ANTONIO M.

SERRANO
VS.
GALLANT MARITIME SERVICES, INC.

[G.R. No. 151833. August 7, 2003]

FACTS:

Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., under a
POEA-approved contract of employment for 12 months, as Chief Officer, with the basic monthly salary of US$1,400, plus
$700/month overtime pay, and 7 days paid vacation leave per month.On the date of his departure, Serrano was constrained to accept a
downgraded employment contract upon the assurance and representation of respondents that he would be Chief Officer by the end of
April 1998.Respondents did not deliver on their promise to make Serrano Chief Officer.Hence, Serrano refused to stay on as second
Officer and was repatriated to the Philippines, serving only two months and 7 days, leaving an unexpired portion of nine months and
twenty-three days.Upon complaint filed by Serrano before the Labor Arbiter (LA), the dismissal was declared illegal.On appeal, the
NLRC modified the LA decision based on the provision of RA 8042.Serrano filed a Motion for Partial Reconsideration, but this time
he questioned the constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042.

ISSUES:

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

HELD:

On the first issue.

The answer is in the negative. Petitioners claim that the subject clause unduly interferes with the stipulations in his contract on the
term of his employment and the fixed salary package he will receive is not tenable.The subject clause may not be declared
unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted in the exercise of the police power
of the State to regulate a business, profession or calling, particularly the recruitment and deployment of OFWs, with the noble end in
view of ensuring respect for the dignity and well-being of OFWs wherever they may be employed.

On the second issue.

The answer is in the affirmative.To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to
economic security and parity.Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a
closer examination reveals that the subject clause has a discriminatory intent against, and an invidious impact on, OFWs at two
levels:First, OFWs with employment contracts of less than one year vis--vis OFWs with employment contracts of one year or
more;Second, among OFWs with employment contracts of more than one year; andThird, OFWs vis--vis local workers with fixed-
period employment;The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage.Thus, the
subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of petitioner and other OFWs to equal
protection.The subject clause or for three months for every year of the unexpired term, whichever is less in the 5th paragraph of
Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL.

Insular Life v. NLRC (Nov. 15, 1989)FACTS:

Insular Life (company) and Basiao entered into a contract by which Basiao was authorized to solicit forinsurance
in accordance with the rules of the company. He would also receive compensation, in the form of commissions. The
contract also contained the relations of the parties, duties of the agent and the acts prohibited tohim including the modes of
termination.After 4 years, the parties entered into another contract an Agency Managers Contact and to implementhis end of it,
Basiao organized an agency while concurrently fulfilling his commitment under the first contract. The company terminated the
Agency Managers Contract. Basiao sued the company in a civil action. Thus,the company terminated Basiaos engagement under the
first contract and stopped payment of his commissions.

ISSUE:W/N Basiao had become the companys employee by virtue of the contract, thereby placing his claim forunpaid commissions

HELD:No.Rules and regulations governing the conduct of the business are provided for in the Insurance Code. Theserules merely
serve as guidelines towards the achievement of the mutually desired result without dictating them e a n s o r
methods to be employed in attaining it. Its aim is only to promote the result, thereby creating
n o employer-employee relationship. It is usual and expected for an insurance company to promulgate a set of rules toguide its
commission agents in selling its policies which prescribe the qualifications of persons who may be insured.None of these really
invades the agents contractual prerogative to adopt his own selling methods or to sellinsurance at his own time and
convenience, hence cannot justifiable be said to establish an employer-employeerelationship between Basiao and the company

RUGA V. NLRC FACTS: Petitioners were the fishermen-crew members of 7/B Sandyman II, one of several fishing vessels owned
and operated by private respondent De Guzman Fishing Enterprises which is primarily engaged in the fishing business with port and
office at Camaligan, Camarines Sur. Petitioners rendered service aboard said fishing vessel in various capacities, as follows: Alipio
Ruga and Jose Parma patron/pilot; Eladio Calderon, chief engineer; Laurente Bautu, second engineer; Jaime Barbin, master fisherman;
Nicanor Francisco, second fisherman; Philip Cervantes and Eleuterio Barbin, fishermen. For services rendered in the conduct of
private respondent's regular business of "trawl" fishing, petitioners were paid on percentage commission basis in cash by one Mrs.
Pilar de Guzman, cashier of private respondent. As agreed upon, they received thirteen percent (13%) of the proceeds of the sale of the
fish-catch if the total proceeds exceeded the cost of crude oil consumed during the fishing trip, otherwise, they received ten percent
(10%) of the total proceeds of the sale. The patron/pilot, chief engineer and master fisherman received a minimum income of P350.00
per week while the assistant engineer, second fisherman, and fisherman-winchman received a minimum income of P260.00 per week.
On September 11, 1983 upon arrival at the fishing port, petitioners were told by Jorge de Guzman, president of private respondent, to
proceed to the police station at Camaligan, Camarines Sur, for investigation on the report that they sold some of their fish-catch at
midsea to the prejudice of private respondent. Petitioners denied the charge claiming that the same was a countermove to their having
formed a labor union and becoming members of Defender of Industrial Agricultural Labor Organizations and General Workers Union
(DIALOGWU) on September 3, 1983. During the investigation, no witnesses were presented to prove the charge against petitioners,
and no criminal charges were formally filed against them. Notwithstanding, private respondent refused to allow petitioners to return to
the fishing vessel to resume their work on the same day, September 11, 1983. On September 22, 1983, petitioners individually filed
their complaints for illegal dismissal and non-payment of 13th month pay, emergency cost of living allowance and service incentive
pay, with the then Ministry (now Department) of Labor and Employment, Regional Arbitration Branch No. V, Legaspi City, Albay.
They uniformly contended that they were arbitrarily dismissed without being given ample time to look for a new job

. ISSUE/S: Whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are employees of its owner-
operator, De Guzman Fishing Enterprises, and if so, whether or not they were illegally dismissed from their employment

. HELD: YES We have consistently ruled that in determining the existence of an employer-employee relationship, the elements that
are generally considered are the following (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power
of dismissal; and (d) the employer s power to control the employee with respect to the means and methods by which the work is to
be accomplished. The employment relation arises from contract of hire, express or implied. In the absence of hiring, no actual
employer-employee relation could exist. From the four (4) elements mentioned, We have generally relied on the so-called right-of-
control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also
the means to be used in reaching such end. The test calls merely for the existence of the right to control the manner of doing the work,
not the actual exercise of the right. The case of Pajarillo vs. SSS, supra, invoked by the public respondent as authority for the ruling
that a joint fishing venture existed between private respondent and petitioners is not applicable in the instant case. There is
neither right of control nor actual exercise of such right on the part of the boat-owners in the Pajarillo case, where the Court found that
the pilots therein are not under the orders of the boat-owners as regards their employment; that they go out to sea not upon directions
of the boat-owners, but upon their own volition as to when, how long and where to go fishing; that the boat-owners do not in any way
control the crew-members with whom the former have no relationship whatsoever; that they simply join every trip for which the pilots
allow them, without any reference to the owners of the vessel; and that they only share in their own catch produced by their own
efforts. WHEREFORE, in view of the foregoing, the petition is GRANTED. The questioned resolution of the National Labor
Relations Commission dated May 30, 1985 is hereby REVERSED and SET ASIDE. Private respondent is ordered to reinstate
petitioners to their former positions or any equivalent positions with 3-year backwages and other monetary benefits under the law. No
pronouncement as to costs.