Ravago To Panis Full Cases Labor

ELS: Labor Law1
Full Cases (Ravago to Panis)
Twenty19 1
(Ravago to Panis Full Cases)

1. Ravago vs Esso
G.R. No. 158324. March 14, 2005
ROBERTO RAVAGO, Petitioners,
vs.
ESSO EASTERN MARINE, LTD. and TRANS-GLOBAL MARITIME AGENCY,
INC., Respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the 1997
Rules of Court, as amended, of the Decision 1 of the Court of Appeals (CA) as
well as its Resolution in CA-G.R. SP No. 66234 which denied the motion for
reconsideration thereof.
The Factual Antecedents
The Esso Eastern Marine Ltd. (EEM), now the Petroleum Shipping Ltd., is a
foreign company based in Singapore and engaged in maritime commerce. It
is represented in the Philippines by its manning agent and co-respondent
Trans-Global Maritime Agency, Inc. (Trans-Global), a corporation organized
under the Philippine laws.
Roberto Ravago was hired by Trans-Global to work as a seaman on board
various Esso vessels. On February 13, 1970, Ravago commenced his duty as
S/N wiper on board the Esso Bataan under a contract that lasted until
February 10, 1971. Thereafter, he was assigned to work in different Esso
vessels where he was designated diverse tasks, such as oiler, then assistant
engineer. He was employed under a total of 34 separate and unconnected
contracts, each for a fixed period, by three different companies, namely,
Esso Tankers, Inc. (ETI), EEM and Esso International Shipping (Bahamas) Co.,
Ltd. (EIS), Singapore Branch. Ravago worked with Esso vessels until August
22, 1992, a period spanning more than 22 years, thus:
CONTRACT FROM DURATION TO
POSITION
VESSEL
COMPANY
13 Feb 70
10 Feb 71
SN/Wiper
Esso Bataan
ETI2
07 May 71
27 May 72
Wiper
Esso Yokohama
EEM3
07 Aug 72
02 Jul 73
Oiler
Esso Kure
EEM
03 Oct 73
30 Jun 74
Oiler
Esso Bangkok
ETI
18 Sep 74
26 July 75
Oiler
Esso Yokohama
EEM
23 Oct 75
22 Jun 76
Oiler
Esso
Dickson
10 Sep 76
26 Dec 76
Oiler
Esso Bangkok
ETI
27 Dec 76
29 Apr 77
Temporary
3AE
Jr. Esso Bangkok
ETI
08 Jul 77
15 Mar 78
Jr. 3AE
Esso Bombay
ETI
03 Jun 78
03 Feb 79
Temporary 3AE
Esso Hongkong
ETI
Port EEM
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04 Apr 79
24 Jun 79
3AE
Esso Orient
EEM
25 Jun 79
16 Jul 79
3AE
Esso Yokohama
EEM
17 Jul 79
05 Dec 79
3AE
Esso Orient
EEM
10 Feb 80
25 Oct 80
3AE
Esso Orient
EEM
19 Jan 81
03 Jun 81
3AE
Esso
Dickson
04 Jun 81
11 Sep 81
3AE
Esso Orient
EEM
06 Dec 81
20 Apr 82
3AE
Esso Chawan
EEM
21 Apr 82
01 Aug 82
Temporary 2AE
Esso Chawan
EEM*
03 Nov 82
06 Feb 83
2AE
Esso Jurong
EEM
07 Feb 83
10 Jul 83
2AE
Esso Yokohama
EEM
31 Aug 83
13 Mar 84
2AE
Esso Tumasik
EEM
04 May 84
08 Jan 85
2AE
Esso
Dickson
13 Mar 85
31 Oct 85
2AE
Esso Castellon
EEM
29 Dec 85
22 Jul 86
2AE
Esso Jurong
EIS4
13 Sep 86
09 Jan 87
2AE
Esso Orient
EIS
21 Mar 87
15 Oct 87
2AE
Esso
Dickson
20 Nov 87
18
Dec
Temporary
19 Dec 87
25 Jun 88
2AE
Esso Melbourne EIS
04 Aug 88
19 Mar 89
Temporary 1AE
Esso
Dickson
Port EIS
20 Mar 89
19 May 89
1AE
Esso
Dickson
Port EIS*
28 Jul 89
17 Feb 90
1AE
Esso Melbourne EIS
16 Apr 90
11 Dec 90
1AE
Esso Orient
09 Feb 91
06 Oct 91
1AE
Esso Melbourne EIS
16 Dec 91
22 Aug 92
1AE
Esso Orient
87 1AE
Esso Chawan
Port EEM
Port EEM
Port EIS
EIS
EIS
EI
* Upgraded/Confirmed on regular rank on board.5

On August 24, 1992, or shortly after completing his latest contract with EIS,
Ravago was granted a vacation leave with pay from August 23, 1992 until
October 28, 1992. Preparatory to his embarkation under a new contract, he
was ordered to report, on September 28, 1992, for a Medical Pre-
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Employment Examination.6 The Pre-Employment Physical Examination

Record shows that Ravago passed the medical examination conducted by the
O.P. Jacinto Medical Clinic, Inc. on October 6, 1992. 7 He, likewise, attended a
Pre-Departure Orientation Seminar conducted by the Capt. I.P. Estaniel
Training Center, a division of Trans-Global, on October 7, 1992.8
On the night of October 12, 1992, a stray bullet hit Ravago on the left leg
while he was waiting for a bus ride in Cubao, Quezon City. He fractured his
left proximal tibia and was hospitalized at the Philippine Orthopedic Hospital.
Ravagos wife, Lolita, informed Trans-Global and EIS of the incident on
October 13, 1992 for purposes of availing medical benefits. As a result of his
injury, Ravagos doctor opined that he would not be able to cope with the job
of a seaman and suggested that he be given a desk job. 9 Ravagos left leg
had become apparently shorter, making him walk with a limp. For this
reason, the company physician, Dr. Virginia G. Manzo, found him to have lost
his dexterity, making him unfit to work once again as a seaman. 10 Citing the
opinion of Ravagos doctor, Dr. Manzo wrote:
Because of his unsteady gait, pronounced limp, and loss of normal
dexterity of his leg and foot, we doubted whether Mr. Ravago can physically
tackle the usual activities of a seaman in the course of his work without any
added risk over and above the ordinary or standard risk inherent to his job.
These activities include climbing up and down the engine room through a
long flight of iron stairs with narrow steps which could be slippery at times
due to grease or oil, jumping from an unsteady and floating motor launch or
boat to board or alight a tanker through a flight of steps or climbing up and
down a pilot ladder, wearing of heavy safety shoes, etc.
Mr. Ravagos doctor replied that, after being informed about the nature of the
job, he believes that Mr. Ravago would not be able to cope with these kinds
of activities. In effect, the Orthopedic doctor said Mr. Ravago is not fit to go
back to his work as a seaman.
We concur with the opinion of the doctor that Mr. Ravago is not fit to go back
to his job as a seaman in view of the risk of physical injury to himself as
result of the deformity and loss of dexterity of his injured leg.
As a seaman, we consider his inability partial permanent. His injury
corresponds to Grade 13 in the Schedule of Disability of the Standard
Employment Contract. 11
Consequently, instead of rehiring Ravago, EIS paid him his Career
Employment Incentive Plan (CEIP)12 as of March 1, 1993 and his final tax
refund for 1992. After deducting his Social Security System and medical
contributions from November 1992 to February 1993, EIS remitted the net
amount of P162,232.65, following Ravagos execution of a Deed of Quitclaim
and/or Release.13
However, on March 22, 1993, Ravago filed a complaint 14 for illegal dismissal
with prayer for reinstatement, backwages, damages and attorneys fees
against Trans-Global and EIS with the Philippine Overseas Employment
Administration Adjudication Office.
In their Answer dated April 14, 1993, respondents denied that Ravago was
dismissed without notice and just cause. Rather, his services were no longer
engaged in view of the disability he suffered which rendered him unfit to
work as a seafarer. This fact was further validated by the company doctor
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and Ravagos attending physician. They averred that Ravago was a

contractual employee and was hired under 34 separate contracts by different
companies.
In his position paper, Ravago insisted that he was fit to resume pre-injury
activities as evidenced by the certification 15 issued by Dr. Marciano Foronda
M.D., one of his attending physicians at the Philippine Orthopedic Hospital,
that "at present, fracture of tibia has completely healed and patient is fit to
resume pre-injury activities anytime."16 Ravago, likewise, asserted that he
was not a mere contractual employee because the respondents regularly and
continuously rehired him for 23 years and, for his continuous service, was
awarded a CEIP payment upon his termination from employment.
On December 15, 1996, Labor Arbiter Ramon Valentin C. Reyes rendered a
decision in favor of Ravago, the complainant. He ruled that Ravago was a
regular employee because he was engaged to perform activities which were
usually necessary or desirable in the usual trade or business of the employer.
The Labor Arbiter noted that Ravagos services were repeatedly contracted;
he was even given several promotions and was paid a monthly service
experience bonus. This was in keeping with the increasing number of long
term careers established with the respondents. Finally, the Labor Arbiter
resolved that an employer cannot terminate a workers employment on the
ground of disease unless there is a certification by a competent public health
authority that the said disease is of such nature or at such a stage that it
cannot be cured within a period of six months even with proper medical
treatment. He concluded that Ravago was illegally dismissed. The decretal
portion of the Labor Arbiters decision reads:
WHEREFORE, premises considered, judgment is hereby rendered finding the
dismissal illegal and ordering respondents to reinstate complainant to his
former position without loss of seniority rights and other benefits. Further,
the respondents are jointly and severally liable to pay complainant
backwages from the time of his dismissal up to the promulgation of this
decision. Such backwages is provisionally fixed at US$96,285.00 less the
P162,285.83 (sic) paid to the complainant as Career Employment Incentive
Plan. And ordering respondents to pay complainant 10% of the total
monetary award as attorneys fees.
All other claims are dismissed for lack of merit.
SO ORDERED.17
Aggrieved, the respondents appealed the decision to the National Labor
Relations Commission (NLRC) on July 3, 1997, raising the following grounds:
THE DECISION IS VITIATED BY SERIOUS ERRORS IN THE FINDINGS OF FACT
WHICH, IF NOT CORRECTED, WOULD CAUSE GRAVE OR IRREPARABLE
DAMAGE OR INJURY TO THE RESPONDENTS. THESE FINDINGS ARE:
(A) THAT COMPLAINANT WAS A REGULAR EMPLOYEE BECAUSE HE WAS HIRED
AND REHIRED IN VARIOUS CAPACITIES ON BOARD ESSO VESSELS IN A SPAN
OF 23 YEARS;
(B) THAT COMPLAINANT WAS A REGULAR EMPLOYEE BECAUSE HE WAS
ENGAGED IN THE SERVICES INDISPENSABLE IN THE OPERATION OF THE
VARIOUS VESSELS OF RESPONDENTS;
(C) THAT COMPLAINANT WAS FIT TO RESUME PRE-INJURY ACTIVITIES AND HIS
FRACTURE COMPLETELY HEALED NOTWITHSTANDING A CONTRARY MEDICAL
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OPINION OF COMPLAINANTS OWN PHYSICIAN AND RESPONDENTS COMPANY

PHYSICIAN; AND
(D) THAT COMPLAINANT WAS ILLEGALLY DISMISSED BY RESPONDENTS. 18
On April 26, 2001, the NLRC rendered a decision affirming that of the Labor
Arbiter. The NLRC based its decision in the case of Millares v. National Labor
Relations Commission,19 wherein it was held that:
It is, likewise, clear that petitioners had been in the employ of the private
respondents for 20 years. The records reveal that petitioners were
repeatedly re-hired by private respondents even after the expiration of their
respective eight-month contracts. Such repeated re-hiring which continued
for 20 years, cannot but be appreciated as sufficient evidence of the
necessity and indispensability of petitioners service to the private
respondents business or trade.
Verily, as petitioners had rendered 20 years of service, performing activities
which were necessary and desirable in the business or trade of private
respondents, they are, by express provision of Article 280 of the Labor Code,
considered regular employees.20
The NLRC, likewise, declared that Ravago was illegally dismissed and that
the quitclaim executed by him could not be considered as a waiver of his
right to question the validity of his dismissal and seek reinstatement and
other reliefs. According to the NLRC, such quitclaim is against public policy,
considering the economic disadvantage of the employee and the inevitable
pressure brought about by financial capacity.
The respondents filed a motion for reconsideration of the decision, claiming
that the ruling of the Court in Millares v. NLRC21 had not yet become final and
executory. However, the NLRC denied the motion.
Thereafter, the respondents filed a petition for certiorari before the CA on the
following grounds: (a) the ruling in Millares v. NLRC had not yet acquired
finality, nor has it become a law of the case or stare decisis because the
Court was still resolving the pending motion for reconsideration; (b) Ravago
was not illegally dismissed because after the expiration of his contract, there
was no obligation on the part of the respondents to rehire him; and (c) the
quitclaim signed by Ravago was voluntarily entered into and represented a
reasonable settlement of the account due him.
On August 29, 2001, the respondents filed an Urgent Application for the
Issuance of a Temporary Restraining Order and Writ of Preliminary Injunction
to enjoin and restrain the Labor Arbiter from enforcing his decision. On
September 5, 2001, the CA issued a Resolution 22 temporarily restraining
NLRC Sheriff Manolito Manuel from enforcing and/or implementing the
decision of the Labor Arbiter as affirmed by the NLRC.
On November 14, 2001, the CA granted the application for preliminary
injunction upon filing by the respondents of a bond in the amount of
P500,000.00. Thus, the respondents filed the surety bond as directed by the
appellate court. Before the approval thereof, however, Ravago filed a motion
to set aside the Resolution dated November 14, 2001, principally arguing
that the instant case was a labor dispute, wherein an injunction is proscribed
under Article 25423 of the Labor Code of the Philippines.
In their comment on Ravagos motion, the respondents professed that the
case before the CA did not involve a labor dispute within the meaning of
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Article 212(l)24 of the Labor Code of the Philippines, but a money claim
against the employer as a result of termination of employment.
On August 28, 2002, the CA rendered a decision in favor the respondents.
The fallo of the decision reads:
WHEREFORE, the petition is GRANTED. The assailed decisions of the NLRC
are hereby REVERSED and SET ASIDE and the injunctive writ issued on
November 14, 2001, is hereby made PERMANENT.
SO ORDERED.25
The CA ratiocinated as follows:
The employment, deployment, rights and obligation of Filipino seafarers are
particularly set forth under the rules and regulations governing overseas
employment promulgated by the POEA. Section C, Part I of the Standard
Employment Contract Governing the Employment of All Filipino Seamen on
Board Ocean-Going Vessels emphatically provides the following:
"SECTION C. DURATION OF CONTRACT
The period of employment shall be for a fix ( sic) period but in no case to
exceed 12 months and shall be stated in the Crew Contract. Any extension of
the Contract period shall be subject to the mutual consent of the parties."
It is clear from the foregoing that seafarers are contractual employees whose
terms of employment are fixed for a certain period of time. A fixed term is an
essential and natural appurtenance of seamens employment contracts to
which, whatever the nature of the engagement, the concept of regular
employment under Article 280 of the Labor Code does not find application.
The contract entered into by a seafarer with his employer sets in detail the
nature of his job, the amount of his wage and, foremost, the duration of his
employment. Only a satisfactory showing that both parties dealt with each
other on more or less equal terms with no dominance exercised by the
employer over the seafarer is necessary to sustain the validity of the
employment contract. In the absence of duress, as it is in this case, the
contract constitutes the law between the parties.26
The CA noted that the employment status of seafarers has been established
with finality by the Courts reconsideration of its decision in Millares v.
National Labor Relations Commission,27 wherein it was ruled that seamen are
contractual employees. According to the CA, the fact that Ravago was not
rehired upon the completion of his contract did not result in his illegal
dismissal; hence, he was not entitled to reinstatement or payment of
separation pay. The CA, likewise, affirmed the writ of preliminary injunction it
earlier issued, declaring that an injunction is a preservative remedy issued
for the protection of a substantive right or interest, an antidote resorted to
only when there is a pressing necessity to avoid injurious consequences
which cannot be rendered under any standard compensation.
Hence, the present recourse.
Ravago, now the petitioner, has raised the following issues:
I.
[WHETHER OR NOT] THE COURT OF APPLEALS GRAVELY ERRED AND
VIOLATED THE LABOR CODE WHEN IT ISSUED A RESTRAINING ORDER AND
THEREAFTER A WRIT OF PRELIMINARY INJUNCTION IN CA-G.R. SP NO. 66234.
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II.
[WHETHER OR NOT] THE COURT OF APPEALS GRAVELY ERRED, [AND]
BLATANTLY DISREGARDED THE CONSTITUTIONAL MANDATE ON PROTECTION
TO FILIPINO OVERSEAS WORKERS, AND COUNTENANCED UNWARRANTED
DISCRIMINATION WHEN IT RULED THAT PETITIONER CANNOT BECOME A
REGULAR EMPLOYEE.28
On the first issue, the petitioner asserts that the CA violated Article 254 of
the Labor Code when it issued a temporary restraining order, and thereafter
a writ of preliminary injunction, to derail the enforcement of the final and
executory judgment of the Labor Arbiter as affirmed by the NLRC. On the
other hand, the respondents contend that the issue has become academic
since the CA had already decided the case on its merits.
The contention of the petitioner does not persuade.
The petitioners reliance on Article 254 29 of the Labor Code is misplaced. The
law proscribes the issuance of injunctive relief only in those cases involving
or growing out of a labor dispute. The case before the NLRC neither involves
nor grows out of a labor dispute. It did not involve the fixing of terms or
conditions of employment or representation of persons with respect thereto.
In fact, the petitioners complaint revolves around the issue of his alleged
dismissal from service and his claim for backwages, damages and attorneys
fees. Moreover, Article 254 of the Labor Code specifically provides that the
NLRC may grant injunctive relief under Article 218 thereof.
Besides, the anti-injunction policy of the Labor Code, basically, is freedom at
the workplace. It is more appropriate in the promotion of the primacy of free
collective bargaining and negotiations, including voluntary arbitration,
mediation and conciliation, as modes of settling labor and industrial
disputes.30
Generally, an injunction is a preservative remedy for the protection of a
persons substantive rights or interests. It is not a cause of action in itself but
a mere provisional remedy, an appendage to the main suit. Pressing
necessity requires that it should be resorted to only to avoid injurious
consequences which cannot be remedied under any measure of
consideration. The application of an injunctive writ rests upon the presence
of an exigency or of an exceptional reason before the main case can be
regularly heard. The indispensable conditions for granting such temporary
injunctive relief are: (a) that the complaint alleges facts which appear to be
satisfactory to establish a proper basis for injunction, and (b) that on the
entire showing from the contending parties, the injunction is reasonably
necessary to protect the legal rights of the plaintiff pending the litigation.31
It bears stressing that in the present case, the respondents petition contains
facts sufficient to warrant the issuance of an injunction under Article 218,
paragraph (e) of the Labor Code of the Philippines. 32 Further, respondents
had already posted a surety bond more than adequate to cover the judgment
award.
On the second issue, the petitioner earnestly urges this Court to re-examine
its Resolution dated July 29, 2002 in Millares v. National Labor Relations
Commission33 and reinstate the doctrine laid down in its original decision
rendered on March 14, 2000, wherein it was initially determined that a
seafarer is a regular employee. The petitioner asserts that the decision of the
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CA and, indirectly, that of the Resolution of this Court dated July 29, 2002,
are violative of the constitutional mandate of full protection to labor, 34
whether local or overseas, because it deprives overseas Filipino workers,
such as seafarers, an opportunity to become regular employees without valid
and serious reasons. The petitioner maintains that the decision is
discriminatory and violates the constitutional provision on equal protection of
the laws, in addition to being partial to and overly protective of foreign
employers.
The respondents, on the other hand, asseverate that there is no law or
administrative rule or regulation imposing an obligation to rehire a seafarer
upon the completion of his contract. Their refusal to secure the services of
the petitioner after the expiration of his contract can never be tantamount to
a termination. The respondents aver that the petitioner is not entitled to
backwages, not only because it is without factual justification but also
because it is not warranted under the law. Furthermore, the respondents
assert that the rulings in the Coyoca v. NLRC,35 and the latest Millares case
remain good and valid precedents that need to be reaffirmed. The
respondents cited the ruling of the Court in Coyoca case where the Court
ruled that a Filipino seamans contract does not provide for separation or
termination pay because it is governed by the Rules and Regulations
Governing Overseas Employment.
The contention of the respondents is correct.
In a catena of cases, this Court has consistently ruled that seafarers are
contractual, not regular, employees.
In Brent School, Inc. v. Zamora,36 the Court ruled that seamen and overseas
contract workers are not covered by the term "regular employment" as
defined in Article 280 of the Labor Code. The Court said in that case:
The question immediately provoked ... is whether or not a voluntary
agreement on a fixed term or period would be valid where the employee "has
been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer." The definition seems non
sequitur. From the premise that the duties of an employee entail "activities
which are usually necessary or desirable in the usual business or trade of the
employer" the conclusion does not necessarily follow that the employer
and employee should be forbidden to stipulate any period of time for the
performance of those activities. There is nothing essentially contradictory
between a definite period of an employment contract and the nature of the
employees duties set down in that contract as being "usually necessary or
desirable in the usual business or trade of the employer." The concept of the
employees duties as being "usually necessary or desirable in the usual
business or trade of the employer" is not synonymous with or identical to
employment with a fixed term. Logically, the decisive determinant in term
employment should not be the activities that the employee is called upon to
perform, but the day certain agreed upon by the parties for the
commencement and termination of their employment relationship, a day
certain being understood to be "that which must necessarily come, although
it may not be known when." Seasonal employment, and employment for a
particular project are merely instances of employment in which a period,
were not expressly set down, is necessarily implied.37
...
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Some familiar examples may be cited of employment contracts which may

be neither for seasonal work nor for specific projects, but to which a fixed
term is an essential and natural appurtenance: overseas employment
contracts, for one, to which, whatever the nature of the engagement, the
concept of regular employment with all that it implies does not appear ever
to have been applied, Article 280 of the Labor Code notwithstanding; also
appointments to the positions of dean, assistant dean, college secretary,
principal, and other administrative offices in educational institutions, which
are by practice or tradition rotated among the faculty members, and where
fixed terms are a necessity without which no reasonable rotation would be
possible. ... 38
...
Accordingly, and since the entire purpose behind the development of
legislation culminating in the present Article 280 of the Labor Code clearly
appears to have been, as already observed, to prevent circumvention of the
employees right to be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral agreements
conflicting with the concept of regular employment as defined therein should
be construed to refer to the substantive evil that the Code itself has singled
out: agreements entered into precisely to circumvent security of tenure. It
should have no application to instances where a fixed period of employment
was agreed upon knowingly and voluntarily by the parties, without any force,
duress or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee dealt with each other
on more or less equal terms with no moral dominance whatever being
exercised by the former over the latter. Unless, thus, limited in its purview,
the law would be made to apply to purposes other than those explicitly
stated by its framers; it thus becomes pointless and arbitrary, unjust in its
effects and apt to lead to absurd and unintended consequences.39
The Court made the same ruling in Coyoca v. National Labor Relations
Commission40 and declared that a seafarer, not being a regular employee, is
not entitled to separation or termination pay.
Furthermore, petitioners contract did not provide for separation benefits. In
this connection, it is important to note that neither does the POEA standard
employment contract for Filipino seamen provide for such benefits.
As a Filipino seaman, petitioner is governed by the Rules and Regulations
Governing Overseas Employment and the said Rules do not provide for
separation or termination pay. ...
...
Therefore, although petitioner may not be a regular employee of private
respondent, the latter would still have been liable for payment of the
benefits had the principal failed to pay the same. 41
In the July 29, 2002 Resolution of this Court in Millares v. National Labor
Relations Commission,42 it reiterated its ruling that seafarers are contractual
employees and, as such, are not covered by Article 280 of the Labor Code of
the Philippines:
From the foregoing cases, it is clear that seafarers are considered contractual
employees. They cannot be considered as regular employees under Article
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280 of the Labor Code. Their employment is governed by the contracts they
sign every time they are rehired and their employment is terminated when
the contract expires. Their employment is contractually fixed for a certain
period of time. They fall under the exception of Article 280 whose
employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of
engagement of the employee or where the work or services to be performed
is seasonal in nature and the employment is for the duration of the season.
We need not depart from the rulings of the Court in the two aforementioned
cases which indeed constitute stare decisis with respect to the employment
status of seafarers.
...
... The Standard Employment Contract governing the Employment of All
Filipino Seamen on Board Ocean-Going Vessels of the POEA, particularly in
Part I, Sec. C, specifically provides that the contract of seamen shall be for a
fixed period. And in no case should the contract of seamen be longer than 12
months. It reads:
Section C. Duration of Contract
The period of employment shall be for a fixed period but in no case to
exceed 12 months and shall be stated in the Crew Contract. Any extension of
the Contract period shall be subject to the mutual consent of the parties.
Petitioners make much of the fact that they have been continually re-hired or
their contracts renewed before the contracts expired (which has admittedly
been going on for twenty [20] years). By such circumstance they claim to
have acquired regular status with all the rights and benefits appurtenant to
it. Such contention is untenable. Undeniably, this circumstance of continuous
re-hiring was dictated by practical considerations that experienced crew
members are more preferred. Petitioners were only given priority or
preference because of their experience and qualifications but this does not
detract the fact that herein petitioners are contractual employees. They can
not be considered regular employees. We quote with favor the explanation of
the NLRC in this wise:
xxx The reference to "permanent" and "probationary" masters and
employees in these papers is a misnomer and does not alter the fact that the
contracts for enlistment between complainants-appellants and respondentappellee Esso International were for a definite periods of time, ranging from
8 to 12 months. Although the use of the terms "permanent" and
"probationary" is unfortunate, what is really meant is "eligible for-re-hire."
This is the only logical conclusion possible because the parties cannot and
should not violate POEAs requirement that a contract of enlistment shall be
for a limited period only; not exceeding twelve (12) months.
From all the foregoing, we hereby state that petitioners are not considered
regular or permanent employees under Article 280 of the Labor Code.
Petitioners employment have automatically ceased upon the expiration of
their contracts of enlistment (COE). Since there was no dismissal to speak of,
it follows that petitioners are not entitled to reinstatement or payment of
separation pay or backwages, as provided by law. 43
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The Court ruled that the employment of seafarers for a fixed period is not
discriminatory against seafarers and in favor of foreign employers. As
explained by this Court in its July 29, 2002 Resolution in Millares:
Moreover, it is an accepted maritime industry practice that employment of
seafarers are for a fixed period only. Constrained by the nature of their
employment which is quite peculiar and unique in itself, it is for the mutual
interest of both the seafarer and the employer why the employment status
must be contractual only or for a certain period of time. Seafarers spend
most of their time at sea and understandably, they can not stay for a long
and an indefinite period of time at sea. Limited access to shore society
during the employment will have an adverse impact on the seafarer. The
national, cultural and lingual diversity among the crew during the COE is a
reality that necessitates the limitation of its period.44
In Pentagon International Shipping, Inc. v. William B. Adelantar,45 the Court
cited its rulings in Millares and Coyoca and reiterated that a seafarer is not a
regular employee entitled to backwages and separation pay:
Therefore, Adelantar, a seafarer, is not a regular employee as defined in
Article 280 of the Labor Code. Hence, he is not entitled to full backwages and
separation pay in lieu of reinstatement as provided in Article 279 of the
Labor Code. As we held in Millares, Adelantar is a contractual employee
whose rights and obligations are governed primarily by [the] Rules and
Regulations of the POEA and, more importantly, by R.A. 8042, or the Migrant
Workers and Overseas Filipinos Act of 1995.
The latest ruling of the Court in Marcial Gu-Miro v. Rolando C. Adorable and
Bergesen D.Y. Manila46 reaffirmed yet again its rulings that a seafarer is
employed only on a contractual basis:
Clearly, petitioner cannot be considered as a regular employee
notwithstanding that the work he performs is necessary and desirable in the
business of respondent company. As expounded in the above-mentioned
Millares Resolution, an exception is made in the situation of seafarers. The
exigencies of their work necessitates that they be employed on a contractual
basis.
Thus, even with the continued re-hiring by respondent company of petitioner
to serve as Radio Officer onboard Bergesens different vessels, this should be
interpreted not as a basis for regularization but rather a series of contract
renewals sanctioned under the doctrine set down by the second Millares
case. If at all, petitioner was preferred because of practical considerations
namely, his experience and qualifications. However, this does not alter the
status of his employment from being contractual.
The petitioner failed to convince the Court why it should restate its decision
in Millares and reverse its July 29, 2002 Resolution in the same case.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The
assailed Decision dated August 28, 2002 of the Court of Appeals is hereby
AFFIRMED. No pronouncement as to costs.
SO ORDERED.
2. Sunace vs NLRC
ELS: Labor Law1
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SUNACE INTERNATIONAL
MANAGEMENT SERVICES, INC.
Petitioner,
- versus
NATIONAL LABOR RELATIONS COMMISSION, Second Division; HON.
ERNESTO S. DINOPOL, in his capacity as Labor Arbiter, NLRC; NCR,
Arbitration Branch, Quezon City and DIVINA A. MONTEHERMOZO,
Respondents.
DECISION
CARPIO MORALES, J.:
Petitioner, Sunace International Management Services (Sunace), a
corporation duly organized and existing under the laws of the Philippines,
deployed to Taiwan Divina A. Montehermozo (Divina) as a domestic helper
under a 12-month contract effective February 1, 1997.[1] The deployment
was with the assistance of a Taiwanese broker, Edmund Wang, President of
Jet Crown International Co., Ltd.
After her 12-month contract expired on February 1, 1998, Divina

continued working for her Taiwanese employer, Hang Rui Xiong, for two more
years, after which she returned to the Philippines on February 4, 2000.
Shortly after her return or on February 14, 2000, Divina filed a
complaint[2] before the National Labor Relations Commission (NLRC) against
Sunace, one Adelaide Perez, the Taiwanese broker, and the employer-foreign
principal alleging that she was jailed for three months and that she was
underpaid.
The following day or on February 15, 2000, Labor Arbitration Associate
Regina T. Gavin issued Summons[3] to the Manager of Sunace, furnishing it
with a copy of Divinas complaint and directing it to appear for mandatory
conference on February 28, 2000.
The scheduled mandatory conference was reset. It appears to have
been concluded, however.
On April 6, 2000, Divina filed her Position Paper[4] claiming that under
her original one-year contract and the 2-year extended contract which was
ELS: Labor Law1
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with the knowledge and consent of Sunace, the following amounts

representing income tax and savings were deducted:
Year
Deduction for
Income Tax
Deduction
Savings
1997
NT10,450.00
NT23,100.00
1998
NT9,500.00
NT36,000.00
1999
NT13,300.00
NT36,000.00;[5]
for
and while the amounts deducted in 1997 were refunded to her, those
deducted in 1998 and 1999 were not. On even date, Sunace, by its
Proprietor/General Manager Maria Luisa Olarte, filed its Verified Answer and
Position Paper,[6] claiming as follows, quoted verbatim:
COMPLAINANT IS NOT ENTITLED
FOR THE REFUND OF HER 24 MONTHS
SAVINGS
3. Complainant could not anymore claim nor entitled for the refund of
her 24 months savings as she already took back her saving
already last year and the employer did not deduct any money
from her salary, in accordance with a Fascimile Message from
the respondent SUNACEs employer, Jet Crown International Co.
Ltd., a xerographic copy of which is herewith attached as ANNEX
2 hereof;
COMPLAINANT IS NOT ENTITLED
TO REFUND OF HER 14 MONTHS TAX
AND PAYMENT OF ATTORNEYS FEES
4. There is no basis for the grant of tax refund to the complainant as
the she finished her one year contract and hence, was not
illegally dismissed by her employer. She could only lay claim
over the tax refund or much more be awarded of damages such
as attorneys fees as said reliefs are available only when the
dismissal of a migrant worker is without just valid or lawful cause
as defined by law or contract.
The rationales behind the award of tax refund and payment of
attorneys fees is not to enrich the complainant but to
compensate him for actual injury suffered. Complainant did not
ELS: Labor Law1
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suffer injury, hence, does not deserve to be compensated for

whatever kind of damages.
Hence, the complainant has NO cause of action against respondent
SUNACE for monetary claims, considering that she has been
totally paid of all the monetary benefits due her under her
Employment Contract to her full satisfaction.
6.
Furthermore, the tax deducted from her salary is in
compliance with the Taiwanese law, which respondent SUNACE
has no control and complainant has to obey and this Honorable
Office has no authority/jurisdiction to intervene because the
power to tax is a sovereign power which the Taiwanese
Government is supreme in its own territory. The sovereign power
of taxation of a state is recognized under international law and
among sovereign states.
7. That respondent SUNACE respectfully reserves the right to file
supplemental Verified Answer and/or Position Paper to
substantiate its prayer for the dismissal of the above case
against the herein respondent. AND BY WAY OF x x x x (Emphasis and underscoring supplied)
Reacting to Divinas Position Paper, Sunace filed on April 25, 2000 an . . .
ANSWER TO COMPLAINANTS POSITION PAPER [7]
alleging that Divinas 2-year extension of
her contract was without its knowledge and consent, hence, it had no liability
attaching to any claim arising therefrom, and Divina in fact executed a
Waiver/Quitclaim
and
Release
of
Responsibility
and
an
Affidavit
Desistance, copy of each document was annexed to said . . .
of
ANSWER TO
COMPLAINANTS POSITION PAPER.
To Sunaces . . .
ANSWER TO COMPLAINANTS POSITION PAPER,
Divina filed a 2-page reply,[8]
without, however, refuting Sunaces disclaimer of knowledge of the extension

of her contract and without saying anything about the Release, Waiver and
Quitclaim and Affidavit of Desistance.
The Labor Arbiter, rejected Sunaces claim that the extension of Divinas
contract for two more years was without its knowledge and consent in this
wise:
We reject Sunaces submission that it should not be

held responsible for the amount withheld because her
contract was extended for 2 more years without its
ELS: Labor Law1
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knowledge and consent because as Annex B[9] shows,

Sunace
and
Edmund
Wang
have
not
stopped
communicating with each other and yet the matter of the
contracts extension and Sunaces alleged non-consent
thereto has not been categorically established.
What Sunace should have done was to write to POEA
about the extension and its objection thereto, copy
furnished the complainant herself, her foreign employer,
Hang Rui Xiong and the Taiwanese broker, Edmund Wang.
And because it did not, it is presumed to have
consented to the extension and should be liable for
anything that resulted thereform (sic).[10] (Underscoring
supplied)
The Labor Arbiter rejected too Sunaces argument that it is not liable on
account of Divinas execution of a Waiver and Quitclaim and an Affidavit of
Desistance. Observed the Labor Arbiter:
Should the parties arrive at any agreement as to the whole

or any part of the dispute, the same shall be reduced to writing
and signed by the parties and their respective counsel (sic), if
any, before the Labor Arbiter.
The settlement shall be approved by the Labor Arbiter after
being satisfied that it was voluntarily entered into by the parties
and after having explained to them the terms and consequences
thereof.
A compromise agreement entered into by the parties not in
the presence of the Labor Arbiter before whom the case is
pending shall be approved by him, if after confronting the
parties, particularly the complainants, he is satisfied that they
understand the terms and conditions of the settlement and that
it was entered into freely voluntarily (sic) by them and the
agreement is not contrary to law, morals, and public policy.
And because no consideration is indicated in the
documents, we strike them down as contrary to law, morals, and
public policy.[11]
He accordingly decided in favor of Divina, by decision of October 9, 2000,[12]

the dispositive portion of which reads:
ELS: Labor Law1
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Wherefore, judgment is hereby rendered ordering

respondents SUNACE INTERNATIONAL SERVICES and its owner
ADELAIDA PERGE, both in their personal capacities and as agent
of Hang Rui Xiong/Edmund Wang to jointly and severally pay
complainant DIVINA A. MONTEHERMOZO the sum of NT91,950.00
in its peso equivalent at the date of payment, as refund for the
amounts which she is hereby adjudged entitled to as earlier
discussed plus 10% thereof as attorneys fees since compelled to
litigate, complainant had to engage the services of counsel.
SO ORDERED.[13] (Underescoring supplied)
On appeal of Sunace, the NLRC, by Resolution of April 30, 2002,[14]
affirmed the Labor Arbiters decision.
Via petition for certiorari,[15] Sunace elevated the case to the Court of
Appeals which dismissed it outright by Resolution of November 12, 2002,[16]
the full text of which reads:
The petition for certiorari faces outright dismissal.

The petition failed to allege facts constitutive of grave
abuse of discretion on the part of the public respondent
amounting to lack of jurisdiction when the NLRC affirmed the
Labor Arbiters finding that petitioner Sunace International
Management Services impliedly consented to the extension of
the contract of private respondent Divina A. Montehermozo. It is
undisputed that petitioner was continually communicating with
private respondents foreign employer (sic). As agent of the
foreign principal, petitioner cannot profess ignorance of such
extension as obviously, the act of the principal extending
complainant (sic) employment contract necessarily bound
it. Grave abuse of discretion is not present in the case at bar.
ACCORDINGLY, the petition is hereby DENIED DUE
COURSE and DISMISSED.[17]
SO ORDERED.
(Emphasis on words in capital letters in the original;
emphasis on words in small letters and underscoring supplied)
Its Motion for Reconsideration having been denied by the appellate court by
Resolution of January 14, 2004,[18] Sunace filed the present petition for
review on certiorari.
ELS: Labor Law1
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The Court of Appeals affirmed the Labor Arbiter and NLRCs finding that
Sunace knew of and impliedly consented to the extension of Divinas 2-year
contract. It went on to state that It is undisputed that [Sunace] was
continually communicating with [Divinas] foreign employer. It thus concluded
that [a]s agent of the foreign principal, petitioner cannot profess ignorance of
such extension as obviously, the act of the principal extending complainant
(sic) employment contract necessarily bound it.
Contrary to the Court of Appeals finding, the alleged continuous

communication was with the Taiwanese broker Wang, not with the foreign
employer Xiong.
The February 21, 2000 telefax message from the Taiwanese broker to
Sunace, the only basis of a finding of continuous communication, reads
verbatim:
xxxx
Regarding to Divina, she did not say anything
about her saving in police station. As we contact with
her employer, she took back her saving already last
years. And they did not deduct any money from her
salary. Or she will call back her employer to check it
again. If her employer said yes! we will get it back for
her.
Thank you and best regards.

(sgd.)
Edmund Wang
President[19]
The finding of the Court of Appeals solely on the basis of the abovequoted telefax message, that Sunace continually communicated with the
foreign principal (sic) and therefore was aware of and had consented to the
execution of the extension of the contract is misplaced. The message does
not provide evidence that Sunace was privy to the new contract executed
after the expiration on February 1, 1998 of the original contract. That Sunace
ELS: Labor Law1
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and the Taiwanese broker communicated regarding Divinas allegedly

withheld savings does not necessarily mean that Sunace ratified the
extension of the contract. As Sunace points out in its Reply[20] filed before
the Court of Appeals,
As can be seen from that letter communication, it
was just an information given to the petitioner that the
private respondent had t[aken] already her savings from
her foreign employer and that no deduction was made on
her salary. It contains nothing about the extension or the
petitioners consent thereto.[21]
Parenthetically, since the telefax message is dated February 21, 2000,
it is safe to assume that it was sent to enlighten Sunace who had been
directed, by Summons issued on February 15, 2000, to appear on February
28, 2000 for a mandatory conference following Divinas filing of the complaint
on February 14, 2000.
Respecting the Court of Appeals following dictum:
As agent of its foreign principal, [Sunace] cannot profess
ignorance of such an extension as obviously, the act of its
principal extending [Divinas] employment contract necessarily
bound it,[22]
it too is a misapplication, a misapplication of the theory of imputed
knowledge.
The theory of imputed knowledge ascribes the knowledge of the agent,
Sunace, to the principal, employer Xiong, not the other way around.[23]
The knowledge of the principal-foreign employer cannot, therefore, be
imputed to its agent Sunace.
There being no substantial proof that Sunace knew of and consented to
be bound under the 2-year employment contract extension, it cannot be said
to be privy thereto. As such, it and its owner cannot be held solidarily liable
for any of Divinas claims arising from the 2-year employment extension. As
the New Civil Code provides,
Contracts take effect only between the parties, their

assigns, and heirs, except in case where the rights and
obligations arising from the contract are not transmissible
by their nature, or by stipulation or by provision of law.[24]
ELS: Labor Law1
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Furthermore, as Sunace correctly points out, there was an implied

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

business entrusted to the agent, dealing directly with third
persons.
thus applies.
In light of the foregoing discussions, consideration of the validity of the

Waiver and Affidavit of Desistance which Divina executed in favor of Sunace
is rendered unnecessary.
WHEREFORE, the petition is GRANTED. The challenged resolutions of
the Court of Appeals are hereby REVERSED and SET ASIDE. The complaint
of respondent Divina A. Montehermozo against petitioner is DISMISSED.
SO ORDERED.
3. Southeastern Shipping vs Navarro

SOUTHEASTERN SHIPPING, SOUTHEASTERN SHIPPING GROUP, LTD.,
Petitioners,
- versus
FEDERICO U. NAVARRA, JR., Respondent.
DECISION
DEL CASTILLO, J.
Money claims arising from employer-employee relations, including those specified
in the Standard Employment Contract for Seafarers, prescribe within three years
from the time the cause of action accrues.[1] However, for death benefit claims to
prosper, the seafarers death must have occurred during the effectivity of said
contract.
ELS: Labor Law1
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This Petition for Review assails the January 31, 2005 Decision[2] and the
April 4, 2005 Resolution [3] of the Court of Appeals (CA) in CA-G.R. SP. No. 85584.
The CA dismissed the petition for certiorari filed before it assailing the May 7, 2003
Decision[4] of the National Labor Relations Commission (NLRC) ordering
petitioners to pay to Evelyn J. Navarra (Evelyn), the surviving spouse of deceased
Federico U. Navarra, Jr. (Federico), death compensation, allowances of the three
minor children, burial expenses plus 10% of the total monetary awards as and for
attorney's fees.
Factual Antecedents
Petitioner Southeastern Shipping, on behalf of its foreign principal, petitioner

Southeastern Shipping Group, Ltd., hired Federico to work on board the vessel
"George McLeod." Federico signed 10 successive separate employment contracts
of varying durations covering the period from October 5, 1995 to March 30, 1998.
His latest contract was approved by the Philippine Overseas Employment
Administration (POEA) on January 21, 1998 for 56 days extendible for another 56
days. He worked as roustabout during the first contract and as a motorman during
the succeeding contracts.
On March 6, 1998, Federico, while on board the vessel, complained of
having a sore throat and on and off fever with chills. He also developed a soft
mass on the left side of his neck. He was given medication.
On March 30, 1998, Federico arrived back in the Philippines. On April 21,
1998 the specimen excised from his neck lymph node was found negative for
malignancy.[5] On June 4, 1998, he was diagnosed at the Philippine General
Hospital to be suffering from a form of cancer called Hodgkin's Lymphoma,
Nodular Sclerosing Type (also known as Hodgkin's Disease). This diagnosis was
confirmed in another test conducted at the Medical Center Manila on June 8, 1998.
On September 6, 1999, Federico filed a complaint against petitioners with
the arbitration branch of the NLRC claiming entitlement to disability benefits, loss
of earning capacity, moral and exemplary damages, and attorney's fees.
During the pendency of the case, on April 29, 2000, Federico died. His
widow, Evelyn, substituted him as party complainant on her own behalf and in
ELS: Labor Law1
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behalf of their three children. The claim for disability benefits was then converted
into a claim for death benefits.
Ruling of the Labor Arbiter

On May 10, 2000, Labor Arbiter Ermita T. Abrasaldo-Cuyuca rendered a Decision
dismissing the complaint on the ground that "Hodgkin's Lymphoma is not one of
the occupational or compensable diseases or the exact cause is not known," the
dispositive portion of which states:
WHEREFORE, premises considered judgment
rendered dismissing the complaint for lack of merit.
is
hereby
SO ORDERED.[6]
Evelyn appealed the Decision to the NLRC.
Ruling of the NLRC
On May 7, 2003, the NLRC rendered a Decision reversing that of the Labor
Arbiter, the dispositive portion of which provides:
WHEREFORE, the appealed decision is REVERSED and SET
ASIDE. Judgment is hereby rendered ordering the respondents
Southeastern Shipping/Southeastern Shipping Group Ltd. jointly and
severally, to pay complainant Evelyn J. Navarra the following:
Death compensation
Minor child allowance
(3 x US$ 7,000)
Burial expense
Total
US$ 50,000.00
21,000.00
1,000.00
US$ 72,000.00
Plus 10% of the total monetary awards as and for attorney's

fees.
SO ORDERED.[7]
Petitioners filed a Motion for Reconsideration which was denied by the
NLRC. They, thus, filed a petition for certiorari with the CA.
Ruling of the Court of Appeals
The CA found that the claim for benefits had not yet prescribed despite the
complaint being filed more than one year after Federico's return to the Philippines.
It also found that although Federico died 17 months after his contract had expired,
ELS: Labor Law1
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his heirs could still claim death benefits because the cause of his death was the
same illness for which he was repatriated. The dispositive portion of the CA
Decision states:
WHEREFORE, premises considered, petition is hereby
DISMISSED for lack of merit and the May 7, 2003 Decision of the
National Labor Relations Commission is hereby AFFIRMED en toto.
SO ORDERED.[8]
After the denial by the CA of their motion for reconsideration, petitioners
filed the present petition for review.
Issues
Petitioners raise the following issues:
I
THE HON. COURT OF APPEALS ERRED IN RULING THAT PRESCRIPTION
DOES NOT APPLY DESPITE THE LATE FILING OF THE COMPLAINT OF
THE RESPONDENT FEDERICO U. NAVARRA, JR.
II
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT
HODGKIN'S DISEASE IS A COMPENSABLE ILLNESS.
III
THE HON. COURT OF APPEALS ERRED IN ITS CONCLUSION THAT
PETITIONERS ARE LIABLE FOR THE DEATH OF THE RESPONDENT AS
SUCH DEATH WAS DURING THE TERM OF HIS EMPLOYMENT
CONTRACT.[9]
Petitioners' Arguments
Petitioners contend that the factual findings of the CA were not supported
by sufficient evidence. They argue that as can be seen from the medical report of
Dr. Salim Marangat Paul, Federico suffered from and was treated for Acute
Respiratory Tract Infection, not Hodgkin's Disease, during his employment in
March 1998. They further contend that Federico returned to the Philippines on
March 30, 1998 because he had already finished his contract, not because he had
to undergo further medical treatment.
They also insist that the complaint has already prescribed. Despite having
been diagnosed on June 4, 1998 of Hodgkin's Disease, the complaint was filed
only on September 6, 1999, one year and five months after Federico arrived in
Manila from Qatar.
ELS: Labor Law1
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They also posit that respondents are not entitled to the benefits claimed
because Federico did not die during the term of his contract and the cause of his
death was not contracted by him during the term of his contract.
Respondents' Arguments
Respondents on the other hand contend that the complaint has not
prescribed and that the prescriptive period for filing seafarer claims is three years
from the time the cause of action accrued. They claim that in case of conflict
between the law and the POEA Contract, it is the law that prevails.
Respondents also submit that Federico contracted on board the vessel the
illness which later caused his death, hence it is compensable.
Our Ruling
The petition is partly meritorious.
Prescription
The employment contract signed by Federico stated that "the same shall be
deemed an integral part of the Standard Employment Contract for Seafarers,"
Section 28 of which states:
SECTION 28. JURISDICTION

The Philippine Overseas Employment Administration (POEA) or
the National Labor Relations Commission (NLRC) shall have original
and exclusive jurisdiction over any and all disputes or controversies
arising out of or by virtue of this Contract.
Recognizing the peculiar nature of overseas shipboard
employment, the employer and the seafarer agree that all claims
arising from this contract shall be made within one (1) year from the
date of the seafarer's return to the point of hire.
On the other hand, the Labor Code states:
Art. 291. Money claims.-All money claims arising from
employer-employee relations during the effectivity of this Code shall
be filed within three (3) years from the time the cause of action
accrued; otherwise they shall forever be barred.
The Constitution affirms labor as a primary social economic force.[10] Along
this vein, the State vowed to afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
ELS: Labor Law1
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employment opportunities for all.[11]

"The employment of seafarers, including claims for death benefits, is
governed by the contracts they sign every time they are hired or rehired; and as
long as the stipulations therein are not contrary to law, morals, public order or
public policy, they have the force of law between the parties."[12]
In Cadalin v. POEA's Administrator,[13] we held that Article 291 of the Labor
Code covers all money claims from employer-employee relationship. It is not
limited to money claims recoverable under the Labor Code, but applies
also to claims of overseas contract workers.[14]
Based on the foregoing, it is therefore clear that Article 291 is the law
governing the prescription of money claims of seafarers, a class of overseas
contract workers. This law prevails over Section 28 of the Standard Employment
Contract for Seafarers which provides for claims to be brought only within one
year from the date of the seafarers return to the point of hire. Thus, for the
guidance of all, Section 28 of the Standard Employment Contract for Seafarers,
insofar as it limits the prescriptive period within which the seafarers may file their
money claims, is hereby declared null and void. The applicable provision is Article
291 of the Labor Code, it being more favorable to the seafarers and more in
accord with the States declared policy to afford full protection to labor. The
prescriptive period in the present case is thus three years from the time the cause
of action accrues.
In the present case, there is no exact showing of when the cause of action
accrued. Nevertheless, it could not have accrued earlier than January 21, 1998
which is the date of his last contract. Hence, the claim has not yet prescribed,
since the complaint was filed with the arbitration branch of the NLRC on
September 6, 1999.
Compensability and Liability
In petitions for review on certiorari, only questions of law may be raised, the
only exceptions being when the factual findings of the appellate court are
erroneous, absurd, speculative, conjectural, conflicting, or contrary to the findings
culled by the court of origin. Considering the conflicting findings of the NLRC, the
CA and the Labor Arbiter, we are impelled to resolve the factual issues in this case
along with the legal ones.[15]
ELS: Labor Law1
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Section 20 of the Standard Terms and Conditions Governing the

Employment of Filipino Seafarers On-Board Ocean-Going Vessels states:
A.
COMPENSATION AND BENEFITS FOR DEATH

1.
In case of death of the seafarer during the term of his

contact, the employer shall pay his beneficiaries the
Philippine currency equivalent to the amount of Fifty
Thousand US Dollars (US$50,000) and an additional
amount of Seven Thousand US Dollars (US$7,000) to
each child under the age of twenty-one (21) but not
exceeding four children, at the exchange rate prevailing
during the time of payment. (Emphasis supplied)
Thus, as we declared in Gau Sheng Phils., Inc. v. Joaquin, Hermogenes v.

Oseo Shipping Services, Inc., Prudential Shipping and Management Corporation v.
Sta. Rita, Klaveness Maritime Agency, Inc. v. Beneficiaries of Allas, in order to avail
of death benefits, the death of the employee should occur during the effectivity of
the employment contract.[16] For emphasis, we reiterate that the death of a
seaman during the term of employment makes the employer liable to his heirs for
death compensation benefits, but if the seaman dies after the termination of his
contract of employment, his beneficiaries are not entitled to the death benefits.
[17] Federico did not die while he was under the employ of petitioners. His
contract of employment ceased when he arrived in the Philippines on March 30,
1998, whereas he died on April 29, 2000. Thus, his beneficiaries are not entitled to
the death benefits under the Standard Employment Contract for Seafarers.
Moreover, there is no showing that the cancer was brought about by
Federico's stint on board petitioners' vessel. The records show that he got sick a
month after he boarded M/V George Mcleod. He was then brought to a doctor who
diagnosed him to have acute respiratory tract infection. It was only on June 6,
1998, more than two months after his contract with petitioners had expired, that
he was diagnosed to have Hodgkin's Disease. There is no proof and we are not
convinced that his exposure to the motor fumes of the vessel, as alleged by
Federico, caused or aggravated his Hodgkin's Disease.
While the Court adheres to the principle of liberality in favor of the seafarer
in construing the Standard Employment Contract, we cannot allow claims for
compensation based on surmises. When the evidence presented negates
compensability, we have no choice but to deny the claim, lest we cause injustice
ELS: Labor Law1
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to the employer.
The law in protecting the rights of the employees, authorizes neither
oppression nor self-destruction of the employer there may be cases where the
circumstances warrant favoring labor over the interests of management but never
should the scale be so tilted as to result in an injustice to the employer.[18]
WHEREFORE, the petition is PARTLY GRANTED. The January 31, 2005
Decision of the Court of Appeals in CA-G.R. SP No. 85584 holding that the claim for
death benefits has not yet prescribed is AFFIRMED with MODIFICATION that
petitioners are not liable to pay to respondents death compensation benefits for
lack of showing that Federicos disease was brought about by his stint on board
petitioners vessels and also considering that his death occurred after the
effectivity of his contract.
SO ORDERED.
4. Catan vs NLRC
MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY, petitioners,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE
OVERSEAS EMPLOYMENT ADMINISTRATION and FRANCISCO D.
REYES, respondents.
Demetria Reyes, Merris & Associates for petitioners.
The Solicitor General for public respondents.
Bayani G. Diwa for private respondent.
CORTES, J.:
Petitioner, in this special civil action for certiorari, alleges grave abuse of
discretion on the part of the National Labor Relations Commission in an effort
to nullify the latters resolution and thus free petitioner from liability for the
disability suffered by a Filipino worker it recruited to work in Saudi Arabia.
This Court, however, is not persuaded that such an abuse of discretion was
committed. This petition must fail.
The facts of the case are quite simple.
Petitioner, a duly licensed recruitment agency, as agent of Ali and Fahd
Shabokshi Group, a Saudi Arabian firm, recruited private respondent to work
in Saudi Arabia as a steelman.
The term of the contract was for one year, from May 15,1981 to May 14,
1982. However, the contract provided for its automatic renewal:
FIFTH: The validity of this Contract is for ONE YEAR commencing
from the date the SECOND PARTY assumes hill port. This Contract
is renewable automatically if neither of the PARTIES notifies the
ELS: Labor Law1
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other PARTY of his wishes to terminate the Contract by at least

ONE MONTH prior to the expiration of the contractual period.
[Petition, pp. 6-7; Rollo, pp. 7-8].
The contract was automatically renewed when private respondent was not
repatriated by his Saudi employer but instead was assigned to work as a
crusher plant operator. On March 30, 1983, while he was working as a
crusher plant operator, private respondent's right ankle was crushed under
the machine he was operating.
On May 15, 1983, after the expiration of the renewed term, private
respondent returned to the Philippines. His ankle was operated on at the Sta.
Mesa Heights Medical Center for which he incurred expenses.
On September 9, 1983, he returned to Saudi Arabia to resume his work. On
May 15,1984, he was repatriated.
Upon his return, he had his ankle treated for which he incurred further
expenses.
On the basis of the provision in the employment contract that the employer
shall compensate the employee if he is injured or permanently disabled in
the course of employment, private respondent filed a claim, docketed as
POEA Case No. 84-09847, against petitioner with respondent Philippine
Overseas Employment Administration. On April 10, 1986, the POEA rendered
judgment in favor of private respondent, the dispositive portion of which
reads:
WHEREFORE, judgment is hereby rendered in favor of the
complainant and against the respondent, ordering the latter to
pay to the complainant:
1. SEVEN THOUSAND NINE HUNDRED EIGHTY-FIVE PESOS and
60/100 (P7,985.60), Philippine currency, representing disability
benefits;
2. TWENTY-FIVE THOUSAND NINETY-SIX Philippine pesos and
20/100 (29,096.20) representing reimbursement for medical
expenses;
3. Ten percent (10%) of the abovementioned amounts as and for
attorney's fees. [NLRC Resolution, p. 1; Rollo, p. 16].
On appeal, respondent NLRC affirmed the decision of the POEA in a
resolution dated December 12, 1986.
Not satisfied with the resolution of the POEA, petitioner instituted the instant
special civil action for certiorari, alleging grave abuse of discretion on the
part of the NLRC.
1. Petitioner claims that the NLRC gravely abused its discretion when it ruled
that petitioner was liable to private respondent for disability benefits since at
the time he was injured his original employment contract, which petitioner
facilitated, had already expired. Further, petitioner disclaims liability on the
ground that its agency agreement with the Saudi principal had already
expired when the injury was sustained.
There is no merit in petitioner's contention.
Private respondents contract of employment can not be said to have expired
on May 14, 1982 as it was automatically renewed since no notice of its
ELS: Labor Law1
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termination was given by either or both of the parties at least a month

before its expiration, as so provided in the contract itself. Therefore, private
respondent's injury was sustained during the lifetime of the contract.
A private employment agency may be sued jointly and solidarily with its
foreign principal for violations of the recruitment agreement and the
contracts of employment:
Sec. 10. Requirement before recruitment. Before recruiting any
worker, the private employment agency shall submit to the
Bureau the following documents:
(a) A formal appointment or agency contract executed by a
foreign-based employer in favor of the license holder to recruit
and hire personnel for the former ...
xxx xxx xxx
2. Power of the agency to sue and be sued jointly and
solidarily with the principal or foreign-based
employer for any of the violations of the recruitment
agreement and the contracts of employment.
[Section 10(a) (2) Rule V, Book I, Rules to Implement
the Labor Code].
Thus, in the recent case of Ambraque International Placement & Services v.
NLRC [G.R. No. 77970, January 28,1988], the Court ruled that a recruitment
agency was solidarily liable for the unpaid salaries of a worker it recruited for
employment in Saudi Arabia.
Even if indeed petitioner and the Saudi principal had already severed their
agency agreement at the time private respondent was injured, petitioner
may still be sued for a violation of the employment contract because no
notice of the agency agreement's termination was given to the private
respondent:
Art 1921. If the agency has been entrusted for the purpose of
contra with specified persons, its revocation shall not prejudice
the latter if they were not given notice thereof. [Civil Code].
In this connection the NLRC elaborated:
Suffice it to state that albeit local respondent M. S. Catan Agency
was at the time of complainant's accident resulting in his
permanent partial disability was (sic) no longer the accredited
agent of its foreign principal, foreign respondent herein, yet its
responsibility over the proper implementation of complainant's
employment/service contract and the welfare of complainant
himself in the foreign job site, still existed, the contract of
employment in question not having expired yet. This must be so,
because the obligations covenanted in the recruitment
agreement entered into by and between the local agent and its
foreign principal are not coterminus with the term of such
agreement so that if either or both of the parties decide to end
the agreement, the responsibilities of such parties towards the
contracted employees under the agreement do not at all end,
but the same extends up to and until the expiration of the
employment contracts of the employees recruited and employed
pursuant to the said recruitment agreement. Otherwise, this will
ELS: Labor Law1
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render nugatory the very purpose for which the law governing
the employment of workers for foreign jobs abroad was enacted.
[NLRC Resolution, p. 4; Rollo, p. 18]. (Emphasis supplied).
2. Petitioner contends that even if it is liable for disability benefits, the NLRC
gravely abused its discretion when it affirmed the award of medical expenses
when the said expenses were the consequence of private respondent's
negligence in returning to work in Saudi Arabia when he knew that he was
not yet medically fit to do so.
Again, there is no merit in this contention.
No evidence was introduced to prove that private respondent was not
medically fit to work when he returned to Saudi Arabia. Exhibit "B", a
certificate issued by Dr. Shafquat Niazi, the camp doctor, on November 1,
1983, merely stated that private respondent was "unable to walk properly,
moreover he is still complaining [of] pain during walking and different lower
limbs movement" [Annex "B", Reply; Rollo, p. 51]. Nowhere does it say that
he was not medically fit to work.
Further, since petitioner even assisted private respondent in returning to
work in Saudi Arabia by purchasing his ticket for him [Exhibit "E"; Annex "A",
Reply to Respondents' Comments], it is as if petitioner had certified his
fitness to work. Thus, the NLRC found:
Furthermore, it has remained unrefuted by respondent that
complainant's subsequent departure or return to Saudi Arabia on
September 9, 1983 was with the full knowledge, consent and
assistance of the former. As shown in Exhibit "E" of the record, it
was respondent who facilitated the travel papers of complainant.
[NLRC Resolution, p. 5; Rollo, p. 19].
WHEREFORE, in view of the foregoing, the petition is DISMISSED for lack of
merit, with costs against petitioner.
SO ORDERED.
5. Hornales vs NLRC
MARIO HORNALES, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, JOSE CAYANAN AND
JEAC INTERNATIONAL MANAGEMENT CONTRACTOR SERVICES,
respondents.
SANDOVAL-GUTIERREZ, J.:
It is sad enough that poverty has impelled many of our countrymen to seek
greener pastures in foreign lands. But what is more lamentable is when a
Filipino recruiter, after sending his unlettered countrymen to a foreign land
and letting them suffer inhuman treatment in the hand of an abusive
employer, connives with the foreign employer in denying them their rightful
compensation. Surely, there shall be a day of reckoning for such a recruiter
whose insatiable love for money made him a tyrant to his own race.
At bench is a petition for certiorari seeking to annul and set aside the (a)
Decision1 dated July 28, 1994 of the National Labor Relations Commission
(NLRC) reversing the Decision2 of the Philippine Overseas Employment
Administration (POEA) in POEA Case No. (L) 92-07- 939, 3 and (b) Resolution4
ELS: Labor Law1
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dated October 6, 1994 denying petitioner's motion for

reconsideration.1wphi1.nt
The facts as shown by the records are:
On July 15, 1992, Mario Hornales (herein petitioner) filed with the POEA a
complaint5 for non-payment of wages and recovery of damages against JEAC
International Management & Contractor Services (JEAC) and its owner, Jose
Cayanan (herein private respondents). As private respondents' surety,
Country Bankers Insurance Corporation (Country Bankers) was later on
impleaded by petitioner. The complaint alleged that on October 8, 1991,
private respondents sent petitioner, together with other Filipinos, to
Singapore. At their departure, they were advised that someone would meet
them in Singapore. True enough, they were welcomed by Victor Lim, the
owner of Step-Up Employment Agency (Step-Up Agency).6 He informed them
that they would be working as fishermen with a monthly salary of US
$200.00 each. Thereafter, they boarded Ruey Horn #3, a vessel owned by
Min Fu Fishery Co. Ltd. of Taiwan.
On board the vessel, petitioner was subjected to inhumane work conditions,
like inadequate supply of food and water, maltreatment by the ship captain,
and lack of medical attendance. He was also required to work for twenty-two
hours a day without pay. Unable to bear his situation any longer, he joined
the other Filipino workers in leaving the vessel while it was docked at
Mauritius Islands on July 15, 1992.
Upon his return to the Philippines, petitioner asked private respondents to
pay his salaries. Instead of doing so, they required him to surrender his
passport promising that they would procure another job for him. Later,
private respondents gave him the amount of five hundred pesos (P500.00).
Private respondents filed an answer7 claiming that, petitioner, Victor Lim and
Min Fee Fishery Co. Ltd are all "total strangers" to them. To bolster the claim,
they offered in evidence the Joint Affidavit8 of Efren B. Balucas and
Alexander C. Natura, petitioner's co-workers in Singapore, stating that while
they were in Singapore, petitioner admitted to them that he did not apply in
any agency in the Philippines; that he came to Singapore merely as a tourist;
and that, he applied directly and personally with Step-Up Agency. These
statements were corroborated by the "Certification"9 issued by Step-Up
Agency.
On January 23, 1993, petitioner filed a Supplemental Affidavit10 claiming that
he was not a "total stranger" to private respondents, and that, as a matter of
fact, he knew respondent Cayanan since 1990, when they used to go to the
San Lazaro Hippodrome to watch horse races. He also averred that while the
vessel was docked at Mauritius Islands on June 1992, respondent Cayanan
reminded him and his co-workers of their loan obligations by sending them
photocopies of the PNB checks he (respondent Cayanan) issued in favor of
their relatives, and the agreements whereby they authorized Victor Lim to
deduct from their salaries the amount of their loan obligations.
On January 5, 1994, the POEA rendered a decision in favor of petitioner, the
dispositive portion of which reads:
"WHEREFORE, premises considered, respondents JEAC International
Management and Contractor Services, Jose E. Cayanan and Travellers
Insurance Corp. are hereby ordered, jointly and severally to pay
ELS: Labor Law1
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complainant the amount of US DOLLARS: ONE THOUSAND SIX

HUNDRED FORTY SIX AND 66/100 (US$ 1, 646.66) representing his
unpaid salaries and US $ 164.66 as and by way of attorney's fees.
Payment shall be made in Philippine Currency at the prevailing rate of
exchange at the time of payment.
For want of jurisdiction, the claim for moral and exemplary damages is
denied.
All other claims and counterclaims are denied.
SO ORDERED."11
Incidentally, the POEA dismissed petitioner's claim against Country Bankers
on the ground that the surety bond which was effective at the time of
petitioner's deployment was that of Travelers Insurance Corporation.
On appeal, respondent NLRC vacated the decision of the POEA and dismissed
petitioner's complaint mainly on the ground that there was no employeremployee relationship between the parties. The NLRC ratiocinated as follows:
"At the outset, we note that the record is bereft of any showing that
complainant applied with the respondent agency as a job applicant and
subsequently entered into an overseas contract with the latter which
was later processed and approved by the POEA. X x x What appears is
that complainant used the agency as a stepping stone to enter
Singapore as a tourist and obtain employment thereat on his own. This
is evidenced by Annexes "A-1 " to '"H" of Complainant's Reply (See pp.
65-72, record) which purports to show that the batch of complainant
was obligated to pay back respondent Jose Cayanan the expenses for
their deployment. No less than the POEA noted that the respondent
agency "is a service contractor and is not authorized to deploy
fishermen." Based on this fact, the respondent agency could not have
deployed complainant as an overseas contract worker. What is
apparent is that it obtained a tourist passport and plane ticket for
complainant as a travel agent on a clearly "fly now pay later" plan.
We cannot rely on the employment agreements and checks (See pp.
66-67, record) presented by complainant to show proof of employment
relations considering that his name does not appear in any of the
documents, hence they are merely hearsay."12
In reversing the POEA's finding, respondent NLRC gave considerable weight
to the Joint Affidavit of Natura and Balucas.
Unsatisfied, petitioner filed a motion for reconsideration but was denied.
Petitioner now comes to this Court via a petition for certiorari, imputing
grave abuse of discretion to public respondent NLRC. He asserts that private
respondents were the ones who deployed him to Singapore to work as
fisherman; and that, respondent NLRC's conclusion that respondent JEAC was
a mere "travel agency" and petitioner, a mere tourist, has no basis in fact
and in law.
For their part, private respondents maintain that respondent NLRC did not
commit grave abuse of discretion when it set aside the decision of the POEA,
since petitioner failed to show any POEA record or document to prove that
they deployed him to work in Singapore. Neither did he present a Special
Power of Attorney to prove that Step-Up Agency authorized private
ELS: Labor Law1
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respondents to recruit and deploy contract workers in its behalf nor an

Affidavit of Responsibility to show that they (private respondents and StepUp Agency) assumed solidary liability to petitioner.13 Private respondents
likewise insist that the photocopies of the PNB checks and agreements are
hearsay and inadmissible in evidence.
The Solicitor General, in his comment,14 joins petitioner in assailing the
decision of respondent NLRC as "baseless and erroneous." According to him,
the conclusion of respondent NLRC directly contradicts private respondents'
defense that petitioner was a "total stranger." Further, he contends that the
Joint Affidavit of Balucas and Natura are hearsay.
The cardinal issue in this case hinges on the question - Are private
respondents responsible for petitioner's recruitment and deployment to
Singapore?
Let us take a closer look at the scale of evidence.
On one arm of the scale are petitioner's evidence consisting of photocopies
of the PNB checks and agreements which were intended to disprove
private respondents' claim that petitioner, Victor Lim and Step-Up Agency
are "total strangers." The PNB checks represent the payments made by
respondent Cayanan to the relatives of petitioner's co-workers (including
Balucas and Natura). The checks show the name of LIM Chang Koo &/or
Jose Cayanan, as drawers. While the agreements, denominated "For
Fisherman Deployed For Work To Singapore," constitute authorization to
Victor Lim to deduct from the monthly salaries of the workers the amounts of
their obligations to private respondents. Petitioner's own undertaking to
private respondents reads:
"I hereby certify that my expenses abroad in going to Singapore as
fisherman amounting to SIXTEEN THOUSAND PESOS (P16,000.00) shall
be temporarily shouldered by JEAC INT'L MGT & CONT. SERVICES
and as soon as I arrive in Singapore, said amount will be charged by
MR. VICTOR LIM and will be remitted to Eng. Jose E. Cayanan.
(Sgd.) Mario Hornales
F. CREW" 15
On the other side of the scale are the Joint Affidavit secured by private
respondents from petitioner's co-workers, Balucas and Natura, and a
Certification issued by Step-Up Agency. These evidence were intended to
prove the alleged admission of petitioner to Balucas and Natura that he went
as a tourist to Singapore and that he applied directly with Step-Up Agency.
The Certification of Step-Up Agency re-echoes the allegations in the Joint
Affidavit.
The scale of evidence must tilt in favor of petitioner.
In a catena of labor cases, this Court has consistently held that where the
adverse party is deprived of the opportunity to cross-examine the affiants,
affidavits are generally rejected for being hearsay, unless the affiant
themselves are placed on the witness stand to testify thereon.16 Private
respondents' Joint Affidavit has no probative value. It suffers from two
infirmities, first, petitioner was not given the opportunity to cross-examine
the two affiants regarding the contents thereof, and second, the two affiants
ELS: Labor Law1
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merely swore as to what petitioner told them but not as to the truth of the
statements uttered.17
In the same vein, the Certification must not be given weight. Private
respondents not only failed to present Victor Lim before the POEA to be
cross-examined by petitioner, but the Certification was also not verified or
under oath.18 To our mind, it is just a last-ditch attempt on the part of StepUp Agency to help private respondents free themselves from liability to
petitioner. It bears noting that private respondents, Victor Lim and Step-Up
Agency, as shown by petitioner's evidence, acted in concert in his
deployment to Singapore. Hence, such certification is, at most, self-serving.
On the other hand, the PNB Checks and the agreements presented by
petitioner strongly disprove private respondents' total strangers" theory .It
may be observed that, in their attempt to exculpate themselves from
monetary liability, private respondents adopted an extreme position, i.e.,
that they have nothing to do with petitioner, Victor Lim and Step-Up Agency.
Such strategy proved to be disastrous to them. The mere presentation of
documents bearing private respondents' names and that of Step-Up Agency
and Victor Lim is enough to defeat their theory. More so, when the
documetary evidence consist of bank checks showing the existence of a joint
account, and authorization agreements revealing a contract of agency.
Private respondents' argument that petitioner's evidence are mere,
photocopies and therefore cannot be considered as the best evidence on the
issue does not persuade us. The best evidence rule enshrined in the Revised
Rules on Evidence provides that "when the subject of an inquiry is the
contents of a document, no evidence shall be admissible other than the
original document itself."19 This rule is not without exception. Some of the
exception are when the original has been lost or destroyed; cannot be
produced in court without bad faith on the part of the offeror; or when the
original is in the custody or under the control of the party against whom the
evidence is offered and the latter fails to produce it after reasonable notice.20
It would be unreasonable to demand from petitioner the presentation of the
original PNB Checks considering that it is a banking practice that for a
check to be encashed, the same must be surrendered to the bank first.
These checks are, therefore, most likely in the possession of the bank. As to
the agreements, it is reasonable to conclude that respondent Cayanan was
the one in possession of the originals thereof. It maybe recalled that these
agreements were executed by the workers for his security and benefit. At
any rate, it is worthy to note that private respondents did not disown the
PNB checks nor deny the existence of the agreements.
Notwithstanding the foregoing, it must be emphasized that the proceedings
before the POEA is non-litigious in nature. The technicalities of law and
procedure and the rules obtaining in the courts of law shall not strictly apply
thereto and a hearing officer may avail himself of all reasonable means to
ascertain the facts of the case.21 On the applicability of the Rules of Court to
labor cases, the Supreme Court has ruled in Shoemart, Inc. v. National Labor
Relations Commission22:
"The argument cannot be sustained. Whatever merit it might have in
the context of ordinary civil actions, where the rules of evidence apply
with more or less strictness, disappears when adduced in connection
with proceedings before Labor Arbiters and the National Labor
ELS: Labor Law1
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Relations Commission; for in said proceedings, the law is explicit that

'the rules of evidence prevailing in courts of law or equity shall not be
controlling and it is the (law's) spirit and intention that the Commission
and its members and the Labor Arbiters shall use every and all
reasonable means to ascertain the facts in each case speedily and
objectively and without regard to technicalities of law or procedure, all
in the interest of due process.' Indeed, it is not the Rules of Court
enacted by the Supreme Court but rather the regulations promulgated
by the National Labor Relations Commission which govern "the hearing
and disposition of cases before it and its regional branches**.' The
'Revised Rules of Court of the Philippines and prevailing jurisprudence,'
the law says, may be applied to labor cases only under quite stringent
limits, i.e., 'in the absence of any applicable provision (in the Rules of
the Commission), and in order to effectuate the objectives of the Labor
Code**, in the interest of expeditious labor justice and whenever
practicable and convenient, by analogy or in a suppletory character
and effect." Under these rules, the proceedings before a Labor Arbiter
are 'non-litigious in nature' in which, 'subject to the requirements of
due process, the technicalities of law and procedure and the rules
obtaining in the courts of law ** (do not) strictly apply."
Undoutedly, the factual and legal bases of respondent NLRC's conclusions
are bereft of substantial evidence - the quantum of proof in labor cases. As
aptly said by the Solicitor General, its decision is "baseless and erroneous."
Its disposition is manifestly a grave abuse of discretion.23
In concluding that respondent JEAC was a mere "travel agency" and
petitioner, a mere "tourist, " respondent NLRC came up with a new theory
which find no support even from the evidence of private respondents, the
party in whose favor the decision was rendered. First, there is nothing in the
record which shows that respondent JEAC is a mere travel agency. Even
private respondents consistently plead that respondent JEAC is a "licensed
recruitment agency authorized to recruit and deploy overseas Filipino
contract workers."
Second, the evidence upon which respondent NLRC based its findings consist
of agreements authorizing Victor Lim to deduct from the salaries of
petitioner and his co-workers the amount of their obligations to respondent
Cayanan. It would be too much of a coincidence to say that petitioner and his
co-workers are all mere tourists who allowed a certain Victor Lim to deduct
from their salaries the amount of their obligations to respondent Cayanan.
What is evident here is that there is an internal arrangement between
respondent Cayanan and Victor Lim brought about by the fact that the
former deployed these workers to serve the latter. As correctly pointed out
by the POEA, there must be a "previous arrangement" between private
respondents and Victor Lim.
Significantly, from these pieces of evidence respondent NLRC could already
see the falsity in private respondents' "total strangers" theory. How could
there be an arrangement between two persons who do not know each other?
Note how respondent NLRC conveniently closed its eye to the name of Victor
Lim, as mentioned in the agreements, when it ruled that Victor Lim and
Step-Up Agency are indeed " total strangers" to private respondents. We
sustain the findings of the POEA, being more convincing and supported by
substantial evidence, thus:
ELS: Labor Law1
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"[C]omplainant applied at the office of respondent agency and was

able to seek employment in Singapore through Engineer Jose Cayanan,
owner of respondent agency. Complainant's allegations are supported
by the Annexes he attached to his Reply (Annexes "'A" to "H"). These
documents readily show that it was not only complainant who was
recruited by respondent agency through Engr. Cayanan and as agreed
upon, the expenses in going to Singapore shall be advanced by
respondents. Thus their loans payable to Engr. Cayanan and charged
against their salaries. The checks representing the salaries of the
complainant and his co-workers show that they are drawn from
the account of Lim Chang Khoo and/or Jose Gayanan. From the
foregoing, it is properly noted that complainant's salaries were
taken from the funds of respondents which means that the
latter had a hand or participated in his recruitment and
deployment.
We cannot give credence to respondents' contentions that
complainant is a total stranger to them and that MIN Fee
Fishery Co. Ltd. is not its principal, neither do we believe that
respondents do not know Mr. Victor Lim who met complainant
in Singapore. Annex "B" in respondents' position paper belies
respondents' contentions. How could respondents write to a
certain Step Up Employment Agency in Singapore,
complainant's employer, when the latter is not even mentioned
in his complaint? We wonder where respondents got the name
of this employer if the same is really not known to them.
It is very unlikely for complainant to proceed to Singapore as a
tourist without knowing anybody at the site and just to apply
for work. Had there not been previous arrangements with
respondents, it is not all possible for complainant to land on a
job in Singapore because he is only a tourist.
Respondents had to resort to this misrepresentation of allowing its
recruits to leave as tourist because it is a service contractor and it is
not authorized to deploy fishermen."24
Private respondents further argue that they cannot be held liable by
petitioner because no employment contract between him and Step-Up
Agency had been approved by the POEA. They also claim that the absence of
a Special Power of Attorney and an Affidavit of Responsibility, as required
under Sections 1 and 2, Rule 1, Book III of the POEA Rules and Regulations25
only proves that they did not deploy petitioner to Singapore.
Their argument is far from persuasive. Surely, they cannot expect us to
utilize their non-compliance with the POEA Rules and Regulations as a basis
in absolving them. To do so would be tantamount to giving premium to acts
done in violation of established rules. At most, private respondents' act of
deploying petitioner to Singapore without complying with the POEA
requirements only made them susceptible to cancellation or suspension of
license as provided by Section 2, Rule I, Book VI of POEA Rules and
Regulations:
SEC.2.Grounds for suspension/cancellation of license.
xxx
xxx
ELS: Labor Law1
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m. Deploying workers whose employment and travel documents were

not processed by the Administration;
n. Deploying workers workers or seafarers to vessels or principals not
accredited by the Administration;
But of course, such violations should be threshed out in a proper
administrative proceeding for suspension or cancellation of license.
Meantime, we just uphold POEA's Decision holding private respondents and
Travelers Insurance Corporation jointly and severally liable to petitioner.
Section 2 (e), Rule V, Book I of the Omnibus Rules lmplementing the Labor
Code requires a private employment agency to assume all responsibilities for
the implementation of the contract of employment of an overseas worker. 26
This provision is substantially reiterated in Section 1 (f) (3) of Rule II, Book II
of the POEA Rules and Regulations which provides:
"Section 1. Requirements for Issuance of License - Every applicant for
license to operate a private employment agency or manning agency
shall submit a written application together with the following
requirements:
xxx
xxx
f) a verified undertaking stating that the applicant:

xxx
(3) shall assume joint and solidary liability with the employer which
may arise in connection with the implementation of the contract,
including but not limited to payment of wages, health and disability
compensation and repatriation.
With respect to private respondents' surety, its liability is founded on Section
4, Rule II, Book II of the POEA Rules and Regulations. Cash and surety bonds
are required by the POEA from recruitment and employment companies
precisely as a means of ensuring prompt and effective recourse against such
companies when held liable for applicant's or worker's claims. The cash and
surety bonds shall answer for all valid and legal claims arising from violations
of the conditions for the grant and use of the license, and/or accreditations
and contracts of employment. The bonds shall likewise guarantee
compliance with the provisions of the Code and its implementing rules and
regulations relating to recruitment and placement, the POEA Rules and
relevant issuances of the Department and all liabilities which the POEA may
impose.27
Accordingly, we find it proper to reinstate the Decision dated January 5, 1994
of the POEA subject to the modification that the amount of P16,000, the
amount which petitioner admitted to have been advanced by respondent
JEAC for his expenses in going to Singapore28 be deducted from the total
amount to be awarded to him which includes a) US$ 1,646.66 corresponding
to his unpaid salaries and b) attorney's fees. The award of attorney's fees
amounting to ten percent (10%) of the total award is justified under Article
111 (a) of the Labor Code. The solidary liability of Travelers Insurance Corp.,
as surety of respondent JEAC, is maintained.
WHEREFORE, the petition is hereby GRANTED and the respondent NLRC's
a) Decision dated July 28, 1994, and b) Resolution dated October 6, 1994 are
SET ASIDE. The Decision of POEA Administrator Felicisimo O. Joson in POEA
ELS: Labor Law1
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Case No. (L) 92-07-939 is REINSTATED with the MODIFICATION that the
sum of P16,000.00 be deducted from the total amount to be awarded to
petitioner. 1wphi1.nt
Payment should be made in Philippine currency at the prevailing rate of
exchange at the time of payment.
SO ORDERED.
6. Sagun vs Sunace
AVELINA F. SAGUN, Petitioner,
vs.
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC., Respondent.
RESOLUTION
NACHURA, J.:
This is a Petition for Review on certiorari under Rule 45 of the Rules of Court,
seeking to reverse and set aside the Court of Appeals (CA) Decision 1 dated
March 23, 2007 and Resolution2 dated August 16, 2007 in CA-G.R. SP No.
89298.
The case arose from a complaint for alleged violation of Article 32 and Article
34(a) and (b) of the Labor Code, as amended, filed by petitioner Avelina F.
Sagun against respondent Sunace International Management Services, Inc.
and the latters surety, Country Bankers Insurance Corporation, before the
Philippine Overseas Employment Administration (POEA). The case was
docketed as POEA Case No. RV 00-03-0261.3
Petitioner claimed that sometime in August 1998, she applied with
respondent for the position of caretaker in Taiwan. In consideration of her
placement and employment, petitioner allegedly paid P30,000.00 cash,
P10,000.00 in the form of a promissory note, and NT$60,000.00 through
salary deduction, in violation of the prohibition on excessive placement fees.
She also claimed that respondent promised to employ her as caretaker but,
at the job site, she worked as a domestic helper and, at the same time, in a
poultry farm.4
Respondent, however, denied petitioners allegations and maintained that it
only collected P20,840.00, the amount authorized by the POEA and for which
the corresponding official receipt was issued. It also stressed that it did not
furnish or publish any false notice or information or document in relation to
recruitment or employment as it was duly received, passed upon, and
approved by the POEA.5
On December 27, 2001, POEA Administrator Rosalinda Dimapilis-Baldoz
dismissed6 the complaint for lack of merit. Specifically, the POEA
Administrator found that petitioner failed to establish facts showing a
violation of Article 32, since it was proven that the amount received by
respondent as placement fee was covered by an official receipt; or of Article
34(a) as it was not shown that respondent charged excessive fees; and of
Article 34(b) simply because respondent processed petitioners papers as
caretaker, the position she applied and was hired for.
ELS: Labor Law1
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Aggrieved, petitioner filed a Motion for Reconsideration7 with the Office of

the Secretary of Labor. The Secretary treated the motion as a Petition for
Review. On January 13, 2004, then Secretary of Labor Patricia A. Sto. Tomas
partially granted8 petitioners motion, the pertinent portion of which reads:
WHEREFORE, premises considered, the Motion for Reconsideration, herein
treated as a petition for review, is PARTIALLY GRANTED. The Order dated
December 27, 2001 of the POEA Administrator is partially MODIFIED, and
SUNACE International Management Services, Inc. is held liable for collection
of excessive placement fee in violation of Article 34 (a) of the Labor Code, as
amended. The penalty of suspension of its license for two (2) months, or in
lieu thereof, the penalty of fine in the amount of Twenty Thousand Pesos
(P20,000.00) is hereby imposed upon SUNACE. Further, SUNACE and its
surety, Country Bankers Insurance Corporation, are ordered to refund the
petitioner the amounts of Ten Thousand Pesos (P10,000.00) and
NT$65,000.00, representing the excessive placement fee exacted from her.
SO ORDERED.9
On appeal by respondent, the Office of the President (OP) affirmed 10 the
Order of the Secretary of Labor. In resolving the case for petitioner, the OP
emphasized the States policy on the full protection to labor, local and
overseas, organized and unorganized. It also held that it was impossible for
respondent to have extended a loan to petitioner since it was not in the
business of lending money. It likewise found it immaterial that no evidence
was presented to show the overcharging since the issuance of a receipt could
not be expected.
Respondents motion for reconsideration was denied in an Order11 dated
March 21, 2005, which prompted respondent to elevate the matter to the CA
via a petition for review under Rule 43 of the Rules of Court.
On March 23, 2007, the CA decided in favor of respondent, disposing, as
follows:
WHEREFORE, premises considered, the instant petition is GRANTED and the
decision of the Office of the President dated 07 January 2005 is REVERSED
and SET ASIDE for lack of sufficient evidence. The Order of the POEA
Administrator dismissing the complaint of respondent for violation of Article
34(a) and (b) of the Labor Code is hereby AFFIRMED.
SO ORDERED.12
The appellate court reversed the rulings of the Secretary of Labor and the OP
mainly because their conclusions were based not on evidence but on
speculation, conjecture, possibilities, and probabilities.
Hence, this petition filed by petitioner, raising the sole issue of:
WHETHER THE COURT OF APPEALS ERRED IN GRANTING THE RESPONDENTS
PETITION FOR REVIEW REVERSING THE DECISION AND ORDER [OF THE]
OFFICE OF THE PRESIDENT.13
The petition is without merit.
Respondent was originally charged with violation of Article 32 and Article
34(a) and (b) of the Labor Code, as amended. The pertinent provisions read:
ART. 32. Fees to be Paid by Workers. - Any person applying with a private fee
charging employment agency for employment assistance shall not be
ELS: Labor Law1
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charged any fee until he has obtained employment through its efforts or has
actually commenced employment. Such fee shall be always covered with the
appropriate receipt clearly showing the amount paid. The Secretary of Labor
shall promulgate a schedule of allowable fees.
ART. 34. Prohibited Practices. - It shall be unlawful for any individual, entity,
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; 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.
The POEA, the Secretary of Labor, the OP, and the CA already absolved
respondent of liability under Articles 32 and 34(b). As no appeal was
interposed by petitioner when the Secretary of Labor freed respondent of
said liabilities, the only issue left for determination is whether respondent is
liable for collection of excess placement fee defined in Article 34(a) of the
Labor Code, as amended.
Although initially, the POEA dismissed petitioners complaint for lack of merit,
the Secretary of Labor and the OP reached a different conclusion. On appeal
to the CA, the appellate court, however, reverted to the POEA conclusion.
Following this turn of events, we are constrained to look into the records of
the case and weigh anew the evidence presented by the parties.
We find and so hold that the POEA and the CA are correct in dismissing the
complaint for illegal exaction filed by petitioner against respondent.
In proceedings before administrative and quasi-judicial agencies, the
quantum of evidence required to establish a fact is substantial evidence, or
that level of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion.14
In this case, are the pieces of evidence presented by petitioner substantial to
show that respondent collected from her more than the allowable placement
fee? We answer in the negative.
To show the amount it collected as placement fee from petitioner,
respondent presented an acknowledgment receipt showing that petitioner
paid and respondent received P20,840.00. This notwithstanding, petitioner
claimed that she paid more than this amount. In support of her allegation,
she presented a photocopy of a promissory note she executed, and testified
on the purported deductions made by her foreign employer. In the
promissory note, petitioner promised to pay respondent the amount of
P10,000.00 that she borrowed for only two weeks.15 Petitioner also explained
that her foreign employer deducted from her salary a total amount of
NT$60,000.00. She claimed that the P10,000.00 covered by the promissory
note was never obtained as a loan but as part of the placement fee collected
by respondent. Moreover, she alleged that the salary deductions made by
her foreign employer still formed part of the placement fee collected by
respondent.
We are inclined to give more credence to respondents evidence, that is, the
acknowledgment receipt showing the amount paid by petitioner and received
by respondent. A receipt is a written and signed acknowledgment that
ELS: Labor Law1
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money or goods have been delivered.16 Although a receipt is not conclusive

evidence, an exhaustive review of the records of this case fails to disclose
any other evidence sufficient and strong enough to overturn the
acknowledgment embodied in respondents receipt as to the amount it
actually received from petitioner. Having failed to adduce sufficient rebuttal
evidence, petitioner is bound by the contents of the receipt issued by
respondent. The subject receipt remains as the primary or best
evidence.171avvphi1
The promissory note presented by petitioner cannot be considered as
adequate evidence to show the excessive placement fee. It must be
emphasized that a promissory note is a solemn acknowledgment of a debt
and a formal commitment to repay it on the date and under the conditions
agreed upon by the borrower and the lender. A person who signs such an
instrument is bound to honor it as a legitimate obligation duly assumed by
him through the signature he affixes thereto as a token of his good faith.18
Moreover, as held by the CA, the fact that respondent is not a lending
company does not preclude it from extending a loan to petitioner for her
personal use. As for the deductions purportedly made by petitioners foreign
employer, we reiterate the findings of the CA that "there is no single piece of
document or receipt showing that deductions have in fact been made, nor is
there any proof that these deductions from the salary formed part of the
subject placement fee."19
At this point, we would like to emphasize the well-settled rule that the factual
findings of quasi-judicial agencies, like the POEA, which have acquired
expertise because their jurisdiction is confined to specific matters, are
generally accorded not only respect, but at times even finality if such
findings are supported by substantial evidence.20 While the Constitution is
committed to the policy of social justice and to the protection of the working
class, it should not be presumed that every dispute will automatically be
decided in favor of labor.21
To be sure, mere general allegations of payment of excessive placement fees
cannot be given merit as the charge of illegal exaction is considered a grave
offense which could cause the suspension or cancellation of the agencys
license. They should be proven and substantiated by clear, credible, and
competent evidence.22
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
The Court of Appeals Decision dated March 23, 2007 and Resolution dated
August 16, 2007 in CA-G.R. SP No. 89298 are AFFIRMED.
SO ORDERED.
7. Abante vs KJGS Fleet Mgt Manila

LEOPOLDO ABANTE, Petitioner,
vs.
KJGS FLEET MANAGEMENT MANILA and/or GUY DOMINGO A.
MACAPAYAG, KRISTIAN GERHARD JEBSENS SKIPSRENDERI A/S,
Respondents.
DECISION
CARPIO MORALES, J.:
ELS: Labor Law1
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On January 4, 2000, Leopoldo Abante (petitioner) was hired by respondent

KJGS Fleet Management Manila (KJGS) to work as ablebodied seaman aboard
M/T Rathboyne, for a period of nine months and with a basic salary of
US$535.00 per month.
Sometime in June, 2000, while carrying equipment on board the vessel,
petitioner slipped and hurt his back. Upon the vessels arrival in Kaohsiung,
Taiwan on July 4, 2000, petitioner was brought to a hospital whereupon he
was diagnosed to be suffering from "lower back pain r/o old fracture lesion
4th lumbar body." Nevertheless, he was still declared to be fit for restricted
work and was advised to see another doctor in the next port of call. Unable
to bear the pain, petitioner was, on his request, repatriated to the Philippines
on July 19, 2000.
On July 21, 2000, petitioner reported to KJGS and was referred to a companydesignated physician, Dr. Roberto D. Lim (Dr. Lim), at the Metropolitan
Hospital. After a series of tests, he was diagnosed to be suffering from
"Foraminal stenosis L3-L14 and central disc protrusion L4-L5" on account of
which he underwent Laminectomy and Discectomy on August 18, 2000, the
cost of which was borne by KJGS. He was discharged from the hospital 10
days later, but was advised to continue physical therapy. He was seen by Dr.
Lim around 10 times from the time he was discharged until February 20,
2001 when he was pronounced fit to resume sea duties. He, however,
refused to sign his Certificate of Fitness for Work.1
Petitioner later sought the opinion of another doctor, Dr. Jocelyn Myra R.
Caja, who diagnosed him to have "failed back syndrome" and gave a grade 6
disability rating2 --- which rating rendered him medically unfit to work again
as a seaman and called for the award of US$25,000.00 disability benefits --drawing him to file on April 27, 2001 a Complaint3 before the National Labor
Relations Commission (NLRC), docketed as NLRC OFW Case No. 01-04-073600, for disability compensation in the amount of US$25,000.00, moral and
exemplary damages and attorneys fees.
By Decision4 of July 24, 2003, Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed
the complaint, holding that under Philippine Overseas Employment
Administration (POEA) Memo Circular No. 9, series of 2000, in the event of
conflict between the assessment of the company-designated physician and
the doctor chosen by the seafarer, the opinion of a third doctor agreed on by
both the employer and the seafarer should be sought. Hence, the Labor
Arbiter held that petitioners immediate filing of the complaint, insisting on
his own physicians assessment, was premature and, therefore, the
assessment of the company-designated physician that he is still fit to work
prevails.
On petitioners appeal, the NLRC, by Decision5 of January 31, 2005, ordered
the remand of the case to the Labor Arbiter for further proceedings. It held
that since there were two conflicting diagnoses as to petitioners fitness to
work, the matter must be referred to a third doctor to determine his
entitlement to disability benefits under the new POEA Standard Employment
Contract for seafarers. KJGSs Motion for Reconsideration of said Decision
was denied by Resolution6 of November 3, 2006, hence, it appealed to the
Court of Appeals.
By Decision7 of December 10, 2007, the appellate court reversed and set
aside the NLRC ruling and reinstated the Labor Arbiters Decision. It held that
ELS: Labor Law1
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Sec. 20 (B) of POEA Memo Circular No. 9, series of 2000, which requires a
third doctor in case of conflicting assessments, is inapplicable.
Noting that the employment contract between KJGS and petitioner was
executed on January 4, 2000, the appellate court held that the contract is
governed by Memo Circular No. 55, series of 1996, which did not have a
similar provision, hence, it is the determination or assessment of the
company-designated physician which is deemed controlling. Petitioners
motion for reconsideration having been denied by Resolution8 of April 1,
2008, he interposed the present petition, insisting that he is entitled to
Grade 6 disability benefits under the new POEA Standard Employment
Contract.
The petition is meritorious.
Section 20 (B) (3) of the POEA Standard Employment Contract of 2000
provides:
SECTION 20. COMPENSATION AND BENEFITS FOR INJURY AND ILLNESS
The liabilities of the employer when the seafarer suffers work-related injury
or illness during the term of his contract are as follows:
xxxx
3. Upon sign-off from the vessel for medical treatment, the seafarer is
entitled to sickness allowance equivalent to his basic wage until he is
declared fit to work or the degree of permanent disability has been assessed
by the company-designated physician but in no case shall this period exceed
one hundred twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment
medical examination by a company-designated physician within three
working days upon his return except when he is physically incapacitated to
do so, in which case, a written notice to the agency within the same period is
deemed as compliance. Failure of the seafarer to comply with the mandatory
reporting requirement shall result in his forfeiture of the right to claim the
above benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a third
doctor may be agreed jointly between the Employer and the seafarer. The
third doctors decision shall be final and binding on both parties. (emphasis
supplied)
Clearly, the above provision does not preclude the seafarer from getting a
second opinion as to his condition for purposes of claiming disability benefits,
for as held in NYK-Fil Ship Management v. Talavera::9
This provision substantially incorporates the 1996 POEA Standard
Employment Contract. Passing on the 1996 POEA Standard Employment
Contract, this Court held that "[w]hile it is the company-designated physician
who must declare that the seaman suffers a permanent disability during
employment, it does not deprive the seafarer of his right to seek a second
opinion," hence, the Contract "recognizes the prerogative of the seafarer to
request a second opinion and, for this purpose, to consult a physician of his
choice." (emphasis and underscoring supplied)
In the present case, it is undisputed that petitioner immediately consulted
with a physician of his choice after initially having been seen and operated
on by a company-designated physician. It was after he got a second opinion
ELS: Labor Law1
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and a finding that he is unfit for further work as a seaman that he filed the
claim for disability benefits.
Respecting the appellate courts ruling that it is POEA Memo Circular No. 55,
series of 1996 which is applicable and not Memo Circular No. 9, series of
2000, apropos is the ruling in Seagull Maritime Corporation v. Dee10 involving
employment contract entered into in 1999, before the promulgation of POEA
Memo Circular No. 9, series of 2000 or the use of the new POEA Standard
Employment Contract, like that involved in the present case. In said case, the
Court applied the 2000 Circular in holding that while it is the companydesignated physician who must declare that the seaman suffered permanent
disability during employment, it does not deprive the seafarer of his right to
seek a second opinion which can then be used by the labor tribunals in
awarding disability claims.
Courts are called upon to be vigilant in their time-honored duty to protect
labor, especially in cases of disability or ailment. When applied to Filipino
seamen, the perilous nature of their work is considered in determining the
proper benefits to be awarded. These benefits, at the very least, should
approximate the risks they brave on board the vessel every single day.
Accordingly, if serious doubt exists on the company-designated physicians
declaration of the nature of a seamans injury and its corresponding
impediment grade, resort to prognosis of other competent medical
professionals should be made. In doing so, a seaman should be given the
opportunity to assert his claim after proving the nature of his injury. These
evidences will in turn be used to determine the benefits rightfully accruing to
him. (emphasis and underscoring supplied)
It bears noting that Dr. Lims medical findings did not significantly differ from
those of Dr. Cajas. In essence, even if Dr. Lim declared petitioner to be fit to
resume sea duties, still, the final diagnosis of "foraminal stenosis and central
disc protrusion" remained six months post-surgery.11 It is understandable that
a company-designated physician is more positive than that of a physician of
the seafarers choice. It is on this account that a seafarer is given the option
by the POEA Standard Employment Contract to seek a second opinion from
his preferred physician.
Petitioners are, at this point, reminded that the POEA standard employment
contract for seamen was designed primarily for the protection and benefit of
Filipino seamen in the pursuit of their employment on board ocean-going
vessels. Its provisions must be construed and applied fairly, reasonably and
liberally in their favor. Only then can its beneficent provisions be fully carried
into effect. (emphasis and underscoring supplied)121avvphi1
In HFS Philippines v. Pilar,13 where the findings of the independent physicians
were given more credence than those of the company-designated physicians,
the Court held:
The bottomline is this: the certification of the company-designated physician
would defeat respondents claim while the opinion of the independent
physicians would uphold such claim. In such a situation, we adopt the
findings favorable to respondent.
The law looks tenderly on the laborer. Where the evidence may be
reasonably interpreted in two divergent ways, one prejudicial and the other
ELS: Labor Law1
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favorable to him, the balance must be tilted in his favor consistent with the
principle of social justice. (emphasis and underscoring supplied)
As to whether petitioner can claim disability benefits, the Court rules in the
affirmative. Permanent disability refers to the inability of a worker to perform
his job for more than 120 days, regardless of whether he loses the use of
any part of his body. What determines petitioners entitlement to permanent
disability benefits is his inability to work for more than 120 days.14 In the
case at bar, it was only on February 20, 2001 that the Certificate of Fitness
for Work was issued by Dr. Lim, more than 6 months from the time he was
initially evaluated by the doctor on July 24, 2000 and after he underwent
operation on August 18, 2000.
It is gathered15 from the documents emanating from the Office of Dr. Lim that
petitioner was seen by him from July 24, 2000 up to February 20, 2001 or a
total of 13 times; and except for the medical reports dated February 5, 2001
and February 20, 2001 (when the doctor finally pronounced petitioner fit to
work), Dr. Lim consistently recommended that petitioner continue his
physical rehabilitation/therapy and revisit clinic on specific dates for reevaluation, thereby implying that petitioner was not yet fit to work.
Given a seafarers entitlement to permanent disability benefits when he is
unable to work for more than 120 days, the failure of the companydesignated physician to pronounce petitioner fit to work within the 120-day
period entitles him to permanent total disability benefit in the amount of
US$60,000.00.16
Respecting the claim for moral and exemplary damages, the same cannot be
granted, there being no concrete showing of bad faith or malice on the part
of KJGS. The records show that it shouldered all the expenses incurred in
petitioners surgery and subsequent rehabilitation. And it regularly inquired
from Dr. Lim about petitioners condition.
The claim for attorneys fees is granted following Article 2208 of the New
Civil Code which allows its recovery in actions for recovery of wages of
laborers and actions for indemnity under the employer's liability laws. The
same fees are also recoverable when the defendant's act or omission has
compelled the plaintiff to incur expenses to protect his interest17 as in the
present case following the refusal by respondent to settle his claims.
Pursuant to prevailing jurisprudence, petitioner is entitled to attorneys fees
of ten percent (10%) of the monetary award.
WHEREFORE, the decision and resolution of the Court of Appeals dated
December 10, 2007, and April 1, 2008, respectively, are REVERSED and SET
ASIDE. Respondents are held jointly and severally liable to pay petitioner the
following: a) permanent total disability benefits of US$60,000.00 at its peso
equivalent at the time of actual payment; and b) attorney's fees of ten
percent (10%) of the total monetary award at its peso equivalent at the time
of actual payment.
SO ORDERED.
8. Eastern Mediterranean
ELS: Labor Law1
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EASTERN MEDITERRANEAN MARITIME LTD. AND AGEMAR MANNING

AGENCY, INC., Petitioners,
vs.
EST ANISLAO SURIO, FREDDIE PALGUIRAN, GRACIANO MORALES,
HENRY CASTILLO, ARISTOTLE ARREOLA, ALEXANDER YGOT, ANRIQUE
BA TTUNG, GREGORIO ALDOVINO, NARCISO FRIAS, VICTOR FLORES,
SAMUEL MARCIAL, CARLITO PALGUIRAN, DUQUE VINLUAN, .JESUS
MENDEGORIN, NEIL FLORES, ROMEO MANGALIAG, JOE GARFIN and
SALESTINO SUSA, Respondents.
*
PEREZ
DECISION
BERSAMIN, J.:
On appeal is the decision the Court of Appeals (CA) promulgated on
December 21, 2001 affirming the resolution of the National Labor Relations
Commission (NLRC) declaring itself to be without appellate jurisdiction to
review the decision of the Philippine Overseas Employment Administration
(POEA) involving petitioners complaint for disciplinary action against
respondents.1
Respondents were former crewmembers of MT Seadance, a vessel owned by
petitioner Eastern Mediterranean Maritime Ltd. and manned and operated by
petitioner Agemar Manning Agency, Inc. While respondents were still on
board the vessel, they experienced delays in the payment of their wages and
in the remittance of allotments, and were not paid for extra work and extra
overtime work. They complained about the vessels inadequate equipment,
and about the failure of the petitioners to heed their repeated requests for
the improvement of their working conditions. On December 19, 1993, when
MT Seadance docked at the port of Brofjorden, Sweden to discharge oil,
representatives of the International Transport Federation (ITF) boarded the
vessel and found the wages of the respondents to be below the prevailing
rates. The ensuing negotiations between the ITF and the vessel owner on the
increase in respondents wages resulted in the payment by the vessel owner
of wage differentials and the immediate repatriation of respondents to the
Philippines.
Subsequently, on December 23, 1993, the petitioners filed against the newlyrepatriated respondents a complaint for disciplinary action based on breach
of discipline and for the reimbursement of the wage increases in the Workers
Assistance and Adjudication Office of the POEA.
During the pendency of the administrative complaint in the POEA, Republic
Act No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995) took
effect on July 15, 1995. Section 10 of Republic Act No. 8042 vested original
and exclusive jurisdiction over all money claims arising out of employeremployee relationships involving overseas Filipino workers in the Labor
Arbiters, to wit:
Section 10. Money Claims. Notwithstanding any provision of law to the
contrary, the Labor Arbiters of the National Labor Relations Commission
(NLRC) shall have the original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after the filing of the complaint, the claims
arising out of an employer-employee relationship or by virtue of any law or
ELS: Labor Law1
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contract involving Filipino workers for overseas deployment including claims

for actual, moral, exemplary and other forms of damages.
The jurisdiction over such claims was previously exercised by the POEA under
the POEA Rules and Regulations of 1991 (1991 POEA Rules).
On May 23, 1996, the POEA dismissed the complaint for disciplinary action.
Petitioners received the order of dismissal on July 24, 1996.2
Relying on Section 1, Rule V, Book VII of the 1991 POEA Rules, petitioners
filed a partial appeal on August 2, 1996 in the NLRC, still maintaining that
respondents should be administratively sanctioned for their conduct while
they were on board MT Seadance.
On March 21, 1997, the NLRC dismissed petitioners appeal for lack of
jurisdiction,3 thus:
We dismiss the partial appeal.
The Commission has no jurisdiction to review cases decided by the POEA
Administrator involving disciplinary actions. Under the Migrant Workers and
Overseas Filipinos Act of 1995, the Labor Arbiter shall have jurisdiction over
money claims involving employer-employee relationship (sec. 10, R.A. 8042).
Said law does not provide that appeals from decisions arising from complaint
for disciplinary action rest in the Commission.
PREMISES CONSIDERED, instant appeal from the Order of May 23, 1996 is
hereby DISMISSED for lack of jurisdiction.
SO ORDERED.
Not satisfied, petitioners moved for reconsideration, but the NLRC denied
their motion. They received the denial on July 8, 1997.4
Petitioners then commenced in this Court a special civil action for certiorari
and mandamus. Citing St. Martin Funeral Homes v. National Labor Relations
Commission,5 however, the Court referred the petition to the CA on
November 25, 1998.
Petitioners contended in their petition that:
THE NLRC GRAVELY ABUSED ITS DISCRETION AND/OR GRAVELY ERRED IN
DISMISSING PETITIONERS APPEAL AND MOTION FOR RECONSIDERATION
WHEN IT REFUSED TO TAKE COGNIZANCE OF PETITIONERS APPEAL DESPITE
BEING EMPOWERED TO DO SO UNDER THE LAW.6
On December 21, 2001, the CA dismissed the petition for certiorari and
mandamus, holding that the inclusion and deletion of overseas contract
workers from the POEA blacklist/watchlist were within the exclusive
jurisdiction of the POEA to the exclusion of the NLRC, and that the NLRC had
no appellate jurisdiction to review the matter, viz:
Section 10 of RA 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, provides that:
"Money Claims Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have
the original and exclusive jurisdiction to hear and decide, within ninety (90)
calendar days after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages.
ELS: Labor Law1
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xxxx
Likewise, the Rules and Regulations implementing RA 8042 reiterate the
jurisdiction of POEA, thus:
"Section 28. Jurisdiction of the POEA. The POEA shall exercise original and
exclusive jurisdiction to hear and decide:
a) All cases, which are administrative in character, involving or arising out of
violations of rules and regulations relating to licensing and registration of
recruitment and employment agencies or entities; and
b) Disciplinary action cases and other special cases, which are administrative
in character, involving employers, principals, contracting partners and
Filipino migrant workers."
Further, Sections 6 and 7 Rule VII, Book VII of the POEA Rules & Regulations
(1991) provide:
"Sec. 6. Disqualification of Contract Workers. Contract workers, including
seamen, against whom have been imposed or with pending obligations
imposed upon them through an order, decision or resolution shall be included
in the POEA Blacklist Workers shall be disqualified from overseas
employment unless properly cleared by the Administration or until their
suspension is served or lifted.
Sec. 7. Delisting of the Contract Workers Name from the POEA Watchlist. The
name of an overseas worker may be excluded, deleted and removed from
the POEA Watchlist only after disposition of the case by the Administration."
Thus, it can be concluded from the afore-quoted law and rules that, public
respondent has no jurisdiction to review disciplinary cases decided by the
POEA involving contract workers. Clearly, the matter of inclusion and deletion
of overseas contract workers in the POEA Blacklist/Watchlist is within the
exclusive jurisdiction of the POEA to the exclusion of the public respondent.
Nor has the latter appellate jurisdiction to review the findings of the POEA
involving such cases.
xxx
In fine, we find and so hold, that, no grave abuse of discretion can be
imputed to the public respondent when it issued the assailed Decision and
Order, dated March 21, 1997 and June 13, 1997, respectively, dismissing
petitioners appeal from the decision of the POEA.
WHEREFORE, finding the instant petition not impressed with merit, the same
is hereby DENIED DUE COURSE. Costs against petitioners.
SO ORDERED.7
Issue
Petitioners still appeal, submitting to the Court the sole issue of:
WHETHER OR NOT THE NLRC HAS JURISDICTION TO REVIEW ON APPEAL
CASES DECIDED BY THE POEA ON MATTERS PERTAINING TO DISCIPLINARY
ACTIONS AGAINST PRIVATE RESPONDENTS.
They contend that both the CA and the NLRC had no basis to rule that the
NLRC had no jurisdiction to entertain the appeal only because Republic Act
No. 8042 had not provided for its retroactive application.
ELS: Labor Law1
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Respondents counter that the appeal should have been filed with the
Secretary of Labor who had exclusive jurisdiction to review cases involving
administrative matters decided by the POEA.
Ruling
The petition for review lacks merit.
Petitioners adamant insistence that the NLRC should have appellate
authority over the POEAs decision in the disciplinary action because their
complaint against respondents was filed in 1993 was unwarranted. Although
Republic Act No. 8042, through its Section 10, transferred the original and
exclusive jurisdiction to hear and decide money claims involving overseas
Filipino workers from the POEA to the Labor Arbiters, the law did not remove
from the POEA the original and exclusive jurisdiction to hear and decide all
disciplinary action cases and other special cases administrative in character
involving such workers. The obvious intent of Republic Act No. 8042 was to
have the POEA focus its efforts in resolving all administrative matters
affecting and involving such workers. This intent was even expressly
recognized in the Omnibus Rules and Regulations Implementing the Migrant
Workers and Overseas Filipinos Act of 1995 promulgated on February 29,
1996, viz:
Section 28. Jurisdiction of the POEA. The POEA shall exercise original and
exclusive jurisdiction to hear and decide:
(a) all cases, which are administrative in character, involving or arising out of
violations or rules and regulations relating to licensing and registration of
recruitment and employment agencies or entities; and
(b) disciplinary action cases and other special cases, which are
administrative in character, involving employers, principals, contracting
partners and Filipino migrant workers.
Section 29. Venue The cases mentioned in Section 28(a) of this Rule, may
be filed with the POEA Adjudication Office or the DOLE/POEA regional office
of the place where the complainant applied or was recruited, at the option of
the complainant. The office with which the complaint was first filed shall take
cognizance of the case.
Disciplinary action cases and other special cases, as mentioned in the
preceding Section, shall be filed with the POEA Adjudication Office.
It is clear to us, therefore, that the NLRC had no appellate jurisdiction to
review the decision of the POEA in disciplinary cases involving overseas
contract workers.
Petitioners position that Republic Act No. 8042 should not be applied
retroactively to the review of the POEAs decision dismissing their complaint
against respondents has no support in jurisprudence. Although, as a rule, all
laws are prospective in application unless the contrary is expressly provided,8
or unless the law is procedural or curative in nature,9 there is no serious
question about the retroactive applicability of Republic Act No. 8042 to the
appeal of the POEAs decision on petitioners disciplinary action against
respondents. In a way, Republic Act No. 8042 was a procedural law due to its
providing or omitting guidelines on appeal. A law is procedural, according to
De Los Santos v. Vda. De Mangubat,10 when it
ELS: Labor Law1
Twenty19 49
Refers to the adjective law which prescribes rules and forms of procedure in
order that courts may be able to administer justice. Procedural laws do not
come within the legal conception of a retroactive law, or the general rule
against the retroactive operation of statues they may be given retroactive
effect on actions pending and undetermined at the time of their passage and
this will not violate any right of a person who may feel that he is adversely
affected, insomuch as there are no vested rights in rules of procedure.
Republic Act No. 8042 applies to petitioners complaint by virtue of the case
being then still pending or undetermined at the time of the laws passage,
there being no vested rights in rules of procedure.11 They could not validly
insist that the reckoning period to ascertain which law or rule should apply
was the time when the disciplinary complaint was originally filed in the POEA
in 1993. Moreover, Republic Act No. 8042 and its implementing rules and
regulations were already in effect when petitioners took their appeal. A
statute that eliminates the right to appeal and considers the judgment
rendered final and unappealable only destroys the right to appeal, but not
the right to prosecute an appeal that has been perfected prior to its passage,
for, at that stage, the right to appeal has already vested and cannot be
impaired.12 Conversely and by analogy, an appeal that is perfected when a
new statute affecting appellate jurisdiction comes into effect should comply
with the provisions of the new law, unless otherwise provided by the new
law. Relevantly, petitioners need to be reminded that the right to appeal from
a decision is a privilege established by positive laws, which, upon authorizing
the taking of the appeal, point out the cases in which it is proper to present
the appeal, the procedure to be observed, and the courts by which the
appeal is to be proceeded with and resolved.13 This is why we consistently
hold that the right to appeal is statutory in character, and is available only if
granted by law or statute.14
When Republic Act No. 8042 withheld the appellate jurisdiction of the NLRC
in respect of cases decided by the POEA, the appellate jurisdiction was
vested in the Secretary of Labor in accordance with his power of supervision
and control under Section 38(1), Chapter 7, Title II, Book III of the Revised
Administrative Code of 1987, to wit:
Section 38. Definition of Administrative Relationship. Unless otherwise
expressly stated in the Code or in other laws defining the special
relationships of particular agencies, administrative relationships shall be
categorized and defined as follows:
Supervision and Control. Supervision and control shall include authority to
act directly whenever a specific function is entrusted by law or regulation to
a subordinate; direct the performance of duty; restrain the commission of
acts; review, approve, reverse or modify acts and decisions of subordinate
officials or units; determine priorities in the execution of plans and programs.
Unless a different meaning is explicitly provided in the specific law governing
the relationship of particular agencies, the word "control" shall encompass
supervision and control as defined in this paragraph. xxx.
Thus, Section 1, Part VII, Rule V of the 2003 POEA Rules and Regulations
specifically provides, as follows:
Section 1. Jurisdiction. The Secretary shall have the exclusive and original
jurisdiction to act on appeals or petition for review of disciplinary action
cases decided by the Administration.
ELS: Labor Law1
Twenty19 50
In conclusion, we hold that petitioners should have appealed the adverse

decision of the POEA to the Secretary of Labor instead of to the NLRC.
Consequently, the CA, being correct on its conclusions, committed no error in
upholding the NLRC.
WHEREFORE, we AFFIRM the decision promulgated on December 21, 2001
by the Court of Appeals; and ORDER the petitioners to pay the costs of suit.
SO ORDERED.
9. People vs. Panis

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
ELS: Labor Law1
Twenty19 51
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 be
prima 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
ELS: Labor Law1
Twenty19 52
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.

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