THIRD DIVISION

FERNANDO G. MANAYA,
Petitioner,

G.R. No. 168988

Present:

- versus -

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

ALABANG
COUNTRY
CLUB
Promulgated:
INCORPORATED,
Respondent.
June 19, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

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 13 th 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, NCR-South 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 counter-balanced 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. Laboronly 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)

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

ii)

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

2005 is REVERSED. The

May

Decision

2005 and
of

the

its

Labor

Resolution
Arbiter

dated 21

dated 20

July

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 twoday 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 print-out, 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 print-outs. 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 non-presentation 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 nonpayment 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 nonissuance 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 SEAFDEC-AQD 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 nonpolitical. 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 SEAFDEC-AQD 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 non-waivability 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 time-honored principle that the issue of jurisdiction is
not lost by waiver or by estoppel. (Calimlim vs. Ramirez, G.R. No. L34362, 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 Med-Arbiter'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. 4143), 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 preelection 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 non-adversary, 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, non-profit, 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 rice-growing 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 Director-General 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 Med-Arbiter 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 DirectorGeneral 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 managementemployee 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 1983-1985, 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

total

th

of P16,007,996.00 as back wages, 13 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 CAG.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
Philippines

[20]

Decree

(PD)

No.

807

or

the Civil

Service

Decree

of

the

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 government-owned 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 (NLRC-NCR 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

NATIONAL
LABOR
COMMISSION,

G.R. Nos. 174941

RELATIONS
Present:

Petitioners,
CARPIO, Chairperson,
BRION,
- versus -

PORTUGAL PEREZ,
SERENO, and
REYES, JJ.

COURT OF APPEALS and

CLARK DEVELOPMENT

Promulgated:

CORPORATION,
Respondents.

February 1, 2012

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
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 Commission-Regional Arbitration Branch (NLRCRAB) 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
respondent corporation
his position was that of
had not been accorded
without the benefit of
opportunity to be heard

classified redundant. The LA further pointed out that

had not disputed the argument of petitioner Salenga that
a regular employee. Moreover, the LA found that petitioner
the right to due process. Instead, the latter was dismissed
an explanation of the grounds for his termination, or an
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, TimbolRoman 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 NLRCRAB 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 pre-conference 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 nonforum 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
[39]
Manifestation
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 relitigating 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 forumshopping. 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 socalled 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 Timbol-Roman 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 non-forum 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
quasi-judicial 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 CompanyEnergy 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 Director-General, 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 informed 7rll 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 agree9rll 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 non-license 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 nonlicensee 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 recruiters 11rlland 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 nonlicensed 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.blrll
lbrr
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:

- versus RODOLFO GALLO y GADOT,

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

CORONA, C.J., Chairperson,

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

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

The Case

This is an appeal from the Decision[1] dated December 24, 2008 of the Court
of Appeals (CA) in CA-G.R. CR-H.C. No. 02764 entitled People of the Philippines v.
Rodolfo Gallo y Gadot (accused-appellant), Fides Pacardo y Jungco and Pilar Manta y
Dungo (accused), which affirmed the Decision [2] dated March 15, 2007 of the
Regional Trial Court (RTC), Branch 30 in Manila which convicted the accusedappellant

Rodolfo

Gallo

Gadot

(accused-appellant)

of

syndicated

illegal

recruitment in Criminal Case No. 02-206293 and estafa in Criminal Case No. 02206297.

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, accused-appellant Gallo was similarly acquitted

in Criminal Case Nos. 02-206300, the case filed by Guantero, and 02-206308, the
case filed by Sare. However, accused-appellant was found guilty beyond reasonable

doubt in Criminal Case Nos. 02-206293 and 02-206297, both filed by Dela Caza, for
syndicated illegal recruitment 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 accusedappellant, 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 accusedappellant Gallo, Pacardo, Manta, Mardeolyn, Lulu Mendanes, Yeo Sin Ung and
another Korean national at the office of MPM International Recruitment and
Promotion Agency (MPM Agency) located in Malate, Manila.

Dela Caza was told that Mardeolyn was the President of MPM Agency, while
Nelmar Martir was one of the incorporators. Also, that Marcelino Martir, Norman
Martir, Nelson Martir and Ma. Cecilia Ramos were its board members. Lulu
Mendanes acted as the cashier and accountant, while Pacardo acted as the agencys
employee who was in charge of the records of the applicants. Manta, on the other
hand, was also an employee who was tasked to deliver documents to the Korean
embassy.

Accused-appellant Gallo then introduced himself as a relative of Mardeolyn

and informed Dela Caza that the agency was able to send many workers abroad.
Together with Pacardo and Manta, he also told Dela Caza about the placement fee of
One Hundred Fifty Thousand Pesos (PhP 150,000) with a down payment of Forty-Five
Thousand Pesos (PhP 45,000) and the balance to be paid through salary deduction.

Dela Caza, together with the other applicants, were briefed by Mardeolyn
about the processing of their application papers for job placement in Korea as a
factory worker and their possible salary. Accused Yeo Sin Ung also gave a briefing
about the business and what to expect from the company and the salary.

With accused-appellants assurance that many workers have been sent

abroad, as well as the presence of the two (2) Korean nationals and upon being
shown the visas procured for the deployed workers, Dela Caza was convinced to
part with his money. Thus, on May 29, 2001, he paid Forty-Five Thousand Pesos (PhP
45,000) to MPM Agency through accused-appellant Gallo who, while in the presence
of Pacardo, Manta and Mardeolyn, issued and signed Official Receipt No. 401.

Two (2) weeks after paying MPM Agency, Dela Caza went back to the agencys
office in Malate, Manila only to discover that the office had moved to a new location
at Batangas Street, Brgy. San Isidro,Makati. He proceeded to the new address and
found out that the agency was renamed to New Filipino Manpower Development &
Services, Inc. (New Filipino). At the new office, he talked to Pacardo, Manta,
Mardeolyn, Lulu Mendanes and accused-appellant Gallo. He was informed that the
transfer was done for easy accessibility to clients and for the purpose of changing
the name of the agency.

Dela Caza decided to withdraw his application and recover the amount he
paid but Mardeolyn, Pacardo, Manta and Lulu Mendanes talked him out from
pursuing his decision. On the other hand, accused-appellant Gallo even denied any
knowledge about the money.

After two (2) more months of waiting in vain to be deployed, Dela Caza and
the other applicants decided to take action. The first attempt was unsuccessful
because the agency again moved to another place. However, with the help of the
Office of Ambassador Seeres and the Western Police District, they were able to
locate the new address at 500 Prudential Building, Carriedo, Manila. The agency
explained that it had to move in order to separate those who are applying as
entertainers from those applying as factory workers. Accused-appellant Gallo,
together with Pacardo and Manta, were then arrested.

The testimony of prosecution witness Armando Albines Roa, a POEA

employee, was dispensed with after the prosecution and defense stipulated and
admitted to the existence of the following documents:
1.

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

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

2.

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

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

3.

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

1999 regarding placement fee ceiling for landbased workers.

4.

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

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

5.

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

of 1998.

Version of the Defense

For his defense, accused-appellant denied having any part in the recruitment
of Dela Caza. In fact, he testified that he also applied with MPM Agency for
deployment to Korea as a factory worker. According to him, he gave his application
directly with Mardeolyn because she was his town mate and he was allowed to pay
only Ten Thousand Pesos (PhP 10,000) as processing fee. Further, in order to
facilitate the processing of his papers, he agreed to perform some tasks for the
agency, such as taking photographs of the visa and passport of applicants, running
errands and performing such other tasks assigned to him, without salary except for
some allowance. He said that he only saw Dela Caza one or twice at the agencys
office when he applied for work abroad. Lastly, that he was also promised
deployment abroad but it never materialized.

Ruling of the Trial Court

On March 15, 2007, the RTC rendered its Decision convicting the accused of
syndicated illegal recruitment and estafa. The dispositive portion reads:
WHEREFORE, judgment is hereby rendered as follows:
I.

Accused FIDES PACARDO y JUNGO and PILAR

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

II.

Accused RODOLFO GALLO y GADOT is found guilty

beyond reasonable doubt in Criminal Case No. 02-206293
of the crime of Illegal Recruitment committed by a
syndicate and is hereby sentenced to suffer the penalty of
life imprisonment and to pay a fine of ONE MILLION

(Php1,000,000.00) PESOS. He is also ordered to indemnify

EDGARDO DELA CAZA of the sum of FORTY-FIVE
THOUSAND (Php45,000.00) PESOS with legal interest from
the filing of the information on September 18, 2002 until
fully paid.
III.

Accused RODOLFO GALLO y GADOT in Criminal Case

No. 02-206297 is likewise found guilty and is hereby
sentenced to suffer the indeterminate penalty of FOUR (4)
years of prision correccional as minimum to NINE (9)
years of prision mayor as maximum.

IV.

Accused RODOLFO GALLO y GADOT is hereby

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

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

Ruling of the Appellate Court

On appeal, the CA, in its Decision dated December 24, 2008, disposed of the case
as follows:
WHEREFORE, the appealed Decision of the Regional Trial Court of
Manila, Branch 30, in Criminal Cases Nos. 02-206293 and 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 accusedappellant, together with others, engaged in the recruitment of Dela Caza. His
actions and representations to Dela Caza can hardly be construed as the actions of
a mere errand boy.

As determined by the appellate court, the offense is considered economic sabotage

having been committed by more than three (3) persons, namely, accused-appellant
Gallo, Mardeolyn, Eleonor Panuncio and Yeo Sin Ung. More importantly, a personal
found guilty of illegal recruitment may also be convicted of estafa.[7] The same
evidence proving accused-appellants commission of the crime of illegal recruitment
in large scale also establishes his liability for estafa under paragragh 2(a) of Article
315 of the Revised Penal Code (RPC).

On January 15, 2009, the accused-appellant filed a timely appeal before this Court.

The Issues

Accused-appellant interposes in the present appeal the following assignment of

errors:
I
The court a quo gravely erred in finding the accused-appellant guilty of
illegal recruitment committed by a syndicate despite the failure of the
prosecution to prove the same beyond reasonable doubt.
II
The court a quo gravely erred in finding the accused-appellant guilty
of estafa despite the failure of the prosecution to prove the same
beyond reasonable doubt.

Our Ruling

The appeal has no merit.

Evidence supports conviction of the
crime
of
Syndicated
Illegal
Recruitment

Accused-appellant avers that he cannot be held criminally liable for illegal

recruitment because he was neither an officer nor an employee of the recruitment
agency. He alleges that the trial court erred in adopting the asseveration of the

private complainant that he was indeed an employee because such was not duly
supported by competent evidence. According to him, even assuming that he was an
employee, such cannot warrant his outright conviction sans evidence that he acted
in conspiracy with the officers of the agency.

We disagree.

To

commit

syndicated

illegal

recruitment,

three

elements

must

be

established: (1) the offender undertakes either any activity within the meaning of
recruitment and placement defined under Article 13(b), or any of the prohibited
practices enumerated under Art. 34 of the Labor Code; (2) he has no valid license or
authority required by law to enable one to lawfully engage in recruitment and
placement of workers;[8]and (3) the illegal recruitment is committed by a group of
three (3) or more persons conspiring or confederating with one another. [9] When
illegal recruitment is committed by a syndicate or in large scale, i.e., if it is
committed against three (3) or more persons individually or as a group, it is
considered an offense involving economic sabotage. [10]

Under Art. 13(b) of the Labor Code, recruitment and placement refers to any
act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not.

After a thorough review of the records, we believe that the prosecution was
able to establish the elements of the offense sufficiently. The evidence readily
reveals that MPM Agency was never licensed by the POEA to recruit workers for
overseas employment.

Even with a license, however, illegal recruitment could still be committed

under Section 6 of Republic Act No. 8042 (R.A. 8042), otherwise known as
the Migrants and Overseas Filipinos Act of 1995,viz:
Sec. 6. Definition. For purposes of this Act, illegal recruitment
shall mean any act of canvassing, enlisting, contracting, transporting,

utilizing, hiring, or procuring workers and includes referring, contract

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

To charge or accept directly or indirectly any amount

greater than that specified in the schedule of allowable fees
prescribed by the Secretary of Labor and Employment, or to
make a worker pay any amount greater than that actually
received by him as a loan or advance;
xxxx

(l) Failure to actually deploy without valid reason as determined

by the Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the worker in
connection with his documentation and processing for
purposes of deployment and processing for purposes of
deployment, in cases where the deployment does not
actually take place without the workers fault. Illegal
recruitment when committed by a syndicate or in large scale
shall be considered an offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate if
carried out by a group of three (3) or more persons conspiring or
confederating with one another. It is deemed committed in large scale
if committed against three (3) or more persons individually or as a
group.
The persons criminally liable for the above offenses are the
principals, accomplices and accessories. In case of juridical persons,
the officers having control, management or direction of their business
shall be liable.

In the instant case, accused-appellant committed the acts enumerated in

Sec. 6 of R.A. 8042. Testimonial evidence presented by the prosecution clearly
shows that, in consideration of a promise of foreign employment, accused-appellant
received the amount of Php 45,000.00 from Dela Caza. When 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 accused-appellant as one of those who induced him and the other
applicants to part with their money. His testimony showed that accused-appellant
made false misrepresentations and promises in assuring them that after they paid
the placement fee, jobs in Korea as factory workers were waiting for them and that
they would be deployed soon. In fact, Dela Caza personally talked to accusedappellant 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 accusedappellant 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 co-accused went into hiding by changing their office locations without
informing complainants; and that complainants were never deployed abroad. As all
these representations of the accused-appellant proved false, paragraph 2(a), Article
315 of the Revised Penal Code is thus applicable.
Defense of Denial Cannot Prevail
over Positive Identification

Indubitably, accused-appellants denial of the crimes charged crumbles in the

face of the positive identification made by Dela Caza and his co-complainants as
one of the perpetrators of the crimes charged.As enunciated by this Court in People
v. Abolidor,[16] [p]ositive identification where categorical and consistent and not
attended by any showing of ill motive on the part of the eyewitnesses on the matter
prevails over alibi and denial.

The defense has miserably failed to show any evidence of ill motive on the
part of the prosecution witnesses as to falsely testify against him.

Therefore, between the categorical statements of the prosecution witnesses,

on the one hand, and bare denials of the accused, on the other hand, the former
must prevail.[17]

Moreover, this Court accords the trial courts findings with the probative
weight it deserves in the absence of any compelling reason to discredit the same. It
is a fundamental judicial dictum that the findings of fact of the trial court are not
disturbed on appeal except when it overlooked, misunderstood or misapplied some
facts or circumstances of weight and substance that would have materially affected
the outcome of the case. We find that the trial court did not err in convicting the
accused-appellant.

WHEREFORE, the appeal is DENIED for failure to sufficiently show reversible

error in the assailed decision. The Decision dated December 24, 2008 of the CA in
CA-G.R. CR-H.C. No. 02764 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,
- versus -

VELASCO, JR.,
LEONARDO-DE CASTRO,
PERALTA,* and
PEREZ, JJ.

DOLORES OCDEN,
Accused-Appellant.

Promulgated:

June 1, 2011

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 accused-appellant 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 16964R.[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 coapplicants 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 by 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 non-licensee, 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;

(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 non-licensee 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, biodata, 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 accused-appellant 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 self-serving 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. People 19 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.