Case: Atienza eklavu

257 Phil. 334

CRUZ, J.:

The facts of this case are not disputed. Even the legal issues are simple and are soon resolved.

Joseph B. Atienza was engaged by Philimare Shipping and Equipment Supply, as agent for Trans Ocean Liner Pte. Ltd. of
Germany, based in Singapore, to work as Third Mate on board the MV Tibati for the stipulated compensation of US$850.00 a
month from January 20, 1981 to January 20, 1982. [1] The Crew Agreement signed by the parties on January 3, 1981, provided
for insurance benefits "as per NSB Standard Format" and was validated and approved by the National Seamen Board on
January 14, 1981.[2]

On May 12, 1981, Atienza died as a result of an accident which befell him while working on the vessel in Bombay, India. [3] In
due time, his father, the herein petitioner, filed a claim for death benefits computed at the rate of 36 months times the seaman's
monthly salary plus ten per cent thereof in accordance with the Workmen's Compensation Law of Singapore, for a total of
$30,600.00. The private respondents, while admitting liability, contended that this was limited to only P40,000.00 under
Section D(1) of the NSB Standard Format.

On November 6, 1984, the Philippine Overseas Employment Administration sustained the private respondent and held that the
applicable law was Philippine law. [4] On appeal, the decision was affirmed by the National Labor Relations Commission except
that it increased the award to P75,000.00 pursuant to NSB Memorandum Circular No. 71, Series of 1981. [5]

In the petition before us, we are asked to reverse the public respondent on the ground that Singaporean law should have been
applied in line with our ruling in Norse Management Co. v. National Seamen Board, [6] where the foreign law was held
controlling because it provided for greater benefits for the claimant. For their part, the private respondents question the
application of NSB Memorandum Circular No. 71, Series of 1981, which they say became effective after the seaman's death. [7]

On the first issue, our ruling is that Norse is not applicable to the present petition. The reason is that in that case, it was
specifically stipulated by the parties in the Crew Agreement that "compensation shall be paid to employee in accordance
with and subject to the limitations of the Workmen's Compensation Act of the Philippines or the Workmen's Insurance
Law of the registry of the vessel, whichever is greater." [8] That was why the higher benefits prescribed by the foreign law
were awarded. By contrast, no such stipulation appears in the Crew Agreement now under consideration. Instead, it is clearly
stated therein that the insurance benefits shall be "as per NSB Standard Format," in the event "of death of the seaman during the
term of his contract, over and above the benefits for which the Philippine Government is liable under Philippine law." [9]
The petitioner argues that the Standard Format prescribed only the minimum benefits and does not preclude the parties from
stipulating for higher compensation. That may be true enough. But the point is that the parties in this case did not
provide for such higher benefits as the parties did in the Norse case. There was no stipulation in the Crew
Agreement of January 3, 1981, that the employee would be entitled to whichever greater insurance benefits were
offered by either Philippine law or the foreign law; on the contrary, it was plainly provided that insurance benefits
would be determined according to the NSB Standard Format then in force. The consequence is that the petitioner
cannot now claim a higher award than the compensation prescribed in the said format.

As we said in Bagong Filipinas Overseas Corporation v. NLRC:[10]

Wehold that the shipboard employment contract is controlling in this case. The contract provides that the beneficiaries of the
seaman are entitled to P20,000.00 'over and above the benefits' for which the Philippine Government is liable under Philippine
Law.
Hongkonglaw on workmens' compensation is not the applicable law. The case of Norse Management Co. v. National Seaman
Board, G.R. No. 54204, September 30, 1982, 117 SCRA 486 cannot be a precedent because it was expressly stipulated in the
employment contract in that case that the workmen's compensation payable to the employee should be in accordance with
Philippine Law or the Workmen's Insurance Law of the country where the vessel is registered "whichever is greater."

The next issue involves the effectivity of NSB Memorandum Circular No. 71, which appears to have been retroactively applied
by the NLRC in increasing the compensation from P40,000.00. The amended award was based by the POEA on NSB
Memorandum Circular No. 46, which became effective in 1979. [11] The NLRC, apparently laboring under the belief that
Memorandum Circular No. 71 was already effective at the time of the seaman's death on May 12, 1981, increased the death
benefits to P75,000.00 as provided thereunder. The fact, though, is that the new rule became effective only in December 1981,
as certified by the POEA itself,[12] or seven months after Atienza's fatal accident.
On the petitioner's claim that the award should be adjusted in view of the decrease in the purchasing power of the Philippine
peso, it suffices to cite the following relevant ruling of the Court in Sta. Rita and Well Run Maritime SA Ltd. v. NLRC: [13]
Regarding the third contention of the petitioners, the records show that when Sta. Rita died on September 14, 1981, NSB
Memorandum Circular No. 46 (Series of 1979) was the applicable law. Pursuant to this circular, in case of a seaman's death
during the terms of his contract, the company shall pay his beneficiaries the amount of P30,000.00. On November 18, 1981 or
more than one month after Sta. Rita's death the administrative regulations were amended to increase death compensation for
seamen to P50,000.00, effective December 1, 1981.
Considering that the applicable law governing death compensation for seamen at the time of Sta. Rita's death was Memorandum
Circular No. 46, Series of 1979, the petitioner's liability should be limited to P30,000.00. Moreover, if manning agents or
shipping corporations secure employer's insurance to cover their liabilities for death, total disability and sickness of officers and
ratings on board foreign going vessels, the extent of the coverage is based on the applicable law at the time. It would be unjust
to compel them to pay benefits based on a law not yet in effect at the time the contingency occurs.
WHEREFORE, the decision of the NLRC dated 15 July 1985 is SET ASIDE and that of the POEA is REINSTATED, without
any pronouncement as to costs. It is so ordered.
Narvasa, (Chairman), Gancayco, Grio-Aquino, and Medialdea, JJ., concur.
Xxx

Case: Bagong Filipinas

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-66006 February 28, 1985
BAGONG FILIPINAS OVERSEAS CORPORATION and GOLDEN STAR SHIPPING, LTD.,petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, DIRECTOR PATRICIA SANTO TOMAS and PROSERFINA
PANCHOrespondents.
Elizer A. Odulios for petitioners.
Pedro L. Linsangan for respondent P. Pancho.
s we said in Bagong Filipinas Overseas Corporation v. NLRC:[10]

Wehold that the shipboard employment contract is controlling in this case. The contract provides that the beneficiaries of the
seaman are entitled to P20,000.00 'over and above the benefits' for which the Philippine Government is liable under Philippine
Law.
Hongkonglaw on workmens' compensation is not the applicable law.

AQUINO, J.:
The issue in this case is whether the shipboard employment contract or Hongkong law should govern the amount of death
compensation due to the wife of Guillermo Pancho who was employed by Golden Star Shipping, Ltd., a Hongkong based firm.

The shipboard employment contract dated June 1, 1978 was executed in this country between Pancho and Bagong Filipinas
Overseas Corporation, the local agent of Golden Star Shipping. It was approved by the defunct National Seamen Board. Pancho
was hired as an oiler in the M/V Olivine for 12 months with a gross monthly wage of US $195.
In October, 1978, he had a cerebral stroke. He was rushed to the hospital while the vessel was docked at Gothenberg, Sweden.
He was repatriated to the Philippines and confined at the San Juan de Dios Hospital. He died on December 13, 1979.
The National Seamen Board awarded his widow, Proserfina, P20,000 as disability compensation benefits pursuant to the
above-mentioned employment contract plus P2,000 as attorney's fees . Proserfina appealed to the National Labor Relations
Commission which awarded her $621 times 36 months or its equivalent in Philippine currency plus 10% of the benefits as
attorney's fees. Golden Star Shipping assailed that decision by certiorari.

We hold that the shipboard employment contract is controlling in this case. The contract provides that the beneficiaries
of the seaman are entitled to P20,000 "over and above the benefits" for which the Philippine Government is liable
under Philippine law.
Hongkong law on workmen's compensation is not the applicable law. The case of Norse Management Co. vs. National
Seamen Board, G. R. No. 54204, September 30, 1982, 117 SCRA 486 cannot be a precedent because it was expressly
stipulated in the employment contract in that case that the workmen's compensation payable to the employee should be
in accordance with Philippine Law or the Workmen's Insurance Law of the country where the vessel is registered
"whichever is greater".
The Solicitor General opines that the employment contract should be applied. For that reason, he refused to uphold
the decision of the NLRC.
WHEREFORE, the judgment of the National Labor Relations Commission is reversed and set aside. The decision of the
National Seamen Board dated February 26, 1981 is affirmed. No costs.
SO ORDERED.
Concepcion, Jr., Abad Santos, Escolin and Cuevas, JJ., concur.
Makasiar, J., I reserve my vote.
Xxx

Case: Pakistan International

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 61594 September 28, 1990
PAKISTAN INTERNATIONAL AIRLINES CORPORATION,petitioner,
vs
HON. BLAS F. OPLE, in his capacity as Minister of Labor; HON. VICENTE LEOGARDO, JR., in his
capacity as Deputy Minister; ETHELYNNE B. FARRALES and MARIA MOONYEEN
MAMASIG,respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for petitioner.
Ledesma, Saludo & Associates for private respondents.

FELICIANO, J.:

On 2 December 1978, petitioner Pakistan International Airlines Corporation ("PIA"), a foreign corporation
licensed to do business in the Philippines, executed in Manila two (2) separate contracts of employment, one
with private respondent Ethelynne B. Farrales and the other with private respondent Ma. M.C. Mamasig. 1 The
contracts, which became effective on 9 January 1979, provided in pertinent portion as follows:
5. DURATION OF EMPLOYMENT AND PENALTY
This agreement is for a period of three (3) years, but can be extended by the mutual consent of the parties.
xxx xxx xxx
6. TERMINATION
xxx xxx xxx
Notwithstanding anything to contrary as herein provided, PIA reserves the right to terminate this agreement at any time by
giving the EMPLOYEE notice in writing in advance one month before the intended termination or in lieu thereof, by paying the
EMPLOYEE wages equivalent to one month's salary.
xxx xxx xxx
10. APPLICABLE LAW:
This agreement shall be construed and governed under and by the laws of Pakistan, and only the Courts of Karachi,
Pakistan shall have the jurisdiction to consider any matter arising out of or under this agreement.

Respondents then commenced training in Pakistan. After their training period, they began discharging their job
functions as flight attendants, with base station in Manila and flying assignments to different parts of the Middle
East and Europe.
On 2 August 1980, roughly one (1) year and four (4) months prior to the expiration of the contracts of employment, PIA through
Mr. Oscar Benares, counsel for and official of the local branch of PIA, sent separate letters both dated 1 August 1980 to private
respondents Farrales and Mamasig advising both that their services as flight stewardesses would be terminated "effective 1
September 1980, conformably to clause 6 (b) of the employment agreement [they had) executed with [PIA]." 2

On 9 September 1980, private respondents Farrales and Mamasig jointly instituted a complaint, docketed as
NCR-STF-95151-80, for illegal dismissal and non-payment of company benefits and bonuses, against PIA with
the then Ministry of Labor and Employment ("MOLE"). After several unfruitful attempts at conciliation, the
MOLE hearing officer Atty. Jose M. Pascual ordered the parties to submit their position papers and evidence
supporting their respective positions. The PIA submitted its position paper, 3 but no evidence, and there claimed
that both private respondents were habitual absentees; that both were in the habit of bringing in from abroad
sizeable quantities of "personal effects"; and that PIA personnel at the Manila International Airport had been
discreetly warned by customs officials to advise private respondents to discontinue that practice. PIA further
claimed that the services of both private respondents were terminated pursuant to the provisions of the
employment contract.
In his Order dated 22 January 1981, Regional Director Francisco L. Estrella ordered the reinstatement of private
respondents with full backwages or, in the alternative, the payment to them of the amounts equivalent to their
salaries for the remainder of the fixed three-year period of their employment contracts; the payment to private
respondent Mamasig of an amount equivalent to the value of a round trip ticket Manila-USA Manila; and
payment of a bonus to each of the private respondents equivalent to their one-month salary. 4 The Order stated
that private respondents had attained the status of regular employees after they had rendered more than a year of
continued service; that the stipulation limiting the period of the employment contract to three (3) years was null
and void as violative of the provisions of the Labor Code and its implementing rules and regulations on regular
and casual employment; and that the dismissal, having been carried out without the requisite clearance from the
MOLE, was illegal and entitled private respondents to reinstatement with full backwages.
On appeal, in an Order dated 12 August 1982, Hon. Vicente Leogardo, Jr., Deputy Minister, MOLE, adopted the
findings of fact and conclusions of the Regional Director and affirmed the latter's award save for the portion
thereof giving PIA the option, in lieu of reinstatement, "to pay each of the complainants [private respondents]
their salaries corresponding to the unexpired portion of the contract[s] [of employment] . . .". 5

In the instant Petition for Certiorari, petitioner PIA assails the award of the Regional Director and the Order of
the Deputy Minister as having been rendered without jurisdiction; for having been rendered without support in
the evidence of record since, allegedly, no hearing was conducted by the hearing officer, Atty. Jose M. Pascual;
and for having been issued in disregard and in violation of petitioner's rights under the employment contracts
with private respondents.
1. Petitioner's first contention is that the Regional Director, MOLE, had no jurisdiction over the subject matter of the complaint
initiated by private respondents for illegal dismissal, jurisdiction over the same being lodged in the Arbitration Branch of the
National Labor Relations Commission ("NLRC") It appears to us beyond dispute, however, that both at the time the complaint
was initiated in September 1980 and at the time the Orders assailed were rendered on January 1981 (by Regional Director
Francisco L. Estrella) and August 1982 (by Deputy Minister Vicente Leogardo, Jr.), the Regional Director had jurisdiction over
termination cases.
Art. 278 of the Labor Code, as it then existed, forbade the termination of the services of employees with at least one (1) year of
service without prior clearance from the Department of Labor and Employment:
Art. 278. Miscellaneous Provisions . . .
(b) With or without a collective agreement, no employer may shut down his establishment or dismiss or terminate the
employment of employees with at least one year of service during the last two (2) years, whether such service is continuous or
broken, without prior written authority issued in accordance with such rules and regulations as the Secretary may
promulgate . . . (emphasis supplied)
Rule XIV, Book No. 5 of the Rules and Regulations Implementing the Labor Code, made clear that in case of a
termination without the necessary clearance, the Regional Director was authorized to order the reinstatement of
the employee concerned and the payment of backwages; necessarily, therefore, the Regional Director must have
been given jurisdiction over such termination cases:
Sec. 2. Shutdown or dismissal without clearance. Any shutdown or dismissal without prior clearance shall be conclusively
presumed to be termination of employment without a just cause. The Regional Director shall, in such case order the immediate
reinstatement of the employee and the payment of his wages from the time of the shutdown or dismissal until the time of
reinstatement. (emphasis supplied)
Policy Instruction No. 14 issued by the Secretary of Labor, dated 23 April 1976, was similarly very explicit
about the jurisdiction of the Regional Director over termination of employment cases:
Under PD 850, termination cases with or without CBA are now placed under the original jurisdiction of the Regional
Director. Preventive suspension cases, now made cognizable for the first time, are also placed under the Regional Director.
Before PD 850, termination cases where there was a CBA were under the jurisdiction of the grievance machinery and voluntary
arbitration, while termination cases where there was no CBA were under the jurisdiction of the Conciliation Section.
In more details, the major innovations introduced by PD 850 and its implementing rules and regulations with respect to
termination and preventive suspension cases are:
1. The Regional Director is now required to rule on every application for clearance, whether there is opposition or not, within
ten days from receipt thereof.
xxx xxx xxx
(Emphasis supplied)

2. The second contention of petitioner PIA is that, even if the Regional Director had jurisdiction, still his order
was null and void because it had been issued in violation of petitioner's right to procedural due process . 6 This
claim, however, cannot be given serious consideration. Petitioner was ordered by the Regional Director to
submit not only its position paper but also such evidence in its favor as it might have. Petitioner opted to rely
solely upon its position paper; we must assume it had no evidence to sustain its assertions. Thus, even if no
formal or oral hearing was conducted, petitioner had ample opportunity to explain its side. Moreover, petitioner
PIA was able to appeal his case to the Ministry of Labor and Employment. 7

There is another reason why petitioner's claim of denial of due process must be rejected. At the time the
complaint was filed by private respondents on 21 September 1980 and at the time the Regional Director issued
his questioned order on 22 January 1981, applicable regulation, as noted above, specified that a "dismissal
without prior clearance shall be conclusively presumed to be termination of employment without a cause", and
the Regional Director was required in such case to" order the immediate reinstatement of the employee and the
payment of his wages from the time of the shutdown or dismiss until . . . reinstatement." In other words, under
the then applicable rule, the Regional Director did not even have to require submission of position papers by the
parties in view of the conclusive (juris et de jure) character of the presumption created by such applicable law
and regulation. In Cebu Institute of Technology v. Minister of Labor and Employment, 8 the Court pointed out
that "under Rule 14, Section 2, of the Implementing Rules and Regulations, the termination of [an employee]
which was without previous clearance from the Ministry of Labor is conclusively presumed to be without [just]
cause . . . [a presumption which] cannot be overturned by any contrary proof however strong."
3. In its third contention, petitioner PIA invokes paragraphs 5 and 6 of its contract of employment with private
respondents Farrales and Mamasig, arguing that its relationship with them was governed by the provisions of its
contract rather than by the general provisions of the Labor Code. 9
Paragraph 5 of that contract set a term of three (3) years for that relationship, extendible by agreement between
the parties; while paragraph 6 provided that, notwithstanding any other provision in the Contract, PIA had the
right to terminate the employment agreement at any time by giving one-month's notice to the employee or, in
lieu of such notice, one-months salary.
10
A contract freely entered into should, of course, be respected, as PIA argues, since a contract is the law between the parties.
The principle of party autonomy in contracts is not, however, an absolute principle. The rule in Article 1306, of
our Civil Code is that the contracting parties may establish such stipulations as they may deem convenient,
"provided they are not contrary to law, morals, good customs, public order or public policy." Thus, counter-
balancing the principle of autonomy of contracting parties is the equally general rule that provisions of
applicable law, especially provisions relating to matters affected with public policy, are deemed written into the
11
contract. Put a little differently, the governing principle is that parties may not contract away applicable
provisions of law especially peremptory provisions dealing with matters heavily impressed with public interest.
The law relating to labor and employment is clearly such an area and parties are not at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations by simply contracting with
each other. It is thus necessary to appraise the contractual provisions invoked by petitioner PIA in terms of their
consistency with applicable Philippine law and regulations.
As noted earlier, both the Labor Arbiter and the Deputy Minister, MOLE, in effect held that paragraph 5 of that
employment contract was inconsistent with Articles 280 and 281 of the Labor Code as they existed at the time
the contract of employment was entered into, and hence refused to give effect to said paragraph 5. These
Articles read as follows:
Art. 280. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and to his backwages computed from the time his compensation was withheld
from him up to the time his reinstatement.
Art. 281. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless
of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the
employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: provided, that, any employee who
has rendered at least one year of service, whether such service is continuous or broken, shall be considered as regular
employee with respect to the activity in which he is employed and his employment shall continue while such actually exists.
(Emphasis supplied)
In Brent School, Inc., et al. v. Ronaldo Zamora, etc., et al., 12 the Court had occasion to examine in detail the
question of whether employment for a fixed term has been outlawed under the above quoted provisions of the
Labor Code. After an extensive examination of the history and development of Articles 280 and 281, the Court
reached the conclusion that a contract providing for employment with a fixed period was not necessarily
unlawful:
There can of course be no quarrel with the proposition that where from the circumstances it is apparent that
periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck
down or disregarded as contrary to public policy, morals, etc. But where no such intent to circumvent the law is
shown, or stated otherwise, where the reason for the law does not exist e.g. where it is indeed the employee
himself who insists upon a period or where the nature of the engagement is such that, without being seasonal or
for a specific project, a definite date of termination is a sine qua nonwould an agreement fixing a period be
essentially evil or illicit, therefore anathema Would such an agreement come within the scope of Article 280
which admittedly was enacted "to prevent the circumvention of the right of the employee to be secured in . . .
(his) employment?"
As it is evident from even only the three examples already given that Article 280 of the Labor Code, under a narrow and literal
interpretation, not only fails to exhaust the gamut of employment contracts to which the lack of a fixed period would be an
anomaly, but would also appear to restrict, without reasonable distinctions, the right of an employee to freely stipulate with his
employer the duration of his engagement, it logically follows that such a literal interpretation should be eschewed or avoided .
The law must be given reasonable interpretation, to preclude absurdity in its application. Outlawing the whole concept of term
employment and subverting to boot the principle of freedom of contract to remedy the evil of employers" using it as a means to
prevent their employees from obtaining security of tenure is like cutting off the nose to spite the face or, more relevantly, curing
a headache by lopping off the head.
xxx xxx xxx
Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article 280 of the
Labor Code clearly appears to have been, as already observed, to prevent circumvention of the employee's right to be secure in
his tenure, the clause in said article indiscriminately and completely ruling out all written or oral agreements conflicting with the
concept of regular employment as defined therein should be construed to refer to the substantive evil that the Code itself has
singled out: agreements entered into precisely to circumvent security of tenure. It should have no application to instances where
a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral
dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the law would be made to
apply to purposes other than those explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects
and apt to lead to absurd and unintended consequences. (emphasis supplied)
It is apparent from Brent School that the critical consideration is the presence or absence of a substantial
indication that the period specified in an employment agreement was designed to circumvent the security of
tenure of regular employees which is provided for in Articles 280 and 281 of the Labor Code. This indication
must ordinarily rest upon some aspect of the agreement other than the mere specification of a fixed term of the
ernployment agreement, or upon evidence aliunde of the intent to evade.

Examining the provisions of paragraphs 5 and 6 of the employment agreement between petitioner PIA and
private respondents, we consider that those provisions must be read together and when so read, the fixed period
of three (3) years specified in paragraph 5 will be seen to have been effectively neutralized by the provisions of
paragraph 6 of that agreement. Paragraph 6 in effect took back from the employee the fixed three (3)-year
period ostensibly granted by paragraph 5 by rendering such period in effect a facultative one at the option of the
employer PIA. For petitioner PIA claims to be authorized to shorten that term, at any time and for any cause
satisfactory to itself, to a one-month period, or even less by simply paying the employee a month's salary.
Because the net effect of paragraphs 5 and 6 of the agreement here involved is to render the employment of
private respondents Farrales and Mamasig basically employment at the pleasure of petitioner PIA, the Court
considers that paragraphs 5 and 6 were intended to prevent any security of tenure from accruing in favor of
private respondents even during the limited period of three (3) years,13 and thus to escape completely the thrust
of Articles 280 and 281 of the Labor Code.
Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which specifies, firstly, the law
of Pakistan as the applicable law of the agreement and, secondly, lays the venue for settlement of any dispute
arising out of or in connection with the agreement "only [in] courts of Karachi Pakistan". The first clause of
paragraph 10 cannot be invoked to prevent the application of Philippine labor laws and regulations to the
subject matter of this case, i.e., the employer-employee relationship between petitioner PIA and private
respondents. We have already pointed out that the relationship is much affected with public interest and that the
otherwise applicable Philippine laws and regulations cannot be rendered illusory by the parties agreeing upon
some other law to govern their relationship. Neither may petitioner invoke the second clause of paragraph 10,
specifying the Karachi courts as the sole venue for the settlement of dispute; between the contracting parties.
Even a cursory scrutiny of the relevant circumstances of this case will show the multiple and substantive
contacts between Philippine law and Philippine courts, on the one hand, and the relationship between the
parties, upon the other: the contract was not only executed in the Philippines, it was also performed here, at least
partially; private respondents are Philippine citizens and respondents, while petitioner, although a foreign
corporation, is licensed to do business (and actually doing business) and hence resident in the Philippines; lastly,
private respondents were based in the Philippines in between their assigned flights to the Middle East and
Europe. All the above contacts point to the Philippine courts and administrative agencies as a proper forum for
the resolution of contractual disputes between the parties. Under these circumstances, paragraph 10 of the
employment agreement cannot be given effect so as to oust Philippine agencies and courts of the jurisdiction
vested upon them by Philippine law. Finally, and in any event, the petitioner PIA did not undertake to plead and
prove the contents of Pakistan law on the matter; it must therefore be presumed that the applicable provisions of
the law of Pakistan are the same as the applicable provisions of Philippine law.14
We conclude that private respondents Farrales and Mamasig were illegally dismissed and that public respondent
Deputy Minister, MOLE, had not committed any grave abuse of discretion nor any act without or in excess of
jurisdiction in ordering their reinstatement with backwages. Private respondents are entitled to three (3) years
backwages without qualification or deduction. Should their reinstatement to their former or other substantially
equivalent positions not be feasible in view of the length of time which has gone by since their services were
unlawfully terminated, petitioner should be required to pay separation pay to private respondents amounting to
one (1) month's salary for every year of service rendered by them, including the three (3) years service
putatively rendered.
ACCORDINGLY, the Petition for certiorariis hereby DISMISSED for lack of merit, and the Order dated 12 August 1982 of
public respondent is hereby AFFIRMED, except that (1) private respondents are entitled to three (3) years backwages, without
deduction or qualification; and (2) should reinstatement of private respondents to their former positions or to substantially
equivalent positions not be feasible, then petitioner shall, in lieu thereof, pay to private respondents separation pay amounting to
one (1)-month's salary for every year of service actually rendered by them and for the three (3) years putative service by private
respondents. The Temporary Restraining Order issued on 13 September 1982 is hereby LIFTED. Costs against petitioner.
SO ORDERED.
Fernan (C.J., Chairman), Gutierrez, Jr., Bidin and Corts, JJ., concur.

Xxx

Case: government v Frank

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-2935 March 23, 1909
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, plaintiff-appellee,
vs.
GEORGE I. FRANK, defendant-appellant.
Bishop and O'Brien for appellant.
Attorney-General Wilfley for appellee.
JOHNSON, J.:
Judgment was rendered in the lower court on the 5th day of September, 1905. The defendant appealed. On the 12th day of
October, 1905, the appellant filed his printed bill of exceptions with the clerk of the Supreme Court. On the 5th day of
December, 1905, the appellant filed his brief with the clerk of the Supreme Court. On the 19th day of January, 1906, the
Attorney-General filed his brief in said cause. Nothing further was done in said cause until on or about the 30th day of January,
1909, when the respective parties were requested by this court to prosecute the appeal under the penalty of having the same
dismissed for failure so to do; whereupon the appellant, by petition, had the caused placed upon the calendar and the same was
heard on the 2d day of February, 1909.
The facts from the record appear to be as follows:

First. That on or about the 17th day of April, 1903, in the city of Chicago, in the state of Illinois, in the United States, the
defendant, through a respective of the Insular Government of the Philippine Islands, entered into a contract for a period of two
years with the plaintiff, by which the defendant was to receive a salary of 1,200 dollars per year as a stenographer in the service
of the said plaintiff, and in addition thereto was to be paid in advance the expenses incurred in traveling from the said city of
Chicago to Manila, and one-half salary during said period of travel.
Second. Said contract contained a provision that in case of a violation of its terms on the part of the defendant, he should
become liable to the plaintiff for the amount expended by the Government by way of expenses incurred in traveling from
Chicago to Manila and one-half salary paid during such period.
Third. The defendant entered upon the performance of his contract upon the 30th day of April, 1903, and was paid half-salary
from that date until June 4, 1903, the date of his arrival in the Philippine Islands.
Fourth. That on the 11th day of February, 1904, the defendant left the service of the plaintiff and refused to make further
compliance with the terms of the contract.
Fifth. On the 3d day of December, 1904, the plaintiff commenced an action in the Court of First Instance of the city of Manila to
recover from the defendant the sum of 269.23 dollars, which amount the plaintiff claimed had been paid to the defendant as
expenses incurred in traveling from Chicago to Manila, and as half salary for the period consumed in travel.
Sixth. It was expressly agreed between the parties to said contract that Laws No. 80 and No. 224 should constitute a
part of said contract.
To the complaint of the plaintiff the defendant filed a general denial and a special defense, alleging in his special defense
that the Government of the Philippine Islands had amended Laws No. 80 and No. 224 and had thereby materially altered
the said contract, and also that he was a minor at the time the contract was entered into and was therefore not responsible
under the law.

To the special defense of the defendant the plaintiff filed a demurrer, which demurrer the court sustained.
Upon the issue thus presented, and after hearing the evidence adduced during the trial of the cause, the lower court rendered a
judgment against the defendant and in favor of the plaintiff for the sum of 265.90 dollars. The lower court found that at the time
the defendant quit the service of the plaintiff there was due him from the said plaintiff the sum of 3.33 dollars, leaving a balance
due the plaintiff in the sum of 265.90 dollars. From this judgment the defendant appealed and made the following assignments
of error:
1. The court erred in sustaining plaintiff's demurrer to defendant's special defenses.
2. The court erred in rendering judgment against the defendant on the facts.

With reference to the above assignments of error, it may be said that the mere fact that the legislative department of the
Government of the Philippine Islands had amended said Acts No. 80 and No. 224 by the Acts No. 643 and No. 1040 did not
have the effect of changing the terms of the contract made between the plaintiff and the defendant. The legislative department of
the Government is expressly prohibited by section 5 of the Act of Congress of 1902 from altering or changing the terms of the
contract. The right which the defendant had acquired by virtue of Acts No. 80 and No. 224 had not been changed in any respect
by the fact that said laws had been amended. These acts, constituting the terms of the contract, still constituted a part of said
contract and were enforceable in favor of the defendant.
The defendant alleged in his special defense that he was a minor and therefore the contract could not be enforced against him.
The record discloses that, at the time the contract was entered into in the State of Illinois, he was an adult under the laws of that
State and had full authority to contract. The plaintiff [the defendant] claims that, by reason of the fact that, under the laws of the
Philippine Islands at the time the contract was made, male persons in said Islands did not reach their majority until they had
attained the age of 23 years, he was not liable under said contract, contending that the laws of the Philippine Islands governed. It
is not disputed upon the contrary the fact is admitted that at the time and place of the making of the contract in question
the defendant had full capacity to make the same. No rule is better settled in law than that matters bearing upon the
execution, interpretation and validity of a contract are determined by the law of the place where the contract is
made. (Scudder vs. Union National Bank, 91 U. S., 406.) Matters connected with its performance are regulated by
the law prevailing at the place of performance. Matters respecting a remedy, such as the bringing of suit,
admissibility of evidence, and statutes of limitations, depend upon the law of the place where the suit is brought.
(Idem.)
The defendant's claim that he was an adult when he left Chicago but was a minor when he arrived at Manila; that he was an
adult at the time he made the contract but was a minor at the time the plaintiff attempted to enforce the contract, more than a
year later, is not tenable.
Our conclusions with reference to the first above assignment of error are, therefore:
First. That the amendments to Acts No. 80 and No. 224 in no way affected the terms of the contract in
question; and
Second. The plaintiff [defendant] being fully qualified to enter into the contract at the place and time the
contract was made, he can not plead infancy as a defense at the place where the contract is being
enforced.
We believe that the above conclusions also dispose of the second assignment of error.
For the reasons above stated, the judgment of the lower court is affirmed, with costs.
Arellano, C. J., Torres, Mapa, Carson, and Willard, JJ., concur.
Xxx

Case: Triple Eight

THIRD DIVISION
[G.R. No. 129584. December 3, 1998]
TRIPLE EIGHT INTEGRATED SERVICES, INC., petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION, HON.
LABOR ARBITER POTENCIANO S. CANIZARES, JR. and ERLINDA R. OSDANA, respondents.
DECISION
ROMERO, J.:
In this petition for certiorari now before us, petitioner Triple Eight Integrated Services Inc. seeks to annul the decision [1] of
public respondent National Labor Relations Commission (First Division, Quezon City) dated March 11, 1997 affirming the
August 20, 1996 decision[2] of Labor Arbiter Potenciano Canizares. Petitioner was ordered to pay private respondent Erlinda
Osdana her salaries for the unexpired portion of her employment contract, unpaid salaries, salary differential, moral and
exemplary damages, as well as attorneys fees. On April 28, 1997, the NLRC denied petitioners motion for reconsideration.[3]
The antecedent facts follow.
Sometime in August 1992, private respondent Osdana was recruited by petitioner for employment with the latters principal,
Gulf Catering Company (GCC), a firm based in the Kingdom of Saudi Arabia. Under the original employment contract, Osdana
was engaged to work as Food Server for a period of thirty-six (36) months with a salary of five hundred fifty Saudi rials
(SR550).
Osdana claims she was required by petitioner to pay a total of eleven thousand nine hundred fifty pesos (P11,950.00) in
placement fees and other charges, for which no receipt was issued. She was likewise asked to undergo a medical examination
conducted by the Philippine Medical Tests System, a duly accredited clinic for overseas workers, which found her to be Fit of
Employment.
Subsequently, petitioner asked Osdana to sign another Contractor-Employee Agreement [4] which provided that she would be
employed as a waitress for twelve (12) months with a salary of two hundred eighty US dollars ($280). It was this employment
agreement which was approved by the Philippine Overseas Employment Administration (POEA).

On September 16, 1992, Osdana left for Riyadh, Saudi Arabia, and commenced working for GCC. She was assigned to the
College of Public Administration of the Oleysha University and, contrary to the terms and conditions of the employment
contract, was made to wash dishes, cooking pots, and utensils, perform janitorial work and other tasks which were unrelated to
her job designation as waitress.Making matters worse was the fact that she was made to work a gruelling twelve-hour shift,
from six oclock in the morning to six oclock in the evening, without overtime pay.
Because of the long hours and the strenuous nature of her work, Osdana suffered from numbness and pain in her arms. The pain
was such that she had to be confined at the Ladies Villa, a housing facility of GCC, from June 18 to August 22, 1993, during
which period, she was not paid her salaries.
After said confinement, Osdana was allowed to resume work, this time as Food Server and Cook at the Hota Bani Tameem
Hospital, where she worked seven days a week from August 22 to October 5, 1993. Again, she was not compensated.
Then, from October 6 to October 23, 1993, Osdana was again confined at the Ladies Villa for no apparent reason. During
this period, she was still not paid her salary.
On October 24, 1993, she was re-assigned to the Oleysha University to wash dishes and do other menial tasks. As with her
previous assignment at the said University, Osdana worked long hours and under harsh conditions.Because of this, she was
diagnosed as having Bilateral Carpal Tunnel Syndrome, a condition precipitated by activities requiring repeated flexion,
pronation, and supination of the wrist and characterized by excruciating pain and numbness in the arms. [5]
As the pain became unbearable, Osdana had to be hospitalized. She underwent two surgical operations, one in January 1994,
another on April 23, 1994. Between these operations, she was not given any work assignments even if she was willing and able
to do light work in accordance with her doctors advice. Again, Osdana wasnot paid anycompensation for the period between
February to April 22, 1994.
After her second operation, Osdana was discharged from the hospital on April 25, 1994. The medical report stated that she had
very good improvement of the symptoms and she was discharged on the second day of the operation. [6]

Four days later, however, she was dismissed from work, allegedly on the ground of illness. She was not given any separation
pay nor was she paid her salaries for the periods when she was not allowed to work.

Upon her return to the Philippines, Osdana sought the help of petitioner, but to no avail. She was thus constrained to file a
complaint before the POEA against petitioner, praying for unpaid and underpaid salaries, salaries for the unexpired portion of
the employment contract, moral and exemplary damages and attorneys fees, as well as the revocation, cancellation, suspension
and/or imposition of administrative sanctions against petitioner.
Pursuant to Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, the case was
transferred to the arbitration branch of the NLRC and assigned to Labor Arbiter Canizares.
In a decision dated August 20, 1996, the labor arbiter ruled in favor of Osdana. The dispositive portion of the decision follows:
Wherefore, the respondent is hereby ordered to pay the complainant US$2,499.00 as salaries for the unexpired portion of the
contract, and US$1,076.00 as unpaid salary and salary differential, or its equivalent in Philippine Peso.
The respondent is likewise ordered to pay the complainant P50,000 moral damages, and P20,000 exemplary damages.
The respondent is further ordered to pay the complainant 10% of the monetary award as attorneys fee.
Other claims are hereby dismissed for lack of sufficient evidence.
SO ORDERED.
Aggrieved by the labor arbiters decision, petitioner appealed to the NLRC, which affirmed the decision in question on March
11, 1997.Petitioners motion for reconsideration was likewise denied by the NLRC in its order dated April 28, 1997.
Hence, this petition for certiorari.
Petitioner alleges grave abuse of discretion on the part of the public respondents for the following reasons: (a) ruling in favor of
Osdana even if there was no factual or legal basis for the award and, (b) holding petitioner solely liable for her claims despite
the fact that its liability is joint and several with its principal, GCC.
At the outset, petitioner argues that public respondent Labor Arbiter gravely abused his discretion when he rendered the
questioned decision dated August 20, 1996 without stating the facts and the law where he derived his conclusions. [7] In support
of this argument, petitioner cites the first paragraph of Article VIII, Section 14 of the Constitution: No decision shall be
rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based.
On this point, it is enough to note that the decisions of both the labor arbiter and the NLRC were based mainly on the facts and
allegations in Osdanas position paper and supporting documents. We find these sufficient to constitute substantial evidence to
support the questioned decisions. Generally, findings of facts of quasi-judicial agencies like the NLRC are accorded great
respect and, at times, even finality if supported by substantial evidence. Substantial evidence is such amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion. [8]
Moreover, well-settled is the rule that if doubts exist between the evidence presented by the employer and the employee, the
scales of justice must be tilted in favor of the latter. Thus, in controversies between a worker and her employer, doubts
reasonably arising from the evidence or in the interpretation of agreements should be resolved in favor of the former.
Petitioner, for its part, was given the same opportunity to file its own position paper but instead, it opted to file a two-page
Answer With Special And Affirmative Defenses, denying generally the allegations of the complaint. [9]
As observed by the labor arbiter, The record shows the complainant filed complaint (sic), position paper, and supporting
documents, and prosecuted her case diligently; while the respondent merely tried to settle the case amicably, failing even to file
its position paper.[10] The present case being one for illegal dismissal, it was incumbent upon petitioner employer to show by
substantial evidence that the termination was validly made. In termination cases, the burden of proof rests on the employer to
show that the dismissal is for a just cause. [11] Having failed to file its position paper and to support its denials and affirmative
defenses in its answer, petitioner cannot now fault the labor arbiter and the NLRC for relying on the facts as laid down by
Osdana in her position paper and supported by other documents. The essence of due process is that a party be afforded
reasonable opportunity to be heard and to submit any evidence he may have in support of his defense, [12] and this is exactly
what petitioner was accorded, although it chose not to fully avail thereof.
This Court, therefore, upholds the finding of herein public respondents that the facts and the evidence on record adduced by
Osdana and taken in relation to the answer of petitioner show that indeed there was breach of the employment contract and
illegal dismissal committed by petitioners principal.
Petitioner claims that public respondents committed grave abuse of discretion when they ruled that Osdana had been illegally
dismissed by GCC. It maintains that the award for salaries for the unexpired portion of the contract was improper because
Osdana was validly dismissed on the ground of illness.
The argument must fail.
In its Answer, Memorandum of Appeal,[13] Petition for Certiorari,[14] and Consolidated Reply,[15] petitioner consistently
asserted that Osdana was validly repatriated for medical reasons, but it failed to substantiate its claim that such repatriation was
justified and done in accordance with law.
Article 284 of the Labor Code is clear on the matter of termination by reason of disease or illness, viz:
Art. 284. Disease as a ground for termination An employer may terminate the services of an employee who has been found to be
suffering from any disease and whose continued employment is prohibited by law or prejudicial to his health as well as the
health of his co-employees: x x x.
Specifically, Section 8, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code provides:
Sec. 8. Disease as a ground for dismissal Where the employee suffers from a disease and his continued employment is
prohibited bylaw or prejudicial to his health or to the health of his co-employees, the employer shall not terminate his
employment unless there is a certification by competent public authority that the disease is of such nature or at such a stage that
it cannot be cured within a period of six (6) months with proper medical treatment. If the disease or ailment can be cured within
the period, the employer shall not terminate the employee but shall ask the employee to take a leave. The employer shall
reinstate such employee to his former position immediately upon the restoration of his normal health. (Underscoring supplied)
Viewed in the light of the foregoing provisions, the manner by which Osdana was terminated was clearly in violation of the
Labor Code and its implementing rules and regulations.
In the first place, Osdanas continued employment despite her illness was not prohibited by law norwas it prejudicial to her
health, as well as that of her co-employees. In fact, the medical report issued after her second operation stated that she had very
good improvement of the symptoms. Besides, Carpal Tunnel Syndrome is not a contagious disease.
Petitioner attributes good faith on the part of its principal, claiming that It was the concern for the welfare and physical well
being (sic) of private respondent that drove her employer to take the painful decision of terminating her from the service and
having her repatriated to the Philippines at its expense.The employer did not want to risk the aggravation of the illness of private
respondent which could have been the logical consequence were private respondent allowed to continue with her job. [16]
The Court notes, however, that aside from these bare allegations, petitioner has not presented any medical certificate or similar
document from a competent public health authority in support of its claims.
On the medical certificate requirement, petitioner erroneously argues that private respondent was employed in Saudi Arabia and
not here in the Philippines. Hence, there was a physical impossibility to secure from a Philippine public health authority the
alluded medical certificate that public respondents illness will not be cured within a period of six months. [17]
Petitioner entirely misses the point, as counsel for private respondent states in the Comment. [18] The rule simply prescribes a
certification by a competent public health authority and not a Philippine public health authority.
If, indeed, Osdana was physically unfit to continue her employment, her employer could have easily obtained a certification to
that effect from a competent public health authority in Saudi Arabia, thereby heading off any complaint for illegal dismissal.
The requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with; otherwise, it would
sanction the unilateral and arbitrary determination by the employer of the gravity or extent of the employees illness and thus
defeat the public policy on the protection of labor.As the Court observed in Prieto v. NLRC, [19] The Court is not unaware of
the many abuses suffered by our overseas workers in the foreign land where they have ventured, usually with heavy hearts, in
pursuit of a more fulfilling future. Breach of contract, maltreatment, rape, insufficient nourishment, sub-human lodgings, insults
and other forms of debasement, are only a few of the inhumane acts to which they are subjected by their foreign employers, who
probably feel they can do as they please in their country. While these workers may indeed have relatively little defense against
exploitation while they are abroad, that disadvantage must not continue to burden them when they return to their own territory
to voice their muted complaint. There is no reason why, in their own land, the protection of our own laws cannot be extended to
them in full measure for the redress of their grievances.
Petitioner likewise attempts to sidestep the medical certificate requirement by contending that since Osdana was working in
Saudi Arabia, her employment was subject to the laws of the host country. Apparently, petitioner hopes to make it appear that
the labor laws of Saudi Arabia do not require any certification by a competent public health authority in the dismissal of
employees due to illness.
Again, petitioners argument is without merit.
First, established is the rule that lex loci contractus (the law of the place where the contract is made) governs in this
jurisdiction.There is no question that the contract of employment in this case was perfected here in the Philippines.
Therefore, the Labor Code, its implementing rules and regulations, and other laws affecting labor apply in this
case. Furthermore, settled is the rule that the courts of the forum will not enforce any foreign claim obnoxious to
the forums public policy.[20] Here in the Philippines, employment agreements are more than contractual in
nature. The Constitution itself, in Article XIII Section 3, guarantees the special protection of workers, to wit:
The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of
work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits
as may be provided by law.
x x x x x x x x x.
This public policy should be borne in mind in this case because to allow foreign employers to determine for and by themselves
whether an overseas contract worker may be dismissed on the ground of illness would encourage illegal or arbitrary pre-
termination of employment contracts.
As regards the monetary award of salaries for the unexpired portion of the employment contract, unpaid salaries and salary
differential granted by public respondents to Osdana, petitioner assails the same for being contrary to law, evidence and existing
jurisprudence, all of which therefore constitutes grave abuse of discretion.
Although this contention is without merit, the award for salaries for the unexpired portion of the contract must, however, be
reduced. Paragraph 5, Section 10 of R.A. No. 8042, applies in this case, thus:
In case of termination of overseas employment 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 at 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.
In the case at bar, while it would appear that the employment contract approved by the POEA was only for a period of twelve
months, Osdanas actual stint with the foreign principal lasted for one year and seven-and-a-half months.It may be inferred,
therefore, that the employer renewed her employment contract for another year. Thus, the award for the unexpired portion of the
contract should have been US$1,260 (US$280 x 4 months) or its equivalent in Philippine pesos, not US$2,499 as adjudged by
the labor arbiter and affirmed by the NLRC.
As for the award for unpaid salaries and differential amounting to US$1,076 representing seven months unpaid salaries and one
month underpaid salary, the same is proper because, as correctly pointed out by Osdana, the no work, no pay rule relied upon by
petitioner does not apply in this case.In the first place, the fact that she had not worked from June 18 to August 22, 1993 and
then from January 24 to April 29, 1994, was due to her illness which was clearly work-related.Second, from August 23 to
October 5, 1993, Osdana actually worked as food server and cook for seven days a week at the Hota Bani Tameem Hospital, but
was not paid any salary for the said period. Finally, from October 6 to October 23, 1993, she was confined to quarters and was
not given any work for no reason at all.
Now, with respect to the award of moral and exemplary damages, the same is likewise proper but should be reduced. Worth
reiterating is the rule that moral damages are recoverable where the dismissal of the employee was attended by bad faith or
fraud or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs, or public policy. [21]
Likewise, exemplary damages may be awarded if the dismissal was effected in a wanton, oppressive or malevolent manner. [22]
According to the facts of the case as stated by public respondent, Osdana was made to perform such menial chores, as
dishwashing and janitorial work, among others, contrary to her job designation as waitress. She was also made to work long
hours without overtime pay.Because of such arduous working conditions, she developed Carpal Tunnel Syndrome. Her illness
was such that she had to undergo surgery twice. Since her employer determined for itself that she was no longer fit to continue
working, they sent her home posthaste without as much as separation pay or compensation for the months when she was unable
to work because of her illness. Since the employer is deemed to have acted in bad faith, the award for attorneys fees is likewise
upheld.
Finally, petitioner alleges grave abuse of discretion on the part of public respondents for holding it solely liable for the claims of
Osdana despite the fact that its liability with the principal is joint and several.
Petitioner misunderstands the decision in question. It should be noted that contrary to petitioners interpretation, the decision of
the labor arbiter which was affirmed by the NLRC did not really absolve the foreign principal.
Petitioner was the only one held liable for Osdanas monetary claims because it was the only respondent named in the complaint
and it does not appear that petitioner took steps to have its principal included as co-respondent. Thus, the POEA, and later the
labor arbiter, did not acquire jurisdiction over the foreign principal.
This is not to say, however, that GCC may not be held liable at all. Petitioner can still claim reimbursement or contribution from
it for the amounts awarded to the illegally-dismissed employee.
WHEREFORE, in view of the foregoing, the instant petition is DISMISSED. Accordingly, the decisions of the labor arbiter
dated August 20, 1996, and of the NLRC dated March 11, 1997, are AFFIRMED with the MODIFICATION that the award to
private respondent Osdana should be one thousand two hundred sixty US dollars (US$1,260), or its equivalent in Philippine
pesos, as salaries for the unexpired portion of the employment contract, and one thousand seventy six US dollars (US$1,076), or
its equivalent in Philippine pesos, representing unpaid salaries for seven (7) months and underpaid salary for one (1) month,
plus interest.
Petitioner is likewise ordered to pay private respondent P30,000.00 in moral damages, P10,000.00 in exemplary damages and
10% attorneys fees.
This decision is without prejudice to any remedy or claim for reimbursement or contribution petitioner may institute against its
foreign principal, Gulf Catering Company. No pronouncement as to costs.
SO ORDERED.
Kapunan, Purisima, and Pardo JJ., concur

[1] Rollo, pp. 66-74.