SUNACE INTERNATIONAL MANAGEMENT SERVICES vs NLRC Case Digest

SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. v. NATIONAL

LABOR RELATIONS COMMISSION et al.
480 SCRA 146 (2006)
FACTS: Respondent Divina Montehermozo is a domestic helper deployed to Taiwan
by Sunace International Management Services (Sunace) under a 12-month contract.
Such employment was made with the assistance of Taiwanese broker Edmund
Wang. After the expiration of the contract, Montehermozo continued her employment
with her Taiwanese employer for another 2 years.
When Montehermozo returned to the Philippines, she filed a complaint against
Sunace, Wang, and her Taiwanese employer before the National Labor Relations
Commission (NLRC). She alleges that she was underpaid and was jailed for three
months in Taiwan. She further alleges that the 2-year extension of her employment
contract was with the consent and knowledge of Sunace. Sunace, on the other hand,
denied all the allegations.
The Labor Arbiter ruled in favor of Montehermozo and found Sunace liable thereof.
The National Labor Relations Commission and Court of Appeals affirmed the labor
arbiters decision. Hence, the filing of this appeal.
ISSUE: Whether or not the 2-year extension of Montehermozos employment was
made with the knowledge and consent of Sunace
HELD: There is an implied revocation of an agency relationship when after the
termination of the original employment contract, the foreign principal directly
negotiated with the employee and entered into a new and separate employment
contract.
Contrary to the Court of Appeals finding, the alleged continuous communication was
with the Taiwanese broker Wang, not with the foreign employer.
The finding of the Court of Appeals solely on the basis of the telefax message written
by Wang to Sunace, that Sunace continually communicated with the foreign
"principal" (sic) and therefore was aware of and had consented to the execution of
the extension of the contract is misplaced. The message does not provide evidence
that Sunace was privy to the new contract executed after the expiration on February
1, 1998 of the original contract. That Sunace and the Taiwanese broker
communicated regarding Montehermozos allegedly withheld savings does not
necessarily mean that Sunace ratified the extension of the contract.
As can be seen from that letter communication, it was just an information given to
Sunace that Montehermozo had taken already her savings from her foreign
employer and that no deduction was made on her salary. It contains nothing about
the extension or Sunaces consent thereto.
Parenthetically, since the telefax message is dated February 21, 2000, it is safe to
assume that it was sent to enlighten Sunace who had been directed, by Summons

issued on February 15, 2000, to appear on February 28, 2000 for a mandatory
conference following Montehermozos filing of the complaint on February 14, 2000.
Respecting the decision of Court of Appeals following as agent of its foreign
principal, [Sunace] cannot profess ignorance of such an extension as obviously, the
act of its principal extending [Montehermozos] employment contract necessarily
bound it, it too is a misapplication, a misapplication of the theory of imputed
knowledge.
The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to
the principal, employer, not the other way around. The knowledge of the principalforeign employer cannot, therefore, be imputed to its agent Sunace.
There being no substantial proof that Sunace knew of and consented to be bound
under the 2-year employment contract extension, it cannot be said to be privy
thereto. As such, it and its "owner" cannot be held solidarily liable for any of
Montehermozos claims arising from the 2-year employment extension. As the New
Civil Code provides, Contracts take effect only between the parties, their assigns,
and heirs, except in case where the rights and obligations arising from the contract
are not transmissible by their nature, or by stipulation or by provision of law.
Furthermore, as Sunace correctly points out, there was an implied revocation of its
agency relationship with its foreign principal when, after the termination of the
original employment contract, the foreign principal directly negotiated with
Montehermozo and entered into a new and separate employment contract in Taiwan.
Article 1924 of the New Civil Code states that the agency is revoked if the principal
directly manages the business entrusted to the agent, dealing directly with third
persons.
Chavez vs Bonto-Perez
Chavez is a dancer who was contracted by Centrum Placement & Promotions
Corporation to perform in Japan for 6 months. The contract was for $1.5k a month,
which was approved by POEA. After the approval of said contract, Chavez entered
into a side contract reducing her salary with her Japanese employer through her
local manager-agency (Jaz Talents Promotion). The salary was reduced to $500 and
$750 was to go to Jaz Talents. In February 1991 (two years after the expiration of
her contract), Chavez sued Centrum Placement and Jaz Talents for underpayment of
wages before the POEA.
The POEA ruled against her. POEA stated that the side agreement entered into by
Chavez with her Japanese employer superseded the Standard Employment
Contract; that POEA had no knowledge of such side agreement being entered into;
that Chavez is barred by laches for sleeping on her right for two years.
ISSUE: Whether or not Chavez is entitled to relief.

HELD: Yes. The SC ruled that the managerial commission agreement executed by
Chavez to authorize her Japanese Employer to deduct her salary is void because it
is against our existing laws, morals and public policy. It cannot supersede the
standard employment contract approved by the POEA with the following stipulation
appended thereto:
It is understood that the terms and conditions stated in this Employment Contract are
in conformance with the Standard Employment Contract for Entertainers prescribed
by the POEA under Memorandum Circular No. 2, Series of 1986. Any alterations or
changes made in any part of this contract without prior approval by the POEA shall
be null and void;
The side agreement which reduced Chavezs basic wage is null and void for violating
the POEAs minimum employment standards, and for not having been approved by
the POEA. Here, both Centrum Placement and Jaz Talents are solidarily liable.
Laches does not apply in the case at bar. In this case, Chavez filed her claim well
within the three-year prescriptive period for the filing of money claims set forth in
Article 291 of the Labor Code. For this reason, laches is not applicable.

PLACEWELL INTERNATIONAL SERVICES CORP. vs. CAMOTE Case Digest

PLACEWELL INTERNATIONAL SERVICES CORP. vs. CAMOTE
G.R. No. 169973, June 26, 2006
FACTS: Petitioner Placewell International Services Corporation (PISC) deployed
respondent Ireneo B. Camote to work as building carpenter for SAAD Trading and
Contracting Co. (SAAD) at the Kingdom of Saudi Arabia (KSA) for a contract
duration of two years, with a corresponding salary of US$370.00 per month. At the
job site, respondent was allegedly found incompetent by his foreign employer; thus
the latter decided to terminate his services. However, respondent pleaded for his
retention and consented to accept a lower salary of SR 800.00 per month. Thus,
SAAD retained respondent until his return to the Philippines two years after.
On November 27, 2001, respondent filed a sworn Complaint for monetary claims
against petitioner alleging that when he arrived at the job site, he and his fellow
Filipino workers were required to sign another employment contract written in Arabic
under the constraints of losing their jobs if they refused; that for the entire duration of
the new contract, he received only SR 590.00 per month; that he was not given his
overtime pay despite rendering nine hours of work everyday; that he and his coworkers sought assistance from the Philippine Embassy but they did not succeed in
pursuing their cause of action because of difficulties in communication.
ISSUE: Whether there is estoppel by laches
HELD: R.A. No. 8042 explicitly prohibits the substitution or alteration to the prejudice
of the worker, of employment contracts already approved and verified by the
Department of Labor and Employment (DOLE) 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 DOLE. The subsequently executed side agreement of an
overseas contract worker with her foreign employer which reduced her salary below
the amount approved by the POEA is void because it is against our existing laws,
morals and public policy. The said side agreement cannot supersede her standard
employment contract approved by the POEA.
Petitioners contention that respondent is guilty of laches is without basis. Laches
has been defined as the failure of or neglect for an unreasonable and unexplained
length of time to do that which by exercising due diligence, could or should have
been done earlier, or to assert a right within reasonable time, warranting a
presumption that the party entitled thereto has either abandoned it or declined to
assert it. Thus, the doctrine of laches presumes that the party guilty of negligence
had the opportunity to do what should have been done, but failed to do so.
Conversely, if the said party did not have the occasion to assert the right, then, he
can not be adjudged guilty of laches. Laches is not concerned with the mere lapse of
time; rather, the party must have been afforded an opportunity to pursue his claim in
order that the delay may sufficiently constitute laches.
In the instant case, respondent filed his claim within the three-year prescriptive
period for the filing of money claims set forth in Article 291 of the Labor Code from
the time the cause of action accrued. Thus, we find that the doctrine of laches finds
no application in this case.

ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC.

FACTS:
Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc.
and Marlow Navigation Co., Inc., under a POEA-approved contract of employment
for 12 months, as Chief Officer, with the basic monthly salary of US$1,400, plus
$700/month overtime pay, and 7 days paid vacation leave per month.
On the date of his departure, Serrano was constrained to accept a downgraded
employment contract upon the assurance and representation of respondents that he
would be Chief Officer by the end of April 1998.
Respondents did not deliver on their promise to make Serrano Chief Officer.
Hence, Serrano refused to stay on as second Officer and was repatriated to the
Philippines, serving only two months and 7 days, leaving an unexpired portion of
nine months and twenty-three days.
Upon complaint filed by Serrano before the Labor Arbiter (LA), the dismissal was
declared illegal.

On appeal, the NLRC modified the LA decision based on the provision of RA 8042.
Serrano filed a Motion for Partial Reconsideration, but this time he questioned the
constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042.
ISSUES:
1. Whether or not the subject clause violates Section 10, Article III of the Constitution
on non-impairment of contracts;
2. Whether or not the subject clause violate Section 1, Article III of the Constitution,
and Section 18, Article II and Section 3, Article XIII on labor as a protected sector.
HELD:
On the first issue.
The answer is in the negative. Petitioners claim that the subject clause unduly
interferes with the stipulations in his contract on the term of his employment and the
fixed salary package he will receive is not tenable.
The subject clause may not be declared unconstitutional on the ground that it
impinges on the impairment clause, for the law was enacted in the exercise of the
police power of the State to regulate a business, profession or calling, particularly the
recruitment and deployment of OFWs, with the noble end in view of ensuring respect
for the dignity and well-being of OFWs wherever they may be employed.
On the second issue.
The answer is in the affirmative.
To Filipino workers, the rights guaranteed under the foregoing constitutional
provisions translate to economic security and parity.
Upon cursory reading, the subject clause appears facially neutral, for it applies to all
OFWs. However, a closer examination reveals that the subject clause has a
discriminatory intent against, and an invidious impact on, OFWs at two levels:
First, OFWs with employment contracts of less than one year vis--vis OFWs with
employment contracts of one year or more;
Second, among OFWs with employment contracts of more than one year; and
Third, OFWs vis--vis local workers with fixed-period employment;

The subject clause singles out one classification of OFWs and burdens it with a
peculiar disadvantage.
Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is
violative of the right of petitioner and other OFWs to equal protection.
The subject clause or for three months for every year of the unexpired term,
whichever is less in the 5th paragraph of Section 10 of Republic Act No. 8042 is
DECLARED UNCONSTITUTIONAL.

CLAUDIO S. YAP, Petitioner, vs. THENAMARIS SHIP'S MANAGEMENT and

INTERMARE MARITIME AGENCIES, INC.,
Respondents.
G.R. No. 179532, May 30, 2011
Facts:
Claudio S. Yap was employed as electrician of the vessel, M/T SEASCOUT on 14
August 2001 by Intermare MaritimeAgencies, Inc. in behalf of its principal, Vulture
Shipping Limited. for a duration of 12 months. On 23 August 2001, Yapboarded M/T
SEASCOUT and commenced his job as electrician. However, on or about 08
November 2001, the vessel wassold. Yap, along with the other crewmembers, was
informed by the Master of their vessel that the same was sold and willbe
scrapped.Yap received his seniority bonus, vacation bonus, extra bonus along with
the scrapping bonus. However, with respect tothe payment of his wage, he refused
to accept the payment of one-month basic wage. He insisted that he was entitled
tothe payment of the unexpired portion of his contract since he was illegally
dismissed from employment. He alleged that heopted for immediate transfer but
none was made.
The Labor Arbiter
Thus, Claudio S. Yap (petitioner) filed a complaint for Illegal Dismissal with Damages
and Attorneys Fees before the Labor Arbiter (LA). On July 26, 2004, the LA rendered
a decision in favor of petitioner, finding the latter to have beenconstructively and
illegally dismissed by respondents.
LA opined that since the unexpired portion of petitioners contract was less than one
year, petitioner was entitled to his salaries for the unexpired portion of his contract for
a period of nine months.The NLRC Aggrieved, respondents sought recourse from
the NLRC.
The NLRC affirmed the LAs findings that petitioner wasindeed constructively and
illegally dismissed. However, the NLRC held that instead of an award of

salariescorresponding to nine months, petitioner was only entitled to salaries for

three months as provided under Section 108 of Republic Act (R.A.) No. 8042,9 as
enunciated in our ruling in Marsaman Manning Agency, Inc. v. National Labor
Relations Commission. Respondents filed a Motion for Partial Reconsideration.
Finding merit in petitioners arguments, the NLRC reversed itsearlier Decision,
holding that "there can be no choice to grant only three (3) months salary for every
year of theunexpired term because there is no full year of unexpired term which this
can be applied."
The Court of Appeals
The CA affirmed the findings and ruling of the LA and the NLRC that petitioner was
constructively and illegally dismissed.However, the CA ruled that the NLRC erred in
sustaining the LAs interpretation of Section 10 of R.A. No. 8042. In this regard, the
CA relied on the clause "or for three months for every year of the unexpired term,
whichever is less" provided in the 5th paragraph of Section 10 of R.A. No. 8042.
Issue:
Whether or not Section 10 of R.A. [No.] 8042, to the extent that it affords an
illegally dismissed migrant worker the lesser benefit of "salaries for [the]
unexpired portion of his employment contract or for three (3) months for every
yearof the unexpired term, whichever is less" is unconstitutional.
YES
Whether or not the Court of Appeals gravely erred in granting petitioner only
three (3) months backwages when his unexpired term of 9 months is far short
of the "every year of the unexpired term" threshold.
-YES
The Supreme Court
In the meantime, while this case was pending before this Court, we declared as
unconstitutional the clause "or forthree months for every year of the unexpired term,
whichever is less" provided in the 5th paragraph of Section 10 of R.A. No. 8042 in
the case of Serrano v. Gallant Maritime Services, Inc. on March 24, 2009. This case
should not be different from Serrano.The said provision of law has long been a
source of abuse by callous employers against migrant workers; and that
saidprovision violates the equal protection clause under the Constitution because,
while illegally dismissed local workersare guaranteed under the Labor Code of
reinstatement with full backwages computed from the time compensation
waswithheld from them up to their actual reinstatement. It imposes a 3-month cap on
the claim of OFWs with an unexpiredportion of one year or more in their contracts,
but none on the claims of other OFWs or local workers with fixed-termemployment.
Respondents, aware of our ruling in Serrano, aver that our pronouncement of

unconstitutionality should not apply in thiscase because Section 10 of R.A. No. 8042
is a substantive law that deals with the rights and obligations of the parties incase of
Illegal Dismissal of a migrant worker and is not merely procedural in character. Thus,
pursuant to the Civil Code,there should be no retroactive application of the law in this
case.As a general rule, an unconstitutional act is not a law; it confers no rights; it
imposes no duties; it affords no protection; it creates no office; it is inoperative as if it
has not been passed at all.
The doctrine of operative fact serves as an exception to the aforementioned general
rule.The doctrine of operative fact, as an exception to the general rule, only applies
as a matter of equity and fair play. It nullifies the effects of an unconstitutional law by
recognizing that the existence of a statute prior to a determination of
unconstitutionality is an operative fact and may have consequences which cannot
always be ignored. The past cannot always be erased by a new judicial declaration.
The doctrine is applicable when a declaration of unconstitutionalitywill impose an
undue burden on those who have relied on the invalid law.
Following Serrano, we hold that this case should not be included in the
aforementioned exception
. To rule otherwisewould be iniquitous to petitioner and other OFWs, and would, in
effect, send a wrong signal that principals/employers and recruitment/manning
agencies may violate an OFWs security of tenure which an employment contract
embodies and actually profit from such violation based on an unconstitutional
provision of law.Invoking Serrano, respondents claim that the tanker allowance
should be excluded from the definition of the term"salary."Fair play, justice, and due
process dictate that this Court cannot now, for the first time on appeal, pass upon
this question.Matters not taken up below cannot be raised for the first time on
appeal. A close perusal of the contract reveals that thetanker allowance of
US$130.00 was not categorized as a bonus but was rather encapsulated in the basic
salary clause,hence, forming part of the basic salary of petitioner.
A final note.
We ought to be reminded of the plight and sacrifices of our OFWs. In Olarte v.
Nayona , this Court held that:
Our overseas workers belong to a disadvantaged class. Most of them come from the
poorest sector of our society. Their profileshows they live in suffocating slums,
trapped in an environment of crimes. Hardly literate and in ill health, their only hope
liesin jobs they find with difficulty in our country. Their unfortunate circumstance
makes them easy prey to avaricious employers.They will climb mountains, cross the
seas, endure slave treatment in foreign lands just to survive. Out of despondence,
they will work under sub-human conditions and accept salaries below the minimum.
The least we can do is to protect them withour laws.

WHEREFORE, the Petition is GRANTED.

SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner, vs. JOY C.
CABILES, Respondent.
G.R. No. 170139
August 5, 2014
TOPIC: Section 10 of RA 8042 vis-a-vis Section 7 of RA 10022
FACTS:
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and
placement agency.
Respondent Joy Cabiles was hired thus signed a one-year employment
contract for a monthly salary of NT$15,360.00. Joy was deployed to work for Taiwan
Wacoal, Co. Ltd. (Wacoal) on June 26, 1997. She alleged that in her employment
contract, she agreed to work as quality control for one year. In Taiwan, she was
asked to work as a cutter.
Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal
informed Joy, without prior notice, that she was terminated and that she should
immediately report to their office to get her salary and passport. She was asked to
prepare for immediate repatriation. Joy claims that she was told that from June 26
to July 14, 1997, she only earned a total of NT$9,000.15 According to her, Wacoal
deducted NT$3,000 to cover her plane ticket to Manila.
On October 15, 1997, Joy filed a complaint for illegal dismissal with the
NLRC against petitioner and Wacoal. LA dismissed the complaint. NLRC reversed
LAs decision. CA affirmed the ruling of the National Labor Relations Commission
finding respondent illegally dismissed and awarding her three months worth of
salary, the reimbursement of the cost of her repatriation, and attorneys fees
ISSUE:
Whether or not Cabiles was entitled to the unexpired portion of her salary
due to illegal dismissal.
HELD:
YES. The Court held that the award of the three-month equivalent of
respondents salary should be increased to the amount equivalent to the unexpired
term of the employment contract.
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co.,
Inc., this court ruled that the clause or for three (3) months for every year of the

unexpired term, whichever is less is unconstitutional for violating the equal

protection clause and substantive due process.
A statute or provision which was declared unconstitutional is not a law. It
confers no rights; it imposes no duties; it affords no protection; it creates no office; it
is inoperative as if it has not been passed at all.
The Court said that they are aware that the clause or for three (3) months
for every year of the unexpired term, whichever is less was reinstated in Republic
Act No. 8042 upon promulgation of Republic Act No. 10022 in 2010.
Ruling on the constitutional issue
In the hierarchy of laws, the Constitution is supreme. No branch or office of
the government may exercise its powers in any manner inconsistent with the
Constitution, regardless of the existence of any law that supports such exercise. The
Constitution cannot be trumped by any other law. All laws must be read in light of the
Constitution. Any law that is inconsistent with it is a nullity.
Thus, when a law or a provision of law is null because it is inconsistent
with the Constitution, the nullity cannot be cured by reincorporation or reenactment
of the same or a similar law or provision. A law or provision of law that was already
declared unconstitutional remains as such unless circumstances have so changed
as to warrant a reverse conclusion.
The Court observed that the reinstated clause, this time as provided in
Republic Act. No. 10022, violates the constitutional rights to equal protection and due
process.96 Petitioner as well as the Solicitor General have failed to show any
compelling change in the circumstances that would warrant us to revisit the
precedent.
The Court declared, once again, the clause, or for three (3) months for
every year of the unexpired term, whichever is less in Section 7 of Republic Act No.
10022 amending Section 10 of Republic Act No. 8042 is declared unconstitutional
and, therefore, null and void.