ANTONIO M. SERRANO vs.

GALLANT MARITIME SERVICES

INC. and MARLOW NAVIGATION CO., INC

G.R. 167614 MAR. 24, 2009

FACTS:

Petitioner was hired by Gallant Maritime Services, Inc. and

Marlow Navigation Co., Ltd. (respondents) under a Philippine
Overseas Employment Administration (POEA)-approved
Contract of Employment with the following terms and
conditions:

Duration of contract: 12 months

Position: Chief Officer

Basic monthly salary: US$1,400.00

Hours of work: 48.0 hours per week

Overtime: US$700.00 per month

Vacation leave with pay: 7.00 days per month

On March 19, 1998, the date of his departure, petitioner was

constrained to accept a downgraded employment contract for
the position of Second Officer with a monthly salary of
US$1,000.00, upon the assurance and representation of
respondents that he would be made Chief Officer by the end of
April 1998.
Respondents did not deliver on their promise to make
petitioner Chief Officer. Hence, petitioner refused to stay on as
Second Officer and was repatriated to the Philippines on May
26, 1998.
Petitioners employment contract was for a period of 12 months
or from March 19, 1998 up to March 19, 1999, but at the time of
his repatriation on May 26, 1998, he had served only two (2)
months and seven (7) days of his contract, leaving an unexpired
portion of nine (9) months and twenty-three (23) days.
Petitioner filed with the Labor Arbiter (LA) a Complaint against
respondents for constructive dismissal and for payment of his
money claims in the total amount of US$26,442.73.

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 The LA rendered a Decision dated July 15, 1999, declaring the
dismissal of petitioner illegal and awarding him monetary
benefits, to wit:
WHEREFORE, premises considered, judgment
is hereby rendered declaring that the dismissal of the
complainant (petitioner) by the respondents in the
above-entitled case was illegal and the respondents
are hereby ordered to pay the complainant
[petitioner], jointly and severally, in Philippine
Currency, based on the rate of exchange prevailing at
the time of payment, the amount of EIGHT
THOUSAND SEVEN HUNDRED SEVENTY U.S.
DOLLARS (US $8,770.00), representing the
complainants salary for three (3) months of the
unexpired portion of the aforesaid contract of
employment.

The claims of the complainant for moral and exemplary

damages are hereby DISMISSED for lack of merit.
In awarding petitioner a lump-sum salary of US$8,770.00, the
LA based his computation on the salary period of three months
only rather than the entire unexpired portion of nine months
and 23 days of petitioners employment contract applying the
subject clause. However, the LA applied the salary rate of
US$2,590.00, consisting of petitioners [b]asic salary,
US$1,400.00/month + US$700.00/month, fixed overtime pay, +
US$490.00/month, vacation leave pay =
US$2,590.00/compensation per month.
Respondents appealed to the National Labor Relations
Commission (NLRC) to question the finding of the LA that
petitioner was illegally dismissed.
The NLRC modified the LA Decision and corrected the LAs
computation of the lump-sum salary awarded to petitioner by
reducing the applicable salary rate from US$2,590.00 to
US$1,400.00 because R.A. No. 8042 does not provide for the
award of overtime pay, which should be proven to have been
actually performed, and for vacation leave pay.
Petitioner filed a Motion for Partial Reconsideration, but this
time he questioned the constitutionality of the subject clause.
The NLRC denied the motion.

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 Petitioner filed a Petition for Certiorari with the CA, reiterating
the constitutional challenge against the subject clause. After
initially dismissing the petition on a technicality, the CA
eventually gave due course to it, as directed by this Court in its
Resolution which granted the petition for certiorari, filed by
petitioner.
The CA affirmed the NLRC ruling on the reduction of the
applicable salary rate; however, the CA skirted the
constitutional issue raised by petitioner.
His Motion for Reconsideration having been denied by the CA,
petitioner brings his cause to this Court on the following
grounds:
The Court of Appeals and the labor tribunals have decided the
case in a way not in accord with applicable decision of the
Supreme Court involving similar issue of granting unto the
migrant worker back wages equal to the unexpired portion of
his contract of employment instead of limiting it to three (3)
months.
Even without considering the constitutional limitations [of] Sec.
10 of Republic Act No. 8042, the Court of Appeals gravely erred
in law in excluding from petitioners award the overtime pay
and vacation pay provided in his contract since under the
contract they form part of his salary.
The Court now takes up the full merit of the petition mindful of
the extreme importance of the constitutional question raised
therein.

ISSUES:

1. Whether Section 10 (par 5) of RA 8042 is unconstitutional.

2. Proper computation of the Lump-sum salary to be awarded to

petitioner by reason of his illegal dismissal.

3. Whether the overtime and leave pay should form part of the salary
basis in the computation of his monetary award.

The unanimous finding of the LA, NLRC and CA that the dismissal
of petitioner was illegal is not disputed. Likewise not disputed is the
salary differential of US$45.00 awarded to petitioner in all three fora.

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Applying the subject clause, the NLRC and the CA computed the
lump-sum salary of petitioner at the monthly rate of US$1,400.00
covering the period of three months out of the unexpired portion of
nine months and 23 days of his employment contract or a total of
US$4,200.00.

Impugning the constitutionality of the subject clause, petitioner

contends that, in addition to the US$4,200.00 awarded by the NLRC
and the CA, he is entitled to US$21,182.23 more or a total of
US$25,382.23, equivalent to his salaries for the entire nine months
and 23 days left of his employment contract, computed at the
monthly rate of US$2,590.00.31

Arguments of the Petitioner

For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in

the 5th paragraph of Section 10, Republic Act (R.A.) No. 8042, violates
the OFWs constitutional rights in that it impairs the terms of their
contract, deprives them of equal protection and denies them due
process.

The Arguments of Respondents

Respondents contend that the constitutional issue should not be

entertained, for this was belatedly interposed by petitioner in his
appeal before the CA, and not at the earliest opportunity, which was
when he filed an appeal before the NLRC.40

The Arguments of the Solicitor General

The Solicitor General (OSG)41 points out that as R.A. No. 8042 took
effect on July 15, 1995, its provisions could not have impaired
petitioners 1998 employment contract. Rather, R.A. No. 8042 having
preceded petitioners contract, the provisions thereof are deemed part
of the minimum terms of petitioners employment, especially on the
matter of money claims, as this was not stipulated upon by the
parties.

RULING:

1. The answer is in the affirmative.

Section 1, Article III of the Constitution guarantees:

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 No person shall be deprived of life, liberty, or property
without due process of law nor shall any person be denied the
equal protection of the law.

Section 18, Article II and Section 3, Article XIII accord all

members of the labor sector, without distinction as to place of
deployment, full protection of their rights and welfare.

To Filipino workers, the rights guaranteed under the foregoing

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

Imbued with the same sense of obligation to afford protection

to labor, the Court in the present case also employs the standard of
strict judicial scrutiny, for it perceives in the subject clause a suspect
classification prejudicial to OFWs.

Upon cursory reading, the subject clause appears facially

neutral, for it applies to all OFWs. However, a closer examination
reveals that the subject clause has a discriminatory intent against, and
an invidious impact on OFWs.

The subject clause does not state or imply any definitive

governmental purpose; and it is for that precise reason that the clause
violates not just petitioners right to equal protection, but also her
right to substantive due process under Section 1, Article III of the
Constitution.

2. It is plain that prior to R.A. No. 8042, all OFWs, regardless of

contract periods or the unexpired portions thereof, were treated alike
in terms of the computation of their monetary benefits in case of
illegal dismissal. Their claims were subjected to a uniform rule of
computation: their basic salaries multiplied by the entire unexpired
portion of their employment contracts.

The enactment of the subject clause in R.A. No. 8042 introduced

a differentiated rule of computation of the money claims of illegally
dismissed OFWs based on their employment periods, in the process
singling out one category whose contracts have an unexpired portion

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of one year or more and subjecting them to the peculiar disadvantage
of having their monetary awards limited to their salaries for 3 months
or for the unexpired portion thereof, whichever is less, but all the
while sparing the other category from such prejudice, simply because
the latters unexpired contracts fall short of one year.

Prior to R.A. No. 8042, a uniform system of computation of the

monetary awards of illegally dismissed OFWs was in place. This
uniform system was applicable even to local workers with fixed-term
employment.

The subject clause does not state or imply any definitive

governmental purpose; and it is for that precise reason that the clause
violates not just petitioners right to equal protection, but also her
right to substantive due process under Section 1, Article III of the
Constitution.

The subject clause being unconstitutional, petitioner is entitled

to his salaries for the entire unexpired period of nine months and 23
days of his employment contract, pursuant to law and jurisprudence
prior to the enactment of R.A. No. 8042.

3. Petitioner contends that his overtime and leave pay should form
part of the salary basis in the computation of his monetary award,
because these are fixed benefits that have been stipulated into his
contract.

Petitioner is mistaken.

The word salaries in Section 10(5) does not include overtime

and leave pay. For seafarers like petitioner, DOLE Department Order
No. 33, series 1996, provides a Standard Employment Contract of
Seafarers, in which salary is understood as the basic wage, exclusive
of overtime, leave pay and other bonuses; whereas overtime pay is
compensation for all work performed in excess of the regular eight
hours, and holiday pay is compensation for any work performed on
designated rest days and holidays.

In the same vein, the claim for the days leave pay for the
unexpired portion of the contract is unwarranted since the same is
given during the actual service of the seamen.

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 WHEREFORE, the Court GRANTS the Petition. The subject
clause or for three months for every year of the unexpired term,
whichever is less in the 5th paragraph of Section 10 of Republic Act
No. 8042 is DECLARED UNCONSTITUTIONAL; and the December
8, 2004 Decision and April 1, 2005 Resolution of the Court of Appeals
are MODIFIED to the effect that petitioner is AWARDED his salaries
for the entire unexpired portion of his employment contract
consisting of nine months and 23 days computed at the rate of
US$1,400.00 per month.

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 SAMEER OVERSEAS PLACEMENT AGENCY, INC.

vs. JOY C. CABILES

G.R. 170139 AUG. 5, 2014

FACTS:

Petitioner, Sameer Overseas Placement Agency, Inc., is a

recruitment and placement agency. Responding to an ad it
published, respondent, Joy C. Cabiles, submitted her
application for a quality control job in Taiwan.
Joys application was accepted. Joy was later asked to sign a
one-year employment contract for a monthly salary of
NT$15,360.00. She alleged that Sameer Overseas Agency
required her to pay a placement fee of P70,000.00 when she
signed the employment contract.
Joy was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal)
on June 26, 1997. She alleged that in her employment contract,
she agreed to work as quality control for one year. In Taiwan,
she was asked to work as a cutter.
Sameer Overseas Placement Agency claims that on July 14,
1997, a certain Mr. Huwang from Wacoal informed Joy, without
prior notice, that she was terminated and that she should
immediately report to their office to get her salary and
passport. She was asked to prepare for immediate
repatriation.
Joy claims that she was told that from June 26 to July 14, 1997,
she only earned a total of NT$9,000. According to her, Wacoal
deducted NT$3,000 to cover her plane ticket to Manila.
On October 15, 1997, Joy filed a complaint for illegal dismissal
with the NLRC against petitioner and Wacoal. LA dismissed
the complaint. NLRC reversed LAs decision. CA affirmed the
ruling of the National Labor Relations Commission finding
respondent illegally dismissed and awarding her three months
worth of salary, the reimbursement of the cost of her
repatriation, and attorneys fees.

ISSUE:

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 Whether or not Cabiles was entitled to the unexpired
portion of her salary due to illegal dismissal.

RULING:

YES. The Court held that the award of the three-month

equivalent of respondents salary should be increased to the amount
equivalent to the unexpired term of the employment contract.

In Serrano v. Gallant Maritime Services, Inc. and Marlow

Navigation Co., Inc., this court ruled that the clause or for three (3)
months for every year of the unexpired term, whichever is less is
unconstitutional for violating the equal protection clause and
substantive due process.

A statute or provision which was declared unconstitutional

is not a law. It confers no rights; it imposes no duties; it affords no
protection; it creates no office; it is inoperative as if it has not been
passed at all.

The Court said that they are aware that the clause or for
three (3) months for every year of the unexpired term, whichever is
less was reinstated in Republic Act No. 8042 upon promulgation of
Republic Act No. 10022 in 2010.

Ruling on the constitutional issue

In the hierarchy of laws, the Constitution is supreme. No

branch or office of the government may exercise its powers in any
manner inconsistent with the Constitution, regardless of the existence
of any law that supports such exercise. The Constitution cannot be
trumped by any other law. All laws must be read in light of the
Constitution. Any law that is inconsistent with it is a nullity.

Thus, when a law or a provision of law is null because it is

inconsistent with the Constitution, the nullity cannot be cured by
reincorporation or reenactment of the same or a similar law or
provision. A law or provision of law that was already declared
unconstitutional remains as such unless circumstances have so
changed as to warrant a reverse conclusion.

The Court observed that the reinstated clause, this time as

provided in Republic Act. No. 10022, violates the constitutional rights
to equal protection and due process. Petitioner as well as the Solicitor

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General have failed to show any compelling change in the
circumstances that would warrant us to revisit the precedent.

The Court declared, once again, the clause, or for three (3)
months for every year of the unexpired term, whichever is less in
Section 7 of Republic Act No. 10022 amending Section 10 of Republic
Act No. 8042 is declared unconstitutional and, therefore, null and
void.

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 AUTO BUS TRANSPORT SYSTEMS INC. vs.

ANTONIO BAUTISTA

G.R. 156367 MAY 16, 2005

FACTS:

Antonio Bautista was employed by Auto Bus Transport

Systems, Inc. in May 1995. He was assigned to the Isabela-
Manila route and he was paid by commission (7% of gross
income per travel for twice a month).
In January 2000, while he was driving his bus he bumped
another bus owned by Auto Bus. He claimed that he
accidentally bumped the bus as he was so tired and that he has
not slept for more than 24 hours because Auto Bus required
him to return to Isabela immediately after arriving at Manila.
Damages were computed and 30% or P75,551.50 of it was being
charged to Bautista. Bautista refused payment.
Auto Bus terminated Bautista after due hearing as part of Auto
Bus management prerogative. Bautista sued Auto Bus for
Illegal Dismissal. The Labor Arbiter Monroe Tabingan
dismissed Bautistas petition but ruled that Bautista is entitled
to P78,117.87 13th month pay payments and P13,788.05 for his
unpaid service incentive leave pay.
The case was appealed before the National Labor Relations
Commission. NLRC modified the LAs ruling. It deleted the
award for 13th Month pay. The court of Appeals affirmed the
NLRC.
Auto Bus averred that Bautista is a commissioned employee
and if that is not reason enough that Bautista is also a field
personnel hence he is not entitled to a service incentive leave.
They invoke:
Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE

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 (a) Every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive leave of
five days with pay.

Book III, Rule V: SERVICE INCENTIVE LEAVE

SECTION 1. Coverage. This rule shall apply to all

employees except:

(d) Field personnel and other employees whose performance

is unsupervised by the employer including those who are
engaged on task or contract basis, purely commission basis,
or those who are paid in a fixed amount for performing work
irrespective of the time consumed in the performance
thereof; . . .

ISSUE:

Whether or not Bautista is entitled to Service Incentive Leave. If

he is, Whether or not the three (3)-year prescriptive period provided
under Article 291 of the Labor Code, as amended, is applicable to
respondents claim of service incentive leave pay.

RULING:

Yes, Bautista is entitled to Service Incentive Leave. The Supreme

Court emphasized that it does not mean that just because an
employee is paid on commission basis he is already barred to receive
service incentive leave pay.

The question actually boils down to whether or not Bautista is a

field employee.

According to Article 82 of the Labor Code, field personnel shall

refer to non-agricultural employees who regularly perform their
duties away from the principal place of business or branch office of
the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty.

As a general rule, field personnel are those whose performance

of their job/service is not supervised by the employer or his
representative, the workplace being away from the principal office
and whose hours and days of work cannot be determined with
reasonable certainty; hence, they are paid specific amount for
rendering specific service or performing specific work. If required to be
at specific places at specific times, employees including drivers cannot be

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said to be field personnel despite the fact that they are performing work away
from the principal office of the employee.

Certainly, Bautista is not a field employee. He has a specific

route to traverse as a bus driver and that is a specific place that he
needs to be at work. There are inspectors hired by Auto Bus to
constantly check him. There are inspectors in bus stops who inspects
the passengers, the punched tickets, and the driver. Therefore he is
definitely supervised though he is away from the Auto Bus main
office.

On the other hand, the 3 year prescriptive period ran but

Bautista was able to file his suit in time before the prescriptive period
expired. It was only upon his filing of a complaint for illegal
dismissal, one month from the time of his dismissal, that Bautista
demanded from his former employer commutation of his
accumulated leave credits. His cause of action to claim the payment
of his accumulated service incentive leave thus accrued from the time
when his employer dismissed him and failed to pay his accumulated
leave credits.

Therefore, the prescriptive period with respect to his claim for service
incentive leave pay only commenced from the time the employer failed to
compensate his accumulated service incentive leave pay at the time of his
dismissal. Since Bautista had filed his money claim after only one
month from the time of his dismissal, necessarily, his money claim
was filed within the prescriptive period provided for by Article 291 of
the Labor Code.

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 VIVIAN Y. IMBUIDO vs.

NATIONAL LABOR RELATIONS COMMISSION,

INTERNATIONAL INFORMATION SERVICES, INC.

and GABRIEL LIBRANDO

G.R. 114734 March 31, 2000

FACTS:

Petitioner was employed as a data encoder by private

respondent International Information Services, Inc., a domestic
corporation engaged in the business of data encoding and
keypunching, from August 26, 1988 until October 18, 1991 when
her services were terminated. In the duration of her
employment, petitioner entered into thirteen (13) separate
contracts each lasting only for a period of three (3) months.
Aside from the basic hourly rate, specific job contract number
and period of employment, each contract contains the following
terms and conditions:
a. This Contract is for a specific project/job contract only and
shall be effective for the period covered as above-mentioned
unless sooner terminated when the job contract is completed
earlier or withdrawn by client, or when employee is
dismissed for just and lawful causes provided by law. The
happening of any of these events will automatically
terminate this contract of employment.

b. Subject shall abide with the Companys rules and

regulations for its employees attached herein to form an
integral part hereof.

c. The nature of your job may require you to render overtime

work with pay so as not to disrupt the Companys

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 commitment of scheduled delivery dates made on said job
contract."

September 1991: petitioner and twelve (12) other employees

allegedly agreed to the filing of a petition for certification
election involving the rank-and-file employees of private
respondent.
October 8, 1991: Lakas Manggagawa sa Pilipinas (LAKAS) filed
a petition for certification election with the Bureau of Labor
Relations (BLR).
October 18, 1991: petitioner received a termination letter from
Edna Kasilag, Administrative Officer of private respondent,
allegedly "due to low volume of work."
May 25, 1992: petitioner filed a complaint for illegal dismissal
with prayer for service incentive leave pay and 13th month
differential pay, with the National Labor Relations Commission,
National Capital Region, Arbitration Branch.
In her position paper dated August 3, 1992 and filed before the
labor arbiter, petitioner alleged that her employment was
terminated not due to the alleged low volume of work but
because she "signed a petition for certification election among
the rank and file employees of respondents," thus charging
private respondent with committing unfair labor practices.
Petitioner further complained of non-payment of service
incentive leave benefits and underpayment of 13th month pay.
Private respondent, in its position paper dated July 16, 1992,
maintained that it had valid reasons to terminate petitioners
employment and disclaimed any knowledge of the existence or
formation of a union among its rank-and-file employees at the
time petitioners services were terminated. They stressed that
its business "relies heavily on companies availing of its services.
Its retention by client companies with particular emphasis on
data encoding is on a project to project basis lasting 2-5 months.
They further argued that petitioners employment was for a
"specific project with a specified period of engagement."
According to private respondent, "the certainty of the
expiration of complainants engagement has been determined at
the time of their engagement (until 27 November 1991) or when
the project is earlier completed or when the client withdraws,"
as provided in the contract. Finally, private respondent averred

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 that petitioners "claims for non-payment of overtime time and
service incentive leave pay are without factual and legal basis."
Labor arbiter ruling:
- Ordered her reinstatement without loss of seniority
rights and privileges, and payment of back wages and
service incentive leave pay.
- Petitioner was a regular employee, in conformity with
the provisions under Art. 280 of the Labor Code.
- Low volume of work is not among the just causes for
termination recognized by law, thus considered
illegally dismissed.
- Rejected petitioners claim for 13th month pay since
she failed to fully substantiate and argue the same.
NLRC ruling:
- Reversed Labor Arbiters decision.
- Complaint for illegal dismissal was dismissed for being
without merit.
- Claim for service incentive leave pay is hereby
remanded for further arbitration.

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