G.R. No.

196036 : OCTOBER 23, 2013

ELIZABETH M. GAGUI, Petitioner, v. SIMEON DEJERO and TEODORO R. PERMEJO,

Respondents.

SERENO, C.J.:

FACTS:

On 14 December 1993, respondents Simeon Dejero and Teodoro Permejo filed separate
Complaints for illegal dismissal, nonpayment of salaries and overtime pay, refund of transportation
expenses, damages, and attorney fees against PRO Agency Manila, Inc., and Abdul Rahman Al
Mahwes.

The Labor Arbiter Pedro Ramos rendered a decision ordering respondents Pro Agecy Manila Inc.,
and Abdul Rahman Al Mahwes to pay complainants. The LA also issued a Writ of Execution. When
the writ was returned unsatisfied, an Alias Writ of Execution was issued, but was also returned
unsatisfied.

Respondents filed a Motion to Implead Respondent Pro Agency Manila, Inc. Corporate Officers
and Directors as Judgment Debtor. It included petitioner as the Vice-president/Stockholder/Director
of PRO Agenct, Manila, Inc. The LA granted the motion.

A 2nd Alias Writ of Execution was issued, which resulted in the garnishment of petitioner bank
deposit in the amount of P85,430.48. Since, judgment remained unsatisfied, respondents sought a
3rd alias writ of execution. The motion was granted resulting in the levying of two parcels of lot
owned by petitioner located in San Fernando Pampanga.

Petitioner filed a Motion to Quash 3rd Alias Writ of Execution. Petitioner alleged that apart from not
being made aware that she was impleaded as one of the parties to the case, the LA decision did
not hold her liable in any form whatsoever. Executive Labor Arbiter denied the motion.

Upon appeal, NLRC denied the appeal for lack of merit. NLRC ruled that in so far as overseas
migrant workers are concerned, it is R.A. 8042 itself that describes the nature of the liability of the
corporation and its officers and directors. It is not essential that the individual officers and directors
be impleaded as party respondents to the case instituted by the worker. A finding of liability on the
part of the corporation will necessarily mean the liability of the corporate officers or directors.

The CA affirmed the NLRC decision. The two Motions for Reconsideration were denied.

ISSUE: Whether or not petitioner may be held jointly and severally liable with PRO Agency Manila,
Inc. in accordance with Section 10 of R.A. 8042?

HELD: The Petitioner may not be held jointly and severally liable.

LABOR LAW: liability of corporate officers

The pertinent portion of Section 10, R.A. 8042 reads as follows: The liability of the principal/
employer and the recruitment/placement agency for any and all claims under this section shall be
joint and several. This provision shall be incorporated in the contract for overseas employment and
shall be a condition precedent for its approval.

In Sto. Tomas v. Salac, we had the opportunity to pass upon the constitutionality of this provision.
We have thus maintained: the Court has already held, pending adjudication of this case, that the
liability of corporate directors and officers is not automatic. To make them jointly and solidarily
liable with their company, there must be a finding that they were remiss in directing the affairs of
that company, such as sponsoring or tolerating the conduct of illegal activities.

Hence, for petitioner to be found jointly and solidarily liable, there must be a separate finding that
she was remiss in directing the affairs of the agency, resulting in the illegal dismissal of
respondents. Examination of the records would reveal that there was no finding of neglect on the
part of the petitioner in directing the affairs of the agency. In fact, respondents made no mention of
any instance when petitioner allegedly failed to manage the agency in accordance with law,
thereby contributing to their illegal dismissal.

G.R. No. 78085 October 16, 1989

ROYAL CROWN INTERNATIONALE, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSI0N and VIRGILIO P. NACIONALES, respondents.
Ceferino Padua Law Office for petitioner.
Acosta & Rico Law Offices for private respondent.

CORTES, J.:
Petitioner Royal Crown Internationale seeks the nullification of a resolution of the National Labor
Relations Commission (NLRC) which affirmed a decision of the Philippine Overseas Employment
Administration (POEA) holding it liable to pay, jointly and severally with Zamel-Turbag Engineering
and Architectural Consultant (ZAMEL), private respondent Virgilio P. Nacionales' salary and
vacation pay corresponding to the unexpired portion of his employment contract with ZAMEL.
In 1983, petitioner, a duly licensed private employment agency, recruited and deployed private
respondent for employment with ZAMEL as an architectural draftsman in Saudi Arabia. On May 25,
1983, a service agreement was executed by private respondent and ZAMEL whereby the former
was to receive per month a salary of US$500.00 plus US$100.00 as allowance for a period of one
(1) year commencing from the date of his arrival in Saudi Arabia. Private respondent departed for
Saudi Arabia on June 28,1983.
On February 13, 1984, ZAMEL terminated the employment of private respondent on the ground
that his performance was below par. For three (3) successive days thereafter, he was detained at
his quarters and was not allowed to report to work until his exit papers were ready. On February
16, 1984, he was made to board a plane bound for the Philippines.
Private respondent then filed on April 23, 1984 a complaint for illegal termination against petitioner
and ZAMEL with the POEA, docketed as POEA Case No. (L) 84-04-401.
Based on a finding that petitioner and ZAMEL failed to establish that private respondent was
terminated for just and valid cause, the Workers' Assistance and Adjudication Office of the POEA
issued a decision dated June 23, 1986 signed by Deputy Administrator and Officer-in-Charge
Crescencio M. Siddayao, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the complainant and against respondents,
ordering the latter to pay, jointly and severally, to complainant the following amounts:
1. TWO THOUSAND SIX HUNDRED FORTY US DOLLARS (US$2,640.00) or its equivalent in
Philippine currency at the time of payment, representing the salaries corresponding to the
unexpired portion of complainant's contract;
2. SIX HUNDRED US DOLLARS (US$ 600.00) less partial payment of FIVE HUNDRED FIFTY-
EIGHT SAUDI RIYALS (SR558), or its equivalent in Philippine currency at the time of actual
payment, representing the unpaid balance of complainant's vacation pay;
3. THREE HUNDRED FIFTY US DOLLARS (US$350.00) or its equivalent in Philippine currency at
the time of actual payment representing reimbursement of salary deductions for return travel fund;
4. Ten percent (10%) of the above-stated amounts, as and for attorney's fees.
Complainant's claim for legal and transportation expenses are hereby DISMISSED for lack of
merit.
SO ORDERED.
[POEA Decision, p. 5; Rollo, p. 34.]
On July 18, 1986, petitioner filed thru its new counsel a motion for reconsideration which was
treated as an appeal to the NLRC by the POEA. Petitioner alleged that the POEA erred in holding it
solidarity liable for ZAMEL's violation of private respondent's service agreement even if it was not a
party to the agreement.
In a resolution promulgated on December 11, 1986, the NLRC affirmed the POEA decision, holding
that, as a duly licensed private employment agency, petitioner is jointly and severally liable with its
foreign principal ZAMEL for all claims and liabilities which may arise in connection with the
implementation of the employment contract or service agreement [NLRC Decision, pp. 3-4; Rollo,
pp. 26-27].
On March 30, 1987, the NLRC denied for lack of merit petitioner's motion for reconsideration.
Hence, petitioner filed the present petition captioned as "Petition for Review".
At this point, it is not amiss to note that the filing of a "Petition for Review" under Rule 45 of the
Rules of Court is not the proper means by which NLRC decisions are appealed to the Supreme
Court. It is only through a petition for certiorari under Rule 65 that NLRC decisions may be
reviewed and nullified on the grounds of lack of jurisdiction or grave abuse of discretion amounting
to lack or excess of jurisdiction. Nevertheless, in the interest of justice, this Court opted to treat the
instant petition as if it were a petition for certiorari. Thus, after the filing of respondents' comments,
petitioner's joint reply thereto, and respondents' rejoinders, the Court resolved to consider the
issues joined and the case submitted for decision.
The case at bar involves two principal issues, to wit:
I. Whether or not petitioner as a private employment agency may be held jointly and severally
liable with the foreign-based employer for any claim which may arise in connection with the
implementation of the employment contracts of the employees recruited and deployed abroad;
II. Whether or not sufficient evidence was presented by petitioner to establish the termination of
private respondent's employment for just and valid cause.
I.
Petitioner contends that there is no provision in the Labor Code, or the omnibus rules implementing
the same, which either provides for the "third-party liability" of an employment agency or recruiting
entity for violations of an employment agreement performed abroad, or designates it as the agent
of the foreign-based employer for purposes of enforcing against the latter claims arising out of an
employment agreement. Therefore, petitioner concludes, it cannot be held jointly and severally
liable with ZAMEL for violations, if any, of private respondent's service agreement.
Petitioner's conclusion is erroneous. Petitioner conveniently overlooks the fact that it had
voluntarily assumed solidary liability under the various contractual undertakings it submitted to the
Bureau of Employment Services. In applying for its license to operate a private employment
agency for overseas recruitment and placement, petitioner was required to submit, among others,
a document or verified undertaking whereby it assumed all responsibilities for the proper use of its
license and the implementation of the contracts of employment with the workers it recruited and
deployed for overseas employment [Section 2(e), Rule V, Book 1, Rules to Implement the Labor
Code (1976)]. It was also required to file with the Bureau a formal appointment or agency contract
executed by the foreign-based employer in its favor to recruit and hire personnel for the former,
which contained a provision empowering it to sue and be sued jointly and solidarily with the foreign
principal for any of the violations of the recruitment agreement and the contracts of employment
[Section 10 (a) (2), Rule V, Book I of the Rules to Implement the Labor Code (1976)]. Petitioner
was required as well to post such cash and surety bonds as determined by the Secretary of Labor
to guarantee compliance with prescribed recruitment procedures, rules and regulations, and terms
and conditions of employment as appropriate [Section 1 of Pres. Dec. 1412 (1978) amending
Article 31 of the Labor Code].
These contractual undertakings constitute the legal basis for holding petitioner, and other private
employment or recruitment agencies, liable jointly and severally with its principal, the foreign-based
employer, for all claims filed by recruited workers which may arise in connection with the
implementation of the service agreements or employment contracts [See Ambraque International
Placement and Services v. NLRC, G.R. No. 77970, January 28, 1988, 157 SCRA 431; Catan v.
NLRC, G.R. No. 77279, April 15, 1988, 160 SCRA 691; Alga Moher International Placement
Services v. Atienza, G.R. No. 74610, September 30, 1988].
In a belated attempt to bolster its position, petitioner contends in its joint reply that the omnibus
rules implementing the Labor Code are invalid for not having been published in the Official Gazette
pursuant to the Court's pronouncements in the cases of Tanada v. Tuvera [G.R. No. 63915, April
25, 1985, 136 SCRA 27; December 29, 1986, 146 SCRA 446]. Petitioner further contends that the
1985 POEA Rules and Regulations, in particular Section 1, Rule I of Book VII** quoted in the
NLRC decision, should not have been retroactively applied to the case at bar.
But these contentions are irrelevant to the issues at bar. They proceed from a misapprehension of
the legal basis of petitioner's liabilities as a duly licensed private employment agency. It bears
repeating that the basis for holding petitioner jointly and severally liable with the foreign-based
employer ZAMEL is the contractual undertakings described above which it had submitted to the
Bureau of Employment Services. The sections of the omnibus rules implementing the Labor Code
cited by this Court merely enumerate the various documents or undertakings which were submitted
by petitioner as applicant for the license to operate a private employment agency for overseas
recruitment and placement. These sections do not create the obligations and liabilities of a private
employment agency to an employee it had recruited and deployed for work overseas. It must be
emphasized again that petitioner assumed the obligations and liabilities of a private employment
agency by contract. Thus, whether or not the omnibus rules are effective in accordance with
Tanada v. Tuvera is an issue the resolution of which does not at all render nugatory the binding
effect upon petitioner of its own contractual undertakings.
The Court, consequently, finds it unnecessary to pass upon both the implications of Tanada v.
Tuvera on the omnibus rules implementing the Labor Code as well as the applicability of the 1985
POEA Rules and Regulations.
Petitioner further argues that it cannot be held solidarily liable with ZAMEL since public respondent
had not acquired jurisdiction over ZAMEL through extra-territorial service of summons as
mandated by Section 17, Rule 14 of the Rules of Court.
This argument is untenable. It is well-settled that service upon any agent of a foreign corporation,
whether or not engaged in business in the Philippines, constitutes personal service upon that
corporation, and accordingly, judgment may be rendered against said foreign corporation [Facilities
Management Corporation v. De la Osa, G.R. No. L-38649, March 26, 1979, 89 SCRA 131]. In the
case at bar, it cannot be denied that petitioner is an agent of ZAMEL. The service agreement was
executed in the Philippines between private respondent and Milagros G. Fausto, the General
Manager of petitioner, for and in behalf of ZAMEL [Annex "D" of Petition, p. 3; Rollo, p. 37].
Moreover, one of the documents presented by petitioner as evidence, i.e., the counter-affidavit of
its General Manager Ms. Fausto, contains an admission that it is the representative and agent of
ZAMEL [See Paragraph No. 1 of Annex "H" of Petition; Rollo. p. 43].
Considering the foregoing, the Court holds that the NLRC committed no grave abuse of discretion
amounting to lack or excess of jurisdiction in declaring petitioner jointly and severally liable with its
foreign principal ZAMEL for all claims which have arisen in connection with the implementation of
private respondent's employment contract.
II.
Petitioner asserts that the NLRC failed to consider the overwhelming evidence it had presented
before the POEA which establishes the fact that private respondent was terminated for just and
valid cause in accordance with his service agreement with ZAMEL.
This assertion is without merit. The NLRC upheld the POEA finding that petitioner's evidence was
insufficient to prove termination from employment for just and valid cause. And a careful study of
the evidence thus far presented by petitioner reveals to this Court that there is legal basis for public
respondent's conclusion.
It must be borne in mind that the basic principle in termination cases is that the burden of proof
rests upon the employer to show that the dismissal is for just and valid cause, and failure to do so
would necessarily mean that the dismissal was not justified and, therefore, was illegal [Polymedic
General Hospital v. NLRC, G.R. No. 64190, January 31, 1985,134 SCRA 420; and also Article 277
of the Labor Code]. And where the termination cases involve a Filipino worker recruited and
deployed for overseas employment, the burden naturally devolves upon both the foreign-based
employer and the employment agency or recruitment entity which recruited the worker, for the
latter is not only the agent of the former, but is also solidarily liable with its foreign principal for any
claims or liabilities arising from the dismissal of the worker.
In the case at bar, petitioner had indeed failed to discharge the burden of proving that private
respondent was terminated from employment for just and valid cause. Petitioner's evidence
consisted only of the following documents:
(1) A letter dated May l5, 1984 allegedly written by an official of ZAMEL, stating that a periodic
evaluation of the entire staff was conducted; that the personnel concerned were given a chance to
improve; that complainant's performance was found below par; and that on February 13,1984, at
about 8:30 AM, complainant was caught on the way out of the office to look for another job during
office hours without the permission of his supervisor;
(2) A telex message allegedly sent by employees of ZAMEL, stating that they have not experienced
maltreatment, and that the working conditions (in ZAMEL) are good;
(3) The signatures of fifteen (15) persons who allegedly sent the telex message;
(4) A receipt dated February 16, 1984 signed by complainant, stating that he was paid SR915
representing his salary and SR558, representing vacation pay for the month of February 1984;
(5) The counter-affidavit of Milagros G. Fausto, the General Manager of Royal Crown, stating that
complainant was dismissed because of poor performance, acts of dishonesty and misconduct, and
denying complainant's claim that his salary and leave pay were not paid, and that he was
maltreated [See POEA Decision, p. 3; Rollo, p. 32, See also Annexes "E", "F", "F-1 ", "G" and "H"
of Petition; Rollo, pp. 38-43].
Certainly, the telex message supposedly sent by the employees of ZAMEL is not relevant in the
determination of the legality of private respondent's dismissal. On the other hand, the receipt
signed by private respondent does not prove payment to him of the salary and vacation pay
corresponding to the unexpired portion of his contract.
More importantly, except for its allegation that private respondent was caught on February 13,1984
on his way out of the office compound without permission, petitioner had failed to allege and to
prove with particularity its charges against private respondent. The letter dated May 15, 1984
allegedly written by the Actg. Project Architect and the counter-affidavit of petitoner's General
Manager merely stated that the grounds for the employee's dismissal were his unsatisfactory
performance and various acts of dishonesty, insubordination and misconduct. But the particular
acts which would indicate private respondent's incompetence or constitute the above infractions
were neither specified nor described therein. In the absence of any other evidence to substantiate
the general charges hurled against private respondent, these documents, which comprise
petitioner's evidence in chief, contain empty and self-serving statements insufficient to establish
just and valid cause for the dismissal of private respondent [See Euro-Lines, Phils., Inc. v. NLRC,
G.R. No. 75782, December 1, 1987,156 SCRA 78; Ambraque International Placement and
Services v. NLRC, supra].
The Court is aware of the document attached in petitioner's manifestation and joint reply which is
purportedly a xerox copy of a statement executed on December 13, 1987 in Saudi Arabia by
private respondent claiming that the latter had settled the case with ZAMEL and had "received all
[his] benefits that is salary, vacation pay, severance pay and all other bonuses before [he] left the
kingdom of Saudi Arabia on 13 Feb. 1984 and hereby indemnify [ZAMEL] from any claims or
liabilities, [he] raised in the Philippine Courts" [Annex "A" of petitioner's Manifestation with Motion
to hold in Abeyance; Rollo, p. 82. And also Annex "A" of petitioner's Joint Reply; Rollo, p. 111].
But the veracity of the contents of the document is precisely disputed by private respondent. He
claims that he was made to sign the above statement against his will and under threat of
deportation [See Telex of private respondent received by the Supreme Court of the Philippines on
January 14,1988; Rollo, p. 83. And also private respondent's Rejoinder, pp. 1-3; Rollo, pp.
139-141].
Petitioner finally contends that inasmuch as clause no. 13 of the service agreement provided that
the law under which the agreement shall be regulated was the laws of Saudi Arabia [Annex "D" of
Petition, p. 2; Rollo, p. 36], public respondent should have taken into account the laws of Saudi
Arabia and the stricter concept of morality availing in that jurisdiction for the determination of the
legality of private respondent's dismissal.
This contention is patently erroneous. The provisions of the Labor Code of the Philippines, its
implementing rules and regulations, and doctrines laid down in jurisprudence dealing with the
principle of due process and the basic right of all Filipino workers to security of tenure, provide the
standard by which the legality of the exercise by management of its prerogative to dismiss
incompetent, dishonest or recalcitrant employees, is to be determined. Whether employed locally
or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social
legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping
with the basic public policy of the State to afford protection to labor, promote full employment,
ensure equal work opportunities regardless of sex, race or creed, and regulate the relations
between workers and employers. For the State assures the basic rights of all workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of work
[Article 3 of the Labor Code of the Philippines; See also Section 18, Article II and Section 3, Article
XIII, 1987 Constitution]. This ruling is likewise rendered imperative by Article 17 of the Civil Code
which states that laws "which have for their object public order, public policy and good customs
shall not be rendered ineffective by laws or judgments promulgated, or by determination or
conventions agreed upon in a foreign country."
Needless to say, the laws of Saudi Arabia which were, incidentally, neither pleaded nor proved by
petitioner, have absolutely no bearing whatsoever to the case at bar.
The Court holds, therefore, that the NLRC committed no grave abuse of discretion amounting to
lack or excess of jurisdiction in upholding the POEA's finding of insufficiency of evidence to prove
termination for just and valid cause.
WHEREFORE, the Court Resolved to DISMISS the instant petition.
SO ORDERED.

G.R. No. 138193 March 5, 2003

OSM SHIPPING PHILIPPINES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (Third Division) and FERMIN F. GUERRERO,
respondents.
PANGANIBAN, J.:
The Rules of Court do not require that all supporting papers and documents accompanying a
petition for certiorari should be duplicate originals or certified true copies. Furthermore, unilateral
decisions to alter the use of a vessel from overseas service to coastwise shipping will not affect the
validity of an existing employment contract validly executed. Workers should not be prejudiced by
actions done solely by employers without the former's consent or participation.
The Case
Before us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, seeking to set
aside the February 11, 1999 and the March 26, 1999 Resolutions of the Court of Appeals (CA) in
CA-GR SP No. 50667. The assailed Resolutions dismissed a Petition filed in the CA, challenging
an adverse ruling of the National Labor Relations Commission (NLRC). The first Resolution
disposed as follows:
"We resolve to OUTRIGHTLY DISMISS the petition."2
The second Resolution3 denied petitioners' Motion for Reconsideration.
On the other hand, the NLRC Decision disposed in this wise:
"WHEREFORE, premises considered, the Decision appealed from is hereby MODIFIED in that
respondents OSM Shipping Phils. Inc. and its principal, Philippine Carrier Shipping Agency
Services Co. are jointly and severally ordered to pay complainant the sum of ELEVEN
THOUSAND THREE HUNDRED FIFTY NINE and 65/100 [US dollars] (US$11,359.65) or its peso
equivalent at the time of payment representing complainant's unpaid salaries, accrued fixed
overtime pay, allowance, vacation leave pay and termination pay."4
The Facts
This case originated from a Complaint filed by Fermin F. Guerrero against OSM Shipping
Philippines, Inc.; and its principal, Philippine Carrier Shipping Agency Services Co. The Complaint
was for illegal dismissal and non-payment of salaries, overtime pay and vacation pay. The facts are
summarized in the NLRC Decision as follows:
"[Private respondent] was hired by [Petitioner] OSM for and in behalf of its principal, Phil Carrier
Shipping Agency Services Co. (PC-SLC) to board its vessel MN '[Princess] Hoa' as a Master
Mariner for a contract period of ten (10) months. Under the said contract, his basic monthly salary
is US$1,070.00, US$220.00 allowance, US$321.00 fixed overtime, US$89 vacation leave pay per
month for . . . 44 hours [of] work per week. He boarded the vessel on July 21, 1994 and complied
faithfully with the duties assigned to him.
"[Private respondent] alleged that from the start of his work with MN 'Princess Hoa', he was not
paid any compensation at all and was forced to disembark the vessel sometime in January 1995
because he cannot even buy his basic personal necessities. For almost seven (7) months, i.e. from
July 1994 to January 1995, despite the services he rendered, no compensation or remuneration
was ever paid to him. Hence, this case for illegal dismissal, [non-payment] of salaries, overtime
pay and vacation pay.
"[Petitioner] OSM, for its part, alleged that on July 26, 1994, Concorde Pacific, an American
company which owns MN 'Princess Hoa', then a foreign registered vessel, appointed . . . Philippine
Carrier Shipping Agency Services Co. (PC-SASCO) as ship manager particularly to negotiate,
transact and deal with any third persons, entities or corporations in the planning of crewing
selection or determination of qualifications of Filipino Seamen. On the same date, [Petitioner] OSM
entered into a Crew Agreement with . . . PC-SASCO for the purpose of processing the documents
of crew members of MN 'Princess Hoa'. The initial plan of the [s]hip-owner was to use the vessel in
the overseas trade, particularly the East Asian Growth Area. Thereafter, the contract of [private
respondent] was processed before the POEA on September 20, 1994.
"OSM alleged further that the shipowner changed its plans on the use of the vessel. Instead of
using it for overseas trade, it decided to use it in the coastwise trade, thus, the crewmembers hired
never left the Philippines and were merely used by the shipowner in the coastwise trade.
Considering that the MN 'Princess Hoa' was a foreign registered vessel and could not be used in
the coastwise trade, the shipowner converted the vessel to Philippine registry on September 28,
1994 by way of bareboat chartering it out to another entity named Philippine Carrier Shipping Lines
Co. (PCSLC). To do this, the shipowner through Conrado V. Tendido had to terminate its
management agreement with . . . PC-SASCO on September 28, 1994 by a letter of termination
dated September 20, 1994. In the same letter of termination, the ship owner stated that it has
bareboat chartered out the vessel to said [PCSLC] and converted it into Philippine registry.
Consequently, . . . PC-SASCO terminated its crew agreement with OSM in a letter dated
December 5, 1994. Because of the bareboat charter of the vessel to PCSLC and its subsequent
conversion to Philippine registry and use in coastwise trade as well as to the termination of the
management agreement and crew agency agreement, a termination of contract ensued whereby
PCSLC, the bareboat charterer, became the disponent owner/employer of the crew.
As a disponent owner/employer, PCSLC is now responsible for the payment of complainant's
wages. . . . .5
Labor Arbiter (LA) Manuel R. Caday rendered a Decision6 in favor of Private Respondent
Guerrero. Petitioner and its principal, Philippine Carrier Shipping Agency Services, Co. (PC-
SASCO), were ordered to jointly and severally pay Guerrero his unpaid salaries and allowances,
accrued fixed overtime pay, vacation leave pay and termination pay. The Decision held that there
was a constructive dismissal of private respondent, since he had not been paid his salary for seven
months. It also dismissed petitioner's contention that there was a novation of the employment
contract.
On appeal, the NLRC (Third Division) affirmed the LA's Decision, with a modification as to the
amount of liability. On January 28, 1999, petitioner filed with the CA a Petition7 to set aside the
NLRC judgment. The petition was dismissed, because petitioner had allegedly failed to comply
with the requirements of Section 3 of Rule 46 of the Rules of Court. Specifically, petitioner had
attached to its Petition, not a duplicate original or a certified true copy of the LA's Decision, but a
mere machine copy thereof. Further, it had not indicated the actual address of Private Respondent
Fermin F. Guerrero.8
Hence, this Petition.9
The Issues
In its Memorandum, petitioner raises the following issues for the Court's consideration:
"1. Did not the Court of Appeals err in interpreting and applying the 1997 Rules when it required as
attachment to the Petition for Certiorari the duplicate original of another Decision which is not the
subject of the said Petition?
"2. Did not the Court of Appeals err in interpreting and applying the 1997 Rules when it disregarded
the subsequent compliance made by petitioner?
"3. Did not the Court of Appeals err in interpreting and applying the 1997 Rules when it did not
consider the Notice to private respondent Guerrero through his counsel as Notice to Guerrero
himself?"10
The foregoing issues all refer to the question of whether, procedurally, petitioner has complied with
Section 3 of Rule 46 of the Rules of Court. Additionally and in the interest of speedy justice, this
Court will also resolve the substantive issue brought before the CA: did the NLRC commit grave
abuse of discretion in ruling in favor of private respondent?
The Court's Ruling
While petitioner is procedurally correct, the case should nonetheless be decided on the merits in
favor of private respondent.
Procedural Issue:
Compliance with the Rules of Court
Petitioner puts at issue the proper interpretation of Section 3 of Rule 46 of the Rules of Court.11
Specifically, was petitioner required to attach a certified true copy of the LA's Decision to its Petition
for Certiorari challenging the NLRC judgment?
Section 3 of Rule 46 does not require that all supporting papers and documents accompanying a
petition be duplicate originals or certified true copies. Even under Rule 65 on certiorari and
prohibition, petitions need to be accompanied only by duplicate originals or certified true copies of
the questioned judgment, order or resolution. Other relevant documents and pleadings attached to
it may be mere machine copies thereof.12 Numerous decisions issued by this Court emphasize
that in appeals under Rule 45 and in original civil actions for certiorari under Rule 65 in relation to
Rules 46 and 56, what is required to be certified is the copy of the questioned judgment, final order
or resolution.13 Since the LA's Decision was not the questioned ruling, it did not have to be
certified. What had to be certified was the NLRC Decision. And indeed it was.
As to the alleged missing address of private respondent, the indication by petitioner that Guerrero
could be served with process care of his counsel was substantial compliance with the Rules.
This Court has held that the sending of pleadings to a party is not required, provided that the party
is represented by counsel.14 This rule is founded on considerations of fair play, inasmuch as an
attorney of record is engaged precisely because a party does not feel competent to deal with the
intricacies of law and procedure.15 Both jurisprudence16 and the basics of procedure17 provide
that when a party has appeared through counsel, service is to be made upon the latter, unless the
court specifically orders that it be upon the party.
We also note that from the inception of the case at the LA's office, all pleadings addressed to
private respondent had always been sent to his counsel, Atty. Danilo G. Macalino. Note that private
respondent, who was employed as a seaman, was often out of his home. The service of pleadings
and other court processes upon him personally would have been futile, as he would not have been
around to receive them.
This Court has repeatedly held that while courts should meticulously observe the Rules, they
should not be overly strict about procedural lapses that do not impair the proper administration of
justice.18 Rather, procedural rules should be liberally construed to secure the just, speedy and
inexpensive disposition of every action and proceeding.19
Substantive Issue:
Liability of Petitioner for Unpaid Salaries
It is worthwhile to note that what is involved in this case is the recovery of unpaid salaries and
other monetary benefits. The Court is mindful of the plight of private respondent and, indeed, of
workers in general who are seeking to recover wages that are being unlawfully withheld from them.
Such recovery should not be needlessly delayed at the expense of their survival. This case is now
on its ninth year since its inception at the LA's office. Its remand to the CA will only unduly delay its
disposition. In the interest of substantial justice,20 this Court will decide the case on the merits
based upon the records of the case, particularly those relating to the OSM Shipping Philippines'
Petition before the CA.
On behalf of its principal, PC-SASCO, petitioner does not deny hiring Private Respondent Guerrero
as master mariner. However, it argues that since he was not deployed overseas, his employment
contract became ineffective, because its object was allegedly absent. Petitioner contends that
using the vessel in coastwise trade and subsequently chartering it to another principal had the
effect of novating the employment contract. We are not persuaded.
As approved by the Philippine Overseas Employment Agency (POEA), petitioner was the
legitimate manning agent of PC-SASCO.21 As such, it was allowed to select, recruit, hire and
deploy seamen on board the vessel M/V Princess Hoa, which was managed by its principal, PC-
SASCO.22 It was in this capacity that petitioner hired private respondent as master mariner. They
then executed and agreed upon an employment contract.
An employment contract, like any other contract, is perfected at the moment (1) the parties come to
agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the
contracting parties, (b) object certain which is the subject matter of the contract and (c) cause of
the obligation.23 Based on the perfected contract, Private Respondent Guerrero complied with his
obligations thereunder and rendered his services on board the vessel. Contrary to petitioner's
contention, the contract had an object, which was the rendition of service by private respondent on
board the vessel. The non-deployment of the ship overseas did not affect the validity of the
perfected employment contract. After all, the decision to use the vessel for coastwise shipping was
made by petitioner only and did not bear the written conformity of private respondent. A contract
cannot be novated by the will of only one party.24 The claim of petitioner that it processed the
contract of private respondent with the POEA only after he had started working is also without
merit. Petitioner cannot use its own misfeasance to defeat his claim.
Petitioner, as manning agent, is jointly and severally liable with its principal,25 PC-SASCO, for
private respondent's claim. This conclusion is in accordance with Section 1 of Rule II of the POEA
Rules and Regulations.26 Joint and solidary liability is meant to assure aggrieved workers of
immediate and sufficient payment of what is due them.27 The fact that petitioner and its principal
have already terminated their agency agreement does not relieve the former of its liability. The
reason for this ruling was given by this Court in Catan v. National Labor Relations Commission,28
which we reproduce in part as follows:
"This must be so, because the obligations covenanted in the [manning] agreement between the
local agent and its foreign principal are not coterminus with the term of such agreement so that if
either or both of the parties decide to end the agreement, the responsibilities of such parties
towards the contracted employees under the agreement do not at all end, but the same extends up
to and until the expiration of the employment contracts of the employees recruited and employed
pursuant to the said recruitment agreement. Otherwise, this will render nugatory the very purpose
for which the law governing the employment of workers for foreign jobs abroad was enacted."29
WHEREFORE, the assailed Resolutions are hereby SET ASIDE, and the September 10, 1998
NLRC Decision REINSTATED and AFFIRMED. Costs against petitioner.
SO ORDERED.
Puno, Sandoval-Gutierrez and Carpio Morales, JJ., concur.
Corona, J., on leave.

PAUL V. SANTIAGO, petitioner, vs. CF SHARP CREW MANAGEMENT, INC., respondent.

G.R. No. 162419
July 10, 2007
FACTS:
Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about
5 yrs. In February 3, 1998, petitioner signed a new contract of employment with respondent, with
the duration of 9 months. The contract was approved by POEA. Petitioner was to be deployed on
board the MSV Seaspread which was scheduled to leave the port of Manila for Canada on 13
February 1998.
A week before the date of departure, Capt. Pacifico Fernandez, respondents Vice President, sent
a facsimile message to the captain of MSV Seaspread,, saying that it received a phone call from
Santiagos wife and some other callers who did not reveal their identity and gave him some
feedbacks that Paul Santiago this time, if allowed to depart, will jump ship in Canada like his
brother Christopher Santiago. The captain of MSV Seaspread replied that it cancel plans for
Santiago to return to Seaspread.
Petitioner thus told that he would not be leaving for Canada anymore. Petitioner filed a complaint
for illegal dismissal, damages, and attorneys fees against respondent and its foreign principal,
Cable and Wireless (Marine) Ltd. The Labor Arbiter (LA) favored petitioner and ruled that the
employment contract remained valid but had not commenced since petitioner was not deployed
and that respondent violated the rules and regulations governing overseas employment when it did
not deploy petitioner, causing petitioner to suffer actual damages. On appeal by respondent, NLRC
ruled that there is no employer-employee relationship between petitioner and respondent because
the employment contract shall commence upon actual departure of the seafarer from the airport or
seaport at the point of hire and with a POEA-approved contract. In the absence of an employer-
employee relationship between the parties, the claims for illegal dismissal, actual damages, and
attorneys fees should be dismissed. But the NLRC found respondents decision not to deploy
petitioner to be a valid exercise of its management prerogative. Petitioner filed MR but it was
denied. He went to CA. CA affirmed the decision of NLRC. Petitioners MR was denied. Hence this
case.
ISSUE:
When does an employer- employee relationship begin in the case at bar.
RULING:
There is some merit in the petition. The parties entered into an employment contract whereby
petitioner was contracted by respondent to render services on board MSV Seaspread for the
consideration of US$515.00 per month for 9 months, plus overtime pay. However, respondent
failed to deploy petitioner from the port of Manila to Canada. Considering that petitioner was not
able to depart from the airport or seaport in the point of hire, the employment contract did not
commence, and no employer-employee relationship was created between the parties. However, a
distinction must be made between the perfection of the employment contract and the
commencement of the employer-employee relationship. The perfection of the contract, which in
this case coincided with the date of execution thereof, occurred when petitioner and respondent
agreed on the object and the cause, as well as the rest of the terms and conditions therein. The
commencement of the employer-employee relationship would have taken place had petitioner
been actually deployed from the point of hire. Thus, even before the start of any employer-
employee relationship, contemporaneous with the perfection of the employment contract was the
birth of certain rights and obligations, the breach of which may give rise to a cause of action
against the erring party. Thus, if the reverse had happened, that is the seafarer failed or refused to
be deployed as agreed upon, he would be liable for damages.
Neither the manning agent nor the employer can simply prevent a seafarer from being deployed
without a valid reason. Respondents act of preventing petitioner from departing the port of Manila
and boarding MSV Seaspread constitutes a breach of contract, giving rise to petitioners cause of
action. Respondent unilaterally and unreasonably reneged on its obligation to deploy petitioner and
must therefore answer for the actual damages he suffered.
Despite the absence of an employer-employee relationship between petitioner and respondent, the
Court rules that the NLRC has jurisdiction over petitioners complaint. The jurisdiction of labor
arbiters is not limited to claims arising from employer-employee relationships. Section 10 of R.A.
No. 8042 (Migrant Workers Act), provides that:
Sec. 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters
of the NLR) shall have the original and exclusive jurisdiction to hear and decide, within 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.
Since the present petition involves the employment contract entered into by petitioner for overseas
employment, his claims are cognizable by the labor arbiters of the NLRC.
Respondent is liable to pay petitioner only the actual damages in the form of the loss of nine (9)
months worth of salary as provided in the contract. He is not, however, entitled to overtime pay.
While the contract indicated a fixed overtime pay, it is not a guarantee that he would receive said
amount regardless of whether or not he rendered overtime work. Even though petitioner was
prevented without valid reason from rendering regular much less overtime service, the fact remains
that there is no certainty that petitioner will perform overtime work had he been allowed to board
the vessel. The amount stipulated in the contract will be paid only if and when the employee
rendered overtime work. Realistically speaking, a seaman, by the very nature of his job, stays on
board a ship or vessel beyond the regular eight-hour work schedule. For the employer to give him
overtime pay for the extra hours when he might be sleeping or attending to his personal chores or
even just lulling away his time would be extremely unfair and unreasonable.
The Court also holds that petitioner is entitled to attorneys fees in the concept of damages and
expenses of litigation. Respondents basis for not deploying petitioner is the belief that he will jump
ship just like his brother, a mere suspicion that is based on alleged phone calls of several persons
whose identities were not even confirmed. This Court has upheld management prerogatives so
long as they are exercised in good faith for the advancement of the employers interest and not for
the purpose of defeating or circumventing the rights of the employees under special laws or under
valid agreements. Respondents failure to deploy petitioner is unfounded and unreasonable
However, moral damages cannot be awarded in this case. because respondents action was not
tainted with bad faith, or done deliberately to defeat petitioners rights, as to justify the award of
moral damages.
Seafarers are considered contractual employees and cannot be considered as regular employees
under 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. The exigencies of their
work necessitates that they be employed on a contractual basis.
WHEREFORE, petition is GRANTED IN PART.

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

NAVIGATION CO., INC.
GR No. 167614 - March 24, 2009
En banc

FACTS:

Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and Marlow
Navigation Co., Inc., under a POEA-approved contract of employment for 12 months, as Chief
Officer, with the basic monthly salary of US$1,400, plus $700/month overtime pay, and 7 days paid
vacation leave per month.

On March 19, 1998, the date of his departure, Serrano was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000 upon the
assurance and representation of respondents that he would be Chief Officer by the end of April
1998.

Respondents did not deliver on their promise to make Serrano Chief Officer. Hence, Serrano
refused to stay on as second Officer and was repatriated to the Philippines on May 26, 1998,
serving only two (2) months and seven (7) days of his contract, leaving an unexpired portion of
nine (9) months and twenty-three (23) days.

Serrano filed with the Labor Arbiter (LA) a Complaint against respondents for constructive
dismissal and for payment of his money claims in the total amount of US$26,442.73 (based on the
computation of $2590/month from June 1998 to February 199, $413.90 for March 1998, and $1640
for March 1999) as well as moral and exemplary damages.

The LA declared the petitioner's dismissal illegal and awarded him US$8,770, representing his
salaray for three (3) months of the unexpired portion of the aforesaid contract of employment, plus
$45 for salary differential and for attorney's fees equivalent to 10% of the total amount; however,
no compensation for damages as prayed was awarded.

On appeal, the NLRC modified the LA decision and awarded Serrano $4669.50, representing three
(3) months salary at $1400/month, plus 445 salary differential and 10% for attorney's fees. This
decision was based on the provision of RA 8042, which was made into law on July 15, 1995.
Serrano filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality
of the last clause in the 5th paragraph of Section 10 of RA 8042, which reads:

Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, the workers shall be entitled to the full
reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his
salaries for the unexpired portion of his employment contract or for three (3) months for every year
of the unexpired term, whichever is less.

The NLRC denied the Motion; hence, Serrano filed a Petition for Certiorari with the Court of
Appeals (CA), reiterating the constitutional challenge against the subject clause. The CA affirmed
the NLRC ruling on the reduction of the applicable salary rate, but skirted the constitutional issue
raised by herein petitioner Serrano.

ISSUES:

1. Whether or not the subject clause violates Section 10, Article III of the Constitution on non-
impairment of contracts;
2. Whether or not the subject clause violate Section 1, Article III of the Constitution, and Section
18, Article II and Section 3, Article XIII on labor as a protected sector.

HELD:

On the first issue.

The answer is in the negative. Petitioner's claim that the subject clause unduly interferes with the
stipulations in his contract on the term of his employment and the fixed salary package he will
receive is not tenable.

Section 10, Article III of the Constitution provides: No law impairing the obligation of contracts shall
be passed.

The prohibition is aligned with the general principle that laws newly enacted have only a
prospective operation, and cannot affect acts or contracts already perfected; however, as to laws
already in existence, their provisions are read into contracts and deemed a part thereof. Thus, the
non-impairment clause under Section 10, Article II is limited in application to laws about to be
enacted that would in any way derogate from existing acts or contracts by enlarging, abridging or in
any manner changing the intention of the parties thereto.

As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of
the employment contract between petitioner and respondents in 1998. Hence, it cannot be argued
that R.A. No. 8042, particularly the subject clause, impaired the employment contract of the
parties. Rather, when the parties executed their 1998 employment contract, they were deemed to
have incorporated into it all the provisions of R.A. No. 8042.

But even if the Court were to disregard the timeline, the subject clause may not be declared
unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted
in the exercise of the police power of the State to regulate a business, profession or calling,
particularly the recruitment and deployment of OFWs, with the noble end in view of ensuring
respect for the dignity and well-being of OFWs wherever they may be employed. Police power
legislations adopted by the State to promote the health, morals, peace, education, good order,
safety, and general welfare of the people are generally applicable not only to future contracts but
even to those already in existence, for all private contracts must yield to the superior and legitimate
measures taken by the State to promote public welfare.

On the second issue.

The answer is in the affirmative.

Section 1, Article III of the Constitution guarantees: No person shall be deprived of life, liberty, or
property without due process of law nor shall any person be denied the equal protection of the law.

Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without
distinction as to place of deployment, full protection of their rights and welfare.

To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to
economic security and parity: all monetary benefits should be equally enjoyed by workers of similar
category, while all monetary obligations should be borne by them in equal degree; none should be
denied the protection of the laws which is enjoyed by, or spared the burden imposed on, others in
like circumstances.

Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it
sees fit, a system of classification into its legislation; however, to be valid, the classification must
comply with these requirements: 1) it is based on substantial distinctions; 2) it is germane to the
purposes of the law; 3) it is not limited to existing conditions only; and 4) it applies equally to all
members of the class.

There are three levels of scrutiny at which the Court reviews the constitutionality of a classification
embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification
needs only be shown to be rationally related to serving a legitimate state interest; b) the middle-tier
or intermediate scrutiny in which the government must show that the challenged classification
serves an important state interest and that the classification is at least substantially related to
serving that interest; and c) strict judicial scrutiny in which a legislative classification which
impermissibly interferes with the exercise of a fundamental right or operates to the peculiar
disadvantage of a suspect class is presumed unconstitutional, and the burden is upon the
government to prove that the classification is necessary to achieve a compelling state interest and
that it is the least restrictive means to protect such interest.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs.
However, a closer examination reveals that the subject clause has a discriminatory intent against,
and an invidious impact on, OFWs at two levels:

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

Second, among OFWs with employment contracts of more than one year; and

Third, OFWs vis--vis local workers with fixed-period employment;

In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were
illegally discharged were treated alike in terms of the computation of their money claims: they were
uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the
enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally dismissed
OFWs with an unexpired portion of one year or more in their employment contract have since been
differently treated in that their money claims are subject to a 3-month cap, whereas no such
limitation is imposed on local workers with fixed-term employment.

The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged, it
imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in
their contracts, but none on the claims of other OFWs or local workers with fixed-term employment.
The subject clause singles out one classification of OFWs and burdens it with a peculiar
disadvantage.

There being a suspect classification involving a vulnerable sector protected by the Constitution, the
Court now subjects the classification to a strict judicial scrutiny, and determines whether it serves a
compelling state interest through the least restrictive means.

What constitutes compelling state interest is measured by the scale of rights and powers arrayed in
the Constitution and calibrated by history. It is akin to the paramount interest of the state for which
some individual liberties must give way, such as the public interest in safeguarding health or
maintaining medical standards, or in maintaining access to information on matters of public
concern.

In the present case, the Court dug deep into the records but found no compelling state interest that
the subject clause may possibly serve.

In fine, the Government has failed to discharge its burden of proving the existence of a compelling
state interest that would justify the perpetuation of the discrimination against OFWs under the
subject clause.

Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the
employment of OFWs by mitigating the solidary liability of placement agencies, such callous and
cavalier rationale will have to be rejected. There can never be a justification for any form of
government action that alleviates the burden of one sector, but imposes the same burden on
another sector, especially when the favored sector is composed of private businesses such as
placement agencies, while the disadvantaged sector is composed of OFWs whose protection no
less than the Constitution commands. The idea that private business interest can be elevated to
the level of a compelling state interest is odious.

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

The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based
Overseas Workers, dated February 4, 2002, imposes administrative disciplinary measures on
erring foreign employers who default on their contractual obligations to migrant workers and/or
their Philippine agents. These disciplinary measures range from temporary disqualification to
preventive suspension. The POEA Rules and Regulations Governing the Recruitment and
Employment of Seafarers, dated May 23, 2003, contains similar administrative disciplinary
measures against erring foreign employers.

Resort to these administrative measures is undoubtedly the less restrictive means of aiding local
placement agencies in enforcing the solidary liability of their foreign principals.

Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right
of petitioner and other OFWs to equal protection.

The subject clause or for three months for every year of the unexpired term, whichever is less in
the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL

Note:

When the Court is called upon to exercise its power of judicial review of the acts of its co-equals,
such as the Congress, it does so only when these conditions obtain: (1) that there is an actual case
or controversy involving a conflict of rights susceptible of judicial determination; (2) that the
constitutional question is raised by a proper party and at the earliest opportunity; and (3) that the
constitutional question is the very lis mota of the case, otherwise the Court will dismiss the case or
decide the same on some other ground.

----

As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary
awards of illegally dismissed OFWs was in place. This uniform system was applicable even to local
workers with fixed-term employment.

Article 605 of the Code of Commerce provides:

Article 605. If the contracts of the captain and members of the crew with the agent should be for a
definite period or voyage, they cannot be discharged until the fulfillment of their contracts, except
for reasons of insubordination in serious matters, robbery, theft, habitual drunkenness, and
damage caused to the vessel or to its cargo by malice or manifest or proven negligence.

Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie, in which the Court held the
shipping company liable for the salaries and subsistence allowance of its illegally dismissed
employees for the entire unexpired portion of their employment contracts.

While Article 605 has remained good law up to the present, Article 299 of the Code of Commerce
was replaced by Art. 1586 of the Civil Code of 1889, to wit:
Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for a
certain work cannot leave or be dismissed without sufficient cause, before the fulfillment of the
contract.

SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner,

vs.
JOY C. CABILES, Respondent.
G.R. No. 170139 August 5, 2014

PONENTE: Leonen
TOPIC: Section 10 of RA 8042 vis-a-vis Section 7 of RA 10022

FACTS:
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement
agency.
Respondent Joy Cabiles was hired thus signed a one-year employment contract for a
monthly salary of NT$15,360.00. Joy was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal)
on June 26, 1997. She alleged that in her employment contract, she agreed to work as quality
control for one year. In Taiwan, she was asked to work as a cutter.
Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed Joy,
without prior notice, that she was terminated and that she should immediately report to their office
to get her salary and passport. She was asked to prepare for immediate repatriation. Joy claims
that she was told that from June 26 to July 14, 1997, she only earned a total of NT$9,000.15
According to her, Wacoal deducted NT$3,000 to cover her plane ticket to Manila.
On October 15, 1997, Joy filed a complaint for illegal dismissal with the NLRC against
petitioner and Wacoal. LA dismissed the complaint. NLRC reversed LAs decision. CA affirmed the
ruling of the National Labor Relations Commission finding respondent illegally dismissed and
awarding her three months worth of salary, the reimbursement of the cost of her repatriation, and
attorneys fees
ISSUE:
Whether or not Cabiles was entitled to the unexpired portion of her salary due to illegal
dismissal.

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

G.R. NO. 81510, March 14, 1990

Hortencia Salazar, petitioner
vs Hon. Tomas Achaoso as Administrator of POEA and Ferdie Marquez, respondents
Ponente: Sarmiento

Facts:
Concerns the validity of the power of Secretary of Labor to issue of warrants of arrest and seizure
under Article 38 of the Labor Code, prohibiting illegal recruitment

On October 1987, Rosalie Tesoro of Pasay City in a sworn statement filed with POEA charged
Hortencia Salazar of illegally taking her PECC Card thus prohibiting her to be employed.

On November 1987, Atty. Marquez telegram the petitioner to report to the anti-illegal recruitment
unit of PEOA, but on the same day, having ascertained that the petitioner had no license to operate
a recruitment agency, Achaoso issued his challenged Closure and Seizure Order stating that
pursuant to PD No. 1920, the recruitment agency ordered be for closure and seizure of the
documents having verified that it has (1) no valid license from DOLE to recruit and deploy workers
for overseas employment (2) committed acts prohibited under Article 34 of Labor Code in relation
to Article 38.

On January 26, 1988, POEA director on Licensing and Regulation Atty. Espiritu issued an office
order designating the Atty Marquez and other members of a team tasked to implement closure and
seizure.

On January 28, 1988, petitioner filed a petition with POEA that the personal properties seized at
her residence be immediately returned on the ground that it was contrary to law because: (1) client
was not given prior notice or hearing, (2) violates section 2 of constitution (3) the premises
invaded were the private residence of the Salazar family and it was without consent.

On February 2, 1988 before POEA could answer the letter, petitioner filed the instant petition, on
even date, POEA filed a criminal complaint against her with the Pasig Provincial Fiscal

Issue: May POEA validly issue warrants of search and seizure under Article 38 of the Labor Code?

Ruling:
Under new constitution, only a judge may issue warrants of search and arrest, however in the
amended RA 8042, the minister of labor shall have the power to cause the arrest and detention of
non-licensee of authority if after proper investigation.

Petition is granted, Article 38 of the Labor code is declared unconstitutional and null and void.