-57826, subject of this
appeal, is REVERSED and SET ASIDE, and the appellant, Alicia B. Gaoat, ACQUITTED, with
costs de officio.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 113161 August 29, 1995

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
LOMA GOCE y OLALIA, DAN GOCE and NELLY D. AGUSTIN, accused. NELLY D.
AGUSTIN, accused-appellant.

REGALADO, J.:
On January 12, 1988, an information for illegal recruitment committed by a syndicate and in large
scale, punishable under Articles 38 and 39 of the Labor Code (Presidential Decree No. 442) as
amended by Section 1(b) of Presidential Decree No. 2018, was filed against spouses Dan and Loma
Goce and herein accused-appellant Nelly Agustin in the Regional Trial Court of Manila, Branch 5,
alleging
That in or about and during the period comprised between May 1986 and June 25,
1987, both dates inclusive, in the City of Manila, Philippines, the said accused,

conspiring and confederating together and helping one another, representing

themselves to have the capacity to contract, enlist and transport Filipino workers for
employment abroad, did then and there willfully and unlawfully, for a fee, recruit and
promise employment/job placement abroad, to (1) Rolando Dalida y Piernas, (2)
Ernesto Alvarez y Lubangco, (3) Rogelio Salado y Savillo, (4) Ramona Salado y
Alvarez, (5) Dionisio Masaya y de Guzman, (6) Dave Rivera y de Leon, (7) Lorenzo
Alvarez y Velayo, and (8) Nelson Trinidad y Santos, without first having secured the
required license or authority from the Department of Labor. 1
On January 21, 1987, a warrant of arrest was issued against the three accused but not one of them
was arrested.2 Hence, on February 2, 1989, the trial court ordered the case archived but it issued a
standing warrant of arrest against the accused. 3
Thereafter, on learning of the whereabouts of the accused, one of the offended parties, Rogelio
Salado, requested on March 17, 1989 for a copy of the warrant of arrest. 4 Eventually, at around
midday of February 26, 1993, Nelly Agustin was apprehended by the Paraaque police. 5 On March 8,
1993, her counsel filed a motion to revive the case and requested that it be set for hearing "for purposes
of due process and for the accused to immediately have her day in court" 6 Thus, on April 15, 1993, the
trial court reinstated the case and set the arraignment for May 3, 1993, 7 on which date of Agustin pleaded
not guilty 8 and the case subsequently went to trial.
Four of the complainants testified for the prosecution. Rogelio Salado was the first to take the
witness stand and he declared that sometime in March or April, 1987, he was introduced by Lorenzo
Alvarez, his brother-in-law and a co-applicant, to Nelly Agustin in the latter's residence at Factor,
Dongalo, Paraaque, Metro Manila. Representing herself as the manager of the Clover Placement
Agency, Agustin showed him a job order as proof that he could readily be deployed for overseas
employment. Salado learned that he had to pay P5,000.00 as processing fee, which amount he gave
sometime in April or May of the same year. He was issued the corresponding receipt. 9
Also in April or May, 1987, Salado, accompanied by five other applicants who were his relatives,
went to the office of the placement agency at Nakpil Street, Ermita, Manila where he saw Agustin
and met the spouses Dan and Loma Goce, owners of the agency. He submitted his bio-data and
learned from Loma Goce that he had to give P12,000.00, instead of the original amount of
P5,000.00 for the placement fee. Although surprised at the new and higher sum, they subsequently
agreed as long as there was an assurance that they could leave for abroad. 10
Thereafter, a receipt was issued in the name of the Clover Placement Agency showing that Salado
and his aforesaid co-applicants each paid P2,000.00, instead of the P5,000.00 which each of them
actually paid. Several months passed but Salado failed to leave for the promised overseas
employment. Hence, in October, 1987, along with the other recruits, he decided to go to the
Philippine Overseas Employment Administration (POEA) to verify the real status of Clover
Placement Agency. They discovered that said agency was not duly licensed to recruit job applicants.
Later, upon learning that Agustin had been arrested, Salado decided to see her and to demand the
return of the money he had paid, but Agustin could only give him P500.00. 11
Ramona Salado, the wife of Rogelio Salado, came to know through her brother, Lorenzo Alvarez,
about Nelly Agustin. Accompanied by her husband, Rogelio, Ramona went to see Agustin at the
latter's residence. Agustin persuaded her to apply as a cutter/sewer in Oman so that she could join
her husband. Encouraged by Agustin's promise that she and her husband could live together while
working in Oman, she instructed her husband to give Agustin P2,000.00 for each of them as
placement fee, or the total sum of P4,000.00. 12

Much later, the Salado couple received a telegram from the placement agency requiring them to
report to its office because the "NOC" (visa) had allegedly arrived. Again, around February, or March,
1987, Rogelio gave P2,000.00 as payment for his and his wife's passports. Despite follow-up of their
papers twice a week from February to June, 1987, he and his wife failed to leave for abroad. 13
Complainant Dionisio Masaya, accompanied by his brother-in-law, Aquiles Ortega, applied for a job
in Oman with the Clover Placement Agency at Paraaque, the agency's former office address.
There, Masaya met Nelly Agustin, who introduced herself as the manager of the agency, and the
Goce spouses, Dan and Loma, as well as the latter's daughter. He submitted several pertinent
documents, such as his bio-data and school credentials. 14
In May, 1986, Masaya gave Dan Goce P1,900.00 as an initial downpayment for the placement fee,
and in September of that same year, he gave an additional P10,000.00. He was issued receipts for
said amounts and was advised to go to the placement office once in a while to follow up his
application, which he faithfully did. Much to his dismay and chagrin, he failed to leave for abroad as
promised. Accordingly, he was forced to demand that his money be refunded but Loma Goce could
give him back only P4,000.00 in installments. 15
As the prosecution's fourth and last witness, Ernesto Alvarez took the witness stand on June 7,
1993. He testified that in February, 1987, he met appellant Agustin through his cousin, Larry Alvarez,
at her residence in Paraaque. She informed him that "madalas siyang nagpapalakad sa Oman" and
offered him a job as an ambulance driver at the Royal Hospital in Oman with a monthly salary of
about $600.00 to $700.00. 16
On March 10, 1987, Alvarez gave an initial amount of P3,000.00 as processing fee to Agustin at the
latter's residence. In the same month, he gave another P3,000.00, this time in the office of the
placement agency. Agustin assured him that he could leave for abroad before the end of 1987. He
returned several times to the placement agency's office to follow up his application but to no avail.
Frustrated, he demanded the return of the money he had paid, but Agustin could only give back
P500.00. Thereafter, he looked for Agustin about eight times, but he could no longer find her. 17
Only herein appellant Agustin testified for the defense. She asserted that Dan and Loma Goce were
her neighbors at Tambo, Paraaque and that they were licensed recruiters and owners of the Clover
Placement Agency. Previously, the Goce couple was able to send her son, Reynaldo Agustin, to
Saudi Arabia. Agustin met the aforementioned complainants through Lorenzo Alvarez who requested
her to introduce them to the Goce couple, to which request she acceded. 18
Denying any participation in the illegal recruitment and maintaining that the recruitment was
perpetrated only by the Goce couple, Agustin denied any knowledge of the receipts presented by the
prosecution. She insisted that the complainants included her in the complaint thinking that this would
compel her to reveal the whereabouts of the Goce spouses. She failed to do so because in truth, so
she claims, she does not know the present address of the couple. All she knew was that they had
left their residence in 1987. 19
Although she admitted having given P500.00 each to Rogelio Salado and Alvarez, she explained
that it was entirely for different reasons. Salado had supposedly asked for a loan, while Alvarez
needed money because he was sick at that time. 20
On November 19, 1993, the trial court rendered judgment finding herein appellant guilty as a
principal in the crime of illegal recruitment in large scale, and sentencing her to serve the penalty of
life imprisonment, as well as to pay a fine of P100,000.00. 21

In her present appeal, appellant Agustin raises the following arguments: (1) her act of introducing
complainants to the Goce couple does not fall within the meaning of illegal recruitment and
placement under Article 13(b) in relation to Article 34 of the Labor Code; (2) there is no proof of
conspiracy to commit illegal recruitment among appellant and the Goce spouses; and (3) there is no
proof that appellant offered or promised overseas employment to the complainants. 22 These three
arguments being interrelated, they will be discussed together.
Herein appellant is accused of violating Articles 38 and 39 of the Labor Code. Article 38 of the Labor
Code, as amended by Presidential Decree No. 2018, provides that any recruitment activity, including
the prohibited practices enumerated in Article 34 of said Code, undertaken by non-licensees or nonholders of authority shall be deemed illegal and punishable under Article 39 thereof. The same
article further provides that illegal recruitment shall be considered an offense involving economic
sabotage if any of these qualifying circumstances exist, namely, (a) when illegal recruitment is
committed by a syndicate, i.e., if it is carried out by a group of three or more persons conspiring
and/or confederating with one another; or (b) when illegal recruitment is committed in large
scale, i.e., if it is committed against three or more persons individually or as a group.
At the outset, it should be made clear that all the accused in this case were not authorized to engage
in any recruitment activity, as evidenced by a certification issued by Cecilia E. Curso, Chief of the
Licensing and Regulation Office of the Philippine Overseas Employment Administration, on
November 10, 1987. Said certification states that Dan and Loma Goce and Nelly Agustin are neither
licensed nor authorized to recruit workers for overseas
employment. 23 Appellant does not dispute this. As a matter of fact her counsel agreed to stipulate that
she was neither licensed nor authorized to recruit applicants for overseas employment. Appellant,
however, denies that she was in any way guilty of illegal recruitment. 24
It is appellant's defensive theory that all she did was to introduce complainants to the Goce spouses.
Being a neighbor of said couple, and owing to the fact that her son's overseas job application was
processed and facilitated by them, the complainants asked her to introduce them to said spouses.
Allegedly out of the goodness of her heart, she complied with their request. Such an act, appellant
argues, does not fall within the meaning of "referral" under the Labor Code to make her liable for
illegal recruitment.
Under said Code, recruitment and placement refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not; provided, that
any person or entity which, in any manner, offers or promises for a fee employment to two or more
persons shall be deemed engaged in recruitment and placement. 25 On the other hand, referral is the
act of passing along or forwarding of an applicant for employment after an initial interview of a selected
applicant for employment to a selected employer, placement officer or bureau. 26
Hence, the inevitable query is whether or not appellant Agustin merely introduced complainants to
the Goce couple or her actions went beyond that. The testimonial evidence hereon show that she
indeed further committed acts constitutive of illegal recruitment. All four prosecution witnesses
testified that it was Agustin whom they initially approached regarding their plans of working
overseas. It was from her that they learned about the fees they had to pay, as well as the papers that
they had to submit. It was after they had talked to her that they met the accused spouses who
owned the placement agency.
As correctly held by the trial court, being an employee of the Goces, it was therefore logical for
appellant to introduce the applicants to said spouses, they being the owners of the agency. As such,

appellant was actually making referrals to the agency of which she was a part. She was therefore
engaging in recruitment activity. 27
Despite Agustin's pretensions that she was but a neighbor of the Goce couple, the testimonies of the
prosecution witnesses paint a different picture. Rogelio Salado and Dionisio Masaya testified that
appellant represented herself as the manager of the Clover Placement Agency. Ramona Salado was
offered a job as a cutter/sewer by Agustin the first time they met, while Ernesto Alvarez remembered
that when he first met Agustin, the latter represented herself as "nagpapaalis papunta sa
Oman." 28 Indeed, Agustin played a pivotal role in the operations of the recruitment agency, working
together with the Goce couple.
There is illegal recruitment when one gives the impression of having the ability to send a worker
abroad." 29 It is undisputed that appellant gave complainants the distinct impression that she had the
power or ability to send people abroad for work such that the latter were convinced to give her the money
she demanded in order to be so employed. 30
It cannot be denied that Agustin received from complainants various sums for purpose of their
applications. Her act of collecting from each of the complainants payment for their respective
passports, training fees, placement fees, medical tests and other sundry expenses unquestionably
constitutes an act of recruitment within the meaning of the law. In fact, appellant demanded and
received from complainants amounts beyond the allowable limit of P5,000.00 under government
regulations. It is true that the mere act of a cashier in receiving money far exceeding the amount
allowed by law was not considered per se as "recruitment and placement" in contemplation of law,
but that was because the recipient had no other participation in the transactions and did not conspire
with her co-accused in defrauding the victims. 31 That is not the case here.
Appellant further argues that "there is no evidence of receipts of collections/payments from
complainants to appellant." On the contrary, xerox copies of said receipts/vouchers were presented
by the prosecution. For instance, a cash voucher marked as Exhibit D, 32 showing the receipt of
P10,000.00 for placement fee and duly signed by appellant, was presented by the prosecution. Another
receipt, identified as Exhibit E, 33 was issued and signed by appellant on February 5, 1987 to
acknowledge receipt of P4,000.00 from Rogelio and Ramona Salado for "processing of documents for
Oman." Still another receipt dated March 10, 1987 and presented in evidence as Exhibit F, shows that
appellant received from Ernesto Alvarez P2,000.00 for "processing of documents for Oman." 34
Apparently, the original copies of said receipts/vouchers were lost, hence only xerox copies thereof
were presented and which, under the circumstances, were admissible in evidence. When the original
writing has been lost or destroyed or cannot be produced in court, upon proof of its execution and
loss or destruction, or unavailability, its contents may be proved by a copy or a recital of its contents
in some authentic document, or by the recollection of witnesses. 35
Even assuming arguendo that the xerox copies presented by the prosecution as secondary evidence
are not allowable in court, still the absence thereof does not warrant the acquittal of appellant.
In People vs. Comia, 36where this particular issue was involved, the Court held that the complainants'
failure to ask for receipts for the fees they paid to the accused therein, as well as their consequent failure
to present receipts before the trial court as proof of the said payments, is not fatal to their case. The
complainants duly proved by their respective testimonies that said accused was involved in the entire
recruitment process. Their testimonies in this regard, being clear and positive, were declared sufficient to
establish that factum probandum.
Indeed, the trial court was justified and correct in accepting the version of the prosecution witnesses,
their statements being positive and affirmative in nature. This is more worthy of credit than the mere
uncorroborated and self-serving denials of appellant. The lame defense consisting of such bare

denials by appellant cannot overcome the evidence presented by the prosecution proving her guilt
beyond reasonable doubt. 37
The presence of documentary evidence notwithstanding, this case essentially involves the credibility
of witnesses which is best left to the judgment of the trial court, in the absence of abuse of discretion
therein. The findings of fact of a trial court, arrived at only after a hearing and evaluation of what can
usually be expected to be conflicting testimonies of witnesses, certainly deserve respect by an
appellate court. 38 Generally, the findings of fact of the trial court on the matter of credibility of witnesses
will not be disturbed on appeal. 39
In a last-ditch effort to exculpate herself from conviction, appellant argues that there is no proof of
conspiracy between her and the Goce couple as to make her liable for illegal recruitment. We do not
agree. The evidence presented by the prosecution clearly establish that appellant confabulated with
the Goces in their plan to deceive the complainants. Although said accused couple have not been
tried and convicted, nonetheless there is sufficient basis for appellant's conviction as discussed
above.
In People vs. Sendon, 40 we held that the non-prosecution of another suspect therein provided no ground
for the appellant concerned to fault the decision of the trial court convicting her. The prosecution of other
persons, equally or more culpable than herein appellant, may come later after their true identities and
addresses shall have been ascertained and said malefactors duly taken into custody. We see no reason
why the same doctrinal rule and course of procedure should not apply in this case.
WHEREFORE, the appealed judgment of the court a quo is hereby AFFIRMED in toto, with costs
against accused-appellant Nelly D. Agustin.
SO ORDERED.

G.R. No. 113161 Case Digest

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.

SECOND DIVISION

[G.R. No. 97369. July 31, 1997]

P.I. MANPOWER PLACEMENTS INC., petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION (SECOND DIVISION), and NORBERTO
CUENTA, SR., respondents.
DECISION
MENDOZA, J.:

This is a petition for certiorari and prohibition to set aside the decision of the NLRC,
affirming the decision of the POEA dated April 20, 1990 which held petitioner P.I. Manpower
Placements Inc., LPJ Enterprises Inc. (now ADDISC Enterprises Inc.) and foreign employer Al
Jindan Contracting and Trading Establishment jointly and solidarily liable to private respondent
Norberto Cuenta, Sr., for the sum of US$10,560.00 representing his unpaid salaries and the
unexpired portion of his contract, as well as the resolution of the NLRC denying reconsideration.
The facts of the case, as found by the NLRC, are as follows:
On September 29, 1988, private respondent Norberto Cuenta, Sr., applied to petitioner P.I.
Manpower Placements Inc. (P.I. Manpower) for overseas employment as trailer driver. Danny
Alonzo, representing himself as an agent of petitioner, accompanied Cuenta to the office of
Teresita Rivera, Operations Manager of petitioner. Cuenta was asked to submit his BLT
certificate, secure a valid passport, undergo medical examination and pay a placement fee of
P10,800.00. Teresita Rivera wrote the Bureau of Land Transportation in behalf of Cuenta to
facilitate issuance of the BLT certificate.
When the requirements were almost complete, Rivera, in an urgent letter dated October 27,
1988, told Cuenta to come to her office as soon as possible. For lack of funds, private
respondent reported only on November 5, 1988 and made a partial payment

of P3,000.00. Rivera allowed Cuenta to pay the balance of P7,800.00 later. Thereafter, she
issued a receipt and made Cuenta sign in blank the Agency-Worker Agreement, assuring
Cuenta that the terms and conditions of his employment as agreed would be stated in the
contract, particularly Cuentas salary at $440.00 a month.
On November 20, 1988, private respondent was advised of his flight to Dharan, Saudi
Arabia. Accordingly, on November 23, 1988, he paid the balance of P7,800.00, although no
receipt was issued to him even after he had left. It was when he was already on the plane that
he was able to read his employment papers as the same were handed to him by Rivera only
before he boarded the plane. To his surprise, Cuenta found out that his deploying agent was
LPJ Enterprises, not P.I. Manpower, and that his monthly salary was SR960.00, and not
$440.00, which was less than what he and Teresita Rivera had agreed.
Upon arriving in Dharan, Saudi Arabia, Cuenta was assigned by Al Jindan Contracting and
Trading Establishment (Al Jindan) to drive a trailer. He was later informed that he would receive
an allowance of SR200.00 for the first two months but none in the third, because he was on
probation. On March 23, 1989, without prior notice and investigation Cuenta was dismissed and
told to pack up and surrender his working permit (Iguama).
After arriving home in the Philippines, he immediately saw a certain Mr. Depsi, owner of P.I.
Manpower. Cuenta was told, however, that nothing could be done by P.I. Manpower because
the obligation of the agency was only to deploy workers, like Cuenta.
In July 1989, private respondent Cuenta filed a complaint in the POEA for illegal dismissal,
non-payment of wages and recruitment violations against P.I. Manpower Placements Inc., LPJ
Enterprises Inc., and Al Jindan Contracting and Trading Establishment and their respective
bonding companies. In addition, he filed criminal charges against Teresita Rivera, Issan El
Debs, General Manager of P.I. Manpower, and Danny Alonzo for estafa and illegal recruitment,
but the cases were dismissed after the fiscal found no deceit and misrepresentation on the part
of the accused.[1]
On April 20, 1990, the POEA, rendered a decision, the dispositive portion of which reads:[2]

WHEREFORE, respondents P.I. Manpower Placement Inc., and LPG

Enterprises, Inc., (Addisc Enterprises) and Al Jindan Cont. and
Trading Est. are hereby held jointly and severally liable to pay
complainant Norberto Cuenta the following:
1. US$8,800.00 - representing salaries for the unexpired portion of
the contract; and
2. US$1,760.00 - representing his unpaid salaries for 4 months of
actual service.
or the total amount of $10,560.00 or its peso equivalent at the time
of actual payment.
Both parties appealed to the NLRC which, on November 20, 1990, affirmed the decision of
the POEA.

On January 2, 1990, petitioner filed a motion for reconsideration but its motion was denied
on January 21, 1991.[3] Separate petitions forcertiorari were thereafter filed by petitioner and the
LPJ Enterprises, questioning the decision of the NLRC.
On July 15, 1991, this Courts First Division, in a resolution of that date, modified the
decision of the NLRC. The dispositive part of the resolution in G.R. No. 97857 reads:[4]

WHEREFORE, the petition is DISMISSED with costs against petitioner.

The challenged decision is AFFIRMED, with the modification that the
amount of SR400 or its equivalent in Philippine pesos, representing
the food allowance paid to the private respondent for two months,
shall be deducted from the total amount awarded to him. The
temporary restraining order dated May 6, 1991, is LIFTED.
On December 11, 1991, a writ of execution was served upon the petitioner. In an Urgent
Motion for the Issuance of a Temporary Restraining Order [5] filed on January 2, 1992, petitioner
sought to enjoin the POEA from enforcing the decision against it in view of the pendency of this
petition. Its motion was granted on January 20, 1992.[6]
Petitioner contends that the resolution of the NLRC has no factual and legal basis; that
private respondents dismissal was for a just cause because, as stated in the telegram [7] dated
April 5, 1989 of the foreign employer, Cuenta was unwilling to work and was threatening to harm
others if he was given other assignments. In any event, it is contended that Cuenta cannot
question the termination of his employment because he was on probation and thus can be
dismissed for failing to meet the minimum standards required by his employer.
Petitioner also argues that public respondent improperly construed the rules on the joint
and solidary liability of the placement agency and the foreign employer for claims and liabilities
arising from violations of the terms and conditions of the contract. Petitioner claims that Cuenta
was a walk-in applicant whose application was accepted only for manpooling purposes and
that Rivera only referred Cuenta to her friend Danny Alonzo of LPJ Enterprises because Cuenta
was in a hurry to get a job. It denies liability under the contract of employment because the
Agency-Worker Agreement and the travel exit pass (TEP) show LPJ Enterprises to be the local
deploying agent of private respondent.
Denying it was guilty of misrepresentation, petitioner claims that Cuenta read the
documents before he left for abroad.
Petitioner disputes the NLRCs assessment that reprocessing of applications was evil and
asserts that agencies, like itself, which refer applicants to other agencies for employment, help
reduce unemployment in the country. Petitioner maintains that its suspension for four months
should be sufficient to answer for its misrepresentation or for whatever indiscretions it may
have committed in the use of its license.
The petition has no merit. The facts of this case amply support the NLRCs findings that
Cuenta was not dismissed for cause and that petitioner was privy to Cuentas contract of
employment by taking an active part in the latters recruitment, justifying thereby the finding that
petitioner is jointly and solidarily liable with LPJ Enterprises and Al-Jindan.
First. In termination cases, the burden of proving just and valid grounds for dismissal rests
upon the employer.[8] Considering this rule and the evidence of petitioner, particularly the
telegram sent by Cuentas foreign employer to Danny Alonzo, we find no reason to disturb the

NLRCs findings that Cuenta was denied a hearing before he was dismissed from employment.
In fact, petitioner does not deny that private respondent was asked to leave his job without any
notice and investigation at all. The telegram[9] claimed to have been sent by Mohd Abu Dawood,
general manager of Al Jindan, has no probative value to prove just cause for Cuentas
dismissal. There is no proof of its due execution and no concrete evidence to support its
contents. It does not prove the charge that Cuenta was a dangerous person who carried deadly
weapon to work and who failed to meet the minimum requirements set by his
employer. Petitioner failed to adduce substantial evidence to prove its allegations.
Nor is there any merit in petitioners claim that private respondent was a probationary
employee who could be dismissed any time. Private respondent was an employee hired for a
fixed term whose employment was to end only at the expiration of the period stipulated in his
contract.[10] But even if he was a probationary employee, he is nonetheless entitled to
constitutional protection of security of tenure that no worker shall be dismissed except for cause
provided by law[11] and after due process.[12]
Second. Cuenta was accepted for immediate deployment. This is shown by the following
undisputed facts: Rivera wrote a letter to the Bureau of Land Transportation to facilitate the
processing of Cuentas papers, received from the latter the P3,000.00 as partial payment of the
required fees, and the P7,080.00 balance thereof, signed the order of payment accepting
the partial payment made by him and approving Cuentas application for processing, and
delivered to Cuenta his employment and travel documents at the airport. [13] As pointed out by
the Solicitor General, certain circumstances in this case such as the fact that Rivera sent
Cuenta a letter informing him that an employer was asking for his (Cuentas) employment
papers as soon as possible and the issuance by petitioner of the order of payment showing that
Cuentas papers were approved for processing indicate that Rivera indeed recruited Cuenta
within the meaning of the Labor Code, which defines recruitment as any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally or abroad, whether for profit
or not . . .[14]
Petitioner does not question these facts attributed to Rivera. Instead, it avers that Rivera
acted in her personal capacity and denies that it received the money paid by private
respondent. Petitioner claims that its general manager did not approve the order of payment
because no position was available to accommodate private respondents application.
This is a self serving claim. The mere fact that the order of payment was not signed by
petitioners general manager does not prove that petitioner did not receive the money paid by
Cuenta to Rivera or that petitioner had no knowledge and did not consent to the acts of
Rivera. The fact is that Rivera was a responsible officer of petitioner. No evidence was
adduced to show that the public was properly warned that without the general managers
approval no order of payment was valid. The fact that private respondent was received in the
petitioners business address and that petitioners name, seal and address were imprinted in the
letters sent by Rivera for the processing and completion of Cuentas papers sufficiently make
petitioner liable for these transactions. That these documents are accessible to any person is
immaterial. What is important is that Rivera, as operations manager of petitioner PI Manpower,
used them in the course of petitioners business, i.e., recruitment. Indeed, except for its denial,
petitioner has not presented evidence showing that it disowned Riveras representations to
private respondent.
Third. Petitioners claim that it had no opening and could not have considered Cuentas
application does not negate the fact that petitioner was instrumental in his deployment. As
observed by the NLRC, LPJ Enterprises acted as a confederate agency of P.I. Manpower. With

Rivera and Alonzo agreeing to send Cuenta abroad as truck driver for Al Jindan (LPJs foreign
principal), it was immaterial that P.I. Manpower did not have a foreign employer for
Cuenta. This further explains why the Agency-Worker Agreement and travel exit pass (TEP)
indicate LPJ Enterprises and not to P.I. Manpower to be the recruiter. The POEAs approval
could not have been obtained had the name of petitioner appeared therein.
The NLRC correctly found petitioner guilty of misrepresentation. Indeed, Cuenta could not
have known that LPJ Enterprises was his local employing agent because he had been dealing
with petitioner. His employment documents were given to him only when he was about to board
the plane, and therefore he had no time to examine them completely. As the NLRC, pointed
out:

The true relationship between the applicant and the agency is

usually revealed only when the former is at the airport and is about
to depart or is already abroad, at the time and place where no
matter how disadvantageous the contract of employment maybe, in
terms of salaries and benefits, prudence would deter the applicant
from backing out from the contract, what with all the time, effort,
and money he had spent for this.
Petitioner insists that there was no misrepresentation because Cuenta knew that LPJ
Enterprises was his agency. Petitioner alleges that Cuenta read the documents and could not
have signed the Agency-Worker agreement in blank form because he is not an illiterate
individual who could have been made to do that.
The fact, however, is that private respondent, after arriving in the Philippines, promptly went
to P.I. Manpowers office and complained to its owner, Mr. Depsi. If Cuenta knew that LPJ
Enterprises was his agency, he would have undoubtedly have gone to the latters office and not
to P.I. Manpower. Moreover, we cannot find any reason why Teresita Rivera should go to all the
trouble of making sure that private respondent was deployed, if petitioner had no part in the
recruitment of Cuenta. That private respondent is not an illiterate who could be victimized is not
a reason for finding that he could not have failed to notice that he was signing up for
employment overseas with another agency and not with petitioner. He was assured that
everything he and Rivera had agreed could be embodied in the contract and he believed Rivera.
Lastly, the finding of the prosecutor in the criminal case filed by Cuenta that there was no
misrepresentation and deceit on the part of Teresita Rivera, Issan Al Debs and Danny Alonzo is
not binding on the NLRC. The two cases are separate and distinct and require different
quantum of evidence and involve different procedure.[15] Furthermore, the POEA and the NLRC
conducted independent means of finding the ultimate facts of this case which serve as basis of
their decisions. These factual findings of the NLRC, when supported by substantial evidence,
are accorded respect if not finality by courts.[16]
Petitioners reliance on the ruling in Ilas v. NLRC[17] is misplaced. Unlike in the case at bar,
the agency in that case was exonerated from liability (although it appeared as a party in the
contract of employment of the complaining workers) because the agency did not consent nor
have knowledge of its involvement in recruiting the workers. The complaining workers there
admitted that they knew that the agency was not their recruiter and that it was merely used to
enable them to travel and obtain travel exit passes as their actual recruitment agency had no
license. It was also found that transactions were not made in the business address of the
agency. On the other hand, here petitioner actively took part in recruiting and deploying

Cuenta. It allowed its name, business premises, office supplies, and other facilities, including
the services of its Operations Manager, to be used for the transaction.
Fourth. While the practice of agencies in referring applicants to other agencies for
immediate hiring and deployment, what is referred to by the POEA and petitioner as
reprocessing, is not evil per se, agencies should know that the act of endorsing and referring
workers is recruitment as defined by law and, therefore, they can be held liable for the
consequences thereof. Recruitment, whether a business activity or otherwise, has economic
and social consequences, as its failure or success affects the very livelihood of families and,
ultimately, of the nation.
The joint and solidary liability imposed by law against recruitment agencies and foreign
employers is meant to assure the aggrieved worker of immediate and sufficient payment of what
is due him. This is in line with the policy of the State to protect and alleviate the plight of the
working class. Hence, petitioners contention that the four-month suspension of its license is
enough punishment is without merit.
WHEREFORE, the petition is DISMISSED and the temporary restraining order issued on
January 20, 1990 is LIFTED. The decision of the NLRC, as modified in G.R. No. 97857, must
now be executed.
SO ORDERED.
Regalado, (Chairman), Romero, and Puno, JJ., concur.
Torres, Jr., J., on leave.

PHILIPPINE DUPLICATORS, INC.

v.
NATIONAL LABOR RELATIONS COMMISSION AND PHILIPPINE DUPLICATORS
EMPLOYEES UNION-TUPAS G.R. No. 110068, February 15, 1995
Philippine Duplicators, Inc. (Duplicators) is assailing the decision of the NLRC
directing petitioner to pay 13th month pay to private respondent employees
computed on the basis of their fixed wages plus sales commissions. The Third
Division denied with finality on 15 December 1993 the Motion for Reconsideration
filed (on 12 December 1993) by petitioner. On 17 January 1994, petitioner
Duplicators filed (a) a Motion for Leave to Admit Second Motion for Reconsideration
and (b) a Second Motion for Reconsideration. This time, petitioner invoked the
decision handed down by this Court, through its Second Division, on 10 December
1993 in the two (2) consolidated cases of
Boie- Takeda Chemicals, Inc. vs. Hon. Dionisio de la Serna and Philippine Fuji Xerox
Corp. vs. Hon. Cresenciano B. Trajano, in G.R. Nos. 92174 and 102552.
ISSUE:
Is the sales commission earned by the salesmen who make or close a sale of
duplicating machines distributed by petitioner corporation, constitute part of the

compensation or remuneration paid to salesmen for serving as salesmen, and

hence as part of the 'wage' or salary of petitioner's salesmen?
HELD:
YES. The Third Division held, correctly, that the sales commissions were an integral
part of the basic salary structure of Philippine Duplicators' employees-salesmen.
These commissions are not overtime payments, nor profit-sharing payments nor
any other fringe benefit. Thus, the salesmen's commissions, comprising a predetermined percent of the selling price of the goods sold by each salesman, were
properly included in the term "basic salary" for purposes of computing their 13[th]
month pay. The Supplementary Rules and Regulations Implementing P.D. No. 851
subsequently issued by former Labor Minister Ople sought to clarify the scope of
items excluded in the computation of the 13th month pay; viz. "Sec. 4. Overtime
pay, earnings and other remunerations which are not part of the basic salary shall
not be included in the computation of the 13th month pay." We observe that the
third item excluded from the term "basic salary" is cast in open ended and
apparently circular terms: "other remunerations which are not part of the basic
salary." However, what particular types of earnings and remuneration are or are not
properly included or integrated in the basic salary are questions to be resolved on a
case to case basis, in the light of the specific and detailed facts of each case. In
principle, where these earnings and remuneration are closely akin to fringe benefits,
overtime pay or profit-sharing payments, they are properly excluded in computing
the 13th month pay. However, sales commissions which are effectively an integral
portion of the basic salary structure of an employee, shall be included in
determining his 13th month pay. ____________________________________________
We recognize that both productivity bonuses and sales commissions may have an
incentive effect. But there is reason to distinguish one from the other here.
Productivity bonuses are generally tied to the productivity or profit generation of the
employer corporation. Productivity bonuses are not directly dependent on the
extent an individual employee exerts himself. A productivity bonus is something
extra for which no specific additional services are rendered by any particular
employee and hence not legally demandable, absent a contractual undertaking to
pay it.
Sales commissions, on the other hand, such as those paid in Duplicators, are
intimately related to or directly proportional to the extent or energy of an
employee's endeavors. Commissions are paid upon the specific results achieved by
a salesman-employee. It is a percentage of the sales closed by a salesman and
operates as an integral part of such salesman's basic pay.

SAMEER OVERSEAS PLACEMENT AGENCY V BAJARO (G.R. NO. 170029, 21 NOV 2012)

Sameer Overseas Placement Agency, Inc. (Sameer) deployed respondents Bajaro,

Morilla, Magdaong, Tabujara, Cancino,Meliang, Sumigcay, Saria, Angulo and Ingal
(Bajaro et al.) to Taiwan to work as operators for its foreign principal, Mabuchi
Motors Company, Ltd. under individual two-year employment contracts, with a
monthly salary of Taiwan Dollars (NT$)15,840.00 each. Prior to their deployment,
each respondent paid Sameer the amount of P47,900.00 as placement fee.
However, after only 11 months and before the expiration of the two-year period,
Bajaro et al.s employment contracts were terminated and they were repatriated to
the Philippines.This prompted the filing of a complaint for illegal dismissal against
petitioner company and its President and General Manager, individual petitioner
Rizalina Lamson, with prayer for the payment of salaries and wages covering the
unexpired portion of their employment contracts in lieu of reinstatement, and with
allegations of illegal deductions and illegal collection of placement fees. In defense,
petitioners claimed that respondents were validly retrenched due to severe business
losses suffered by their foreign principal. The Labor Arbiter found Bajaro et al. to
have been illegally dismissed for
Sameers failure to substantiate their defense of a valid retrenchment, granting
Bajaro et al. their money claims, in accordance with Section 10 of R.A. No. 8042.On
appeal, the NLRC vacated and set aside the Labor Arbiters decision upon a finding
that all the requirements for avalid retrenchment have been established, thus,
Bajaro et al. were not illegally dismissed. Therefore, it found that the awards of
salaries corresponding to the unexpired portion of the contracts and the refund of
placement fees to be bereft of any basis in fact and in law. The CA reversed the
decision of NLRC, and reinstated the Labor Arbiters decision.
Issue:
(1) Whether the CA erred in nullifying the NLRC issuances and in reinstating in toto
the Decision of the Labor Arbiter;
(2) Whether the Labor Arbiter misconstrued and misapplied Section 10 of R.A. 8042.
RULING:
The petition is bereft of merit. The Supreme Court affirmed the decision of the CA,
ruling in favor of Bajaro et al.
Section 10 of R.A. 8042 provides that [i]f the recruitment/placement agency is a
juridical being, the corporate officers and directors x x x shall themselves be jointly
and solidarily liable with the corporation x x x for any claims and damages that
may be due to the overseas workers. Indisputably, Bajaro et al.s illegal dismissal
complaint with money claims is anchored on the overseas employment contracts
with Sameer and the allegations that they were dismissed without just, valid or
authorized cause. With these allegations, Section 10 clearly applies in this case. As
Sameer failed to establish a valid retrenchment, Bajaro et al. were clearly dismissed

without just, valid or authorized cause. Consequently, Lamson is solidarily liable

with Sameer. Section 10 of R.A. 8042 provides that [i]f the recruitment/placement
agency is a juridical being, the corporate officers and directors x x x shall
themselves be jointly and solidarily liable with the corporation x x x for any claims
and damages that may be due to the overseas workers.
Notwithstanding the foregoing, however, the Court finds that a modification of the
monetary award in the amount of NT$47,520.00 per respondent, corresponding to
three(3) months worth of salaries granted by the Labor Arbiter is in order.In the
case of Serrano v. Gallant Maritime Services and Marlow Navigation Co. Inc., the
Court En Banc declared unconstitutional, for being violative of the Constitutionallyguaranteed rights to equal protection and due process of the overseas workers, the
clause or for three months for every year of the unexpired term, whichever is less
found in Section 10 of R.A. 8042. Since the unexpired portion of Bajaro et al.s
individual two-year contracts is still for 13 months, as they worked in Taiwan for a
period of only 1I months, each respondent is therefore entitled to a total amount of
NT$205,920.0023 or its current equivalent in Philippine Peso, by way of unpaid
salaries, in addition to the other monetary awards granted by the Labor Arbiter.