THIRD DIVISION

FERNANDO G. MANAYA,
Petitioner,

G.R. No. 168988

Present:

- versus -

ALABANG COUNTRY CLUB INCORPORATED,

Respondent.

YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO, and
NACHURA, JJ.

Promulgated:

June 19, 2007

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DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure filed by
Fernando G. Manaya (petitioner) assailing: (1) the Decision[1] of the Court of Appeals in CA-G.R. SP No.
75417, dated 9 May 2005, granting the Petition of Alabang Country Club Inc. (respondent) and setting
aside the Resolutions dated 30 August 2002 and 30 October 2002 of the National Labor Relations
Commission (NLRC); and (2) the Resolution[2] of the Court of Appeals dated 21 July 2005 denying
petitioners Motion for Reconsideration of its earlier Decision.
The assailed decision of the Court of Appeals reversed the Resolution of the NLRC dismissing the appeal
of the respondent for failure to perfect its appeal within the statutory period. Instead, the Court of
Appeals ordered the NLRC to give due course to the appeal of the respondent.
The antecedent facts are:
Petitioner alleged that on 21 August 1989, he was initially hired by the respondent as a maintenance
helper[3] receiving a salary of P198.00 per day. He was later designated as company electrician. He

continued to work for the respondent until 22 August 1998 when the latter, through its Engineering and
Maintenance Department Manager, Engr. Ronnie B. de la Cruz, informed him that his services were no
longer required by the company.[4] Petitioner alleged that he was forcibly and illegally dismissed without
cause and without due process on 22 August 1998.[5] Hence, he filed a Complaint[6] before the Labor
Arbiter. He claimed that he had not committed any infraction of company policies or rules and that he
was not paid his service incentive leave pay, holiday pay and 13th month pay. He further asserted that
with his more or less nine years of service with the respondent, he had become a regular employee. He,
therefore, demanded his reinstatement without loss of seniority rights with full backwages and all
monetary benefits due him.[7]
In its Answer, respondent denied that petitioner was its employee. It countered by saying that petitioner
was employed by First Staffing Network Corporation (FSNC), with which respondent had an existing
Memorandum of Agreement dated 21 August 1989. Thus, by virtue of a legitimate job contracting,
petitioner, as an employee of FSNC, came to work with respondent, first, as a maintenance helper, and
subsequently as an electrician. Respondent prayed for the dismissal of the complaint insisting that
petitioner had no cause of action against it.
In a Decision, dated 20 November 2000, the Labor Arbiter held:
WHEREFORE, premises considered, complainant Fernando G. Manaya is hereby found to
be a regular employee of respondent Alabang Country Club, Inc., as aforediscussed. His
dismissal from the service having been effected without just and valid cause and
without the due observance of due process is hereby declared illegal. Consequently,
respondent Alabang Country Club, Inc. is hereby ordered to reinstate complainant to his
former position without loss of seniority rights and other benefits appurtenant thereto
with full backwages in the partial amount of P160,724.48 as computed by Ms.
Ma. Concepcion Manliclic and duly noted by Ms. Ma. Elena L. Estadilla, OIC-CEU, NCRSouth Sector which computation has been made part of the records.
Furthermore, respondent Alabang Country Club, Inc. and First Staffing Network
Corporation are hereby ordered to pay complainant, jointly and severally the following
amounts by way of the following:
1. Service Incentive Leave 2,961.75
2. 13th Month Pay 15,401.10, and
3. Attorneys fees of ten (10%) percent of the total
monetary award herein adjudged due him, within ten (10) days from receipt hereof. [8]

Respondent filed an Appeal with the NLRC which dismissed the same.[9] In a Resolution dated 30 August
2002, the NLRC held:

PREMISES CONSIDERED, instant appeal from the Decision of November 20, 2000 is
hereby DISMISSED for failure to perfect appeal within the statutory period of
appeal. The Decision is now final and executory.[10]

The NLRC found that respondents counsel of record Atty. Angelina A. Mailon of Monsod, Valencia and
Associates received a copy of the Labor Arbiters Decision on or before 11 December 2000 as shown by
the postal stamp or registry return card.[11] Said counsel did not file a withdrawal of appearance. Instead,
a Memorandum of Appeal[12] dated 26 December 2000 was filed by the respondents new counsel,
Atty. Arizala of Tierra and Associates Law Office. Reckoned from 11 December 2000, the date of receipt
of the Decision by respondents previous counsel, the filing of the Memorandum of Appeal by its new
counsel on 26 December 2000 was clearly made beyond the reglementary period. The NLRC held that
the failure to perfect an appeal within the statutory period is not only mandatory but jurisdictional. The
appeal having been belatedly filed, the Decision of the Labor Arbiter had become final and executory.[13]
Respondent filed a Motion for Reconsideration,[14] which the NLRC denied in a Resolution dated 30
October 2002.[15] The NLRC held that the decision of the Labor Arbiter has become final
and executoryon 28 November 2002; thus, Entry of Judgment, dated 8 January 2003[16] was issued.
Respondent filed a Petition for Certiorari[17] under Rule 65 of the Rules of Court before the Court of
Appeals. In a Decision dated 9 May 2005,[18] the Court of Appeals granted the petition and ordered the
NLRC to give due course to respondents appeal of the Labor Arbiters Decision. Petitioner filed a Motion
for Reconsideration which was denied by the Court of Appeals in a Resolution[19] dated 21 July 2005.
Not to be dissuaded, petitioner filed the instant petition before this Court.
The issue for resolution:
WHETHER OR NOT THE COURT OF APPEALS COMMITTED AN ERROR WHEN IT ORDERED
THE NLRC TO GIVE DUE COURSE TO THE APPEAL OF RESPONDENT ALABANG COUNTRY
CLUB, INCORPORATED EVEN IF THE SAID APPEAL WAS FILED BEYOND THE
REGLEMENTARY PERIOD OF TEN (10) DAYS FOR PERFECTING AN APPEAL. [20]

Essentially, the issue raised by the respondent before the NLRC in assailing the decision of the Labor
Arbiter pertains to the finding of the Labor Arbiter that petitioner was a regular employee of the
respondent.

In granting the petition, the Court of Appeals relied mainly on the case of Aguam v. Court of
Appeals,[21] where this Court held that litigation must be decided on the merits and not on
technicalities. The appellate court further justified the grant of respondents petition by saying that the
negligence of its counsel should not bind the respondent.[22]
The Court of Appeals gave credence to respondents claim that its lawyer abandoned the case; hence,
they were not effectively represented by a competent counsel. It further held that the respondent, upon
its receipt of the Decision of the Labor Arbiter on 15 December 2000, filed its appeal on 26 December
2000 through a new lawyer. The appeal filed by respondent through its new lawyer on 26 December
2000 was well within the reglementary period, 25 December 2000 being a holiday.
It is axiomatic that when a client is represented by counsel, notice to counsel is notice to client. In the
absence of a notice of withdrawal or substitution of counsel, the Court will rightly assume that the
counsel of record continues to represent his client and receipt of notice by the former is the reckoning
point of the reglementary period.[23] As heretofore adverted, the original counsel did not file any notice
of withdrawal.Neither was there any intimation by respondent at that time that it was terminating the
services of its counsel.
For negligence not to be binding on the client, the same must constitute gross negligence as to amount
to a deprivation of property without due process.[24] This does not exist in the case at bar. Notice sent to
counsel of record is binding upon the client and the neglect or failure of counsel to inform him of an
adverse judgment resulting in the loss of his right to appeal is not a ground for setting aside a judgment,
valid and regular on its face.[25]
Even more, it is respondents duty as a client to be in touch with his counsel so as to be constantly
posted about the case. It is mandated to inquire from its counsel about the status and progress of the
case from time to time and cannot expect that all it has to do is sit back, relax and await the outcome of
the case.[26]
On this score, we hold that the notice to respondents counsel, Atty. Angelina A. Mailon on 11 December
2000 is the controlling date of the receipt of the decision.
We now come to the issue of whether or not the Court of Appeals properly gave due course to the
petition of the respondent before it.
Of relevance is Section 1, Rule VI of the 2005 Revised Rules of the NLRC

Section 1. PERIODS OF APPEAL. Decisions, resolutions or orders of the Labor Arbiter

shall be final and executory unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt thereof; and in case of decisions, resolutions
or orders of the Regional Director of the Department of Labor and Employment
pursuant to Article 129 of the Labor Code, within five (5) calendar days from receipt
thereof. If the 10th or 5th day, as the case may be, falls on a Saturday, Sunday or holiday,
the last day to perfect the appeal shall be the first working day following such Saturday,
Sunday or holiday.
No motion or request for extension of the period within which to perfect an appeal shall
be allowed.

Remarkably, in highly exceptional instances, we have allowed the relaxing of the rules on the application
of the reglementary periods of appeal.[27] Thus:
In Ramos v. Bagasao, 96 SCRA 395, we excused the delay of four days in the filing of a
notice of appeal because the questioned decision of the trial court was served upon
appellant Ramos at a time when her counsel of record was already dead. Her new
counsel could only file the appeal four days after the prescribed reglementary period
was over. In Republic v. Court of Appeals, 83 SCRA 453, we allowed the perfection of an
appeal by the Republic despite the delay of six days to prevent a gross miscarriage of
justice since the Republic stood to lose hundreds of hectares of land already titled in its
name and had since then been devoted for educational purposes. In Olacao v. National
Labor Relations Commission, 177 SCRA 38, 41, we accepted a tardy appeal considering
that the subject matter in issue had theretofore been judicially settled, with finality, in
another case. The dismissal of the appeal would have had the effect of the appellant
being ordered twice to make the same reparation to the appellee.[28]

We pronounced in those cases that technicality should not be allowed to stand in the way of equitably
and completely resolving the rights and obligations of the parties.
In all these, the Court allowed liberal interpretation given the extraordinary circumstances that justify a
deviation from an otherwise stringent rule.[29]
Clearly, emphasized in these cases is that the policy of liberal interpretation is qualified by the
requirement that there must be exceptional circumstances to allow the relaxation of the rules. [30]
Absent exceptional circumstances, we adhere to the rule that certain procedural precepts must remain
inviolable, like those setting the periods for perfecting an appeal or filing a petition for review, for it is
doctrinally entrenched that the right to appeal is a statutory right and one who seeks to avail oneself of
that right must comply with the statute or rules. The rules, particularly the requirements for perfecting

an appeal within the reglementary period specified in the law, must be strictly followed as they are
considered indispensable interdictions against needless delays and for orderly discharge of judicial
business.Furthermore, the perfection of an appeal in the manner and within the period permitted by
law is not only mandatory but also jurisdictional and the failure to perfect the appeal renders the
judgment of the court final and executory. Just as a losing party has the right to file an appeal within the
prescribed period, the winning party also has the correlative right to enjoy the finality of the resolution
of his/her case.[31]
In this particular case, we adhere to the strict interpretation of the rule for the following reasons:
Firstly, in this case, entry of judgment had already been made [32] which rendered the Decision of the
Labor Arbiter as final and executory.
Secondly, it is a basic and irrefragable rule that in carrying out and in interpreting the provisions of the
Labor Code and its implementing regulations, the workingmans welfare should be the primordial and
paramount consideration. The interpretation herein made gives meaning and substance to the liberal
and compassionate spirit of the law enunciated in Article 4 of the Labor Code that all doubts in the
implementation and interpretation of the provisions of the Labor Code including its implementing rules
and regulations shall be resolved in favor of labor.[33]
In the case of Bunagan v. Sentinel[34] we declared that:
[T]hat the perfection of an appeal within the statutory or reglementary period is not
only mandatory, but jurisdictional, and failure to do so renders the questioned decision
final and executory and deprives the appellate court of jurisdiction to alter the final
judgment, much less to entertain the appeal. The underlying purpose of this principle is
to prevent needless delay, a circumstance which would allow the employer to wear out
the efforts and meager resources of the worker to the point that the latter is
constrained to settle for less than what is due him. This Court has declared that
although the NLRC is not bound by the technical rules of procedure and is allowed to be
liberal in the interpretation of the rules in deciding labor cases, such liberality should not
be applied where it would render futile the very purpose for which the principle of
liberality is adopted. The liberal interpretation stems from the mandate that the
workingmans welfare should be the primordial and paramount consideration. We see
no reason in this case to waive the rules on the perfection of appeal.[35]

The Court is aware that the NLRC is not bound by the technical rules of procedure and is
allowed to be liberal in the interpretation of rules in deciding labor cases. However,
such liberality should not be applied in the instant case as it would render futile the
very purpose for which the principle of liberality is adopted. The liberal interpretation

in favor of labor stems from the mandate that the workingmans welfare should be the
primordial and paramount consideration. xx x.[36] (Emphases supplied.)

Indeed, there is no room for liberality in the instant case as it would render futile the very purpose for
which the principle of liberality is adopted. As so rightfully enunciated, the liberal interpretation in favor
of labor stems from the mandate that the workingmans welfare should be the primordial and
paramount consideration. This Court has repeatedly ruled that delay in the settlement of labor cases
cannot be countenanced. Not only does it involve the survival of an employee and his loved ones who
are dependent on him for food, shelter, clothing, medicine and education; it also wears down the
meager resources of the workers to the point that, not infrequently, they either give up or compromise
for less than what is due them.[37]

Without doubt, to allow the appeal of the respondent as what the Court of Appeals had done and
remand the case to the NLRC would only result in delay to the detriment of the petitioner. In Narag v.
National Labor Relations Commission,[38] citing Vir-Jen Shipping and Marine Services, Inc. v. National
Labor Relations Commission,[39] we held that delay in most instances gives the employers more
opportunity not only to prepare even ingenious defenses, what with well-paid talented lawyers they can
afford, but even to wear out the efforts and meager resources of the workers, to the point that not
infrequently the latter either give up or compromise for less than what is due them. [40]
Nothing is more settled in our jurisprudence than the rule that when the conflicting interest of loan and
capital are weighed on the scales of social justice, the heavier influence of the latter must be counterbalanced by the sympathy and compassion the law must accord the under-privileged worker.[41]
Thirdly, respondent has not shown sufficient justification to reverse the findings of the Labor Arbiter as
affirmed by the NLRC.
Pertinent provision of the Labor Code provides:

ART. 223. APPEAL. Decisions, awards, or orders of the Labor Arbiter are final
and executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders. Such appeal may be
entertained only on any of the following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the Labor
Arbiter;

(b) If the decision, order or award was secured through fraud or coercion, including graft
an corruption;
(c) If made purely on question of law; and
(d) If serious errors in the finding of facts are raised which would cause grave or
irreparable damage or injury to the appellant.

Under the above provision, to obtain a reversal of the decision of the Labor Arbiter, the respondent
must be able to show in his appeal that any one of the above instances exists.
Respondent failed to show the existence of any of the above. A more than perfunctory reading of the
Decision of the Labor Arbiter shows that the same is supported by the evidence on record.
Respondent narrates that it had a contract of services, first, with Supreme Construction
(Supreme). Supreme assigned petitioner to work with the respondent starting as a painter and moving
on to perform electrical jobs. Respondent terminated its contract with Supreme and entered into
another contract of services with another job-contracting agency, First Staffing Network
Corporation. Petitioner continued to work for the respondent which claimed that the former was
supplied by FNSC to it as part of its contract to supply the manpower requirements of the
respondent. Petitioner is not the employee of the respondent. He was directly hired first by Supreme
then later by FNSC and deployed to work with the respondent based on the contract of services
between respondent and these job-contracting agencies. All these considered, respondent insists that
petitioner is therefore not its employee.
We do not agree to this submission of the respondent. The Labor Arbiter concluded otherwise and this
finds support from the evidence, thus:
[R]espondent was not able to convincingly disprove complainants claims that at the
outset, he was directly hired by it as a maintenance helper on 21 August 1989. Although
said respondent alleges that complainant was hired by its job contractor, Supreme
Construction, it failed to submit in evidence the Contract of Service it had entered into
in order to establish the entry of complainant as deployed by said company for his
duties at Alabang Country Club, Inc. pursuant to the said Agreement. It can therefore be
readily presumed that said respondent did not produce the said document because the
production of the same will readily prove complainants assertion of having been hired
long before said contractor Supreme Construction entered into the picture. We have
noted complainants admission of having been later coerced to sign up with said
Supreme Construction by respondent Alabang Country Club, Inc. which he did as he was
told in his fear of losing his job.

As shown by respondent Alabang Country Club, Inc.s own evidence, it later terminated
its contract of service or Memorandum of Agreement with Supreme Construction and
entered into a new contract of service with respondent First Staffing Network
Corporation effective on 16 June 1994. However by said respondents own allegation,
even with the absence of complainants supposed direct employer Supreme
Construction, he still remained in its employ until he signed up with respondent First
Staffing Network Corporation on 11 February 1996. This indeed runs counter to the
normal course of human experience such that when a contractor losses (sic) his contract
of service he packs up along with all his employees, but in this case, complainant was
not terminated from the service notwithstanding the expiration/termination of the
contract of service of his alleged direct employer. Complainant remained working with
respondent Alabang Country Club, Inc. despite the severance of the contractual
relations between itself and Supreme Construction.
The initial Memorandum of Agreement entered into by respondents Alabang Country
Club, Inc. and First Staffing Network Corporation was dated, 16 June 1994, and was
apparently renewed thereafter providing under Article III On Compensation thereof, the
following, viz:
3.01 For and in consideration of the performance by FIRST STAFFING of
its obligations under this AGREEMENT, the CLIENT agrees to pay the
former based on the schedule of billing rates which shall be specified in
the Personnel Requisition Form signed by the CLIENT. The schedule of
billing rates is as follows, to wit:
BILLING RATES/HOUR PLUS 10% VALUE ADDED TAX
Covered Pos.
ABC
Waiters Accounting Supervisor
Janitors Data Encoders
Bag Boy Gen. Clerks
Stewards Secretary
Cook Helpers Receptionist
Messengers Secretary
Cashier
xxx.
Nowhere, does complainants position of electrician appear as covered in the said
contract. Finally, suffice it for Us to stress that the said contract covers almost all of
respondents Alabang Country Club, Inc.s workforce including those whose jobs or
activities are directly related to said respondents business, emphasizing in no uncertain
terms that respondent First Staffing Network Corporation was not a truly bonafide job
contractor, as it did not contract out specific service but merely supplied work
personnel, a clear indication, that it was engaged in a job only contracting which is
prohibited by law.

Besides, the said respondent First Staffing Network Corporation failed to prove that it is
a bonafide job contractor by showing that it had an adequate capital or investment in
tools, equipments and machineries and premises for that matter, and so did
respondent Alabang Country Club, Inc. fail to establish the same. For that matter,
respondent First Staffing Network Corporation had waived its right to present any
evidence in its favor in this case.
Obviously, herein respondent Alabang Country Club, Inc. actually resorted to contracting
out all the positions for its workforce in violation of law in its desire to circumvent said
employees rights as regular employees under the law.[42]

The existence of an employer-employee relationship between petitioner and respondent is

fortified by the fact that during his stint with the respondent, petitioner was given the opportunity to
attend a seminar/training on refrigeration and air conditioning from 16 January 1995 to 18 February
1995.[43] A certificate of participation signed by three of respondents officials was issued to the
petitioner.
Equally significant is Article 106 of the Labor Code, as amended, which provides that legitimate
job contracting is permitted, but labor-only contracting is prohibited. The said provision reads:
Art. 106. CONTRACTOR OR SUBCONTRACTOR. Whenever an employer enters into a
contract with another person for the performance of the formers work, the employees
of the contractor and of the latters subcontractor, if any, shall be paid in accordance
with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his employees
in accordance with this Code, the employer shall be jointly and severally liable with his
contractor or subcontractor to such employees to the extent of the work performed
under the contract, in the same manner and extent that he is liable to employees
directly employed by him.
The Secretary of Labor may, by appropriate regulations, restrict or prohibit the
contracting out of labor to protect the rights of workers established under the Code. In
so prohibiting or restricting, he may make appropriate distinctions between labor only
contracting and job contracting as well as differentiations within these types of
contracting and determine who among the parties involved shall be considered the
employer for purposes of this Code, to prevent any violation or circumvention of any
provision of this Code.
There is laboronly contracting where the person supplying workers to an employer does
not have substantial capital or investment in the form of tools, equipment, machineries,
work premises, among others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal business of such
employer. In such cases, the person or intermediary shall be considered merely as an

agent of the employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.

Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code, as amended by
Department Order No. 18, distinguishes between legitimate and labor only contracting:
Section 3. Trilateral Relationship in Contracting Arrangements. - In
legitimate contracting, there exists a trilateral relationship under which
there is a contract for a specific job, work or service between the principal
and the contractor or subcontractor, and a contract of employment
between the contractor and subcontractor and its workers. Hence, there
are three parties involved in these arrangements, the principal which
decides to farm out a job or service to a contractor or subcontractor, the
contractor or subcontractor which has the capacity to independently
undertake the performance of the job, work or service, and the contractual
workers engaged by the contractor or subcontractor to accomplish the job,
work or service.
Section 5. Prohibition against laboronly contracting. Labor-only contracting
is hereby declared prohibited. For this purpose, labor only contracting shall
refer to an arrangement where the contractor or subcontractor merely
recruits, supplies or places workers to perform a job, work or service for a
principal, and any of the following elements are present:
i)

ii)

The contractor or subcontractor does not have

substantial capital or investment which relates to the
job, work or service to be performed and the employees
recruited, supplied or placed by such contractor or
subcontractor are performing activities which are
directly related to the main business of the principal, or
The contractor does not exercise the right to
control over the performance of the work of the
contractual employee.

The foregoing provisions shall be without prejudice to the application of Article 248(c) of
the Labor Code, as amended.
Substantial capital or investment refers to capital stocks and subscribed capitalization in
the case of corporations, tools, equipments, implements, machineries and work
premises, actually and directly used by the contractor or subcontractor in the
performance or completion of the job, work or service contracted out.
The right to control shall refer to the right reserved to the person for whom the services
of the contractual workers are performed, to determine not only the end to be
achieved, but also the manner and means to be used in reaching that end.

The test to determine the existence of independent contractorship is whether one

claiming to be an independent contractor has contracted to do the work according to
his on methods and without being subject to the control of the employer, except only as
to the results of the work.
In legitimate labor contracting, the law creates an employer-employee relationship for a
limited purpose, i.e., to ensure that the employees are paid their wages. The principal
employer becomes jointly and severally liable with the job contractor, only for the
payment of the employees wages whenever the contractor fails to pay the same. Other
than that, the principal employer is not responsible for any claim made by the
employees. [44]

Despite respondents disavowal of the existence of the employer-employee relationship between it and
petitioner and its insistence that petitioner is an employee first, of Supreme and subsequently, of FSNC,
the totality of the facts and surrounding circumstances of the case convey otherwise.
On this point, the law is clear-cut. In laboronly contracting, the statute creates an employeremployee
relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is
considered merely an agent of the principal employer and the latter is responsible to the employees of
the laboronly contractor as if such employees had been directly employed by the principal employer.
The Labor Code and its implementing rules empower the Labor Arbiter to be the trier of facts in labor
cases. Much reliance is placed on findings of facts of the Arbiter having had the opportunity to talk to
and discuss with the parties and their witnesses the factual matters of the case during the conciliation
phase.[45] We, thus, give full credence to the findings of facts of the labor arbiter.
WHEREFORE, premises considered, the Petition is GRANTED. The Decision of the Court of Appeals
dated 9 May 2005 and its Resolution dated 21 July 2005 is REVERSED. The Decision of the Labor Arbiter
dated 20 November 2000 is REINSTATED. Let the records of the above-entitled case be remanded to the
Labor Arbiter for immediate execution of the Decision. No costs.

SO ORDERED.

[G. R. No. 129329. July 31, 2001]

ESTER M. ASUNCION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, Second Division,
MABINI MEDICAL CLINIC and DR. WILFRIDO JUCO, respondents.
DECISION
KAPUNAN, J.:
In her petition filed before this Court, Ester Asuncion prays that the Decision, dated November 29,
1996, and the Resolution, dated February 20,1997, of the public respondent National Labor Relations
Commission, Second Division, in NLRC CA. 011188 which reversed the Decision of the Labor Arbiter,
dated May 15, 1996 be set aside.
The antecedents of this case are as follows:
On August 16, 1993, petitioner Ester M. Asuncion was employed as an accountant/bookkeeper by
the respondent Mabini Medical Clinic. Sometime in May 1994, certain officials of the NCR-Industrial
Relations Division of the Department of Labor and Employment conducted a routine inspection of the
premises of the respondent company and discovered upon the disclosure of the petitioner of
(documents) violations of the labor standards law such as the non-coverage from the SSS of the
employees.Consequently, respondent Company was made to correct these violations.
On August 9, 1994, the private respondent, Medical Director Wilfrido Juco, issued a memorandum
to petitioner charging her with the following offenses:
1. Chronic Absentism (sic) You have incurred since Aug. 1993 up to the present 35 absences
and 23 half-days.
2. Habitual tardiness You have late (sic) for 108 times. As shown on the record book.
3. Loitering and wasting of company time on several occasions and witnessed by several
employees.
4. Getting salary of an absent employee without acknowledging or signing for it.
5. Disobedience and insubordination - continued refusal to sign memos given to you.[1]
Petitioner was required to explain within two (2) days why she should not be terminated based on
the above charges.
Three days later, in the morning of August 12, 1994, petitioner submitted her response to the
memorandum. On the same day, respondent Dr. Juco, through a letter dated August 12, 1994, dismissed
the petitioner on the ground of disobedience of lawful orders and for her failure to submit her reply
within the two-day period.
This prompted petitioner to file a case for illegal termination before the NLRC.
In a Decision, dated May 15, 1996, Labor Arbiter Manuel Caday rendered judgment declaring that
the petitioner was illegally dismissed. The Labor Arbiter found that the private respondents were unable
to prove the allegation of chronic absenteeism as it failed to present in evidence the time cards,
logbooks or record book which complainant signed recording her time in reporting for work. These

documents, according to the Labor Arbiter, were in the possession of the private respondents. In fact,
the record book was mentioned in the notice of termination. Hence, the non-presentation of these
documents gives rise to the presumption that these documents were intentionally suppressed since
they would be adverse to private respondents claim. Moreover, the Labor Arbiter ruled that the
petitioners absences were with the conformity of the private respondents as both parties had agreed
beforehand that petitioner would not report to work on Saturdays. The handwritten listing of the days
when complainant was absent from work or late in reporting for work and even the computerized printout, do not suffice to prove that petitioners absences were unauthorized as they could easily be
manufactured.[2] Accordingly, the dispositive portion of the decision states, to wit:
WHEREFORE, Premises Considered, judgment is hereby rendered declaring the dismissal of the
complainant as illegal and ordering the respondent company to immediately reinstate her to her former
position without loss of seniority rights and to pay the complainants backwages and other benefits, as
follows:
1) P73,500.00 representing backwages as of the date of this decision until she is actually
reinstated in the service;
2) P20,000.00 by way of moral damages and another P20,000.00 representing exemplary
damages; and
3) 10% of the recoverable award in this case representing attorneys fees.
SO ORDERED.[3]
On appeal, public respondent NLRC rendered the assailed decision which set aside the Labor
Arbiters ruling. Insofar as finding the private respondents as having failed to present evidence relative to
petitioners absences and tardiness, the NLRC agrees with the Labor Arbiter. However, the NLRC ruled
that petitioner had admitted the tardiness and absences though offering justifications for the
infractions. The decretal portion of the assailed decision reads:
WHEREFORE, premises considered, the appealed decision is hereby VACATED and SET ASIDE and a NEW
ONE entered dismissing the complaint for illegal dismissal for lack of merit.
However, respondents Mabini Medical Clinic and Dr. Wilfrido Juco are jointly and solidarily ordered to
pay complainant Ester Asuncion the equivalent of her three (3) months salary for and as a penalty for
respondents non-observance of complainants right to due process.
SO ORDERED.[4]
Petitioner filed a motion for reconsideration which the public respondent denied in its Resolution,
dated February 19, 1997. Hence, petitioner through a petition for certiorari under Rule 65 of the Rules
of Court seeks recourse to this Court and raises the following issue:
THE PUBLIC RESPONDENT ERRED IN FINDING THAT THE PETITIONER WAS DISMISSED BY THE PRIVATE
RESPONDENT FOR A JUST OR AUTHORIZED CAUSE.
The petition is impressed with merit.

Although, it is a legal tenet that factual findings of administrative bodies are entitled to great
weight and respect, we are constrained to take a second look at the facts before us because of the
diversity in the opinions of the Labor Arbiter and the NLRC.[5] A disharmony between the factual findings
of the Labor Arbiter and those of the NLRC opens the door to a review thereof by this Court. [6]
It bears stressing that a workers employment is property in the constitutional sense. He cannot be
deprived of his work without due process. In order for the dismissal to be valid, not only must it be
based on just cause supported by clear and convincing evidence,[7] the employee must also be given an
opportunity to be heard and defend himself. [8] It is the employer who has the burden of proving that
the dismissal was with just or authorized cause. [9] The failure of the employer to discharge this burden
means that the dismissal is not justified and that the employee is entitled to reinstatement and
backwages.[10]
In the case at bar, there is a paucity of evidence to establish the charges of absenteeism and
tardiness. We note that the employer company submitted mere handwritten listing and computer printouts. The handwritten listing was not signed by the one who made the same. As regards the print-outs,
while the listing was computer generated, the entries of time and other annotations were again
handwritten and unsigned.[11]
We find that the handwritten listing and unsigned computer print-outs were unauthenticated and,
hence, unreliable. Mere self-serving evidence of which the listing and print-outs are of that nature
should be rejected as evidence without any rational probative value even in administrative
proceedings. For this reason, we find the findings of the Labor Arbiter to be correct. On this point, the
Labor Arbiter ruled, to wit:
x x x In the instant case, while the Notice of Termination served on the complainant clearly mentions the
record book upon which her tardiness (and absences) was based, the respondent (company) failed to
establish (through) any of these documents and the handwritten listing, notwithstanding, of (sic) the
days when complainant was absent from work or late in reporting for work and even the computerized
print-outs, do not suffice to prove the complainants absences were unauthorized as they could easily be
manufactured. x x x[12]
In IBM Philippines, Inc. v. NLRC,[13] this Court clarified that the liberality of procedure in
administrative actions is not absolute and does not justify the total disregard of certain fundamental
rules of evidence. Such that evidence without any rational probative value may not be made the basis of
order or decision of administrative bodies. The Courts ratiocination in that case is relevant to the
propriety of rejecting the unsigned handwritten listings and computer print-outs submitted by private
respondents which we quote, to wit:
However, the liberality of procedure in administrative actions is subject to limitations imposed by basic
requirements of due process. As this Court said in Ang Tibay v. CIR, the provision for flexibility in
administrative procedure does not go so far as to justify orders without a basis in evidence having
rational probative value. More specifically, as held in Uichico v. NLRC:
It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules
of procedure in the adjudication of cases. However, this procedural rule should not be construed as a
license to disregard certain fundamental evidentiary rules. While the rules of evidence prevailing in the
courts of law or equity are not controlling in proceedings before the NLRC, the evidence presented
before it must at least have a modicum of admissibility for it to be given some probative value. The

Statement of Profit and Losses submitted by Crispa, Inc. to prove its alleged losses, without the
accompanying signature of a certified public accountant or audited by an independent auditor, are
nothing but self-serving documents which ought to be treated as a mere scrap of paper devoid of any
probative value.
The computer print-outs, which constitute the only evidence of petitioners, afford no assurance of their
authenticity because they are unsigned. The decisions of this Court, while adhering to a liberal view in
the conduct of proceedings before administrative agencies, have nonetheless consistently required
some proof of authenticity or reliability as condition for the admission of documents.
In Jarcia Machine Shop and Auto Supply, Inc. v. NLRC,[14] this Court held as incompetent unsigned
daily time records presented to prove that the employee was neglectful of his duties:
Indeed, the DTRs annexed to the present petition would tend to establish private respondents neglectful
attitude towards his work duties as shown by repeated and habitual absences and tardiness and
propensity for working undertime for the year 1992. But the problem with these DTRs is that they are
neither originals nor certified true copies. They are plain photocopies of the originals, if the latter do
exist. More importantly, they are not even signed by private respondent nor by any of the employers
representatives. x x x.
In the case at bar, both the handwritten listing and computer print-outs being unsigned, the
authenticity thereof is highly suspect and devoid of any rational probative value especially in the light of
the existence of the official record book of the petitioners alleged absences and tardiness in the
possession of the employer company.
Ironically, in the memorandum charging petitioner and notice of termination, private respondents
referred to the record book as its basis for petitioners alleged absenteeism and tardiness. Interestingly,
however, the record book was never presented in evidence. Private respondents had possession thereof
and the opportunity to present the same. Being the basis of the charges against the petitioner, it is
without doubt the best evidence available to substantiate the allegations. The purpose of the rule
requiring the production of the best evidence is the prevention of fraud, because if a party is in
possession of such evidence and withholds it, and seeks to substitute inferior evidence in its place, the
presumption naturally arises that the better evidence is withheld for fraudulent purposes which its
production would expose and defeat.[15] Thus, private respondents unexplained and unjustified nonpresentation of the record book, which is the best evidence in its possession and control of the charges
against the petitioner, casts serious doubts on the factual basis of the charges of absenteeism and
tardiness.
We find that private respondents failed to present a single piece of credible evidence to serve as
the basis for their charges against petitioner and consequently, failed to fulfill their burden of proving
the facts which constitute the just cause for the dismissal of the petitioner. However, the NLRC ruled
that despite such absence of evidence, there was an admission on the part of petitioner in her Letter
dated August 11, 1994 wherein she wrote:
I am quite surprised why I have incurred 35 absences since August 1993 up to the present. I can
only surmise that Saturdays were not included in my work week at your clinic. If you will please recall,
per agreement with you, my work days at your clinic is from Monday to Friday without Saturday
work. As to my other supposed absences, I believe that said absences were authorized and therefore
cannot be considered as absences which need not be explained (sic). It is also extremely difficult to

understand why it is only now that I am charged to explain alleged absences incurred way back August
1993.[16]
In reversing the decision of the Labor Arbiter, public respondent NLRC relied upon the supposed
admission of the petitioner of her habitual absenteeism and chronic tardiness.
We do not subscribe to the findings of the NLRC that the above quoted letter of petitioner
amounted to an admission of her alleged absences. As explained by petitioner, her alleged absences
were incurred on Saturdays. According to petitioner, these should not be considered as absences as
there was an arrangement between her and the private respondents that she would not be required to
work on Saturdays. Private respondents have failed to deny the existence of this arrangement. Hence,
the decision of the NLRC that private respondent had sufficient grounds to terminate petitioner as she
admitted the charges of habitual absences has no leg to stand on.
Neither have the private respondents shown by competent evidence that the petitioner was given
any warning or reprimanded for her alleged absences and tardiness. Private respondents claimed that
they sent several notices to the petitioner warning her of her absences, however, petitioner refused to
receive the same. On this point, the Labor Arbiter succinctly observed:
The record is bereft of any showing that complainant was ever warned of her absences prior to her
dismissal on August 9, 1994. The alleged notices of her absences from August 17, until September 30,
1993, from October until November 27, 1993, from December 1, 1993 up to February 26, 1994 and the
notice dated 31 May 1994 reminding complainant of her five (5) days absences, four (4) half-days and
tardiness for 582 minutes (Annex "1" to "1-D" attached to respondent' Rejoinder), fail to show that the
notices were received by the complainant. The allegation of the respondents that the complainant
refused to received (sic) the same is self-serving and merits scant consideration. xxx[17]
The Court, likewise, takes note of the fact that the two-day period given to petitioner to explain and
answer the charges against her was most unreasonable, considering that she was charged with several
offenses and infractions (35 absences, 23 half-days and 108 tardiness), some of which were allegedly
committed almost a year before, not to mention the fact that the charges leveled against her lacked
particularity.
Apart from chronic absenteeism and habitual tardiness, petitioner was also made to answer for
loitering and wasting of company time, getting salary of an absent employee without acknowledging or
signing for it and disobedience and insubordination. [18]Thus, the Labor Arbiter found that actually
petitioner tried to submit her explanation on August 11, 1994 or within the two-day period given her,
but private respondents prevented her from doing so by instructing their staff not to accept
complainants explanation, which was the reason why her explanation was submitted a day later. [19]
The law mandates that every opportunity and assistance must be accorded to the employee by the
management to enable him to prepare adequately for his defense. [20] In Ruffy v. NLRC,[21] the Court held
that what would qualify as sufficient or ample opportunity, as required by law, would be every kind of
assistance that management must accord to the employee to enable him to prepare adequately for his
defense. In the case at bar, private respondents cannot be gainsaid to have given petitioner the ample
opportunity to answer the charges leveled against her.
From the foregoing, there are serious doubts in the evidence on record as to the factual basis of the
charges against petitioner. These doubts shall be resolved in her favor in line with the policy under the
Labor Code to afford protection to labor and construe doubts in favor of labor. [22] The consistent rule is

that if doubts exist between the evidence presented by the employer and the employee, the scales of
justice must be tilted in favor of the latter. The employer must affirmatively show rationally adequate
evidence that the dismissal was for a justifiable cause. [23] Not having satisfied its burden of proof, we
conclude that the employer dismissed the petitioner without any just cause. Hence, the termination is
illegal.
Having found that the petitioner has been illegally terminated, she is necessarily entitled to
reinstatement to her former previous position without loss of seniority and the payment of
backwages.[24]
WHEREFORE, the Decision of the National Labor Relations Commission, dated November 29, 1996
and the Resolution, dated February 20, 1997 are hereby REVERSED and SET ASIDE, and the Decision of
the Labor Arbiter, dated May 15, 1996 REINSTATED.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 86773 February 14, 1992

SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT (SEAFDEC-AQD),
DR. FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE DIV.), BEN DELOS REYES
(FINANCE OFFICER), petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and JUVENAL LAZAGA, respondents.
Ramon Encarnacion for petitioners.
Caesar T. Corpus for private respondent.

NOCON, J.:
This is a petition for certiorari to annul and set aside the July 26, 1988 decision of the National Labor
Relations Commission sustaining the labor arbiter, in holding herein petitioners Southeast Asian
Fisheries Development Center-Aquaculture Department (SEAFDEC-AQD), Dr. Flor Lacanilao, Rufil Cuevas
and Ben de los Reyes liable to pay private respondent Juvenal Lazaga the amount of P126,458.89 plus
interest thereon computed from May 16, 1986 until full payment thereof is made, as separation pay and
other post-employment benefits, and the resolution denying the petitioners' motion for reconsideration
of said decision dated January 9, 1989.
The antecedent facts of the case are as follows:
SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries
Development Center, organized through an agreement entered into in Bangkok, Thailand on December
28, 1967 by the governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia and the Philippines
with Japan as the sponsoring country (Article 1, Agreement Establishing the SEAFDEC).
On April 20, 1975, private respondent Juvenal Lazaga was employed as a Research Associate an a
probationary basis by the SEAFDEC-AQD and was appointed Senior External Affairs Officer on January 5,
1983 with a monthly basic salary of P8,000.00 and a monthly allowance of P4,000.00. Thereafter, he was
appointed to the position of Professional III and designated as Head of External Affairs Office with the
same pay and benefits.
On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of
termination to private respondent informing him that due to the financial constraints being experienced

by the department, his services shall be terminated at the close of office hours on May 15, 1986 and
that he is entitled to separation benefits equivalent to one (1) month of his basic salary for every year of
service plus other benefits (Rollo, p. 153).
Upon petitioner SEAFDEC-AQD's failure to pay private respondent his separation pay, the latter filed on
March 18, 1987 a complaint against petitioners for non-payment of separation benefits plus moral
damages and attorney's fees with the Arbitration Branch of the NLRC (Annex "C" of Petition
for Certiorari).
Petitioners in their answer with counterclaim alleged that the NLRC has no jurisdiction over the case
inasmuch as the SEAFDEC-AQD is an international organization and that private respondent must first
secure clearances from the proper departments for property or money accountability before any claim
for separation pay will be paid, and which clearances had not yet been obtained by the private
respondent.
A formal hearing was conducted whereby private respondent alleged that the non-issuance of the
clearances by the petitioners was politically motivated and in bad faith. On the other hand, petitioners
alleged that private respondent has property accountability and an outstanding obligation to SEAFDECAQD in the amount of P27,532.11. Furthermore, private respondent is not entitled to accrued sick leave
benefits amounting to P44,000.00 due to his failure to avail of the same during his employment with the
SEAFDEC-AQD (Annex "D", Id.).
On January 12, 1988, the labor arbiter rendered a decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering respondents:
1. To pay complainant P126,458.89, plus legal interest thereon computed from May 16,
1986 until full payment thereof is made, as separation pay and other post-employment
benefits;
2. To pay complainant actual damages in the amount of P50,000, plus 10% attorney's
fees.
All other claims are hereby dismissed.
SO ORDERED. (Rollo, p. 51, Annex "E")
On July 26, 1988, said decision was affirmed by the Fifth Division of the NLRC except as to the award of
P50,000.00 as actual damages and attorney's fees for being baseless. (Annex "A", p. 28, id.)
On September 3, 1988, petitioners filed a Motion for Reconsideration (Annex "G", id.) which was denied
on January 9, 1989. Thereafter, petitioners instituted this petition for certiorari alleging that the NLRC
has no jurisdiction to hear and decide respondent Lazaga's complaint since SEAFDEC-AQD is immune
from suit owing to its international character and the complaint is in effect a suit against the State which
cannot be maintained without its consent.
The petition is impressed with merit.

Petitioner Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-AQD) is an

international agency beyond the jurisdiction of public respondent NLRC.
It was established by the Governments of Burma, Kingdom of Cambodia, Republic of Indonesia, Japan,
Kingdom of Laos, Malaysia. Republic of the Philippines, Republic of Singapore, Kingdom of Thailand and
Republic of Vietnam (Annex "H", Petition).
The Republic of the Philippines became a signatory to the Agreement establishing SEAFDEC on January
16,1968. Its purpose is as follows:
The purpose of the Center is to contribute to the promotion of the fisheries
development in Southeast Asia by mutual co-operation among the member
governments of the Center, hereinafter called the "Members", and through
collaboration with international organizations and governments external to the Center.
(Agreement Establishing the SEAFDEC, Art. 1; Annex "H" Petition) (p.310, Rollo)
SEAFDEC-AQD was organized during the Sixth Council Meeting of SEAFDEC on July 3-7, 1973 in Kuala
Lumpur, Malaysia as one of the principal departments of SEAFDEC (Annex "I", id.) to be established in
Iloilo for the promotion of research in aquaculture. Paragraph 1, Article 6 of the Agreement establishing
SEAFDEC mandates:
1. The Council shall be the supreme organ of the Center and all powers of the Center
shall be vested in the Council.
Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional
independence and freedom from control of the state in whose territory its office is located.
As Senator Jovito R. Salonga and Former Chief Justice Pedro L. Yap stated in their book, Public
International Law (p. 83, 1956 ed.):
Permanent international commissions and administrative bodies have been created by
the agreement of a considerable number of States for a variety of international
purposes, economic or social and mainly non-political. Among the notable instances are
the International Labor Organization, the International Institute of Agriculture, the
International Danube Commission. In so far as they are autonomous and beyond the
control of any one State, they have a distinct juridical personality independent of the
municipal law of the State where they are situated. As such, according to one leading
authority "they must be deemed to possess a species of international personality of
their own." (Salonga and Yap, Public International Law, 83 [1956 ed.])
Pursuant to its being a signatory to the Agreement, the Republic of the Philippines agreed to be
represented by one Director in the governing SEAFDEC Council (Agreement Establishing SEAFDEC, Art. 5,
Par. 1, Annex "H",ibid.) and that its national laws and regulations shall apply only insofar as its
contribution to SEAFDEC of "an agreed amount of money, movable and immovable property and
services necessary for the establishment and operation of the Center" are concerned (Art. 11, ibid.). It
expressly waived the application of the Philippine laws on the disbursement of funds of petitioner
SEAFDEC-AQD (Section 2, P.D. No. 292).

The then Minister of Justice likewise opined that Philippine Courts have no jurisdiction over SEAFDECAQD in Opinion No. 139, Series of 1984
4. One of the basic immunities of an international organization is immunity from local
jurisdiction, i.e.,that it is immune from the legal writs and processes issued by the
tribunals of the country where it is found. (See Jenks, Id., pp. 37-44) The obvious reason
for this is that the subjection of such an organization to the authority of the local courts
would afford a convenient medium thru which the host government may interfere in
there operations or even influence or control its policies and decisions of the
organization; besides, such subjection to local jurisdiction would impair the capacity of
such body to discharge its responsibilities impartially on behalf of its member-states. In
the case at bar, for instance, the entertainment by the National Labor Relations
Commission of Mr. Madamba's reinstatement cases would amount to interference by
the Philippine Government in the management decisions of the SEARCA governing
board; even worse, it could compromise the desired impartiality of the organization
since it will have to suit its actuations to the requirements of Philippine law, which may
not necessarily coincide with the interests of the other member-states. It is precisely to
forestall these possibilities that in cases where the extent of the immunity is specified in
the enabling instruments of international organizations, jurisdictional immunity from
the host country is invariably among the first accorded. (See Jenks, Id.; See also Bowett,
The Law of International Institutions, pp. 284-1285).
Respondent Lazaga's invocation of estoppel with respect to the issue of jurisdiction is unavailing
because estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action.
Jurisdiction is conferred by law. Where there is none, no agreement of the parties can provide one.
Settled is the rule that the decision of a tribunal not vested with appropriate jurisdiction is null and void.
Thus, in Calimlim vs. Ramirez, this Court held:
A rule, that had been settled by unquestioned acceptance and upheld in decisions so
numerous to cite is that the jurisdiction of a court over the subject matter of the action
is a matter of law and may not be conferred by consent or agreement of the parties. The
lack of jurisdiction of a court may be raised at any stage of the proceedings, even on
appeal. This doctrine has been qualified by recent pronouncements which it stemmed
principally from the ruling in the cited case of Sibonghanoy. It is to be regretted,
however, that the holding in said case had been applied to situations which were
obviously not contemplated therein. The exceptional circumstances involved
in Sibonghanoy which justified the departure from the accepted concept of nonwaivability of objection to jurisdiction has been ignored and, instead a blanket doctrine
had been repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as
the exception, but rather the general rule, virtually overthrowing altogether the timehonored principle that the issue of jurisdiction is not lost by waiver or by estoppel.
(Calimlim vs. Ramirez, G.R. No. L-34362, 118 SCRA 399; [1982])
Respondent NLRC'S citation of the ruling of this Court in Lacanilao v. De Leon (147 SCRA 286 [1987]) to
justify its assumption of jurisdiction over SEAFDEC is misplaced. On the contrary, the Court in said case
explained why it took cognizance of the case. Said the Court:

We would note, finally, that the present petition relates to a controversy between two
claimants to the same position; this is not a controversy between the SEAFDEC on the
one hand, and an officer or employee, or a person claiming to be an officer or employee,
of the SEAFDEC, on the other hand. There is before us no question involving immunity
from the jurisdiction of the Court, there being no plea for such immunity whether by or
on behalf of SEAFDEC, or by an official of SEAFDEC with the consent of SEAFDEC (Id., at
300; emphasis supplied).
WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the courts
or local agency of the Philippine government, the questioned decision and resolution of the NLRC dated
July 26, 1988 and January 9, 1989, respectively, are hereby REVERSED and SET ASIDE for having been
rendered without jurisdiction. No costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 85750 September 28, 1990

INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, petitioner
vs
HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND
TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU respondents.
G.R. No. 89331 September 28, 1990
KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ASSOCIATION IN LINE
INDUSTRIES AND AGRICULTURE, petitioner,
vs
SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH INSTITUTE,
INC.,respondents.
Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.
Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331.
Jimenez & Associates for IRRI.
Alfredo L. Bentulan for private respondent in 85750.

MELENCIO-HERRERA, J.:
Consolidated on 11 December 1989, these two cases involve the validity of the claim of immunity by the
International Catholic Migration Commission (ICMC) and the International Rice Research Institute, Inc.
(IRRI) from the application of Philippine labor laws.
I
Facts and Issues
A. G.R. No. 85750 the International Catholic Migration Commission (ICMC) Case.
As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam's
communist rule confronted the international community.

In response to this crisis, on 23 February 1981, an Agreement was forged between the Philippine
Government and the United Nations High Commissioner for Refugees whereby an operating center for
processing Indo-Chinese refugees for eventual resettlement to other countries was to be established in
Bataan (Annex "A", Rollo, pp. 22-32).
ICMC was one of those accredited by the Philippine Government to operate the refugee processing
center in Morong, Bataan. It was incorporated in New York, USA, at the request of the Holy See, as a
non-profit agency involved in international humanitarian and voluntary work. It is duly registered with
the United Nations Economic and Social Council (ECOSOC) and enjoys Consultative Status, Category II. As
an international organization rendering voluntary and humanitarian services in the Philippines, its
activities are parallel to those of the International Committee for Migration (ICM) and the International
Committee of the Red Cross (ICRC) [DOLE Records of BLR Case No. A-2-62-87, ICMC v. Calleja, Vol. 1].
On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry
of Labor and Employment a Petition for Certification Election among the rank and file members
employed by ICMC The latter opposed the petition on the ground that it is an international organization
registered with the United Nations and, hence, enjoys diplomatic immunity.
On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition for lack
of jurisdiction.
On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the MedArbiter's Decision and ordered the immediate conduct of a certification election. At that time, ICMC's
request for recognition as a specialized agency was still pending with the Department of Foreign Affairs
(DEFORAF).
Subsequently, however, on 15 July 1988, the Philippine Government, through the DEFORAF, granted
ICMC the status of a specialized agency with corresponding diplomatic privileges and immunities, as
evidenced by a Memorandum of Agreement between the Government and ICMC (Annex "E",
Petition, Rollo, pp. 41-43), infra.
ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election invoking the
immunity expressly granted but the same was denied by respondent BLR Director who, again, ordered
the immediate conduct of a pre-election conference. ICMC's two Motions for Reconsideration were
denied despite an opinion rendered by DEFORAF on 17 October 1988 that said BLR Order violated
ICMC's diplomatic immunity.
Thus, on 24 November 1988, ICMC filed the present Petition for Certiorari with Preliminary Injunction
assailing the BLR Order.
On 28 November 1988, the Court issued a Temporary Restraining Order enjoining the holding of the
certification election.
On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge C. Coquia of the Court
of Appeals, filed a Motion for Intervention alleging that, as the highest executive department with the
competence and authority to act on matters involving diplomatic immunity and privileges, and tasked

with the conduct of Philippine diplomatic and consular relations with foreign governments and UN
organizations, it has a legal interest in the outcome of this case.
Over the opposition of the Solicitor General, the Court allowed DEFORAF intervention.
On 12 July 1989, the Second Division gave due course to the ICMC Petition and required the submittal of
memoranda by the parties, which has been complied with.
As initially stated, the issue is whether or not the grant of diplomatic privileges and immunites to ICMC
extends to immunity from the application of Philippine labor laws.
ICMC sustains the affirmative of the proposition citing (1) its Memorandum of Agreement with the
Philippine Government giving it the status of a specialized agency, (infra); (2) the Convention on the
Privileges and Immunities of Specialized Agencies, adopted by the UN General Assembly on 21
November 1947 and concurred in by the Philippine Senate through Resolution No. 91 on 17 May 1949
(the Philippine Instrument of Ratification was signed by the President on 30 August 1949 and deposited
with the UN on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987 Constitution, which
declares that the Philippines adopts the generally accepted principles of international law as part of the
law of the land.
Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and seeks an affirmance of the
DEFORAF determination that the BLR Order for a certification election among the ICMC employees is
violative of the diplomatic immunity of said organization.
Respondent BLR Director, on the other hand, with whom the Solicitor General agrees, cites State policy
and Philippine labor laws to justify its assailed Order, particularly, Article II, Section 18 and Article III,
Section 8 of the 1987 Constitution, infra; and Articles 243 and 246 of the Labor Code, as amended, ibid.
In addition, she contends that a certification election is not a litigation but a mere investigation of a nonadversary, fact-finding character. It is not a suit against ICMC its property, funds or assets, but is the sole
concern of the workers themselves.
B. G.R. No. 89331 (The International Rice Research Institute [IRRI] Case).
Before a Decision could be rendered in the ICMC Case, the Third Division, on 11 December 1989,
resolved to consolidate G.R. No. 89331 pending before it with G.R. No. 85750, the lower-numbered case
pending with the Second Division, upon manifestation by the Solicitor General that both cases involve
similar issues.
The facts disclose that on 9 December 1959, the Philippine Government and the Ford and Rockefeller
Foundations signed a Memorandum of Understanding establishing the International Rice Research
Institute (IRRI) at Los Baos, Laguna. It was intended to be an autonomous, philanthropic, tax-free, nonprofit, non-stock organization designed to carry out the principal objective of conducting "basic research
on the rice plant, on all phases of rice production, management, distribution and utilization with a view
to attaining nutritive and economic advantage or benefit for the people of Asia and other major ricegrowing areas through improvement in quality and quantity of rice."

Initially, IRRI was organized and registered with the Securities and Exchange Commission as a private
corporation subject to all laws and regulations. However, by virtue of Pres. Decree No. 1620,
promulgated on 19 April 1979, IRRI was granted the status, prerogatives, privileges and immunities of an
international organization.
The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a legitimate labor
organization with an existing local union, the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan, for
short) in respondent IRRI.
On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with Region IV, Regional
Office of the Department of Labor and Employment (DOLE).
IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the status of an
international organization and granting it immunity from all civil, criminal and administrative
proceedings under Philippine laws.
On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis of Pres. Decree No.
1620 and dismissed the Petition for Direct Certification.
On appeal, the BLR Director, who is the public respondent in the ICMC Case, set aside the Med-Arbiter's
Order and authorized the calling of a certification election among the rank-and-file employees of IRRI.
Said Director relied on Article 243 of the Labor Code, as amended, infra and Article XIII, Section 3 of the
1987 Constitution, 1and held that "the immunities and privileges granted to IRRI do not include
exemption from coverage of our Labor Laws." Reconsideration sought by IRRI was denied.
On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR Director's Order,
dismissed the Petition for Certification Election, and held that the grant of specialized agency status by
the Philippine Government to the IRRI bars DOLE from assuming and exercising jurisdiction over IRRI
Said Resolution reads in part as follows:
Presidential Decree No. 1620 which grants to the IRRI the status, prerogatives, privileges
and immunities of an international organization is clear and explicit. It provides in
categorical terms that:
Art. 3 The Institute shall enjoy immunity from any penal, civil and administrative
proceedings, except insofar as immunity has been expressly waived by the DirectorGeneral of the Institution or his authorized representative.
Verily, unless and until the Institute expressly waives its immunity, no summons,
subpoena, orders, decisions or proceedings ordered by any court or administrative
or quasi-judicial agency are enforceable as against the Institute. In the case at bar there
was no such waiver made by the Director-General of the Institute. Indeed, the Institute,
at the very first opportunity already vehemently questioned the jurisdiction of this
Department by filing an ex-parte motion to dismiss the case.
Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by
respondent Secretary of Labor in upholding IRRI's diplomatic immunity.

The Third Division, to which the case was originally assigned, required the respondents to comment on
the petition. In a Manifestation filed on 4 August 1990, the Secretary of Labor declared that it was "not
adopting as his own" the decision of the BLR Director in the ICMC Case as well as the Comment of the
Solicitor General sustaining said Director. The last pleading was filed by IRRI on 14 August 1990.
Instead of a Comment, the Solicitor General filed a Manifestation and Motion praying that he be
excused from filing a comment "it appearing that in the earlier case of International Catholic Migration
Commission v. Hon. Pura Calleja, G.R. No. 85750. the Office of the Solicitor General had sustained the
stand of Director Calleja on the very same issue now before it, which position has been superseded by
respondent Secretary of Labor in G.R. No. 89331," the present case. The Court acceded to the Solicitor
General's prayer.
The Court is now asked to rule upon whether or not the Secretary of Labor committed grave abuse of
discretion in dismissing the Petition for Certification Election filed by Kapisanan.
Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the status, privileges,
prerogatives and immunities of an international organization, invoked by the Secretary of Labor, is
unconstitutional in so far as it deprives the Filipino workers of their fundamental and constitutional right
to form trade unions for the purpose of collective bargaining as enshrined in the 1987 Constitution.
A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for entertaining IRRI'S
appeal from the Order of the Director of the Bureau of Labor Relations directing the holding of a
certification election. Kapisanan contends that pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of the
Omnibus Rules Implementing the Labor Code, the Order of the BLR Director had become final and
unappeable and that, therefore, the Secretary of Labor had no more jurisdiction over the said appeal.
On the other hand, in entertaining the appeal, the Secretary of Labor relied on Section 25 of Rep. Act.
No. 6715, which took effect on 21 March 1989, providing for the direct filing of appeal from the MedArbiter to the Office of the Secretary of Labor and Employment instead of to the Director of the Bureau
of Labor Relations in cases involving certification election orders.
III
Findings in Both Cases.
There can be no question that diplomatic immunity has, in fact, been granted ICMC and IRRI.
Article II of the Memorandum of Agreement between the Philippine Government and ICMC provides
that ICMC shall have a status "similar to that of a specialized agency." Article III, Sections 4 and 5 of the
Convention on the Privileges and Immunities of Specialized Agencies, adopted by the UN General
Assembly on 21 November 1947 and concurred in by the Philippine Senate through Resolution No. 19 on
17 May 1949, explicitly provides:
Art. III, Section 4. The specialized agencies, their property and assets, wherever located
and by whomsoever held, shall enjoy immunity from every form of legal process except
insofar as in any particular case they have expressly waived their immunity. It is,

however, understood that no waiver of immunity shall extend to any measure of

execution.
Sec. 5. The premises of the specialized agencies shall be inviolable. The property and
assets of the specialized agencies, wherever located and by whomsoever held shall be
immune from search, requisition, confiscation, expropriation and any other form of
interference, whether by executive, administrative, judicial or legislative action.
(Emphasis supplied).
IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its grant of immunity, thus:
Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity from any
penal, civil and administrative proceedings, except insofar as that immunity has been
expressly waived by the Director-General of the Institute or his authorized
representatives.
Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S invocation of immunity when in
a Memorandum, dated 17 October 1988, it expressed the view that "the Order of the Director of the
Bureau of Labor Relations dated 21 September 1988 for the conduct of Certification Election within
ICMC violates the diplomatic immunity of the organization." Similarly, in respect of IRRI, the DEFORAF
speaking through The Acting Secretary of Foreign Affairs, Jose D. Ingles, in a letter, dated 17 June 1987,
to the Secretary of Labor, maintained that "IRRI enjoys immunity from the jurisdiction of DOLE in this
particular instance."
The foregoing opinions constitute a categorical recognition by the Executive Branch of the Government
that ICMC and IRRI enjoy immunities accorded to international organizations, which determination has
been held to be a political question conclusive upon the Courts in order not to embarrass a political
department of Government.
It is a recognized principle of international law and under our system of separation of
powers that diplomatic immunity is essentially a political question and courts should
refuse to look beyond a determination by the executive branch of the government, and
where the plea of diplomatic immunity is recognized and affirmed by the executive
branch of the government as in the case at bar, it is then the duty of the courts to
accept the claim of immunity upon appropriate suggestion by the principal law officer of
the government . . . or other officer acting under his direction. Hence, in adherence to
the settled principle that courts may not so exercise their jurisdiction . . . as to
embarrass the executive arm of the government in conducting foreign relations, it is
accepted doctrine that in such cases the judicial department of (this) government
follows the action of the political branch and will not embarrass the latter by assuming
an antagonistic jurisdiction. 3
A brief look into the nature of international organizations and specialized agencies is in order. The term
"international organization" is generally used to describe an organization set up by agreement between
two or more states. 4 Under contemporary international law, such organizations are endowed with
some degree of international legal personality 5 such that they are capable of exercising specific rights,
duties and powers. 6 They are organized mainly as a means for conducting general international business

in which the member states have an interest. 7 The United Nations, for instance, is an international
organization dedicated to the propagation of world peace.
"Specialized agencies" are international organizations having functions in particular fields. The term
appears in Articles 57 8 and 63 9 of the Charter of the United Nations:
The Charter, while it invests the United Nations with the general task of promoting
progress and international cooperation in economic, social, health, cultural, educational
and related matters, contemplates that these tasks will be mainly fulfilled not by organs
of the United Nations itself but by autonomous international organizations established
by inter-governmental agreements outside the United Nations. There are now many
such international agencies having functions in many different fields, e.g. in posts,
telecommunications, railways, canals, rivers, sea transport, civil aviation, meteorology,
atomic energy, finance, trade, education and culture, health and refugees. Some are
virtually world-wide in their membership, some are regional or otherwise limited in
their membership. The Charter provides that those agencies which have "wide
international responsibilities" are to be brought into relationship with the United
Nations by agreements entered into between them and the Economic and Social
Council, are then to be known as "specialized agencies." 10
The rapid growth of international organizations under contemporary international law has paved the
way for the development of the concept of international immunities.
It is now usual for the constitutions of international organizations to contain provisions
conferring certain immunities on the organizations themselves, representatives of their
member states and persons acting on behalf of the organizations. A series of
conventions, agreements and protocols defining the immunities of various international
organizations in relation to their members generally are now widely in force; . . . 11
There are basically three propositions underlying the grant of international immunities to international
organizations. These principles, contained in the ILO Memorandum are stated thus: 1) international
institutions should have a status which protects them against control or interference by any one
government in the performance of functions for the effective discharge of which they are responsible to
democratically constituted international bodies in which all the nations concerned are represented; 2)
no country should derive any national financial advantage by levying fiscal charges on common
international funds; and 3) the international organization should, as a collectivity of States members, be
accorded the facilities for the conduct of its official business customarily extended to each other by its
individual member States. 12 The theory behind all three propositions is said to be essentially
institutional in character. "It is not concerned with the status, dignity or privileges of individuals, but
with the elements of functional independence necessary to free international institutions from national
control and to enable them to discharge their responsibilities impartially on behalf of all their
members. 13 The raison d'etre for these immunities is the assurance of unimpeded performance of their
functions by the agencies concerned.
The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their
international character and respective purposes. The objective is to avoid the danger of partiality and
interference by the host country in their internal workings. The exercise of jurisdiction by the
Department of Labor in these instances would defeat the very purpose of immunity, which is to shield

the affairs of international organizations, in accordance with international practice, from political
pressure or control by the host country to the prejudice of member States of the organization, and to
ensure the unhampered performance of their functions.
ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic rights, which
are guaranteed by Article II, Section 18, 14 Article III, Section 8, 15 and Article XIII, Section 3 (supra), of the
1987 Constitution; and implemented by Articles 243 and 246 of the Labor Code, 16 relied on by the BLR
Director and by Kapisanan.
For, ICMC employees are not without recourse whenever there are disputes to be settled. Section 31 of
the Convention on the Privileges and Immunities of the Specialized Agencies of the United
Nations 17 provides that "each specialized agency shall make provision for appropriate modes of
settlement of: (a) disputes arising out of contracts or other disputes of private character to which the
specialized agency is a party." Moreover, pursuant to Article IV of the Memorandum of Agreement
between ICMC the the Philippine Government, whenever there is any abuse of privilege by ICMC, the
Government is free to withdraw the privileges and immunities accorded. Thus:
Art. IV. Cooperation with Government Authorities. 1. The Commission shall cooperate
at all times with the appropriate authorities of the Government to ensure the
observance of Philippine laws, rules and regulations, facilitate the proper administration
of justice and prevent the occurrences of any abuse of the privileges and immunities
granted its officials and alien employees in Article III of this Agreement to the
Commission.
2. In the event that the Government determines that there has been an abuse of the
privileges and immunities granted under this Agreement, consultations shall be held
between the Government and the Commission to determine whether any such abuse
has occurred and, if so, the Government shall withdraw the privileges and immunities
granted the Commission and its officials.
Neither are the employees of IRRI without remedy in case of dispute with management as, in fact, there
had been organized a forum for better management-employee relationship as evidenced by the
formation of the Council of IRRI Employees and Management (CIEM) wherein "both management and
employees were and still are represented for purposes of maintaining mutual and beneficial
cooperation between IRRI and its employees." The existence of this Union factually and tellingly belies
the argument that Pres. Decree No. 1620, which grants to IRRI the status, privileges and immunities of
an international organization, deprives its employees of the right to self-organization.
The immunity granted being "from every form of legal process except in so far as in any particular case
they have expressly waived their immunity," it is inaccurate to state that a certification election is
beyond the scope of that immunity for the reason that it is not a suit against ICMC. A certification
election cannot be viewed as an independent or isolated process. It could tugger off a series of events in
the collective bargaining process together with related incidents and/or concerted activities, which
could inevitably involve ICMC in the "legal process," which includes "any penal, civil and administrative
proceedings." The eventuality of Court litigation is neither remote and from which international
organizations are precisely shielded to safeguard them from the disruption of their functions. Clauses on
jurisdictional immunity are said to be standard provisions in the constitutions of international

Organizations. "The immunity covers the organization concerned, its property and its assets. It is equally
applicable to proceedings in personam and proceedings in rem." 18
We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p. 161, Rollo), wherein
TUPAS calls attention to the case entitled "International Catholic Migration Commission v. NLRC, et als.,
(G.R. No. 72222, 30 January 1989, 169 SCRA 606), and claims that, having taken cognizance of that
dispute (on the issue of payment of salary for the unexpired portion of a six-month probationary
employment), the Court is now estopped from passing upon the question of DOLE jurisdiction petition
over ICMC.
We find no merit to said submission. Not only did the facts of said controversy occur between 19831985, or before the grant to ICMC on 15 July 1988 of the status of a specialized agency with
corresponding immunities, but also because ICMC in that case did not invoke its immunity and,
therefore, may be deemed to have waived it, assuming that during that period (1983-1985) it was tacitly
recognized as enjoying such immunity.
Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision of the BLR
Director, dated 15 February 1989, had not become final because of a Motion for Reconsideration filed
by IRRI Said Motion was acted upon only on 30 March 1989 when Rep. Act No. 6715, which provides for
direct appeals from the Orders of the Med-Arbiter to the Secretary of Labor in certification election
cases either from the order or the results of the election itself, was already in effect, specifically since 21
March 1989. Hence, no grave abuse of discretion may be imputed to respondent Secretary of Labor in
his assumption of appellate jurisdiction, contrary to Kapisanan's allegations. The pertinent portion of
that law provides:
Art. 259. Any party to an election may appeal the order or results of the election as
determined by the Med-Arbiter directly to the Secretary of Labor and Employment on
the ground that the rules and regulations or parts thereof established by the Secretary
of Labor and Employment for the conduct of the election have been violated. Such
appeal shall be decided within 15 calendar days (Emphasis supplied).
En passant, the Court is gratified to note that the heretofore antagonistic positions assumed by two
departments of the executive branch of government have been rectified and the resultant
embarrassment to the Philippine Government in the eyes of the international community now,
hopefully, effaced.
WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the Order of the Bureau of
Labor Relations for certification election is SET ASIDE, and the Temporary Restraining Order earlier
issued is made PERMANENT.
In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of discretion having been
committed by the Secretary of Labor and Employment in dismissing the Petition for Certification
Election.
No pronouncement as to costs.
SO ORDERED.

HIDALGO vs. REPUBLIC

DECISION
VILLARAMA, JR., J.:
Which quasi-judicial agency has jurisdiction to hear and decide complaints for illegal dismissal against an
adjunct government agency engaged in proprietary function? Should the complaint be lodged before
the National Labor Relations Commission (NLRC) or to the Civil Service Commission (CSC)? This is the
focal issue that needs to be resolved in this petition for review on certiorari assailing the Decision[1] and
Resolution[2] of the Court of Appeals in CA-G.R. SP No. 84801 nullifying the Labor Arbiters and the NLRCs
rulings.
Republic of the Philippines has represented respondent Armed Forces of the Philippines Commissary
and Exchange Services (AFPCES) in this recourse. AFPCES is a unit/facility of the Armed Forces of the
Philippines (AFP) organized pursuant to Letter of Instruction (LOI) No. 31, which was issued on
November 20, 1972 by then President Ferdinand Marcos. Under LOI No. 31-A, which amended LOI No.
31, an amount of P5 million was set aside from the Philippine Veterans Claims Settlement Fund as seed
capital for the AFPCES to be utilized and administered for the operations and management of all
commissary facilities in the military establishments all over the country. AFPCES was intended to benefit
the veterans, their widows and orphans, and the members of the AFP and their dependents. In
December 1972, the AFP General Headquarters (AFP GHQ) issued Staff Memorandum No. 5 formally
organizing the AFPCES.[3]
In order to socialize the services of AFPCES, General Order No. 920 was issued by the AFP GHQ on July
13, 1976 reorganizing the AFPCES as an AFP-Wide Service Support Unit. General Order No. 920 also
provided that all installation Commissary Exchange Service including their equipment, records and
assets shall be assigned and absorbed by the AFPCES.[4] This, in effect, centralized the management of
the commissary exchange services to the AFPCES. On February 26, 1987, General Order No. 138 was
issued activating the AFPCES as a regular unit under the direct control of the AFP Chief of Staff. [5]
Petitioners, on the other hand, numbering 65 in all,[6] were hired as regular employees of AFPCES. Some
worked as food handlers in AFPCES catering business and served during social functions held within its
premises. Others occupied positions as computer technicians, auditors, record clerks, cashiers,
canvassers, bookkeepers, and warehousemen.[7] Several of them had worked with AFPCES for a number
of years, ranging from 4 to 31 years. Since the start of their employment, petitioners were enrolled in

the Social Security System (SSS), with respondent AFPCES paying its corresponding employers share in
their monthly SSS contribution.[8]
Between 1999 and 2001, however, AFPCES advised petitioners to undergo an indefinite leave of absence
without pay, allegedly upon a conditional promise that they would be allowed to return to work as soon
as AFPCES tax subsidy is released and upon resumption of its store operations. [9]
When AFPCES failed to recall petitioners to their work as allegedly promised, petitioners filed a
complaint for illegal (constructive) dismissal with damages against AFPCES before the NLRC. [10] On July 4,
2002, after efforts to forge an amicable settlement had failed, Labor Arbiter Salimathar V. Nambi
rendered a decision[11] in favor of petitioners by ordering AFPCES to pay a total of P16,007,996.00 as
back wages, 13th month pay and separation pay to petitioners.
AFPCES filed an appeal[12] praying, among others, that it be exempted from posting the required appeal
bond. The NLRC, however, denied the plea and gave AFPCES ten (10) days to post an appeal bond. The
NLRC likewise denied AFPCES motion for reconsideration. Meanwhile, petitioners sought the immediate
execution of the Labor Arbiters decision.
AFPCES filed a petition before the appellate court docketed as CA-G.R. SP. No. 84801, and
prayed among others, for the issuance of a temporary restraining order to enjoin the NLRC from
dismissing the appeal and granting execution of the Labor Arbiters decision.
On October 22, 2004, the Court of Appeals issued a Resolution denying AFPCES prayer for the issuance
of a temporary restraining order for lack of merit.[13]
Subsequently, on October 29, 2004, the NLRC dismissed AFPCES appeal following its failure to
post the required appeal bond.[14] On December 7, 2004, petitioners moved for the execution of the
Labor Arbiters decision.
On March 17, 2005, the enforcing sheriffs of the NLRC issued a Progress Report[15] indicating that writs
of execution and garnishment have been issued against AFPCES funds deposited with the Land Bank of
the Philippines to satisfy the Labor Arbiters award. The said report noted that AFPCES has reinstated
petitioners to their former positions although Capt. Preciliano M. Ruiz, AFPCES commander and general
manager, gave no assurance regarding the payment of petitioners salaries. [16]

On April 7, 2005, the Court of Appeals granted AFPCES motion to lift the writ of garnishment and to stay
the execution of the Labor Arbiters monetary award. Undaunted, petitioners were able to secure an
alias writ of execution after due hearing before the Labor Arbiter. The issue was again brought before
the Court of Appeals.
On August 31, 2006, the appellate court promulgated the assailed Decision in CA-G.R. SP No. 84801
granting AFPCES petition. The Court of Appeals, after applying the Supreme Courts pronouncement
inDuty Free Philippines v. Mojica,[17] explained that since AFPCES is a governmental agency that has no
personality separate and distinct from the AFP, petitioners are considered civil service employees, and
that complaints for illegal dismissal should therefore be lodged not with the Labor Arbiter but with the
CSC.[18]
Aggrieved, petitioners moved for a reconsideration of the said decision, but the appellate court denied
the same for lack of merit.[19]
Hence, this petition.
Pivotal to the resolution of this petition is a determination of the classification of petitioners
employment status with respondent AFPCES. AFPCES asserts that since petitioners are government
employees, jurisdiction over their complaints lies not with the NLRC, but with the CSC. Petitioners, on
the other hand, contend that since they do not belong to the approved plantilla of government
personnel, their complaints for illegal dismissal was properly made before the NLRC.
Let us clarify the matter.
Presidential Decree (PD) No. 807 or the Civil Service Decree of the Philippines[20] declares that the Civil
Service Commission shall be the central personnel agency to set standards and to enforce the laws
governing the discipline of civil servants. [21] PD No. 807 categorically described the scope of the civil
service as embracing every branch, agency, subdivision, and instrumentality of the government,
including every government-owned or controlled corporations whether performing governmental or
proprietary function;[22] and construed an agency to mean any bureau, office, commission,
administration, board, committee, institute, corporation, whether performing governmental or
proprietary function, or any other unit of the National Government, as well as provincial, city or
municipal government, except as otherwise provided.[23]

Subsequently, Executive Order (EO) No. 180[24] defined government employees as all employees of all
branches, subdivisions, instrumentalities, and agencies of the Government, including governmentowned or controlled corporations with original charters. [25] It provided that the Civil Service and labor
laws shall be followed in the resolution of complaints, grievances and cases involving government
employees.[26]
In Philippine Refining Company v. Court of Appeals,[27] we declared that AFPCES is a government agency
that is not immune from suit since it is engaged in proprietary activities. We find no compelling reason
to deviate from such pronouncement. The historical background of its creation and establishment
indicates that AFPCES is an agency under the direct control and supervision of the AFP as it was
established to take charge of the operations and management of all commissary facilities in military
establishments all over the country. By clear implication of law, all AFPCES personnel should therefore
be classified as government employees and any appointment, promotion, discipline and termination of
its civilian staff should be governed by appropriate civil service laws and procedures.
Interestingly, in the course of the proceedings, petitioners did not question or refute such classification
of the AFPCES. They, in fact, averred that AFPCES is not created by a special law to classify it as a
government-owned or controlled corporation with original charter, but a mere entity of the AFP. They
also admit that AFPCES is without any corporate features as it is merely an agency performing
proprietary functions not only for the benefit of veterans, their widows and orphans, and the members
of the AFP, but for the public in general.[28]
Petitioners, however, assert that the pronouncement in Duty Free Philippines should not be applied in
the instant case since the factual milieu of the said case is different from the case at bar.
We partly agree with petitioners.
Like AFPCES, Duty Free Philippines is also a government agency engaged in proprietary activities without
separate corporate existence. Unlike Duty Free Philippines, however, AFPCES committed acts which
created an impression upon petitioners that they fall within the coverage of pertinent labor laws and
not the civil service law. First, since the start of their employment and until their unceremonious
indefinite suspension from work, AFPCES have enrolled petitioners to the SSS, the primary governmental
agency engaged in providing social security benefits to employees of the private sector, instead of the
Government Service Insurance System (GSIS) as mandated by Commonwealth Act No. 186. [29] AFPCES
even remitted its corresponding employers share to petitioners SSS contributions. Such practice has
been continuously observed by the AFPCES in the span of more than three (3) decades.

Second, the hiring, appointment and discipline of AFPCES employees never went through the proper
procedure as required by pertinent civil service laws and regulations. In a formal request made by
Feliciano M. Gacis, Jr., Officer-in-Charge of the Office of the Assistant Secretary for Personnel of the
Department of National Defense, inquiring from the CSC whether petitioners are indeed government
employees covered by the Civil Service Law and CSC regulations, the said Commission issued a
Resolution containing the following findings:
It is explicit that the aforequoted LOI merely set aside a fund in the amount of five (5)
[m]illion [p]esos for the operation of a commissary in all military establishments in the
country for the benefit of veterans, their widows and orphans, and the members of the
Armed Forces of the Philippines. And the fund and commissary shall be managed by an
entity called AFPCES. It can, thus, be said that the AFPCES is a mere entity in the Armed
Forces of the Philippines that is tasked to manage a commissary in different military
establishments for the benefit of those mentioned in the said LOI. Hence, it does not
necessarily follow that all its civilian employees are considered government employees
covered by and subject to the Civil Service Law and rules.
Section 2 (1), Article IX B of the 1987 Constitution defines the scope of the civil service,
as follows:
Sec. 2. (1) The civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original charters.
From the aforequoted constitutional provision, it is clear that only government-owned
or controlled corporations with original charters are embraced by the civil service.
Hence, the question now that needs to be answered is: Can LOI 31-A be considered as
the charter of the AFPCES such that it can be considered a government-owned or
controlled corporation embraced by the Civil Service Law and rules?
After a careful evaluation and scrutiny of LOI 31-A, the Commission is of the opinion and
so holds that the said LOI could hardly be considered as the charter of AFPCES. It should
be noted that the said LOI does not specify the composition of AFPCES, its specific
functions, its governing board, its powers and the limitation of the exercise thereof. In
short, the said LOI does not provide the AFPCES corporate features. This being the case,
the AFPCES cannot be considered a government-owned or controlled corporation with
original charter. In fact, the AFPCES does not exercise corporate powers. Accordingly, its
civilian employees cannot be considered as government employees covered by the Civil
Service Law and rules.
xxxx
Further, there is neither a showing that the positions of civilian employees of the
AFPCES are included in the plantilla of personnel duly approved by the Department of
Budget and Management (DBM) nor said employees were issued appointments attested
by the Commission.

WHEREFORE, the Commission hereby rules that all civilian employees of the Armed
Forces of the Philippines Commissary and Exchange Service are not government
employees covered and embraced by the Civil Service Law and rules. [30]
Indeed, petitioners employment to the AFPCES should have been made in conformity with pertinent
civil service regulations since AFPCES is a government agency under the direct control and supervision of
the AFP. However, since this did not happen, petitioners were placed under an anomalous situation with
AFPCES insisting that they are government employees under the jurisdiction of the CSC, but with the CSC
itself disavowing any jurisdiction over them.
This notwithstanding, since it cannot be denied that petitioners are government employees, the proper
body that has jurisdiction to hear the case is the CSC. Such fact cannot be negated by the failure of
respondents to follow appropriate civil service rules in the hiring, appointment, discipline and dismissal
of petitioners. Neither can it be denied by the fact that respondents chose to enroll petitioners in the
SSS instead of the GSIS. Such considerations cannot be used against the CSC to deprive it of its
jurisdiction. It is not the absence or presence of the required appointment from the CSC, or the
membership of an employee in the SSS or in the GSIS that determine the status of the position of an
employee. We agree with the opinion of the AFP Judge Advocate General that it is the regulation or the
law creating the Service that determines the position of the employee.[31]
Petitioners are government personnel since they are employed by an agency attached to the AFP.
Consequently, as correctly observed by the Court of Appeals, the Labor Arbiters decision on their
complaint for illegal dismissal cannot be made to stand since the same was issued without jurisdiction.
Any decision issued without jurisdiction is a total nullity, and may be struck down at any time.[32]
However, given petitioners peculiar situation, the Court is constrained not to deny the petition entirely,
but instead to refer it to the CSC pro hac vice. The Court notes that this case has been pending for nearly
a decade, but deciding it on the merits at this juncture, while ideal and more expeditious, is not possible.
The records of the case fail to adequately spell out the validity of the complaint for illegal dismissal as
well as the actual amount of the claim. In fact, the records even fail to disclose the amount of salary
received by petitioners while they were engaged to work in AFPCES facilities. But rather than directing
petitioners to re-file and relitigate their claim before the CSC a step which will only duplicate much of
the proceedings already accomplished the Court deems it best, pro hac vice, to order the NLRC to
forward the entire records of the case directly to the CSC which is directed to take cognizance of the
case. The CSC is directed to promptly resolve whether petitioners were illegally dismissed from the
service, and whether they are entitled to their monetary claims. Further, taking into consideration

AFPCES failure to observe the proper procedure required by pertinent civil service rules and regulations
regarding the hiring, appointment and placement of petitioners, we likewise caution the CSC not to use
the AFPCES inefficiency to prejudice the status of petitioners employment or to deny whatever right
they may have under pertinent civil service laws. To hold otherwise would only be giving premium to
AFPCES delinquent attitude towards petitioners in particular, and to the civil service in general. The
AFPCES cannot be made to have its cake and eat it, too.
WHEREFORE, the petition is PARTLY GRANTED. The Court of Appeals Decision dated August 31, 2006 in
CA-G.R. SP No. 84801 and its Resolution dated September 18, 2007 are hereby SET ASIDE.
The National Labor Relations Commission (NLRC) is DIRECTED to forward the records of the case (NLRCNCR Case No. 03-01533-2001-NLRC NCR Case No. 032920-02) to the Civil Service Commission (CSC),
which is ordered to promptly proceed with the resolution of the case on the merits with deliberate
dispatch.
SO ORDERED.

Republic of the Philippines

Supreme Court
Manila
SECOND DIVISION
ANTONIO P. SALENGA and

G.R. Nos. 174941

NATIONAL LABOR RELATIONS COMMISSION,

Petitioners,

Present:

CARPIO, Chairperson,
- versus -

BRION,
PORTUGAL PEREZ,
SERENO, and

COURT OF APPEALS and

REYES, JJ.

CLARK DEVELOPMENT
CORPORATION,

Promulgated:

Respondents.
February 1, 2012

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DECISION
SERENO, J.:
The present Petition for Certiorari under Rule 65 assails the Decision[1] of the Court of Appeals
(CA) promulgated on 13 September 2005, dismissing the Complaint for illegal dismissal filed by
petitioner Antonio F. Salenga against respondent Clark Development Corporation (CDC). The dispositive
portion of the assailed Decision states:
WHEREFORE, premises considered, the original and supplemental petitions
are GRANTED. The assailed resolutions of the National Labor Relations Commission
dated September 10, 2003 and January 21, 2004 are ANNULLEDand SET ASIDE. The
complaint filed by Antonio B. Salenga against Clark Development is DISMISSED.
Consequently, Antonio B. Salenga is ordered to restitute to Clark Development

Corporation the amount of P3,222,400.00, which was received by him as a consequence

of the immediate execution of said resolutions, plus interest thereon at the rate of 6%
per annum from date of

such receipt until finality of this judgment, after which the interest shall be at the rate of
12% per annum until said amount is fully restituted.
SO ORDERED.[2]
The undisputed facts are as follows:
On 22 September 1998, President/Chief Executive Officer (CEO) Rufo Colayco issued an Order
informing petitioner that, pursuant to the decision of the board of directors of respondent CDC, the
position of head executive assistant the position held by petitioner was declared redundant. Petitioner
received a copy of the Order on the same day and immediately went to see Colayco. The latter informed
him that the Order had been issued as part of the reorganization scheme approved by the board of
directors. Thus, petitioners employment was to be terminated thirty (30) days from notice of the Order.
On 17 September 1999, petitioner filed a Complaint for illegal dismissal with a claim for
reinstatement and payment of back wages, benefits, and moral and exemplary damages against
respondent CDC and Colayco. The Complaint was filed with the National Labor Relations CommissionRegional Arbitration Branch (NLRC-RAB) III in San Fernando, Pampanga. In defense, respondents,
represented by the Office of the Government Corporate Counsel (OGCC), alleged that the NLRC had no
jurisdiction to entertain the case on the ground that petitioner was a corporate officer and, thus, his
dismissal was an intra-corporate matter falling properly within the jurisdiction of the Securities and
Exchange Commission (SEC).
On 29 February 2000, labor arbiter (LA) Florentino R. Darlucio issued a Decision[3] in favor of
petitioner Salenga. First, the LA held that the NLRC had jurisdiction over the Complaint, considering that
petitioner was not a corporate officer but a managerial employee. He held the position of head
executive assistant, categorized as a Job Level 12 position, not subject to election or appointment by the
board of directors.
Second, the LA pointed out that respondent CDC and Colayco failed to establish a valid cause for
the termination of petitioners employment. The evidence presented by respondent CDC failed to show
that the position of petitioner was superfluous as to be classified redundant. The LA further pointed out
that respondent corporation had not disputed the argument of petitioner Salenga that his position was
that of a regular employee. Moreover, the LA found that petitioner had not been accorded the right to

due process. Instead, the latter was dismissed without the benefit of an explanation of the grounds for
his termination, or an opportunity to be heard and to defend himself.
Finally, considering petitioners reputation and contribution as a government employee for 40
years, the LA awarded moral damages amounting to P2,000,000 and exemplary damages of P500,000.
The dispositive portion of the LAs Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring
respondent Clark Development Corporation and Rufo Colayco guilty of illegal dismissal
and for which they are ordered, as follows:
1.

To reinstate complainant to his former or equivalent position without loss

of seniority rights and privileges;

2.

To pay complainant his backwages reckoned from the date of his dismissal
on September 22, 1998 until actual reinstatement or merely reinstatement
in the payroll which as of this date is in the amount of P722,400.00;

3.

To pay complainant moral damages in the amount of P2,000,000.00; and,

4.

To pay complainant exemplary damages in the amount of P500,000.00.

SO ORDERED.[4]

At the time the above Decision was rendered, respondent CDC was already under the leadership
of Sergio T. Naguiat. When he received the Decision on 10 March 2000, he subsequently instructed Atty.
Monina C. Pineda, manager of the Corporate and Legal Services Department and concurrent corporate
board secretary, not to appeal the Decision and to so inform the OGCC. [5]
Despite these instructions, two separate appeals were filed before LA Darlucio on 20 March
2000. One appeal[6] was from the OGCC on behalf of respondent CDC and Rufo Colayco. The OGCC
reiterated its allegation that petitioner was a corporate officer, and that the termination of his
employment was an intra-corporate matter. The Memorandum of Appeal was verified and certified by
Hilana Timbol-Roman, the executive vice president of respondent CDC. The Memorandum was
accompanied by a UCPB General Insurance Co., Inc. supersedeas bond covering the amount due to
petitioner as adjudged by LA Darlucio. Timbol-Roman and OGCC lawyer Roy Christian Mallari also
executed on 17 March 2000 a Joint Affidavit of Declaration wherein they swore that they were the
respective authorized representative and counsel of respondent corporation. However, the
Memorandum of Appeal and the Joint Affidavit of Declaration were not accompanied by a board
resolution from respondents board of directors authorizing either Timbol-Roman or Atty. Mallari, or
both, to pursue the case or to file the appeal on behalf of respondent.

It is noteworthy that Naguiat, who was president/CEO of respondent CDC from 3 February 2000
to 5 July 2000, executed an Affidavit on 20 March 2002,[7] wherein he stated that without his knowledge,
consent or approval, Timbol-Roman and Atty. Mallari filed the above-mentioned appeal. He further
alleged that their statements were false.
The second appeal, meanwhile, was filed by former CDC President/CEO Rufo Colayco. Colayco
alleged that petitioner was dismissed not on 22 September 1998, but twice on 9 March 1999 and 23
March 1999. The dismissal was allegedly approved by respondents CDC board of directors pursuant to a
new organizational structure. Colayco likewise stated that he had posted a supersedeas bond the same
bond taken out by Timbol-Roman issued by the UCPB General Insurance Co. dated 17 March 2000 in
order to secure the monetary award, exclusive of moral and exemplary damages.
Petitioner thereafter opposed the two appeals on the grounds that both appellants, respondent
CDC as allegedly represented by Timbol-Roman and Atty. Mallari and Rufo Colayco had failed to observe
Rule VI, Sections 4 to 6 of the NLRC Rules of Procedure; and that appellants had not been authorized by
respondents board of directors to represent the corporation and, thus, they were not the employer
whom the Rules referred to. Petitioner also alleged that appellants failed to refute the findings of LA
Darlucio in the previous Decision.
In the meantime, while the appeal was pending, on 19 October 2000, respondents board
chairperson and concurrent President/CEO Rogelio L. Singson ordered the reinstatement of petitioner to
the latters former position as head executive assistant, effective 24 October 2000. [8]
On 28 May 2001, respondent CDCs new President/CEO Emmanuel Y. Angeles issued a
Memorandum, which offered all managers of respondent corporation an early separation/redundancy
program. Those who wished to avail themselves of the program were to be given the equivalent of their
1.25-month basic salary for every year of service and leave credits computed on the basis of the same
1.25-month equivalent of their basic salary.[9]
In August 2001, respondent CDC offered another retirement plan granting higher benefits to the
managerial employees. Thus, on 12 September 2001, petitioner filed an application for the early
retirement program, which Angeles approved on 3 December 2001.
Meanwhile, in the proceedings of the NLRC, petitioner received on 12 September 2001 its 30
July 2001 Decision[10] on the appeal filed by Timbol-Roman and Colayco. It is worthy to note that the said
Decision referred to the reports of reviewer arbiters Cristeta D. Tamayo and Thelma M. Concepcion,
who in turn found that petitioner Salenga was a corporate officer of CDC. Nevertheless, the First Division
of the NLRC upheld LA Darlucios ruling that petitioner Salenga was indeed a regular employee. It also
found that redundancy, as an authorized cause for dismissal, has not been sufficiently proven, rendering
the dismissal illegal. However, the NLRC held that the award of exemplary and moral damages were

unsubstantiated. Moreover, it also dropped Colayco as a respondent to the case, since LA Darlucio had
failed to provide any ground on which to anchor the formers solidary liability.
Petitioner Salenga thereafter moved for a partial reconsideration of the above-mentioned
Decision. He sought the reinstatement of the award of exemplary and moral damages. He likewise
insisted that the NLRC should not have entertained the appeal on the following grounds: (1) respondent
CDC did not file an appeal and did not post the required cash or surety bond; (2) both Timbol-Roman
and Colayco were admittedly not real parties-in-interest; (3) they were not the employer or the
employers authorized representative and, thus, had no right to appeal; and (4) both appeals had not
been perfected for failure to post the required cash or surety bond. In other words, petitioners theory
revolved on the fact that neither Timbol-Roman nor Colayco was authorized to represent the
corporation, so the corporation itself did not appeal LA Darlucios Decision. As a result, that Decision
should be considered as final and executory.
For its part, the OGCC also filed a Motion for Reconsideration[11] of the NLRCs 30 July 2001
Decision insofar as the finding of illegal dismissal was concerned. It no longer questioned the
commissions finding that petitioner was a regular employee, but instead insisted that he had been
dismissed as a consequence of his redundant position. The motion, however, was not verified by the
duly authorized representative of respondent CDC.
On 5 December 2002, the NLRC denied petitioner Salengas Motion for Partial Reconsideration
and dismissed the Complaint. The dispositive portion of the Resolution[12] reads as follows:
WHEREFORE, complainants partial motion for reconsideration is denied. As
recommended by Reviewer Arbiters Cristeta D. Tamayo in her August 2, 2000 report
and Thelma M. Concepcion in her November 25, 2002 report, the decision of Labor
Arbiter Florentino R. Darlucio dated 29 February 2000 is set aside.
The complaint below is dismissed for being without merit.
SO ORDERED.[13]
Meanwhile, pending the Motions for Reconsideration of the NLRCs 30 July 2001 Decision,
another issue arose with regard to the computation of the retirement benefits of petitioner.
Respondent CDC did not immediately give his requested retirement benefits, pending clarification of the
computation of these benefits. He claimed that the computation of his retirement benefits should also
include the forty (40) years he had been in government service in accordance with Republic Act No.
(R.A.) 8291, or the GSIS Act, and should not be limited to the length of his employment with respondent
corporation only, as the latter insisted.
In a letter dated 14 March 2003, petitioner Salengas counsel wrote to the board of directors of
respondent to follow up the payment of the retirement benefits allegedly due to petitioner.[14]

Pursuant to the NLRCs dismissal of the Complaint of petitioner Salenga, Angeles subsequently
denied the formers request for his retirement benefits, to wit:[15]
Please be informed that we cannot favorably grant your clients claim for
retirement benefits considering that Clark Development Corporation's dismissal of Mr.
Antonio B. Salenga had been upheld by the National Labor Relations Commission
through a Resolution dated December 5, 2002...
xxx xxx xxx
As it is, the said Resolution dismissed the Complaint filed by Mr. Salenga for
being without merit. Consequently, he is not entitled to receive any retirement pay from
the corporation.

Meanwhile, petitioner Salenga filed a second Motion for Reconsideration of the 5 December
2002 Resolution of the NLRC, reiterating his claim that it should not have entertained the imperfect
appeal, absent a proper verification and certification against forum-shopping from the duly authorized
representative of respondent CDC. Without that authority, neither could the OGCC act on behalf of the
corporation.
The OGCC, meanwhile, resurrected its old defense that the NLRC had no jurisdiction over the
case, because petitioner Salenga was a corporate officer.
The parties underwent several hearings before the NLRC First Division. During these times,
petitioner Salenga demanded from the OGCC to present a board resolution authorizing it or any other
person to represent the corporation in the proceedings. This, the OGCC failed to do.
After giving due course to the Motion for Reconsideration filed by petitioner Salenga, the NLRC
issued a Resolution[16] on 10 September 2003, partially granting the motion. This time, the First Division
of the NLRC held that, absent a board resolution authorizing Timbol-Roman to file the appeal on behalf
of respondent CDC, the appeal was not perfected and was thus a mere scrap of paper. In other words,
the NLRC had no jurisdiction over the appeal filed before it.
The NLRC further held that respondent CDC had failed to show that petitioner Salengas
dismissal was pursuant to a valid corporate reorganization or board resolution. It also deemed
respondent estopped from claiming that there was indeed a redundancy, considering that petitioner
Salenga had been reinstated to his position as head executive assistant. While it granted the award of
moral damages, it nevertheless denied exemplary damages. Thus, the dispositive portion of its Decision
reads:
WHEREFORE, premises considered, the complainants Motion for
Reconsideration is GRANTED and We set aside our Resolution of December 5, 2002. The

Decision of the Labor Arbiter dated February 29, 2000 is REINSTATED with the
MODIFICATION that:
1.) Being a nominal party, respondent Rufo Colayco is declared to be not
jointly and severally liable with respondent Clark Development Corporation;
2.) Respondent Clark Development Corporation is ordered to pay the
complainant his full backwages and other monetary claims to which he is
entitled under the decision of the Labor Arbiter;
3.) Respondent CDC is likewise ordered to pay the complainant moral and
exemplary damages as provided under the Labor Arbiters Decision; and
4.) All other money claims are DENIED for lack of merit.
In the meantime, respondent CDC is ordered to pay the complainant his
retirement benefits without further delay.
SO ORDERED.[17]

On 3 October 2003, the OGCC filed a Motion for Reconsideration[18] despite the absence of a
verification and the certification against forum shopping.
On 21 January 2004, the motion was denied by the NLRC for lack of merit. [19]
On 5 February 2004, the executive clerk of the NLRC First Division entered the judgment on the
foregoing case. Thereafter, on 9 February 2004, the NLRC forwarded the entire records of the case to
the NLRC-RAB III Office in San Fernando, Pampanga for appropriate action.
On 4 March 2004, petitioner Salenga filed a Motion for Issuance of Writ of Execution before the
NLRC-RAB III, Office of LA Henry D. Isorena. The OGCC opposed the motion on the ground that it had
filed with the CA a Petition for Certiorari seeking the reversal of the NLRC Decision dated 30 July 2001
and the Resolutions dated 10 September 2003 and 21 January 2004, respectively. It is noteworthy that,
again, there was no board resolution attached to the Petition authorizing its filing.
Despite the pending Petition with the CA, LA Isorena issued a Writ of Execution enforcing the 10
September 2003 Resolution of the NLRC. On 1 April 2004, the LA issued an Order [20] to the manager of
the Philippine National Bank, Clark Branch, Angeles City, Pampanga, to immediately release in the name
of NLRC-RAB III the amount of P3,222,400 representing partial satisfaction of the judgment award,
including the execution fee of P31,720.
Respondent CDC filed with the CA in February 2004 a Petition for Certiorari with a prayer for the
issuance of a temporary restraining order and/or a writ of preliminary injunction. However, the Petition

still lacked a board resolution from the board of directors of respondent corporation authorizing its then
President Angeles to verify and certify the Petition on behalf of the board. It was only on 16 March 2004
that counsel for respondent filed a Manifestation/Motion[21] with an attached Secretarys Certificate
containing the boards Resolution No. 86, Series of 2001. The Resolution authorized Angeles to represent
respondent corporation in prosecuting, maintaining, or compromising any lawsuit in connection with its
business.
Meanwhile, in the proceedings before LA Isorena, both respondent CDCs legal department and
the OGCC on 6 April 2004 filed their respective Motions to Quash Writ of Execution.[22] They both cited
the failure to afford to respondent due process in the issuance of the writ. They claimed that the preconference hearing on the execution of the judgment had not pushed through. They also reiterated that
the Petition for Certiorari dated 11 February 2004 was still pending with the CA.
Both motions were denied by LA Isorena for lack of factual and legal bases.
On 6 May 2004, respondent filed with LA Isorena another Motion to Quash Writ of Execution,
again reiterating the pending Petition with the CA.
This active exchange of pleadings and motions and the delay in the payment of his money claims
eventually led petitioner Salenga to file an Omnibus Motion[23] before LA Isorena. In his motion, he
recomputed the amount due him representing back wages, other benefits or allowances, legal interests
and attorneys fees. He also prayed for the computation of his retirement benefits plus interests in
accordance with R.A. 8291[24] and R.A. 1616.[25] He insisted that since respondent CDC was a
government-owned and -controlled corporation (GOCC), his previous government service totalling 40
years must also be credited in the computation of his retirement pay. Thus, he demanded the payment
of the total amount of P23,920,772.30, broken down as follows:
A. From the illegal dismissal suit: (In Philippine peso)
a. Recomputed award 3,758,786
b. Legal interest 5,089,342.58
c. Attorneys fees 1,196,052.80
d. Litigation expenses 250,000
B. Retirement pay
a. Retirement gratuity 6,987,944
b. Unused vacation and sick leave 1,440,328
c. Legal interest 4,050,544.96
d. Attorneys fees 1,147,781.90
On 11 May 2004, the CA issued a Resolution[26] ordering petitioner Salenga to comment on the
Petition and holding in abeyance the issuance of a temporary restraining order.
The parties thereafter filed their respective pleadings.

On 19 July 2004, the CA temporarily restrained the NLRC from enforcing the Decision dated 29
February 2000 for a period of 60 days.[27] After the lapse of the 60 days, LA Isorena issued a Notice of
Hearing/Conference scheduled for 1 October 2004 on petitioners Omnibus Motion dated 7 May 2004.
Meanwhile, on 24 September 2004, the CA issued another Resolution,[28] this time denying the
application for the issuance of a writ of preliminary injunction, after finding that the requisites for the
issuance of the writ had not been met.
Respondent CDC subsequently filed a Supplemental Petition[29] with the CA, challenging the
computation petitioner Salenga made in his Omnibus Motion filed with the NLRC. Respondent alleged
that the examiner had erred in including the other years of government service in the computation of
retirement benefits. It claimed that, since respondent corporation was created under the Corporation
Code, petitioner Salenga was not covered by civil service laws. Hence, his retirement benefits should
only be limited to the number of years he had been employed by respondent.
Subsequently, respondent CDC filed an Omnibus Motion[30] to admit the Supplemental Petition
and to reconsider the CAs Resolution denying the issuance of a writ of preliminary injunction. In the
motion, respondent alleged that petitioner Salenga had been more than sufficiently paid the amounts
allegedly due him, including the award made by LA Darlucio. On 12 March 2002, respondent CDC had
issued a check amounting to P852,916.29, representing petitioners retirement pay and terminal pay.
Meanwhile, on 2 April 2004, P3,254,120 representing the initial award was debited from the account of
respondent CDC.
On 7 February 2005, respondent CDC filed a Motion[31] once again asking the CA to issue a writ
of preliminary injunction in the light of a scheduled 14 February 2005 conference called by LA Mariano
Bactin, who had taken over the case from LA Isorena.
At the 14 February 2005 hearing, the parties failed to reach an amicable settlement and were
thus required to submit their relevant pleadings and documents in support of their respective cases.
On 16 February 2005, the CA issued a Resolution[32] admitting the Supplemental Petition filed by
respondent, but denying the prayer for the issuance of an injunctive writ.
Thereafter, on 8 March 2005, LA Bactin issued an Order[33] resolving the Omnibus Motion filed
by petitioner Salenga for the recomputation of the monetary claims due him. In the Order, LA Bactin
denied petitioners Motion for the recomputation of the award of back wages, benefits, allowances and
privileges based on the 29 February 2000 Decision of LA Darlucio. LA Bactin held that since the Decision
had become final and executory, he no longer had jurisdiction to amend or to alter the judgment.
Anent the second issue of the computation of retirement benefits, LA Bactin also denied the
claim of petitioner Salenga, considering that the latters retirement benefits had already been paid. The
LA, however, did not rule on whether petitioner was entitled to retirement benefits, either under the

Government Service Insurance System (GSIS) or under the Social Security System (SSS), and held that
this issue was beyond the expertise and jurisdiction of a LA.
Petitioner Salenga thereafter appealed to the NLRC, which granted the appeal in a
Resolution[34] dated 22 July 2005. First, it was asked to resolve the issue of the propriety of having the
Laguesma Law Office represent respondent CDC in the proceedings before the LA. The said law firm
entered its appearance as counsel for respondent during the pre-execution conference/hearing on 1
October 2004. On this issue, the NLRC held that respondent corporations legal department, which had
previously been representing the corporation, was not validly substituted by the Laguesma Law Office.
In addition, the NLRC held that respondent had failed to comply with Memorandum Circular No. 9,
Series of 1998, which strictly prohibits the hiring of lawyers of private law firms by GOCCs without the
prior written conformity and acquiescence of the Office of Solicitor General, as the case may be, and the
prior written concurrence of the Commission on Audit (COA). Thus, the NLRC held that all actions and
submissions undertaken by the Laguesma Law Office on behalf of respondent were null and void.
The second issue raised before the NLRC was whether LA Bactin acted without jurisdiction in
annulling and setting aside the formers final and executory judgment contained in its 10 September
2003 Resolution, wherein it held that the appeal had not been perfected, absent the necessary board
resolution allowing or authorizing Timbol-Roman and Atty. Mallari to file the appeal. On this issue, the
NLRC stated:
The final and executory judgment in this case is clearly indicated in the
dispositive portion of Our Resolution promulgated on September 10, 2003 GRANTING
complainants motion for reconsideration, SETTING ASIDE Our Resolution of December
5, 2002, and REINSTATING the Decision of the Labor Arbiter dated February 29, 2000
with the following modification[s]: (1) declaring respondent Rufo Colayco not jointly and
severally liable with respondent Clark Development Corporation; (2) ordering
respondent CDC to pay the complainant his full backwages and other monetary claims
to which he is entitled under the decision of the Labor Arbiter; (3) ordering respondent
CDC to pay complainant moral and exemplary damages as provided under the Labor
Arbiters Decision; and (4) ordering respondent CDC to pay the complainant his
retirement benefits without further delay. This was entered in the Book of Entry of
Judgment as final and executory effective as of February 2, 2004.
Implementing this final and executory judgment, Arbiter Isorena issued an
Order dated May 24, 2004, DENYING respondents Motion to Quash the Writ of
Execution dated March 22, 2004, correctly stating thusly:
Let it be stressed that once a decision has become final and
executory, it becomes the ministerial duty of this Office to issue the
corresponding writ of execution. The rationale behind it is based on the
fact that the winning party has suffered enough and it is the time for

him to enjoy the fruits of his labor with dispatch. The very purpose of
the pre-execution conference is to explore the possibility for the parties
to arrive at an amicable settlement to satisfy the judgment award
speedily, not to delay or prolong its implementation.
Thus, when Arbiter Bactin, who took over from Arbiter Isorena upon the latters
filing for leave of absence due to poor health in January 2005, issued the appealed
Order nullifying, instead of implementing, the final and executory judgment of this
Commission, the labor arbiter a quo acted WITHOUT JURISDICTION. [35]
xxx xxx xxx
WHEREFORE, premises considered, the appeal of herein complainant is hereby
GRANTED, and We declare NULL AND VOID the appealed Order of March 8, 2005 and
SET ASIDE said Order; We direct the immediate issuance of the corresponding Alias Writ
of Execution to enforce the final and executory judgment of this Commission as
contained in Our September 10, 2003 Resolution.
SO ORDERED.[36]
Unwilling to accept the above Resolution of the NLRC, the Laguesma Law Office filed a Motion
for Reconsideration dated 29 August 2005 with the NLRC. Again, the motion lacked proper verification
and certification against non-forum shopping.
In the meantime, the OGCC also filed with the CA a Motion for the Issuance of a Writ of
Preliminary Injunction dated 30 August 2005[37] against the NLRCs 22 July 2005 Resolution. The OGCC
alleged that the issues in the Resolution addressed monetary claims that were raised by petitioner
Salenga only in his Omnibus Motion dated 7 May 2004 or after the issuance of the 10 September 2003
Decision of LA Darlucio. Thus, the OGCC insisted that the NLRC had no jurisdiction over the issue, for the
matter was still pending with the CA.
The OGCC likewise filed another Motion for Reconsideration[38] dated 31 August 2005 with the
NLRC. The OGCC maintained that it was only acting in a collaborative manner with the legal department
of respondent CDC, for which the former remained the lead counsel. The OGCC reiterated that, as the
statutory counsel of GOCCs, it did not need authorization from them to maintain a case, and thus, LA
Bactin had jurisdiction over that case. Finally, it insisted that petitioner Salenga was not covered by civil
service laws on retirement, the CDC having been created under the Corporation Code.
On 13 September 2005, the CA promulgated the assailed Decision. Relying heavily on the
reports of Reviewer Arbiters Cristeta D. Tamayo and Thelma M. Concepcion, it held that petitioner
Salenga was a corporate officer. Thus, the issue before the NLRC was an intra-corporate dispute, which
should have been lodged with the Securities and Exchange Commission (SEC), which had jurisdiction

over the case at the time the issue arose. The CA likewise held that the NLRC committed grave abuse of
discretion when it allowed and granted petitioner Salengas second Motion for Reconsideration, which
was a prohibited pleading.
Petitioner subsequently filed a Motion for Reconsideration on 7 October 2005, alleging that the
CA committed grave abuse of discretion in reconsidering the findings of fact, which had already been
found to be conclusive against respondent; and in taking cognizance of the latters Petition which had
not been properly verified.
The CA, finding no merit in petitioners allegations, denied the motion in its 17 August 2006
Resolution.
On 4 September 2006, petitioner Salenga filed a Motion for Extension of Time to File a Petition
for Review on Certiorari under Rule 45, praying for an extension of fifteen (15) days within which to file
the Petition. The motion was granted through this Courts Resolution dated 13 September 2006. The
case was docketed as G.R. No. 174159.
On 25 September 2006, however, petitioner filed a Manifestation[39] withdrawing the motion.
He manifested before us that he would instead file a Petition for Certiorari under Rule 65, which was
eventually docketed as G.R. No. 174941. On 7 July 2008, this Court, through a Resolution, considered
the Petition for Review in G.R. No. 174159 closed and terminated.
Petitioner raises the following issues for our resolution:
I.
The Court of Appeals acted without jurisdiction in reviving and re-litigating the factual
issues and matters of petitioners illegal dismissal and retirement benefits.
II.
The Court of Appeals had no jurisdiction to entertain the original Petition as a remedy
for an appeal that had actually not been filed, absent a board resolution allowing the
appeal.
III.
The Court of Appeals acted with grave abuse of discretion when it did the following:
a.

It failed to dismiss the original and supplemental Petitions despite the

lack of a board resolution authorizing the filing thereof.

b.

It failed to dismiss the Petitions despite the absence of a proper

verification and certification against non-forum shopping.

c.

It failed to dismiss the Petitions despite respondents failure to inform

it of the pending proceedings before the NLRC involving the same
issues.

d.

It failed to dismiss the Petitions on the ground of forum shopping.

e.

It did not dismiss the Petition when respondent failed to attach to it

certified true copies of the assailed NLRC 30 July 2001 Decision; 10
September 2003 Resolution; 21 January 2004 Resolution; copies of
material portions of the record as are referred to therein; and copies
of pleadings and documents relevant and pertinent thereto.

f.

It did not act on respondents failure to serve on the Office of the

Solicitor General a copy of the pleadings, motions and manifestations
the latter had filed before the Court of Appeals, as well as copies of
pertinent court resolutions and decisions, despite the NLRC being a
party to the present case.

g.

It disregarded the findings of fact and conclusions of law arrived at by

LA Darlucio, subjecting them to a second analysis and evaluation and
supplanting them with its own findings.

h.

It granted the Petition despite respondents failure to show that the

NLRC committed grave abuse of discretion in rendering the latters 30
July 2001 Decision, 10 September 2003 Resolution and 21 January
2004 Resolution.

i.

It dismissed the complaint for illegal dismissal and ordered the

restitution of the P3,222,400 already awarded to petitioner, plus
interest thereon.

In its defense, private respondent insists that the present Petition for Certiorari under Rule 65 is
an improper remedy to question the Decision of the CA, and thus, the case should be dismissed outright.
Nevertheless, it reiterates that private petitioner was a corporate officer whose employment was
dependent on board action. As such, private petitioners employment was an intra-corporate
controversy cognizable by the SEC, not the NLRC. Private respondent also asserts that it has persistently
sought the reversal of LA Darlucios Decision by referring to the letters sent to the OGCC, as well as
Verification and Certificate against forum-shopping. However, these documents were signed only during
Angeles time as private respondents president/CEO, and not of the former presidents. Moreover,
private respondent contends that private petitioner is not covered by civil service laws, thus, his years in
government service are not creditable for the purpose of determining the total amount of retirement
benefits due him. In relation to this, private respondent enumerates the amounts already paid to private
petitioner.

The Courts Ruling

The Petition has merit.
This Court deigns it proper to collapse the issues in this Petition to simplify the matters raised in
what appears to be a convoluted case. First, we need to determine whether the NLRC and the CA
committed grave abuse of discretion amounting to lack or excess of jurisdiction, when they entertained
respondents so-called appeal of the 29 February 2000 Decision rendered by LA Darlucio.
Second, because of the turn of events, a second issue the computation of retirement benefits
cropped up while the first case for illegal dismissal was still pending. Although the second issue may be
considered as separate and distinct from the illegal dismissal case, the issue of the proper computation
of the retirement benefits was nevertheless considered by the relevant administrative bodies, adding
more confusion to what should have been a simple case to begin with.
The NLRC had no jurisdiction
to entertain the appeal filed by
Timbol-Roman and former
CDC CEO Colayco.

To recall, on 29 February 2000, LA Darlucio rendered a Decision in favor of petitioner, stating as follows:
xxxComplainant cannot be considered as a corporate officer because at the time
of his termination, he was holding the position of Head Executive Assistant which is
categorized as a Job Level 12 position that is not subject to the election or appointment
by the Board of Directors. The approval of Board Resolution Nos. 200 and 214 by the
Board of Directors in its meeting held on February 11, 1998 and March 25, 1998 clearly
refers to the New CDC Salary Structure where the pay adjustment was based and not to
complainants relief as Vice-President, Joint Ventures and Special Projects. While it is
true that his previous positions are classified as Job Level 13 which are subject to board
confirmation, the status of his appointment was permanent in nature. In fact, he had
undergone a six-month probationary period before having acquired the permanency of
his appointment. However, due to the refusal of the board under then Chairman
Victorino Basco to confirm his appointment, he was demoted to the position of Head
Executive Assistant. Thus, complainant correctly postulated that he was not elected to
his position and his tenure is not dependent upon the whim of the boardxxx
xxx xxx xxx

Anent the second issue, this Office finds and so holds that respondents have
miserably failed to show or establish the valid cause in terminating the services of
complainant.
Xxx xxx xxx
In the case at bar, respondents failed to adduce any evidence showing that the
position of Head Executive Assistant is superfluous. In fact, they never disputed the
argument advanced by complainant that the position of Head Executive Assistant was
classified as a regular position in the Position Classification Study which is an essential
component of the Organizational Study that had been approved by the CDC board of
directors in 1995 and still remains intact as of the end of 1998. Likewise, studies made
since 1994 by various management consultancy groups have determined the need for
the said position in the Office of the President/CEO in relation to the vision, mission,
plans, programs and overall corporate goals and objectives of respondent CDC. There is
no evidence on record to show that the position of Head Executive Assistant was
abolished by the Board of Directors in its meeting held in the morning of September 22,
1998. The minutes of the meeting of the board on said date, as well as its other three
meetings held in the month of September 1998 (Annexes B, C, D and E, Complainants
Reply), clearly reveal that no abolition or reorganization plan was discussed by the
board. Hence, the ground of redundancy is merely a device made by respondent
Colayco in order to ease out the complainant from the respondent corporation.
Moreover, the other ground for complainants dismissal is unclear and unknown
to him as respondent did not specify nor inform the complainant of the alleged recent
developmentsxxx
This Office is also of the view that complainant was not accorded his right to due
process prior to his termination. The law requires that the employer must furnish the
worker sought to be dismissed with two (2) written notices before termination may be
validly effected: first, a notice apprising the employee of the particular acts or omissions
for which his dismissal is sought and, second, a subsequent notice informing the
employee of the decision to dismiss him. In the case at bar, complainant was not
apprised of the grounds of his termination. He was not given the opportunity to be
heard and defend himselfxxx[40]
The OGCC, representing respondent CDC and former CEO Colayco separately appealed from the
above Decision. Both alleged that they had filed the proper bond to cover the award granted by LA
Darlucio.
It is clear from the NLRC Rules of Procedure that appeals must be verified and certified against
forum-shopping by the parties-in-interest themselves. In the case at bar, the parties-in-interest are
petitioner Salenga, as the employee, and respondent Clark Development Corporation as the employer.

A corporation can only exercise its powers and transact its business through its board of
directors and through its officers and agents when authorized by a board resolution or its bylaws. The
power of a corporation to sue and be sued is exercised by the board of directors. The physical acts of the
corporation, like the signing of documents, can be performed only by natural persons duly authorized
for the purpose by corporate bylaws or by a specific act of the board. The purpose of verification is to
secure an assurance that the allegations in the pleading are true and correct and have been filed in good
faith.[41]
Thus, we agree with petitioner that, absent the requisite board resolution, neither TimbolRoman nor Atty. Mallari, who signed the Memorandum of Appeal and Joint Affidavit of Declaration
allegedly on behalf of respondent corporation, may be considered as the appellant and employer
referred to by Rule VI, Sections 4 to 6 of the NLRC Rules of Procedure, which state:
SECTION 4. REQUISITES FOR PERFECTION OF APPEAL. - (a) The Appeal shall be
filed within the reglementary period as provided in Section 1 of this Rule; shall be
verified by appellant himself in accordance with Section 4, Rule 7 of the Rules of
Court, with proof of payment of the required appeal fee and the posting of a cash or
surety bond as provided in Section 6 of this Rule; shall be accompanied by
memorandum of appeal in three (3) legibly typewritten copies which shall state the
grounds relied upon and the arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the appealed decision, resolution or
order and a certificate of non-forum shopping with proof of service on the other party
of such appeal. A mere notice of appeal without complying with the other requisites
aforestated shall not stop the running of the period for perfecting an appeal.
(b) The appellee may file with the Regional Arbitration Branch or Regional Office
where the appeal was filed, his answer or reply to appellant's memorandum of appeal,
not later than ten (10) calendar days from receipt thereof. Failure on the part of the
appellee who was properly furnished with a copy of the appeal to file his answer or
reply within the said period may be construed as a waiver on his part to file the same.
(c) Subject to the provisions of Article 218, once the appeal is perfected in
accordance with these Rules, the Commission shall limit itself to reviewing and deciding
specific issues that were elevated on appeal.
SECTION 5. APPEAL FEE. -The appellant shall pay an appeal fee of one hundred
fifty pesos (P150.00) to the Regional Arbitration Branch or Regional Office, and the
official receipt of such payment shall be attached to the records of the case.
SECTION 6. BOND. - In case the decision of the Labor Arbiter or the Regional
Director involves a monetary award, an appeal by the employer may be perfected only
upon the posting of a cash or surety bond. The appeal bond shall either be in cash or

surety in an amount equivalent to the monetary award, exclusive of damages and

attorneys fees.
In case of surety bond, the same shall be issued by a reputable bonding
company duly accredited by the Commission or the Supreme Court, and shall be
accompanied by:
(a) a joint declaration under oath by the employer, his counsel, and the
bonding company, attesting that the bond posted is genuine, and shall be in
effect until final disposition of the case.
(b) a copy of the indemnity agreement between the employer-appellant
and bonding company; and
(c) a copy of security deposit or collateral securing the bond.
A certified true copy of the bond shall be furnished by the appellant to the
appellee who shall verify the regularity and genuineness thereof and immediately report
to the Commission any irregularity.
Upon verification by the Commission that the bond is irregular or not genuine,
the Commission shall cause the immediate dismissal of the appeal.
No motion to reduce bond shall be entertained except on meritorious grounds
and upon the posting of a bond in a reasonable amount in relation to the monetary
award.
The filing of the motion to reduce bond without compliance with the requisites
in the preceding paragraph shall not stop the running of the period to perfect an appeal.
(Emphasis supplied)

The OGCC failed to produce any valid authorization from the board of directors despite
petitioner Salengas repeated demands. It had been given more than enough opportunity and time to
produce the appropriate board resolution, and yet it failed to do so. In fact, many of its pleadings,
representations, and submissions lacked board authorization.
We cannot agree with the OGCCs attempt to downplay this procedural flaw by claiming that, as
the statutorily assigned counsel for GOCCs, it does not need such authorization. In Constantino-David v.
Pangandaman-Gania,[42] we exhaustively explained why it was necessary for government agencies or
instrumentalities to execute the verification and the certification against forum-shopping through their
duly authorized representatives. We ruled thereon as follows:

But the rule is different where the OSG is acting as counsel of record for a
government agency. For in such a case it becomes necessary to determine whether the
petitioning government body has authorized the filing of the petition and is espousing
the same stand propounded by the OSG. Verily, it is not improbable for government
agencies to adopt a stand different from the position of the OSG since they weigh not
just legal considerations but policy repercussions as well. They have their respective
mandates for which they are to be held accountable, and the prerogative to
determine whether further resort to a higher court is desirable and indispensable
under the circumstances.
The verification of a pleading, if signed by the proper officials of the client
agency itself, would fittingly serve the purpose of attesting that the allegations in the
pleading are true and correct and not the product of the imagination or a matter of
speculation, and that the pleading is filed in good faith. Of course, the OSG may opt to
file its own petition as a People's Tribune but the representation would not be for a
client office but for its own perceived best interest of the State.
The case of Commissioner of Internal Revenue v. S.C. Johnson and Son, Inc., is
not also a precedent that may be invoked at all times to allow the OSG to sign the
certificate of non-forum shopping in place of the real party-in-interest. The ruling
therein mentions merely that the certification of non-forum shopping executed by the
OSG constitutes substantial compliance with the rule since the OSG is the only lawyer
for the petitioner, which is a government agency mandated under Section 35, Chapter
12, Title III, Book IV, of the 1987 Administrative Code (Reiterated under Memorandum
Circular No. 152 dated May 17, 1992) to be represented only by the Solicitor General.
By its very nature, substantial compliance is actually inadequate observance of
the requirements of a rule or regulation which are waived under equitable
circumstances to facilitate the administration of justice there being no damage or injury
caused by such flawed compliance. This concept is expressed in the statement the
rigidity of a previous doctrine was thus subjected to an inroad under the concept of
substantial compliance. In every inquiry on whether to accept substantial compliance,
the focus is always on the presence of equitable conditions to administer justice
effectively and efficiently without damage or injury to the spirit of the legal obligation.
xxx xxx xxx
The fact that the OSG under the 1987 Administrative Code is the only lawyer
for a government agency wanting to file a petition, or complaint for that matter, does
not operate per se to vest the OSG with the authority to execute in its name the
certificate of non-forum shopping for a client office. For, in many instances, client
agencies of the OSG have legal departments which at times inadvertently take legal
matters requiring court representation into their own hands without the intervention

of the OSG. Consequently, the OSG would have no personal knowledge of the history
of a particular case so as to adequately execute the certificate of non-forum shopping;
and even if the OSG does have the relevant information, the courts on the other hand
would have no way of ascertaining the accuracy of the OSG's assertion without precise
references in the record of the case. Thus, unless equitable circumstances which are
manifest from the record of a case prevail, it becomes necessary for the concerned
government agency or its authorized representatives to certify for non-forum
shopping if only to be sure that no other similar case or incident is pending before any
other court.
We recognize the occasions when the OSG has difficulty in securing the
attention and signatures of officials in charge of government offices for the verification
and certificate of non-forum shopping of an initiatory pleading. This predicament is
especially true where the period for filing such pleading is non-extendible or can no
longer be further extended for reasons of public interest such as in applications for the
writ of habeas corpus, in election cases or where sensitive issues are involved. This
quandary is more pronounced where public officials have stations outside Metro
Manila.
But this difficult fact of life within the OSG, equitable as it may seem, does not
excuse it from wantonly executing by itself the verification and certificate of non-forum
shopping. If the OSG is compelled by circumstances to verify and certify the pleading in
behalf of a client agency, the OSG should at least endeavor to inform the courts of its
reasons for doing so, beyond instinctively citing City Warden of the Manila City Jail v.
Estrella and Commissioner of Internal Revenue v. S.C. Johnson and Son, Inc.
Henceforth, to be able to verify and certify an initiatory pleading for nonforum shopping when acting as counsel of record for a client agency, the OSG must (a)
allege under oath the circumstances that make signatures of the concerned officials
impossible to obtain within the period for filing the initiatory pleading; (b) append to
the petition or complaint such authentic document to prove that the party-petitioner
or complainant authorized the filing of the petition or complaint and understood and
adopted the allegations set forth therein, and an affirmation that no action or claim
involving the same issues has been filed or commenced in any court, tribunal or quasijudicial agency; and, (c) undertake to inform the court promptly and reasonably of any
change in the stance of the client agency.
Anent the document that may be annexed to a petition or complaint under
letter (b) hereof, the letter-endorsement of the client agency to the OSG, or other
correspondence to prove that the subject-matter of the initiatory pleading had been
previously discussed between the OSG and its client, is satisfactory evidence of the
facts under letter (b) above. In this exceptional situation where the OSG signs the
verification and certificate of non-forum shopping, the court reserves the authority to

determine the sufficiency of the OSG's action as measured by the equitable

considerations discussed herein. (Emphasis ours, italics provided)
The ruling cited above may have pertained only to the Office of the Solicitor Generals
representation of government agencies and instrumentalities, but we see no reason why this doctrine
cannot be applied to the case at bar insofar as the OGCC is concerned.
While in previous decisions we have excused transgressions of these rules, it has always been in
the context of upholding justice and fairness under exceptional circumstances. In this case, though,
respondent failed to provide any iota of rhyme or reason to compel us to relax these requirements.
Instead, what is clear to us is that the so-called appeal was done against the instructions of then
President/CEO Naguiat not to file an appeal. Timbol-Roman, who signed the Verification and the
Certification against forum-shopping, was not even an authorized representative of the corporation. The
OGCC was equally remiss in its duty. It ought to have advised respondent corporation, the proper
procedure for pursuing an appeal. Instead, it maintained the appeal and failed to present any valid
authorization from respondent corporation even after petitioner had questioned OGCCs authority all
throughout the proceedings. Thus, it is evident that the appeal was made in bad faith.
The unauthorized and overzealous acts of officials of respondent CDC and the OGCC have led to
a waste of the governments time and resources. More alarmingly, they have contributed to the injustice
done to petitioner Salenga. By taking matters into their own hands, these officials let the case drag on
for years, depriving him of the enjoyment of property rightfully his. What should have been a simple
case of illegal dismissal became an endless stream of motions and pleadings.
Time and again, we have said that the perfection of an appeal within the period prescribed by
law is jurisdictional, and the lapse of the appeal period deprives the courts of jurisdiction to alter the
final judgment.[43] Thus, there is no other recourse but to respect the findings and ruling of the labor
arbiter. Clearly, therefore, the CA committed grave abuse of discretion in entertaining the Petition filed
before it after the NLRC had dismissed the case based on lack of jurisdiction. The assailed CA Decision
did not even resolve petitioner Salengas consistent and persistent claim that the NLRC should not have
taken cognizance of the appeal in the first place, absent a board resolution. Thus, LA Darlucios Decision
with respect to the liability of the corporation still stands.
However, we note from that Decision that Rufo Colayco was made solidarily liable with
respondent corporation. Colayco thereafter filed his separate appeal. As to him, the NLRC correctly held
in its 30 July 2001 Decision that he may not be held solidarily responsible to petitioner. As a result, it
dropped him as respondent. Notably, in the case at bar, petitioner does not question that ruling.
Based on the foregoing, all other subsequent proceedings regarding the issue of petitioners
dismissal are null and void for having been conducted without jurisdiction. Thus, it is no longer
incumbent upon us to rule on the other errors assigned in the matter of petitioner Salengas dismissal.

CDC is not under the civil service laws on retirement.

While the case was still persistently being pursued by the OGCC, a new issue arose when
petitioner Salenga reached retirement age: whether his retirement benefits should be computed
according to civil service laws.
To recall, the issue of how to compute the retirement benefits of petitioner was raised in his
Omnibus Motion dated 7 May 2004 filed before the NLRC after it had reinstated LA Darlucios original
Decision. The issue was not covered by petitioners Complaint for illegal dismissal, but was a different
issue altogether and should have been properly addressed in a separate Complaint. We cannot fault
petitioner, though, for raising the issue while the case was still pending with the NLRC. If it were not for
the appeal undertaken by Timbol-Roman and the OGCC through Atty. Mallari, the issue would have
taken its proper course and would have been raised in a more appropriate time and manner. Thus, we
deem it proper to resolve the matter at hand to put it to rest after a decade of litigation.
Petitioner Salenga contends that respondent CDC is covered by the GSIS Law. Thus, he says, the
computation of his retirement benefits should include all the years of actual government service,
starting from the original appointment forty (40) years ago up to his retirement.
Respondent CDC owes its existence to Executive Order No. 80 issued by then President Fidel V.
Ramos. It was meant to be the implementing and operating arm of the Bases Conversion and Development
Authority (BCDA) tasked to manage the Clark Special Economic Zone (CSEZ). Expressly, respondent was
formed in accordance with Philippine corporation laws and existing rules and regulations promulgated by the
SEC pursuant to Section 16 of Republic Act (R.A.) 7227.[44] CDC, a government-owned or -controlled
corporation without an original charter, was incorporated under the Corporation Code. Pursuant to Article
IX-B, Sec. 2(1), the civil service embraces only those government-owned or -controlled corporations with
original charter. As such, respondent CDC and its employees are covered by the Labor Code and not by
the Civil Service Law, consistent with our ruling in NASECO v. NLRC,[45] in which we established this
distinction. Thus, in Gamogamo v. PNOC Shipping and Transport Corp.,[46] we held:
Retirement results from a voluntary agreement between the employer and the
employee whereby the latter after reaching a certain age agrees to sever his
employment with the former.
Since the retirement pay solely comes from Respondent's funds, it is but natural
that Respondent shall disregard petitioner's length of service in another company for
the computation of his retirement benefits.
Petitioner was absorbed by Respondent from LUSTEVECO on 1 August 1979.
Ordinarily, his creditable service shall be reckoned from such date. However, since
Respondent took over the shipping business of LUSTEVECO and agreed to assume

without interruption all the service credits of petitioner with LUSTEVECO, petitioner's
creditable service must start from 9 November 1977 when he started working with
LUSTEVECO until his day of retirement on 1 April 1995. Thus, petitioner's creditable
service is 17.3333 years.
We cannot uphold petitioner's contention that his fourteen years of service with
the DOH should be considered because his last two employers were government-owned
and controlled corporations, and fall under the Civil Service Law.Article IX(B), Section 2
paragraph 1 of the 1987 Constitution states
Sec. 2. (1)The civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original charters.
It is not at all disputed that while Respondent and LUSTEVECO are
government-owned and controlled corporations, they have no original charters; hence
they are not under the Civil Service Law. In Philippine National Oil Company-Energy
Development Corporation v. National Labor Relations Commission, we ruled:
xxx Thus under the present state of the law, the test in determining
whether a government-owned or controlled corporation is subject to
the Civil Service Law are [sic] the manner of its creation, such that
government corporations created by special charter(s) are subject to its
provisions while those incorporated under the General Corporation Law
are not within its coverage. (Emphasis supplied)
Hence, petitioner Salenga is entitled to receive only his retirement benefits based only on the
number of years he was employed with the corporation under the conditions provided under its
retirement plan, as well as other benefits given to him by existing laws.
WHEREFORE, in view of the foregoing, the Petition in G.R. No. 174941 is partially GRANTED. The
Decision of LA Darlucio is REINSTATED insofar as respondent corporations liability is concerned.
Considering that petitioner did not maintain the action against Rufo Colayco, the latter is not solidarily
liable with respondent Clark Development Corporation.
The case is REMANDED to the labor arbiter for the computation of petitioners retirement
benefits in accordance with the Social Security Act of 1997 otherwise known as Republic Act No. 8282,
deducting therefrom the sums already paid by respondent CDC. If any, the remaining amount shall be
subject to the legal interest of 6% per annum from the filing date of petitioners Omnibus Motion on 11
May 2004 up to the time this judgment becomes final and executory. Henceforth, the rate of legal
interest shall be 12% until the satisfaction of judgment.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 98107 August 18, 1997

BENJAMIN C. JUCO, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL HOUSING CORPORATION, respondents.

HERMOSISIMA, JR., J.:

This is a petition for certiorari to set aside the Decision of the National Labor Relations Commission
(NLRC) dated March 14, 1991, which reversed the Decision dated May 21, 1990 of Labor Arbiter Manuel
R Caday, on the ground of lack of jurisdiction.
Petitioner Benjamin C. Juco was hired as a project engineer of respondent National Housing Corporation
(NHC) from November 16, 1970 to May 14, 1975. On May 14, 1975, he was separated from the service
for having been implicated in a crime of theft and/or malversation of public funds.
On March 25, 1977, petitioner filed a complaint for illegal dismissal against the NHC with the
Department of Labor.
On September 17, 1977, the Labor Arbiter rendered a decision dismissing the complaint on the ground
that the NLRC had no jurisdiction over the case. 1
Petitioner then elevated the case to the NLRC which rendered a decision on December 28, 1982,
reversing the decision of the Labor Arbiter. 2
Dissatisfied with the decision of the NLRC, respondent NHC appealed before this Court and on January
17, 1985, we rendered a decision, the dispositive portion thereof reads as follows:
WHEREFORE, the petition is hereby GRANTED. The questioned decision of the
respondent National Labor Relations Commission is SET ASIDE. The decision of the Labor
Arbiter dismissing the case before it for lack of jurisdiction is REINSTATED. 3
On January 6, 1989, petitioner filed with the Civil Service Commission a complaint for illegal dismissal,
with preliminary mandatory injunction. 4
On February 6, 1989, respondent NHC moved for the dismissal of the complaint on the ground that the
Civil Service Commission has no jurisdiction over the case. 5

On April 11, 1989, the Civil Service Commission issued an order dismissing the complaint for lack of
jurisdiction. It ratiocinated that:
The Board finds the comment and/or motion to dismiss meritorious. It was not disputed
that NHC is a government corporation without an original charter but organized/created
under the Corporation Code.
Article IX, Section 2 (1) of the 1987 Constitution provides:
The civil service embraces all branches, subdivisions, instrumentalities
and agencies of the Government, including government owned and
controlled corporations with original charters. (emphasis supplied)
From the aforequoted constitutional provision, it is clear that respondent NHC is not
within the scope of the civil service and is therefore beyond the jurisdiction of this
Board. Moreover, it is pertinent to state that the 1987 Constitution was ratified and
became effective on February 2, 1987.
WHEREFORE, for lack of jurisdiction, the instant complaint is hereby dismissed. 6
On April 28, 1989, petitioner filed with respondent NLRC a complaint for illegal dismissal with
preliminary mandatory injunction against respondent NHC. 7
On May 21, 1990, respondent NLRC thru Labor Arbiter Manuel R. Caday ruled that petitioner was
illegally dismissed from his employment by respondent as there was evidence in the record that the
criminal case against him was purely fabricated, prompting the trial court to dismiss the charges against
him. Hence, he concluded that the dismissal was illegal as it was devoid of basis, legal or factual.
He further ruled that the complaint is not barred by prescription considering that the period from which
to reckon the reglementary period of four years should be from the date of the receipt of the decision of
the Civil Service Commission promulgated on April 11, 1989. He also ratiocinated that:
It appears . . . complainant filed the complaint for illegal dismissal with the Civil Service
Commission on January 6, 1989 and the same was dismissed on April 11, 1989 after
which on April 28, 1989, this case was filed by the complainant. Prior to that, this case
was ruled upon by the Supreme Court on January 17, 1985 which enjoined the
complainant to go to the Civil Service Commission which in fact, complainant did. Under
the circumstances, there is merit on the contention that the running of the
reglementary period of four (4) years was suspended with the filing of the complaint
with the said Commission. Verily, it was not the fault of the respondent for failing to file
the complaint as alleged by the respondent but due to, in the words of the complainant,
a "legal knot" that has to be untangled. 8
Thereafter, the Labor Arbiter rendered a decision, the dispositive portion of which reads:
Premises considered, judgment is hereby rendered declaring the dismissal of the
complainant as illegal and ordering the respondent to immediately reinstate him to his

former position without loss of seniority rights with full back wages inclusive of
allowance and to his other benefits or equivalent computed from the time it is withheld
from him when he was dismissed on March 27, 1977, until actually reinstated. 9
On June 1, 1990, respondent NHC filed its appeal before the NLRC and on March 14, 1991, the NLRC
promulgated a decision which reversed the decision of Labor Arbiter Manuel R. Caday on the ground of
lack of jurisdiction. 10
The primordial issue that confronts us is whether or not public respondent committed grave abuse of
discretion in holding that petitioner is not governed by the Labor Code.
Under the laws then in force, employees of government-owned and/or controlled corporations were
governed by the Civil Service Law and not by the Labor Code. Hence,
Article 277 of the Labor Code (PD 442) then provided:
The terms and conditions of employment of all government employees, including
employees of government-owned and controlled corporations shall be governed by the
Civil Service Law, rules and regulations . . . .
The 1973 Constitution, Article II-B, Section 1(1), on the other hand provided:
The Civil Service embraces every branch, agency, subdivision and instrumentality of the
government, including government-owned or controlled corporations.
Although we had earlier ruled in National Housing Corporation v.
Juco, 11 that employees of government-owned and/or controlled corporations, whether created by
special law or formed as subsidiaries under the general Corporation Law, are governed by the Civil
Service Law and not by the Labor Code, this ruling has been supplanted by the 1987 Constitution. Thus,
the said Constitution now provides:
The civil service embraces all branches, subdivisions, instrumentalities, and agencies of
the Government, including government owned or controlled corporations with original
charter. (Article IX-B, Section 2[1])
In National Service Corporation (NASECO) v. National Labor Relations Commission, 12 we had the
occasion to apply the present Constitution in deciding whether or not the employees of NASECO are
covered by the Civil Service Law or the Labor Code notwithstanding that the case arose at the time when
the 1973 Constitution was still in effect. We ruled that the NLRC has jurisdiction over the employees of
NASECO on the ground that it is the 1987 Constitution that governs because it is the Constitution in
place at the time of the decision. Furthermore, we ruled that the new phrase "with original charter"
means that government-owned and controlled corporations refer to corporations chartered by special
law as distinguished from corporations organized under the Corporation Code. Thus, NASECO which had
been organized under the general incorporation statute and a subsidiary of the National Investment
Development Corporation, which in turn was a subsidiary of the Philippine National Bank, is exluded
from the purview of the Civil Service Commission.

We see no cogent reason to depart from the ruling in the aforesaid case.
In the case at bench, the National Housing Corporation is a government owned corporation organized in
1959 in accordance with Executive Order No. 399, otherwise known as the Uniform Charter of
Government Corporation, dated January 1, 1959. Its shares of stock are and have been one hundred
percent (100%) owned by the Government from its incorporation under Act 1459, the former
corporation law. The government entities that own its shares of stock are the Government Service
Insurance System, the Social Security System, the Development Bank of the Philippines, the National
Investment and Development Corporation and the People's Homesite and Housing
Corporation. 13 Considering the fact that the NHA had been incorporated under Act 1459, the former
corporation law, it is but correct to say that it is a government-owned or controlled corporation whose
employees are subject to the provisions of the Labor Code. This observation is reiterated in the recent
case of Trade Union of the Philippines and Allied Services (TUPAS) v. National Housing
Corporation, 14 where we held that the NHA is now within the jurisdiction of the Department of Labor
and Employment, it being a government-owned and/or controlled corporation without an original
charter. Furthermore, we also held that the workers or employees of the NHC (now NHA) undoubtedly
have the right to form unions or employee's organization and that there is no impediment to the holding
of a certification election among them as they are covered by the Labor Code.
Thus, the NLRC erred in dismissing petitioner's complaint for lack of jurisdiction because the rule now is
that the Civil Service now covers only government-owned or controlled corporations with original
charters. 15 Having been incorporated under the Corporation Law, its relations with its personnel are
governed by the Labor Code and come under the jurisdiction of the National Labor Relations
Commission.
One final point. Petitioners have been tossed from one forum to another for a simple illegal dismissal
case. It is but apt that we put an end to his dilemna in the interest of justice.
WHEREFORE, the decision of the NLRC in NLRC NCR-04-02036089 dated March 14, 1991 is hereby
REVERSED and the Decision of the Labor Arbiter dated May 21, 1990 is REINSTATED.
SO ORDERED.

EN BANC

G.R. No. 152642 : November 13, 2012

HON. PATRICIA A. STO.TOMAS, ROSALINDA BALDOZ and LUCITA LAZO, Petitioners, v. REY SALAC,
WILLIE D. ESPIRITU, MARIO MONTENEGRO, DODGIE BELONIO, LOLIT SALINEL and BUDDY
BONNEVIE, Respondents.
G.R. No. 152710
HON. PATRICIA A. STO. TOMAS, in her capacity as Secretary of Department of Labor and Employment
(DOLE), HON. ROSALINDA D. BALDOZ, in her capacity as Administrator, Philippine Overseas
Employment Administration (POEA), and the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION
GOVERNING BOARD, Petitioners, v. HON. JOSE G. PANEDA, in his capacity as the Presiding Judge of
Branch 220, Quezon City, ASIAN RECRUITMENT COUNCIL PHILIPPINE CHAPTER, INC. (ARCOPHIL), for
itself and in behalf of its members: WORLDCARE PHILIPPINES SERVIZO INTERNATIONALE, INC.,
STEADFAST INTERNATIONAL RECRUITMENT CORP., VERDANT MANPOWER MOBILIZATION CORP.,
BRENT OVERSEAS PERSONNEL, INC., ARL MANPOWER SERVICES, INC., DAHLZEN INTERNATIONAL
SERVICES, INC., INTERWORLD PLACEMENT CENTER, INC., LAKAS TAO CONTRACT SERVICES LTD. CO.,
SSC MULTI-SERVICES, DMJ INTERNATIONAL, and MIP INTERNATIONAL MANPOWER SERVICES,
represented by its proprietress, MARCELINA I. PAGSIBIGAN, Respondents.
G.R. No. 167590
REPUBLIC OF THE PHILIPPINES, represented by the HONORABLE EXECUTIVE SECRETARY, the
HONORABLE SECRETARY OF LABOR AND EMPLOYMENT (DOLE), the PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION (POEA), the OVERSEAS WORKERS WELFARE ADMINISTRATION
(OWWA), the LABOR ARBITERS OF THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), the
HONORABLE SECRETARY OF JUSTICE, the HONORABLE SECRETARY OF FOREIGN AFFAIRS and the
COMMISSION ON AUDIT (COA), Petitioners, v. PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC.
(P ASEI), Respondent.
G.R. Nos. 182978-79
BECMEN SERVICE EXPORTER AND PROMOTION, INC., Petitioner, v. SPOUSES SIMPLICIO AND MILA
CUARESMA (for and in behalf of daughter, Jasmin G. Cuaresma), WHITE FALCON SERVICES, INC., and
JAIME ORTIZ (President of White Falcon Services, Inc.), Respondents.
G.R. Nos. 184298-99
SPOUSES SIMPLICIO AND MILA CUARESMA (for and in behalf of deceased daughter, Jasmin G.
Cuaresma), Petitioners, v. WHITE FALCON SERVICES, INC. and BECMEN SERVICES EXPORTER AND
PROMOTION, INC., Respondents.
DECISION
ABAD, J.:

These consolidated cases pertain to the constitutionality of certain provisions of Republic Act 8042,
otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995.
The Facts and the Case
On June 7, 1995 Congress enacted Republic Act (R.A.) 8042 or the Migrant Workers and Overseas
Filipinos Act of 1995 that, for among other purposes, sets the Governments policies on overseas
employment and establishes a higher standard of protection and promotion of the welfare of migrant
workers, their families, and overseas Filipinos in distress.
G.R. 152642 and G.R. 152710
(Constitutionality of Sections 29 and 30, R.A. 8042)
Sections 29 and 30 of the Act1rll commanded the Department of Labor and Employment (DOLE) to
begin deregulating within one year of its passage the business of handling the recruitment and
migration of overseas Filipino workers and phase out within five years the regulatory functions of the
Philippine Overseas Employment Administration (POEA).
On January 8, 2002 respondents Rey Salac, Willie D. Espiritu, Mario Montenegro, Dodgie Belonio, Lolit
Salinel, and Buddy Bonnevie (Salac, et al.) filed a petition for certiorari, prohibition and mandamus with
application for temporary restraining order (TRO) and preliminary injunction against petitioners, the
DOLE Secretary, the POEA Administrator, and the Technical Education and Skills Development Authority
(TESDA) Secretary-General before the Regional Trial Court (RTC) of Quezon City, Branch 96.2rll
Salac, et al. sought to: 1) nullify DOLE Department Order 10 (DOLE DO 10) and POEA Memorandum
Circular 15 (POEA MC 15); 2) prohibit the DOLE, POEA, and TESDA from implementing the same and
from further issuing rules and regulations that would regulate the recruitment and placement of
overseas Filipino workers (OFWs); and 3) also enjoin them to comply with the policy of deregulation
mandated under Sections 29 and 30 of Republic Act 8042.
On March 20, 2002 the Quezon City RTC granted Salac, et al.s petition and ordered the government
agencies mentioned to deregulate the recruitment and placement of OFWs.3rll The RTC also annulled
DOLE DO 10, POEA MC 15, and all other orders, circulars and issuances that are inconsistent with the
policy of deregulation under R.A. 8042.
Prompted by the RTCs above actions, the government officials concerned filed the present petition in
G.R. 152642 seeking to annul the RTCs decision and have the same enjoined pending action on the
petition.
On April 17, 2002 the Philippine Association of Service Exporters, Inc. intervened in the case before the
Court, claiming that the RTC March 20, 2002 Decision gravely affected them since it paralyzed the
deployment abroad of OFWs and performing artists. The Confederated Association of Licensed
Entertainment Agencies, Incorporated (CALEA) intervened for the same purpose.4rll
On May 23, 2002 the Court5rll issued a TRO in the case, enjoining the Quezon City RTC, Branch 96,
from enforcing its decision.

In a parallel case, on February 12, 2002 respondents Asian Recruitment Council Philippine Chapter, Inc.
and others (Arcophil, et al.) filed a petition for certiorari and prohibition with application for TRO and
preliminary injunction against the DOLE Secretary, the POEA Administrator, and the TESDA DirectorGeneral,6rll before the RTC of Quezon City, Branch 220, to enjoin the latter from implementing the
2002 Rules and Regulations Governing the Recruitment and Employment of Overseas Workers and to
cease and desist from issuing other orders, circulars, and policies that tend to regulate the recruitment
and placement of OFWs in violation of the policy of deregulation provided in Sections 29 and 30 of R.A.
8042.
On March 12, 2002 the Quezon City RTC rendered an Order, granting the petition and enjoining the
government agencies involved from exercising regulatory functions over the recruitment and placement
of OFWs. This prompted the DOLE Secretary, the POEA Administrator, and the TESDA Director-General
to file the present action in G.R. 152710. As in G.R. 152642, the Court issued on May 23, 2002 a TRO
enjoining the Quezon City RTC, Branch 220 from enforcing its decision.
On December 4, 2008, however, the Republic informed7rll the Court that on April 10, 2007 former
President Gloria Macapagal-Arroyo signed into law R.A. 94228rll which expressly repealed Sections
29 and 30 of R.A. 8042 and adopted the policy of close government regulation of the recruitment and
deployment of OFWs. R.A. 9422 pertinently provides:
xxx
SEC. 1. Section 23, paragraph (b.1) of Republic Act No. 8042, otherwise known as the "Migrant Workers
and Overseas Filipinos Act of 1995" is hereby amended to read as follows:chanroblesvirtuallawlibrary
(b.1) Philippine Overseas Employment Administration The Administration shall regulate private sector
participation in the recruitment and overseas placement of workers by setting up a licensing and
registration system. It shall also formulate and implement, in coordination with appropriate entities
concerned, when necessary, a system for promoting and monitoring the overseas employment of
Filipino workers taking into consideration their welfare and the domestic manpower requirements.
In addition to its powers and functions, the administration shall inform migrant workers not only of their
rights as workers but also of their rights as human beings, instruct and guide the workers how to assert
their rights and provide the available mechanism to redress violation of their rights.
In the recruitment and placement of workers to service the requirements for trained and competent
Filipino workers of foreign governments and their instrumentalities, and such other employers as public
interests may require, the administration shall deploy only to countries where the Philippines has
concluded bilateral labor agreements or arrangements: Provided, That such countries shall guarantee to
protect the rights of Filipino migrant workers; and: Provided, further, That such countries shall observe
and/or comply with the international laws and standards for migrant workers.
SEC. 2. Section 29 of the same law is hereby repealed.
SEC. 3. Section 30 of the same law is also hereby repealed.
xxx

On August 20, 2009 respondents Salac, et al. told the Court in G.R. 152642 that they agree 9rll with
the Republics view that the repeal of Sections 29 and 30 of R.A. 8042 renders the issues they raised by
their action moot and academic. The Court has no reason to disagree. Consequently, the two cases, G.R.
152642 and 152710, should be dismissed for being moot and academic.
G.R. 167590
(Constitutionality of Sections 6, 7, and 9 of R.A. 8042)
On August 21, 1995 respondent Philippine Association of Service Exporters, Inc. (PASEI) filed a petition
for declaratory relief and prohibition with prayer for issuance of TRO and writ of preliminary injunction
before the RTC of Manila, seeking to annul Sections 6, 7, and 9 of R.A. 8042 for being unconstitutional.
(PASEI also sought to annul a portion of Section 10 but the Court will take up this point later together
with a related case.)
Section 6 defines the crime of "illegal recruitment" and enumerates the acts constituting the same.
Section 7 provides the penalties for prohibited acts. Thus:chanroblesvirtuallawlibrary
SEC. 6. Definition. For purposes of this Act, illegal recruitment shall mean any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, procuring workers and includes referring, contract
services, promising or advertising for employment abroad, whether for profit or not, when undertaken
by a non-license 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 such nonlicense 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
SEC. 7. Penalties.
(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less
than six (6) years and one (1) day but not more than twelve (12) years and a fine not less than two
hundred thousand pesos (P200,000.00) nor more than five hundred thousand pesos (P500,000.00).
(b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos
(P500,000.00) nor more than one million pesos (P1,000,000.00) shall be imposed if illegal recruitment
constitutes economic sabotage as defined herein.
Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less
than eighteen (18) years of age or committed by a non-licensee or non-holder of authority.10rll
Finally, Section 9 of R.A. 8042 allowed the filing of criminal actions arising from "illegal recruitment"
before the RTC of the province or city where the offense was committed or where the offended party
actually resides at the time of the commission of the offense.

The RTC of Manila declared Section 6 unconstitutional after hearing on the ground that its definition of
"illegal recruitment" is vague as it fails to distinguish between licensed and non-licensed
recruiters11rlland for that reason gives undue advantage to the non-licensed recruiters in violation of
the right to equal protection of those that operate with government licenses or authorities.
But "illegal recruitment" as defined in Section 6 is clear and unambiguous and, contrary to the RTCs
finding, actually makes a distinction between licensed and non-licensed recruiters. By its terms, persons
who engage in "canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers"
without the appropriate government license or authority are guilty of illegal recruitment whether or not
they commit the wrongful acts enumerated in that section. On the other hand, recruiters who engage in
the canvassing, enlisting, etc. of OFWs, although with the appropriate government license or authority,
are guilty of illegal recruitment only if they commit any of the wrongful acts enumerated in Section 6.
The Manila RTC also declared Section 7 unconstitutional on the ground that its sweeping application of
the penalties failed to make any distinction as to the seriousness of the act committed for the
application of the penalty imposed on such violation. As an example, said the trial court, the mere
failure to render a report under Section 6(h) or obstructing the inspection by the Labor Department
under Section 6(g) are penalized by imprisonment for six years and one day and a minimum fine
ofP200,000.00 but which could unreasonably go even as high as life imprisonment if committed by at
least three persons.
Apparently, the Manila RTC did not agree that the law can impose such grave penalties upon what it
believed were specific acts that were not as condemnable as the others in the lists. But, in fixing uniform
penalties for each of the enumerated acts under Section 6, Congress was within its prerogative to
determine what individual acts are equally reprehensible, consistent with the State policy of according
full protection to labor, and deserving of the same penalties. It is not within the power of the Court to
question the wisdom of this kind of choice. Notably, this legislative policy has been further stressed in
July 2010 with the enactment of R.A. 1002212rll which increased even more the duration of the
penalties of imprisonment and the amounts of fine for the commission of the acts listed under Section
7.
Obviously, in fixing such tough penalties, the law considered the unsettling fact that OFWs must work
outside the countrys borders and beyond its immediate protection. The law must, therefore, make an
effort to somehow protect them from conscienceless individuals within its jurisdiction who, fueled by
greed, are willing to ship them out without clear assurance that their contracted principals would treat
such OFWs fairly and humanely.
As the Court held in People v. Ventura,13rll the State under its police power "may prescribe such
regulations as in its judgment will secure or tend to secure the general welfare of the people, to protect
them against the consequence of ignorance and incapacity as well as of deception and fraud." Police
power is "that inherent and plenary power of the State which enables it to prohibit all things hurtful to
the comfort, safety, and welfare of society."14rll
The Manila RTC also invalidated Section 9 of R.A. 8042 on the ground that allowing the offended parties
to file the criminal case in their place of residence would negate the general rule on venue of criminal
cases which is the place where the crime or any of its essential elements were committed. Venue, said
the RTC, is jurisdictional in penal laws and, allowing the filing of criminal actions at the place of

residence of the offended parties violates their right to due process. Section 9
provides:chanroblesvirtuallawlibrary
SEC. 9. Venue. A criminal action arising from illegal recruitment as defined herein shall be filed with the
Regional Trial Court of the province or city where the offense was committed or where the offended
party actually resides at the time of the commission of the offense: Provided, That the court where the
criminal action is first filed shall acquire jurisdiction to the exclusion of other courts: Provided, however,
That the aforestated provisions shall also apply to those criminal actions that have already been filed in
court at the time of the effectivity of this Act.
But there is nothing arbitrary or unconstitutional in Congress fixing an alternative venue for violations of
Section 6 of R.A. 8042 that differs from the venue established by the Rules on Criminal Procedure.
Indeed, Section 15(a), Rule 110 of the latter Rules allows exceptions provided by laws.
Thus:chanroblesvirtuallawlibrary
SEC. 15. Place where action is to be instituted. (a) Subject to existing laws, the criminal action shall be
instituted and tried in the court of the municipality or territory where the offense was committed or
where any of its essential ingredients occurred. (Emphasis supplied)
xxx
Section 9 of R.A. 8042, as an exception to the rule on venue of criminal actions is, consistent with that
laws declared policy15rll of providing a criminal justice system that protects and serves the best
interests of the victims of illegal recruitment.
G.R. 167590, G.R. 182978-79,16rll and G.R. 184298-9917rll
(Constitutionality of Section 10, last sentence of 2nd paragraph)
G.R. 182978-79 and G.R. 184298-99 are consolidated cases. Respondent spouses Simplicio and Mila
Cuaresma (the Cuaresmas) filed a claim for death and insurance benefits and damages against
petitioners Becmen Service Exporter and Promotion, Inc. (Becmen) and White Falcon Services, Inc.
(White Falcon) for the death of their daughter Jasmin Cuaresma while working as staff nurse in Riyadh,
Saudi Arabia.
The Labor Arbiter (LA) dismissed the claim on the ground that the Cuaresmas had already received
insurance benefits arising from their daughters death from the Overseas Workers Welfare
Administration (OWWA). The LA also gave due credence to the findings of the Saudi Arabian authorities
that Jasmin committed suicide.
On appeal, however, the National Labor Relations Commission (NLRC) found Becmen and White Falcon
jointly and severally liable for Jasmins death and ordered them to pay the Cuaresmas the amount of
US$113,000.00 as actual damages. The NLRC relied on the Cabanatuan City Health Offices autopsy
finding that Jasmin died of criminal violence and rape.
Becmen and White Falcon appealed the NLRC Decision to the Court of Appeals (CA). 18rll On June 28,
2006 the CA held Becmen and White Falcon jointly and severally liable with their Saudi Arabian

employer for actual damages, with Becmen having a right of reimbursement from White Falcon. Becmen
and White Falcon appealed the CA Decision to this Court.
On April 7, 2009 the Court found Jasmins death not work-related or work-connected since her rape and
death did not occur while she was on duty at the hospital or doing acts incidental to her employment.
The Court deleted the award of actual damages but ruled that Becmens corporate directors and officers
are solidarily liable with their company for its failure to investigate the true nature of her death. Becmen
and White Falcon abandoned their legal, moral, and social duty to assist the Cuaresmas in obtaining
justice for their daughter. Consequently, the Court held the foreign employer Rajab and Silsilah, White
Falcon, Becmen, and the latters corporate directors and officers jointly and severally liable to the
Cuaresmas for: 1) P2,500,000.00 as moral damages; 2) P2,500,000.00 as exemplary damages; 3)
attorneys fees of 10% of the total monetary award; and 4) cost of suit.
On July 16, 2009 the corporate directors and officers of Becmen, namely, Eufrocina Gumabay, Elvira
Taguiam, Lourdes Bonifacio and Eddie De Guzman (Gumabay, et al.) filed a motion for leave to
Intervene. They questioned the constitutionality of the last sentence of the second paragraph of Section
10, R.A. 8042 which holds the corporate directors, officers and partners jointly and solidarily liable with
their company for money claims filed by OFWs against their employers and the recruitment firms. On
September 9, 2009 the Court allowed the intervention and admitted Gumabay, et al.s motion for
reconsideration.
The key issue that Gumabay, et al. present is whether or not the 2nd paragraph of Section 10, R.A. 8042,
which holds the corporate directors, officers, and partners of recruitment and placement agencies
jointly and solidarily liable for money claims and damages that may be adjudged against the latter
agencies, is unconstitutional.
In G.R. 167590 (the PASEI case), the Quezon City RTC held as unconstitutional the last sentence of the
2nd paragraph of Section 10 of R.A. 8042. It pointed out that, absent sufficient proof that the corporate
officers and directors of the erring company had knowledge of and allowed the illegal recruitment,
making them automatically liable would violate their right to due process of law.
The pertinent portion of Section 10 provides:
SEC. 10. Money Claims. x x x
The liability of the principal/employer and the recruitment/placement agency for any and all claims
under this section shall be joint and several. This provision shall be incorporated in the contract for
overseas employment and shall be a condition precedent for its approval. The performance bond to be
filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims
or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical
being, the corporate officers and directors and partners as the case may be, shall themselves be jointly
and solidarily liable with the corporation or partnership for the aforesaid claims and damages. (Emphasis
supplied)
But the Court has already held, pending adjudication of this case, that the liability of corporate directors
and officers is not automatic. To make them jointly and solidarily liable with their company, there must
be a finding that they were remiss in directing the affairs of that company, such as sponsoring or

tolerating the conduct of illegal activities. 19rll In the case of Becmen and White Falcon,20rll while
there is evidence that these companies were at fault in not investigating the cause of Jasmins death,
there is no mention of any evidence in the case against them that intervenors Gumabay, et al., Becmens
corporate officers and directors, were personally involved in their companys particular actions or
omissions in Jasmins case.
As a final note, R.A. 8042 is a police power measure intended to regulate the recruitment and
deployment of OFWs. It aims to curb, if not eliminate, the injustices and abuses suffered by numerous
OFWs seeking to work abroad. The rule is settled that every statute has in its favor the presumption of
constitutionality. The Court cannot inquire into the wisdom or expediency of the laws enacted by the
Legislative Department. Hence, in the absence of a clear and unmistakable case that the statute is
unconstitutional, the Court must uphold its validity.blrlllbrr
WHEREFORE, in G.R. 152642 and 152710, the Court DISMISSES the petitions for having become moot
and academic.
In G.R. 167590, the Court SETS ASIDE the Decision of the Regional Trial Court ofManila dated December
8, 2004 and DECLARES Sections 6, 7, and 9 of Republic Act 8042 valid and constitutional.
In G.R. 182978-79 and G.R. 184298-99 as well as in G.R. 167590, the Court HOLDS the last sentence of
the second paragraph of Section 10 of Republic Act 8042 valid and constitutional. The Court, however,
RECONSIDERS and SETS ASIDE the portion of its Decision in G.R. 182978-79 and G.R. 184298-99 that held
intervenors Eufrocina Gumabay, Elvira Taguiam, Lourdes Bonifacio, and Eddie De Guzman jointly and
solidarily liable with respondent Becmen Services Exporter and Promotion, Inc. to spouses Simplicia and
Mila Cuaresma for lack of a finding in those cases that such intervenors had a part in the act or omission
imputed to their corporation.rllbrr
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. Nos. L-58674-77 July 11, 1990
PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of Zambales & Olongapo City,
Branch III and SERAPIO ABUG, respondents.
CRUZ, J:The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise
known as the Labor Code, reading as follows:
(b) Recruitment and placement' refers to any act of canvassing, enlisting, contracting,
transporting, hiring, or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged in recruitment and
placement.
Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and
Olongapo City alleging that Serapio Abug, private respondent herein, "without first securing a license
from the Ministry of Labor as a holder of authority to operate a fee-charging employment agency, did
then and there wilfully, unlawfully and criminally operate a private fee charging employment agency by
charging fees and expenses (from) and promising employment in Saudi Arabia" to four separate
individuals named therein, in violation of Article 16 in relation to Article 39 of the Labor Code. 1
Abug filed a motion to quash on the ground that the informations did not charge an offense because he
was accused of illegally recruiting only one person in each of the four informations. Under the proviso in
Article 13(b), he claimed, there would be illegal recruitment only "whenever two or more persons are in
any manner promised or offered any employment for a fee. " 2
Denied at first, the motion was reconsidered and finally granted in the Orders of the trial court dated
June 24 and September 17, 1981. The prosecution is now before us on certiorari. 3
The posture of the petitioner is that the private respondent is being prosecuted under Article 39 in
relation to Article 16 of the Labor Code; hence, Article 13(b) is not applicable. However, as the first two
cited articles penalize acts of recruitment and placement without proper authority, which is the charge
embodied in the informations, application of the definition of recruitment and placement in Article
13(b) is unavoidable.
The view of the private respondents is that to constitute recruitment and placement, all the acts
mentioned in this article should involve dealings with two or mre persons as an indispensable
requirement. On the other hand, the petitioner argues that the requirement of two or more persons is

imposed only where the recruitment and placement consists of an offer or promise of employment to
such persons and always in consideration of a fee. The other acts mentioned in the body of the article
may involve even only one person and are not necessarily for profit.
Neither interpretation is acceptable. We fail to see why the proviso should speak only of an offer or
promise of employment if the purpose was to apply the requirement of two or more persons to all the
acts mentioned in the basic rule. For its part, the petitioner does not explain why dealings with two or
more persons are needed where the recruitment and placement consists of an offer or promise of
employment but not when it is done through "canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring (of) workers.
As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide an
exception thereto but merely to create a presumption. The presumption is that the individual or entity is
engaged in recruitment and placement whenever he or it is dealing with two or more persons to whom,
in consideration of a fee, an offer or promise of employment is made in the course of the "canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers. "
The number of persons dealt with is not an essential ingredient of the act of recruitment and placement
of workers. Any of the acts mentioned in the basic rule in Article 13(b) win constitute recruitment and
placement even if only one prospective worker is involved. The proviso merely lays down a rule of
evidence that where a fee is collected in consideration of a promise or offer of employment to two or
more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in
the act of recruitment and placement. The words "shall be deemed" create that presumption.
This is not unlike the presumption in article 217 of the Revised Penal Code, for example, regarding the
failure of a public officer to produce upon lawful demand funds or property entrusted to his custody.
Such failure shall beprima facie evidence that he has put them to personal use; in other words, he shall
be deemed to have malversed such funds or property. In the instant case, the word "shall be deemed"
should by the same token be given the force of a disputable presumption or of prima facie evidence of
engaging in recruitment and placement. (Klepp vs. Odin Tp., McHenry County 40 ND N.W. 313, 314.)
It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of
records of debates and deliberations that would otherwise have been available if the Labor Code had
been enacted as a statute rather than a presidential decree. The trouble with presidential decrees is that
they could be, and sometimes were, issued without previous public discussion or consultation, the
promulgator heeding only his own counsel or those of his close advisers in their lofty pinnacle of power.
The not infrequent results are rejection, intentional or not, of the interest of the greater number and, as
in the instant case, certain esoteric provisions that one cannot read against the background facts usually
reported in the legislative journals.
At any rate, the interpretation here adopted should give more force to the campaign against illegal
recruitment and placement, which has victimized many Filipino workers seeking a better life in a foreign
land, and investing hard- earned savings or even borrowed funds in pursuit of their dream, only to be
awakened to the reality of a cynical deception at the hands of theirown countrymen.
WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are set aside and the four
informations against the private respondent reinstated. No costs. SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

PEOPLE OF THE PHILIPPINES,

Petitioner,

G.R. No. 187730

Present:
CORONA, C.J., Chairperson,
VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.

- versus -

RODOLFO GALLO y GADOT,

Accused-Appellant,
FIDES PACARDO y JUNGCO and PILAR MANTA y
DUNGO,
Accused.

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 (accusedappellant), 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 (accused-appellant) 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 of estafa 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 accused-appellant 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 02-206296, 02-206298 to 02-206299, 02-206301 to 02-206307
and 02-206309 to 02-206311 were likewiseprovisionally 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, 02-206300 and 02-206308 for insufficiency of evidence. Likewise, accusedappellant 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 and estafa, respectively.

Thus, the present appeal concerns solely accused-appellants 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. 02206293, 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 02-206297, 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 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 act, whether committed by any person, whether a non-licensee, nonholder, 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
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. [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: 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?
A: 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: There appears a signature appearing at the left bottom portion of this
receipt. Do you know whose signature is this?
A: Yes, maam, signature of Rodolfo Gallo.
PROS. MAGABLIN
Q: Why do you say that that is his signature?
A: 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 accusedappellant 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 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 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, accused-appellant and his coaccused 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 isAFFIRMED.

No costs. SO ORDERED.

Republic of the Philippines

Supreme Court
Manila

FIRST DIVISION

PEOPLE OF THE PHILIPPINES,

G.R. No. 173198

Plaintiff-Appellee,
Present:

CORONA, C.J.,
Chairperson,
VELASCO, JR.,
LEONARDO-DE CASTRO,
- versus -

PERALTA,* and
PEREZ, JJ.

Promulgated:

DOLORES OCDEN,

June 1, 2011

Accused-Appellant.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

LEONARDO-DE CASTRO, J.:

For Our consideration is an appeal from the Decision[1] dated April 21, 2006 of the Court of Appeals
in CA-G.R. CR.-H.C. No. 00044, which affirmed with modification the Decision[2] dated July 2, 2001 of the
Regional Trial Court (RTC), Baguio City, Branch 60, in Criminal Case No. 16315-R. The RTC found accusedappellant Dolores Ocden (Ocden) guilty of illegal recruitment in large scale, as defined and penalized
under Article 13(b), in relation to Articles 38(b), 34, and 39 of Presidential Decree No. 442, otherwise
known as the New Labor Code of the Philippines, as amended, in Criminal Case No. 16315-R; and of the
crime of estafa under paragraph 2(a), Article 315 of the Revised Penal Code, in Criminal Case Nos.
16316-R, 16318-R, and 16964-R.[3] The Court of Appeals affirmed Ocdens conviction in all four cases, but
modified the penalties imposed in Criminal Case Nos. 16316-R, 16318-R, and 16964-R,
The Amended Information[4] for illegal recruitment in large scale in Criminal Case No. 16315-R reads:
That during the period from May to December, 1998, in the City of Baguio, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused, did then
and there willfully, unlawfully and feloniously for a fee, recruit and promise employment
as factory workers in Italy to more than three (3) persons including, but not limited to
the following: JEFFRIES C. GOLIDAN, HOWARD C. GOLIDAN, KAREN M. SIMEON, JEAN S.
MAXIMO, NORMA PEDRO, MARYLYN MANA-A, RIZALINA FERRER, and MILAN DARING
without said accused having first secured the necessary license or authority from the
Department of Labor and Employment.

Ocden was originally charged with six counts of estafa in Criminal Case Nos. 16316-R, 16318-R,
16350-R, 16369-R, 16964-R, and 16966-R.
The Information in Criminal Case No. 16316-R states:
That sometime during the period from October to December, 1998 in the City of
Baguio, Philippines and within the jurisdiction of this Honorable Court, the above-named
accused, did then and there willfully, unlawfully and feloniously defraud JEFFRIES C.
GOLIDAN, by way of false pretenses, which are executed prior to or simultaneous with
the commission of the fraud, as follows, to wit: the accused knowing fully well that she
is not (sic) authorized job recruiter for persons intending to secure work abroad
convinced said Jeffries C. Golidan and pretended that she could secure a job for him/her
abroad, for and in consideration of the sum of P70,000.00 when in truth and in fact they
could not; the said Jeffries C. Golidan deceived and convinced by the false pretenses
employed by the accused parted away the total sum of P70,000.00, in favor of the
accused, to the damage and prejudice of the said Jeffries C. Golidan in the
aforementioned amount ofSEVENTY THOUSAND PESOS (P70,000,00), Philippine
Currency.[5]

The Informations in the five other cases for estafa contain substantially the same allegations as
the one above-quoted, except for the private complainants names, the date of commission of the
offense, and the amounts defrauded, to wit:
Case No. Name of the Date of Amount Private Complainant Commission of Defrauded
the Offense
16318-R Howard C. Golidan Sometime during the P70,000.00
period from October
to December 1998
16350-R Norma Pedro Sometime in May, 1998 P65,000.00
16369-R Milan O. Daring Sometime during the P70.000.00
period from November
13, 1998 to December
10, 1998
16964-R Rizalina Ferrer Sometime in September P70,000.00
16966-R Marilyn Mana-a Sometime in September P70,000.00[6]
1998
All seven cases against Ocden were consolidated on July 31, 2000 and were tried jointly after Ocden
pleaded not guilty.
The prosecution presented three witnesses namely: Marilyn Mana-a (Mana-a) and Rizalina Ferrer
(Ferrer), complainants; and Julia Golidan (Golidan), mother of complainants Jeffries and Howard
Golidan.
Mana-a testified that sometime in the second week of August 1998, she and Isabel Dao-as (Dao-as) went
to Ocdens house in Baguio City to apply for work as factory workers in Italy with monthly salaries of
US$1,200.00. They were required by Ocden to submit their bio-data and passports, pay the placement
fee of P70,000.00, and to undergo medical examination.
Upon submitting her bio-data and passport, Mana-a paid Ocden P500.00 for her certificate of
employment and P20,000.00 as down payment for her placement fee. On September 8, 1998, Ocden
accompanied Mana-a and 20 other applicants to Zamora Medical Clinic in Manila for their medical
examinations, for which each of the applicants paid P3,000.00. Mana-a also paid to Ocden P22,000.00 as
the second installment on her placement fee. When Josephine Lawanag (Lawanag), Mana-as sister,
withdrew her application, Lawanags P15,000.00 placement fee, already paid to Ocden, was credited to
Mana-a.[7]
Mana-a failed to complete her testimony, but the RTC considered the same as no motion to
strike the said testimony was filed.

Ferrer narrated that she and her daughter Jennilyn were interested to work overseas. About the second
week of September 1998, they approached Ocden through Fely Alipio (Alipio). Ocden showed Ferrer and
Jennilyn a copy of a job order from Italy for factory workers who could earn as much as $90,000.00 to
$100,000.00.[8] In the first week of October 1998, Ferrer and Jennilyn decided to apply for work, so they
submitted their passports and pictures to Ocden. Ferrer also went to Manila for medical examination,
for which she spent P3,500.00. Ferrer paid to Ocden on November 20, 1998 the initial amount
ofP20,000.00, and on December 8, 1998 the balance of her and Jennilyns placement fees. All in all,
Ferrer paid Ocden P140,000.00, as evidenced by the receipts issued by Ocden.[9]
Ferrer, Jennilyn, and Alipio were supposed to be included in the first batch of workers to be sent to
Italy. Their flight was scheduled on December 10, 1998. In preparation for their flight to Italy, the three
proceeded to Manila. In Manila, they were introduced by Ocden to Erlinda Ramos (Ramos). Ocden and
Ramos then accompanied Ferrer, Jennilyn, and Alipio to the airport where they took a flight to
Zamboanga. Ocden explained to Ferrer, Jennilyn, and Alipio that they would be transported to Malaysia
where their visa application for Italy would be processed.
Sensing that they were being fooled, Ferrer and Jennilyn decided to get a refund of their money, but
Ocden was nowhere to be found. Ferrer would later learn from the Baguio office of the Philippine
Overseas Employment Administration (POEA) that Ocden was not a licensed recruiter.
Expecting a job overseas, Ferrer took a leave of absence from her work. Thus, she lost income
amounting to P17,700.00, equivalent to her salary for one and a half months. She also spent P30,000.00
for transportation and food expenses.[10]
According to Golidan, the prosecutions third witness, sometime in October 1998, she inquired from
Ocden about the latters overseas recruitment. Ocden informed Golidan that the placement fee
was P70,000.00 for each applicant, that the accepted applicants would be sent by batches overseas, and
that priority would be given to those who paid their placement fees early. On October 30, 1998, Golidan
brought her sons, Jeffries and Howard, to Ocden. On the same date, Jeffries and Howard handed over to
Ocden their passports and P40,000.00 as down payment on their placement fees. On December 10,
1998, Jeffries and Howard paid the balance of their placement fees amounting to P100,000.00. Ocden
issued receipts for these two payments.[11] Ocden then informed Golidan that the first batch of accepted
applicants had already left, and that Jeffries would be included in the second batch for deployment,
while Howard in the third batch.
In anticipation of their deployment to Italy, Jeffries and Howard left for Manila on December 12, 1998
and December 18, 1998, respectively. Through a telephone call, Jeffries informed Golidan that his flight
to Italy was scheduled on December 16, 1998. However, Golidan was surprised to again receive a
telephone call from Jeffries saying that his flight to Italy was delayed due to insufficiency of funds, and
that Ocden went back to Baguio City to look for additional funds. When Golidan went to see Ocden,
Ocden was about to leave for Manila so she could be there in time for the scheduled flights of Jeffries
and Howard.
On December 19, 1998, Golidan received another telephone call from Jeffries who was in Zamboanga
with the other applicants. Jeffries informed Golidan that he was stranded in Zamboanga because Ramos
did not give him his passport. Ramos was the one who briefed the overseas job applicants in Baguio City
sometime in November 1998. Jeffries instructed Golidan to ask Ocdens help in looking for
Ramos. Golidan, however, could not find Ocden in Baguio City.

On December 21, 1998, Golidan, with the other applicants, Mana-a and Dao-as, went to Manila to meet
Ocden. When Golidan asked why Jeffries was in Zamboanga, Ocden replied that it would be easier for
Jeffries and the other applicants to acquire their visas to Italy in Zamboanga. Ocden was also able to
contact Ramos, who assured Golidan that Jeffries would be able to get his passport. When Golidan went
back home to Baguio City, she learned through a telephone call from Jeffries that Howard was now
likewise stranded in Zamboanga.
By January 1999, Jeffries and Howard were still in Zamboanga. Jeffries refused to accede to Golidans
prodding for him and Howard to go home, saying that the recruiters were already working out the
release of the funds for the applicants to get to Italy. Golidan went to Ocden, and the latter told her not
to worry as her sons would already be flying to Italy because the same factory owner in Italy, looking for
workers, undertook to shoulder the applicants travel expenses. Yet, Jeffries called Golidan once more
telling her that he and the other applicants were still in Zamboanga.
Golidan went to Ocdens residence. This time, Ocdens husband gave Golidan P23,000.00 which
the latter could use to fetch the applicants, including Jeffries and Howard, who were stranded in
Zamboanga. Golidan traveled again to Manila with Mana-a and Dao-as. When they saw each other,
Golidan informed Ocden regarding the P23,000.00 which the latters husband gave to her. Ocden begged
Golidan to give her the money because she needed it badly. Of the P23,000.00, Golidan
retained P10,000.00, Dao-as received P3,000.00, and Ocden got the rest. Jeffries was able to return to
Manila on January 16, 1999. Howard and five other applicants, accompanied by Ocden, also arrived in
Manila five days later.
Thereafter, Golidan and her sons went to Ocdens residence to ask for a refund of the money they had
paid to Ocden. Ocden was able to return only P50,000.00. Thus, out of the total amount of P140,000.00
Golidan and her sons paid to Ocden, they were only able to get back the sum of P60,000.00. After all
that had happened, Golidan and her sons went to the Baguio office of the POEA, where they discovered
that Ocden was not a licensed recruiter.[12]
The defense presented the testimony of Ocden herself.
Ocden denied recruiting private complainants and claimed that she was also an applicant for an
overseas job in Italy, just like them. Ocden identified Ramos as the recruiter.
Ocden recounted that she met Ramos at a seminar held in St. Theresas Compound, Navy Base, Baguio
City, sometime in June 1998. The seminar was arranged by Aida Comila (Comila), Ramoss sub-agent. The
seminar was attended by about 60 applicants, including Golidan. Ramos explained how one could apply
as worker in a stuff toys factory in Italy. After the seminar, Comila introduced Ocden to Ramos. Ocden
decided to apply for the overseas job, so she gave her passport and pictures to Ramos. Ocden also
underwent medical examination at Zamora Medical Clinic in Manila, and completely submitted the
required documents to Ramos in September 1998.
After the seminar, many people went to Ocdens house to inquire about the jobs available in Italy. Since
most of these people did not attend the seminar, Ocden asked Ramos to conduct a seminar at Ocdens
house. Two seminars were held at Ocdens house, one in September and another in December
1998. After said seminars, Ramos designated Ocden as leader of the applicants. As such, Ocden received
her co-applicants applications and documents; accompanied her co-applicants to Manila for medical

examination because she knew the location of Zamora Medical Clinic; and accepted placement fees in
the amount ofP70,000.00 each from Mana-a and Ferrer and from Golidan, the amount of P140,000.00
(for Jeffries and Howard).
Ramos instructed Ocden that the applicants should each pay P250,000.00 and if the applicants
could not pay the full amount, they would have to pay the balance through salary deductions once they
start working in Italy. Ocden herself paid Ramos P50,000.00 as placement fee and executed a
promissory note in Ramoss favor for the balance, just like any other applicant who failed to pay the full
amount. Ocden went to Malaysia with Ramoss male friend but she failed to get her visa for Italy.
Ocden denied deceiving Mana-a and Ferrer. Ocden alleged that she turned over to Ramos the money
Mana-a and Ferrer gave her, although she did not indicate in the receipts she issued that she received
the money for and on behalf of Ramos.
Ocden pointed out that she and some of her co-applicants already filed a complaint against Ramos
before the National Bureau of Investigation (NBI) offices in Zamboanga City and Manila.[13]
On July 2, 2001, the RTC rendered a Decision finding Ocden guilty beyond reasonable doubt of the
crimes of illegal recruitment in large scale (Criminal Case No. 16315-R) and three counts of estafa
(Criminal Case Nos. 16316-R, 16318-R, and 16964-R). The dispositive portion of said decision reads:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. In Criminal Case No. 16315-R, the Court finds the accused, DOLORES
OCDEN, GUILTY beyond reasonable doubt of the crime of Illegal Recruitment committed
in large scale as defined and penalized under Article 13(b) in relation to Article 38(b), 34
and 39 of the Labor Code as amended by P.D. Nos. 1693, 1920, 2018 and R.A. 8042. She
is hereby sentenced to suffer the penalty of life imprisonment and to pay a fine
of P100,000.00;
2. In Criminal Case No. 16316-R, the Court finds the accused, DOLORES
OCDEN, GUILTY beyond reasonable doubt of the crime of estafa and sentences her to
suffer an indeterminate penalty ranging from two (2) years, eleven (11) months and ten
(10) days of prision correccional, as minimum, up to nine (9) years and nine (9) months
of prision mayor, as maximum, and to indemnify the complainant Jeffries Golidan the
amount of P40,000.00;
3. In Criminal Case No. 16318-R, the Court finds the accused, DOLORES
OCDEN, GUILTY beyond reasonable doubt of the crime of estafa and sentences her to
suffer an indeterminate penalty ranging from two (2) years, eleven (11) months and ten
(10) days of prision correccional, as minimum, up to nine (9) years and nine (9) months
of prision mayor, as maximum, and to indemnify Howard Golidan the amount
of P40,000.00;

4. In Criminal Case No. 16350-R, the Court finds the accused, DOLORES
OCDEN, NOT GUILTY of the crime of estafa for lack of evidence and a verdict of acquittal
is entered in her favor;
5. In Criminal Case No. 16369-R, the Court finds the accused, DOLORES
OCDEN, NOT GUILTY of the crime of estafa for lack of evidence and a verdict of acquittal
is hereby entered in her favor;
6. In Criminal Case No. 16964-R, the Court finds the accused, DOLORES
OCDEN, GUILTY beyond reasonable doubt of the crime of estafa and sentences her to
suffer an indeterminate penalty of Four (4) years and Two (2) months of prision
correccional, as minimum, up to Twelve (12) years and Nine (9) months of reclusion
temporal, as maximum, and to indemnify Rizalina Ferrer the amount of P70,000.00; and
7. In Criminal Case No. 16966-R, the Court finds the accused, DOLORES
OCDEN, NOT GUILTY of the crime of estafa for insufficiency of evidence and a verdict of
acquittal is hereby entered in her favor.
In the service of her sentence, the provisions of Article 70 of the Penal Code
shall be observed.[14]

Aggrieved by the above decision, Ocden filed with the RTC a Notice of Appeal on August 15,
2001.[15] The RTC erroneously sent the records of the cases to the Court of Appeals, which, in turn,
correctly forwarded the said records to us.
In our Resolution[16] dated May 6, 2002, we accepted the appeal and required the parties to file their
respective briefs. In the same resolution, we directed the Superintendent of the Correctional Institute
for Women to confirm Ocdens detention thereat.
Ocden filed her Appellant's Brief on August 15, 2003,[17] while the People, through the Office of
the Solicitor General, filed its Appellee's Brief on January 5, 2004. [18]
Pursuant to our ruling in People v. Mateo,[19] we transferred Ocdens appeal to the Court of
Appeals. On April 21, 2006, the appellate court promulgated its Decision, affirming Ocdens conviction
but modifying the penalties imposed upon her for the three counts of estafa, viz:

[T]he trial court erred in the imposition of accused-appellants penalty.

Pursuant to Article 315 of the RPC, the penalty for estafa is prision
correccional in its maximum period to prision mayor in its minimum period. If the
amount of the fraud exceeds P22,000.00, the penalty provided shall be imposed in its

maximum period (6 years, 8 months and 21 days to 8 years), adding 1 year for each
additional P10,000.00; but the total penalty which may be imposed shall not exceed 20
years.

Criminal Case Nos. 16316-R and 16318-R involve the amount of P40,000.00
each. Considering that P18,000.00 is the excess amount, only 1 year should be added to
the penalty in its maximum period or 9 years. Also, in Criminal Case No. 16964-R, the
amount involved is P70,000.00. Thus, the excess amount is P48,000.00 and only 4
years should be added to the penalty in its maximum period.

WHEREFORE, the instant appeal is DISMISSED. The assailed Decision, dated 02

July 2001, of the Regional Trial Court (RTC) of Baguio City, Branch 60 is
hereby AFFIRMED with the following MODIFICATIONS:

1.

In Criminal Case No. 16316-R, accused-appellant is sentenced to 2 years,

11 months, and 10 days of prision correccional, as minimum to 9 years
of prision mayor, as maximum and to indemnify Jeffries Golidan the amount
ofP40,000.00;

2.

In Criminal Case No. 16318-R, accused-appellant is sentenced to 2 years,

11 months, and 10 days of prision correccional, as minimum to 9 years
of prision mayor, as maximum and to indemnify Howard Golidan the
amount ofP40,000.00; and

3.

In Criminal Case No. 16964-R, accused-appellant is sentenced to 4 years

and 2 months of prision correccional, as minimum to 12 years of prision
mayor, as maximum and to indemnify Rizalina Ferrer the amount
of P70,000.00.[20]

Hence, this appeal, in which Ocden raised the following assignment of errors:

THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF ILLEGAL

RECRUITMENT COMMITTED IN LARGE SCALE ALTHOUGH THE CRIME WAS NOT PROVEN
BEYOND REASONABLE DOUBT.

II

THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF ESTAFA IN CRIMINAL

CASES NOS. 16316-R, 16318-R AND 16[9]64-R.[21]

After a thorough review of the records of the case, we find nothing on record that would justify
a reversal of Ocdens conviction.
Illegal recruitment in large scale

Ocden contends that the prosecution failed to prove beyond reasonable doubt that she is guilty of the
crime of illegal recruitment in large scale. Other than the bare allegations of the prosecution witnesses,
no evidence was adduced to prove that she was a non-licensee or non-holder of authority to lawfully
engage in the recruitment and placement of workers. No certification attesting to this fact was formally
offered in evidence by the prosecution.

Ocdens aforementioned contentions are without merit.

Article 13, paragraph (b) of the Labor Code defines and enumerates the acts which
constitute recruitment and placement:

(b) Recruitment and placement refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers, and includes referrals, contract
services, promising for advertising for employment locally or abroad, whether for profit

or not: Provided, That any person or entity which, in any manner, offers or promises for
a fee employment to two or more persons shall be deemed engaged in recruitment and
placement.

The amendments to the Labor Code introduced by Republic Act No. 8042, otherwise known as
the Migrant Workers and Overseas Filipinos Act of 1995, broadened the concept of illegal
recruitment and provided stiffer penalties, especially for those that constitute economic
sabotage, i.e., illegal

recruitment

in

large

scale

and

illegal

recruitment

committed

a syndicate. Pertinent provisions of Republic Act No. 8042 are reproduced below:

SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any
act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers and includes referring, contract services, promising or advertising for
employment abroad, whether for profit or not, when undertaken by a non-licensee or
non-holder of authority contemplated under Article 13(f) of Presidential Decree No.
442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That
any such non-licensee or non-holder who, in any manner, offers or promises for a fee
employment abroad to two or more persons shall be deemed so engaged. It shall
likewise include the following acts, whether committed by any person, whether a 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;

(b) To furnish or publish any false notice or information or document in relation to

recruitment or employment;

(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor
Code;

by

(d) To induce or attempt to induce a worker already employed to quit his employment
in order to offer him another unless the transfer is designed to liberate a worker from
oppressive terms and conditions of employment;

(e) To influence or attempt to influence any person or entity not to employ any worker
who has not applied for employment through his agency;

(f) To engage in the recruitment or placement of workers in jobs harmful to public

health or morality or to the dignity of the Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and

Employment or by his duly authorized representative;

(h) To fail to submit reports on the status of employment, placement vacancies,

remittance of foreign exchange earnings, separation from jobs, departures and such
other matters or information as may be required by the Secretary of Labor and
Employment;

(i) To substitute or alter to the prejudice of the worker, employment contracts approved
and verified by the Department of Labor and Employment from the time of actual
signing thereof by the parties up to and including the period of the expiration of the
same without the approval of the Department of Labor and Employment;

(j) For an officer or agent of a recruitment or placement agency to become an officer or

member of the Board of any corporation engaged in travel agency or to be engaged
directly or indirectly in the management of a travel agency;

(k) To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations other than those authorized under the Labor Code
and its implementing rules and regulations;

(l) Failure to actually deploy without valid reason as determined by the Department of
Labor and Employment; and

(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker's fault. Illegal
recruitment when committed by a syndicate or in large scale shall be considered an
offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring or confederating with one another. It is deemed
committed in large scale if committed against three (3) or more persons individually or
as a group.

xxxx

Sec. 7. Penalties.

(a) Any person found guilty of illegal recruitment shall suffer the penalty of
imprisonment of not less than six (6) years and one (1) day but not more than twelve
(12) years and a fine of Two hundred thousand pesos (P200,000.00) nor more than Five
hundred thousand pesos (P500,000.00).

(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand
pesos (P500,000.00) nor more than One million pesos (P1,000,000.00) shall be imposed
if illegal recruitment constitutes economic sabotage as defined herein.

Provided, however, That the maximum penalty shall be imposed if the

person illegally recruited is less than eighteen (18) years of age or committed by a nonlicensee or non-holder of authority. (Emphasis ours.)

It is well-settled that to prove illegal recruitment, it must be shown that appellant gave
complainants the distinct impression that he had the power or ability to send complainants abroad for
work such that the latter were convinced to part with their money in order to be employed. [22] As
testified to by Mana-a, Ferrer, and Golidan, Ocden gave such an impression through the following acts:
(1) Ocden informed Mana-a, Ferrer, and Golidan about the job opportunity in Italy and the list of
necessary requirements for application; (2) Ocden required Mana-a, Ferrer, and Golidans sons, Jeffries
and Howard, to attend the seminar conducted by Ramos at Ocdens house in Baguio City; (3) Ocden
received the job applications, pictures, bio-data, passports, and the certificates of previous employment
(which was also issued by Ocden upon payment of P500.00), of Mana-a, Ferrer, and Golidans sons,
Jeffries and Howard; (4) Ocden personally accompanied Mana-a, Ferrer, and Golidans sons, Jeffries and
Howard, for their medical examinations in Manila; (5) Ocden received money paid as placement fees by
Mana-a, Ferrer, and Golidans sons, Jeffries and Howard, and even issued receipts for the same; and (6)
Ocden assured Mana-a, Ferrer, and Golidans sons, Jeffries and Howard, that they would be deployed to
Italy.

It is not necessary for the prosecution to present a certification that Ocden is a non-licensee or
non-holder of authority to lawfully engage in the recruitment and placement of workers. Section 6 of
Republic Act No. 8042 enumerates particular acts which would constitute illegal recruitment whether
committed by any person, whether a non-licensee, non-holder, licensee or holder of authority. Among
such acts, under Section 6(m) of Republic Act No. 8042, is the [f]ailure 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 workers fault.

Since illegal recruitment under Section 6(m) can be committed by any person, even by a licensed
recruiter, a certification on whether Ocden had a license to recruit or not, is inconsequential. Ocden
committed illegal recruitment as described in said provision by receiving placement fees from Mana-a,
Ferrer, and Golidans two sons, Jeffries and Howard, evidenced by receipts Ocden herself issued; and
failing to reimburse/refund to Mana-a, Ferrer, and Golidans two sons the amounts they had paid when
they were not able to leave for Italy, through no fault of their own.

Ocden questions why it was Golidan who testified for private complainants Jeffries and
Howard. Golidan had no personal knowledge of the circumstances proving illegal recruitment and could

not have testified on the same. Also, Jeffries and Howard already executed an affidavit of desistance. All
Golidan wants was a reimbursement of the placement fees paid.

Contrary to Ocdens claims, Golidan had personal knowledge of Ocdens illegal recruitment
activities, which she could competently testify to. Golidan herself had personal dealings with Ocden as
Golidan assisted her sons, Jeffries and Howard, in completing the requirements for their overseas job
applications, and later on, in getting back home from Zamboanga where Jeffries and Howard were
stranded, and in demanding a refund from Ocden of the placement fees paid. That Golidan is seeking a
reimbursement of the placement fees paid for the failed deployment of her sons Jeffries and Howard
strengthens, rather than weakens, the prosecutions case. Going back to illegal recruitment under
Section 6(m) of Republic Act No. 8042, failure to reimburse the expenses incurred by the worker when
deployment does not actually take place, without the workers fault, is illegal recruitment.
The affidavit of desistance purportedly executed by Jeffries and Howard does not exonerate
Ocden from criminal liability when the prosecution had successfully proved her guilt beyond reasonable
doubt.In People v. Romero,[23] we held that:
The fact that complainants Bernardo Salazar and Richard Quillope executed a
Joint Affidavit of Desistance does not serve to exculpate accused-appellant from
criminal liability insofar as the case for illegal recruitment is concerned since the Court
looks with disfavor the dropping of criminal complaints upon mere affidavit of
desistance of the complainant, particularly where the commission of the offense, as is in
this case, is duly supported by documentary evidence.
Generally, the Court attaches no persuasive value to affidavits of desistance,
especially when it is executed as an afterthought. It would be a dangerous rule for
courts to reject testimonies solemnly taken before the courts of justice simply because
the witnesses who had given them, later on, changed their mind for one reason or
another, for such rule would make solemn trial a mockery and place the investigation of
truth at the mercy of unscrupulous witness.
Complainants Bernardo Salazar and Richard Quillope may have a change of
heart insofar as the offense wrought on their person is concerned when they executed
their joint affidavit of desistance but this will not affect the public prosecution of the
offense itself. It is relevant to note that the right of prosecution and punishment for a
crime is one of the attributes that by a natural law belongs to the sovereign power
instinctly charged by the common will of the members of society to look after, guard
and defend the interests of the community, the individual and social rights and the
liberties of every citizen and the guaranty of the exercise of his rights. This cardinal
principle which states that to the State belongs the power to prosecute and punish

crimes should not be overlooked since a criminal offense is an outrage to the sovereign
State.[24]

In her bid to exculpate herself, Ocden asserts that she was also just an applicant for overseas
employment; and that she was receiving her co-applicants job applications and other requirements, and
accepting her co-applicants payments of placement fees, because she was designated as the applicants
leader by Ramos, the real recruiter.

Ocdens testimony is self-serving and uncorroborated. Ocdens denial of any illegal recruitment
activity cannot stand against the prosecution witnesses positive identification of her in court as the
person who induced them to part with their money upon the misrepresentation and false promise of
deployment to Italy as factory workers. Besides, despite several opportunities given to Ocden by the
RTC, she failed to present Ramos, who Ocden alleged to be the real recruiter and to whom she turned
over the placement fees paid by her co-applicants.
Between the categorical statements of the prosecution witnesses, on the one hand, and the
bare denial of Ocden, on the other, the former must perforce prevail. An affirmative testimony is far
stronger than a negative testimony especially when the former comes from the mouth of a credible
witness. Denial, same as an alibi, if not substantiated by clear and convincing evidence, is negative and
self-serving evidence undeserving of weight in law. It is considered with suspicion and always received
with caution, not only because it is inherently weak and unreliable but also because it is easily fabricated
and concocted.[25]
Moreover, in the absence of any evidence that the prosecution witnesses were motivated by
improper motives, the trial courts assessment of the credibility of the witnesses shall not be interfered
with by this Court.[26] It is a settled rule that factual findings of the trial courts, including their
assessment of the witnesses credibility, are entitled to great weight and respect by the Supreme Court,
particularly when the Court of Appeals affirmed such findings. After all, the trial court is in the best
position to determine the value and weight of the testimonies of witnesses. The absence of any showing
that the trial court plainly overlooked certain facts of substance and value that, if considered, might
affect the result of the case, or that its assessment was arbitrary, impels the Court to defer to the trial
courts determination according credibility to the prosecution evidence. [27]
Ocden further argues that the prosecution did not sufficiently establish that she illegally
recruited at least three persons, to constitute illegal recruitment on a large scale. Out of the victims
named in the Information, only Mana-a and Ferrer testified in court. Mana-a did not complete her
testimony, depriving Ocden of the opportunity to cross-examine her; and even if Mana-as testimony
was not expunged from the record, it was insufficient to prove illegal recruitment by Ocden. Although
Ferrer testified that she and Mana-a filed a complaint for illegal recruitment against Ocden, Ferrers
testimony is competent only as to the illegal recruitment activities committed by Ocden against her, and
not against Mana-a. Ocden again objects to Golidans testimony as hearsay, not being based on Golidans
personal knowledge.

Under the last paragraph of Section 6, Republic Act No. 8042, illegal recruitment shall be
considered an offense involving economic sabotage if committed in a large scale, that is, committed
against three or more persons individually or as a group.
In People v. Hu,[28] we held that a conviction for large scale illegal recruitment must be based on
a finding in each case of illegal recruitment of three or more persons, whether individually or as a
group.While it is true that the law does not require that at least three victims testify at the trial,
nevertheless, it is necessary that there is sufficient evidence proving that the offense was committed
against three or more persons. In this case, there is conclusive evidence that Ocden recruited Mana-a,
Ferrer, and Golidans sons, Jeffries and Howard, for purported employment as factory workers in Italy. As
aptly observed by the Court of Appeals:
Mana-as testimony, although not completed, sufficiently established that
accused-appellant promised Mana-a a job placement in a factory in Italy for a fee with
accused-appellant even accompanying her for the required medical
examination. Likewise, Julia Golidans testimony adequately proves that accusedappellant recruited Jeffries and Howard Golidan for a job in Italy, also for a fee. Contrary
to the accused-appellants contention, Julia had personal knowledge of the facts and
circumstances surrounding the charges for illegal recruitment and estafa filed by her
sons. Julia was not only privy to her sons recruitment but also directly transacted with
accused-appellant, submitting her sons requirements and paying the placement fees as
evidenced by a receipt issued in her name. Even after the placement did not materialize,
Julia acted with her sons to secure the partial reimbursement of the placement fees. [29]

And even though only Ferrer and Golidan testified as to Ocdens failure to reimburse the
placements fees paid when the deployment did not take place, their testimonies already established the
fact of non-reimbursement as to three persons, namely, Ferrer and Golidans two sons, Jeffries and
Howard.
Section 7(b) of Republic Act No. 8042 prescribes a penalty of life imprisonment and a fine of not
less than P500,000.00 nor more than P1,000,000.00 if the illegal recruitment constitutes economic
sabotage. The RTC, as affirmed by the Court of Appeals, imposed upon Ocden the penalty of life
imprisonment and a fine of only P100,000.00. Since the fine of P100,000 is below the minimum set by
law, we are increasing the same to P500,000.00.

Estafa
We are likewise affirming the conviction of Ocden for the crime of estafa. The very same
evidence proving Ocdens liability for illegal recruitment also established her liability for estafa.

It is settled that a person may be charged and convicted separately of illegal recruitment under
Republic Act No. 8042 in relation to the Labor Code, and estafa under Article 315, paragraph 2(a) of the
Revised Penal Code. We explicated in People v. Yabut[30] that:
In this jurisdiction, it is settled that a person who commits illegal recruitment
may be charged and convicted separately of illegal recruitment under the Labor Code
and estafa under par. 2(a) of Art. 315 of the Revised Penal Code. The offense of illegal
recruitment is malum prohibitum where the criminal intent of the accused is not
necessary for conviction, while estafa is malum in se where the criminal intent of the
accused is crucial for conviction. Conviction for offenses under the Labor Code does not
bar conviction for offenses punishable by other laws. Conversely, conviction for estafa
under par. 2(a) of Art. 315 of the Revised Penal Code does not bar a conviction for illegal
recruitment under the Labor Code. It follows that ones acquittal of the crime of estafa
will not necessarily result in his acquittal of the crime of illegal recruitment in large
scale, and vice versa.[31]

Article 315, paragraph 2(a) of the Revised Penal Code defines estafa as:

Art. 315. Swindling (estafa). - Any person who shall defraud another by any of the
means mentioned hereinbelow x x x:

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 are: (a) that the accused defrauded another by abuse of confidence or by
means of deceit, and (b) that damage or prejudice capable of pecuniary estimation is caused to the
offended party or third person.[32]

Both these elements are present in the instant case. Ocden represented to Ferrer, Golidan, and
Golidans two sons, Jeffries and Howard, that she could provide them with overseas jobs. Convinced by
Ocden, Ferrer, Golidan, and Golidans sons paid substantial amounts as placement fees to her. Ferrer and
Golidans sons were never able to leave for Italy, instead, they ended up in Zamboanga, where, Ocden
claimed, it would be easier to have their visas to Italy processed. Despite the fact that Golidans sons,
Jeffries and Howard, were stranded in Zamboanga for almost a month, Ocden still assured them and
their mother that they would be able to leave for Italy. There is definitely deceit on the part of Ocden
and damage on the part of Ferrer and Golidans sons, thus, justifying Ocdens conviction for estafa in
Criminal Case Nos. 16316-R, 16318-R, and 16964-R.

The penalty for estafa depends on the amount of defraudation. According to Article 315 of the
Revised Penal Code:

Art. 315. Swindling (estafa). Any person who shall defraud another by any of the
means mentioned hereinbelow shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision mayor in
its minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed
22,000 pesos; and if such amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year for each additional
10,000 pesos; but the total penalty which may be imposed shall not exceed twenty
years. In such cases, and in connection with the accessory penalties which may be
imposed and for the purpose of the other provisions of this Code, the penalty shall be
termed prision mayor or reclusion temporal, as the case may be.

The prescribed penalty for estafa under Article 315 of the Revised Penal Code, when the amount
of fraud is over P22,000.00, is prision correccional maximum to prision mayor minimum, adding one year
to the maximum period for each additional P10,000.00, provided that the total penalty shall not exceed
20 years.

Applying the Indeterminate Sentence Law, we take the minimum term from the penalty next
lower than the minimum prescribed by law, or anywhere within prision correccional minimum and
medium (i.e., from 6 months and 1 day to 4 years and 2 months). [33] Consequently, both the RTC and the
Court of Appeals correctly fixed the minimum term in Criminal Case Nos. 16316-R and 16318-R at 2
years, 11 months, and 10 days of prision correccional; and in Criminal Case No. 16964-R at 4 years and 2
months of prision correccional, since these are within the range of prision correccional minimum and
medium.

As for the maximum term under the Indeterminate Sentence Law, we take the maximum period
of the prescribed penalty, adding 1 year of imprisonment for every P10,000.00 in excess of P22,000.00,
provided that the total penalty shall not exceed 20 years. To compute the maximum period of the
prescribed penalty, the time included in prision correccional maximum to prision mayor minimum shall
be divided into three equal portions, with each portion forming a period. Following this computation,
the maximum period for prision correccional maximum to prision mayor minimum is from 6 years, 8
months, and 21 days to 8 years. The incremental penalty, when proper, shall thus be added to anywhere
from 6 years, 8 months, and 21 days to 8 years, at the discretion of the court. [34]

In computing the incremental penalty, the amount defrauded shall be substracted

by P22,000.00, and the difference shall be divided by P10,000.00. Any fraction of a year shall be
discarded as was done starting with People v. Pabalan.[35]

In Criminal Case Nos. 16316-R and 16318-R, brothers Jeffries and Howard Golidan were each
defrauded of the amount of P40,000.00, for which the Court of Appeals sentenced Ocden to an
indeterminate penalty of 2 years, 11 months, and 10 days of prision correccional as minimum, to 9 years
of prision mayor as maximum. Upon review, however, we modify the maximum term of the
indeterminate penalty imposed on Ocden in said criminal cases. Since the amount defrauded
exceeds P22,000.00 by P18,000.00, 1 year shall be added to the maximum period of the prescribed
penalty (anywhere between 6 years, 8 months, and 21 days to 8 years). There being no aggravating
circumstance, we apply the lowest of the maximum period, which is 6 years, 8 months, and 21
days. Adding the one year incremental penalty, the maximum term of Ocdens indeterminate sentence in
these two cases is only 7 years, 8 months, and 21 days of prision mayor.

In Criminal Cases No. 19694-R, Ferrer was defrauded of the amount of P70,000.00, for which the
Court of Appeals sentenced Ocden to an indeterminate penalty of 4 years and 2 months of prision
correccional, as minimum, to 12 years of prision mayor, as maximum. Upon recomputation, we also
have to modify the maximum term of the indeterminate sentence imposed upon Ocden in Criminal Case
No. 19694-R. Given that the amount defrauded exceeds P22,000.00 by P48,000.00, 4 years shall be
added to the maximum period of the prescribed penalty (anywhere between 6 years, 8 months, and 21
days to 8 years). There likewise being no aggravating circumstance in this case, we add the 4 years of
incremental penalty to the lowest of the maximum period, which is 6 years, 8 months, and 21 days. The
maximum term, therefor, of Ocdens indeterminate sentence in Criminal Case No. 19694-R is only 10
years, 8 months, and 21 days of prision mayor.

WHEREFORE, the instant appeal of accused-appellant Dolores Ocden is DENIED. The Decision
dated

April

21,

2006

of

the

Court

of

Appeals

in CA-G.R.

CR.-H.C.

No.

00044 is AFFIRMED withMODIFICATION to read as follows:

1.

In Criminal Case

No.

16315-R, the

Court finds the

accused, Dolores

Ocden, GUILTY beyond reasonable doubt of the crime of Illegal Recruitment committed in large scale as
defined and penalized under Article 13(b) in relation to Articles 38(b), 34 and 39 of the Labor Code, as
amended. She is hereby sentenced to suffer the penalty of life imprisonment and to pay a fine
of P500,000.00;
2. In Criminal Case No. 16316-R, the Court finds the accused, Dolores Ocden, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to an indeterminate penalty of 2 years, 11
months, and 10 days of prision correccional, as minimum, to 7 years, 8 months, and 21 days of prision
mayor, as maximum, and to indemnify Jeffries Golidan the amount of P40,000.00;

3. In Criminal Case No. 16318-R, the Court finds the accused, Dolores Ocden, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to an indeterminate penalty of 2 years, 11
months, and 10 days of prision correccional, as minimum, to 7 years, 8 months, and 21 days of prision
mayor, as maximum, and to indemnify Howard Golidan the amount of P40,000.00; and

4. In Criminal Case No. 16964-R, the Court finds the accused, Dolores Ocden, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to an indeterminate penalty of 4 years and 2
months of prision correccional, as minimum, to 10 years, 8 months, and 21 days of prision mayor, as
maximum, and to indemnify Rizalina Ferrer the amount of P70,000.00.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 195668

June 25, 2014

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
MA. HARLETA VELASCO y BRIONES, MARICAR B. INOVERO, MARISSA DIALA, and BERNA M.
PAULINO,Accused,
MARICAR B. INOVERO, Accused-Appellant.
DECISION
BERSAMIN, J.:
The several accused in illegal recruitment committed in large scale against whom the State establishes a
conspiracy are each equally criminally and civilly liable. It follows, therefore, that as far as civil liability is
concerned each is solidarily liable to the victims of the illegal recruitment for the reimbursement of the
sums collected from them, regardless of the extent of the participation of the accused in the illegal
recruitment.
The Case
Accused-appellant Maricar B. Inovero seeks the review and reversal of the decision promulgated on
August 26, 2010,1 whereby the Court of Appeals (CA) affirmed her conviction for illegal recruitment
committed in large scale amounting to economic sabotage under the judgment rendered on January 14,
2008 by the Regional Trial Court (RTC), Branch 133, in Makati City. 2
Antecedents
On March 17, 2004, the Office of the City Prosecutor of Makati City filed in the RTC two
informations3 charging Inovero, Ma. Harleta Velasco y Briones, Marissa Diala and Berna Paulino with
illegal recruitment as defined and penalized under Section 6 of Republic Act No. 8042 (Migrant Workers
Act of 1995), and 11 informations4 charging the same accused with estafa as defined and penalized
under Article315, paragraph 2(a) of the Revised Penal Code. Only Inovero was arrested and prosecuted,
the other accused having remained at large.
Six cases charging estafa (Criminal Case No. 04-1565, Criminal Case No. 1568, Criminal Case No. 1570,
Criminal Case No. 1571 and Criminal Case No. 1572 and Criminal Case No. 1573) and one of the two
charging illegal recruitment (Criminal Case No. 04-1563) were provisionally dismissed because of the
failure of the complainants to prosecute.5 The seven cases were later permanently dismissed after the
complainants did not revive them within two years, as provided in Section 8,6 Rule 117 of the Rules of
Court.

Trial on the merits ensued as to the remaining cases (Criminal Case No. 04-1562, for illegal recruitment;
and Criminal Case No. 04-1564; Criminal Case No. 04-1566; Criminal Case No. 04-1567; Criminal Case
No. 1569 and Criminal Case No. 04-1574, for estafa).7
The CA recounted the transactions between the complainants and the accused, including Inovero, in the
following manner:
Regarding Criminal Case No. 04-1562, the prosecution presented the five (5) private complainants as
witnesses to prove the crime of Illegal Recruitment, namely: Novesa Baful ("Baful"), Danilo Brizuela
("Brizuela"), Rosanna Aguirre ("Aguirre"), Annaliza Amoyo ("Amoyo"), and Teresa Marbella ("Marbella"),
and Mildred Versoza ("Versoza") from the Philippine Overseas Employment Administration ("POEA").
Baful testified that on May 20, 2003 she, together with her sister-in-law, went to Harvel International
Talent Management and Promotion ("HARVEL") at Unit 509 Cityland Condominium, Makati City upon
learning that recruitment for caregivers to Japan was on-going there. On said date, she allegedly met
Inovero; Velasco, and Diala, and saw Inovero conducting a briefing on the applicants. She also testified
that Diala, the alleged talent manager, directed her to submit certain documents, and to pay Two
Thousand Five Hundred Pesos (P2,500.00) as training fee, as well as Thirty Thousand Pesos (P30,000.00)
as placement and processing fees. Diala also advised her to undergo physical examination.
On June 6, 2003, after complying with the aforesaid requirements and after paying Diala the amounts of
Eighteen Thousand Pesos (P18,000.00) and Ten Thousand pesos (P10,000.00), Baful was promised
deployment within two (2) to three (3) months. She likewise testified that Inovero briefed her and her
co-applicants on what to wear on the day of their departure. However, she was never deployed. Finally,
she testified that she found out that HARVEL was not licensed to deploy workers for overseas
employment.
Brizuela, another complainant, testified that he went to HARVELs office in Makati on February 7, 2003
to inquire on the requirements and hiring procedure for a caregiver in Japan. There, Diala told him the
amount required as processing fee and the documents to be submitted. And when he submitted on
March 7, 2003 the required documents and payments, it was, this time, Paulino who received them. He
claimed that he underwent training and medical examination; he likewise attended an orientation
conducted by Inovero at which time, he and his batchmates were advised what clothes to wear on the
day of their departure; he was assured of deployment on the first week of June 2003, however, on the
eve of his supposed "pre-departure orientation seminar," Paulino texted him that the seminar was
cancelled because Inovero, who had the applicants money, did not show up. He testified that he was
not deployed. Neither was his money returned, as promised.
On cross-examination, Brizuela testified that Inovero was the one who conducted the orientation, and
represented to all the applicants that most of the time, she was in the Japanese Embassy expediting the
applicants visa.
Aguirre, the third complainant to testify, alleged that she went to HARVEL on May 22, 2003, to apply as
caregiver in Japan; there, Diala informed her that Inovero was oneof the owners of HARVEL and Velasco
was its President; she paid Thirty Five Thousand Pesos (P35,000.00), and submitted her documents,
receipt of which was acknowledged by Diala; despite her undergoing medical examination and several

training seminars, she was however not deployed to Japan. Worse, she found out that HARVEL was not
licensed to recruit workers.
Amoyo, the fourth complainant, testified that she went to HARVELs office on May 28, 2003 to apply as
caregiver in Japan, and Diala required her to submit certain documents, to undergo training and medical
examination, and to pay Thirty Five Thousand Pesos (P35,000.00) as placement and processing fees.
However, after complying with said requirements, she was never deployed as promised.
Marbella was the last complainant to testify. She alleged that she applied for the position of janitress at
HARVEL sometime in December 2002; just like the rest of the complainants, she was required to submit
certain documents and to pay a total amount of Twenty Thousand pesos (P20,000.00) as processing fee;
after paying said fee, Diala and Inovero promised her and the other applicants that they will be deployed
in three (3) months or in June 2003; however, the promised deployment never materialized; she later
found out that HARVEL was not even licensed to recruit workers.
[Mildred] Versoza, on the other hand, is a Labor and Employment Officer at the POEA Licensing Branch.
She testified that she prepared a Certification certifying that neither HARVEL nor Inovero was authorized
to recruit workers for overseas employment as per records at their office.
In her defense, Inovero denied the allegations hurled against her. As summarized in the assailed
Decision, she claimed that she is the niece of accused Velasco, the owner of HARVEL, but denied
working there. Explaining her presence in HARVEL, she alleged that she worked for her uncle, Velascos
husband, as an office assistant, hence, for at least two or three times a week, she had to go to HARVEL
on alleged errands for her uncle. She also testified that her alleged errands mainly consisted of serving
food and refreshments during orientations at HARVEL. Inovero likewise denied receiving any money
from the complainants, nor issuing receipts therefor.8
Judgment of the RTC
On January 14, 2008, the RTC rendered judgment acquitting Inovero of five counts of estafabut
convicting her in Criminal Case No. 04-1562 of illegal recruitment committed in large scale as defined
and penalized by Section 6 and Section 7 of Republic Act No. 8042 (Migrant Workers and Overseas
Filipinos Act of 1995), disposing thusly:
WHEREFORE, judgment is hereby rendered in the aforestated cases as follows:
In Criminal Case No. 04-1562, accused Maricar Inovero is found guilty beyond reasonable doubt of the
crime of Illegal Recruitment in large scale defined and penalized under Sections 6 and 7, II, of Republic
Act No. 8042 otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, and is
hereby sentenced to suffer the penalty of life imprisonment. She is likewise ordered to pay a fine of Five
Hundred Thousand Pesos (P500,000.00).
Criminal Case No. 04-1563 also for illegal recruitment in large scale is hereby ordered dismissed to its
finality for failure of complainants Alvin De Leon, Roderick Acuna, Agosto Vale and Marina Viernes to
revive said case despite the lapse of two years from its provisional dismissal.

Criminal Cases No. 04-1564, 1566, 1567, 1569, 1571 and 1574 are hereby ordered DISMISSED for failure
of the prosecution to adduce sufficient evidence to prove all the elements of the said offense.
Criminal Cases Nos. 1565, 1568, 1570, 1572 and 1573 also for estafa [are] hereby ordered dismissed to
its finality for failure of complainants Agosto Vale, Alvin De Leon, Roselyn Saruyda, Roderick Acuna and
Marina Viernes to revive said cases despite the lapse of two (2) years from its provisional dismissal.
Considering that the accused is a detention prisoner, she shall be credited in the service of her sentence
with the full time during which she has undergone preventive imprisonment if she agrees voluntarily to
abide by the same disciplinary rules imposed upon convicted prisoners, otherwise, with four-fifths
thereof.
Meanwhile, considering that the accused Ma. Harleta B. Velasco, Marissa Diala and Berna Paulino are
still at large, let alias warrants of arrest be issued against them. In the meantime, let the cases filed
against them be archived, which shall be revived upon their apprehension.
SO ORDERED.9
Decision of the CA
Inovero appealed, contending that:
THE TRIAL COURT GRAVELY ERRED IN FINDING ACCUSEDAPPELLANT GUILTY OF THE CRIME CHARGED
DESPITE THE PROSECUTIONS FAILURE TO ESTABLISH [HER] GUILT BEYOND REASONABLE DOUBT. 10
On August 26, 2010, the CA affirmed the conviction, viz:
WHEREFORE, the instant appeal is DISMISSED. The January 14, 2008 Decision of the RTC is AFFIRMED.
SO ORDERED.11
Issue
In this appeal, Inovero insists that the CA erred in affirming her conviction by the RTC because she had
not been an employee of Harvel at any time; that she could be faulted only for her association with the
supposed illegal recruiters; that in all stages of the complainants recruitment for overseas employment
by Harvel, they had transacted only and directly with Diala; and that the certification from the POEA to
the effect she was not a licensed recruiter was not a positive proof that she engaged in illegal
recruitment.
Ruling of the Court
The appeal lacks merit.
In its assailed decision, the CA affirmed the entire findings of fact of the RTC, stating:

The essential elements of illegal recruitment committed in large scale are: (1) that the accused engaged
in acts of recruitment and placement of workers as defined under Article 13(b) of the Labor Code, or in
any prohibited activities under Article 34 of the same Code; (2) that the accused had not complied with
the guidelines issued by the Secretary of Labor and Employment with respect to the requirement to
secure a license or authority to recruit and deploy workers; and (3) that the accused committed the
unlawful acts against 3 or more persons. In simplest terms, illegal recruitment is committed by persons
who, without authority from the government, give the impression that they have the power to send
workers abroad for employment purposes. In Our view, despite Inoveros protestations that she did not
commit illegal recruitment, the following circumstances contrarily convince Us that she was into illegal
recruitment.
First, private complainants Baful and Brizuela commonly testified that Inovero was the one who
conducted orientations/briefings on them; informed them, among others, on how much their salary
would be as caregivers in Japan; and what to wear when they finally will be deployed. Second, when
Diala introduced her (Inovero) to private complainant Amoyo as one of the owners of HARVEL, Inovero
did not bother to correct said representation. Inoveros silence is clearly an implied acquiescence to said
representation.
Third, Inovero, while conducting orientation on private complainant Brizuela, represented herself as the
one expediting the release of applicants working visa for Japan.
Fourth, in a Certification issued and attested to by POEAs Versoza Inovero had no license nor
authority to recruit for overseas employment.
Based on the foregoing, there is therefore no doubt that the RTC correctly found that Inovero
committed illegal recruitment in large scale by giving private complainants the impression that she can
send them abroad for employment purposes, despite the fact that she had no license or authority to do
so.12
It is basic that the Court, not being a trier of facts, must of necessity rely on the findings of fact by the
trial court which are conclusive and binding once affirmed by the CA on intermediate review. The
bindingness of the trial courts factual findings is by virtue of its direct access to the evidence. The direct
access affords the trial court the unique advantage to observe the witnesses demeanor while testifying,
and the personal opportunity to test the accuracy and reliability of their recollections of past events,
both of which are very decisive in a litigation like this criminal prosecution for the serious crime of illegal
recruitment committed in large scale where the parties have disagreed on the material facts. The Court
leaves its confined precinct of dealing only with legal issues in order to deal with factual ones only when
the appellant persuasively demonstrates a clear error in the appreciation of the evidence by both the
trial and the appellate courts. This demonstration was not done herein by the appellant. Hence, the
Court upholds the CAs affirmance of the factual findings by the trial court.
All that Inoveros appeal has offered was her denial of complicity in the illegal recruitment of the
complainants. But the complainants credibly described and affirmed her specific acts during the
commission of the crime of illegal recruitment. Their positive assertions were far trustworthier than her
mere denial.

Denial, essentially a negation of a fact, does not prevail over an affirmative assertion of the
fact.1wphi1 Thus, courts both trial and appellate have generally viewed the defense of denial in
criminal cases with considerable caution, if not with outright rejection. Such judicial attitude comes from
the recognition that denial is inherently weak and unreliable by virtue of its being an excuse too easy
and too convenient for the guilty to make. To be worthy of consideration at all, denial should be
substantiated by clear and convincing evidence. The accused cannot solely rely on her negative and selfserving negations, for denial carries no weight in law and has no greater evidentiary value than the
testimony of credible witnesses who testify on affirmative matters.13 It is no different here.
We concur with the RTC and the CA that Inovero was criminally liable for the illegal recruitment charged
against her. Strong and positive evidence demonstrated beyond reasonable doubt her having conspired
with her co-accused in the recruitment of the complainants. The decision of the CA amply recounted her
overt part in the conspiracy. Under the law, there is a conspiracy when two or more persons come to an
agreement concerning the commission of a felony, and decide to commit it. 14
The complainants paid varying sums for placement, training and processing fees, respectively as follows:
(a) Baful P28,500.00; (b) Brizuela P38,600.00; (c) Aguirre P38,600.00; (d) Amoyo P39,000.00; and
(e) Marbella P20,250.00. However, the RTC and the CA did not adjudicate Inoveros personal liability
for them in their judgments. Their omission needs to be corrected, notwithstanding that the
complainants did not appeal, for not doing so would be patently unjust and contrary to law. The Court,
being the ultimate reviewing tribunal, has not only the authority but also the duty to correct at any time
a matter of law and justice. It is, indeed, a basic tenet of our criminal law that every person criminally
liable is also civilly liable.15 Civil liability includes restitution, reparation of the damage caused, and
indemnification for consequential damages.16 To enforce the civil liability, the Rules of Court has
deemed to be instituted with the criminal action the civil action for the recovery of civil liability arising
from the offense charged unless the offended party waives the civil action, or reserves the right to
institute the civil action separately, or institutes the civil action prior to the criminal action. 17 Considering
that the crime of illegal recruitment, when it involves the transfer of funds from the victims to the
accused, is inherently in fraud of the former, civil liability should include the return of the amounts paid
as placement, training and processing fees.18Hence, Inovero and her co-accused were liable to indemnify
the complainants for all the sums paid.
That the civil liability should be made part of the judgment by the RTC and the CA was not disputable.
The Court pointed out in Bacolod v. People19 that it was "imperative that the courts prescribe the proper
penalties when convicting the accused, and determine the civil liability to be imposed on the accused,
unless there has been a reservation of the action to recover civil liability or a waiver of its recovery,"
because:
It is not amiss to stress that both the RTC and the CA disregarded their express mandate under Section
2, Rule 120 of the Rules of Court to have the judgment, if it was of conviction, state: "(1) the legal
qualification of the offense constituted by the acts committed by the accused and the aggravating or
mitigating circumstances which attended its commission; (2) the participation of the accused in the
offense, whether as principal, accomplice, or accessory after the fact; (3) the penalty imposed upon the
accused; and (4) the civil liability or damages caused by his wrongful act or omission to be recovered
from the accused by the offended party, if there is any, unless the enforcement of the civil liability by a
separate civil action has been reserved or waived." Their disregard compels us to act as we now do lest
the Court be unreasonably seen as tolerant of their omission. That the Spouses Cogtas did not
themselves seek the correction of the omission by an appeal is no hindrance to this action because the

Court, as the final reviewing tribunal, has not only the authority but also the duty to correct at any time
a matter of law and justice.
We also pointedly remind all trial and appellate courts to avoid omitting reliefs that the parties are
properly entitled to by law or in equity under the established facts. Their judgments will not be worthy
of the name unless they thereby fully determine the rights and obligations of the litigants. It cannot be
otherwise, for only by a full determination of such rights and obligations would they be true to the
judicial office of administering justice and equity for all. Courts should then be alert and cautious in their
rendition of judgments of conviction in criminal cases. They should prescribe the legal penalties, which is
what the Constitution and the law require and expect them to do. Their prescription of the wrong
penalties will be invalid and ineffectual for being done without jurisdiction or in manifest grave abuse of
discretion amounting to lack of jurisdiction. They should also determine and set the civil liability ex
delicto of the accused, in order to do justice to the complaining victims who are always entitled to them.
The Rules of Court mandates them to do so unless the enforcement of the civil liability by separate
actions has been reserved or waived.20
What was the extent of Inoveros civil liability?
The nature of the obligation of the co-conspirators in the commission of the crime requires solidarity,
and each debtor may be compelled to pay the entire obligation. 21 As a co-conspirator, then, Inoveros
civil liability was similar to that of a joint tortfeasor under the rules of the civil law. Joint tortfeasors are
those who command, instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the
commission of a tort, or who approve of it after it is done, if done for their benefit.22 They are also
referred to as those who act together in committing wrong or whose acts, if independent of each other,
unite in causing a single injury.23 Under Article 2194 of the Civil Code, joint tortfeasors are solidarily
liable for the resulting damage. In other words, joint tortfeasors are each liable as principals, to the
same extent and in the same manner as if they had performed the wrongful act themselves. As regards
the extent of their respective liabilities, the Court expressed in Far Eastern Shipping Company v. Court of
Appeals:24
x x x. Where several causes producing an injury are concurrent and each is an efficient cause without
which the injury would not have happened, the injury may be attributed to all or any of the causes and
recovery may be had against any or all of the responsible persons although under the circumstances of
the case, it may appear that one of them was more culpable, and that the duty owed by them to the
injured person was not same. No actors negligence ceases to be a proximate cause merely because it
does not exceed the negligence of other acts. Each wrongdoer is responsible for the entire result and is
liable as though his acts were the sole cause of the injury.
There is no contribution between joint tort-feasors whose liability is solidary since both of them are
liable for the total damage. Where the concurrent or successive negligent acts or omissions of two or
more persons, although acting independently, are in combination the direct and proximate cause of a
single injury to a third person, it is impossible to determine in what proportion each contributed to the
injury and either of them is responsible for the whole injury. x x x
It would not be an excuse for any of the joint tortfeasors to assert that her individual participation in the
wrong was insignificant as compared to those of the others. 25 Joint tortfeasors are not liable pro rata.
The damages cannot be apportioned among them, except by themselves. They cannot insist upon an
apportionment, for the purpose of each paying an aliquot part. They are jointly and severally liable for

the whole amount.26 Hence, Inoveros liability towards the victims of their illegal recruitment was
solidary, regardless of whether she actually received the amounts paid or not, and notwithstanding that
her co-accused, having escaped arrest until now, have remained untried.
Under Article 2211 of the Civil Code, interest as part of the damages may be adjudicated in criminal
proceedings in the discretion of the court. The Court believes and holds that such liability for interest
attached to Inovero as a measure of fairness to the complainants. Thus, Inovero should pay interest of
6% per annum on the sums paid by the complainants to be reckoned from the finality of this judgment
until full payment.27
WHEREFORE, the Court AFFIRMS the decision promulgated on August 26, 2010, subject to the
MODIFICATION that appellant Maricar B. Inovero is ordered to pay by way of actual damages to each of
the complainants the amounts paid by them for placement, training and processing fees, respectively as
follows:
(a) Noveza Baful - P28,500.00;
(b) Danilo Brizuela - P38,600.00;
(c) Rosanna Aguirre - P38,600.00;
(d) Annaliza Amoyo - P39,000.00; and
(e) Teresa Marbella - P20,250.00.
plus interest on such amounts at the rate of six percent (6%) per annum from the finality of this
judgment until fully paid.
Inovero shall further pay the costs of suit.
SO ORDERED.