Jurisprudence POEA

SECOND DIVISION

C.F. SHARP & CO. INC. and G.R. No. 179469

JOHN J. ROCHA,
Petitioners,
Present:

CARPIO, J.,
Chairperson,
-versus- VILLARAMA, JR.,*
PEREZ,
SERENO, and
REYES, JJ.

PIONEER INSURANCE &

SURETY CORPORATION,
WILFREDO C. AGUSTIN and Promulgated:
HERNANDO G. MINIMO,
Respondents. February 15, 2012
x ----------------------------------------------------------------------------------------x

DECISION

PEREZ, J.:

Whether a local private employment agency may be held liable for breach of
contract for failure to deploy a seafarer, is the bone of contention in this case.

Assailed in this petition for review are the Decision [1] dated 30 October 2003 and
the 29 August 2007 Resolution of the Court of Appeals in CA-G.R. CV No. 53336
finding petitioners C.F. Sharp Co. Inc. (C.F. Sharp) and John J. Rocha (Rocha)
liable for damages.

Responding to a newspaper advertisement of a job opening for sandblasters and

painters in Libya, respondents Wilfredo C. Agustin and Hernando G. Minimo
applied with C.F. Sharp sometime in August 1990. After passing the interview,
they were required to submit their passports, seamans book, National Bureau of
Investigation clearance, employment certificates, certificates of seminars attended,
and results of medical examination. Upon submission of the requirements, a
Contract of Employment was executed between respondents and C.F.
Sharp. Thereafter, respondents were required to attend various seminars, open a
bank account with the corresponding allotment slips, and attend a pre-departure
orientation. They were then advised to prepare for immediate deployment and to
report to C.F. Sharp to ascertain the schedule of their deployment.

After a month, respondents were yet to be deployed prompting them to request for
the release of the documents they had submitted to C.F. Sharp. C.F. Sharp allegedly
refused to surrender the documents which led to the filing of a complaint by
respondents before the Philippine Overseas Employment Administration (POEA)
on 21 January 1991.

On 30 October 1991, POEA issued an Order finding C.F. Sharp guilty of violation
of Article 34(k) of the Labor Code, which makes it unlawful for any entity to
withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations other than those authorized under this Code
and its implementing rules and regulations. Consequently, C.F. Sharps license was
suspended until the return of the disputed documents to respondents. POEA
likewise declared that it has no jurisdiction to adjudicate the monetary claims of
respondents.
On 10 March 1995, respondents filed a Complaint for breach of contract and
damages against C.F. Sharp and its surety, Pioneer Insurance and Surety
Corporation (Pioneer Insurance), before the Regional Trial Court (RTC) of Pasay
City. Respondents claimed that C.F. Sharp falsely assured them of deployment and
that its refusal to release the disputed documents on the ground that they were
already bound by reason of the Contract of Employment, denied respondents of
employment opportunities abroad and a guaranteed income. Respondents also
prayed for damages. Pioneer Insurance filed a cross claim against C.F. Sharp and
John J. Rocha, the executive vice-president of C.F. Sharp, based on an Indemnity
Agreement which substantially provides that the duo shall jointly and severally
indemnify Pioneer Insurance for damages, losses, and costs which the latter may
incur as surety. The RTC rendered judgment on 27 June 1996 favoring
respondents, to wit:

WHEREFORE, plaintiffs causes of action having been proved with a

preponderance of evidence, judgment is hereby ordered as follows:
 a. Declaring the non-deployment of plaintiffs and the refusal to release
documents as breach of contract;
b. By way of compensatory damages, awarding $450 per month and
$439 overtime per month, which should have been received by
plaintiffs from other employers, making a joint and solidary
obligation on the part of the two defendants C.F. Sharp and Pioneer
for the period covered by the employment contracts;
c. Ordering each defendant to pay each plaintiff P50,000.00 as moral
damages and another P50,000.00 each as exemplary damages;
d. Ordering defendants to share in the payment to plaintiffs
of P50,000.00 attorneys fees;
e. Defendants to pay litigation expenses and costs of suit.[2]

The trial court ruled that there was a violation of the contract when C.F.
Sharp failed to deploy and release the papers and documents of respondents, hence,
they are entitled to damages. The trial court likewise upheld the cause of action of
respondents against Pioneer Insurance, the former being the actual beneficiaries of
the surety bond.

On appeal, C.F. Sharp and Rocha raise a jurisdictional issue that the RTC
has no jurisdiction over the instant case pursuant to Section 4(a) of Executive
Order No. 797 which vests upon the POEA the jurisdiction over all cases,
including money claims, arising out of or by virtue of any contract involving
workers for overseas employment. C.F. Sharp and Rocha refuted the findings of
the trial court and maintained that the perfection and effectivity of the Contract of
Employment depend upon the actual deployment of respondents.

The Court of Appeals upheld the jurisdiction of the trial court by ruling that
petitioners are now estopped from raising such question because they have actively
participated in the proceedings before the trial court. The Court of Appeals further
held that since there is no perfected employment contract between the parties, it is
the RTC and not the POEA, whose jurisdiction pertains only to claims arising from
contracts involving Filipino seamen, which has jurisdiction over the instant case.

Despite the finding that no contract was perfected between the parties, the
Court of Appeals adjudged C.F. Sharp and Rocha liable for damages, to wit:

WHEREFORE, the Appeal of C.F. Sharp Co Inc. and John J. Rocha is

PARTIALLY GRANTED only insofar as We declare that there is no breach of
contract because no contract of employment was perfected. However, We find
appellants C.F. Sharp Co. Inc. and John J. Rocha liable to plaintiff-appellees for
damages pursuant to Article 21 of the Civil Code and award each plaintiff-
 appellees temperate damages amounting to P100,000.00, and moral damages in
the increased amount of P100,000.00. The award of exemplary damages and
attorneys fees amounting to P50,000.00, respectively, is hereby affirmed.[3]

The Court of Appeals limited the liability of Pioneer Insurance to the amount
of P150,000.00 pursuant to the Contract of Suretyship between C.F. Sharp and
Pioneer Insurance.

Rocha filed the instant petition on the submission that there is no basis to
hold him liable for damages under Article 21 of the Civil Code because C.F. Sharp
has signified its intention to return the documents and had in fact informed
respondents that they may, at any time of the business day, withdraw their
documents. Further, respondents failed to establish the basis for which they are
entitled to moral damages. Rocha refuted the award of exemplary damages because
the act of requiring respondents to sign a quitclaim prior to the release of their
documents could not be considered bad faith. Rocha also questions the award of
temperate damages on the ground that the act of withholding respondents
documents could not be considered chronic and continuing.[4]

Right off, insofar as Pioneer Insurance is concerned, the petition should be

dismissed against it because the ruling of the Court of Appeals limited its liability
to P150,000.00 was not assailed by Rocha, hence the same has now attained
finality.
Before us, respondents maintain that they are entitled to damages under
Article 21 of the Civil Code for C.F. Sharps unjustified refusal to release the
documents to them and for requiring them to sign a quitclaim which would
effectively bar them from seeking redress against petitioners. Respondents justify
the award of other damages as they suffered pecuniary losses attributable to
petitioners malice and bad faith.

In his Reply, Rocha introduced a new argument, i.e., that he should not be held
jointly liable with C.F. Sharp considering that the company has a separate
personality. Rocha argues that there is no showing in the Complaint that he had
participated in the malicious act complained. He adds that his liability only stems
from the Indemnity Agreement with Pioneer Insurance and does not extend to
respondents.

Records disclose that Rocha was first impleaded in the case by Pioneer
Insurance. Pioneer Insurance, as surety, was sued by respondents together with C.F.
Sharp. Pioneer Insurance in turn filed a third party complaint against Rocha on the
basis of an Indemnity Agreement whereby he bound himself to indemnify and hold
harmless Pioneer Insurance from and against any and all damages which the latter
may incur in consequence of having become a surety.[5] The third party complaint
partakes the nature of a cross-claim.

C.F. Sharp, as defendant-appellant and Rocha, as third-party defendant-

appellant, filed only one brief before the Court of Appeals essentially questioning
the declaration of the trial court that non-deployment is tantamount to breach of
contract and the award of damages. The Court of Appeals found them both liable
for damages. Both C.F. Sharp and Rocha sought recourse before this Court via a
Motion for Extension of Time (To File a Petition for Review) on 19 September
2007.[6] In the Petition for Review, however, C.F. Sharp was noticeably dropped as
petitioner. Rocha maintains essentially the same argument that he and C.F. Sharp
were wrongfully adjudged liable for damages.

It was only in its Reply dated 25 March 2008 that Rocha, through a new
representation, suddenly forwarded the argument that he should not be held liable
as an officer of C.F. Sharp. It is too late in the day for Rocha to change his
theory. It is doctrinal that defenses not pleaded in the answer may not be raised for
the first time on appeal. A party cannot, on appeal, change fundamentally the
nature of the issue in the case. When a party deliberately adopts a certain theory
and the case is decided upon that theory in the court below, he will not be
permitted to change the same on appeal, because to permit him to do so would be
unfair to the adverse party.[7] More so in this case, where Rocha introduced a new
theory at the Reply stage. Disingenuousness may even be indicated by the sudden
exclusion of the name of C.F. Sharp from the main petition even as Rocha posited
arguments not just for himself and also in behalf of C.F. Sharp.

The core issue pertains to damages.

The bases of the lower courts award of damages differ. In upholding the
perfection of contract between respondents and C.F. Sharp, the trial court stated
that the unjustified failure to deploy and subsequently release the documents of
respondents entitled them to compensatory damages, among others. Differently, the
appellate court found that no contract was perfected between the parties that will
give rise to a breach of contract. Thus, the appellate court deleted the award of
actual damages. However, it adjudged other damages against C.F. Sharp for its
unlawful withholding of documents from respondents.
We sustain the trial courts ruling.

On the issue of whether respondents are entitled to relief for failure to deploy them,
the RTC ruled in this wise:

The contract of employment entered into by the plaintiffs and the defendant C.F.
Sharp is an actionable document, the same contract having the essential requisites
for its validity. It is worthy to note that there are three stages of a contract: (1)
preparation, conception, or generation which is the period of negotiation and
bargaining ending at the moment of agreement of the parties. (2)Perfection or
birth of the contract, which is the moment when the parties come to agree on the
terms of the contract. (3) Consummation or death, which is the fulfillment or
performance of the terms agreed upon in the contract.
Hence, it is imperative to know the stage reached by the contract entered into
by the plaintiffs and C.F. sharp. Based on the testimonies of the witnesses
presented in this Court, there was already a perfected contract between plaintiffs
and defendant C.F. Sharp. Under Article 1315 of the New Civil Code of the
Philippines, it states that:

xxxx

Thus, when plaintiffs signed the contract of employment with C.F. Sharp (as
agent of the principal WB Slough) consequently, the latter is under obligation to
deploy the plaintiffs, which is the natural effect and consequence of the contract
agreed by them.[8]

We agree.

As correctly ruled at the trial, contracts undergo three distinct stages, to wit:
negotiation; perfection or birth; and consummation. Negotiation begins from the
time the prospective contracting parties manifest their interest in the contract and
ends at the moment of agreement of the parties. Perfection or birth of the contract
takes place when the parties agree upon the essential elements of the contract.
Consummation occurs when the parties fulfill or perform the terms agreed upon in
the contract, culminating in the extinguishment thereof.[9]

Under Article 1315 of the Civil Code, a contract is perfected by mere

consent and from that moment the parties are bound not only to the fulfillment of
what has been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage and law.[10]
 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.[11]

We have scoured through the Contract of Employment and we hold that it is

a perfected contract of employment. We reproduce below the terms of the Contract
of Employment for easy reference:

WITNESSETH

That the Seafarer shall be employed on board under the following terms
and conditions:

1.1 Duration of Contract: 3 month/s

1.2 Position: SANDBLASTER/PAINTER
1.3 Basic Monthly Salary: $450.00 per month
1.4 Living Allowances: $0.00 per month
1.5 Hours of Work: 48 per week
1.6 Overtime Rate: $439.00 per month
1.7 Vacation Leave with Pay: 30.00 day/s per month on board

The terms and conditions of the Revised Employment Contract for

seafarers governing the employment of all Filipino seafarers approved by the
POEA/DOLE on July 14, 1989 under Memorandum Circular No. 41 series of
1989 and amending circulars relative thereto shall be strictly and faithfully
observed.

Any alterations or changes, in any part of this Contract shall be evaluated,

verified, processed and approved by the Philippine Overseas Employment
Administration (POEA). Upon approval, the same shall be deemed an integral
part of the Standard Employment Contract (SEC) for seafarers.

All claims, complaints or controversies relative to the implementation and

interpretation of this overseas employment contract shall be exclusively resolved
through the established Grievance Machinery in the Revised Employment
Contract for seafarers, the adjudication procedures of the Philippine Overseas
Employment Administration and the Philippine Courts of Justice, in that order.
Violations of the terms and conditions of this Contract with its approved
addendum shall warrant the imposition of appropriate disciplinary or
administrative sanctions against the erring party.

The Employee hereby certifies that he had received, read or has had
explained to him and fully understood this contract as well as the POEA revised
Employment Contract of 1989 and the Collective Bargaining Agreement (CBA)
 and/or company terms and conditions of employment covering this vessel and that
he is fully aware of and has head or has had explained to him the terms and
conditions including those in the POEA Employment Contract, the CBA and this
contract which constitute his entire agreement with the employer.

The Employee also confirms that no verbal or other written promises other
than the terms and conditions of this Contract as well as the POEA Revised
Employment Contract, the CBA and/or company terms and conditions had been
given to the Employee. Therefore, the Employee cannot claim any additional
benefits or wages of any kind except those which have been provided in this
Contract Agreement.[12]

By the contract, C.F. Sharp, on behalf of its principal, International Shipping

Management, Inc., hired respondents as Sandblaster/Painter for a 3-month contract,
with a basic monthly salary of US$450.00. Thus, the object of the contract is the
service to be rendered by respondents on board the vessel while the cause of the
contract is the monthly compensation they expect to receive. These terms were
embodied in the Contract of Employment which was executed by the parties. The
agreement upon the terms of the contract was manifested by the consent freely
given by both parties through their signatures in the contract. Neither parties
disavow the consent they both voluntarily gave. Thus, there is a perfected contract
of employment.

The Court of Appeals agreed with the submission of C.F. Sharp that the
perfection and effectivity of the Contract of Employment depend upon the actual
deployment of respondents. It based its conclusion that there was no perfected
contract based on the following rationale:

The commencement of the employer-employee relationship between

plaintiffs-appellees and the foreign employer, as correctly represented by C.F.
Sharp requires that conditions under Sec. D be met. The Contract of Employment
was duly Verified and approved by the POEA. Regrettably, We have painfully
scrutinized the Records and find no evidence that plaintiffs-appellees were cleared
for travel and departure to their port of embarkation overseas by government
authorities. Consequently, non-fulfillment of this condition negates the
commencement and existence of employer-employee relationship between the
plaintiffs-appellees and C.F. Sharp. Accordingly, no contract between them was
perfected that will give rise to plaintiffs-appellees right of action. There can be no
breach of contract when in the first place, there is no effective contract to speak
of. For the same reason, and finding that the award of actual damages has no
basis, the same is hereby deleted.[13]

The Court of Appeals erred.

 The commencement of an employer-employee relationship must be treated
separately from the perfection of an employment contract. Santiago v. CF Sharp
Crew Management, Inc.,[14] which was promulgated on 10 July 2007, is an
instructive precedent on this point. In said case, petitioner was hired by respondent
on board MSV Seaspread for US$515.00 per month for nine (9) months, plus
overtime pay. Respondent failed to deploy petitioner from the port of Manila to
Canada. We made a distinction between the perfection of the employment contract
and the commencement of the employer-employee relationship, thus:

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, as earlier discussed,
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.[15]
Despite the fact that the employer-employee relationship has not commenced
due to the failure to deploy respondents in this case, respondents are entitled to
rights arising from the perfected Contract of Employment, such as the right to
demand performance by C.F. Sharp of its obligation under the contract.

The right to demand performance was a categorical pronouncement

in Santiago which ruled that failure to deploy constitutes breach of contract,
thereby entitling the seafarer to damages:

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.
We take exception to the Court of Appeals conclusion that damages are
not recoverable by a worker who was not deployed by his agency. The fact that
the POEA Rules are silent as to the payment of damages to the affected seafarer
does not mean that the seafarer is precluded from claiming the same. The
sanctions provided for non-deployment do not end with the suspension or
cancellation of license or fine and the return of all documents at no cost to the
worker. They do not forfend a seafarer from instituting an action for damages
against the employer or agency which has failed to deploy him.[16]
 The appellate court could not be faulted for its failure to adhere
to Santiago considering that the Court of Appeals Decision was promulgated way
back in 2003 while Santiago was decided in 2007. We now reiterate Santiago and,
accordingly, decide the case at hand.

We respect the lower courts findings that C.F. Sharp unjustifiably refused to
return the documents submitted by respondent. The finding was that C.F. Sharp
would only release the documents if respondent would sign a quitclaim. On this
point, the trial court was affirmed by the Court of Appeals. As a consequence, the
award by the trial court of moral damages must likewise be affirmed.

Moral damages may be recovered under Article 2219 of the Civil Code in
relation to Article 21. The pertinent provisions read:

Art. 2219. Moral damages may be recovered in the following and analogous
cases:

xxxx

(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and
35.

xxxx

Art. 21. Any person who wilfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public policy shall compensate the
latter for the damage.

We agree with the appellate court that C.F. Sharp committed an actionable
wrong when it unreasonably withheld documents, thus preventing respondents
from seeking lucrative employment elsewhere. That C.F. Sharp arbitrarily imposed
a condition that the documents would only be released upon signing of a quitclaim
is tantamount to bad faith because it effectively deprived respondents of resort to
legal remedies.
Furthermore, we affirm the award of exemplary damages and attorneys
fees. Exemplary damages may be awarded when a wrongful act is accompanied by
bad faith or when the defendant acted in a wanton, fraudulent, reckless, oppressive,
or malevolent manner which would justify an award of exemplary damages under
Article 2232 of the Civil Code. Since the award of exemplary damages is proper in
this case, attorneys fees and cost of the suit may also be recovered as provided
under Article 2208 of the Civil Code.[17]

WHEREFORE, the petition is DENIED. The Decision dated 27 June 1996

of the Regional Trial Court of Pasay City is REINSTATED. Accordingly, the
Decision dated 30 October 2003 of the Court of Appeals is MODIFIED.

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

MARTIN S. VILLARAMA, JR. MARIA LOURDES P. A. SERENO

Associate Justice Associate Justice

BIENVENIDO L. REYES
Associate Justice
 AT T E S TAT I O N

I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson

C E R T I F I C AT I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

* Per Special Order No. 1195.

[1]
Penned by Associate Justice Noel G. Tijam with Associate Justices Ruben T. Reyes (retired Supreme Court
Justice) and Edgardo P. Cruz, concurring. Rollo, pp. 29-43.
[2]
Id. at 197.
[3]
Id. at 42.
[4]
Id. at 23.
[5]
Records, p. 51.
[6]
Rollo, pp. 3-4.
[7]
Penera v. Commission on Election (COMELEC), G.R. No. 181613, 11 September 2009, 599 SCRA 609,
649; Philippine Ports Authority v. City of Iloilo, G.R. No. 109791, 14 July 2003, 406 SCRA 88, 93; Bank of
the Philippine Islands v. Leobrera, G.R. No. 13714-48, 18 November 2003, 416 SCRA 15, 19.
[8]
Rollo, p. 238.
[9]
Spouses Tongson v. Emergency Pawnshop Bula, Inc., G.R. No. 167874, 15 January 2010, 610 SCRA 150, 161
citing Swedish Match, AB v. Court of Appeals, 483 Phil. 735, 750-751 (2004) citing further Bugatti v. Court
of Appeals, 397 Phil. 376, 388-389 (2000).
[10]
Famanila v. Court of Appeals, G.R. No. 150429, 29 August 2006, 500 SCRA 76, 85.
[11]
OSM Shipping Phil., Inc. v. National Labor Relations Commission, 446 Phil. 793, 805 (2003) citing Limketkai
Sons Milling, Inc. v. Court of Appeals, G.R. No. 118509, 1 December 1995, 250 SCRA 523, 535.
[12]
Rollo, p. 68.
[13]
Id. at 38.
[14]
G.R. No. 162419, 10 July 2007, 527 SCRA 165.
[15]
Id. at 176.
[16]
Id. at 176-177.
[17]
Sunbanun v. Go, G.R. No. 163280, 2 February 2010, 611 SCRA 320, 327-328.
 FIRST DIVISION

[G.R. No. 115527. August 18, 1997]

ROSSELINI L. DE LA CRUZ, EDGAR S. NINA, VIRGILIO R. DU,

RENATO I. CURIOSO, NOEL T. GALENO, GERONIMO K.
MALUBAY, GERARDO D. TORRES, ERWIN G. OYCO,
MELENDRES E. AGURO, ALOYSIUS C. CONCEPCION, MANOLO
D. ESCANO, VENANCIO B. ACTA, PATROCENIO M. REYES,
YOLANDO B. BAUTISTA, JOB M. SAN BUENAVENTURA, and
BENJIE D. LIM, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, and GRACE MARINE & SHIPPING
CORPORATION, respondents.

DECISION
PADILLA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court which seeks to
annul the decision of the National Labor Relations Commission dated 29 April 1994 in
NLRC-NCR CA No. 00246 entitled Grace Marine & Shipping Corporation v. Rosselini L.
de la Cruz, et al. The NLRC affirmed, with modifications, the decision of the POEA
administrator dated 11 December 1991 in POEA Case No. 90-08-920 upholding the
legality of petitioners repatriation and dismissing for lack of merit petitioners
counterclaim of illegal dismissal and non-payment of their salaries for the unexpired
portion of their contract. The POEA held petitioners solidarily liable to pay the sum of
US$19,114.83 (or its peso equivalent) to Grace Marine and Shipping Corporation as
repatriation expenses and 5% attorneys fees. Petitioners were also suspended by the
POEA for overseas employment for a period of one (1) year upon promulgation of its
decision and their names were listed under the POEA watch list.
The facts, as established by the parties respective evidence, are as follows:
In October 1989, petitioners, all seamen by profession, were hired by Sinkai
Shipping Co., Ltd. (SINKAI) through its local manning agent, private respondent Grace
Marine and Shipping Corporation, to form the Filipino complement aboard its vessel, the
M/V White Castle. In the course of their employment, petitioners discovered that the
shipowners, through the officers of M/V White Castle, were engaged in the practice of
double bookkeeping. Petitioners claimed that whenever the vessel was scheduled to
call port in the United State or in other countries ports where the International Transport
Workers Federation (ITF) maintains its presence, its officers required the Filipino crew
members to sign double payrolls. [1]

Petitioners also bewailed that they were not paid overtime pay for work rendered in
excess of ninety (90) hours under their POEA-approved contracts; that the shipmaster
did not provide adequate victualling for the Filipino crew; and that the shipmaster
refused to honor the stipulated holidays in their contract. They brought these complaints
to their (Filipino) second officer but the latter allegedly refused to act for fear of reprisal
from the shipowners.
When the M/V White Castle dropped anchor at Long Beach, California on 12 June
1990, petitioners brought their complaints before the nearest Center of Seamans Rights
(CSR). What happened next was disputed by petitioners and private respondents as
both parties pleaded contrasting versions of the incident.
Petitioners averred that the CSR advised them to return to the vessel not because
their claims were baseless, but because the CSR needed more documents in order to
show cause for interdicting the vessel. When their ITF lawyer confronted the ship
captain, the latter assured them that their grievances would be brought to the
shipowners and that there would be no retaliatory action for those who sought the
assistance of the CSR or ITF. Relying on their captains word, petitioners re-boarded the
vessel and returned to their respective posts. The vessel then sailed to Japan and upon
arriving thereat on 26 June 1990, petitioners were discharged and repatriated to the
Philippines on the ground of abandonment of work and desertion of the M/V White
Castle.
Private respondent presented a masters report dated 15 June 1990 prepared by
Cpt. Takemoto, master of the M/V White Castle, to traverse petitioners allegations. The [2]

report stated that petitioners abandoned their respective posts and disembarked from
the vessel without the captains permission in order to seek ITF intervention. In doing so,
petitioners not only violated their employment contracts and the general guidelines on
board the vessel, but also undermined the safety of the vessel which could not set sail
for Japan with an undermanned crew. Consequently, the ships schedule was
unnecessarily delayed for more than twenty-four (24) hours, which exposed the
shipowners to damage claims of the vessels charterers.
According to Capt. Takemoto, on 12 June 1990 at 1600 hrs., the M/V White Castle
had just completed loading its cargo of citrus at Long Beach, California and was
scheduled to sail out at 1700hrs. On the same day for Tokyo, Japan when the vessels
chief officer informed him that one Filipino crewmember named Gerardo Torres did not
return to the vessel since going on shore leave.
Despite this incident, Captain Takemoto decided to leave behind the missing
seaman and sail on schedule. However, at about 1645 hrs., a US Coast Guard marine
inspector came along side the vessel and requested permission to board and inspect
the same due to reports from the vessels Filipino crew that the vessels equipment,
facilities, and accommodation were below the accepted minimum safety standards. The
marine inspector inspected the vessel and found it to be seaworthy. Takemoto then
surmised that the Filipino crew deliberately made a false report to the US Coast Guard
in order to detain the vessel.
Shortly before 1700 hrs., Captain Takemoto was informed by his chief officer that
fourteen (14) Filipino crew members (except for the 2 officer and 3 officer) had
nd rd

suddenly disembarked from the vessel for no apparent reason. Captain Takemoto went
down the ship to verify the report and saw petitioners assembled at the pier. When
Takemoto confronted petitioners about their unauthorized disembarkation, he was met
by petitioners complaints about alleged unpaid wages, double bookkeeping, and poor
working conditions. According to Takemoto, the fourteen (14) Filipino crew then left the
pier aboard a bus provided by local ITF investigators.
Unable to secure a clearance from the US Coast Guard because the vessel lacked
the minimum safety manning requirements, Captain Takemoto immediately wired the
incident to the shipowners to verify the complaints of the Filipino crew members. In their
reply, the shipowners informed Captain Takemoto that the Filipino crew members have
been paid strictly according to their contracts and under the ITF JSU/AMOSUP CBA
wage scales, with the officers and engineers receiving additional pay. The remittances
of the home allotment pays of the seamen were also up-to-date. The shipowner then
advised the captain that they were dispatching six (6) Japanese crew members to meet
the required minimum safety manning requirements.Meanwhile, the Filipino 3 officerrd

disembarked from the ship to join cause with the fourteen (14) Filipino seamen.
The next day, 13 June 1990 at 1300 hrs., the fifteen (15) Filipino crew members
(petitioners) returned to the vessel under the escort of the US local immigration officers
who requested Captain Takemoto to accept them back to the ship because of their
irregular conduct as per immigration law. While Captain Takemoto knew that the claims
[3]

of the fifteen (15) Filipino crewmen were baseless, he was not in a position to ignore the
request of the immigration officers. Petitioners, who were accompanied by an ITF
lawyer, then demanded that they will only resume work on board the ship if the captain
will sign an ITF prepared agreement condoning the incident.
To prevent any further disruptive action by the petitioners and to avert any further
damage to the shipowners and charterers, Captain Takemoto decided to swallow their
unreasonable demands to save the situation. Eventually, Captain Takemoto signed the
agreement and stationed the Filipino crewmen on the ships deck and in the engine
[4]

room. The M/V White Castle finally left Long Beach at 1715 hrs. on 13 June 1990.
While the M/V White Castle was in transit, Grace Marine and Shipping Corporation
received a telex on 14 June 1990 from its foreign principal, SINKAI narrating the Long
Beach incident. On the same day, Grace Marine and Shipping Corporation Furnished
the POEA a copy of the SINKAI telex and requested the agency to blacklist the fifteen
(15) Filipino seamen (petitioners) and to order their suspension due to their grievous
offenses which caused not only heavy losses to the shipowners and charterers but also
tainted the business name of Sinkai in particular and the reputation of all Filipino
seamen in general. On 15 August 1990, Grace Marine filed a formal complaint for
disciplinary action against petitioners before the POEA.
In upholding the claim of Grace Marine, the POEA administrator held that
Respondents were not only illegally terminated but were terminated for valid cause
when they abandoned their respective posts on board their vessel in gross violation of
their POEA approved contract. This fact is sufficiently and clearly established by the
evidence presented by the complainant. Even granting that respondents have valid
grievances against the officers or shipowners with respect to compensation or working
condition, this office cannot countenance respondents act of simply ignoring their
employment contract approved by the POEA which provides a sufficient mechanism
for redressing whatever grievances they have thru their grievance machinery. x x x.

xxx xxx xxx

Respondents act of seeking the intervention of the ITF/CSR without exhausting first
the remedies provided under the Grievance Machinery provision of their duly
approved POEA contract constitutes a serious breach of such contract for which
penalty of dismissal and suspension is in order. We find respondents allegation that
they notify [sic] their second officer of their grievances bereft of truth for we find no
sufficient evidence substantiating and corroborating this allegation. In this light, it is
but just that respondents reimburse complainant of the sum of US$19,114.83 which
the latter incurred for their repatriation and replacement.

We find respondents allegation of illegal dismissal and counterclaim for salary for the unexpired
portion of the contract without merit.
[5]

On appeal, the NLRC deleted the award of $19,114.83 representing repatriation

expenses and 5% attorneys fees for being uncalled for but upheld petitioners dismissal
[6]

based on a separate factual finding which appears to be in conflict with that of the
POEA decision, thus

Significantly, the parties, at the inception of the whole controversy were at fault,
giving both of them no recourse at law. Indeed, when respondents were allowed to re-
embark at Long Beach, California, after allegedly having abandoned their
vessel, which however, was truthfully refuted by respondents, a sense of qualm if not
mitigation of complainants indiscretion towards the crews grievance, could
understandably have been contemplated.

Consequently, for the complainant to renege from their agreement thru its vessels
master that no adverse repercussion will be meted on respondents act is tantamount to
treahery, thereby leaving respondents in the quagmire of helplessness.

Further, it would be highly irregular and unfair if only the respondents are made to
suffer from fault, the very root of which was not their own doing. Otherwise,
discrimination against Filipino seafarers will flourish, an eventuality surely
destructive of the countrys good name.
Even respondents dismissal were [sic] in disregard of due process of law. On this
basis alone, the complainant cannot be left unadmonished. (emphasis supplied)
[7]

In the case at bar, petitioners raise two (2) issues:

I

Whether or not the NLRC acted with grave abuse of discretion amounting to lack of
and/or in excess of jurisdiction when it did not annul and set aside the decision of the
POEA based on its own conclusion that petitioners did not abandon their work.

II

Whether or not the NLRC acted with grave abuse of discretion amounting to lack of
or in excess of jurisdiction in not awarding petitioners counterclaim despite its finding
that petitioners dismissal were [sic] in disregard of due process of law.

Petitioners contend that the NLRC dismissed private respondents allegations of

abandonment and breach of contract against them for lack of factual basis; meaning,
there was no just cause for their dismissal and repatriation. The NLRC also held that
they were dismissed without due process of law. Since the POEAs decision justified
petitioners suspension and the recovery of repatriation expenses by private respondent
based on abandonment of work, then the NLRC should have set aside both orders
when it held that the matter of alleged abandonment of the vessel was truthfully refuted
by petitioners.
Petitioners further contend that neither the POEA nor the NLRC found evidence of
deliberate, unjustified refusal of an employee to resume his employment. The fact that
[8]

they sought the CSR or ITF intervention cannot be taken as overt acts which unerringly
show that the employee does not want to work anymore, but as a legitimate exercise of
[9]

their freedom of expression to improve the terms and conditions of their

employment. Besides, the act of seeking intervention of the ITF or CSR, or any other
group is not even an offense under the Table of Offenses and Correspondent
Administrative Penalties in the POEA Standard Contract. Therefore, the POEA had no
[10]

basis to hold that petitioners seriously breached their POEA approved contracts when
they failed to follow its grievance machinery provisions. There being a clear case of
illegal dismissal, they should be awarded their salaries for the unexpired portion of their
contract.
In its memorandum, private respondent argues that both the NLRC and the POEA
[11]

found substantial evidence which showed that petitioners breached their contracts when
they abandoned their respective posts on 12 June 1990 which unnecessarily delayed
the schedule of M/V White Castle and caused it to suffer US $19,114.83 in repatriation
expenses. However, petitioners have misinterpreted the NLRC decision to mean that
private respondent was guilty of illegal dismissal and should be made to pay their
salaries corresponding to the unexpired portion of their contracts.
 In private respondents view, the NLRCs statement that at the inception of the whole
controversy the parties were at fault, giving both of them no recourse at law and that the
decision appealed from to some extent must be left unmolested meant that the NLRC
upheld the factual findings and the conclusions of the POEA administrator except that it
deleted the award of repatriation expenses and 5% attorneys fees for lack of factual and
legal bases.
In a separate comment, the Solicitor-General notes that despite the NLRCs finding
[12]

that the petitioners dismissal were in disregard of due process of law and that there was
no abandonment of work committed by petitioners, the NLRC held that both parties
were at fault, giving both of them no recourse at law. Whatever the NLRC meant in such
a cryptic statement was not explained in its decision. The Solicitor-General surmises
that the alleged fault imputed to petitioners was in their act of complaining to the CSR
that delayed the scheduled departure of the vessel, since the absence of some of the
crew, who were then complaining to the CSR, rendered the vessel unseaworthy and
unable to leave as scheduled. [13]

Be that as it may, the Solicitor-General invokes the ruling laid down by this Court in
Wallem Philippine Shipping v. Minister of Labor (102 SCRA 835 [1981]), Virjen Shipping
and Marine Services v. NLRC (125 SCRA 577 [1983]), and Susara v. Benipayo (176
SCRA 465 [1989]), which held that complaints by seamen to the ITF or similar
organizations to protect and uphold their rights are protected activities under the right to
freedom of expression and cannot be a just cause for termination of employment.
In its separate comment, the NLRC contends otherwise. The NLRC argues that
[14]

the filing of the petition for certiorari by petitioners was premature since petitioners did
not file a motion for reconsideration of the NLRC decision. And even
assuming arguendo that petitioners can properly file a petition for certiorari under Rule
65, the same should be dismissed because petitioners have raised only factual issues
in their petition.
The petition is impressed with merit.
Under Art. 282 of the Labor Code, an employer may terminate an employment for
any of the following causes:

(a) serious misconduct or wilfull disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;

(b) gross and habitual neglect by the employee of his duties;

(c) fraud or wilfull breach by the employee of the trust reposed in him by his
employer or duly authorized representative;

(d) commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representative;
(e) other causes analogous to the foregoing.

In termination cases, the employer has the burden of proof to establish the
existence of a valid cause in order to effect a valid dismissal. A valid dismissal, in turn,
presupposes not only the validity of its cause, but also the validity of the manner by
which the dismissal is done.
The POEA held that petitioners sought the intervention of the ITF/CSR without prior
resort to the grievance machinery provision in their seamans contract and this action
constitutes a serious breach of such contract for which a penalty of dismissal is in
order. However, the masters report prepared by Capt. Takemoto disclosed that
petitioners expressed their intentions to resume work aboard the M/V white Castle
provided the captain would sign an ITF prepared agreement condoning the incident;
that is in seeking the CSR intervention shortly before the vessels departure for Tokyo,
Japan. The captain reported that he finally decided to swallow their (petitioners)
unreasonable demands to save the situation, which seems to imply that the fate of the
vessel was at the mercy of petitioners. Upon the other hand, the statement also lends
credence to petitioners claim that the captain assured them that the incident would have
no adverse effect on their employment. Unknown to petitioners, the captain reneged on
their agreement and requested the shipowners that petitioners be replaced upon the
vessels arrival in Tokyo, Japan.
The issue is really whether or not the act of petitioners in seeking CSR (or ITF)
intervention, and the alleged manner in which it was carried out, constitute a just cause
for terminating their employment under Art. 282 of the Labor Code, and whether or not
petitioners were given due process before they were repatriated to the Philippines.
The report of Capt. Takemoto clearly stated that petitioners complained about
alleged unpaid wages, double bookkeeping and poor working conditions before they
boarded a bus provided by local ITF investigators. This circumstances presupposes that
the local CSR otr ITF had been sought earlier by the petitioners which explains the
presence of the bus on the pier.Needless to sa, some of the petitioners have gone
earlier to the CSR or ITF to ask for help even before their disembarkation shortly before
1700 hrs. on 12 June 1990. And in doing so, there is no evidence that they used force,
violence, intimidation, or any illegal means in order to bring their alleged plight to the
attention of the CSR.
In Suzara v. Benipayo, the Court took judicial notice of the worldwide militancy of
the ITF in interdicting foreign vessels and in demanding wage increases for third world
seamen.Interdiction is nothing more than a refusal of ITF members to render service for
the ship, such as to load or unload its cargo, to provision it or to perform such other
chores ordinarily incident to the docking of the ship at a certain point. That in most
[15]

cases, there was even no need for Filipino or other seamen to seek ITF intervention
because the ITF acts on its own volition in all ITF controlled ports not out of pure
altruism but in protecting the interest of its own members.[16]

Thus, when petitioners brought their complaints to the CSR-ITF, the captain cannot
be unaware of the possibility of interdiction which might further complicate the vessels
delay in schedule. If it were indeed true that petitioners claims were entirely baseless,
how could petitioners ITF lawyer even force the ship captain to sign the agreement
condoning the incident?Whatever the case, Capt, Takemoto agreed to petitioners
demand that no retaliatory action would befall those who sought the CSR-ITFs
help. Apparently, the captain brached the agreement when he recommended to the
shipowners petitioners repatriation. The shipowners sent a telex to its local manning
agent Grace Marine and Shipping Corporation as early as 14 June 1990 which in turn
furnished the POEA on the same day with a copy of said telex with a prayer to blacklist
petitioners.
The precipitate haste in which private respondent resolved to have petitioners
blacklisted even before the vessels arrival in Japan on 26 June 1990 not only confirms
Capt. Takemotos false assurances, but more importantly, these actions show the
complete absence of due process in the manner of petitioners repatriation. There is no
evidence on record which would established that petitioners were served written notices
stating the particular acts or omission constituting the grounds for their
repatriation. There is also no evidence to show that petitioners were given an
opportunity to answer the charges against them and hear their defenses. The records
are also silent if petitioners were furnished written notices of repatriation.
The Court notes that under Article XIII of the General Instructions issued by the
shipowners, it is provided that, [I]n case of dismissal, as per AMOSUP request being
rather strict, please exercise 2/3 notices to seamen before repatriating such erring crew
for settling matters smoothly in Manila. The General Instruction also outlined the
procedure to be taken for repatriation of the crew, that is, the master and the 2/0
(second officer, who is a Filipino) shall call a disciplinary meeting and the master shall
give a first or second warning depending on the number of times the same mistake is
committed, and for the 3 mistake, the master will recommend the crews replacement.
rd [17]

The Court has gone over the list of violations contained in the General Instructions
and nowhere is it stated that the act of seeking ITF intervention is a cause for
repatriation. Neither can we view petitioners act of going to the CSR or ITF as serious
misconduct or gross and habitual neglect of duty. They decided to seek outside the
intervention when their second officer ignored their grievances. The fact that the Filipino
3 officer eventually joined their cause gives credence to this allegation.
rd

If it were indeed true, as the POEA held, that petitioners ignored the grievance
machinery in by-passing their 2/0, the best evidence to established this fact would have
to come from the 2/0 himself who should have executed a specific denial that petitioners
never brought their grievances to him.
We agree with the Solicitor-General that the ruling in the cases of Wallem, Virjen,
and Suzara should be applied in the case at bar. In these cases the Filipino seamen
concerned applied effective pressure on their employers by raising the possibility of ITF
interdiction should their demands remain unheeded.
In petitioners case, it cannot be said that they acted unreasonably, oppressively or
maliciously in going to the ITF-CSR. At that time, they had reasonable grounds to
believe that private respondents were involved in double-bookkeeping, unpaid wages
and poor working conditions. They cannot be held guilty of abandonment or decision in
the absence of substantial evidence that they disembarked from the vessel with the
intention never to return to their post.
In sum, we hold that the NLRC gravely abused its discretion when it failed to grant
petitioners counterclaim of illegal dismissal after finding that there was no just cause
and due process in their repatriation. As we held in Wallem, there is a breach of
contract when seamen are dismissed without just cause and prior to the expiration of
the employment contracts and are entitled to collect from the owners or agent of the
vessel their unpaid salaries for the period they were engaged to render the services. [18]

WHEREFORE, the decision of the NLRC is hereby SET ASIDE. The POEAs order
of suspension for overseas employment for one year against petitioners is REVOKED
and petitioners names are hereby ordered DELISTED in, or removed from the watchlist
of the POEA. Private respondent Grace Marine Shipping Corporation is hereby ordered
to pay petitioners their respective salaries for the unexpired portion of their employment
contracts, the computation of which is referred to the NLRC for proper execution.
SO ORDERED.
Bellosillo, Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.

[1]
Annex B; B-1, rollo, pp.31-32.
[2]
Annex A, rollo, p. 38.
[3]
Annex B, Original Records, p. 232. It appears that petitioners conditional landing permits were revoked
by the US Immigration on 12 June 1990 as a precaution due to their failure to reboard the vessel
on the same day.
[4]
Annex C, Original Records. P. 210. The agreement itself was not presented in evidence but was
repeatedly mentioned in the masters report and in the telex sent by Sinkai Shipping to private
respondent Grace Marine on 14 June 1990.
[5]
Rollo, pp. 58-60.
[6]
Rollo, p. 100
[7]
Rollo, pp. 100-101.
[8]
Citing Batangas Laguan Tayabas Co. v. NLRC, 212 SCRA 792.
[9]
Supra.
[10]
Rollo, p. 12.
[11]
Rollo, pp. 167-178. (Private respondent adopted its comment on the petition as its memorandum, Rollo,
p 179)
[12]
Rollo, pp. 136-145.
[13]
Rollo, p. 141.
[14]
Rollo, pp. 200-204.
[15]
176 SCRA 465 (1989) at pp. 474-475.
[16]
Ibid.
[17]
Annex A, Rollo, pp. 26-29.
[18]
102 SCRA 835 at p. 842, citing Madrigal v. Ogline (104 Phil. 748). Philgrecian Maritime
Services v NLRC (139 SCRA 285) at p. 294.
 FIRST DIVISION

GODOFREDO MORALES,
G.R. No. 149285
Petitioner,

Present:

- versus -
PANGANIBAN, C.J.

Chairperson,

YNARES-SANTIAGO,
SKILLS INTERNATIONAL
AUSTRIA-MARTINEZ,
COMPANY AND/OR
MAHER DAAS AND CALLEJO, SR., and
MARIVIC DAAS AND/OR
CHICO-NAZARIO, JJ.
WALLAN AL WALLAN,

Respondents.

Promulgated:

August 30, 2006

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - -x
 DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari assailing

the Court of Appeals Decision[1] dated 28 November 2000 in CA-
G.R. SP No. 58795. The Court of Appeals Decision dismissed
petitioners Petition for Certiorari and had, in effect, affirmed the
Resolution[2] of the National Labor Relations Commission (NLRC)
which in turn sustained the findings of the Labor Arbiter [3] that
petitioner did not have a cause of action against respondent Skills
International Company (Skills International).

The antecedent facts are as follows:

On 1 September 1997, petitioner filed a Complaint against

respondent Skills International before the NLRC claiming that he
was illegally dismissed from service by his foreign
employer, Wallan Al Wallan. In his Complaint, petitioner sought
[4]

the payment of the following: unpaid salaries for one and one-half
months; refund of his plane fare; illegal deductions; attorneys fees
and litigation expenses; and moral and exemplary damages. The
complaint was amended on 2 October
1997 to implead respondents
[5]
Maher Daas, Marivic Daas,
and Wallan Al Wallan. Petitioner likewise sought the payment of
these items: the six and one-half months unexpired portion of his
contract; refund of the amount of 5,000.00 Saudi Riyals allegedly
deducted from his salary; unpaid overtime pay and medical care.
In his Position Paper,[6] petitioner alleged that his employment was
illegally terminated on 14 April 1997 in gross violation of the
Constitution and of the Labor Code. Because of this, he claimed
that he was entitled to receive payment for the unexpired portion
of his employment agreement as well as moral, exemplary, and
nominal damages, and attorneys fees.

For its part, respondent Skills International alleged that it

previously deployed petitioner for work abroad in April 1995 until
he came home in July 1996. Later on, petitioner met his new
employer at respondent Skills Internationals office
in Malate, Manila. Respondent Skills International, however,
clarified that petitioners new employer, Wallan Al Wallan, was not
its accredited principal. This being the case, it argued that
petitioner did not have any cause of action against it because as a
recruitment agency, it could only be held solidarily liable with the
employer if the latter is an accredited principal of the
agency. Respondent Skills International also averred that
petitioners deployment was processed under
the Balik Manggagawa program of the government so that he
could immediately return to work abroad. [7]

On 31 July 1998, Labor Arbiter Felipe Pati rendered a

Decision[8] dismissing the case for lack of merit stating that if
there was anyone liable for petitioners illegal dismissal, it was
none other than his foreign employer, Wallan Al Wallan.

Petitioner then filed an appeal with the NLRC but the same was
resolved against him[9] prompting petitioner to elevate his case to
the Court of Appeals. In the Decision now assailed before us, the
Court of Appeals dismissed his Petition for Certiorari with
the decretal portion of the Decision stating:
 WHEREFORE, for lack of merit, the instant petition is DISMISSED.[10]

In sustaining the NLRC, the Court of Appeals stated that

petitioners arguments were a mere reiteration of those he earlier
presented before the NLRC and which were already passed upon
by the latter.[11] The Court of Appeals also held that petitioner
failed to present any basis to support his argument that the NLRC
committed grave abuse of discretion in resolving the case in favor
of respondent Skills International.[12]

Petitioner filed a Motion for Reconsideration but this was

denied;[13] hence, the present recourse where petitioner argues
that the Court of Appeals erred in its findings that:

a.) There is no formal, valid and signed contract of employment that binds the
petitioner and the private respondents;

b.) Petitioner was hired directly by his foreign employer and was
processed as a Balik-Manggagawa; and

c.) Petitioner did not pay any placement fee and he did not mention
that he was deducted placement fee by the respondent [Skills
International].[14]

Petitioner claims that the relationship

between Wallan Al Wallan and respondent Skills International was
sufficiently established when the latter stated in its Position Paper
that it was in its office in Malate, Manila, where petitioner met his
new employer. Petitioner insists that if Wallan Al Wallan were not
an accredited principal of respondent Skills International, then he
had no business being in the latters office. But since as petitioner
and Wallan Al Wallan met each other within the confines of
respondent Skills Internationals office, it can be said that
respondent Skills International had a hand in their meeting. More
than this, it was respondent Skills International which handled his
deployment for work abroad as a balik-manggagawa.

Petitioner also points out that in the medical examination

report dated 6 September 1996 issued by
Angelina Apostol Punzalan Medical Clinic,[15] it is clearly stated
that it was respondent Skills International which recommended
him for physical examination. He argues that the medical clinic
would not have attended to him had it not been for the referral of
respondent Skills International as under Section 3, Rule VII, Book II
of the Philippine Overseas Employment Administration Rules and
Regulations Governing Overseas Employment,
[16]
[m]edical examination of workers for overseas employment
shall be conducted only after the agency and/or its principal shall
have interviewed and trade tested or have pre-qualified the
worker for an existing overseas position duly covered by an
approved job order.[17]

Likewise, in the Standard Employment Contract for Various

Skills[18] which petitioner signed, it is stated that his local
placement agency is respondent Skills International while his
principal in Riyadh, Saudi Arabia, is Wallan Al Wallan. Petitioner
claims that while he signed and even affixed his thumbmark on
said contract, he avers that he could not explain why no
responsible officer or employee of respondent Skills International
signed said document.

In addition, petitioner maintains that he does not fall within the

category of balik-manggagawa as the term refers to
a landbased contract worker who is on vacation or on emergency
leave, and who is returning to the same work site to resume his
employment.[19] Obviously then, he should not have been
considered as a balik-manggagawa since he was neither here on
vacation nor on emergency leave; instead, he went back abroad
under an entirely new employment contract.

As for the lack of placement fee he paid to respondent Skills

International, petitioner claims that the Labor Arbiter, the NLRC,
and the Court of Appeals failed to take notice of the receipt,
written in Saudi Arabian language, showing that his employer
abroad deducted 5,000 Saudi Riyals from his salary as placement
fee.[20]

Given these circumstances, petitioner concludes that respondent

Skills International should be held liable to him for the illegal
dismissal perpetuated by its accredited
principal, Wallan Al Wallan, as provided for under Section [60] of
the Rules and Regulations Implementing the Migrant Workers and
Overseas Filipinos Act of 1995[21] which states:

Section 60. Solidary Liability. - The liability of the principal/employer

and the recruitment/placement agency on any and all claims under this
Rule shall be joint and solidary. This liability shall be incorporated in
the contract for overseas employment and shall be a condition
 precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be
answerable for all money claims or damages that may be awarded to
the workers.

If the recruitment/placement agency is a juridical being, the corporate

officers and directors and partners as the case may be, shall
themselves be jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages.

Such liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution,
amendment or modification made locally or in a foreign country of the
said contract.

On the other hand, respondent Skills International insists that this

Petition should be dismissed as it seeks a review of the factual
findings of the Labor Arbiter, the NLRC, and the Court of Appeals a
task which clearly does not fall within the ambit of a Petition for
Review on Certiorari. Nevertheless, respondent Skills International
proceeded to address the matters stated in the Petition. It
contends that although it had previously deployed petitioner
abroad, such deployment was for its accredited principal, the
Saudi Automotive Services Company and not
for Wallan Al Wallan. While it may be true
that Wallan Al Wallan and petitioner met one another at its office,
respondent Skills International argues that this does not readily
lead to the conclusion that Wallan Al Wallan was its accredited
principal. As one of its officers is from the Middle East, respondent
Skills International avers that it is customary that it invites visitors
from said region to come to their office.

Anent the medical examination which was undergone by

petitioner, respondent Skills International claims that it could not
have possibly recommended him for such a procedure as
precisely, there was no job order as far
as Wallan Al Wallans company was concerned.

Respondent Skills International also denies having facilitated

petitioners deployment as an alleged balik-manggagawa as
petitioners Balik-Manggagawa Information Sheet does not
indicate the name of any local placement or recruitment
agency. Moreover, on 19 June 1998, POEA
Administrator Felicisimo Joson issued an Order, [22]
the pertinent
portion of which reads:

The issue posed for Our resolution is whether or not the respondent agency
(herein respondent) should be held liable for withholding workers salaries should
be resolved in the negative. As discussed, complainant (herein petitioner) was
hired directly by his employer and the respondent agency had no participation
whatsoever in his overseas employment. Wanting in factual and legal [bases], the
charged offense must be dismissed.

WHEREFORE, premises considered, let the instant case be, as it is

hereby ordered DISMISSED for lack of merit.[23]

Respondent Skills International also insists that it did not

receive placement fee from petitioner for the simple
reason that it did not deploy him to work abroad
for Wallan Al Wallan and that only petitioner and said
employer are the ones privy to the circumstances
surrounding the alleged salary deductions committed by
the latter.
The petition must fail.

At the outset, it must be stressed that the resolution of the issue

of whether respondent Skills International could be
held solidarily liable for the alleged illegal dismissal of petitioner
necessarily hinges on the primordial question of whether
respondent Skills International was the one responsible for his
deployment abroad. This indubitably raises a question of fact
which is not a proper subject of a Petition for Review
on Certiorari. It is axiomatic that in an appeal by certiorari, only
questions of law may be reviewed.[24]

The distinction between a question of law and a question of fact

was comprehensively discussed in the case of Microsoft
Corporation v. Maxicorp, Inc.,[25] thus:

The distinction between questions of law and questions of fact is settled. A

question of law exists when the doubt or difference centers on what the law is on
a certain state of facts. A question of fact exists if the doubt centers on the truth or
falsity of the alleged facts. Though this delineation seems simple, determining the
true nature and extent of the distinction is sometimes problematic. For example, it
is incorrect to presume that all cases where the facts are not in dispute
automatically involve purely questions of law.

There is a question of law if the issue raised is capable of being

resolved without need of reviewing the probative value of the
evidence. The resolution of the issue must rest solely on what the law
provides on the given set of circumstances. Once it is clear that the
issue invites a review of the evidence presented, the question posed is
one of fact. If the query requires a re-evaluation of the credibility of
witnesses, or the existence or relevance of surrounding circumstances
and their relation to each other, the issue in that query is factual. [26]
In this case, the issues brought for our consideration calls for the
re-examination of the evidence presented by the parties and the
determination of whether the Labor Arbiter, the NLRC, and the
Court of Appeals erred in their respective evaluation of the
same. This we cannot do without blurring the difference between
a question of fact and a question of law a significant distinction as
far as the remedy of appeal by certiorari is concerned.

Furthermore, factual findings of administrative agencies that are

affirmed by the Court of Appeals are conclusive on the parties and
not reviewable by this Court.[27] This is so because of the special
knowledge and expertise gained by these quasi-judicial agencies
from presiding over matters falling within their jurisdiction. [28] So
long as these factual findings are supported by substantial
evidence, this Court will not disturb the same. [29]

As earlier stated, in this case, the Labor Arbiter, the NLRC, and the
Court of Appeals are unanimous in their factual conclusions
that Wallan Al Wallan is not an accredited principal of respondent
Skills International and we sustain said findings. As aptly observed
by the NLRC

In the instant case, the alleged Employment Contract, Annex A for the
complainant (herein petitioner) appears to be one which is not perfected by herein
parties, because said contract does not bear the signatures of the respondents or
any of their authorized representatives. It only bears the signature
and thumbmark of the complainant. On its face, the Employment Contract readily
shows that respondent agency has neither participated nor is it a [privy] to any
party who executed the contract binding it to the terms and conditions of the
same.

Even in the Complainants Overseas Employment Certificate No.

144592-A, the name of respondent agency does not appear to be the
one that recruited and deployed the complainant. Likewise,
 the Balikbayan Info Sheet of complainant does not indicated that
herein respondent agency is the contracting agency in the Philippines.
x x x.

Complainant failed to submit evidence to disprove the allegations of

the [respondents] that they neither participated in the contract of
employment of complainant (Annex A for the complainant) nor were
they privy to the terms and conditions appearing therein. The evidence
submitted are not sufficient to hold respondent agency liable. The copy
of the receipt for the alleged placement fee was not issued by the
respondent agency but by the employer of complainant which is not its
accredited principal another fact which was never controverted by the
complainant. This being the case, complainant has no cause of action
against herein respondent and therefore, his money claims could not
prosper in the instant case.

The Solidary Liability under Section [60] of the Omnibus Rules

Implementing the Migrant Workers and Overseas and Filipino Act of
1995, will only apply if there is an existing valid contract and signed by
the parties concerned.[30]

To this, we add our own observations. Petitioner insists that

he does not qualify as a balik-manggagawa as the term is defined
under the law. Nevertheless, it does not escape us that in his
pleadings,[31] he asserts that respondent Skills International
handled his deployment as a balik-manggagawa to expedite his
deployment abroad. In addition, he never denied having filled-up
the entries in the Balik-Manggagawa Information Sheet leaving
the portion pertaining to the name of the placement or
recruitment agency blank. To our mind, it is clear that petitioner
utilizes the Balik-Manggagawa program of the government
whenever it is convenient for him. Thus, he availed himself of said
program in order to fast-track his deployment abroad and yet now
that said Info Sheet is being used against him, he claims that he
could not have been processed as a balik-manggagawa as defined
by law. We simply cannot countenance such trifling regard for the
law by awarding to petitioner the money claims he is seeking in
the present case.

As for the medical examination result which petitioner belatedly

presented before the Court of Appeals, the law clearly requires
that there should first be a job order relating to an existing
overseas position before a worker shall be subjected to a medical
examination. In this case, as petitioner is the one insisting that a
job order exists, he bears the burden of producing the same. After
all, the rule is settled that he who alleges must prove. [32] Petitioner
miserably failed to discharge this burden.

WHEREFORE, premises considered, the present petition is

hereby DENIED and the Decision of the Court of Appeals
dated 28 November 2000 in CA-G.R. SP. No. 58795, affirming the
Resolution of the National Labor Relations Commission dated 31
January 2000, is AFFIRMED. No costs.

SO ORDERED.

MINITA V. CHICO-NAZARIO

Associate Justice

WE CONCUR:
 ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson

CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice Associate Justice

ROMEO J. CALLEJO, SR.

Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby

certified that the conclusions in the above Decision were reached
in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
 ARTEMIO V. PANGANIBAN
Chief Justice

[1]
Penned by Associate Justice Portia Alio-Hormachuelos with Associate Justices Angelina Sandoval-Gutierrez (now
a member of this Court) and Elvi John S. Asuncion concurring; rollo, pp. 25-32.

[2]
Dated 31 January 2000; records, pp. 150-156.

[3]
Dated 31 July 1998; id. at 90-94.

[4]
Records, p. 2.

[5]
Id. at 10.

[6]
Id. at 19-23.

[7]
Position Paper dated 19 November 1997; records, pp. 31-36.

[8]
Records, pp. 90-94.

[9]
Id. at 150-156.

[10]
Rollo, p. 31.

[11]
Id. at 28.

[12]
Id. at 31.

[13]
Id. at 34-35.

[14]
Id. at 15.

[15]
Id. at 53.

[16]
As amended in 1991.

[17]
Rollo, p. 16.
[18]
Annex G of the Petition; rollo, pp. 55-56.

[19]
Citing Section 6, Rule II, POEA Rules and Regulations Governing Overseas Employment, as amended in 1991.

[20]
Annex F of the Petition; rollo, p. 54.

[21]
Republic Act No. 8042.

[22]
Refers to POEA Case No. RV 97-10-0445; rollo, pp.124-127.

[23]
Rollo, p. 127.

[24]
Bangko Sentral ng Pilipinas v. Santamaria, 443 Phil. 108, 119 (2003).

[25]
G.R. No. 140946, 13 September 2004, 438 SCRA 224.

[26]
Id. at 230-231; citations omitted.

[27]
Miralles v. Go, G.R. No. 139943, 18 January 2001, 349 SCRA 596, 604.

[28]
Villanueva v. Court of Appeals, G.R. No. 99357, 27 January 1992, 205 SCRA 537, 544-545.

[29]
Id.

[30]
Records, pp. 153-155.

[31]
Memorandum of Appeal dated 24 September 1997; records, pp. 106-110; Petition for Review Under Rule 45
dated 19 September 2001; rollo, pp. 10-24.

[32]
Bejoc v. Cabreros, G.R. No. 145849, 22 July 2005, 464 SCRA 78, 86-87.
 [Syllabus]

THIRD DIVISION

[G.R. No. 114132. November 14, 1996]

FE M. ALINDAO, petitioner, vs. HON. FELICISIMO O. JOSON, in his

capacity as the Administrator, Philippine Overseas Employment
Administration; PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, and HISHAM GENERAL SERVICES
CONTRACTOR, respondents.

DECISION
DAVIDE, JR., J.:

In this petition for certiorari, prohibition and mandamus under Rule 65 of the Rules
of Court, petitioner Fe M. Alindao seeks to set aside the 10 February 1994 Order of
respondent Philippine Overseas Employment Administration ( POEA) Administrator
Felicisimo O. Joson in POEA Case No. (L) 89-08-703, which reversed the 28 November
1990 Order, for having been issued with grave abuse of discretion.
The material facts leading to the instant petition are not disputed.
Petitioner applied, was interviewed and qualified for employment in Saudi Arabia as
a laboratory aide, for a term of one year and with a monthly salary of US$370.00,
through private respondent Hisham General Services Contractor (hereinafter Hisham).
[1]
She paid Hisham P15,000.00 as a placement fee, but no receipt was issued. She did
not insist on a receipt as she saw her name written in a logbook to record the
transaction and Hisham assured her of employment by presenting her passport already
stamped with a visa and her plane ticket.
Petitioner left for Saudi Arabia on 9 March 1988. Upon arrival, she was met by a
representative of her employer, the Dahem Clinic. She was told she would stay at
Alcobar until needed.
Two weeks later, the petitioners employer brought her to his residence and was
made to work as a domestic helper. Her employer did not treat her well and paid her
only 660 Saudi riyals. The unfair working conditions prompted the petitioner to ask that
she be sent home, but she was merely returned to Alcobar. She worked for only a
month and six days. From there, she worked at several residences until she saved
enough money to return home.
She arrived in the Philippines on 7 July 1989, and filed with the POEA a complaint
against Hisham for breach of contract, violation of the terms and conditions of its
authority as a service contractor, and violation of the following provisions of the Labor
Code: Article 32 (requiring issuances of receipts for fees paid), Article 34 (a) (prohibiting
one from charging an amount greater than that specified in the schedule of allowable
fees), and Article 34(b) (prohibiting one from furnishing false information in relation to
recruitment or employment [misrepresentation]). [2] The case was docketed
as POEA Case No. (L) 89-08-703.
A request for verification revealed that Hishams license as a service contractor was
to expire on 7 March 1991.[3]
After appropriate proceedings, POEA Administrator Jose N. Sarmiento handed
down on 28 November 1990 in POEA Case No. (L) 89-08-703: (a) a Decision on the
petitioners money claims; and (b) an Order pertaining to the administrative aspect
(recruitment) of the case.
The dispositive portion of the Decision reads as follows:
In view of the foregoing, respondent Hisham General Services Contractor is
hereby ordered to pay complainant the following:

1. US$3,120 or its peso equivalent based on the current rate of exchange

representing the total salary differentials for 12 months at US$260.00 a
month.

2. P20,603.00 refund of the plane ticket.

SO ORDERED.[4]

The dispositive portion of the Order reads:

WHEREFORE, premises considered, respondent Hisham General Services is
hereby ordered to refund complainant the amount of P13,500.00 representing
the excess amount of her placement fee.(as Hisham was licensed merely as a
service contractor, it was authorized only to recruit workers for its own
employment abroad and to charge a maximum of P1,500.00 as documentation
expenses.
Further, respondent is hereby ordered suspended for two (2) months or pay a
penalty fine of P20,000.00 for illegal exaction, and an additional penalty of
suspension for two (2) months or fine of P20,000.00 for misrepresentation.
It is understood that the penalty of suspension shall be cumulatively served.
SO ORDERED.[5]
On 27 December 1990, Hisham appealed the Decision to the National Labor
Relations Commission (NLRC),[6] which docketed the appeal as NLRC NCR
CA 00150291, and filed a motion for reconsideration of the Order with the POEA.[7]
 In its resolution of 30 July 1992,[8] the NLRC affirmed in toto the
[9]
challenged Decision. Hishams motion to reconsider the NLRC resolution was denied
by the NLRC in its resolution of 17 February 1993.[10] The NLRC resolution became final
and executory on 4 April 1993 and the corresponding entry of judgment was made
on 18 May 1993.[11]
On 22 April 1993, the petitioner filed with the POEA a motion for execution of
the Decision on the money claims,[12] which Hisham opposed on 29 April 1993 on the
ground that Dahem Clinic was already accredited with another agency. [13] On 10
September 1993, the POEA granted the petitioners motion[14] and on 7 October 1993, it
issued a writ of execution[15] which was, however, for execution of both the Decision on
the money claims and the Order in the administrative aspect of the case.
On 14 October 1993, Hisham then filed a motion for clarification and/or modification
of the writ of execution, asserting that the Order in the administrative case could not be
enforced as the motion for reconsideration of the Order was still pending with
the POEA and remained unresolved.[16]
On 10 February 1994, respondent POEA Administrator Felicisimo O. Joson issued
the Order subject of this petition, the pertinent portions of which read as follows:
Complainant failed to establish or even show the details of how, when, and
where and to whom she paid the amount of P15,000.00. [W]e subscribe to the
Jurisprudence on this matter that 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 and should be proven and substantiated by
clear, credible and competent evidence which is not obtaining in the case at
bar.
We likewise find unmeritorious the charge of misrepresentation under Article
34 (b) of the Labor Code, as amended. We understand that complainant
worked beyond the term of her employment contract which was sixteen (16)
months while she was hired for twelve (12) months. We find it improbable
that if there was really a violation of the contract, complainant could not have
waited for the expiration of said contract much more extended her stay with
her employer. Complainants allegations are contrary to the normal reaction of
a person who was aggrieved. Taking into consideration her applied position as
a laboratory aide which calls for a higher educational qualification than a
domestic helper, she could have well asserted her rights and availed of the
remedy if not immediately but within a reasonable length of time.
We noted that the alleged change of complainants position was without the
knowledge and consent of respondent agency. It was shown that respondent
never knew or learned that complainant had a complaint not until after the
filing of the instant case. Based from the foregoing circumstances respondents
 liability is limited if there is substantial evidence that it has committed
representation in the processing of complainant which is not obtaining in this
case.
WHEREFORE, in the light of the foregoing premises, we find the Motion for
Reconsideration meritorious and this case is hereby ordered dismissed.[17]
Respondent Joson took cognizance of Hishams Motion for Reconsideration of the
28 November 1990 Order because it was filed prior to the effectivity of the
1991 POEA Rules and Regulations; hence, it was governed by the 198[5] POEA Rules
and Regulations.
On 16 March 1994, the petitioner filed this petition for Certiorari, Prohibition
and Mandamus, with prayer for Temporary Restraining Order and/or Writ of Preliminary
Injunction, Damages, and Disbarment with this Court. In the main, the petitioner asserts
most strongly that the 28 November 1990 Decision had become final and executory,
thus respondent Josons 10 February 1994 Order which had the effect of modifying the
said decision, was issued with grave abuse of discretion. She maintains that respondent
Joson should have applied the 1991 POEA Rules and Regulations, for, being rules of
procedure, they may be applied retroactively. She further contends that Hishams appeal
of the money claims case carried with it the appeal of the recruitment case, as
the POEA could not have disposed of one without disposing of the other; moreover,
citing Nual vs. Court of Appeals,[18] a final and executory judgment may not be modified
even if the modification was meant to correct what was perceived to be erroneous
conclusions of fact. As to the propriety of this petition, despite the absence of a motion
for reconsideration, the petitioner alleges inadequacy of an appeal or a motion for
reconsideration, and the patent nullity of the 10 February 1994 Order. She concludes
with a prayer for the reversal of the questioned order, immediate execution of the 28
November 1990 Decision, an award of P100,00.00 as exemplary damages, and the
disbarment of respondent Joson for professional misconduct. [19]
On 28 July 1994, the Office of the Solicitor General filed its Comment contending
that the 28 November 1990 Order imposing administrative disciplinary sanctions for
violations not arising from an employer-employee relationship was immediately
executory and inappealable pursuant to Section 6 (Inappealable Disciplinary Cases),
Rule V (Appeal), Book VI(Adjudication Rules) and Section 3 (Imposition of
Administrative Sanctions Immediately Executory), Rule VI, Book VI (Adjudication Rules)
of the 1985 POEA Rules and Regulations.Moreover, while a motion for reconsideration
was not expressly prohibited, no provision in the said Rules and Regulations allowed
such a motion. Further, even disregarding jurisdictional infirmities, what stands
unrebutted is that Hisham committed misrepresentation, breach of contract and illegal
exaction. The Office of the Solicitor General continues that under the circumstances, it
would have been impossible to require the petitioner to produce a receipt and
unreasonable to expect her to have lodged a complaint against Hisham at an earlier
time. It then recommends that the petitioners complaint for disbarment be referred to the
Integrated Bar of the Philippines for investigation and appropriate action and that
the POEA be granted a new period within which to file its Comment. [20]
 On 3 January 1995, Hisham filed its Comment and admitted the final and executory
nature of the Decision on the money claims. However, it points to Section 1, Rule IV,
Book VI and Rule V, Book VII of the 1991 POEA Rules and Regulations as support for
its thesis that the administrative aspect of the case could not have been deemed final
and executory. Hisham then questions the propriety of the petition in light of the non-
observance of the rule on exhaustion of administrative remedies, which mandates that
the questioned Order should have been first appealed to the Office of the Secretary of
the Department of Labor and Employment and the Office of the President, with resort to
this Court on pure questions of law.[21]
On 9 March 1995, the POEA filed its Comment wherein it rejects the applicability of
the provisions of the 1985 POEA Rules and Regulations cited by the Solicitor General,
as such pertain to disciplinary cases against overseas contract workers, not to
agencies. It contends that the applicable provision is Section 18, Rule VI, Book II of the
1985 POEA Rules and Regulations.[22] Moreover, in accordance with POEA Office Order
No. 3, Adjudication Office, Series of 1991, [23] it was the POEA Adjudication Office which
was empowered to resolve all Motions for Reconsideration filed prior to the effectivity of
the 1991 POEA Rules and Regulations. Finally, the POEA claimed that the dispositive
portion of the questioned Order dismissing the case merely referred to the recruitment
violation and did not include the complaint for money claims. [24]
We gave due course to the petition and required the parties to submit their
respective memoranda. Hisham and the POEA adopted their respective Comments as
their Memoranda, while the petitioner filed her Memorandum on 23 August 1996.
The petition must be granted.
We first assess the propriety of this special civil action under Rule 65 of the Rules of
Court. The petitioner has explained why she forthwith availed of this remedy without first
filing a motion to reconsider the assailed order of 10 February 1994. Evidently, she
anticipated the invocation of the doctrines requiring the filing of such motion for
reconsideration[25] and the exhaustion of administrative remedies. [26] We rule in her
favor. The petition involves a pure question of law and the challenged order is void for
want of jurisdiction on the part of respondent Joson. It has been held that the
requirement of a motion for reconsideration may be dispensed with in the following
instances: (1) when the issue raised is one purely of law; (2) where public interest is
involved; (3) in cases of urgency; and (4) where special circumstances warrant
immediate or more direct action.[27] On the other hand, among the accepted exceptions
to the rule on exhaustion of administrative remedies are: (1) where the question in
dispute is purely a legal one; and (2) where the controverted act is patently illegal or
was performed without jurisdiction or in excess of jurisdiction. [28]
We likewise agree with the petitioner that the 1991 POEA Rules and Regulations
should be given retroactive application. The position taken by respondent Joson on this
issue is tenuous. The said Rules and Regulations, not affecting substantive rights, are
clearly procedural in nature. It is settled that procedural laws may be given retroactive
effect, there being no vested rights in rules of procedure. [29]
 We have recognized an exception to the rule that where a court has already
obtained and is exercising jurisdiction over a controversy, its jurisdiction to proceed to
the final determination of the case is not affected by new legislation transferring
jurisdiction over such proceedings to another tribunal. This exception is when the
change in jurisdiction is curative in character.[30] Thus, this Court gave retroactive effect
to P.D. No. 1691 which substantially re-enacted Article 217 of the Labor Code after the
latter was amended by P.D. No. 1367 by, inter alia, removing from the enumeration of
cases falling under the exclusive jurisdiction of Labor Arbiters money claims arising from
employer-employee relations.[31] If this were so, then it is with more reason that the
provision of the 1991 POEA Rules and Regulations vesting upon the Secretary of Labor
jurisdiction over motions for reconsideration (to be treated as petitions for review)
should be given retroactive effect, not only because it is a rule of procedure, but also
because it is remedial or curative since the 1985 POEA Rules and Regulations is
unclear as to the agency which shall resolve such motions. Section 18, Rule VI of
Book II of the latter merely states that a motion for reconsideration of an order of
suspension or an appeal to the Minister (Secretary) from an order cancelling a license
or authority may be entertained only when filed with the LRO within ten (10) working
days from service of the order or decision. Office Order No. 3, Series of 1991, dated 14
November 1991 and issued by POEA Adjudication Office Director Jaime P. Jimenez,
ordering all Hearing Officers of the Adjudication Office to resolve on or before the end of
November 1991 all pending motions for reconsideration filed prior to the effectivity of the
1991 POEA Rules and Regulations provided no authority for respondent Joson to
resolve on 10 February 1994 Hishams motion to reconsider the Order of 20 November
1990.
We now examine the pertinent provisions of the 1991 POEA Rules and Regulations.
Book VI is entitled Recruitment Violation and Related Cases, while Rule IV (Review)
thereof provides the procedure and mechanisms of an appeal from an order of
the POEA in recruitment violation cases. Section 1 of Rule IV vests exclusive jurisdiction
to review the said cases upon the Secretary of Labor and Employment, while Sections 2
and 3 of Rule IV declare:
Section 2. When to File. -- Petitions for review shall be filed within ten (10)
calendar days from receipt of the Order by the parties.
All Motions for Reconsideration shall be treated as a petition for review.
Section 3. Effects of Filing a Petition for Review. -- The filing of a petition for
review shall not automatically stay the execution of the order of suspension
unless restrained by the Secretary.
It is thus clear that under the 1991 POEA Rules and Regulations, Hishams Motion
for the Reconsideration of the Order of 28 November 1990 on the administrative aspect
of the case (recruitment, etc.) was to be treated as a petition for review which should
have been resolved by the Secretary of Labor and Employment.
We agree, however, with the POEA that the questioned Order of 10 February 1994,
taken in its entirety, only pertains to the 28 November 1990 Order on the Administrative
aspect (recruitment) of the case. Any vague reference to the subject or merits of
the Decision of 28 November 1990 cannot modify nor amend the Decision which had
long become final and already the subject of a writ of execution. Such reference is, at
worst, merely imprecise statements which cannot alter the final character of
the Decision. Even Hisham, in its Comment to the petition, explicitly admits that:
The case filed with the NLRC became final and executory and subject of a
writ of execution and petitioner at this point in time was able to claim and
receive the entire amount of said claim ... [32]
Aside from this statement, however, the record before this Court is bereft of evidence
tending to show that the writ of execution as regards the money claims case has indeed
been implemented to any extent.
WHEREFORE, the instant petition is GRANTED. The challenged Order of 10
February 1994 of respondent POEA Administrator Felicisimo O. Joson in POEA Case
No. (L) 89-08-703 is hereby SET ASIDE. The public respondent Philippine Overseas
Employment Administration is hereby DIRECTED to transmit the record of the said case
to the Secretary of Labor and Employment for the prompt disposition, under the
1991 POEA Rules and Regulations, of the Motion for Reconsideration of
the POEA Order of 28 November 1990 on the administrative aspect (recruitment) of the
case, and ORDERED to implement with reasonable dispatch the Writ of Execution of 7
October 1993 for the execution of the Decision of 28 November 1990 on the money
claims.
Costs against the private respondent.
SO ORDERED.
Narvasa, C.J., (Chairman), Melo, Francisco, and Panganiban, JJ., concur.

[1]
POEA Information Sheet, Original Record (OR), vol. 1, 1, 14; Employment Contract dated 9 March
1988, Id., 2, 15.
[2]
Petitioners affidavit dated 1 August 1989, OR, vol. 1, 7, 12, 22; Petitioners Sworn Statement dated 7
August 1989, Id., vol. 2, 221-226.
[3]
Id., vol. 1, 24.
[4]
Id., 63.
[5]
OR, vol. 1, 73.
[6]
Id., 147-154.
[7]
Id., 109-114.
[8]
Id., 165-171.
[9]
Id., 184-188.
[10]
Id., 191-192.
[11]
Id., 202.
[12]
Id., vol. 2, 239-240.
[13]
Id., 244-246.
[14]
Id., 250-251.
[15]
Id., 260.
[16]
Id., 269-270.
[17]
OR, vol. 2, 271-282; Rollo, 33-38.
[18]
221 SCRA 26 [1993].
[19]
Rollo, 2-32.
[20]
Rollo, 82-96.
[21]
Id., 104-111.
[22]
The section provides:
A motion for reconsideration of an order or suspension or an appeal to the Minister from an order
cancelling a license or authority may be entertained only when filed with the LRO within ten (10) working
days from service of the order or decision.
[23]
Rollo, 184.
[24]
Id., 133-138.
[25]
FLORENZ D. REGALADO, REMEDIAL LAW COMPENDIUM, vol. 1, Fifth Rev. Ed. [1988], 459-460,
citing Villa-Rey Transit vs. Bello, 7 SCRA 735 [1963]; Liberty Insurance Corp. vs. Court of Appeals, 222
SCRA 37, 47 [1993]; PNCC vs. NLRC, 245 SCRA 668, 674-675 [1995].
[26]
Rufino Lopez and Sons, Inc. vs. CTA, 100 Phil. 850, 856-857 [1957]; Cruz vs. Del Rosario, 9 SCRA
755, 758 [1963].
[27]
Liberty Insurance Corp. vs. Court of Appeals, supra note 25.
[28]
Gonzales vs. Hechanova, 9 SCRA 230, 235-236 [1963]; Madrigal vs. Lecaroz, 191 SCRA 20, 26
[1990].
[29]
See People vs. Sumilang, 77 Phil. 764, 765-766 [1946]; Alday vs. Camilon, 120 SCRA 521, 523 [1983];
Liam Law vs. Olympic Sawmill Co., 129 SCRA 439, 442 [1984]; Bernardo vs. Court of Appeals, 168
SCRA 439, 443 [1988]; Duremdes vs. Commission on Elections, 178 SCRA 746, 756 [1989];
Ocampo vs. Court of Appeals, 180 SCRA 27, 33 [1989]; Peoples Financing Corp. vs. Court of Appeals,
192 SCRA 34, 40 [1990]; Aris (Phil.) Inc. vs.NLRC, 200 SCRA 246, 256-257 [1991]; Asset Privatization
Trust vs. Court of Appeals, 229 SCRA 627, 634 [1994]; Del Rosario vs. Court of Appeals, 241 SCRA 519,
526 [1995]; Diu vs. Court of Appeals, 251 SCRA 472, 481 [1995].
[30]
Philippine Long Distance Telephone Co. vs. Dulay, 172 SCRA 31, 41-42 [1989], citations omitted.
[31]
Supra note 30. See Getz Corp. Philippines vs. Court of Appeals, 116 SCRA 86 [1982]; Sentinel
Insurance Co., Inc. vs. Bautista, 127 SCRA 623 [1984]; Atlas Fertilizer Corp. vs. Navarro, 149 SCRA 432
[1987]; Abad vs. Regional Trial Court, 154 SCRA 664 [1987].
[32]
Rollo, 103.
 FIRST DIVISION

[G.R. No. 115527. August 18, 1997]

ROSSELINI L. DE LA CRUZ, EDGAR S. NINA, VIRGILIO R. DU,

RENATO I. CURIOSO, NOEL T. GALENO, GERONIMO K.
MALUBAY, GERARDO D. TORRES, ERWIN G. OYCO,
MELENDRES E. AGURO, ALOYSIUS C. CONCEPCION, MANOLO
D. ESCANO, VENANCIO B. ACTA, PATROCENIO M. REYES,
YOLANDO B. BAUTISTA, JOB M. SAN BUENAVENTURA, and
BENJIE D. LIM, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, and GRACE MARINE & SHIPPING
CORPORATION, respondents.

DECISION
PADILLA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court which seeks to
annul the decision of the National Labor Relations Commission dated 29 April 1994 in
NLRC-NCR CA No. 00246 entitled Grace Marine & Shipping Corporation v. Rosselini L.
de la Cruz, et al. The NLRC affirmed, with modifications, the decision of the POEA
administrator dated 11 December 1991 in POEA Case No. 90-08-920 upholding the
legality of petitioners repatriation and dismissing for lack of merit petitioners
counterclaim of illegal dismissal and non-payment of their salaries for the unexpired
portion of their contract. The POEA held petitioners solidarily liable to pay the sum of
US$19,114.83 (or its peso equivalent) to Grace Marine and Shipping Corporation as
repatriation expenses and 5% attorneys fees. Petitioners were also suspended by the
POEA for overseas employment for a period of one (1) year upon promulgation of its
decision and their names were listed under the POEA watch list.
The facts, as established by the parties respective evidence, are as follows:
In October 1989, petitioners, all seamen by profession, were hired by Sinkai
Shipping Co., Ltd. (SINKAI) through its local manning agent, private respondent Grace
Marine and Shipping Corporation, to form the Filipino complement aboard its vessel, the
M/V White Castle. In the course of their employment, petitioners discovered that the
shipowners, through the officers of M/V White Castle, were engaged in the practice of
double bookkeeping. Petitioners claimed that whenever the vessel was scheduled to
call port in the United State or in other countries ports where the International Transport
Workers Federation (ITF) maintains its presence, its officers required the Filipino crew
members to sign double payrolls. [1]

Petitioners also bewailed that they were not paid overtime pay for work rendered in
excess of ninety (90) hours under their POEA-approved contracts; that the shipmaster
did not provide adequate victualling for the Filipino crew; and that the shipmaster
refused to honor the stipulated holidays in their contract. They brought these complaints
to their (Filipino) second officer but the latter allegedly refused to act for fear of reprisal
from the shipowners.
When the M/V White Castle dropped anchor at Long Beach, California on 12 June
1990, petitioners brought their complaints before the nearest Center of Seamans Rights
(CSR). What happened next was disputed by petitioners and private respondents as
both parties pleaded contrasting versions of the incident.
Petitioners averred that the CSR advised them to return to the vessel not because
their claims were baseless, but because the CSR needed more documents in order to
show cause for interdicting the vessel. When their ITF lawyer confronted the ship
captain, the latter assured them that their grievances would be brought to the
shipowners and that there would be no retaliatory action for those who sought the
assistance of the CSR or ITF. Relying on their captains word, petitioners re-boarded the
vessel and returned to their respective posts. The vessel then sailed to Japan and upon
arriving thereat on 26 June 1990, petitioners were discharged and repatriated to the
Philippines on the ground of abandonment of work and desertion of the M/V White
Castle.
Private respondent presented a masters report dated 15 June 1990 prepared by
Cpt. Takemoto, master of the M/V White Castle, to traverse petitioners allegations. The [2]

report stated that petitioners abandoned their respective posts and disembarked from
the vessel without the captains permission in order to seek ITF intervention. In doing so,
petitioners not only violated their employment contracts and the general guidelines on
board the vessel, but also undermined the safety of the vessel which could not set sail
for Japan with an undermanned crew. Consequently, the ships schedule was
unnecessarily delayed for more than twenty-four (24) hours, which exposed the
shipowners to damage claims of the vessels charterers.
According to Capt. Takemoto, on 12 June 1990 at 1600 hrs., the M/V White Castle
had just completed loading its cargo of citrus at Long Beach, California and was
scheduled to sail out at 1700hrs. On the same day for Tokyo, Japan when the vessels
chief officer informed him that one Filipino crewmember named Gerardo Torres did not
return to the vessel since going on shore leave.
Despite this incident, Captain Takemoto decided to leave behind the missing
seaman and sail on schedule. However, at about 1645 hrs., a US Coast Guard marine
inspector came along side the vessel and requested permission to board and inspect
the same due to reports from the vessels Filipino crew that the vessels equipment,
facilities, and accommodation were below the accepted minimum safety standards. The
marine inspector inspected the vessel and found it to be seaworthy. Takemoto then
surmised that the Filipino crew deliberately made a false report to the US Coast Guard
in order to detain the vessel.
Shortly before 1700 hrs., Captain Takemoto was informed by his chief officer that
fourteen (14) Filipino crew members (except for the 2 officer and 3 officer) had
nd rd

suddenly disembarked from the vessel for no apparent reason. Captain Takemoto went
down the ship to verify the report and saw petitioners assembled at the pier. When
Takemoto confronted petitioners about their unauthorized disembarkation, he was met
by petitioners complaints about alleged unpaid wages, double bookkeeping, and poor
working conditions. According to Takemoto, the fourteen (14) Filipino crew then left the
pier aboard a bus provided by local ITF investigators.
Unable to secure a clearance from the US Coast Guard because the vessel lacked
the minimum safety manning requirements, Captain Takemoto immediately wired the
incident to the shipowners to verify the complaints of the Filipino crew members. In their
reply, the shipowners informed Captain Takemoto that the Filipino crew members have
been paid strictly according to their contracts and under the ITF JSU/AMOSUP CBA
wage scales, with the officers and engineers receiving additional pay. The remittances
of the home allotment pays of the seamen were also up-to-date. The shipowner then
advised the captain that they were dispatching six (6) Japanese crew members to meet
the required minimum safety manning requirements.Meanwhile, the Filipino 3 officerrd

disembarked from the ship to join cause with the fourteen (14) Filipino seamen.
The next day, 13 June 1990 at 1300 hrs., the fifteen (15) Filipino crew members
(petitioners) returned to the vessel under the escort of the US local immigration officers
who requested Captain Takemoto to accept them back to the ship because of their
irregular conduct as per immigration law. While Captain Takemoto knew that the claims
[3]

of the fifteen (15) Filipino crewmen were baseless, he was not in a position to ignore the
request of the immigration officers. Petitioners, who were accompanied by an ITF
lawyer, then demanded that they will only resume work on board the ship if the captain
will sign an ITF prepared agreement condoning the incident.
To prevent any further disruptive action by the petitioners and to avert any further
damage to the shipowners and charterers, Captain Takemoto decided to swallow their
unreasonable demands to save the situation. Eventually, Captain Takemoto signed the
agreement and stationed the Filipino crewmen on the ships deck and in the engine
[4]

room. The M/V White Castle finally left Long Beach at 1715 hrs. on 13 June 1990.
While the M/V White Castle was in transit, Grace Marine and Shipping Corporation
received a telex on 14 June 1990 from its foreign principal, SINKAI narrating the Long
Beach incident. On the same day, Grace Marine and Shipping Corporation Furnished
the POEA a copy of the SINKAI telex and requested the agency to blacklist the fifteen
(15) Filipino seamen (petitioners) and to order their suspension due to their grievous
offenses which caused not only heavy losses to the shipowners and charterers but also
tainted the business name of Sinkai in particular and the reputation of all Filipino
seamen in general. On 15 August 1990, Grace Marine filed a formal complaint for
disciplinary action against petitioners before the POEA.
In upholding the claim of Grace Marine, the POEA administrator held that
Respondents were not only illegally terminated but were terminated for valid cause
when they abandoned their respective posts on board their vessel in gross violation of
their POEA approved contract. This fact is sufficiently and clearly established by the
evidence presented by the complainant. Even granting that respondents have valid
grievances against the officers or shipowners with respect to compensation or working
condition, this office cannot countenance respondents act of simply ignoring their
employment contract approved by the POEA which provides a sufficient mechanism
for redressing whatever grievances they have thru their grievance machinery. x x x.

xxx xxx xxx

Respondents act of seeking the intervention of the ITF/CSR without exhausting first
the remedies provided under the Grievance Machinery provision of their duly
approved POEA contract constitutes a serious breach of such contract for which
penalty of dismissal and suspension is in order. We find respondents allegation that
they notify [sic] their second officer of their grievances bereft of truth for we find no
sufficient evidence substantiating and corroborating this allegation. In this light, it is
but just that respondents reimburse complainant of the sum of US$19,114.83 which
the latter incurred for their repatriation and replacement.

We find respondents allegation of illegal dismissal and counterclaim for salary for the unexpired
portion of the contract without merit.
[5]

On appeal, the NLRC deleted the award of $19,114.83 representing repatriation

expenses and 5% attorneys fees for being uncalled for but upheld petitioners dismissal
[6]

based on a separate factual finding which appears to be in conflict with that of the
POEA decision, thus

Significantly, the parties, at the inception of the whole controversy were at fault,
giving both of them no recourse at law. Indeed, when respondents were allowed to re-
embark at Long Beach, California, after allegedly having abandoned their
vessel, which however, was truthfully refuted by respondents, a sense of qualm if not
mitigation of complainants indiscretion towards the crews grievance, could
understandably have been contemplated.

Consequently, for the complainant to renege from their agreement thru its vessels
master that no adverse repercussion will be meted on respondents act is tantamount to
treahery, thereby leaving respondents in the quagmire of helplessness.

Further, it would be highly irregular and unfair if only the respondents are made to
suffer from fault, the very root of which was not their own doing. Otherwise,
discrimination against Filipino seafarers will flourish, an eventuality surely
destructive of the countrys good name.
Even respondents dismissal were [sic] in disregard of due process of law. On this
basis alone, the complainant cannot be left unadmonished. (emphasis supplied)
[7]

In the case at bar, petitioners raise two (2) issues:

I

Whether or not the NLRC acted with grave abuse of discretion amounting to lack of
and/or in excess of jurisdiction when it did not annul and set aside the decision of the
POEA based on its own conclusion that petitioners did not abandon their work.

II

Whether or not the NLRC acted with grave abuse of discretion amounting to lack of
or in excess of jurisdiction in not awarding petitioners counterclaim despite its finding
that petitioners dismissal were [sic] in disregard of due process of law.

Petitioners contend that the NLRC dismissed private respondents allegations of

abandonment and breach of contract against them for lack of factual basis; meaning,
there was no just cause for their dismissal and repatriation. The NLRC also held that
they were dismissed without due process of law. Since the POEAs decision justified
petitioners suspension and the recovery of repatriation expenses by private respondent
based on abandonment of work, then the NLRC should have set aside both orders
when it held that the matter of alleged abandonment of the vessel was truthfully refuted
by petitioners.
Petitioners further contend that neither the POEA nor the NLRC found evidence of
deliberate, unjustified refusal of an employee to resume his employment. The fact that
[8]

they sought the CSR or ITF intervention cannot be taken as overt acts which unerringly
show that the employee does not want to work anymore, but as a legitimate exercise of
[9]

their freedom of expression to improve the terms and conditions of their

employment. Besides, the act of seeking intervention of the ITF or CSR, or any other
group is not even an offense under the Table of Offenses and Correspondent
Administrative Penalties in the POEA Standard Contract. Therefore, the POEA had no
[10]

basis to hold that petitioners seriously breached their POEA approved contracts when
they failed to follow its grievance machinery provisions. There being a clear case of
illegal dismissal, they should be awarded their salaries for the unexpired portion of their
contract.
In its memorandum, private respondent argues that both the NLRC and the POEA
[11]

found substantial evidence which showed that petitioners breached their contracts when
they abandoned their respective posts on 12 June 1990 which unnecessarily delayed
the schedule of M/V White Castle and caused it to suffer US $19,114.83 in repatriation
expenses. However, petitioners have misinterpreted the NLRC decision to mean that
private respondent was guilty of illegal dismissal and should be made to pay their
salaries corresponding to the unexpired portion of their contracts.
 In private respondents view, the NLRCs statement that at the inception of the whole
controversy the parties were at fault, giving both of them no recourse at law and that the
decision appealed from to some extent must be left unmolested meant that the NLRC
upheld the factual findings and the conclusions of the POEA administrator except that it
deleted the award of repatriation expenses and 5% attorneys fees for lack of factual and
legal bases.
In a separate comment, the Solicitor-General notes that despite the NLRCs finding
[12]

that the petitioners dismissal were in disregard of due process of law and that there was
no abandonment of work committed by petitioners, the NLRC held that both parties
were at fault, giving both of them no recourse at law. Whatever the NLRC meant in such
a cryptic statement was not explained in its decision. The Solicitor-General surmises
that the alleged fault imputed to petitioners was in their act of complaining to the CSR
that delayed the scheduled departure of the vessel, since the absence of some of the
crew, who were then complaining to the CSR, rendered the vessel unseaworthy and
unable to leave as scheduled. [13]

Be that as it may, the Solicitor-General invokes the ruling laid down by this Court in
Wallem Philippine Shipping v. Minister of Labor (102 SCRA 835 [1981]), Virjen Shipping
and Marine Services v. NLRC (125 SCRA 577 [1983]), and Susara v. Benipayo (176
SCRA 465 [1989]), which held that complaints by seamen to the ITF or similar
organizations to protect and uphold their rights are protected activities under the right to
freedom of expression and cannot be a just cause for termination of employment.
In its separate comment, the NLRC contends otherwise. The NLRC argues that
[14]

the filing of the petition for certiorari by petitioners was premature since petitioners did
not file a motion for reconsideration of the NLRC decision. And even
assuming arguendo that petitioners can properly file a petition for certiorari under Rule
65, the same should be dismissed because petitioners have raised only factual issues
in their petition.
The petition is impressed with merit.
Under Art. 282 of the Labor Code, an employer may terminate an employment for
any of the following causes:

(a) serious misconduct or wilfull disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;

(b) gross and habitual neglect by the employee of his duties;

(c) fraud or wilfull breach by the employee of the trust reposed in him by his
employer or duly authorized representative;

(d) commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representative;
(e) other causes analogous to the foregoing.

In termination cases, the employer has the burden of proof to establish the
existence of a valid cause in order to effect a valid dismissal. A valid dismissal, in turn,
presupposes not only the validity of its cause, but also the validity of the manner by
which the dismissal is done.
The POEA held that petitioners sought the intervention of the ITF/CSR without prior
resort to the grievance machinery provision in their seamans contract and this action
constitutes a serious breach of such contract for which a penalty of dismissal is in
order. However, the masters report prepared by Capt. Takemoto disclosed that
petitioners expressed their intentions to resume work aboard the M/V white Castle
provided the captain would sign an ITF prepared agreement condoning the incident;
that is in seeking the CSR intervention shortly before the vessels departure for Tokyo,
Japan. The captain reported that he finally decided to swallow their (petitioners)
unreasonable demands to save the situation, which seems to imply that the fate of the
vessel was at the mercy of petitioners. Upon the other hand, the statement also lends
credence to petitioners claim that the captain assured them that the incident would have
no adverse effect on their employment. Unknown to petitioners, the captain reneged on
their agreement and requested the shipowners that petitioners be replaced upon the
vessels arrival in Tokyo, Japan.
The issue is really whether or not the act of petitioners in seeking CSR (or ITF)
intervention, and the alleged manner in which it was carried out, constitute a just cause
for terminating their employment under Art. 282 of the Labor Code, and whether or not
petitioners were given due process before they were repatriated to the Philippines.
The report of Capt. Takemoto clearly stated that petitioners complained about
alleged unpaid wages, double bookkeeping and poor working conditions before they
boarded a bus provided by local ITF investigators. This circumstances presupposes that
the local CSR otr ITF had been sought earlier by the petitioners which explains the
presence of the bus on the pier.Needless to sa, some of the petitioners have gone
earlier to the CSR or ITF to ask for help even before their disembarkation shortly before
1700 hrs. on 12 June 1990. And in doing so, there is no evidence that they used force,
violence, intimidation, or any illegal means in order to bring their alleged plight to the
attention of the CSR.
In Suzara v. Benipayo, the Court took judicial notice of the worldwide militancy of
the ITF in interdicting foreign vessels and in demanding wage increases for third world
seamen.Interdiction is nothing more than a refusal of ITF members to render service for
the ship, such as to load or unload its cargo, to provision it or to perform such other
chores ordinarily incident to the docking of the ship at a certain point. That in most
[15]

cases, there was even no need for Filipino or other seamen to seek ITF intervention
because the ITF acts on its own volition in all ITF controlled ports not out of pure
altruism but in protecting the interest of its own members.[16]

Thus, when petitioners brought their complaints to the CSR-ITF, the captain cannot
be unaware of the possibility of interdiction which might further complicate the vessels
delay in schedule. If it were indeed true that petitioners claims were entirely baseless,
how could petitioners ITF lawyer even force the ship captain to sign the agreement
condoning the incident?Whatever the case, Capt, Takemoto agreed to petitioners
demand that no retaliatory action would befall those who sought the CSR-ITFs
help. Apparently, the captain brached the agreement when he recommended to the
shipowners petitioners repatriation. The shipowners sent a telex to its local manning
agent Grace Marine and Shipping Corporation as early as 14 June 1990 which in turn
furnished the POEA on the same day with a copy of said telex with a prayer to blacklist
petitioners.
The precipitate haste in which private respondent resolved to have petitioners
blacklisted even before the vessels arrival in Japan on 26 June 1990 not only confirms
Capt. Takemotos false assurances, but more importantly, these actions show the
complete absence of due process in the manner of petitioners repatriation. There is no
evidence on record which would established that petitioners were served written notices
stating the particular acts or omission constituting the grounds for their
repatriation. There is also no evidence to show that petitioners were given an
opportunity to answer the charges against them and hear their defenses. The records
are also silent if petitioners were furnished written notices of repatriation.
The Court notes that under Article XIII of the General Instructions issued by the
shipowners, it is provided that, [I]n case of dismissal, as per AMOSUP request being
rather strict, please exercise 2/3 notices to seamen before repatriating such erring crew
for settling matters smoothly in Manila. The General Instruction also outlined the
procedure to be taken for repatriation of the crew, that is, the master and the 2/0
(second officer, who is a Filipino) shall call a disciplinary meeting and the master shall
give a first or second warning depending on the number of times the same mistake is
committed, and for the 3 mistake, the master will recommend the crews replacement.
rd [17]

The Court has gone over the list of violations contained in the General Instructions
and nowhere is it stated that the act of seeking ITF intervention is a cause for
repatriation. Neither can we view petitioners act of going to the CSR or ITF as serious
misconduct or gross and habitual neglect of duty. They decided to seek outside the
intervention when their second officer ignored their grievances. The fact that the Filipino
3 officer eventually joined their cause gives credence to this allegation.
rd

If it were indeed true, as the POEA held, that petitioners ignored the grievance
machinery in by-passing their 2/0, the best evidence to established this fact would have
to come from the 2/0 himself who should have executed a specific denial that petitioners
never brought their grievances to him.
We agree with the Solicitor-General that the ruling in the cases of Wallem, Virjen,
and Suzara should be applied in the case at bar. In these cases the Filipino seamen
concerned applied effective pressure on their employers by raising the possibility of ITF
interdiction should their demands remain unheeded.
In petitioners case, it cannot be said that they acted unreasonably, oppressively or
maliciously in going to the ITF-CSR. At that time, they had reasonable grounds to
believe that private respondents were involved in double-bookkeeping, unpaid wages
and poor working conditions. They cannot be held guilty of abandonment or decision in
the absence of substantial evidence that they disembarked from the vessel with the
intention never to return to their post.
In sum, we hold that the NLRC gravely abused its discretion when it failed to grant
petitioners counterclaim of illegal dismissal after finding that there was no just cause
and due process in their repatriation. As we held in Wallem, there is a breach of
contract when seamen are dismissed without just cause and prior to the expiration of
the employment contracts and are entitled to collect from the owners or agent of the
vessel their unpaid salaries for the period they were engaged to render the services. [18]

WHEREFORE, the decision of the NLRC is hereby SET ASIDE. The POEAs order
of suspension for overseas employment for one year against petitioners is REVOKED
and petitioners names are hereby ordered DELISTED in, or removed from the watchlist
of the POEA. Private respondent Grace Marine Shipping Corporation is hereby ordered
to pay petitioners their respective salaries for the unexpired portion of their employment
contracts, the computation of which is referred to the NLRC for proper execution.
SO ORDERED.
Bellosillo, Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.

[1]
Annex B; B-1, rollo, pp.31-32.
[2]
Annex A, rollo, p. 38.
[3]
Annex B, Original Records, p. 232. It appears that petitioners conditional landing permits were revoked
by the US Immigration on 12 June 1990 as a precaution due to their failure to reboard the vessel
on the same day.
[4]
Annex C, Original Records. P. 210. The agreement itself was not presented in evidence but was
repeatedly mentioned in the masters report and in the telex sent by Sinkai Shipping to private
respondent Grace Marine on 14 June 1990.
[5]
Rollo, pp. 58-60.
[6]
Rollo, p. 100
[7]
Rollo, pp. 100-101.
[8]
Citing Batangas Laguan Tayabas Co. v. NLRC, 212 SCRA 792.
[9]
Supra.
[10]
Rollo, p. 12.
[11]
Rollo, pp. 167-178. (Private respondent adopted its comment on the petition as its memorandum, Rollo,
p 179)
[12]
Rollo, pp. 136-145.
[13]
Rollo, p. 141.
[14]
Rollo, pp. 200-204.
[15]
176 SCRA 465 (1989) at pp. 474-475.
[16]
Ibid.
[17]
Annex A, Rollo, pp. 26-29.
[18]
102 SCRA 835 at p. 842, citing Madrigal v. Ogline (104 Phil. 748). Philgrecian Maritime
Services v NLRC (139 SCRA 285) at p. 294.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

EDI-STAFFBUILDERS G.R. No. 145587

INTERNATIONAL, INC.,
Petitioner,
Present:
QUISUMBING, J., Chairperson,
- versus - CARPIO,
TINGA,
VELASCO, JR., and
NACHURA,* JJ.
NATIONAL LABOR RELATIONS
COMMISSION and Promulgated:
ELEAZAR S. GRAN,
Respondents. October 26, 2007
x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

 The Case

This Petition for Review on Certiorari[1] seeks to set aside

the October 18, 2000 Decision[2] of the Court of Appeals (CA) in
CA-G.R. SP No. 56120 which affirmed the January 15, 1999
Decision[3] and September 30, 1999 Resolution[4] rendered by
the National Labor Relations Commission (NLRC) (Third Division)
in POEA ADJ (L) 94-06-2194, ordering Expertise Search
International (ESI), EDI-Staffbuilders International, Inc. (EDI),
and Omar Ahmed Ali Bin Bechr Est. (OAB) jointly and severally
to pay Eleazar S. Gran (Gran) the amount of USD 16,150.00 as
unpaid salaries.
The Facts

Petitioner EDI is a corporation engaged in recruitment and

placement of Overseas Filipino Workers (OFWs). [5] ESI is another
recruitment agency which collaborated with EDI to process the
documentation and deployment of private respondent to Saudi
Arabia.

Private respondent Gran was an OFW recruited by EDI, and

deployed by ESI to work for OAB, in Riyadh, Kingdom of Saudi
Arabia.[6]

It appears that OAB asked EDI through its October 3, 1993 letter
for curricula vitae of qualified applicants for the position of
Computer Specialist.[7] In a facsimile transmission
dated November 29, 1993, OAB informed EDI that, from the
applicants curricula vitae submitted to it for evaluation, it
selected Gran for the position of Computer Specialist.The faxed
letter also stated that if Gran agrees to the terms and conditions
of employment contained in it, one of which was a monthly salary
of SR (Saudi Riyal) 2,250.00 (USD 600.00), EDI may arrange for
Grans immediate dispatch.[8]

After accepting OABs offer of employment, Gran signed an

employment contract[9] that granted him a monthly salary of USD
850.00 for a period of two years. Gran was then deployed
to Riyadh, Kingdom of Saudi Arabia on February 7, 1994.

Upon arrival in Riyadh, Gran questioned the discrepancy in his

monthly salaryhis employment contract stated USD 850.00; while
his Philippine Overseas Employment Agency (POEA) Information
Sheet indicated USD 600.00 only. However, through the
assistance of the EDI office in Riyadh, OAB agreed to pay Gran
USD 850.00 a month.[10]

After Gran had been working for about five months for OAB, his
employment was terminated through OABs July 9, 1994 letter,
[11]
on the following grounds:

1. Non-compliance to contract requirements by the recruitment

agency primarily on your salary and contract duration.

2. Non-compliance to pre-qualification requirements by the

recruitment agency[,] vide OAB letter ref. F-5751-93, dated October 3,
1993.[12]

3. Insubordination or disobedience to Top Management Order

and/or instructions (non-submittal of daily activity reports despite
several instructions).
 On July 11, 1994, Gran received from OAB the total amount
of SR 2,948.00 representing his final pay, and on the same day,
he executed a Declaration[13] releasing OAB from any financial
obligation or otherwise, towards him.

After his arrival in the Philippines, Gran instituted a complaint,

on July 21, 1994, against ESI/EDI, OAB, Country Bankers Insurance
Corporation, and Western Guaranty Corporation with the NLRC,
National Capital Region, Quezon City, which was docketed as
POEA ADJ (L) 94-06-2194 for underpayment of wages/salaries and
illegal dismissal.

The Ruling of the Labor Arbiter

In his February 10, 1998 Decision,[14] Labor Arbiter Manuel R.

Caday, to whom Grans case was assigned, ruled that there was
neither underpayment nor illegal dismissal.

The Labor Arbiter reasoned that there was no underpayment of

salaries since according to the POEA-Overseas Contract Worker
(OCW) Information Sheet, Grans monthly salary was USD 600.00,
and in his Confirmation of Appointment as Computer Specialist,
his monthly basic salary was fixed at SR 2,500.00, which was
equivalent to USD 600.00.
 Arbiter Caday also cited the Declaration executed by Gran, to
justify that Gran had no claim for unpaid salaries or wages against
OAB.

With regard to the issue of illegal dismissal, the Labor Arbiter

found that Gran failed to refute EDIs allegations; namely, (1) that
Gran did not submit a single activity report of his daily activity as
dictated by company policy; (2) that he was not qualified for the
job as computer specialist due to his insufficient knowledge in
programming and lack of knowledge in ACAD system; (3) that
Gran refused to follow managements instruction for him to gain
more knowledge of the job to prove his worth as computer
specialist; (4) that Grans employment contract had never been
substituted; (5) and that Gran was paid a monthly salary of USD
850.00, and USD 350.00 monthly as food allowance.

Accordingly, the Labor Arbiter decided that Gran was validly

dismissed from his work due to insubordination, disobedience,
and his failure to submit daily activity reports.

Thus, on February 10, 1998, Arbiter Caday dismissed Grans

complaint for lack of merit.

Dissatisfied, Gran filed an Appeal[15] on April 6, 1998 with the

NLRC, Third Division. However, it appears from the records that
Gran failed to furnish EDI with a copy of his Appeal Memorandum.

The Ruling of the NLRC

 The NLRC held that EDIs seemingly harmless transfer of
Grans contract to ESI is actually reprocessing, which is a
prohibited transaction under Article 34 (b) of the Labor Code. This
scheme constituted misrepresentation through the conspiracy
between EDI and ESI in misleading Gran and even POEA of the
actual terms and conditions of the OFWs employment. In addition,
it was found that Gran did not commit any act that constituted a
legal ground for dismissal. The alleged non-compliance with
contractual stipulations relating to Grans salary and contract
duration, and the absence of pre-qualification requirements
cannot be attributed to Gran but to EDI, which dealt directly with
OAB. In addition, the charge of insubordination was not
substantiated, and Gran was not even afforded the required
notice and investigation on his alleged offenses.

Thus, the NLRC reversed the Labor Arbiters Decision and

rendered a new one, the dispositive portion of which reads:

WHEREFORE, the assailed decision is SET ASIDE. Respondents

Expertise Search International, Inc., EDI Staffbuilders Intl., Inc. and
Omar Ahmed Ali Bin Bechr Est. (OAB) are hereby ordered jointly and
severally liable to pay the complainant Eleazar Gran the Philippine
peso equivalent at the time of actual payment of SIXTEEN THOUSAND
ONE HUNDRED FIFTY US DOLLARS (US$16,150.00) representing his
salaries for the unexpired portion of his contract.

SO ORDERED.[16]

Gran then filed a Motion for Execution of Judgment [17] on March

29, 1999 with the NLRC and petitioner receiving a copy of this
motion on the same date.[18]
 To prevent the execution, petitioner filed an Opposition [19] to
Grans motion arguing that the Writ of Execution cannot issue
because it was not notified of the appellate proceedings before
the NLRC and was not given a copy of the memorandum of appeal
nor any opportunity to participate in the appeal.

Seeing that the NLRC did not act on Grans motion after EDI
had filed its Opposition, petitioner filed, on August 26, 1999, a
Motion for Reconsideration of the NLRC Decision after receiving a
copy of the Decision on August 16, 1999.[20]

The NLRC then issued a Resolution [21] denying petitioners

Motion for Reconsideration, ratiocinating that the issues and
arguments raised in the motion had already been amply
discussed, considered, and ruled upon in the Decision, and that
there was no cogent reason or patent or palpable error that
warrant any disturbance thereof.

Unconvinced of the NLRCs reasoning, EDI filed a Petition

for Certiorari before the CA. Petitioner claimed in its petition that
the NLRC committed grave abuse of discretion in giving due
course to the appeal despite Grans failure to perfect the appeal.

The Ruling of the Court of Appeals

The CA subsequently ruled on the procedural and substantive

issues of EDIs petition.

On the procedural issue, the appellate court held that Grans

failure to furnish a copy of his appeal memorandum [to EDI was] a
mere formal lapse, an excusable neglect and not a jurisdictional
defect which would justify the dismissal of his appeal. [22] The court
also held that petitioner EDI failed to prove that private
respondent was terminated for a valid cause and in accordance
with due process; and that Grans Declaration releasing OAB from
any monetary obligation had no force and effect. The appellate
court ratiocinated that EDI had the burden of proving Grans
incompetence; however, other than the termination letter, no
evidence was presented to show how and why Gran was
considered to be incompetent. The court held that since the law
requires the recruitment agencies to subject OFWs to trade tests
before deployment, Gran must have been competent and
qualified; otherwise, he would not have been hired and deployed
abroad.

As for the charge of insubordination and disobedience due to

Grans failure to submit a Daily Activity Report, the appellate court
found that EDI failed to show that the submission of the Daily
Activity Report was a part of Grans duty or the companys
policy. The court also held that even if Gran was guilty of
insubordination, he should have just been suspended or
reprimanded, but not dismissed.

The CA also held that Gran was not afforded due process, given
that OAB did not abide by the twin notice requirement. The court
found that Gran was terminated on the same day he received the
termination letter, without having been apprised of the bases of
his dismissal or afforded an opportunity to explain his side.

Finally, the CA held that the Declaration signed by Gran did not
bar him from demanding benefits to which he was entitled. The
appellate court found that the Declaration was in the form of a
quitclaim, and as such is frowned upon as contrary to public
policy especially where the monetary consideration given in the
Declaration was very much less than what he was legally
entitled tohis backwages amounting to USD 16,150.00.

As a result of these findings, on October 18, 2000, the appellate

court denied the petition to set aside the NLRC Decision.

Hence, this instant petition is before the Court.

The Issues

Petitioner raises the following issues for our consideration:

I. WHETHER THE FAILURE OF GRAN TO FURNISH A COPY OF HIS

APPEAL MEMORANDUM TO PETITIONER EDI WOULD CONSTITUTE A
JURISDICTIONAL DEFECT AND A DEPRIVATION OF PETITIONER EDIS
RIGHT TO DUE PROCESS AS WOULD JUSTIFY THE DISMISSAL OF
GRANS APPEAL.

II. WHETHER PETITIONER EDI HAS ESTABLISHED BY WAY OF

SUBSTANTIAL EVIDENCE THAT GRANS TERMINATION WAS JUSTIFIABLE
BY REASON OF INCOMPETENCE. COROLLARY HERETO, WHETHER THE
PRIETO VS. NLRC RULING, AS APPLIED BY THE COURT OF APPEALS, IS
APPLICABLE IN THE INSTANT CASE.

III. WHETHER PETITIONER HAS ESTABLISHED BY WAY OF SUBSTANTIAL

EVIDENCE THAT GRANS TERMINATION WAS JUSTIFIABLE BY REASON OF
INSUBORDINATION AND DISOBEDIENCE.

IV. WHETHER GRAN WAS AFFORDED DUE PROCESS PRIOR TO

TERMINATION.
 V. WHETHER GRAN IS ENTITLED TO BACKWAGES FOR THE UNEXPIRED
PORTION OF HIS CONTRACT.[23]

The Courts Ruling

The petition lacks merit except with respect to Grans failure to

furnish EDI with his Appeal Memorandum filed with the NLRC.

First Issue: NLRCs Duty is to Require Respondent to

Provide Petitioner a Copy of the Appeal

Petitioner EDI claims that Grans failure to furnish it a copy of the

Appeal Memorandum constitutes a jurisdictional defect and a
deprivation of due process that would warrant a rejection of the
appeal.

This position is devoid of merit.

In a catena of cases, it was ruled that failure of appellant to

furnish a copy of the appeal to the adverse party is not
fatal to the appeal.

In Estrada v. National Labor Relations Commission,[24] this Court

set aside the order of the NLRC which dismissed an appeal on the
sole ground that the appellant did not furnish the appellee a
memorandum of appeal contrary to the requirements of Article
223 of the New Labor Code and Section 9, Rule XIII of its
Implementing Rules and Regulations.
Also, in J.D. Magpayo Customs Brokerage Corp. v. NLRC, the order
of dismissal of an appeal to the NLRC based on the ground
that there is no showing whatsoever that a copy of the appeal
was served by the appellant on the appellee [25] was annulled. The
Court ratiocinated as follows:

The failure to give a copy of the appeal to the adverse party was a mere formal
lapse, an excusable neglect. Time and again We have acted on petitions to review
decisions of the Court of Appeals even in the absence of proof of service of a
copy thereof to the Court of Appeals as required by Section 1 of Rule 45, Rules of
Court. We act on the petitions and simply require the petitioners to comply
with the rule.[26] (Emphasis supplied.)

The J.D. Magpayo ruling was reiterated

in Carnation Philippines Employees Labor Union-FFW v. National
Labor Relations Commission, [27] Pagdonsalan v. NLRC,[28]and
in Sunrise Manning Agency, Inc. v. NLRC.[29]

Thus, the doctrine that evolved from these cases is that failure to
furnish the adverse party with a copy of the appeal is treated only
as a formal lapse, an excusable neglect, and hence, not a
jurisdictional defect. Accordingly, in such a situation, the appeal
should not be dismissed; however, it should not be given due
course either. As enunciated in J.D. Magpayo, the duty that is
imposed on the NLRC, in such a case, is to require the
appellant to comply with the rule that the opposing party
should be provided with a copy of the appeal
memorandum.
While Grans failure to furnish EDI with a copy of the Appeal Memorandum is
excusable, the abject failure of the NLRC to order Gran to furnish EDI with the
Appeal Memorandum constitutes grave abuse of discretion.

The records reveal that the NLRC discovered that Gran failed to furnish EDI a
copy of the Appeal Memorandum. The NLRC then ordered Gran to present proof
of service. In compliance with the order, Gran submitted a copy of Camp Crame
Post Offices list of mail/parcels sent on April 7, 1998.[30] The post offices list
shows that private respondent Gran sent two pieces of mail on the same date: one
addressed to a certain Dan O. de Guzman of Legaspi Village, Makati; and the other
appears to be addressed to Neil B. Garcia (or Gran),[31] of Ermita, Manilaboth of
whom are not connected with petitioner.

This mailing list, however, is not a conclusive proof that EDI indeed
received a copy of the Appeal Memorandum.

Sec. 5 of the NLRC Rules of Procedure (1990) provides for the proof and
completeness of service in proceedings before the NLRC:

SECTION 5.[32] Proof and completeness of service.The return is prima

facie proof of the facts indicated therein. Service by registered mail is complete
upon receipt by the addressee or his agent; but if the addressee fails to claim
his mail from the post office within five (5) days from the date of first notice of
the postmaster, service shall take effect after such time. (Emphasis supplied.)
 Hence, if the service is done through registered mail, it is only deemed
complete when the addressee or his agent received the mail or after five (5) days
from the date of first notice of the postmaster. However, the NLRC Rules do not
state what would constitute proper proof of service.

Sec. 13, Rule 13 of the Rules of Court, provides for proofs of service:

SECTION 13. Proof of service.Proof of personal service shall consist of a written

admission of the party served or the official return of the server, or the affidavit of
the party serving, containing a full statement of the date, place and manner of
service. If the service is by ordinary mail, proof thereof shall consist of an
affidavit of the person mailing of facts showing compliance with section 7 of this
Rule. If service is made by registered mail, proof shall be made by such
affidavit and registry receipt issued by the mailing office. The registry return
card shall be filed immediately upon its receipt by the sender, or in lieu
thereof the unclaimed letter together with the certified or sworn copy of the
notice given by the postmaster to the addressee (emphasis supplied).

Based on the foregoing provision, it is obvious that the list submitted by

Gran is not conclusive proof that he had served a copy of his appeal memorandum
to EDI, nor is it conclusive proof that EDI received its copy of the Appeal
Memorandum. He should have submitted an affidavit proving that he mailed the
Appeal Memorandum together with the registry receipt issued by the post office;
afterwards, Gran should have immediately filed the registry return card.

Hence, after seeing that Gran failed to attach the proof of service, the NLRC
should not have simply accepted the post offices list of mail and parcels sent; but it
should have required Gran to properly furnish the opposing parties with
copies of his Appeal Memorandum as prescribed in J.D. Magpayo and the
other cases. The NLRC should not have proceeded with the adjudication of the
case, as this constitutes grave abuse of discretion.
The glaring failure of NLRC to ensure that Gran should have furnished petitioner
EDI a copy of the Appeal Memorandum before rendering judgment reversing the
dismissal of Grans complaint constitutes an evasion of the pertinent NLRC Rules
and established jurisprudence. Worse, this failure deprived EDI of procedural due
process guaranteed by the Constitution which can serve as basis for the
nullification of proceedings in the appeal before the NLRC. One can only surmise
the shock and dismay that OAB, EDI, and ESI experienced when they thought that
the dismissal of Grans complaint became final, only to receive a copy of Grans
Motion for Execution of Judgment which also informed them that Gran had
obtained a favorable NLRC Decision. This is not level playing field and absolutely
unfair and discriminatory against the employer and the job recruiters. The rights of
the employers to procedural due process cannot be cavalierly disregarded for they
too have rights assured under the Constitution.

However, instead of annulling the dispositions of the NLRC and

remanding the case for further proceedings we will resolve the
petition based on the records before us to avoid a protracted
litigation.[33]

The second and third issues have a common matterwhether there

was just cause for Grans dismissalhence, they will be discussed
jointly.

Second and Third Issues: Whether Grans dismissal is

justifiable by reason of incompetence,
insubordination, and disobedience

In cases involving OFWs, the rights and obligations among and

between the OFW, the local recruiter/agent, and the foreign
employer/principal are governed by the employment contract. A
contract freely entered into is considered law between the
parties; and hence, should be respected. In formulating the
contract, the parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided
they are not contrary to law, morals, good customs, public order,
or public policy.[34]

In the present case, the employment contract signed by

Gran specifically states that Saudi Labor Laws will govern matters
not provided for in the contract (e.g. specific causes for
termination, termination procedures, etc.). Being the law intended
by the parties (lex loci intentiones) to apply to the contract, Saudi
Labor Laws should govern all matters relating to the termination
of the employment of Gran.

In international law, the party who wants to have a foreign

law applied to a dispute or case has the burden of proving the
foreign law. The foreign law is treated as a question of fact to be
properly pleaded and proved as the judge or labor arbiter cannot
take judicial notice of a foreign law. He is presumed to know only
domestic or forum law.[35]

Unfortunately for petitioner, it did not prove the pertinent

Saudi laws on the matter; thus, the International Law doctrine
of presumed-identity approach or processual presumption comes
into play.[36] Where a foreign law is not pleaded or, even if
pleaded, is not proved, the presumption is that foreign law is the
same as ours.[37] Thus, we apply Philippine labor laws in
determining the issues presented before us.
 Petitioner EDI claims that it had proven that Gran was legally
dismissed due to incompetence and insubordination or
disobedience.

This claim has no merit.

In illegal dismissal cases, it has been established by Philippine law

and jurisprudence that the employer should prove that the
dismissal of employees or personnel is legal and just.

Section 33 of Article 277 of the Labor Code[38] states that:

ART. 277. MISCELLANEOUS PROVISIONS[39]

(b) Subject to the constitutional right of workers to security of tenure

and their right to be protected against dismissal except for a just and
authorized cause and without prejudice to the requirement of notice
under Article 283 of this Code, the employer shall furnish the worker
whose employment is sought to be terminated a written notice
containing a statement of the causes for termination and shall afford
the latter ample opportunity to be heard and to defend himself with
the assistance of his representative if he so desires in accordance with
company rules and regulations promulgated pursuant to guidelines set
by the Department of Labor and Employment. Any decision taken by
the employer shall be without prejudice to the right of the workers to
contest the validity or legality of his dismissal by filing a complaint with
 the regional branch of the National Labor Relations Commission. The
burden of proving that the termination was for a valid or
authorized cause shall rest on the employer. x x x

In many cases, it has been held that in termination disputes

or illegal dismissal cases, the employer has the burden of proving
that the dismissal is for just and valid causes; and failure to do so
would necessarily mean that the dismissal was not justified and
therefore illegal.[40] Taking into account the character of the
charges and the penalty meted to an employee, the employer is
bound to adduce clear, accurate, consistent, and convincing
evidence to prove that the dismissal is valid and legal. [41] This is
consistent with the principle of security of tenure as guaranteed
by the Constitution and reinforced by Article 277 (b) of the Labor
Code of the Philippines.[42]
In the instant case, petitioner claims that private respondent Gran
was validly dismissed for just cause, due to incompetence and
insubordination or disobedience. To prove its allegations, EDI
submitted two letters as evidence. The first is the July 9, 1994
termination letter,[43] addressed to Gran, from Andrea E. Nicolaou,
Managing Director of OAB.The second is an unsigned April 11,
1995 letter[44] from OAB addressed to EDI and ESI, which outlined
the reasons why OAB had terminated Grans employment.

Petitioner claims that Gran was incompetent for the Computer

Specialist position because he had insufficient knowledge in
programming and zero knowledge of [the] ACAD system.
[45]
Petitioner also claims that Gran was justifiably dismissed due
to insubordination or disobedience because he continually failed
to submit the required Daily Activity Reports. [46] However, other
than the abovementioned letters, no other evidence was
presented to show how and why Gran was considered
incompetent, insubordinate, or disobedient. Petitioner EDI had
clearly failed to overcome the burden of proving that Gran was
validly dismissed.

Petitioners imputation of incompetence on private respondent due

to his insufficient knowledge in programming and zero knowledge
of the ACAD system based only on the above mentioned letters,
without any other evidence, cannot be given credence.
An allegation of incompetence should have a factual foundation.
Incompetence may be shown by weighing it against a standard,
benchmark, or criterion. However, EDI failed to establish any such
bases to show how petitioner found Gran incompetent.

In addition, the elements that must concur for the charge of

insubordination or willful disobedience to prosper were not
present.

In Micro Sales Operation Network v. NLRC, we held that:

For willful disobedience to be a valid cause for dismissal, the following

twin elements must concur: (1) the employee's assailed conduct must
have been willful, that is, characterized by a wrongful and perverse
attitude; and (2) the order violated must have been reasonable, lawful,
made known to the employee and must pertain to the duties which he
had been engaged to discharge.[47]

EDI failed to discharge the burden of proving Grans

insubordination or willful disobedience. As indicated by the
second requirement provided for in Micro Sales Operation
Network, in order to justify willful disobedience, we must
determine whether the order violated by the employee is
reasonable, lawful, made known to the employee, and pertains to
the duties which he had been engaged to discharge. In the case
at bar, petitioner failed to show that the order of the company
which was violatedthe submission of Daily Activity Reportswas
part of Grans duties as a Computer Specialist. Before the Labor
Arbiter, EDI should have provided a copy of the company policy,
Grans job description, or any other document that would show
that the Daily Activity Reports were required for submission by
the employees, more particularly by a Computer Specialist.

Even though EDI and/or ESI were merely the local employment or
recruitment agencies and not the foreign employer, they should
have adduced additional evidence to convincingly show that
Grans employment was validly and legally terminated. The
burden devolves not only upon the foreign-based employer but
also on the employment or recruitment agency for the latter is
not only an agent of the former, but is also solidarily liable with
the foreign principal for any claims or liabilities arising from the
dismissal of the worker.[48]

Thus, petitioner failed to prove that Gran was justifiably

dismissed due to incompetence, insubordination, or willful
disobedience.

Petitioner also raised the issue that Prieto v. NLRC,[49] as used by

the CA in its Decision, is not applicable to the present case.

In Prieto, this Court ruled that [i]t is presumed that before their
deployment, the petitioners were subjected to trade tests
required by law to be conducted by the recruiting agency to
insure employment of only technically qualified workers for the
foreign principal.[50] The CA, using the ruling in the said case, ruled
that Gran must have passed the test; otherwise, he would not
have been hired. Therefore, EDI was at fault when it deployed
Gran who was allegedly incompetent for the job.

According to petitioner, the Prieto ruling is not applicable because

in the case at hand, Gran misrepresented himself in
his curriculum vitae as a Computer Specialist; thus, he was not
qualified for the job for which he was hired.

We disagree.

The CA is correct in applying Prieto. The purpose of the required

trade test is to weed out incompetent applicants from the pool of
available workers. It is supposed to reveal applicants with false
educational backgrounds, and expose bogus qualifications. Since
EDI deployed Gran to Riyadh, it can be presumed that Gran had
passed the required trade test and that Gran is qualified for the
job. Even if there was no objective trade test done by EDI, it was
still EDIs responsibility to subject Gran to a trade test; and its
failure to do so only weakened its position but should not in any
way prejudice Gran. In any case, the issue is rendered moot and
academic because Grans incompetency is unproved.

Fourth Issue: Gran was not Afforded Due Process

As discussed earlier, in the absence of proof of Saudi laws,

Philippine Labor laws and regulations shall govern the relationship
between Gran and EDI. Thus, our laws and rules on the requisites
of due process relating to termination of employment shall apply.

Petitioner EDI claims that private respondent Gran was

afforded due process, since he was allowed to work and improve
his capabilities for five months prior to his termination. [51] EDI also
claims that the requirements of due process, as enunciated
in Santos, Jr. v. NLRC,[52] and Malaya Shipping Services, Inc. v.
NLRC,[53] cited by the CA in its Decision, were properly observed in
the present case.

This position is untenable.

In Agabon v. NLRC,[54] this Court held that:

Procedurally, (1) if the dismissal is based on a just cause under Article 282,
the employer must give the employee two written notices and a hearing or
opportunity to be heard if requested by the employee before terminating the
employment: a notice specifying the grounds for which dismissal is sought
a hearing or an opportunity to be heard and after hearing or opportunity to
be heard, a notice of the decision to dismiss; and (2) if the dismissal is
based on authorized causes under Articles 283 and 284, the employer must
give the employee and the Department of Labor and Employment written
notices 30 days prior to the effectivity of his separation.

Under the twin notice requirement, the employees must be

given two (2) notices before their employment could be
terminated: (1) a first notice to apprise the employees of their
fault, and (2) a second notice to communicate to the employees
that their employment is being terminated. In between the first
and second notice, the employees should be given a hearing or
opportunity to defend themselves personally or by counsel of
their choice.[55]

A careful examination of the records revealed that, indeed,

OABs manner of dismissing Gran fell short of the two notice
requirement. While it furnished Gran the written notice informing
him of his dismissal, it failed to furnish Gran the written notice
apprising him of the charges against him, as prescribed by the
Labor Code.[56] Consequently, he was denied the opportunity to
respond to said notice. In addition, OAB did not schedule a
hearing or conference with Gran to defend himself and adduce
evidence in support of his defenses. Moreover, the July 9,
1994 termination letter was effective on the same day. This shows
that OAB had already condemned Gran to dismissal, even before
Gran was furnished the termination letter. It should also be
pointed out that OAB failed to give Gran the chance to be heard
and to defend himself with the assistance of a representative in
accordance with Article 277 of the Labor Code. Clearly, there was
no intention to provide Gran with due process. Summing up, Gran
was notified and his employment arbitrarily terminated on the
same day, through the same letter, and for unjustified
grounds. Obviously, Gran was not afforded due process.

Pursuant to the doctrine laid down in Agabon,[57] an employer

is liable to pay nominal damages as indemnity for violating the
employees right to statutory due process. Since OAB was in
breach of the due process requirements under the Labor Code
and its regulations, OAB, ESI, and EDI, jointly and solidarily, are
liable to Gran in the amount of PhP 30,000.00 as indemnity.
Fifth and Last Issue: Gran is Entitled to Backwages

We reiterate the rule that with regard to employees hired for a fixed period of
employment, in cases arising before the effectivity of R.A. No. 8042 [58] (Migrant
Workers and Overseas Filipinos Act) on August 25, 1995, that when the contract
is for a fixed term and the employees are dismissed without just cause, they are
entitled to the payment of their salaries corresponding to the unexpired portion of
their contract.[59] On the other hand, for cases arising after the effectivity of R.A.
No. 8042, when the termination of employment is without just, valid or
authorized cause as defined by law or contract, the worker 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.[60]

In the present case, the employment contract provides that the employment
contract shall be valid for a period of two (2) years from the date the employee
starts to work with the employer.[61] Gran arrived in Riyadh, Saudi Arabia and
started to work on February 7, 1994;[62] hence, his employment contract is
until February 7, 1996. Since he was illegally dismissed on July 9, 1994, before
the effectivity of R.A. No. 8042, he is therefore entitled to backwages
corresponding to the unexpired portion of his contract, which was equivalent to
USD 16,150.

Petitioner EDI questions the legality of the award of backwages and mainly relies
on the Declaration which is claimed to have been freely and voluntarily executed
by Gran.The relevant portions of the Declaration are as follows:
 I, ELEAZAR GRAN (COMPUTER SPECIALIST) AFTER RECEIVING MY
FINAL SETTLEMENT ON THIS DATE THE AMOUNT OF:

S.R. 2,948.00 (SAUDI RIYALS TWO THOUSAND NINE

HUNDRED FORTY EIGHT ONLY)

REPRESENTING COMPLETE PAYMENT (COMPENSATION) FOR THE

SERVICES I RENDERED TO OAB ESTABLISHMENT.

I HEREBY DECLARE THAT OAB EST. HAS NO FINANCIAL

OBLIGATION IN MY FAVOUR AFTER RECEIVING THE ABOVE
MENTIONED AMOUNT IN CASH.

I STATE FURTHER THAT OAB EST. HAS NO OBLIGATION TOWARDS

ME IN WHATEVER FORM.

I ATTEST TO THE TRUTHFULNESS OF THIS STATEMENT BY

AFFIXING MY SIGNATURE VOLUNTARILY.

SIGNED.
ELEAZAR GRAN

Courts must undertake a meticulous and rigorous review of quitclaims or

waivers, more particularly those executed by employees. This requirement was
clearly articulated by Chief Justice Artemio V. Panganiban in Land and Housing
Development Corporation v. Esquillo:
 Quitclaims, releases and other waivers of benefits granted by laws or contracts in
favor of workers should be strictly scrutinized to protect the weak and the
disadvantaged. The waivers should be carefully examined, in regard not only
to the words and terms used, but also the factual circumstances under which
they have been executed.[63] (Emphasis supplied.)

This Court had also outlined in Land and Housing Development Corporation,
citing Periquet v. NLRC,[64] the parameters for valid compromise agreements,
waivers, and quitclaims:

Not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represents a reasonable settlement, it
is binding on the parties and may not later be disowned simply because of a
change of mind. It is only where there is clear proof that the waiver was wangled
from an unsuspecting or gullible person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the questionable
transaction. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and the
consideration for the quitclaim is credible and reasonable, the transaction
must be recognized as a valid and binding undertaking. (Emphasis supplied.)

Is the waiver and quitclaim labeled a Declaration valid? It is not.

The Court finds the waiver and quitclaim null and void for the
following reasons:
1. The salary paid to Gran upon his termination, in the amount of
SR 2,948.00, is unreasonably low. As correctly pointed out by the
court a quo, the payment of SR 2,948.00 is even lower than his
monthly salary of SR 3,190.00 (USD 850.00). In addition, it is also
very much less than the USD 16,150.00 which is the amount Gran
is legally entitled to get from petitioner EDI as backwages.

2. The Declaration reveals that the payment of SR 2,948.00 is

actually the payment for Grans salary for the services he
rendered to OAB as Computer Specialist. If the Declaration is a
quitclaim, then the consideration should be much much more
than the monthly salary of SR 3,190.00 (USD 850.00)although
possibly less than the estimated Grans salaries for the remaining
duration of his contract and other benefits as employee of OAB. A
quitclaim will understandably be lower than the sum total of the
amounts and benefits that can possibly be awarded to employees
or to be earned for the remainder of the contract period since it is
a compromise where the employees will have to forfeit a certain
portion of the amounts they are claiming in exchange for the
early payment of a compromise amount. The court may however
step in when such amount is unconscionably low or unreasonable
although the employee voluntarily agreed to it. In the case of the
Declaration, the amount is unreasonably small compared to the
future wages of Gran.

3. The factual circumstances surrounding the execution of the

Declaration would show that Gran did not voluntarily and freely
execute the document. Consider the following chronology of
events:

a. On July 9, 1994, Gran received a copy of his letter of

termination;
b. On July 10, 1994, Gran was instructed to depart Saudi
Arabia and required to pay his plane ticket;[65]

c. On July 11, 1994, he signed the Declaration;

d. On July 12, 1994, Gran departed from Riyadh, Saudi Arabia;

and

e. On July 21, 1994, Gran filed the Complaint before the NLRC.

The foregoing events readily reveal that Gran was forced to sign
the Declaration and constrained to receive the amount of SR
2,948.00 even if it was against his willsince he was told on July 10,
1994 to leave Riyadh on July 12, 1994. He had no other choice but
to sign the Declaration as he needed the amount of SR 2,948.00
for the payment of his ticket.He could have entertained some
apprehensions as to the status of his stay or safety in Saudi
Arabia if he would not sign the quitclaim.

4. The court a quo is correct in its finding that the Declaration is a

contract of adhesion which should be construed against the
employer, OAB. An adhesion contract is contrary to public policy
as it leaves the weaker partythe employeein a take-it-or-leave-it
situation. Certainly, the employer is being unjust to the employee
as there is no meaningful choice on the part of the employee
while the terms are unreasonably favorable to the employer. [66]

Thus, the Declaration purporting to be a quitclaim and waiver is

unenforceable under Philippine laws in the absence of proof of the
applicable law of Saudi Arabia.

In order to prevent disputes on the validity and enforceability of

quitclaims and waivers of employees under Philippine laws, said
agreements should contain the following:

1. A fixed amount as full and final compromise settlement;

2. The benefits of the employees if possible with the

corresponding amounts, which the employees are giving up in
consideration of the fixed compromise amount;

3. A statement that the employer has clearly explained to the

employee in English, Filipino, or in the dialect known to the
employeesthat by signing the waiver or quitclaim, they are
forfeiting or relinquishing their right to receive the benefits which
are due them under the law; and

4. A statement that the employees signed and executed the

document voluntarily, and had fully understood the contents of
the document and that their consent was freely given without any
threat, violence, duress, intimidation, or undue influence exerted
on their person.
It is advisable that the stipulations be made
in English and Tagalog or in the dialect known to the
employee. There should be two (2) witnesses to the execution of
the quitclaim who must also sign the quitclaim. The document
should be subscribed and sworn to under oath preferably before
any administering official of the Department of Labor and
Employment or its regional office, the Bureau of Labor Relations,
the NLRC or a labor attach in a foreign country. Such official shall
assist the parties regarding the execution of the quitclaim and
waiver.[67] This compromise settlement becomes final and binding
under Article 227 of the Labor Code which provides that:

[A]ny compromise settlement voluntarily agreed upon with the

assistance of the Bureau of Labor Relations or the regional office of the
DOLE, shall be final and binding upon the parties and the NLRC or any
court shall not assume jurisdiction over issues involved therein except
in case of non-compliance thereof or if there is prima facie evidence
that the settlement was obtained through fraud, misrepresentation, or
coercion.

It is made clear that the foregoing rules on quitclaim or waiver

shall apply only to labor contracts of OFWs in the absence of proof
of the laws of the foreign country agreed upon to govern said
contracts. Otherwise, the foreign laws shall apply.

WHEREFORE, the petition is DENIED. The October 18, 2000

Decision in CA-G.R. SP No. 56120 of the Court of Appeals affirming
the January 15, 1999 Decision and September 30, 1999
Resolution of the NLRC
is AFFIRMED with the MODIFICATION that petitioner EDI-
Staffbuilders International, Inc. shall pay the amount of PhP
30,000.00 to respondent Gran as nominal damages for non-
compliance with statutory due process.

No costs.
SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice

WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T. CARPIO DANTE O. TINGA
Associate Justice Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been

reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the

Division Chairpersons Attestation, I certify that the conclusions in
the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts
Division.

REYNATO S. PUNO
Chief Justice

* As per October 17, 2007 raffle.

[1]
Rollo, pp. 9-39.
 [2]
Id. at 140-148. The Decision was penned by Associate Justice Conchita Carpio Morales (now a Member
of this Court) and concurred in by Associate Justices Candido V. Rivera and Elvi John S. Asuncion.

[3]
Id. at 86-99. The Decision was penned by NLRC Commissioner Ireneo B. Bernardo and concurred in by
Commissioners Lourdes C. Javier and Tito F. Genilo.

[4]
Id. at 106-107.

[5]
Id. at 140.

[6]
Id. at 140-141.

[7]
Id. at 40.

[8]
Id. at 41.

[9]
Signed by Eleazar S. Gran (second party) and Mrs. Andrea Nicolaus (first party) representing Omar
Ahmed Ali Bin Bechr Est., dated January 20, 1994; id. at 42-50.

[10]
Id. at 141.

[11]
Id. at 51.

[12]
Supra note 7.

[13]
Rollo, p. 73.

[14]
Id. at 75.

[15]
CA rollo, pp. 108-113.

[16]
Supra note 3, at 98.

[17]
Rollo, p. 80.

[18]
Id. at 100 & 224.

[19]
Id. at 100-105.

[20]
Id. at 219.

[21]
Supra note 4, at 106.

[22]
Supra note 2, at 145; citing Carnation Phil. Employees Labor Union-FFW v. NLRC, G.R. No. L-
64397, October 11, 1983, 125 SCRA 42 and Flexo Manufacturing Corporation v. NLRC, G.R. No. 164857, April
18, 1997, 135 SCRA 145.

[23]
Rollo, p. 220.
[24]
G.R. No. L-57735, March 19, 1982, 112 SCRA 688, 691.

[25]
G.R. No. L-60950, November 19, 1982, 118 SCRA 645, 646.

[26]
Id.

[27]
Supra note 22.

[28]
G.R. No. L-63701, January 31, 1980, 127 SCRA 463.

[29]
G.R. No. 146703, November 18, 2004, 443 SCRA 35.

[30]
Rollo, pp. 84-85.

[31]
Id. The handwriting is illegible.

[32]
Now Sec. 7 of NEW NLRC RULES OF PROCEDURE.

[33]
Marlene Crisostomo v. Florito M. Garcia, Jr., G.R. No. 164787, January 31, 2006, 481 SCRA
402; Bunao v. Social Security Sytem, G.R. No. 156652, December 13, 2005, 477 SCRA 564, citing Vallejo v. Court
of Appeals, G.R. No. 156413, April 14, 2004, 427 SCRA 658, 669; and San Luis v. Court of Appeals, G.R. No.
142649, September 13, 2001, 417 Phil. 598, 605; Cadalin v. POEA Administrator, G.R. Nos. 104776, 104911,
105029-32, December 5, 1994, 238 SCRA 721; Pagdonsalan v. National Labor Relations Commission, G.R. No. L-
63701, January 31, 1984, 127 SCRA 463.

[34]
CIVIL CODE, Art. 1306.

[35]
Id. Loquia and Pangalanan, p. 144.

[36]
J.R. Coquia & E.A. Pangalangan, CONFLICT OF LAWS 157 (1995); citing Cramton, Currie,
Kay, CONFLICT OF LAWS CASES AND COMMENTARIES 56.

[37]
Philippine Export and Loan Guarantee Corporation v. V.P. Eusebio Construction Inc., et al., G.R. No.
140047, July 14, 2004, 434 SCRA 202, 215.

[38]
See Presidential Decree No. 442, A Decree Instituting a Labor Code, Thereby Revising and
Consolidating Labor and Social Laws to Afford Protection to Labor, Promote Employment and Human Resources
Development and Ensure Industrial Peace Based on Social Justice.

[39]
As amended by Sec. 33, R.A. 6715, An Act to Extend Protection to Labor, Strengthen the Constitutional
Rights of Workers to Self-Organization, Collective Bargaining and Peaceful Concerted Activities, Foster Industrial
Peace and Harmony, Promote the Preferential Use of Voluntary Modes of Settling Labor Disputes, and Reorganize
the National Labor Relations Commission, Amending for these Purposes Certain Provisions of Presidential Decree
No. 442, as amended, Otherwise Known as The Labor Code of the Philippines, Appropriating Funds Therefore and
for Other Purposes, approved on March 2, 1989.

[40]
Ting v. Court of Appeals, G.R. No. 146174, July 12, 2006, 494 SCRA 610.

[41]
Bank of the Philippine Islands v. Uy, G.R. No. 156994, August 31, 2005, 468 SCRA 633.
 [42]
I Alcantara, PHILIPPINE LABOR AND SOCIAL LEGISLATION 1052 (1999).

[43]
Supra note 11.

[44]
Rollo, pp. 155-156.

[45]
Supra note 1, at 25.

[46]
Id. at 29.

[47]
G.R. No. 155279, October 11, 2005, 472 SCRA 328, 335-336.

[48]
Royal Crown Internationale v. NLRC, G.R. No. 78085, October 16, 1989, 178 SCRA 569; see also G &
M (Phil.), Inc. v. Willie Batomalaque, G.R. No. 151849, June 23, 2005, 461 SCRA 111.

[49]
G.R. No. 93699, September 10, 1993, 266 SCRA 232.

[50]
Id. at 237.

[51]
Rollo, p. 235.

[52]
G.R. No. 115795, March 6, 1998, 287 SCRA 117.

[53]
G.R. No. 121698, March 26, 1998, 228 SCRA 181.

[54]
G.R. No. 158693, November 17, 2004, 442 SCRA 573, 608.

[55]
King of Kings Transport Inc. v. Mamac, G.R. No. 166208, June 29, 2007.

[56]
See Article 277 (b) of the Labor Code; Sec. 2 (I) (a) Rule XXIII Rules Implementing Book V of the Labor Code;
and Sec. 2 (d) (i) Rule I, Rules Implementing Book VI of the Labor Code.

[57]
Supra note 54.

[58]
Took effect on July 15, 1995, R.A. No. 8042 is An Act to Institute the Policies of Overseas Employment
and Establish a Higher Standard of Protection and Promotion of the Welfare of Migrant Workers their Families and
Overseas Filipinos in Distress, and for Other Purposes.

[59]
Land and Housing Development Corporation v. Esquillo, G.R. No. 152012, September 30, 2005, 471
SCRA 488, 490.

[60]
Supra note 58, Sec. 10.

[61]
Rollo, p. 45.

[62]
Id. at 70, OABs Final Account of Grans salaries receivable.

[63]
Supra note 59.
 [64]
G.R. No. 91298, June 22 1990, 186 SCRA 724, 730.

[65]
Supra note 14, at 76.

[66]
Chretian v. Donald L. Bren Co. (1984) 151 [185 Cal. App. 3d 450].

[67]
A form copy of the Quitclaim and Release used by the NLRC is reproduced below for the guidance of
management and labor:

Republic of the Philippines

Department of Labor and Employment

NATIONAL LABOR RELATIONS COMMISSION

Quezon City

CONCILIATION AND MEDIATION

QUITCLAIM AND RELEASE

PAGTALIKOD AT PAGPAPAWALANG-SAYSAY

I (Ako), _______________________________ of legal age (may sapat na gulang) residing at

(nakatira sa) ____________________________ for and in consideration of the amount of (bilang
konsiderasyon sa halagang) _________________ pesos (piso) given to me by (na ibinigay sa
akin ng) _________________________________, do hereby release and discharge (ay aking
pinawawalang-saysay at tinatalikuran) aforesaid company/corporation and its officers,
person/s (ang nabanggit na kompanya/korporasyon at ang mga tauhan nito) from any
money claims (mula sa anumang paghahabol na nauukol sa pananalapi) by way of unpaid
wages (sa pamamagitan ng di nabayarang sahod), separation pay, overtime pay otherwise
(o anupaman), as may be due to me (na karapat-dapat para sa akin) in officers/person/s (na
may kaugnayan sa aking huling pinapasukang kompanya o korporasyon at sa mga opisyales
o tauhan nito).

I am executing this quitclaim and release (Isinasagawa ko ang pagtalikod o pagpapawalang-

saysay na ito), freely and voluntary (ng may kalayaan at kusang-loob) before this Honorable
Office (sa harapan ng marangal na tanggapang ito) without any force or duress (ng walang
pamimilit o pamumuwersa) and as part of the compromise agreement reached during the
preventive conciliation and mediation process conducted in the NLRC (at bilang bahagi ng
napagkasunduan buhat sa proseso ng preventive conciliation at mediation dito sa NLRC).

IN VIEW WHEREOF (DAHIL DITO), I hereunto set my hand this (akoy lumagda ngayong)
______ day of (araw ng) _________________, 200__, in Quezon City (sa Lungsod ng Quezon).
_________________________________

Signature of the Requesting Party

(Lagda ng Partidong Humiling ng Com-Med Conference)

Signed in presence of (Nilagdaan sa harapan ni):

____________________________________

Name in Print below Signature

(Limbagin ang pangalan sa ilalim ng lagda)

______________________________________________________________________________________

SUBSCRIBED AND SWORN TO before me this ____ day of ____________ 200__ in Quezon
City, Philippines.

_____________________

Labor Arbiter
 THIRD DIVISION

ATCI OVERSEAS G.R. No. 178551

CORPORATION, AMALIA
G. IKDAL and MINISTRY Present:
OF PUBLIC HEALTH-
KUWAIT CARPIO MORALES, Chairperson, J.,
Petitioners, BRION,
BERSAMIN,
VILLARAMA, JR., and
- versus - SERENO, JJ.

Promulgated:
October 11, 2010
MA. JOSEFA ECHIN,
Respondent.

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO MORALES, J.:

Josefina Echin (respondent) was hired by petitioner ATCI Overseas

Corporation in behalf of its principal-co-petitioner, the Ministry of Public Health of
Kuwait (the Ministry), for the position of medical technologist under a two-year
contract, denominated as a Memorandum of Agreement (MOA), with a monthly
salary of US$1,200.00.

Under the MOA,[1] all newly-hired employees undergo a probationary period

of one (1) year and are covered by Kuwaits Civil Service Board Employment
Contract No. 2.
 Respondent was deployed on February 17, 2000 but was terminated from
employment on February 11, 2001, she not having allegedly passed the
probationary period.

As the Ministry denied respondents request for reconsideration, she returned

to the Philippines on March 17, 2001, shouldering her own air fare.

On July 27, 2001, respondent filed with the National Labor Relations
Commission (NLRC) a complaint[2] for illegal dismissal against petitioner ATCI as
the local recruitment agency, represented by petitioner, Amalia Ikdal (Ikdal), and
the Ministry, as the foreign principal.

By Decision[3] of November 29, 2002, the Labor Arbiter, finding that

petitioners neither showed that there was just cause to warrant respondents
dismissal nor that she failed to qualify as a regular employee, held that respondent
was illegally dismissed and accordingly ordered petitioners to pay her
US$3,600.00, representing her salary for the three months unexpired portion of her
contract.

On appeal of petitioners ATCI and Ikdal, the NLRC affirmed the Labor
Arbiters decision by Resolution[4] of January 26, 2004. Petitioners motion for
reconsideration having been denied by Resolution[5] of April 22, 2004, they
appealed to the Court of Appeals, contending that their principal, the Ministry,
being a foreign government agency, is immune from suit and, as such, the
immunity extended to them; and that respondent was validly dismissed for her
failure to meet the performance rating within the one-year period as required under
Kuwaits Civil Service Laws. Petitioners further contended that Ikdal should not be
liable as an officer of petitioner ATCI.

By Decision[6] of March 30, 2007, the appellate court affirmed the NLRC
Resolution.

In brushing aside petitioners contention that they only acted as agent of the
Ministry and that they cannot be held jointly and solidarily liable with it, the
appellate court noted that under the law, a private employment agency shall assume
all responsibilities for the implementation of the contract of employment of an
overseas worker, hence, it can be sued jointly and severally with the foreign
principal for any violation of the recruitment agreement or contract of
employment.

As to Ikdals liability, the appellate court held that under Sec. 10 of Republic
Act No. 8042, the Migrant and Overseas Filipinos Act of 1995, corporate officers,
directors and partners of a recruitment agency may themselves be jointly and
solidarily liable with the recruitment agency for money claims and damages
awarded to overseas workers.

Petitioners motion for reconsideration having been denied by the appellate

court by Resolution[7] of June 27, 2007, the present petition for review on certiorari
was filed.

Petitioners maintain that they should not be held liable because respondents
employment contract specifically stipulates that her employment shall be governed
by the Civil Service Law and Regulations of Kuwait. They thus conclude that it
was patent error for the labor tribunals and the appellate court to apply the Labor
Code provisions governing probationary employment in deciding the present case.

Further, petitioners argue that even the Philippine Overseas Employment Act
(POEA) Rules relative to master employment contracts (Part III, Sec. 2 of the
POEA Rules and Regulations) accord respect to the customs, practices, company
policies and labor laws and legislation of the host country.

Finally, petitioners posit that assuming arguendo that Philippine labor laws
are applicable, given that the foreign principal is a government agency which is
immune from suit, as in fact it did not sign any document agreeing to be held
jointly and solidarily liable, petitioner ATCI cannot likewise be held liable, more so
since the Ministrys liability had not been judicially determined as jurisdiction was
not acquired over it.

The petition fails.

Petitioner ATCI, as a private recruitment agency, cannot evade responsibility

for the money claims of Overseas Filipino workers (OFWs) which it deploys
abroad by the mere expediency of claiming that its foreign principal is a
government agency clothed with immunity from suit, or that such foreign
principals liability must first be established before it, as agent, can be held jointly
and solidarily liable.

In providing for the joint and solidary liability of private recruitment

agencies with their foreign principals, Republic Act No. 8042 precisely affords the
OFWs with a recourse and assures them of immediate and sufficient payment of
what is due them. Skippers United Pacific v. Maguad[8] explains:

. . . [T]he obligations covenanted in the recruitment agreement entered into

by and between the local agent and its foreign principal are not coterminous
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. (emphasis
supplied)

The imposition of joint and solidary liability is in line with the policy of the state to
protect and alleviate the plight of the working class. [9] Verily, to allow petitioners to
simply invoke the immunity from suit of its foreign principal or to wait for the
judicial determination of the foreign principals liability before petitioner can be
held liable renders the law on joint and solidary liability inutile.

As to petitioners contentions that Philippine labor laws on probationary

employment are not applicable since it was expressly provided in respondents
employment contract, which she voluntarily entered into, that the terms of her
engagement shall be governed by prevailing Kuwaiti Civil Service Laws and
Regulations as in fact POEA Rules accord respect to such rules, customs and
practices of the host country, the same was not substantiated.

Indeed, a contract freely entered into is considered the law between the
parties who can establish stipulations, clauses, terms and conditions as they may
deem convenient, including the laws which they wish to govern their respective
obligations, as long as they are not contrary to law, morals, good customs, public
order or public policy.

It is hornbook principle, however, that the party invoking the application of a

foreign law has the burden of proving the law, under the doctrine of processual
presumptionwhich, in this case, petitioners failed to discharge. The Courts ruling
in EDI-Staffbuilders Intl., v. NLRC[10] illuminates:

In the present case, the employment contract signed by Gran specifically states
that Saudi Labor Laws will govern matters not provided for in the
contract (e.g. specific causes for termination, termination procedures, etc.). Being
the law intended by the parties (lex loci intentiones) to apply to the contract, Saudi
Labor Laws should govern all matters relating to the termination of the
employment of Gran.

In international law, the party who wants to have a foreign law applied to a
dispute or case has the burden of proving the foreign law. The foreign law is
treated as a question of fact to be properly pleaded and proved as the judge
or labor arbiter cannot take judicial notice of a foreign law. He is presumed to
know only domestic or forum law.

Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the
matter; thus, the International Law doctrine of presumed-identity
approach or processual presumptioncomes into play. Where a foreign law is
not pleaded or, even if pleaded, is not proved, the presumption is that foreign
law is the same as ours. Thus, we apply Philippine labor laws in determining
the issues presented before us. (emphasis and underscoring supplied)

The Philippines does not take judicial notice of foreign laws, hence, they
must not only be alleged; they must be proven. To prove a foreign law, the party
invoking it must present a copy thereof and comply with Sections 24 and 25
of Rule 132 of the Revised Rules of Court which reads:

SEC. 24. Proof of official record. The record of public documents referred
to in paragraph (a) of Section 19, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested by the officer
having the legal custody of the record, or by his deputy, and accompanied, if the
record is not kept in the Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a foreign country, the
certificate may be made by a secretary of the embassy or legation, consul
 general, consul, vice consul, or consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign country in which the record
is kept, and authenticated by the seal of his office. (emphasis supplied)

SEC. 25. What attestation of copy must state. Whenever a copy of a

document or record is attested for the purpose of the evidence, the attestation must
state, in substance, that the copy is a correct copy of the original, or a specific part
thereof, as the case may be. The attestation must be under the official seal of the
attesting officer, if there be any, or if he be the clerk of a court having a seal,
under the seal of such court.

To prove the Kuwaiti law, petitioners submitted the following: MOA

between respondent and the Ministry, as represented by ATCI, which provides that
the employee is subject to a probationary period of one (1) year and that the host
countrys Civil Service Laws and Regulations apply; a translated copy [11] (Arabic to
English) of the termination letter to respondent stating that she did not pass the
probation terms, without specifying the grounds therefor, and a translated copy of
the certificate of termination,[12] both of which documents were certified by Mr.
Mustapha Alawi, Head of the Department of Foreign Affairs-Office of Consular
Affairs Inslamic Certification and Translation Unit; and respondents letter[13] of
reconsideration to the Ministry, wherein she noted that in her first eight (8) months
of employment, she was given a rating of Excellent albeit it changed due to
changes in her shift of work schedule.

These documents, whether taken singly or as a whole, do not sufficiently

prove that respondent was validly terminated as a probationary employee under
Kuwaiti civil service laws. Instead of submitting a copy of the pertinent
Kuwaiti labor laws duly authenticated and translated by Embassy officials
thereat, as required under the Rules, what petitioners submitted were mere
certifications attesting only to the correctness of the translations of the MOA
and the termination letter which does not prove at all that Kuwaiti civil
service laws differ from Philippine laws and that under such Kuwaiti laws,
respondent was validly terminated. Thus the subject certifications read:

xxxx
 This is to certify that the herein attached translation/s from Arabic to
English/Tagalog and or vice versa was/were presented to this Office for review
and certification and the same was/were found to be in order. This Office,
however, assumes no responsibility as to the contents of the document/s.

This certification is being issued upon request of the interested party for whatever
legal purpose it may serve. (emphasis supplied)

Respecting Ikdals joint and solidary liability as a corporate officer, the same
is in order too following the express provision of R.A. 8042 on money claims, viz:

SEC. 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 contract involving
Filipino workers for overseas deployment including claims for actual moral,
exemplary and other forms of damages.
The liability of the principal/employer and the recruitment/placement agency for
any and all claims under this section shall be joint and several. This provision
shall be incorporated in the contract for overseas employment and shall be a
condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and
solidarily liable with the corporation or partnership for the aforesaid claims
and damages. (emphasis and underscoring supplied)

WHEREFORE, the petition is DENIED.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice
 WE CONCUR:

ARTURO D. BRION LUCAS P. BERSAMIN

Associate Justice Associate Justice

MARTIN S. VILLARAMA, JR. MARIA LOURDES P. A. SERENO

Associate Justice Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

CONCHITA CARPIO MORALES

Associate Justice
Chairperson
 CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, I certify that the conclusions in the above decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

[1]
Annex C of the petition, rollo, pp. 59-60.
[2]
CA rollo, p. 197.
[3]
Id at. 32-36. Penned by Labor Arbiter Fatima Jambaro Franco.
[4]
Id. at 26-29. Penned by Commissioner (now CA Associate Justice) Angelita A. Gacutan and concurred in by
Presiding Commissioner Raul T. Aquino and Commissioner Victoriano R. Calaycay.
[5]
Id. at 30-31.
[6]
Id. at 95-104. Penned by Associate Justice Fernanda Lampas Peralta and concurred in by Associate Justices
Edgardo P. Cruz and Normandie B. Pizarro.
[7]
Id. at 137. Ibid.
[8]
G.R. No. 166363, August 15, 2006, 498 SCRA 639, 645 citing Catan v. NLRC, 160 SCRA 691.
[9]
Datuman v. First Cosmopolitan Manpower And Promotion Services, Inc., G.R. No. 156029, November 14, 2008,
571 SCRA 41, 42.
[10]
G.R. No. 145587, October 26, 2007, 537 SCRA 409, 430.
[11]
Annex D of the petition, rollo, pp. 61-63.
[12]
Annex D-1 of the petition, id. at 64-66
[13]
Annex E of the petition, id. at 67.
 THIRD DIVISION

ATCI OVERSEAS G.R. No. 178551

CORPORATION, AMALIA
G. IKDAL and MINISTRY Present:
OF PUBLIC HEALTH-
KUWAIT CARPIO MORALES, Chairperson, J.,
Petitioners, BRION,
BERSAMIN,
VILLARAMA, JR., and
- versus - SERENO, JJ.

Promulgated:
October 11, 2010
MA. JOSEFA ECHIN,
Respondent.

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO MORALES, J.:

Josefina Echin (respondent) was hired by petitioner ATCI Overseas

Corporation in behalf of its principal-co-petitioner, the Ministry of Public Health of
Kuwait (the Ministry), for the position of medical technologist under a two-year
contract, denominated as a Memorandum of Agreement (MOA), with a monthly
salary of US$1,200.00.

Under the MOA,[1] all newly-hired employees undergo a probationary period

of one (1) year and are covered by Kuwaits Civil Service Board Employment
Contract No. 2.
 Respondent was deployed on February 17, 2000 but was terminated from
employment on February 11, 2001, she not having allegedly passed the
probationary period.

As the Ministry denied respondents request for reconsideration, she returned

to the Philippines on March 17, 2001, shouldering her own air fare.

On July 27, 2001, respondent filed with the National Labor Relations
Commission (NLRC) a complaint[2] for illegal dismissal against petitioner ATCI as
the local recruitment agency, represented by petitioner, Amalia Ikdal (Ikdal), and
the Ministry, as the foreign principal.

By Decision[3] of November 29, 2002, the Labor Arbiter, finding that

petitioners neither showed that there was just cause to warrant respondents
dismissal nor that she failed to qualify as a regular employee, held that respondent
was illegally dismissed and accordingly ordered petitioners to pay her
US$3,600.00, representing her salary for the three months unexpired portion of her
contract.

On appeal of petitioners ATCI and Ikdal, the NLRC affirmed the Labor
Arbiters decision by Resolution[4] of January 26, 2004. Petitioners motion for
reconsideration having been denied by Resolution[5] of April 22, 2004, they
appealed to the Court of Appeals, contending that their principal, the Ministry,
being a foreign government agency, is immune from suit and, as such, the
immunity extended to them; and that respondent was validly dismissed for her
failure to meet the performance rating within the one-year period as required under
Kuwaits Civil Service Laws. Petitioners further contended that Ikdal should not be
liable as an officer of petitioner ATCI.

By Decision[6] of March 30, 2007, the appellate court affirmed the NLRC
Resolution.

In brushing aside petitioners contention that they only acted as agent of the
Ministry and that they cannot be held jointly and solidarily liable with it, the
appellate court noted that under the law, a private employment agency shall assume
all responsibilities for the implementation of the contract of employment of an
overseas worker, hence, it can be sued jointly and severally with the foreign
principal for any violation of the recruitment agreement or contract of
employment.

As to Ikdals liability, the appellate court held that under Sec. 10 of Republic
Act No. 8042, the Migrant and Overseas Filipinos Act of 1995, corporate officers,
directors and partners of a recruitment agency may themselves be jointly and
solidarily liable with the recruitment agency for money claims and damages
awarded to overseas workers.

Petitioners motion for reconsideration having been denied by the appellate

court by Resolution[7] of June 27, 2007, the present petition for review on certiorari
was filed.

Petitioners maintain that they should not be held liable because respondents
employment contract specifically stipulates that her employment shall be governed
by the Civil Service Law and Regulations of Kuwait. They thus conclude that it
was patent error for the labor tribunals and the appellate court to apply the Labor
Code provisions governing probationary employment in deciding the present case.

Further, petitioners argue that even the Philippine Overseas Employment Act
(POEA) Rules relative to master employment contracts (Part III, Sec. 2 of the
POEA Rules and Regulations) accord respect to the customs, practices, company
policies and labor laws and legislation of the host country.

Finally, petitioners posit that assuming arguendo that Philippine labor laws
are applicable, given that the foreign principal is a government agency which is
immune from suit, as in fact it did not sign any document agreeing to be held
jointly and solidarily liable, petitioner ATCI cannot likewise be held liable, more so
since the Ministrys liability had not been judicially determined as jurisdiction was
not acquired over it.

The petition fails.

Petitioner ATCI, as a private recruitment agency, cannot evade responsibility

for the money claims of Overseas Filipino workers (OFWs) which it deploys
abroad by the mere expediency of claiming that its foreign principal is a
government agency clothed with immunity from suit, or that such foreign
principals liability must first be established before it, as agent, can be held jointly
and solidarily liable.

In providing for the joint and solidary liability of private recruitment

agencies with their foreign principals, Republic Act No. 8042 precisely affords the
OFWs with a recourse and assures them of immediate and sufficient payment of
what is due them. Skippers United Pacific v. Maguad[8] explains:

. . . [T]he obligations covenanted in the recruitment agreement entered into

by and between the local agent and its foreign principal are not coterminous
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. (emphasis
supplied)

The imposition of joint and solidary liability is in line with the policy of the state to
protect and alleviate the plight of the working class. [9] Verily, to allow petitioners to
simply invoke the immunity from suit of its foreign principal or to wait for the
judicial determination of the foreign principals liability before petitioner can be
held liable renders the law on joint and solidary liability inutile.

As to petitioners contentions that Philippine labor laws on probationary

employment are not applicable since it was expressly provided in respondents
employment contract, which she voluntarily entered into, that the terms of her
engagement shall be governed by prevailing Kuwaiti Civil Service Laws and
Regulations as in fact POEA Rules accord respect to such rules, customs and
practices of the host country, the same was not substantiated.

Indeed, a contract freely entered into is considered the law between the
parties who can establish stipulations, clauses, terms and conditions as they may
deem convenient, including the laws which they wish to govern their respective
obligations, as long as they are not contrary to law, morals, good customs, public
order or public policy.

It is hornbook principle, however, that the party invoking the application of a

foreign law has the burden of proving the law, under the doctrine of processual
presumptionwhich, in this case, petitioners failed to discharge. The Courts ruling
in EDI-Staffbuilders Intl., v. NLRC[10] illuminates:

In the present case, the employment contract signed by Gran specifically states
that Saudi Labor Laws will govern matters not provided for in the
contract (e.g. specific causes for termination, termination procedures, etc.). Being
the law intended by the parties (lex loci intentiones) to apply to the contract, Saudi
Labor Laws should govern all matters relating to the termination of the
employment of Gran.

In international law, the party who wants to have a foreign law applied to a
dispute or case has the burden of proving the foreign law. The foreign law is
treated as a question of fact to be properly pleaded and proved as the judge
or labor arbiter cannot take judicial notice of a foreign law. He is presumed to
know only domestic or forum law.

Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the
matter; thus, the International Law doctrine of presumed-identity
approach or processual presumptioncomes into play. Where a foreign law is
not pleaded or, even if pleaded, is not proved, the presumption is that foreign
law is the same as ours. Thus, we apply Philippine labor laws in determining
the issues presented before us. (emphasis and underscoring supplied)

The Philippines does not take judicial notice of foreign laws, hence, they
must not only be alleged; they must be proven. To prove a foreign law, the party
invoking it must present a copy thereof and comply with Sections 24 and 25
of Rule 132 of the Revised Rules of Court which reads:

SEC. 24. Proof of official record. The record of public documents referred
to in paragraph (a) of Section 19, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested by the officer
having the legal custody of the record, or by his deputy, and accompanied, if the
record is not kept in the Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a foreign country, the
certificate may be made by a secretary of the embassy or legation, consul
 general, consul, vice consul, or consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign country in which the record
is kept, and authenticated by the seal of his office. (emphasis supplied)

SEC. 25. What attestation of copy must state. Whenever a copy of a

document or record is attested for the purpose of the evidence, the attestation must
state, in substance, that the copy is a correct copy of the original, or a specific part
thereof, as the case may be. The attestation must be under the official seal of the
attesting officer, if there be any, or if he be the clerk of a court having a seal,
under the seal of such court.

To prove the Kuwaiti law, petitioners submitted the following: MOA

between respondent and the Ministry, as represented by ATCI, which provides that
the employee is subject to a probationary period of one (1) year and that the host
countrys Civil Service Laws and Regulations apply; a translated copy [11] (Arabic to
English) of the termination letter to respondent stating that she did not pass the
probation terms, without specifying the grounds therefor, and a translated copy of
the certificate of termination,[12] both of which documents were certified by Mr.
Mustapha Alawi, Head of the Department of Foreign Affairs-Office of Consular
Affairs Inslamic Certification and Translation Unit; and respondents letter[13] of
reconsideration to the Ministry, wherein she noted that in her first eight (8) months
of employment, she was given a rating of Excellent albeit it changed due to
changes in her shift of work schedule.

These documents, whether taken singly or as a whole, do not sufficiently

prove that respondent was validly terminated as a probationary employee under
Kuwaiti civil service laws. Instead of submitting a copy of the pertinent
Kuwaiti labor laws duly authenticated and translated by Embassy officials
thereat, as required under the Rules, what petitioners submitted were mere
certifications attesting only to the correctness of the translations of the MOA
and the termination letter which does not prove at all that Kuwaiti civil
service laws differ from Philippine laws and that under such Kuwaiti laws,
respondent was validly terminated. Thus the subject certifications read:

xxxx
 This is to certify that the herein attached translation/s from Arabic to
English/Tagalog and or vice versa was/were presented to this Office for review
and certification and the same was/were found to be in order. This Office,
however, assumes no responsibility as to the contents of the document/s.

This certification is being issued upon request of the interested party for whatever
legal purpose it may serve. (emphasis supplied)

Respecting Ikdals joint and solidary liability as a corporate officer, the same
is in order too following the express provision of R.A. 8042 on money claims, viz:

SEC. 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 contract involving
Filipino workers for overseas deployment including claims for actual moral,
exemplary and other forms of damages.
The liability of the principal/employer and the recruitment/placement agency for
any and all claims under this section shall be joint and several. This provision
shall be incorporated in the contract for overseas employment and shall be a
condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and
solidarily liable with the corporation or partnership for the aforesaid claims
and damages. (emphasis and underscoring supplied)

WHEREFORE, the petition is DENIED.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice
 WE CONCUR:

ARTURO D. BRION LUCAS P. BERSAMIN

Associate Justice Associate Justice

MARTIN S. VILLARAMA, JR. MARIA LOURDES P. A. SERENO

Associate Justice Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

CONCHITA CARPIO MORALES

Associate Justice
Chairperson
 CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, I certify that the conclusions in the above decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

[1]
Annex C of the petition, rollo, pp. 59-60.
[2]
CA rollo, p. 197.
[3]
Id at. 32-36. Penned by Labor Arbiter Fatima Jambaro Franco.
[4]
Id. at 26-29. Penned by Commissioner (now CA Associate Justice) Angelita A. Gacutan and concurred in by
Presiding Commissioner Raul T. Aquino and Commissioner Victoriano R. Calaycay.
[5]
Id. at 30-31.
[6]
Id. at 95-104. Penned by Associate Justice Fernanda Lampas Peralta and concurred in by Associate Justices
Edgardo P. Cruz and Normandie B. Pizarro.
[7]
Id. at 137. Ibid.
[8]
G.R. No. 166363, August 15, 2006, 498 SCRA 639, 645 citing Catan v. NLRC, 160 SCRA 691.
[9]
Datuman v. First Cosmopolitan Manpower And Promotion Services, Inc., G.R. No. 156029, November 14, 2008,
571 SCRA 41, 42.
[10]
G.R. No. 145587, October 26, 2007, 537 SCRA 409, 430.
[11]
Annex D of the petition, rollo, pp. 61-63.
[12]
Annex D-1 of the petition, id. at 64-66
[13]
Annex E of the petition, id. at 67.
 Republic of the Philippines
Supreme Court
Manila

SECOND DIVISION

LNS INTERNATIONAL G.R. No. 179792

MANPOWER SERVICES,
Petitioner, Present:

CARPIO, J., Chairperson,

BRION,
- versus - DEL CASTILLO,
ABAD, and
PEREZ, JJ.

ARMANDO C. PADUA, JR., Promulgated:

Respondent. March 5, 2010
x-------------------------------------------------------------x

DECISION

DEL CASTILLO, J.:

Bare and unsubstantiated allegations do not constitute substantial evidence and have no
probative value.

This petition for review on certiorari[1] assails the Decision[2] dated November 30,
2006 of the Court of Appeals (CA) in CA-G.R. SP No. 90526, which affirmed the
Order[3] dated October 16, 2004 of the Department of Labor and Employment (DOLE),
which in turn affirmed the Order[4] dated April 28, 2004 of the Philippine Overseas
Employment Administration (POEA), which held petitioner LNS International
Manpower Services (LNS) liable for misrepresentation and non-issuance of official
receipt. Also assailed is the CA Resolution dated September 12, 2007[5] which denied the
motion for reconsideration.

Factual Antecedents

On January 6, 2003, respondent Armando C. Padua, Jr. (Padua) filed a Sworn

Statement[6] before the Adjudication Office of the POEA against LNS and Sharikat Al
Saedi International Manpower (Sharikat) for violation of Section 2(b), (d), and (e) of
Rule I, Part VI of the 2002 POEA Rules and Regulations Governing the Recruitment and
Employment of Land-based Overseas Workers which provides:

Section 2. Grounds for imposition of administrative sanctions:

xxxx
b. Charging or accepting directly or indirectly any amount greater than that of
specified in the schedule of allowable fees prescribed by the Secretary, or making
a worker pay any amount greater than that actually received by him as a loan or
advance;
xxxx

d. Collecting any fee from a worker without issuing the appropriate receipt clearly
showing the amount paid and the purpose for which payment was made;

e. Engaging in act/s of misrepresentation in connection with recruitment and

placement of workers, such as furnishing or publishing any false notice,
information or document in relation to recruitment or employment;

xxxx

Padua alleged that on July 12, 2002, he applied as auto electrician with
petitioner LNS and was assured of a job in Saudi Arabia. He paid LNS the amounts
of P15,000.00 as processing fees, P6,000.00 for medical expenses, and P1,000.00 for
trade test, but he was not issued the corresponding receipts. He further alleged that he
signed an employment contract with LNS as a body builder with a monthly salary of
US$370.00.

Padua further alleged that it was another agency, Sharikat, which processed his
papers and eventually deployed him on September 29, 2002 to Saudi Arabia. However,
he returned to the Philippines on December 23, 2002 because he was not allegedly paid
his salaries and also because of violations in the terms and conditions of his employment
contract.

LNS and Sharikat filed their respective Answers.

In its Verified Answer,[7] LNS averred that it is a sole proprietorship owned and
managed by Ludevina E. Casabuena. It admitted that Padua applied for employment
abroad but he withdrew all the documents he submitted to LNS on July 27, 2002. As
proof, LNS attached the withdrawal letter duly signed by Padua.

LNS alleged that it did not know that Padua applied with Sharikat or that he was
eventually deployed by the latter to Saudi Arabia. LNS denied that it endorsed Paduas
application papers to Sharikat. LNS claimed that after Padua withdrew his documents, it
no longer had any knowledge whether he applied with another employment agency. LNS
insisted that the contract of employment submitted by Padua to the POEA clearly
indicated that the same was only between him and Sharikat and not LNS.
Thus, LNS claimed that it could not be held liable for non-issuance of receipt or
misrepresentation.

For its part, Sharikat admitted that it processed Paduas papers for
employment in Saudi Arabia.[8] However, it argued that it cannot be held liable for any
alleged violation of labor standards because its principal in Saudi Arabia faithfully
complied with the terms and conditions of Paduas employment.[9] Sharikat also argued
that Paduas contentions are vague and unsubstantiated and deserve no probative weight
at all. Aside from his bare allegations, Padua did not present evidence to show that he
was not paid his salaries or that he was illegally dismissed.[10]

In his Reply to Answer of LNS,[11] Padua admitted signing the withdrawal letter
but alleged that he did not actually receive the documents because he was made to
understand that the same would be endorsed to Sharikat.

Ruling of POEA

On April 28, 2004, the POEA issued its Order finding LNS liable for non-issuance of
receipt and misrepresentation. As to Sharikat, the POEA found no sufficient evidence to
hold it liable for the violations charged. The dispositive portion of the said Order reads:
 WHEREFORE, premises considered, We find and so hold respondent LNS
International liable for violation of Section 2(d) Rule 1, part VI of the 2002 POEA Rules
and Regulations and the penalty of Four (4) months suspension or fine of P40,000.00 is
hereby imposed, being its first offense and for violation of Section 2(e) Rule 1, part VI of
the 2002 POEA Rules and Regulations, the penalty of Eight (8) months suspension or
fine of P80,000.00 is hereby imposed, being its second offense.
The charges against SHARIKAT AL SAIDI INTERNATIONAL MANPOWER
are hereby dismissed for insufficiency of evidence.

SO ORDERED.[12]

Ruling of the Secretary of DOLE

Only LNS filed its Appeal Memorandum with the DOLE.[13] Padua did not appeal from
the said POEA Order absolving Sharikat from any liability. Hence, the same is already
deemed final as against Sharikat.

On December 16, 2004, the DOLE dismissed the appeal of petitioner and
affirmed the ruling of the POEA. The decretal portion of the Order reads:

WHEREFORE, the Appeal, herein treated as Petition for Review, filed by L.N.S.
International Manpower Services is hereby DISMISSED for lack of merit. The Order
dated April 28, 2004 of the POEA Administrator, finding petitioner liable for violation of
Section 2 (d) and (e), Rule I, Part VI of the POEA Rules and Regulations, and imposing
upon it the penalty of suspension of license for a period of twelve (12) months or, in lieu
thereof, the payment of fine in the amount of One Hundred Twenty Thousand Pesos
(P120,000.00), is AFFIRMED.

SO ORDERED.[14]

Petitioner moved for reconsideration, but the motion was denied for lack of merit in an
Order dated May 12, 2005.[15]

Ruling of the Court of Appeals

Aggrieved, petitioner filed with the CA a petition for certiorari but it was dismissed
in its November 30, 2006 Decision. The CA opined that the affirmative assertion of
respondent that he paid petitioner a placement fee is entitled to great weight than the bare
denials of petitioner; and, that respondent was made to believe that petitioner would be
solely responsible for the processing of his employment abroad.

Petitioner filed a Motion for Reconsideration which was denied by the CA in its
Resolution dated September 12, 2007.

Issue

The lone issue in this petition for review on certiorari is whether petitioner is liable for
non-issuance of receipt and misrepresentation.

Petitioner contends that the CA gravely abused its discretion in giving credence to
respondents claims which were all anchored on bare allegations. According to petitioner,
the CA erred in ruling that its defense is purely denial since the same was corroborated by
a document indubitably showing respondents withdrawal of his application for overseas
employment. Considering such withdrawal, petitioner is naturally not bound to issue any
receipt and could not as well be responsible for the recruitment of respondent. Petitioner
likewise asserts that it never asked or received any payment from the respondent.

Our Ruling

We grant the petition.

As a general rule, factual findings of administrative and quasi-judicial agencies

specializing in their respective fields, especially when affirmed by the CA, must be
accorded high respect, if not finality.[16] However, we are not bound to adhere to the
general rule if we find that the factual findings do not conform to the evidence on record
or are not supported by substantial evidence,[17] as in the instant case.

The self-serving and unsubstantiated allegations of respondent cannot defeat the

concrete evidence submitted by petitioner. We note that respondent did not deny the due
execution of the withdrawal form as well as the genuineness of his signature and thumb
mark affixed therein. On the contrary, he admitted signing the same. When he voluntarily
signed the document, respondent is bound by the terms stipulated therein.[18]
 We are not persuaded by respondents contention that he signed the withdrawal
form upon representations by LNS that it would endorse his papers to Sharikat. This
really makes no sense at all. Why would LNS allow Padua to withdraw his application
papers, and even go through the process of making him execute a withdrawal form, if its
ultimate intention is to endorse the said papers to Sharikat? If respondents allegation is to
be believed, why then would LNS relinquish its possession over said documents if it will
refer them anyway to Sharikat?

Moreover, we are inclined to give more evidentiary weight to the allegation of petitioner
that it did not receive any amount from the respondent. This conclusion is more logical
considering that it has been duly established that respondent had withdrawn all his
documents from LNS. Having withdrawn said documents, there is no more reason for
him to pay any fees to LNS. In his Sworn Statement filed before the POEA, respondent
alleged that he paid the P15,000.00 processing fees and P6,000.00 medical fees to LNS
sometime in August, 2002. This self-serving and unsubstantiated allegation deserves no
credence at all considering that even before August, 2002, respondent had already
withdrawn his documents from LNS. It has not escaped our notice that the withdrawal
form was dated and signed by respondent on July 27, 2002. As such, after said date,
there is no more reason for respondent to pay any fees to LNS. Hence, we are not
convinced or persuaded by respondents allegation that he still paid LNS in August 2002
after having withdrawn his documents on July 27, 2002.

There is likewise no basis for the POEA, DOLE, and the CAs conclusion that it was
petitioner that endorsed respondents documents to Sharikat. Other than respondents self-
serving claim, there is no proof whatsoever that petitioner endorsed respondents
application papers to Sharikat. Bare allegations which are not supported by any evidence,
documentary or otherwise, sufficient to support a claim, fall short to satisfy the degree of
proof needed.[19] On the other hand, petitioners denial of these allegations was
corroborated by the withdrawal form proffered as evidence, the existence and due
execution of which were not disputed by respondent. In addition, if respondents
allegations were to be believed, we find it rather odd that LNS would require him to fill
up the withdrawal form if the intention of LNS was to endorse the papers to Sharikat. If
LNS allowed respondent to withdraw all his documents, then there is nothing left for
LNS to endorse to Sharikat.
No evidence whatsoever was adduced that LNS was acting as a conduit of
Sharikat. Likewise, there is no evidence, other than respondents unsubstantiated claim,
that petitioner endorsed his application to Sharikat. On the contrary, this was belied by
the withdrawal letter the existence of which was not even denied by the respondent. In
fact, he admitted its due execution and his signature which appeared thereon. There is
also no denying that respondent was deployed to Saudi Arabia. In fact, Sharikat admitted
in its Answer that it was the one responsible for respondents deployment to Saudi
Arabia. From the foregoing, it is more logical that it was Sharikat to whom respondent
eventually paid the corresponding fees. However, for failure to interpose any appeal from
the judgment of the POEA insofar as it absolved Sharikat, respondent is thereby bound
by it and is considered final as to him.[20]

In fine, for failure to adduce any shred of evidence of payment made to petitioner,
or that petitioner referred or endorsed respondent for employment abroad to another
agency, the charges of non-issuance of receipt and misrepresentation against petitioner
could not possibly prosper. By the voluntary withdrawal of respondents application from
petitioner, the latter could not have been involved in the recruitment and placement of
respondent and consequently could not be held liable for any violation.

WHEREFORE, the petition is GRANTED. The Decision of the Court of

Appeals in CA-G.R. SP No. 90526 dated November 30, 2006, and its Resolution dated
September 12, 2007, are REVERSED and SET ASIDE. The complaint against
petitioner LNS International Manpower Services is hereby DISMISSED for lack of
merit. Accordingly, the amounts of P40,000.00 and P80,000.00 representing petitioners
appeal bond are ordered REFUNDED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
 Chairperson

ARTURO D. BRION ROBERTO A. ABAD

Associate Justice Associate Justice

JOSE P. PEREZ
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

C E R T I F I C AT I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons attestation, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.

REYNATO S. PUNO
 Chief Justice

[1]
Rollo, pp. 8-25.
[2]
Id. at 29-39; penned by Associate Justice Portia Alio-Hormachuelos and concurred in by Associate Justices Amelita G.
Tolentino and Arcangelita Romilla-Lontok.
[3]
CA rollo, pp.55-58.
[4]
Id. at 37-41.
[5]
Rollo, p. 41.
[6]
CA rollo, pp. 19-20.
[7]
Id. at 21-25.
[8]
Id. at 27.
[9]
Id. at 28.
[10]
Id.
[11]
Id. at 30-32.
[12]
Id. at 41.
[13]
Id. at 42-52.
[14]
Id. at 58.
[15]
Id. at 66-68.
[16]
V.V. Aldaba Engineering v. Ministry of Labor and Employment, G.R. No. 76925, September 26, 1994, 237 SCRA 31, 38-39.
[17]
Pleyto v. Philippine National Police Criminal Investigation and Detection Group (PNP-CIDG), G.R. No. 169982, November
23, 2007, 538 SCRA 534, 554-555.
[18]
Camacho v. Court of Appeals, G.R. No. 127520, February 9, 2007, 515 SCRA 242, 261.
[19]
Cuizon v. Court of Appeals, 329 Phil. 456, 483 (1996).
[20]
Pison-Arceo Agricultural and Development Corp. v. National Labor Relations Commission, 344 Phil. 723, 736 (1997).
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 76595 May 6, 1988

PACIFIC ASIA OVERSEAS SHIPPING CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and TEODORO RANCES, respondents.

Acaban, Corvera, Valdez & Del Castillo Law Office for petitioner.

The Solicitor General for public respondent.

Valentin A Zozobrado for private respondent.

FELICIANO, J.:

The petitioner, Pacific Asia Overseas Shipping Corporation (Pascor, in short), seeks the annulment
and setting aside of the Resolutions of the public respondent National Labor Relations Commission
(NLRC) dated 14 August 1986 and 19 November 1986, denying Pascor's appeal for having been
filed out of time and denying its Motion for Reconsideration, respectively.

Sometime in March 1984, private respondent Teodoro Rances was engaged by petitioner Pascor as
Radio Operator of a vessel belonging to Pascor's foreign principal, the Gulf-East Ship Management
Limited. Four (4) months later, and after having been transferred from one vessel to another four
times for misbehaviour and inability to get along with officers and crew members of each of the
vessels, the foreign principal terminated the services of private respondent Rances citing the latter's
poor and incorrigible work attitude and incitement of others to insubordination. 1

Petitioner Pascor filed a complaint against private respondent with the Philippine Overseas
Employment Administration tion (POEA) for acts unbecoming a marine officer and for, character
assassination," which case was docketed as POEA Case No: M-84-09-848. Private respondent
denied the charges set out in the complaint and by way of counterclaim demanded an amount of
US$ 1,500.00 which a court in Dubai had, he contended, awarded in his favor against petitioner's
foreign principal. In due course, on 4 September 1985, the POEA found private respondent liable for
inciting another officer or seaman to insubordination and challenging a superior officer to a fist fight
and imposed six (6) months suspension for each offense or a total of twelve (12) months
suspension, with a warning that commission of the same or similar offense in the future would be
met with a stiffer disciplinary sanction. The POEA decision passed over sub silentio the counterclaim
of private respondent. 2

On 10 October 1985, private respondent filed a complaint against petitioner, docketed as POEA
Case No: M-85-10-0814 and entitled "Teodoro Rances v. Pacific Asia Overseas Shipping
Corporation." In this complaint, he sought to carry out and enforce the same award obtained by him
in Dubai allegedly against Pascor's foreign principal which he had pleaded as a counterclaim in
POEA Case No: M-84-09-848. Private respondent claimed that be had filed an action in the Dubai
court for US$ 9,364.89, which claim was compromised by the parties for US$ 5,500.00 plus "a return
ticket to (private respondent's) country," with the proviso that "the opponent" would pay "to the
claimant" US$ 1,500.00 'in case the wife of the claimant Rantes doesn't agree with the amount sent
to [her] Private respondent further claimed that since his wife did not "agree with" the amount given
to her as 'an allotment for the 3-month period (of April, May and June 1984), he was entitled to
recover the additional US$ 1,500.00 "as mandated under the Compromise Agreement which was the
basis of the decision of the Dubai Civil Court. 3 As evidence of this foreign award, private respondent
submitted what purports to be an "original copy (sic) of the decision" of the Dubai court written in Arabic
script and language, With a copy of an English translation by an unidentified translator and a copy of a
transmittal letter dated 23 September 1984 signed by one Mohd Bin Saleh "Honorary Consul for
Philippines." The full texts of the purported English translation of the Dubai award and of the transmittal
letter are set out in the margin. 4

In its answer filed on 11 December 1985, petitioner Pascor made four principal arguments: that the
copy of the Dubai decision relied upon by private respondent could not be considered as evidence,
not having been properly authenticated; that Pascor was not a party to the Dubai court proceedings;
that the POEA had no jurisdiction over cases for the enforcement of foreign judgments; and that the
claim had already been resolved in POEA Case No: M-84-09-848, having been there dismissed as a
counterclaim.

In a decision dated 14 April 1986, the POEA held petitioner Pascor liable to pay private respondent
Rances the amount of US$ 1,500.00 "at the prevailing rate of exchange at the time of payment." This
decision was served on petitioner's counsel on 18 April 1986, which counsel filed a 'Memorandum on
Appeal and/or Motion for Reconsideration" on 29 April 1986.

Private respondent moved the next day for dismissal of the appeal and for issuance of a writ of
execution, upon the ground that petitioner's appeal had been filed one (1) day beyond the
reglementary period and that, consequently, the POEA decision had become final and executory.

Petitioner opposed dismissal of its appeal and issuance of a writ of execution, arguing that the one
(1) day delay in filing its Memorandum on Appeal had been occasioned by an excusable mistake.

On 20 May 1986, the POEA issued an order denying petitioner's appeal for having been filed out of
time. Petitioner moved for reconsideration, paid the docket fee and posted the required supercedes
bond in connection with its appeal.

On 29 May 1986, the POEA denied private respondent's Motion for a Writ of Execution and elevated
the case to the NLRC.

On 14 August 1986, public respondent NLRC denied petitioner's appeal as flied out of time.
Petitioner's Motion for Reconsideration was similarly denied.

In the present Petition for certiorari and mandamus with prayer for Preliminary Injunction and
Temporary Restraint ' 9 Order, Pascor urges that public respondent NLRC acted with grave abuse of
discretion or in excess of its jurisdiction in denying its appeal and motion for reconsideration.

We think petitioner's contention has merit. The record shows, not an intent to delay the proceedings
but rather a genuine and substantial effort on the part of petitioner Pascor to file, in a timely manner,
its Memorandum on Appeal which, in the circumstances of this case, should not have been
disregarded by respondent NLRC. The circumstances surrounding the one (1) day delay in the filing
of petitioner's Memorandum on Appeal are summed up by petitioner in the following terms:
 30.1. Mr. Ruben de la Cruz, who was newly hired as messenger in the law
firm representing the petitioner was tasked with the delivery of the
memorandum on appeal in the afternoon of April 28, 1986 (the last day for
filing the same).

30.2. When Mr. de la Cruz read the caption of the memorandum, he noted
that the same is addressed to the respondent NLRC and he erroneously
concluded that it should be filed with the offices of the NLRC in Intramuros,
Manila.

30.3. Wen Mr. de la Cruz presented petitioner's Appeal at the docket section
of respondent NLRC, he was advised that the same should be filed with the
offices of the POEA in Ortigas, San Juan, Metro Manila.

30.4. Mr. de la Cruz upon being apprised of his error immediately proceeded
to the offices of the POEA in order to have petitioner's (PASCOR's) appeal
received but unfortunately, by the time he arrived thereat, the POEA office
had already closed for the day. Thus, the appeal was filed the following day.

To Support the above explanation, in addition to an affidavit executed by Mr. Ruben de la Cruz,
petitioner submitted a certification dated 2 May 1986 executed by Evelyn G. Sauza, receive .
receiving clerk of respondent NLRC stating that she had read to receive the Memorandum on Appeal
on or about 4:15 P.M., 28 April 1986, because the Memorandum was supposed to be filed with the
POEA office in Ortigas and not with the NLRC in Intramuros.

The brevity of the delay in filing an appeal is not, of course, by itself a sufficient basis for giving due
course to the appeal. In the present case, however, the factual circumstances combine with the legal
merits of the case urged by the petitioner to move us to the conviction that respondent NLRC should
have recognized and heeded the requirements of orderly procedure and substantial justice which
are at stake in the present case by allowing the appeal. In Siguenza v. Court of appeals, 5 the Court
stressed that the right to appeal should not be lightly disregarded by a stringent application of rules of
procedure especially where the appeal is on its face meritorious and the interests of substantial justice
would be served by permitting the appeal:

In the case of Castro v. Court of Appeals (132 SCRA 782), we stressed the
importance and real purpose of the remedy of appeal and ruled:

An appeal is an essential part of our judicial system. We have

advised the courts to proceed with caution so as not to
deprive a party of the right to appeal (National Waterworks
and Sewerage Authority v. Municipality of Libmanan, 97
SCRA 138) and instructed that every party-litigant should be
afforded the amplest opportunity for the proper and just
disposition of his cause, freed from the constraints of
technicalities (A. One Feeds, Inc. v. Court of Appeals, 100
SCRA 590). <re||an1w>

The rules of procedure are not to be applied in a very rigid

and technical sense. The rules of procedure are used only to
help secure not override substantial justice. (Gregorio v. Court
of Appeals [72 SCRA 1201). Therefore, we ruled in Republic
v. Court of Appeals (83 SCRA 453) that a six-day delay in the
 perfection of the appeal does not warrant its dismissal. And
again in Ramos v. Bagasao, 96 SCRA 396, this Court held
that the delay in four (4) days in filing a notice of appeal and a
notion for extension of time to file a record on appeal can be
excused on the basis of equity.

We should emphasize, however, that we have allowed the of an appeal in

some cases where a sent application of the rules would have denied it only
when to do so would serve the demands of substantial justice and in the
exercise of our equity junction.

In the case at bar, the petitioner's delay in their record on appeal should not
be strictly construed as to deprive them of the right to appeal especially since
on its face the appeal appears to be impressed appeal especially with merit. 6

We turn to the merits of the Petition. An examination of the complaint and of the Manifestation and
Motion filed by respondent Rances in POEA Case No: M-85-08-14, shows that the cause of action
pleaded by respondent Rances was enforcement of the decision rendered by c. Dubai Court which
purported to award him, among other things, an additional amount of US$ 1,500.00 under certain
circumstances. In the complaint dated 23 October 1985, respondent Rances stated:

Details of cause of action (Why are you complaining?) (To include place and
date of occurrence of case of action and amount of claim, if any) P 2,295
US$ salary for three (3) months stated in the compromise of 1,500 TJS$ total
of 2,795.50 US$ [as] per decision from Civil Court of Dubai U.A.E. 7

The Motion/Manifestation dated 3 December 1985 filed by respondent Rances may be quoted in
extension

1. Originally, complainant's claim was US$ 9,364.89 which he filed with the
Dubai Court for adjudication.

xxx xxx xxx

2. The US$ 9,364.89 claim was compromised by the court in a decision

dated September 12, 1984. Xerox copy of the decision is hereto attached as
Annex "B" and the authentication as Annex "B-l' and made an integral part
thereof.

3. Pertinent portion of the decision referred to above reads as follows:

Both parties came to a decision that the opponent would pay

to the claimant the amount of Five Thousand & Five Hundred
dollars for the withdrawal of the claimant and providing him
return ticket to his country. The opponent declared that he
would pay One Thousand & Five Hundred Dollars to the
opponent in case the wife of the claimant doesn't agree with
the amount sent to.

4. During the hearing leading to the Compromise, I emphasized that the

allotment I was giving my wife was US$ 765.00 per month and at the time the
 case was filed the allotment was already 3 months in arrears which already
amounted to US$ 2,295.00.

5. The amount sent my wife which is only P 13,393.45 through PASCOR and
confirmed by a Certification of the Philippine National Bank, Dagupan City
Branch, hereto attached as Annex 'C' is definitely very meager compared to
the exchange value of US$ 2,295.00;

6. My wife certainly did not agree and cannot agree or admit that only P
13,393.45 will be given her as an allotment for the 3-month period; hence,
urder the Compromise Agreement, we are entitled to recover the additional
US$ 1,500.00;

7. The agreement insofar as the additional remittance to my wife of

US$1,500.00 is reasonable in that adding the same to the P13,393.45 my
wife received would sum up to US$2,295.00 corresponding to the
accumulated 3 month allotment due my wife.

WHEREFORE, premises considered, it is respectfully prayed of this

Honorable Office to

Cause or require respondent to remit and/or pay the undersigned or his wife
of the amount of US$ 1,500.00 as mandated under the Compromise
Agreement which was the basis of the decision of the Dubai Civil Court. 8

It should be noted that respondent Rances submitted to the POEA only the Dubai Court decision; he
did not submit any copy of the 'Compromise Agreement' (assuming that to have been reduced to
writing) which he presumably believed to have been absorbed and superseded by the Dubai
decision.

That the cause of action set out in respondent Rances' complaint was enforcement of the Dubai
decision is further, indicated in the decision dated 14 April 1986 rendered by the POEA. This
decision provided in part as follows:

Complainant alleged that his original claim of US$ 9,364.89 for unpaid
salaries, termination pay and travel expenses was filed in Dubai. In a
decision rendered by the Dubai Court, his claim was compromised in the
amount of US$ 5,500.00 plus return plane ticket. The amount of US$
1,500.00 will be paid to his wife if she does not agree with the amount sent to
her. The three (3) months unremitted allotments refers to the months of April,
May and June 1984. As evidenced by the Allotment Shp, respondent
approved the authority given by complainant stating that the amount of US$
765.00 be remitted to his wife belong with the month of April 1984. The
amount remitted to his wife for allotment cover the three (3) month period
was only P 13,393.45. The basis of complainant's claim is the reservation in
the decision of the Dubai Court which states that in case the wife of the
claimant does not agree with the amount sent to her, the opponent shall pay
US$ l,500.00. 9

Clearly, therefore, respondent Rances' action was for enforcement of the Dubai decision to the
extent that such decision provided for payment of an additional amount of US$1,500.00 and that
respondent relied upon such decision.
Petitioner argues vigorously that the POEA had no authority and jurisdiction to enforce the judgment
of a foreign court. Under Section 1, Rule 1, Book VI of the POEA Rules and Regulations, it will be
seen that the POEA has jurisdiction to decide all cases 'involving employer employee relations
arising out of or by virtue of any law or contract involving Filipino workers for overseas employment,
including seamen." Respondent Rances, however, relied not upon the employer - employee
relationship between himself and petitioner corporation and the latter's foreign principal, but rather
upon the judgment obtained by him from the Dubai Court which had apparently already been
partially satisfied by payment to respondent Rances of US$ 5,500.00. The POEA has no jurisdiction
to hear and decide a claim for enforcement of a foreign judgment. Such a claim must be brought
before the regular courts. The POEA is not a court; it is an administrative agency exercising, inter
alia, adjudicatory or quasi-judicial functions. Neither the rules of procedure nor the rules of evidence
which are mandatorily applicable in proceedings before courts, are observed in proceedings before
the POEA. 10

Even assuming (arguendo, merely) that the POEA has jurisdiction to recognize and enforce a foreign
judgment, still respondent Rances cannot rely upon the Dubai decision. The Dubai decision was not
properly proved before the POEA. The Dubai decision purports to be the written act or record of an
act of an official body or tribunal of a foreign country, and therefore a public writing under Section 20
(a) of Rule 132 of the Revised Rules of Court. Sections 25 and 26 of Rules 132 prescribe the
manner of proving a public of official record of a foreign country in the following terms:

Sec. 25. Proof of public or official record. An official record or an entry

therein, when admissible for any purpose, may be evidenced by an official
publication thereof or by a copy attested by the officer having the legal
custody of the record, or by his deputy, and accompanied. if the record is not
kept in the Philippines, with a certificate that such officer has the custody. If
the office in which the record is kept is in a foreign country, the certificate
maybe be made by a secretary of embassy or litigation, consul general,
consul, vice consul, or consular agent or by any officer in the foreign service
of the Philippines stationed in the foreign country in which the record is kept,
and authenticated by the seal of his office.

Sec. 26. What attestation of copy must state. Whenever a copy of a

writing is attend for the purpose of evidence, the attestation must state, in
substance, that the copy is a correct copy of the original, or a specific part
thereof, as the case may be. The attestation must be under the official seal
of the attesting officer, if there be any, or if he be the clerk of a court having a
seal, under the seal of such court. (Emphasis supplied)

In the instant case, respondent Rances failed to submit any attestation issued by the proper Dubai
official having legal custody of the original of the decision of the Dubai Court that the copy presented
by said respondent is a faithful copy of the original decision, which attestation must furthermore be
authenticated by a Philippine Consular Officer having jurisdiction in Dubai. The transmittal letter,
dated 23 September 1984, signed by Mohd Bin Saleh, Honorary Consul for Philippines' does not
comply with the requirements of either the attestation under Section 26 nor the authentication
envisaged by Section 25. 11

There is another problem in respect of the admissibility in evidence of the Dubai decision. The Dubai
decision is accompanied by a document which purports to be an English translation of that decision.,
but that translation is legally defective. Section 34 of Rule 132 of the Revised Rules of Court requires
that documents written in a non-official language hke Arabic) shall not be admitted as evidence
unless accompanied by a translation into English or Spanish or Filipino. 12 In Ahag v. Cabiling, 13 Mr.
Justice Moreland elaborated on the need for a translation of a document written in a language other than
an official language:

... Moreover, when there is presented in evidence an exhibit written in any

language other than Spanish, if there is an appeal, that exhibit should be
translated into Spanish by the official interpreter of the court, or a translation
should be agreed upon by the parties, and both original and translation sent
to this court. In the case before us, there is an untranslated exhibit written in
the Visayan language. 14

In Teng Giok Yan v. Hon. Court of Appeals, et al., 15 the Court, speaking through Mr. Justice
Montemayor, had occasion to stress the importance of having a translation made by the court interpreter
who must, of course, be of recognized competence both in the language in which the document involved
is written and in English. The Court said:

[t]he trial court was certainly not bound by the translation given by the
Chinese Embassy, specially in the absence of a delete assurance that said
translation was correct and that it was made by the Embassy Adviser himself.
On the other hand, the translation made by the court interpreter is official and
reliable not only because of the recognized ability of said interpreter to
translate Chinese characters into English, but also because said interpreter
was under the direct supervision and control of the court. .... 16

In the instant case, there is no showing of who effected the English translation of the Dubai decision
which respondent Rances submitted to the POEA. The English translation does not purport to have
been made by an official court interpreter of the Philippine Government nor of the Dubai
Government. Neither the Identity of the translator nor his competence in both the Arabic and English
languages has been shown. The English translation submitted by the respondent is not sworn to as
an accurate translation of the original decision in Arabic. Neither has that translation been agreed
upon by the parties as a true and faithful one.

The foregoing does not exhaust the difficulties presented by reliance upon the Dubai decision. The
Dubai Court decision, even on the basis of the English translation submitted by respondent Rances,
does not purport on its face to have been rendered against petitioner Pascor nor against the foreign
principal of petitioner. Respondent Rances simply assumed that the decision was rendered against
petitioner's foreign principal. The Dubai decision does not Identify the parties to the litigation that
was resolved by said decision. Accordingly, the Dubai decision can scarcely be enforced against
petitioner Pascor. Further, even if the Dubai decision had on its face purported to be rendered
against petitioner Pascor, we must note that petitioner Pascor has expressly denied that jurisdiction
had ever been acquired by the Dubai court over the person of Pascor in accordance with the Rules
of Procedure applicable before the Dubai Court. 17 Respondent Rances has not proved the contents of
the Dubai Rules of Procedure governing acquisition of jurisdiction over the person of a non-resident
defendant.

Finally, if it be assumed (arguendo, once more) that the Dubai Court had indeed acquired jurisdiction
over the person of Pascor's foreign principal Gulf East Ship Management Ltd. it still would not
follow that Pascor would automatically be bound by the Dubai decision. The statutory agency (or
suretyship) of Pascor is limited in its reach to the contracts of employment Pascor entered into on
behalf of its principal with persons like respondent Rances. 18 Such statutory inability does not extend
to liability for judgments secured against Gulf East Ship Management Ltd., in suits brought against Gulf
East outside Philippine territorial jurisdiction, even though such a suit may involve a contract of
employment with a Filipino seaman.
We conclude that the POEA acted without or in excess of jurisdiction in rendering its Decision dated
14 April 1986 and its Order dated 20 May 1986, and that public respondent NLRC similarly acted
without or in excess of jurisdiction in rendering its Orders dated 14 August 1986 and 19 November
1986 denying petitioner's appeal and Motion for Reconsideration. This, however, is without prejudice
to the right of respondent Rances to initiate another proceeding before the POEA against petitioner
Pascor, this time on the basis alone of the contract of employment which existed between said
respondent and petitioner or petitioner's foreign principal; there, respondent Rances may seek to
show that he is still entitled to the allotments which he claims were not remitted by his employer to
his wife.

ACCORDINGLY, the Petition for certiorari is GRANTED and the Resolutions of public respondent
NLRC dated 14 August 1986 and 19 November 1986 are hereby NULLIFIED and SET ASIDE. The
Temporary Restraining Order issued by this Court on 8 December 1986 is hereby made PERCENT.
No pronouncement as to costs.

SO ORDERED.

Fernan (Chairman), Gutierrez, Jr., Bidin and Cortes JJ., concur.

Footnotes

1 Annex "B" and Annex "E" of the Petition; Rollo, pp. 24, 28.

2 Annex "H" of Petition; Rollo, p. 44.

3 See Annex "J" of Petition; Rollo, pp. 51 52.

4 BIN SALEH GENERAL SERVICES

MANPOWER RECRUITING AGENTS

Demand Suit No:

299/84

COURTS DEPARTMENT-DUBAI

CIVIL

Wednesday's Sitting: 12/9/84

Under the Presidency of Kazi Abdul Munim's Wafa.

Private Secretary: Ibrahim

The claimant was present physically

 Saleem Olvi attended d told that he was the caption of the
ship (Sea-Eagle)

DECISION

Weekly Sitting: 15/9/84, with previous position.

The opponents were present as previous. And advocate Abdul Rahman was
present with the claimant. Both the parties came to a decision that the
opponent would pay to the claimant the amount of Five Thousand & Five
hundred dollars for the withdrawal of the by the claimant and providing him
return ticket to his country. The opponent declared that he would pay One
Thousand & Five Hundred Dollars to the opponent in case the wife of the
claimant doesn't agree with the amount sent to.

Both the parties demanded declaration of compromisation in the presence of

the Sitting and doing it the manner of executing Document Power.

Whereas the compromise is not against the general rules and laws and
protecting the dispute. So, the court approved their request.

Therefore, the court decided the decision of the compromising meeting and
did it in the executing documentary power.

Signed by:

KAZI

TRUE COPY

(SGD.) BIN SAL

BIN SALEH GENERAL SERVICES

MANPOWER RECRUITING AGENTS

Ref. 1723/83 Date 3/9/84

Mr. Teodoro G. Rances

Caballero Street,

Pozorrubio,

Pangasinan,

PHILIPPINES

Dear Mr. Rances,

 We the Philippines Consulate in Dubai has handled and
successfully completed your case.

Please find enclosed the English translation and the Arabic version of your
court proceeding of Court Case No: 992/84 and receipt of US$ 550 being
amount received from you being the cost of translation and typing all papers
in connection with the above case.

Wishing you the best of luck.

SGD. Mohd. Bin Saleh Honorary Consul for Philippines.

5 137 SCRA 570 [1985].

6 137 SCRA at 576; emphasis supplied.

7 Rollo, p. 50; emphasis supplied.

8 Rollo, pp. 51-52; emphasis supplied.

9 Rollo, p. 320; emphasis supplied.

10 Article 221, Labor Code.

11 See Act No: 2103, enacted 26 January 1912, entitled "An Act providing for
the acknowledgment and authentication of instruments and documents
without the [Republic of the Philippines]"

12 Under Section 7 of Article UV of the 1987 Constitution, Spanish is no

longer an official language, though Spanish and Arabic are directed to be
promoted on a voluntary and optional basis.

13 18 Phil. 41.5 (1911)

14 18 PMI. at 417; emphasis supplied.

15 102 Phil. 404 (1957).

16 102 Phil. at 410; emphasis supplied.

17 See Section 50 of Rule 40 of the Revised Rules of Court.

18 See Section 1 (d) of Rule II, Book II of the Rules and Regulations Governing Overseas
Employment, as amended (May, 1985).