Servidad v.

NLRC
1998 March 18, GR No 128682

Facts: Servidad was employed on 9 May 1994 by respondent INNODATA as Data Control Clerk, under a
contract of employment. Section 2 of such contract states: “This Contract shall be effective for a period of
one (1) year commencing on 10 May1994 until 10 May 1995 unless sooner terminated pursuant to the
provisions hereof.”

Petitioner was a contractual employee for six months or from the period of May 10, 1994 to November 10,
1994 during which, the employer can terminate with due notice. The contract also states that should the
employee continue his employment beyond the 6-month period, he shall become a regular employee
upon demonstration of sufficient skill. On November 9, 1995 or one day before his contractual terms
ends, he was made to sign a three-month probationary employment and later, an extended three-month
employment good until 9 May 1995.Petitioner was terminated on May 9, 1995 and filed an illegal
dismissal complaint before the Labor Arbiter.

The Labor Arbiter found the respondent INNODATA guilty of the charge and was ordered to pay back
wages and reinstatement of petitioner. On appeal thereto by INNODATA, the NLRC reversed the decision
declaring that the contract between petitioner and private complainant was for a fixed term and the
dismissal, at the end of one year, was valid.

Issue: WON the contract entered into by the petitioner and respondent is valid and enforceable.

Held: No. The NLRC found that the contract in question is for a fixed term. The said contract provides for
two periods. The first period was for six months terminable at the option of private respondent, while the
second period was also for six months but probationary in character. In both cases, the private
respondent did not specify the criteria for the termination or retention of the services of petitioner. It is
violative of the right of the employee against unwarranted dismissal. By the provisions of the very contract
itself, petitioner has become a regular employee of private respondent.

As to the private respondent statement that the one-year period stipulated in subject contract was to
enable petitioner to acquire the skill necessary for the job. In effect, what respondent employer theorized
upon is that the one-year term of employment is probationary. If the nature of the job did actually
necessitate at least one year for the employee to acquire the requisite training and experience, the same
could not be a valid probationary employment as it falls short of the requirement of Article 281[10] of the
Labor Code. It was not brought to light that the petitioner was duly informed at the start of his
employment, of the reasonable standards under which he could qualify as a regular employee.

WHEREFORE, the petition is GRANTED, the questioned decision of NLRC is SET ASIDE, and the
decision of the Labor Arbiter, dated August 20, 1996, in NLRC-NCR-00-055-03471-95 REINSTATED,
with the modification that the award of back wages be computed from the time of the dismissal of
petitioner to his actual or payroll reinstatement. Costs against the private respondent.
Asian Transmission Corp. vs. CA
“Holiday Pay”

Facts: On March 11, 1993, DOLE issued an Explanatory Bulletin stating that ‘employees are entitled
200% of their basic wage on April 9, 1993, whether unworked, since that day, apart from being a Good
Friday (legal holiday) is also Araw ng Kagitingan (a legal holiday also)’. Despite the explanatory bulletin,
Asian Transmission Corp opted to pay its employees only100% of their basic pay on April 9, 1998. Thus,
Bisig ng Asian Transmission Labor Union (BATLU) protested. Office of the Voluntary Arbitrator: Directed
the Asian Transmission Corp to pay its covered employees 200% of their regular daily waged for
unworked April 19, 1998 which covers two regular holidays. CA: Affirmed the decision of the Voluntary
Arbitrator. It further held that in the absence of an explicit provision of the law which provides for a
reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the interpretation
and implementation of the Labor Code provisions on holiday pay must be resolved in favor of labor
(Art.5, LC).

Issue: WON employees are entitled to 200% of their daily basic wage when 2 legal holidays fall on the
same day.

Decision: (YES) Article 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid
regular holidays (inclusive of 1. New Year’s Day; 2. Maundy Thursday; 3. Good Friday; 4. Araw ng
Kagitingan; 5.Labor Day; 6. Independence Day; 7. National Heroes Day; 8. Bonifacio Day; 9. Christmas
Day; 10. Rizal Day)… holiday pay is a statutory benefit demandable under the law.
Since a worker is entitled to the enjoyment of ten (10) paid regular holidays, the fact that two holidays fall
on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to
receive. It is elementary, under the rules of statutory construction, that when the language of the law is
clear and unequivocal, the law must be taken to mean exactly what it says. In the case at bar, there is
nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be
reduced to nine when two holidays fall on the same day.
Calalang vs. Williams
G.R. No. 47800 December 2, 1940
Petitioner: Maximo Calalang Respondents: A.D. Williams, Et al. Ponente: Laurel, J

Facts: Maximo Calalang in his capacity as a private citizen and a taxpayer of Manila filed a petition for a
writ of prohibition against the respondents. It is alleged in the petition that the National Traffic
Commission, in its resolution of July 17, 1940, resolved to recommend to the Director of the Public Works
and to the Secretary of Public Works and Communications that animal-drawn vehicles be prohibited from
passing along Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas Street from
7:30Am to 12:30 pm and from 1:30 pm to 530 pm; and along Rizal Avenue extending from the railroad
crossing at Antipolo Street to Echague Street from 7 am to 11pm for a period of one year from the date of
the opening of the Colgante Bridge to traffic. The Chairman of the National Traffic Commission on July
18, 1940 recommended to the Director of Public Works with the approval of the Secretary of Public Works
the adoption of the measure proposed in the resolution aforementioned in pursuance of the provisions of
the Commonwealth Act No. 548 which authorizes said Director with the approval from the Secretary of
the Public Works and Communication to promulgate rules and regulations to regulate and control the use
of and traffic on national roads. On August 2, 1940, the Director recommended to the Secretary the
approval of the recommendations made by the Chairman of the National Traffic Commission with
modifications. The Secretary of Public Works approved the recommendations on August 10, 1940. The
Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the
rules and regulation. As a consequence, all animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above mentioned to the detriment not only of their owners but of the riding
public as well.

Issue:
1. Whether the rules and regulations promulgated by the respondents pursuant to the provisions of
Commonwealth Act NO. 548 constitute an unlawful inference with legitimate business or trade and
abridged the right to personal liberty and freedom of locomotion.
2. Whether the rules and regulations complained of infringe upon the constitutional precept regarding the
promotion of social justice to insure the well-being and economic security of all the people?

Held:
1. No. The promulgation of the Act aims to promote safe transit upon and avoid obstructions on national
roads in the interest and convenience of the public. In enacting said law, the National Assembly was
prompted by considerations of public convenience and welfare. It was inspired by the desire to relieve
congestion of traffic, which is a menace to the public safety.
Public welfare lies at the bottom of the promulgation of the said law and the state in order to promote the
general welfare may interfere with personal liberty, with property, and with business and occupations.
Persons and property may be subject to all kinds of restraints and burdens in order to secure the general
comfort, health, and prosperity of the State. To this fundamental aims of the government, the rights of the
individual are subordinated.
Liberty is a blessing which should not be made to prevail over authority because society will fall into
anarchy. Neither should authority be made to prevail over liberty because then the individual will fall into
slavery.
The paradox lies in the fact that the apparent curtailment of liberty is precisely the very means of insuring
its preserving.

2.No. Social justice means the promotion of the welfare of all the people, the adoption by the Government
of measures calculated to insure economic stability of all the competent elements of society, through the
maintenance of a proper economic and social equilibrium in the interrelations of the members of the
community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of all governments on the time-honored
principles of salus populi est suprema lex. Social justice must be founded on the recognition of the
necessity of interdependence among divers and diverse units of a society and of the protection that
should be equally and evenly extended to all groups as a combined force in our social and economic life,
consistent with the fundamental and paramount objective of the state of promoting health, comfort and
quiet of all persons, and of bringing about “the greatest good to the greatest number.”
THE PETITION IS DENIED WITH COSTS AGAINST THE PETITIONER.
LABOR REL: WENPHIL SERRANO AGABON DOCTRINE Distinguished
THE DISMISSAL IS FOR A JUST OR AUTHORIZED CAUSE BUT DUE PROCESS WAS NOT OBSERVED.
Due Process to be observed by The Employer - For termination of the employment based on the any of the just
causes for termination, the requirements of due process that an employer must comply with are: (TWIN NOTICES)

Written notice should be served to the employee specifying the ground or grounds for termination and giving the said
employee reasonable opportunity within which to explain;
A hearing or conference should be held during which the employee concerned, with the assistance of counsel, if the
employee so desires, is given the opportunity to respond to the charge, present his evidence and present the
evidence presented against him;

A written notice of termination, if termination is the decision of the employer, should be served on the employee
indicating that upon due consideration of all the circumstances, grounds have been established to justify his
termination.
For termination of employment based on authorized causes, the requirements of due process shall be deemed
complied with upon service of a written notice to the employee and the appropriate Regional office of the Department
of Labor and employment at least thirty days before the effectivity of the termination specifying the grounds for
termination.

NOTE:
Under the so-called WENPHIL DOCTRINE if the services of the employee was terminated due to a just or authorized
cause but the affected employee’s right to due process has been violated, the dismissal is legal but the employee is
entitled to damages by way of indemnification for the violation of the right.
SERRANO vs. ISETANN et. al. abandoned the WENPHIL DOCTRINE and ruled that if the employee is dismissed
under just or authorized cause but the affected employee’s right to due process has been violated, his dismissal
becomes ineffectual. Therefore, the employee is entitled to backwages from the time he was dismissed until the
determination of the justness of the cause of the dismissal.
AGABON vs. NLRC (Nov. 17, 2004) abandoned the Serrano doctrine and REINSTATED THE WENPHIL
DOCTRINE. The sanctions however must be stiffer than that imposed in Wenphil.

Synopsis on the developments in the law.

In the last couple of decades, the Supreme Court has grappled with the legal effect and the corresponding sanction in
cases where there exists a just and valid ground to justify the dismissal but the employer fails to comply with the due
process requirement of the law. Prior to the promulgation in 1989 of Wenphil v. NLRC, [170 SCRA 69, February 8,
1989], the prevailing doctrine held that dismissing employees without giving them proper notices and an opportunity
to be heard was illegal and that, as a consequence thereof, they were entitled to reinstatement plus full backwages.
Wenphil abandoned this jurisprudence and ruled that if the dismissal was for a just or an authorized cause but done
without due process, the termination was valid but the employer should be sanctioned with the payment of indemnity
ranging from P1,000.00 to P10,000.00.

In 2000, the Supreme Court promulgated Serrano v. NLRC, [G.R. No. 117040, January 27, 2000], which modified
Wenphil. It considered such termination “ineffectual” (not illegal) and sanctioned the employer with payment of full
backwages plus nominal and moral damages, if warranted by the evidence. In case the dismissal was for an
authorized cause, separation pay in accordance with Article 283 of the Labor Code should be awarded.

In 2004, the Supreme Court in Agabon v. NLRC, [G.R. No. 158693, November 17, 2004], abandoned Serrano and
effectively reverted to Wenphil (known also as the “Belated Due Process Rule”) and held that a dismissal due to
abandonment - a just cause - was not illegal or ineffectual, even if done without due process; but the employer should
indemnify the employee with “nominal damages for non-compliance with statutory due process.” (Glaxo Wellcome
Phils., Inc. v. Nagkakaisang Empleyado ng Wellcome-DFA, G.R. No. 149349, March 11, 2005).
Calalang vs Williams
GR 47800 December 2, 1940 CRUZ, J.

Social Justice as the aim of Labor Laws

Facts: The National Traffic Commission, in its resolution of 17 July 1940, resolved to recommend to the Director of
Public Works and to the Secretary of Public Works and Communications that animal-drawn vehicles be prohibited
from passing along Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas Street, from 7:30 a.m.
to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at
Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of
the Colgante Bridge to traffic.

The Chairman of the National Traffic Commission, on 18 July 1940, recommended to the Director of Public Works the
adoption of the measure proposed in the resolution, in pursuance of the provisions of Commonwealth Act 548, which
authorizes said Director of Public Works, with the approval of the Secretary of Public Works and Communications, to
promulgate rules and regulations to regulate and control the use of and traffic on national roads. On 2 August 1940,
the Director of Public Works, in his first indorsement to the Secretary of Public Works and Communications,
recommended to the latter the approval of the recommendation made by the Chairman of the National Traffic
Commission, with the modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles be limited to the
portion thereof extending from the railroad crossing at Antipolo Street to Azcarraga Street.

On 10 August 1940, the Secretary of Public Works and Communications, in his second indorsement addressed to the
Director of Public Works, approved the recommendation of the latter that Rosario Street and Rizal Avenue be closed
to traffic of animal-drawn vehicles, between the points and during the hours as indicated, for a period of 1 year from
the date of the opening of the Colgante Bridge to traffic.

The Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules and
regulations thus adopted. Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought
before the Supreme court the petition for a writ of prohibition against A. D. Williams, as Chairman of the National
Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of Public
Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting
Chief of Police of Manila.

Issue: Whether the rules and regulations promulgated by the Director of Public Works infringe upon the constitutional
precept regarding the promotion of social justice to insure the well-being and economic security of all the people.

Held: The promotion of social justice is to be achieved not through a mistaken sympathy towards any given group.
Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of laws and
the equalization of social and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the
adoption by the Government of measures calculated to insure economic stability of all the competent elements of
society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of
the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through
the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est
suprema lex. Social justice, therefore, must be founded on the recognition of the necessity of interdependence
among divers and diverse units of a society and of the protection that should be equally and evenly extended to all
groups as a combined force in our social and economic life, consistent with the fundamental and paramount objective
of the state of promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest good to the
greatest number."
RUBEN SERRANO, petitioner, vs. NATIONAL LABOR RELATIONSCOMMISSION and ISETANN
DEPARTMENT STORE, respondents

FACTS: Ruben Serrano was the head of the security checkers section of Isetann Department Store. He
was charged with the task of supervising security checkers in their jobs (apprehending shoplifters and
preventing pilferage of merchandise). On October 11, 1991, the management sent him a letter
immediately terminating his services as security section head, effective on the same day. The reason
given by the management was “retrenchment”; they had opted to hire an independent security agency as
a cost-cutting measure. Serrano filed a complaint for ID, illegal layoff, ULP, underpayment of wages and
nonpayment of salary and OT pay with the LA. The LA rendered a decision in favor of Serrano. It stated
that Isetann failed to establish that it had retrenched its security division, that the petitioner was not
accorded due process, etc. and even stated that the day after Serrano’s dismissal; Isetann employed a
safety and security supervisor with similar duties to that of the former. The NLRC on the other hand
reversed the LA but ordered Isetann to pay separation pay equivalent to one month per year of service,
unpaid salary, et al. It held that the phase-out of the security section was a valid exercise of management
prerogative on the part of Isetann, for which the NLRC cannot substitute its judgment in the absence of
bad faith or abuse of discretion on the part of the latter; and that the security and safety supervisor’s
position was long in place prior to Serrano’s separation from the company, or the phase-out of the
Security Section.

ISSUE: Whether the petitioner’s dismissal was illegal.

RULING: Valid, but ineffectual (without legal effect) payment of backwages, separation pay and other
monetary claims
No. The Court held that the dismissal was due to an authorized cause under Art. 283 of the Labor Code,
i.e. redundancy. However, while an authorized cause exists, Isetann failed to follow the procedural
requirement provided by Art. 283 of LC. For termination due to authorized causes, the employer must
give a written notice of termination to the employee concerned and to the DOLE at least 30 days prior to
its effectivity. This Isetann failed to do. The question now arises as to whether the failure of Isetann to
comply with the procedural requirements renders the dismissal invalid, or, in the event that it is valid, what
the appropriate sanction or penalty must be meted out. Prior to the doctrine laid down in the decision
rendered in Wenphil Corp.NLRC in 1989, the termination of an employee, even for just cause but without
following the requisite procedure, renders such dismissal illegal, and therefore null and void. In the
Wenphil doctrine, this was reversed; the said rule was unjust to employers. Instead, the dismissal was
held to be still valid but the employer was sanctioned by way of the payment of indemnity (damages) – in
that case, P1,000. The amount of indemnity will be depended on the circumstances of each case, taking
into account the gravity of the offense committed by the employer. Now, the Court once again examines
the Wenphil doctrine. Puno says that the effect of the Wenphil doctrine was such that there has been a
“dismiss now, pay later” policy where the employers were able to circumvent the procedural requisites of
termination, which is more convenient than the compliance with the 30-day notice. Panganiban said that
the monetary sanctions were too insignificant, niggardly, sometimes even late. Both justices are of the
opinion that the deprivation of due process which must be accorded to the employee renders the
dismissal illegal. Puno quoted that Legislative, Executive and Judicial proceedings that deny due process
do so under the pain of nullity. Panganiban stated that such denial of due process renders decisions and
proceedings void for lack of jurisdiction. The present ruling of the Court held that the dismissal of the
employee is merely ineffectual, not void. The dismissal was upheld but it is ineffectual. The sanction
provided was the payment of backwages from the time of dismissal up to the decision of the court finding
just or authorized cause. This was thought to balance the interests of both parties, recognizing the
employee’s right to notice and at the same time the right of the employer to dismiss for any of the just and
authorized causes. The Court also responded to the arguments of Justices Puno and Panganiban by
stating that the violation in the procedural requirement of termination is not a denial of the fundamental
right to due process. This is because of the ff reasons: 1)The due process clause is a limitation on
governmental powers, inapplicable to the exercise of private power, such as in this case. The provision
“No person shall be deprived of life, liberty and property without due process of law” pertains only to the
State, as only it has the authority to do the same.2) The purpose of the notice and hearing under the Due
process clause is to provide an opportunity for the employee to be heard before the power of the
organized society is brought upon the individual. Under Art. 283, however, the purpose is to give him time
to prepare for the eventual loss of his job and for DOLE to determine whether economic causes exist to
justify termination. It is not to give opportunity to be heard –there is no charge against the employee
under Art. 283. 3) The employer cannot be expected to be an impartial judge of his own cause. 4) Not all
notice requirements are requisites of due process. Some are simply a part of a procedure to be followed
before a right granted to party can be exercised; others are an application of the Justinian precept. Such
is the case here. The failure of the employer to observe a procedure for the termination of employment
which makes the termination of employment merely ineffectual. 5) Art. 279 of the LC provides that only
dismissal without just or authorized cause renders such dismissal illegal. To consider termination without
observing procedural reqt’s as also ID is to add another ground for ID, thereby amending Art. 279.;
Further, there is a disparity in legal treatment, as employees who resign without giving due notice are only
liable for damages; it does not make their resignation void. In this case, the separation pay was a distinct
award from the payment of backwages as a way of penalty.
ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D. FEIST, MARIA OLIVIA
T. YABUTMISA, TERESITA C. BERNARDO, AND ALLAN G. ALMAZAR, Petitioners, vs. PEARLIE
ANN F. ALCARAZ, Respondent.

FACTS:
On June 27, 2004, Abbott Laboratories, Philippines published in major broadsheet that it is in need of
Medical and Regulatory Affairs Manager stating therein the responsibilities and qualifications of said
position.
On December 7, 2004, Abbott formally offered Alcaraz the abovementioned position which was an item
under the company’s Hospira Affiliate Local Surveillance Unit (ALSU) department.
On February 12, 2005, Alcaraz signed an employment contract which stated, inter alia, that she was to be
placed on probation for a period of six (6) months beginning February 15, 2005 to August 14, 2005.
She underwent pre-employment orientation where she was briefed on her duties and responsibilities.
On March 3, 2005, Alcaraz received an e-mail from the HR Director explaining the procedure for
evaluating the performance of probationary employees and further indicated that Abbott had only one
evaluation system for all of its employees.
Alcaraz was also given copies of Abbott’s Code of Conduct and Probationary Performance Standards
and Evaluation and Performance Excellence Orientation Modules which she had to apply in line with her
task of evaluating the Hospira ALSU staff.
On April 12, 2005, Alcaraz received an e-mail from Misa requesting immediate action on the staff’s
performance evaluation as their probationary periods were about to end. This Alcaraz eventually
submitted.
On May 16, 2005, Alcaraz was called to a meeting with her immediate supervisor and the former HR
Director where she was informed that she failed to meet the regularization standards for the position of
Regulatory Affairs Manager. Thereafter she was asked to tender her resignation, else they be forced to
terminate her services.
She filed a case of illegal dismissal against Abott and its officers.
LA dismissed her complaint for lack of merit.
NLRC reversed and set aside the LA’s ruling and ordered Abott to reinstate and pay Alcaraz moral and
exemplary damages.
CA affirmed NLRC decision.

ISSUE(S):
(1) Whether or not Alcaraz was sufficiently informed of the reasonable standards to qualify her as a
regular employee; and
(2) Whether or not Alcaraz was validly terminated from her employment.

HELD:
(1) Yes, Alcaraz was sufficiently informed of the reasonable standards. The employer is made to comply
with two (2) requirements when dealing with a probationary employee: first, the employer must
communicate the regularization standards to the probationary employee; and second, the employer must
make such communication at the time of the probationary employee’s engagement. If the employer fails
to comply with either, the employee is deemed as a regular and not a probationary employee.

A punctilious examination of the records reveals that Abbott had indeed complied with the above-stated
requirements. This conclusion is largely impelled by the fact that Abbott clearly conveyed to Alcaraz her
duties and responsibilities as Regulatory Affairs Manager prior to, during the time of her engagement, and
the incipient stages of her employment.
(2) A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of
probationary employment, aside from just or authorized causes of termination, an additional ground is
provided under Article 295 of the Labor Code, i.e., the probationary employee may also be terminated for
failure to qualify as a regular employee in accordance with the reasonable standards made known by the
employer to the employee at the time of the engagement. A different procedure is applied when
terminating a probationary employee; the usual two-notice rule does not govern. Section 2, Rule I, Book
VI of the Implementing Rules of the Labor Code states that "if the termination is brought about by the
failure of an employee to meet the standards of the employer in case of probationary employment, it shall
be sufficient that a written notice is served the employee, within a reasonable time from the effective date
of termination." As the records show, Alcaraz's dismissal was effected through a letter dated May 19,
2005 which she received on May 23, 2005 and again on May 27, 2005. Stated therein were the reasons
for her termination, i.e., that after proper evaluation, Abbott determined that she failed to meet the
reasonable standards for her regularization considering her lack of time and people management and
decision-making skills, which are necessary in the performance of her functions as Regulatory Affairs
Manager. Undeniably, this written notice sufficiently meets the criteria set forth above, thereby legitimizing
the cause and manner of Alcaraz’s dismissal as a probationary employee under the parameters set by
the Labor Code.
Atok Big Wedge Company vs. Jesus P. Gison [GR No. 169510, August 8, 2011]
Post under case digests, labor law at Wednesday, January 20, 2016 Posted by Schizophrenic Mind

FACTS: Gison was engaged as part-time consultant on retainer basis by Atok Big Wedge Company
(Atok), Inc. through its then AVP and Acting Resident Manager, Rutillo A. Torres. As a consultant on
retainer basis, Gison assisted petitioner's retained legal counsel with matters pertaining to the prosecution
of cases against illegal surface occupants within the area covered by the company's mineral claims.
Gison was likewise tasked to perform liaison work with several government agencies, which he said was
his expertise.

Atok did not require respondent to report to its office on a regular basis. As payment for his services,
respondent received a retainer fee of Php3,000 a month, which was delivered to him either at his
residence or in a local restaurant. The parties executed a retainer agreement, but such agreement was
misplaced and can no longer be found. The said arrangement continued for the next eleven years.

Sometime thereafter, Gison requested that petitioner cause his registration with SSS. Atok did not accede
to his request as he was only a retainer/consultant. Subsequent events led to a complaint for illegal
dismissal among others with the NLRC. The Labor Arbiter rendered a Decision ruling in favor of the
petitioner company. Finding no employee-employer relationship between petitioner and respondent, the
Labor Arbiter dismissed the complaint for lack of merit.

ISSUE: Whether or not there exist an employee-employer relationship between the parties

RULING: No. The so-called “control test” is commonly regarded as the most crucial and determinative
indicator of the presence or absence of an employee-employer relationship. Under the control test, an
employee-employer relationship exists where the person for whom the services are performed reserves
the right to control not only the end achieved, but also the manner and means to be used in reaching the
end.

Applying the aforementioned test, an employee-employer relationship is apparently absent in the case at
bar. More importantly, petitioner did not prescribe the manner in which respondent would accomplish any
of the tasks in which his expertise as a liaison officer was needed; respondent was left alone and given
the freedom to accomplish the tasks using his own means and method. Respondent was assigned tasks
to perform, but petitioner did not control the manner and methods by which respondent performed these
tasks. Verily, the absence of element of control on the part of the petitioner engenders a conclusion that
he is not an employee of the petitioner.
FRANCISCO vs. NLRC
GR No. 170087 August 31, 2006

FACTS:
Angelina Francisco was hired by Kasei Corporation during the incorporation stage. She was designated
as accountant and corporate secretary and was assigned to handle all the accounting needs of the
company. She was also designated as Liaison Officer to the City of Manila to secure permits for the
operation of the company.
In 1996, she was designated as Acting Manager. She was assigned to handle recruitment of all
employees and perform management administration functions. In 2001, she was replaced by Liza
Fuentes as Manager. Kasei Corporation reduced her salary to P2,500 per month which was until
September. She asked for her salary but was informed that she was no longer connected to the
company. She did not anymore report to work since she was not paid for her salary. She filed an action
for constructive dismissal with the Labor Arbiter. Kasei Corporation however averred in its defense that:
- Petitioner had no daily time record and she came to the office any time she wanted. The company
never interfered with her work except that from time to time, the management would ask her opinion on
matters relating to her profession.
- petitioner was not among the employees reported to the BIR, as well as a list of payees subject to
expanded withholding tax which included petitioner. SSS records were also submitted showing that
petitioner's latest employer was Seiji Corporation

DECISION OF LOWER COURTS:

*Labor arbiter: Francisco was illegally dismissed.

*NLRC: affirmed LA.
*CA: reversed NLRC.
*CA (motion for reconsideration): denied.
Hence, the present petition.

ISSUE/S:
(1) WON there was an employer-employee relationship between petitioner and private respondent
Kasei Corporation; and if in the affirmative,

(2) WON petitioner was illegally dismissed.

HELD:
(1) Yes. The court held that in this jurisdiction, there has been no uniform test to determine the existence
of an employer-employee relation.
Generally, courts have 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. In addition to the standard of right-of-control, the existing ECONOMIC
CONDITIONS PREVAILING BETWEEN THE PARTIES, like the inclusion of the employee in the payrolls,
can help in determining the existence of an employer-employee relationship.

The better approach would therefore be to adopt a two-tiered test involving:

*CONTROL TEST - YES
*ECONOMIC CONDITIONS -YES

(1) The putative employer’s POWER TO CONTROL the employee with respect to the means and
methods by which the work is to be accomplished; and
(2) The underlying ECONOMIC REALITIES of the activity or relationship.
By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation
because she was under the direct control and supervision of Seiji Kamura, the corporation’s Technical
Consultant. It is therefore apparent that petitioner is economically dependent on respondent corporation
for her continued employment in the latter’s line of business.
Under the broader economic reality test, the petitioner can likewise be said to be an employee of
respondent corporation because she had served the company for six years before her dismissal,
receiving check vouchers indicating her salaries/wages, benefits, 13th month pay, bonuses and
allowances, as well as deductions and
Social Security contributions from August 1, 1999 to December 18, 2000
In Sevilla v. Court of Appeals, the court observed the need to consider the existing economic
conditions prevailing between the parties, in addition to the standard of right-of-control like the inclusion of
the employee in the payrolls, to give a clearer picture in determining the existence of an employer-
employee relationship based on an analysis of the totality of economic circumstances of the worker.
Thus, the determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as:
(1) the extent to which the services performed are an integral part of the employer’s business;
(2) the extent of the worker’s investment in equipment and facilities;
(3) the nature and degree of control exercised by the employer;
(4) the worker’s opportunity for profit and loss;
(5) the amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise;
(6) the permanency and duration of the relationship between the worker and the employer; and
(7) the degree of dependency of the worker upon the employer for his continued employment in that line
of business.

The proper standard of economic dependence is whether the worker is dependent on the alleged
employer for his continued employment in that line of business.

(2) YES, she was illegally dismissed. A diminution of pay is prejudicial to the employee and amounts to
constructive dismissal. Constructive dismissal is an involuntary resignation resulting in cessation of
work resorted to when continued employment becomes impossible, unreasonable or unlikely; when there
is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an
employer becomes unbearable to an employee

RATIO:
In affording full protection to labor, this Court must ensure equal work opportunities regardless of sex,
race or creed. Even as we, in every case, attempt to carefully balance the fragile relationship between
employees and employers, we are mindful of the fact that the policy of the law is to apply the Labor Code
to a greater number of employees. This would enable employees to avail of the benefits accorded to them
by law, in line with the constitutional mandate giving maximum aid and protection to labor, promoting their
welfare and reaffirming it as a primary social economic force in furtherance of social justice and national
development.
ANGELINA FRANCISCO, Petitioner, versus NATIONAL LABOR RELATIONSCOMMISSION, KASEI
CORPORATION, SEIICHIRO TAKAHASHI, TIMOTEOACEDO, DELFIN LIZA, IRENE BALLESTEROS,
TRINIDAD LIZA and RAMONESCUETA, Respondents., G.R. No. 170087, 2006 Aug 31.

FACTS: 1995, Petitioner was hired by Kasei Corporation during its incorporation stage. She was
designated as Accountant and Corporate Secretary and was assigned to handle all the accounting needs
of the company. She was also designated as Liaison Officer to the City of Makati to secure business
permits, construction permits and other licenses for the initial operation of the company. Although she
was designated as Corporate Secretary, she was not entrusted with the corporate documents; neither did
she attend any board meeting nor required to do so. She never prepared any legal document and never
represented the company as its Corporate Secretary.1996, petitioner was designated Acting Manager.
Petitioner was assigned to handle recruitment of all employees and perform management administration
functions; represent the company in all dealings with government agencies, especially with the BIR, SSS
and in the city government of Makati; and to administer all other matters pertaining to the operation of
Kasei Restaurant which is owned and operated by Kasei Corporation. January 2001, petitioner was
replaced by a certain Liza R. Fuentes as Manager. Kasei Corporation reduced her salary, she was not
paid her mid-year bonus allegedly because the company was not earning well. On October 2001,
petitioner did not receive her salary from the company. She made repeated follow-ups with the company
cashier but she was advised that the company was not earning well. Eventually she was informed that
she is no longer connected with the company. Since she was no longer paid her salary, petitioner did not
report for work and filed an action for constructive dismissal before the labor arbiter. Private respondents
averred that petitioner is not an employee of Kasei Corporation. They alleged that petitioner was hired
in1995 as one of its technical consultants on accounting matters and act concurrently as Corporate
Secretary. As technical consultant, petitioner performed her work at her own discretion without control
and supervision of Kasei Corporation. Petitioner had no daily time record and she came to the office any
time she wanted and that her services were only temporary in nature and dependent on the needs of the
corporation. The Labor Arbiter found that petitioner was illegally dismissed, NLRC affirmed with
modification the Decision of the Labor Arbiter. On appeal, CA reversed the NLRC decision. CA denied
petitioner’s MR, hence, the present recourse.

ISSUES:
1. WON there was an employer-employee relationship between petitioner and private respondent; and if
in the affirmative,
2. Whether petitioner was illegally dismissed.

RULING:
1. Generally, courts have 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. In addition to the standard of right-of-control, the existing economic
conditions prevailing between the parties, like the inclusion of the employee in the payrolls, can help in
determining the existence of an employer-employee relationship. There are instances when, aside from
the employer’s power to control the employee, economic realities of the employment relations help
provide a comprehensive analysis of the true classification of the individual, whether as employee,
independent contractor, corporate officer or some other capacity. It is better, therefore, to adopt a two-
tiered test involving: (1) the employer’s power to control; and (2) the economic realities of the activity or
relationship. The control test means that there is an employer-employee relationship when the person for
whom the services are performed reserves the right to control not only the end achieved but also the
manner and means used to achieve that end. There has to be analysis of the totality of economic
circumstances of the worker. Thus, the determination of the relationship between employer and employee
depends upon the circumstances of the whole economic activity, such as: (1) the extent to which the
services performed are an integral part of the employer’s business; (2) the extent of the worker’s
investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4)
the worker’s opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required
for the success of the claimed independent enterprise; (6) the permanency and duration of the
relationship between the worker and the employer; and (7) the degree of dependency of the worker upon
the employer for his continued employment in that line of business. The proper standard of economic
dependence is whether the worker is dependent on the alleged employer for his continued employment in
that line of business By applying the control test, it can be said that petitioner is an employee of Kasei
Corporation because she was under the direct control and supervision of Seiji Kamura, the corporation’s
Technical Consultant. She reported for work regularly and served in various capacities as Accountant,
Liaison Officer, Technical Consultant, Acting Manager and Corporate Secretary, with substantially the
same job functions, that is, rendering accounting and tax services to the company and performing
functions necessary and desirable for the proper operation of the corporation such as securing business
permits and other licenses over an indefinite period of engagement. Respondent corporation had the
power to control petitioner with the means and methods by which the work is to be accomplished. Under
the economic reality test, the petitioner can also be said to be an employee of respondent corporation
because she had served the company for 6 yrs. before her dismissal, receiving check vouchers indicating
her salaries/wages, benefits, 13th month pay, bonuses and allowances, as well as deductions and Social
Security contributions from. When petitioner was designated General Manager, respondent corporation
made a report to the SSS. Petitioner’s membership in the SSS evinces the existence of an employer-
employee relationship between petitioner and respondent corporation. The coverage of Social Security
Law is predicated on the existence of an employer-employee relationship.2. The corporation
constructively dismissed petitioner when it reduced her. This amounts to an illegal termination of
employment, where the petitioner is entitled to full backwages. A diminution of pay is prejudicial to the
employee and amounts to constructive dismissal. Constructive dismissal is an involuntary resignation
resulting in cessation of work resorted to when continued employment becomes impossible,
unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to an employee. Petition is
GRANTED.
Francisco v. NLRC August 31, 2006 G.R NO. 170087 500 SCRA 690

Facts:
Petitioner was hired by Kasei Corporation during its incorporation stage. She was designated
as Accountant and Corporate Secretary and was assigned to handle all the accounting needs of the
company, however she was not entrusted with the corporate documents; neither did she attend any board
meeting nor required to do so. She never prepared any legal document and never represented the
company as its Corporate Secretary, but she was prevailed upon to sign documentation for the company.
She was also designated as Liaison Officer to secure business permits, construction permits and other
licenses for the initial operation of the company.
In 1996, petitioner was designated Acting Manager, she was assigned to handle recruitment of
all employees and perform management administration functions. For 5 years, petitioner performed the
duties of Acting Manager.
In January 2001, petitioner was replaced by Liza R. Fuentes as Manager and the petitioner was
assured that she would still be connected with Kasei Corporation as Technical Assistant to Seiji Kamura
and in charge of all BIR matters. Petitioner did not receive her salary from the company and was informed
that she is no longer connected with the company. Petitioner filed an action for constructive dismissal
before the labor arbiter.
Private respondents averred that petitioner is not an employee of Kasei Corporation. They
alleged that as technical consultant, petitioner performed her work at her own discretion without control
and supervision of Kasei Corporation. She had no daily time record and she came to the office any time
she wanted. The company never interfered with her work except that from time to time, the management
would ask her opinion on matters relating to her profession. The petitioner did not go through the usual
procedure of selection of employees and her designation as technical consultant depended solely upon
the will of management. As such, her consultancy may be terminated any time considering that her
services were only temporary in nature and dependent on the needs of the corporation.

Issue: Won there was an employer-employee relationship between the parties.

Ruling:
In certain cases the control test is not sufficient to give a complete picture of the relationship
between the parties, owing to the complexity of such a relationship where several positions have been
held by the worker. There are instances when, aside from the employer’s power to control the employee
with respect to the means and methods by which the work is to be accomplished, economic realities of
the employment relations help provide a comprehensive analysis of the true classification of the
individual, whether as employee, independent contractor, corporate officer or some other capacity.
The better approach would therefore be to adopt a two-tiered test involving: 1) putative
employer’s power to control the employee with respect to the means and methods by which the work is to
be accomplished; and 2) the underlying economic realities of the activity or relationship. This two-tiered
test would provide us with a framework of analysis, which would take into consideration the totality of
circumstances surrounding the true nature of the relationship between the parties. This is especially
appropriate in this case where there is no written agreement or terms of reference to base the relationship
on; and due to the complexity of the relationship based on the various positions and responsibilities given
to the worker over the period of the latter’s employment.
The determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as: 1) the extent to which the services performed are
an integral part of the employer’s business; 2) the extent of the worker’s investment in equipment and
facilities; 3) the nature and degree of control exercised by the employer; 4) the worker’s opportunity for
profit or loss; 5) the amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise; 6) the permanency and duration of the relationship between the worker and the
employer; and 7) the degree of dependency of the worker upon the employer of his continued
employment in that line of business.
The proper standard of economic dependence is whether the worker is dependent on the
alleged employer for his continued employment in that line of business. Based on the foregoing, there can
be no other conclusion that petitioner is an employee of respondent Kasei Corporations. She was
selected and engaged by the company for compensation, and is economically dependent upon
respondent for her continued employment in that line of business. Her main job function involved
accounting and tax services rendered to respondent corporation on a regular basis over an indefinite
period of engagement. Respondent corporation hired and engaged petitioner for compensation, with the
power to dismiss her for cause. More importantly, respondent corporation had the power to control
petitioner with the means and methods by which the work is to be accomplished.
FRANCISCO vs. NLRC
[GR. No.170087 Aug. 31, 2006]

Facts: Angelina Francisco has held several positions in Kasei Corporation, to wit: (1) Accountant and
Corporate Secretary; (2) Liaison Officer to the City of Makati; (3) Corporate Secretary; and (4)Acting Manager. She
performed the work of Acting Manager for five years but later she was replaced by Liza R. Fuentes as Manager.
Then, Kasei Corporation reduced her salary and was not paid her mid-year bonus allegedly because the company
was not earning well. She made repeated follow-ups with the company cashier but she was advised that the
company was not earning well. Ultimately, she did not report for work and filed an action for constructive dismissal
before the labor arbiter.

Issue:
Was Francisco an employee of Kasei Corporation?

Held:
In certain cases where the control test is not sufficient to give a complete picture of the relationship between the
parties, owing to the complexity of such a relationship where several positions have been held by the worker. There
are instances when, aside from the employer’s power to control the employee with respect to the means and
methods by which the work is to be accomplished, economic realities of the employment relations help provide a
comprehensive analysis of the true classification of the individual, whether as employee, independent contractor,
corporate officer or some other capacity. The better approach would therefore be to adopt a two-tiered test involving:
(1) the putative employer’s power to control the employee with respect to the means and methods by which the work
is to be accomplished; and
(2) the underlying economic realities of the activity or relationship.
This two-tiered test would provide us with a framework of analysis, which would take into consideration the totality of
circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in
this case where there is no written agreement or terms of reference to base the relationship on; and due to the
complexity of the relationship based on the various positions and responsibilities given to the worker over the period
of the latter’s employment.
Thus, the determination of the relationship between employer and employee depends upon the circumstances of the
whole economic activity, such as:
1. the extent to which the services performed are an integral part of the employer’s business;
2. the extent of the worker’s investment in equipment and facilities;
3. the nature and degree of control exercised by the employer;
4. the worker’s opportunity for profit and loss;
5. the amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise;
6. the permanency and duration of the relationship between the worker and the employer; and
7. the degree of dependency of the worker upon the employer for his continued employment in that line of business.
The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his
continued employment in that line of business.
By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was
under the direct control and supervision of Seiji Kamura, the corporation’s Technical Consultant. She reported for
work regularly and served in various capacities, with substantially the same job functions, that is, rendering
accounting and tax services to the company and performing functions necessary and desirable for the proper
operation of the corporation such as securing business permits and other licenses over an indefinite period of
engagement.
There can be no other conclusion that she is an employee of respondent Kasei Corporation. She was selected and
engaged by the company for compensation, and is economically dependent upon respondent for her continued
employment in that line of business. Her main job function involved accounting and tax services rendered to the
corporation on a regular basis over an indefinite period of engagement. The corporation hired and engaged her for
compensation, with the power to dismiss for cause. More importantly, the corporation had the power to control her
with the means and methods by which the work is to be accomplished.
Tiu vs. NLRC and de la Cruz GR No 95845, 21.02.1996
Nature of the Case
A petition for certiorari seeking reversal of NLRC decision which upheld in toto the decision of labor
arbiter.

Facts: Private respondent, a dispatcher, filed a complaint for illegal dismissal. Petitioner, a land
transportation operator, denied private respondent as his employee, but the labor arbiter ruled the private
respondent was an employee of the petitioner, and thus awarded differentials, 13th month pay and
separation pay. On appeal, NLRC affirmed the labor arbiter’s decision in toto. Thus, the petition for
certiorari citing NLRC for reckless disregard of the applicable facts and law which amounts to grave
abuse of discretion.

Issue(s)
(1). Whether private respondent is an employee petitioner?

Held
(1). Yes. The petitioners denial that private respondent [de la Cruz] was not his employee for security
reasons is countered by the agreement entered into between private respondents’ father, Chief
Dispatcher, and petitioner. As Chief Dispatcher, de la Cruz (father) was acting under supervisory powers
in behalf of the petitioner, which therefore negates the fact that he is an independent contractor providing
labor only to the petitioner. As Chief Dispatcher, de la Cruz (father) was also tasked in keeping daily time
records (DTR) of the private respondent de la Cruz (son). Private respondent is indeed an employee by
petitioner, as correctly ruled by the labor arbiter and affirmed by the NLRC. The higher court cannot
interfere with questions of fact based on substantial evidence, as the same rule has been satisfied in the
lower tribunals.
Orozco vs. Fifth Division of the Court of Appeals

Facts: PDI engaged the services of Orozco to write a weekly column for its Lifestyle section. She
religiously submitted her articles except for a 6-month stint when she went to NY City. Nevertheless, she
continued to send her articles through mail. She also received compensation for every column that was
published. When Orozco’s column appeared in the newspaper for the last time, her editor, Logarta, told
her that the PDI’s editor-in-chief, Magsanoc, wanted to stop publishing her columns for no reason at all
and advised her to talk to the editor-in-chief. When Orozco talked to Magsanoc, the latter told her that it
was the PDI chairperson who wanted to stop the publication of her column. However, when Orozco talked
to Apostol, the latter told her that Magsanoc informed her that the Lifestyle section had already many
columnists.PDI claims that Magsanoc met with the editor of the Lifestyle section to discuss how to
improve said section. They agreed to cut down the number of columnists by keeping only those whose
columns were well-written, with regular feedback and following. In their judgment, petitioner’s column
failed to improve, continued to be superficially and poorly written, and failed to meet the high standards of
the newspaper. Hence, they decided to terminate petitioner’s column. Orozco filed a complaint for illegal
dismissal. The LA decided in favor of petitioner. On appeal, the NLRC dismissed the appeal and affirmed
the LA’s decision. The CA on the other hand, set aside the NLRC’s decision and dismissed Orozco’s
complaint.

Issue: Whether petitioner is an employee of PDI.

Whether petitioner was illegally dismissed.

Decision: Petition dismissed. Judgment and Resolution affirmed. Applying the four-fold test, the Court
held that PDl lacked control over the petitioner. Though PDI issued guidelines for the petitioner to follow
in the course of writing her columns, careful examination reveals that the factors enumerated by the
petitioner are inherent conditions in running a newspaper. In other words, the so-called control as to time,
space, and discipline are dictated by the very nature of the newspaper business itself. Aside from the
constraints presented by the space allocation of her column, there were no restraints on her creativity;
petitioner was free to write her column in the manner and style she was accustomed to and to use
whatever research method she deemed suitable for her purpose. The apparent limitation that she had to
write only on subjects that befitted the Lifestyle section did not translate to control, but was simply a
logical consequence of the fact that her column appeared in that section and therefore had to cater to the
preference of the readers of that section. Orozco in this case is considered as an independent contractor.
As stated in the case of Sonza vs. ABS-CBN, independent contractors often present themselves to
possess unique skills, expertise or talent to distinguish them from ordinary employees. Like the petitioner
in the cited case, Petitioner was engaged as a columnist for her talent, skill, experience, and her unique
viewpoint as a feminist advocate. How she utilized all these in writing her column was not subject to
dictation by respondent. As in Sonza, respondent PDI was not involved in the actual performance that
produced the finished product. It only reserved the right to shorten petitioner’s articles based on the
newspaper’s capacity to accommodate the same. This fact was not unique to petitioner’s column. It is a
reality in the newspaper business that space constraints often dictate the length of articles and columns,
even those that regularly appear therein. Furthermore, respondent PDI did not supply petitioner with the
tools and instrumentalities she needed to perform her work. Petitioner only needed her talent and skill to
come up with a column every week. As such, she had all the tools she needed to perform her work.
Hence, since Orozco is not an employee of PDI, the latter cannot be held guilty of illegally dismissing the
petitioner.
Wilhelmina Orozco vs Court of Appeals (2008)
Labor Standards – Employer-employee Relationship in a Publication – Four Fold Test – Control Test

In March 1990, Wilhelmina Orozco was hired as a writer by the Philippine Daily Inquirer (PDI). She was
the columnist of “Feminist Reflections” under the Lifestyle section of the publication. She writes on a
weekly basis and on a per article basis (P250-300/article).

In 1991, Leticia Magsanoc as the editor-in-chief sought to improve the Lifestyle section of the paper. She
said there were too many Lifestyle writers and that it was time to reduce the number of writers. Orozco’s
column was eventually dropped.

Orozco filed for a case for Illegal Dismissal against PDI and Magsanoc. Orozco won in the Labor Arbiter
where the arbiter ruled that there exists an employer-employee relationship between PDI and Orozco.

The case eventually reached the Court of Appeals where the CA ruled that there is no such relationship.

Orozco insists that by applying the four-fold test, it can be seen that she is an employee of PDI; Orozco
insists that PDI had been exercising the power of control over her because:

a) PDI provides the guidelines as to what her article content should be;
b) PDI sets deadlines as to when Orozco must submit her article/s;
c) PDI controls the number of articles to be submitted by Orozco;
d) PDI requires a certain discipline from their writers so as to maintain their readership.

ISSUE: Whether or not a newspaper columnist is an employee of the newspaper which publishes the
column.

HELD: No. The type of control being argued by Orozco is not the type of control contemplated under the
four fold test principle in labor law. The Supreme Court emphasized: The main determinant to test control
is whether the rules set by the employer are meant to control not just the results of the work but also the
means and method to be used by the hired party in order to achieve such results.

In this case, the “control” exercised by PDI over Orozco, as mentioned earlier, is not that “control”
contemplated under the four fold test. In fact, such standards set by PDI is merely incidental or inherent in
the newspaper business and is not an exercise of control over Orozco.

Orozco has not shown that PDI, acting through its editors, dictated how she was to write or produce her
articles each week. There were no restraints on her creativity; Orozco was free to write her column in the
manner and style she was accustomed to and to use whatever research method she deemed suitable for
her purpose. The apparent limitation that she had to write only on subjects that befitted the Lifestyle
section did not translate to control, but was simply a logical consequence of the fact that her column
appeared in that section and therefore had to cater to the preference of the readers of that section.
LABOR LAW: Four-Fold Test to Determine the Existence of an Employer-Employee Relationship
Tongko v. Manufacturers LIfe Insurance Co. (Phils.), Inc. (570 SCRA 503)

FACTS: The contractual relationship between Tongko and Manulife had two basic phases. The first
phase began on July 1, 1977, under a Career Agent’s Agreement, which provided that “the Agent is an
independent contractor and nothing contained herein shall be construed or interpreted as creating an
employer-employee relationship between the Company and the Agent.”The second phase started in 1983
when Tongko was named Unit Manager in Manulife’s Sales Agency Organization. In 1990, he became a
Branch Manager. In 1996), Tongko became a Regional Sales Manager. Tongko’s gross earnings
consisted of commissions, persistency income, and management overrides. Since the beginning, Tongko
consistently declared himself self-employed in his income tax returns. Under oath, he declared his gross
business income and deducted his business expenses to arrive at his taxable business income.
Respondent Renato Vergel de Dios, sales manager, wrote Tongko a letter dated November 6, 2001 on
concerns that were brought up during the Metro North Sales Managers Meeting, expressing
dissatisfaction of Tongko’s performance in their agent recruiting business, which resulted in some
changes on how Tongko would conduct his duties, including that Tongko hire at his expense a competent
assistant to unload him of routine tasks, which he had been complaining to be too taxing for him. On
December 18, 2001, de Dios wrote Tongko another letter which served as notice of termination of his
Agency Agreement with the company effective fifteen days from the date of the letter. Tongko filed an
illegal dismissal complaint with the National Labor Relations Commission (NLRC), alleging that despite
the clear terms of the letter terminating his Agency Agreement, that he was Manulife’s employee before
he was illegally dismissed. The labor arbiter decreed that no employer-employee relationship existed
between the parties. The NLRC reversed the labor arbiter’s decision on appeal; it found the existence of
an employer-employee relationship and concluded that Tongko had been illegally dismissed. The Court of
Appeals found that the NLRC gravely abused its discretion in its ruling and reverted to the labor arbiter’s
decision that no employer-employee relationship existed between Tongko and Manulife.

ISSUE: Is there an employer-employee relationship between Tongko and Manulife?

HELD: NO. In the determination of whether an employer-employee relationship exists between 2 parties,
this court applies the four-fold test to determine the existence of the elements of such relationship.
Jurisprudence is firmly settled that whenever the existence of an employment relationship is in dispute,
four elements constitute the reliable yardstick: (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’s
conduct. IT is the so-called “control test” which constitutes the most important index of existence of the
employer-employee relationship that is, whether the employer controls or has reserved the right to control
the employee not only as to the result of the work to be done but also as to the means and methods by
which the same is to be accomplished. Stated otherwise, an employer-employee relationship exists
where the person for whom the services are performed reserves the right to control not only the end to be
achieved but also the means to be used in reaching such end. In the case at bar, the absence of
evidence showing Manulife’s control over Tongko’s contractual duties points to the absence of any
employer-employee relationship between Tongko and Manulife. In the context of the established
evidence, Tongko remained an agent all along; although his subsequent duties made him a lead agent
with leadership role, he was nevertheless only an agent whose basic contract yields no evidence of
means-and-manner control. Claimant clearly failed to substantiate his claim of employment relationship
by the quantum of evidence the Labor Code requires. Tongko’s failure to comply with the guidelines of de
Dios’ letter, as a ground for termination of Tongko’s agency, is a matter that the labor tribunals cannot
rule upon in the absence of an employer-employee relationship. Jurisdiction over the matter belongs to
the courts applying the laws of insurance, agency and contracts.
Dispositive: We REVERSE our Decision of November 7, 2008, GRANT Manulife’s motion for
reconsideration and, accordingly, DISMISS Tongko’s petition.

Tongko v. The Manufacturers Life Insurance & de Dios

G.R. No. 167622, January 25, 2011
GREGORIO V. TONGKO, petitioner, vs. THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC.
and RENATO A. VERGEL DE DIOS, respondents. BRION, J.:

FACTS: Manufacturers Life Insurance, Co. is a domestic corporation engaged in life insurance business.
De Dios was its President and Chief Executive Officer. Petitioner Tongko started his relationship with
Manulife in 1977 by virtue of a Career Agent's Agreement.
Pertinent provisions of the agreement state that: It is understood and agreed that the Agent is an
independent contractor and nothing contained herein shall be construed or interpreted as creating an
employer-employee relationship between the Company and the Agent.
a) The Agent shall canvass for applications for Life Insurance, Annuities, Group policies and other
products offered by the Company, and collect, in exchange for provisional receipts issued by the Agent,
money due or to become due to the Company in respect of applications or policies obtained by or through
the Agent or from policyholders allotted by the Company to the Agent for servicing, subject to subsequent
confirmation of receipt of payment by the Company as evidenced by an Official Receipt issued by the
Company directly to the policyholder.
b) The Company may terminate this Agreement for any breach or violation of any of the provisions hereof
by the Agent by giving written notice to the Agent within fifteen (15) days from the time of the discovery of
the breach. No waiver, extinguishment, abandonment, withdrawal or cancellation of the right to terminate
this Agreement by the Company shall be construed for any previous failure to exercise its right under any
provision of this Agreement.
c) Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giving
to the other party fifteen (15) days notice in writing.

Sometime in 2001, De Dios addressed a letter to Tongko, then one of the Metro North Managers,
regarding meetings wherein De Dios found Tongko's views and comments to be unaligned with the
directions the company was taking. De Dios also expressed his concern regarding the Metro North
Managers' interpretation of the company's goals. He maintains that Tongko's allegations are unfounded.
Some allegations state that some Managers are unhappy with their earnings, that they're earning less
than what they deserve and that these are the reasons why Tonko's division is unable to meet agency
development objectives. However, not a single Manager came forth to confirm these allegations. Finally,
De Dios related his worries about Tongko's inability to push for company development and growth.

De Dios subsequently sent Tongko a letter of termination in accordance with Tongko's Agents Contract.
Tongko filed a complaint with the NLRC against Manulife for illegal dismissal, alleging that he had an
employer-employee relationship with De Dios instead of a revocable agency by pointing out that the latter
exercised control over him through directives regarding how to manage his area of responsibility and
setting objectives for him relating to the business. Tongko also claimed that his dismissal was without
basis and he was not afforded due process. The NLRC ruled that there was an employer-employee
relationship as evidenced by De Dios's letter which contained the manner and means by which Tongko
should do his work. The NLRC ruled in favor of Tongko, affirming the existence of the employer-employee
relationship.

The Court of Appeals, however, set aside the NLRC's ruling. It applied the four-fold test for determining
control and found the elements in this case to be lacking, basing its decision on the same facts used by
the NLRC. It found that Manulife did not exert control over Tongko, there was no employer-employee
relationship and thus the NLRC did not have jurisdiction over the case.

The Supreme Court reversed the ruling of the Court of Appeals and ruled in favor of Tongko. However,
the Supreme Court issued another Resolution dated June 29, 2010, reversing its decision. Tongko filed a
motion for reconsideration, which is now the subject of the instant case.

ISSUE: Whether the Supreme Court erred in issuing the June 29, 2010 resolution, reversing its earlier
decision that an employer-employee relationship existed.

HELD: The petition is unmeritorious.

LABOR LAW Agency; Employer-employee relationships
The Supreme Court finds no reason to reverse the June 29, 2010 decision. Control over the performance
of the task of one providing service both with respect to the means and manner, and the results of the
service is the primary element in determining whether an employment relationship exists. The Supreme
Court ruled petitioners Motion against his favor since he failed to show that the control Manulife exercised
over him was the control required to exist in an employer-employee relationship; Manulifes control fell
short of this norm and carried only the characteristic of the relationship between an insurance company
and its agents, as defined by the Insurance Code and by the law of agency under the Civil Code.

In the Supreme Courts June 29, 2010 Resolution, they noted that there are built-in elements of control
specific to an insurance agency, which do not amount to the elements of control that characterize an
employment relationship governed by the Labor Code.The Insurance Code provides definite parameters
in the way an agent negotiates for the sale of the companys insurance products, his collection activities
and his delivery of the insurance contract or policy. They do not reach the level of control into the means
and manner of doing an assigned task that invariably characterizes an employment relationship as
defined by labor law.

To reiterate, guidelines indicative of labor law "control" do not merely relate to the mutually desirable
result intended by the contractual relationship; they must have the nature of dictating the means and
methods to be employed in attaining the result. Tested by this norm, Manulifes instructions regarding the
objectives and sales targets, in connection with the training and engagement of other agents, are among
the directives that the principal may impose on the agent to achieve the assigned tasks.They are targeted
results that Manulife wishes to attain through its agents. Manulifes codes of conduct, likewise, do not
necessarily intrude into the insurance agents means and manner of conducting their sales. Codes of
conduct are norms or standards of behavior rather than employer directives into how specific tasks are to
be done.

In sum, the Supreme Court found absolutely no evidence of labor law control.

Petition is DENIED.
Romero v. People G.R. No. 171644: November 23, 2011
DELIA D. ROMERO, Petitioner, v. PEOPLE OF THE PHILIPPINES, ROMULO PADLAN and ARTURO
SIAPNO, Respondents, PERALTA, J.:

FACTS: Sometime in September 2000 Romulo went to petitioner's stall to inquire about securing a job in
Israel. Convinced by petitioner's words of encouragement and inspired by the potential salary of
US$700.00 to US$1,200.00 a month, Romulo asked petitioner the amount of money required in order for
him to be able to go to Israel. Petitioner informed him that as soon as he could give her US$3,600.00, his
papers would be immediately processed.

Petitioner contacted Jonney Erez Mokra who instructed Romulo to attend a briefing at his (Jonney's)
house in Dau, Mabalacat, Pampanga. Romulo was able to leave for Israel on October 26, 2000 and was
able to secure a job. Unfortunately, after two and a half months, he was caught by Israel's immigration
police, detained, and then deported.

On the other hand, private respondent Arturo Siapno is petitioner's nephew. He suffered the same fate as
Romulos.

Arturo, after learning that his story was similar to Romulos checked with the DOLE whether petitioner,
Teresita D.Visperas and Jonney Erez Mokra had any license or authority to recruit employees for
overseas employment. Finding that petitioner and the others were not authorized to recruit for overseas
employment, Arturo and Romulo filed a complaint before the NBI. Consequently, an Information was filed
against petitioner and Jonney Erez Mokra for the crime of Illegal Recruitment which reads as follows:

Upon arraignment on, petitioner, with the assistance of her counsel pleaded not guilty, whereas accused
Jonney ErezMokra was and is still at-large.

The RTC found petitioner guilty as charged. The dispositive portion of its decision reads as follows:

On appeal, the CA affirmed in toto the decision of the RTC.

Hence, the present petition after petitioner's motion for reconsideration was denied by the CA. Petitioner
enumerates the following assignment of errors:

ISSUE:
(1) Whether the CA erred in affirming the conviction of the accused based merely on a certification from
the DOLE-Dagupan District Office without said certification being properly identified and testified thereto,

(2) Whether the CA erred in affirming the conviction of the accused in interpreting the gesture of good
faith of the petitioner as referral in the guise of illegal recruitment.

HELD: Petition denied

ILLEGAL RECRUITMENT, TWO ELEMENTS

The crime of illegal recruitment is committed when two elements concur, namely: (1) the offender has no
valid license or authority required by law to enable one to lawfully engage in recruitment and placement of
workers; and (2) he undertakes either any activity within the meaning of "recruitment and placement"
defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code.

CREATION OF POEA DID NOT DIVEST SECRETARY OF LABOR OF HIS JURISDICTION OVER
RECRUITMENT AND PLACEMENT ACTIVITIES

Petitioner claims that the prosecution committed a procedural lapse in not procuring a certification from
the agency primarily involved, the Philippine Overseas Employment Administration (POEA). The said
argument, however, is flawed. A non-licensee or non-holder of authority is any person, corporation or
entity which has not been issued a valid license or authority to engage in recruitment and placement by
the Secretary of Labor, or whose license or authority has been suspended, revoked or cancelled by the
POEA or the Secretary. Clearly, the creation of the POEA did not divest the Secretary of Labor of his/her
jurisdiction over recruitment and placement of activities.

ACTS OF PETITIONER CONSTITUTE REFERRAL UNDER ART. 13 (B) OF THE LABOR CODE
Petitioner insists that the CA was wrong in affirming the factual findings of the trial court. According to her,
the accommodation extended by the petitioner to the private respondents is far from the referral as
contemplated in Article 13 (b) of the Labor Code. Nevertheless, the testimonies of the private
respondents clearly establish the fact that petitioner's conduct falls within the term recruitment as defined
by law. As testified by Romulo Padlan, petitioner convinced him and Arturo Siapno to give her
US$3,600.00 for the processing of their papers. Thus, it is apparent that petitioner was able to convince
the private respondents to apply for work in Israel after parting with their money in exchange for the
services she would render.

ABSENCE OF RECEIPTS, NOT FATAL

The Court has already ruled that the absence of receipts in a case for illegal recruitment is not fatal, as
long as the prosecution is able to establish through credible testimonial evidence that accused-appellant
has engaged in illegal recruitment. Such case is made, not by the issuance or the signing of receipts for
placement fees, but by engagement in recruitment activities without the necessary license or authority.
DELIA D. ROMERO, Petitioner, vs PEOPLE OF THE PHILIPPINES, ROMULO PADLAN and ARTURO SIAPNO,
Respondents G.R. No. 171644 November 23, 2011

FACTS: Petition for Review on Certiorari of petitioner DELIA D. ROMERO assailing the Decision and Resolution of
the Court of Appeals (CA) affirming the Decision of the Regional Trial Court (RTC) of Dagupan City, finding petitioner
guilty beyond reasonable doubt of the crime of Illegal Recruitment as defined in paragraph (a) of Article 38 of
Presidential Decree No. 2018[1].

Sometime in August 2000, ARTURO SIAPNO went to petitioner's stall. He was convinced by the petitioner that if he
could give her US$3,600.00 for the processing of his papers, he could leave the country within 1 to 2 weeks for a job
placement in Israel. Arturo was able to secure the amount needed through relatives help then petitioner processed
Arturo's papers and contacted Jonney Erez Mokra. Jonney instructed Arturo to attend a briefing in Dau, Mabalacat,
Pampanga. Afterwards, Arturo left for Israel sometime in September 2000. He was able to work and receive
US$800.00 salary per month. After three months of stay in Israel, he was caught by the immigration officials,
incarcerated for ten days and was eventually deported. After arriving in the country, Arturo immediately sought the
petitioner who then promised him that she would send him back to Israel, which did not happen.
Meanwhile, sometime in September 2000, ROMULO PADLAN went to petitioner's stall at Calasiao, Pangasinan to
inquire about securing a job in Israel. Convinced by petitioner's words of encouragement and inspired by a high
potential salary, Romulo asked petitioner the amount of money required in order for him to be able to go to Israel.
Petitioner informed him that as soon as he could give her US$3,600.00, his papers would be immediately processed.
When he was able to raise the amount, Romulo went back to petitioner and handed her the money. Petitioner
contacted Jonney Erez Mokra who instructed Romulo to attend a briefing at his house in Dau, Mabalacat, Pampanga.
Romulo was able to leave for Israel on October 26, 2000 and was able to secure a job but unfortunately, after two
and a half months, he was caught by Israel's immigration police and detained for 25 days. He was subsequently
deported because he did not possess a working visa. On his return, Romulo demanded from petitioner the return of
his money, but the latter refused and failed to do so.
Petitioner also claims that the testimony of Arturo Siapno saying that he paid a certain amount of money to the former
must not be given any credence due to the absence of any receipt or any other documentary evidence proving such.

ISSUE: Whether or not DELIA D. ROMERO is guilty of the act of Illegal Recruitment.

HELD: Yes. As testimonies of SIAPNO and PADLAN shows that petitioner was able to convince the private
respondents to apply for work in Israel after parting with their money in exchange for the services she would render.
Such act of the petitioner, without a doubt, falls within the meaning of recruitment and placement as defined in Article
13 (b) of the Labor Code[2].
The Court ruled that in illegal recruitment cases, the failure to present receipts for money that was paid in connection
with the recruitment process will not affect the strength of the evidence presented by the prosecution as long as the
payment can be proved through clear and convincing testimonies of credible witnesses.
WHEREFORE, the Petition for Review on Certiorari of petitioner Delia D. Romero is hereby DENIED.
Consequently, the Decision and Resolution of the Court of Appeals, affirming the Decision of the Regional Trial
Court, finding petitioner guilty beyond reasonable doubt of the crime of Illegal Recruitment as defined in paragraph (a)
of Article 38 of Presidential Decree (P.D.) No. 2018, are hereby AFFIRMED with the MODIFICATION on the penalty
to be imposed.

[1] “Art. 38. Illegal Recruitment. — (a) Any recruitment activities, including the prohibited practices enumerated under
Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority shall be deemed illegal and
punishable under Article 39 of this Code. The Ministry of Labor and Employment or any law enforcement officers may
initiate complaints under this Article.” x x x PRESIDENTIAL DECREE NO. 2018 [2] Article 13 (b) of the Labor Code
defines recruitment and placement as: any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or
abroad, whether for profit or not: Provided, that any person or entity which, in any manner, offers or promises for a
fee, employment to two or more persons shall be deemed engaged in recruitment and placement.
Delia Romero vs. People
Facts: On separate occasions, the complainants asked the accused how they can secure jobs in Israel.
They were informed that upon payment of $3,600.00, their papers would be immediately processed. They
were deployed to Israel and were able to work for a couple of months before being deported for not
possessing the required working visa. Upon going to the accused, the accused did not return their money
and promised that she will send them back to Israel which she ultimately failed to do.

Issue: W/N accused is liable for illegal recruitment

Held: Yes. Article 13 (b) of the Labor Code defines, recruitment and placement as: any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided,
that any person or entity which, in any manner, offers or promises for a fee, employment to two or more
persons shall be deemed engaged in recruitment and placement.

The crime of illegal recruitment is committed when two elements concur, namely: (1) the offender has no
valid license or authority required by law to enable one to lawfully engage in recruitment and placement of
workers; and (2) he undertakes either any activity within the meaning of “recruitment and placement”
defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code.

It is apparent that petitioner was able to convince the private respondents to apply for work in Israel after
parting with their money in exchange for the services she would render. The said act of the petitioner,
without a doubt, falls within the meaning of recruitment and placement as defined in Article 13 (b) of the
Labor Code.
CASE DIGEST: PP. V. ROMERO (G.R. NOS. 103385-88

FACTS: In January 1989, Doriz Dapnit met with Elma Romero and told the latter about her desire to work
abroad. Romero informed her that she can work in Taiwan as a factory worker with a monthly salary of
US$5,000.00. Thereafter, Dapnit paid Romero the placement fee charged by the latter as evidenced by
the receipts issued by the accused-appellant totalling P21,000.00. Romero told her that she could leave
on April 1, 1989 for Taiwan.

Dapnit later on spent more than 2 months following up with Romero regarding her visa, to no avail. It was
then that Dapnit went to the office of the Philippine Overseas Employment Administration (POEA) and
found out that Romero is not a licensed recruiter as shown by the Certification issued by the POEA. She
then filed a case in court charging Romero of Estafa and Illegal Recruitment.

Sometime also in January 1989, two other complainants (Bernardo Salazar and Richard Quillope testified
that they, too, where deceived by Romero into believing that they can work abroad. They likewise paid
her the amounts she demanded. And the promise of working abroad was likewise broken. However,
these two complainants both later on issued a joint Affidavit of Desistance. Thus, their case against
Romero on Illegal Recruitment was dismissed.

The lower court found Romero guilty of Illegal Recruitment and Estafa. However, Romero appealed and
argued that since Salazar and Quillope both desisted, she cannot be convicted of large-scale illegal
recruitment which requires at least (3) persons to be victimized considering that only one victim testified
against her while the other two complainants executed a joint affidavit of desistance which resulted in the
dismissal of their complaints.

ISSUE: Whether or not Romero can be found guilty of large scale illegal recruitment when two out of
three of the victims already issued a joint affidavit of desistance, resulting in the dismissal of their
complaints.

HELD: Romero is still guilty of large scale illegal recruitment.

The fact that complainants Bernardo Salazar and Richard Quillope executed a Joint Affidavit of
Desistance does not serve to exculpate accused-appellant from criminal liability insofar as the case for
illegal recruitment is concerned since the Court looks with disfavor the dropping of criminal complaints
upon mere affidavit of desistance of the complainant, particularly where the commission of the offense, as
is in this case, is duly supported by documentary evidence.

As provided by the Civil Code of the Philippines:

Art. 2034. There may be a compromise upon the civil liability arising from an offense; but such
compromise shall not extinguish the public action for the imposition of the legal penalty
Romero vs. People
FACTS: That sometime in the month of August and September 2000 in Calasiao, Pangasinan, Delia D.
Romero, not being licensee or holder of authority, recruited Arturo Siapno and Romulo Padlan to a
supposed job abroad particularly in Israel, for a fee, without first securing the necessary license and
permit to do the same. The victims testified that when they went to the accused stall, the latter
encouraged them to apply abroad and they were convinced. They attended a briefing with Jonney, a
friend of Delia, in Dau, Mabalacat, Pampanga. They were able to work in Israel for more or less three
months but they were later caught by the immigration officials, incarcerated for a couple of days and then
deported because they have no working visas.

ISSUE: Is Delia Romero guilty of illegal recruitment?

LAWS INVOLVED:
Arts. 38 and 13 (b) of the Labor Code.

RULING: Yes. Delia Romero is guilty of illegal recruitment and estafa. The Court held that the crime of
illegal recruitment is committed when two elements concur, namely: (1) the offender has no valid license
or authority required by law to enable one to lawfully engage in recruitment and placement of workers;
and (2) he undertakes either any activity within the meaning of "recruitment and placement" defined under
Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code. From the above
testimonies, it is apparent that petitioner was able to convince the private respondents to apply for work in
Israel after parting with their money in exchange for the services she would render. The said act of the
petitioner, without a doubt, falls within the meaning of recruitment and placement as defined in Article 13
(b) of the Labor Code.
Lapasaran vs. People
G.R. No. 179907 Lapasaran vs. People February 12, 2009

FACTS: In September 2001, private complainant Menardo Villarin (Menardo) and his sister Vilma Villarin
(Vilma) met petitioner Arlene N. Lapasaran, who worked at Silver Jet Travel Tours Agency (Silver Jet) at
SIMCAS Building, Makati. For a fee of P85,000.00, petitioner undertook the processing of the papers
necessary for the deployment (under a tourist visa) and employment of Menardo in South Korea.
Petitioner informed Menardo that he would be employed as “factory worker,” which was, subsequently,
changed to “bakery worker.” Thereafter, Menardo paid the said fee in installments. After two
postponements in his flight schedule, Menardo finally left for South Korea on November 25, 2001.
Unfortunately, he was incarcerated by South Korean immigration authorities and was immediately
deported to the Philippines because the travel documents issued to him by the petitioner were fake.
He immediately contacted petitioner and informed her of what happened. Thereupon, petitioner promised
to send him back to South Korea, but the promise was never fulfilled. Consequently, Menardo and his
sister Vilma demanded the return of the money they paid, but petitioner refused andeven said, “Magkorte
na lang tayo.” It was later found out that petitioner was no longer connected with Silver Jet.

ISSUE: Whether or not the laws on illegal recruitment and estafa are applicable in the case at bar.
LAWS INVOLVED: Secs.6 and 7 (a) of RA 8042.

RULING:
Illegal recruitment is committed when it is shown that petitioner gave the complainant the distinct
impression that she had the power or ability to send the complainant abroad for work, such that the latter
was convinced to part with his money in order to be employed. To be engaged in the practice of
recruitment and placement, it is plain that there must, at least, be a promise or an offer of employment
from the person posing as a recruiter whether locally or abroad. Petitioner’s misrepresentations
concerning her purported power and authority to recruit for overseas employment, and the collection from
Menardo of various amounts, clearly indicate acts constitutive of illegal recruitment.
People of the Philippines (petitioner) v Jamilosa (repondent) GR No. 169076 January 23, 2007
Callejo, Sr.

FACTS:
Sometime in the months of January to February, 1996, representing to have the capacity, authority or
license to contract, enlist and deploy or transport workers for overseas employment, did then and there,
willfully, unlawfully and criminally recruit, contract and promise to deploy, for a fee the herein
complainants, namely, Imelda D. Bamba, Geraldine M. Lagman and Alma E. Singh, for work or
employment in Los Angeles, California, U.S.A. in Nursing Home and Care Center. Prosecution presented
three witnesses, namely Imelda Bamba,Geraldine Lagman and Alma Singh. According to Bamba, she
met the appellant on a bus. She was on her way to SM North Edsa where she was a company nurse.
Appellant introduced himself as a recruiter of workers for employment abroad. Appellant told her he could
help her get employed as nurse. Appellant gave his pager number and instructed her to contact him is
she’s interested. Sometime in January 1996, appellant fetched her at her office, went to her house and
gave him the necessary documents and handed to appellant the amount of US$300.00 and the latter
showed her a photocopy of her supposed US visa. However, the appellant did not issue a receipt for the
said money. Thereafter, appellant told her to resign from her work because she was booked with
Northwest Airlines and to leave for USA on Feb, 1996. On the scheduled departure, appellant failed to
show up. Instead, called and informed her that he failed to give the passport and US visa because she
had to go to province because his wife died. Trying to contact him to the supposed residence and hotel
where he temporarily resided, but to no avail. Witness Lagman testified that she is a registered nurse. In
January 1996, she went to SM North Edsa to visit her cousin Bamba. At that time Bamba informed her
that she was going to meet to appellant. Bamba invited Lagman to go with her. The appellant convinced
them of his ability to send them abroad. On their next meeting, Lagman handed to the latter the
necessary documents and an amount of US$300.00 and 2 bottles of black label without any receipt
issued by the appellant. Four days after their meeting, a telephone company called her because her
number was appearing in appellants cell phone documents. The caller is trying to locate him as he was a
swindler. She became suspicious and told Bamba about the matter. One week before her scheduled
flight, appellant told her he could not meet them because his mother passed away. Lastly, Alma Singh,
who is also a registered nurse, declared that she first met the appellant at SM North Edsa when Imelda
Bamba introduced the latter to her. Appellant told her that he is an undercover agent of FBI and he could
fix her US visa. On their next meeting, she gave all the pertinent documents. Thereafter, she gave
P10,000 to the appellant covering half price of her plane ticket. They paged the appellant through his
beeper to set up another appointment but the appellant avoided them as he had many things to do. The
accused Jamilosa testified on direct examination that he never told Bamba that he could get her a job in
USA, the truth being that she wanted to leave SM as company nurse because she was having a problem
thereat. Bamba called him several times, seeking advices from him. He started courting Bamba and went
out dating until later became his girlfriend. He met Lagman and Singh thru Bamba. As complainants
seeking advice on how to apply for jobs abroad, lest he be charged as a recruiter, he made Bamba,
Lagman and Singh sign separate certifications, all to effect that he never recruited them and no money
was involved. Bamba filed an illegal recruitment case against him because they quarreled and
separated.RTC rendered judgment finding accused guilty beyond reasonable doubt of illegal recruitment
in large scale.

ISSUE: W/N the trial court erred in convicting accused appellant of the crime of illegal recruitment in large
scale

HELD: “Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not. Provided, That any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in
recruitment and placement. Illegal recruitment shall mean any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or
advertising for employment abroad, whether for profit or not, when undertaken by anon-licensee or non-
holder of authority. Provided, That any such non-licensee or non-holder who, in any manner, offers or
promises for a fee employment abroad to two or more persons shall be deemed so engaged. To prove
illegal recruitment in large scale, the prosecution is burdened to prove three (3) essential elements, to wit:
(1) the person charged undertook a recruitment activity under Article 13(b) or any prohibited practice
under Article 34 of the Labor Code; (2) accused did not have the license or the authority to lawfully
engage in the recruitment and placement of workers; and (3) accused committed the same against three
or more persons individually or as a group. As gleaned from the collective testimonies of the complaining
witnesses which the trial court and the appellate court found to be credible and deserving of full probative
weight, the prosecution mustered the requisite quantum of evidence to prove the guilt of accused beyond
reasonable doubt for the crime charged. Indeed, the findings of the trial court, affirmed on appeal by the
CA, are conclusive on this Court absent evidence that the tribunals ignored, misunderstood, or misapplied
substantial fact or other circumstance. The failure of the prosecution to adduce in evidence any receipt or
document signed by appellant where he acknowledged to have received money and liquor does not free
him from criminal liability. Even in the absence of money or other valuables given as consideration for the
"services" of appellant, the latter is considered as being engaged in recruitment activities. It can be
gleaned from the language of Article 13(b) of the Labor Code that the act of recruitment may be for profit
or not. It is sufficient that the accused promises or offers for a fee employment to warrant conviction for
illegal recruitment.
People vs. Gallo

FACTS: Accused-appellant made false misrepresentations and promises in assuring Dela Caza and the
other victims that after they paid the placement fee, jobs in Korea as factory workers were waiting for
them and that they would be deployed soon. In fact, Dela Caza personally talked to accused-appellant
and gave him the money and saw him sign and issue an official receipt as proof of his payment.

ISSUE: Whether Gallo and others are guilty of syndicated illegal recruitment and estafa.
LAWS INVOLVED: Articles 13 (b) and 34 of the Labor Code.

RULING: In the instant case, accused-appellant committed the acts enumerated in Sec. 6 of R.A. 8042.
Testimonial evidence presented by the prosecution clearly shows that, in consideration of a promise of
foreign employment, accused-appellant received the amount of Php 45,000.00 from Dela Caza. When
accused-appellant made misrepresentations concerning the agency’s purported power and authority to
recruit for overseas employment, and in the process, collected money in the guise of placement fees, the
former clearly committed acts constitutive of illegal recruitment.
1[ In this case, it cannot be denied that the accused-appellant together with Mardeolyn and the rest of the
officers and employees of MPM Agency participated in a network of deception. Verily, the active
involvement of each in the recruitment scam was directed at one single purpose – to divest complainants
with their money on the pretext of guaranteed employment abroad. The prosecution evidence shows that
complainants were briefed by Mardeolyn about the processing of their papers for a possible job
opportunity in Korea, as well as their possible salary. Likewise, Yeo Sin Ung, a Korean national, gave a
briefing about the business and what to expect from the company. Then, here comes accused-appellant
who introduced himself as Mardeolyn’s relative and specifically told Dela Cazaof the fact that the agency
was able to send many workers abroad. Dela Cazawas even showed several workers visas who were
already allegedly deployed abroad. Later on, accused-appellant signed and issued an official receipt
acknowledging the down payment of Dela Caza. Without a doubt, the nature and extent of the actions of
accused-appellant, as well as with the other persons in MPM Agency clearly show unity of action towards
a common undertaking. Hence, conspiracy is evidently present.
People vs. Gallo

FACTS: That on or about the period comprising March 21, 2003 to March 28,2003, in Pasay City, Rachel
Balagan, Rosabel Balagan and Herminia Avila conspired and confederated together and mutually helped
one another, by falsely represented themselves to have the capacity to contract, enlist, employ, and
recruit workers for overseas deployment/employment as Factory Worker in Ireland, for a fee recruited and
promised overseas deployment/employment to private complainant Michael O. Fernandez without first
securing the required license or authority from the POEA.

ISSUE: Whether or not the three accused are guilty of syndicated illegal recruitment?
LAWS INVOLVED:

RULING:
In the case for Syndicated Illegal Recruitment, the appellate court credited the position of the Office of the
Solicitor General that the prosecution failed to establish that the illegal recruitment was committed by a
syndicate.
It instead found appellants culpable of Simple Illegal Recruitment.
Patricia Sto. Tomas vs Rey Salac

In G.R. No. 152642, in 2002, Rey Salac et al, who are recruiters deploying workers abroad, sought to
enjoin the Secretary of Labor, Patricia Sto. Tomas, the POEA, and TESDA, from regulating the activities
of private recruiters. Salac et al invoked Sections 29 and 30 of the Republic Act 8042 or the Migrant
Workers Act which provides that recruitment agency in the Philippines shall be deregulated one year from
the passage of the said law; that 5 years thereafter, recruitment should be fully deregulated. RA 8042 was
passed in 1995, hence, Salac et al insisted that as early as 2000, the aforementioned government
agencies should have stopped issuing memorandums and circulars regulating the recruitment of workers
abroad.

Sto. Tomas then questioned the validity of Sections 29 and 30.

ISSUE: Whether or not Sections 29 and 30 are valid.

HELD: The issue became moot and academic. It appears that during the pendency of this case in 2007,
RA 9422 (An Act to Strengthen the Regulatory Functions of the POEA) was passed which repealed
Sections 29 and 30 of RA 8042.

G.R. 167590

In this case, the Philippine Association of Service Exporters, Inc. (PASEI) questioned the validity of the
following provisions of RA 8042:
a. Section 6, which defines the term “illegal recruitment”. PASEI claims that the definition by the law is
vague as it fails to distinguish between licensed and non-licensed recruiters;
b. Section 7, which penalizes violations against RA 8042. PASEI argues that the penalties for simple
violations against RA 8042, i.e., mere failure to render report or obstructing inspection are already
punishable for at least 6 years and 1 day imprisonment an a fine of at least P200k. PASEI argues that
such is unreasonable;
c. Section 9, which allows the victims of illegal recruitment to have the option to either file the criminal
case where he or she resides or at the place where the crime was committed. PASEI argues that this
provision is void for being contrary to the Rules of Court which provides that criminal cases must be
prosecuted in the place where the crime or any of its essential elements were committed;
d. Section 10, which provides that corporate officers and directors of a company found to be in violation of
RA 8042 shall be themselves be jointly and solidarily liable with the corporation or partnership for the
aforesaid claims and damages. PASEI claims that this automatic liability imposed upon corporate officers
and directors is void for being violative of due process.

RTC Judge Jose Paneda of Quezon City agreed with PASEI and he declared the said provisions of RA
8042 as void. Secretary Sto. Tomas petitioned for the annulment of the RTC judgment.

ISSUE: Whether or not Sections 6, 7, 9, and 10 of RA 8042 are void.

HELD: No, they are valid provisions.

a. Section 6: The law clearly and unambiguously distinguished between licensed and non-licensed
recruiters. By its terms, persons who engage in “canvassing, enlisting, contracting, transporting, utilizing,
hiring, or procuring workers” without the appropriate government license or authority are guilty of illegal
recruitment whether or not they commit the wrongful acts enumerated in that section. On the other hand,
recruiters who engage in the canvassing, enlisting, etc. of OFWs, although with the appropriate
government license or authority, are guilty of illegal recruitment only if they commit any of the wrongful
acts enumerated in Section 6.
b. Section 7: The penalties are valid. Congress is well within its right to prescribed the said penalties.
Besides, it is not the duty of the courts to inquire into the wisdom behind the law.
c. Section 9: The Rules on Criminal Procedure, particularly Section 15(a) of Rule 110, itself, provides that
the rule on venue when it comes to criminal cases is subject to existing laws. Therefore, there is nothing
arbitrary when Congress provided an alternative venue for violations of a special penal law like RA 8042.
d. Section 10: The liability of corporate officers and directors is not automatic. To make them jointly and
solidarily liable with their company, there must be a finding that they were remiss in directing the affairs of
that company, such as sponsoring or tolerating the conduct of illegal activities.

G.R. 182978-79, and G.R. 184298-99

In this case, Jasmin Cuaresma, a nurse working in Saudi Arabia was found dead. Her parents received
insurance benefits from the OWWA (Overseas Workers Welfare Administration). But when they found out
based on an autopsy conducted in the Philippines that Jasmin was raped and thereafter killed, her
parents (Simplicio and Mila Cuaresma) filed for death and insurance benefits with damages from the
recruitment and placement agency which handled Jasmin (Becmen Service Exporter and Promotion,
Inc.).

The case reached the Supreme Court where the Supreme Court ruled that since Becmen was negligent
in investigating the true cause of death of Jasmin ( a violation of RA 8042), it shall be liable for damages.
The Supreme Court also ruled that pursuant to Section 10 of RA 8042, the directors and officers of
Becmen are themselves jointly and solidarily liable with Becmen.

Eufrocina Gumabay and the other officers of Becmen filed a motion for leave to intervene. They aver that
Section 10 is invalid.

ISSUE: Whether or not Section is invalid.

HELD: No. As earlier discussed, Section 10 is valid. The liability of Gumabay et al is not automatic.
However, the SC reconsidered its earlier ruling that Gumabay et al are solidarily and jointly liable with
Becmen there being no evidence on record which shows that they were personally involved in their
company’s particular actions or omissions in Jasmin’s case.
CALALANG v. WILLIAMS, 70 PHIL 726, GR No. 47800, December 2, 1940

FACTS: The National Traffic Commission resolved that animal-drawn vehicles be prohibited from
passing along some major streets such a Rizal Ave. in Manila for a period of one year from the date of
the opening of the Colgante Bridge to traffic. The Secretary of Public Works approved the resolution on
August 10,1940. The Mayor of Manila and the Acting Chief of Police of Manila have enforced the rules
and regulation. As a consequence, all animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above mentioned to the detriment not only of their owners but of the riding
public as well.

ISSUE: Does the rule infringe upon the constitutional precept regarding the promotion of social justice?
What is Social Justice?

HELD: No. The regulation aims to promote safe transit and avoid obstructions on national roads in the
interest and convenience of the public. Persons and property may be subject to all kinds of restraints and
burdens in order to secure the general comfort, health, and prosperity of the State. To this fundamental
aims of the government, the rights of the individual are subordinated.
Social justice is “neither communism, nor despotism, nor atomism, nor anarchy,” but the humanization of
laws and the equalization of social and economic forces by the State so that justice in its rational and
objectively secular conception may at least be approximated. Social justice means the promotion of the
welfare of all the people, the adoption by the Government of measures calculated to insure economic
stability of all the competent elements of society, through the maintenance of a proper economic and
social equilibrium in the interrelations of the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers
underlying the existence of all governments on the time-honored principles of Salus Populi est Suprema
Lex.(Justice Laurel)
CAPITOL MEDICAL CENTER (CMC) v. MERIS,

FACTS: Petitioner closed its industrial service unit due to alleged loss and extinct demand resulting to
the termination of the employment of the respondent. The latter filed an illegal dismissal case but the
same was denied by the labor arbiter, and subsequently by the NLRC contending that the same is part of
the management prerogative.

ISSUE: Has employer the right to close its business even without basis resulting to the displacement of
the worker?

HELD: No. Employers are also accorded with rights and privileges to assure their self-determination and
independence and reasonable return of capital. This mass of privileges is called management
prerogatives. Although they may be broad and unlimited in scope, the State has the right to determine
whether an employer's privilege is exercised in a manner that complies with the legal requirements and
does not offend the protected rights of labor.

CAPITOL MEDICAL CENTER vs. MERIS G.R. No. 155098, September 16, 2005 FACTS: Capitol
Medical Center abolished its Industrial Service Unit (ISU). Dr. Cesar Meris received a letter advising
him of said abolition and the consequent termination of his services. The abolition was allegedly caused
by an “almost extinct demand for direct medical service by the private and semi-government corporations
in providing health care for their employees” due to proliferation of HMOs, among others. A complaint for
illegal dismissal was filed with the Labor Arbiter, which was decided in Capitol’s favor. The LA’s decision
was affirmed by the NLRC, but was reversed by the CA – hence, this petition. PARTIES’
CONTENTIONS: (1) Dr. Meris: he was illegally dismissed. (2) Capitol: the abolition of the ISU was a
valid exercise of management prerogatives; the ISU was being operated at a loss. ISSUE: Was Dr. Meris
illegally dismissed? RULING: YES. Work is a necessity that has economic significance deserving legal
protection. The social justice and protection to labor provisions in the Constitution dictate so. [...][The]
right to close an establishment or undertaking may be justified on grounds other than business losses but
it cannot be an unbridled prerogative to suit the whims of the employer. The ultimate test of the
validity of closure or cessation of establishment or undertaking is that it must be bona fide in
character.[39] And the burden of proving such falls upon the employer. In the case at bar, Capitol failed to
sufficiently prove its good faith in closing the ISU.
Meralco v. NLRC
G.R. No. 78763 July 12,1989, MEDIALDEA, J.
(Labor Standards: Proper Construction and Interpretation of labor Laws)

FACTS: Private resondent, Apolinario Signo was dismissed from work by Meralco when it was found out
that he breached the trust of the company by making it appear that the residence of one applicant for an
electric service is within the serviceable area of MEralco. The applicant’s residence was installed with
electrical services thru Signo’s maneuver, however, due to the fault of the Power sales division, the
applicant-consumer was not billed for a year.

ISSUE: Whether or not, the dismissal of Signo was a proper penalty for his acts.

RULING: The Court affirmed the decision of the Labor Arbiter in finding that Dismissal was a drastic
measure considering the length of service of to the Company by Signo, which is 20 years, and the 2
awards he received for honesty from the employer. He was ordered reinstated, thought without
backwages for he is not at all faultless.
Further, it was held that in carrying out and interpreting the Labor Code's provisions and its implementing
regulations, the workingman's welfare should be the primordial and paramount consideration. This kind of
interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided
for in Article 4 of the New Labor Code which states that "all doubts in the implementation and
interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be
resolved in favor of labor"
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. v. NLRC
G.R. No. 161757; January 25, 2006
Ponente: J. Carpio-Morales

FACTS: Petitioner, Sunace International Management Services (Sunace), deployed to Taiwan Divina A.
Montehermozo (Divina) as a domestic helper under a 12-month contract effective February 1, 1997. The
deployment was with the assistance of a Taiwanese broker, Edmund Wang, President of Jet Crown
International Co., Ltd.
After her 12-month contract expired on February 1, 1998, Divina continued working for her Taiwanese
employer, Hang Rui Xiong, for two more years, after which she returned to the Philippines on February 4,
2000.
Shortly after her return or on February 14, 2000, Divina filed a complaint before the National Labor
Relations Commission (NLRC) against Sunace, one Adelaide Perez, the Taiwanese broker, and the
employer-foreign principal alleging that she was jailed for three months and that she was underpaid

Reacting to Divina's Position Paper, Sunace filed on April 25, 2000 an ". . . ANSWER TO
COMPLAINANT'S POSITION PAPER" alleging that Divina's 2-year extension of her contract was without
its knowledge and consent, hence, it had no liability attaching to any claim arising therefrom, and Divina
in fact executed a Waiver/Quitclaim and Release of Responsibility and an Affidavit of Desistance, copy of
each document was annexed to said

The Labor Arbiter, rejected Sunace's claim that the extension of Divina's contract for two more years was
without its knowledge and consent.

ISSUE: Whether the act of the foreigner-principal in renewing the contract of Divina be attributable to
Sunace

HELD: No, the act of the foreigner-principal in renewing the contract of Divina is not attributable to
Sunace.

There being no substantial proof that Sunace knew of and consented to be bound under the 2-year
employment contract extension, it cannot be said to be privy thereto. As such, it and its "owner" cannot be
held solidarily liable for any of Divina's claims arising from the 2-year employment extension.

Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship
with its foreign principal when, after the termination of the original employment contract, the foreign
principal directly negotiated with Divina and entered into a new and separate employment contract in
Taiwan.
PLASTIC TOWN CENTER CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION AND NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM)-KATIPUNAN,
respondents.

Facts: On September 1984, respondent Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan filed a

complaint against petitioner Plastic Town Center Corporation with:
– violation of CBA by crediting the P1 per day increase in gratuity pay to resigning employees instead of
30 days equivalent to one month
– unfair labor practice by giving only 26 days pay instead of 30 days equivalent to one month as gratuity
pay to resigning employees.

In the CBA, it was provided that: Company agreed to grant regular workers who rendered at least one
year of continuous service of P1 per worked day.
Company to grant gratuity pay to a resigning employee or laborer amounting to, among others, one
month salary for those who rendered two to five years of service.

Plastic Town Center Corporation maintained that under the principle of “fair day’s wage for fair day’s
labor”, gratuity pay should be computed on the basis of 26 days for one month salary considering that the
employees are daily paid.

Labor Arbiter: Ruled in favor of NLM Union. As daily wage earner, there would be no instance that the
worker would work for 30 days a month since work does not include Sunday or rest days.

NLRC: Reversed the decision of Labor Arbiter and held that PTC should grant gratuity pay equivalent of
thirty days salary.

Issue: Whether the PTC’s contention that the gratuity pay should be computed on the basis of 26 days for
one month salary instead of 30 days is valid.

Held: No, PTC’s contention does not hold merit in this case.

Gratuity pay is not intended to pay a worker for actual services rendered. It is a money benefit given to
the workers whose purpose is “to reward employees or laborers who have rendered satisfactory and
efficient service to the company.”

While it may be enforced once it forms part of a contractual undertaking, the grant of such benefit is not
mandatory so as to be considered a part of labor standard law unlike salary, which are covered in Labor
Code. Nowhere has it ever been stated that gratuity pay should be based on actual number of days
worked over the period of years forming its basis. Court saw no point in counting the number of days
worked over a ten-year period to determine the meaning of “two and one- half months’ gratuity.”

Moreover any doubts or ambiguity in the contract between management and the union members should
be resolved in favor of the laborer. When months are not designated by name, a month is understood to
be 30 days.

As such, NLRC did not act with grave abuse of discretion when it decided that the gratuity pay should be
equivalent to 30 days.

WHEREFORE, the petition is hereby DISMISSED for lack of merit.

HLURB vs. Esquillo

PANGANIBAN, J.:
Quitclaims, releases and other waivers of benefits granted by laws or contracts in favor of workers should be strictly
scrutinized to protect the weak and the disadvantaged. The waivers should be carefully examined, in regard not only
to the words and terms used, but also the factual circumstances under which they have been executed.

The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to set aside the July 27, 2001
Decision[2] and the January 29, 2002 Resolution[3] of the Court of Appeals (CA) in CA-GR SP No. 50679. The
dispositive portion of the Decision reads as follows:

WHEREFORE, premises considered, the decision dated May 30, 1997 of public respondent is hereby ANNULLED
and SET ASIDE and the decision, dated February 27, 1997 of Labor Arbiter Andres Zavalla is REINSTATED and
AFFIRMED in toto. Costs against [herein petitioners].
The assailed Resolution denied petitioners Motion for Reconsideration.

The Facts: The antecedents are narrated by the CA as follows:

[Respondent] Marianito C. Esquillo was hired as a structural engineer by [Petitioner] ABV Rock Group (ABV) based in
Jeddah, Kingdom of Saudi Arabia. He commenced employment on July 27, 1989, with an initial monthly salary of
US$1,000.00 that was gradually increased, on account of his good performance and the annual renewal of his
employment contract, until it reached US$1,300.00. Private respondent Land & Housing Development Corporation
(LHDC), a local placement agency, facilitated [respondents] employment papers.

Although [respondents] employment contract was supposed to be valid until July 26, 1995, it was pre-terminated,
through an Inter-Office Memo on Notice of Termination, dated November 17, 1994, allegedly, for the reason,
reduction of force. Petitioner however, claims that the reason adduced was negated by the fact that a lot of
transferees from other sites were taken in and promotions as well as re-classifications in the lower ranks were done
as shown by the list of fifteen (15) transferees from Riyadh effective November 5, 1994, as well as letters of
promotion and re-classification. He further claimed that [Petitioner] ABV maliciously confiscated his iqama or resident
visa despite the fact that it was [respondents] previous employer, FEAL IBC., which secured his iqama.
Consequently, [respondent] was prevented from getting another job in Jeddah.

[Respondent] subsequently received the amount of twenty-three thousand, one hundred fifty-three Saudi Riyals
(SR23,153.00) from [Petitioner] ABV, as final settlement of his claims and was issued an exit visa that required him to
immediately go back to the Philippines.

As a result of the foregoing, [respondent] filed a complaint for breach of contract and/or illegal dismissal, before the
Philippine Overseas Employment Administration which was referred to the National Labor Relations Commission,
Sub-Regional Arbitration Branch No. IV, San Pablo City, and docketed as SRAB-IV-4-0053-96-L. The parties were
required to file their position papers and responsive pleadings.

In their position paper, [petitioners] maintained that [respondents] dismissal was for valid cause, that is, reduction of
force. Due to the Gulf War, the projects of [Petitioner] ABV were reduced and it was forced to terminate the contracts
of workers whose job were not so immediate and urgent and retain only those workers whose skills were needed just
to maintain the projects. [Respondent] was informed, one month in advance, of the pre-termination of his contract,
and he was paid his salary, overtime pay, bonus and other benefits in the total amount of US$6,716.00 or Saudi
Riyals SR25,192.00. With respect to the alleged confiscation of [respondents] iqama, [petitioners] alleged that the law
requires its surrender to the Saudi authorities upon the termination of the employees contract of employment.

Upon the submission of the case for resolution, the Hon. Labor Arbiter Andres Zavalla issued his Decision, dated
February 27, 1997, decreeing, as follows:
WHEREFORE, premises considered, judgment is hereby rendered ordering [petitioners] jointly and severally to pay
[respondent] his salaries corresponding to the unexpired portion of his contract from December 19, 1994 up to July
26, 1995 in the total amount of NINE THOUSAND FOUR HUNDRED FORTY SEVEN U.S. Dollars (US$9,447.00)
and ten percent (10%) of his monetary award as attorneys fees both in Philippine currency to be computed at the
prevailing rate at the time of payment.

All other claims of [respondent] are hereby dismissed for lack of merit.
SO ORDERED.

When [petitioners] filed their joint appeal, docketed as NLRC NCR CA No. 012650-97, [the NLRC] in a Decision,
dated May 30, 1997, reversed the aforecited decision and dismissed the [respondents] complaint for lack of merit.
[Respondents] motion for reconsideration was denied in a Resolution, dated July 10, 1997.[5]

Ruling of the Court of Appeals:

The Court of Appeals ruled that despite the absence of a written categorical objection to the sufficiency of the
payment received as consideration for the execution of the quitclaim,
jurisprudence supported the right of respondent to demand what was rightfully his under our labor laws. Hence, he
should have been allowed to recover the difference between the amount he had actually received and the amount he
should have received.

The CA also found that the NLRC had erroneously applied RA 8042 to the case. The appellate court held that
respondent was entitled to the salaries corresponding to the unexpired portion of his Contract, in addition to what he
had already received.
Hence, this Petition.[6]

The Issues:
Petitioners raise the following issues for this Courts consideration:

A. Whether or not the Honorable Court of Appeals committed reversible error when it took cognizance of an issue of
fact which was raised for the first time on appeal.
B. Whether or not the Honorable Court of Appeals committed reversible error in its 27 July 2001 Decision and 29
January 2002 Resolution by affirming the 27 February 1997 Decision of the Labor Arbiter which rendered as null and
void and without binding effect the release and quitclaim executed by the respondent in favor of the petitioners, and,
thereafter, granted the respondent monetary award.[7]

In the main, the issue is whether respondent, despite having executed a quitclaim, is entitled to a grant of his
additional monetary claims.

The Courts Ruling:

The Petition has no merit.
At the outset, the Court notes the Manifestation of the Office of the Solicitor General (OSG), recommending that the
decision dated May 30, 1997 of the NLRC be annulled and set aside and that [Respondent] Esquillo be awarded the
total amount of his salaries corresponding to the unexpired portion of his contract of employment.[8]

Main Issue:
Entitlements of a Dismissed
Employee Who Has Executed a Quitclaim

The factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but finality.[9] In the present case, the labor arbiter found
respondents dismissal to be illegal and devoid of any just or authorized cause. The factual findings of the NLRC and
the CA on this matter were not contradictory. Hence, the Court finds no reason to deviate from their factual finding
that respondent was dismissed without any legal cause.
Indeed, an employee cannot be dismissed except for cause, as provided by law, and only after due notice and
hearing.[10] Employees who are dismissed without cause have the right to be reinstated without loss of seniority
rights and other privileges; and to be paid full back wages, inclusive of allowances and other benefits, plus proven
damages.

With regard to contract workers, in cases arising before the effectivity of RA 8042 (the Migrant Workers and Overseas
Filipinos Act[11]), it is settled that if the contract is for a fixed term and the employee is dismissed without just cause,
he is entitled to the payment of his salaries corresponding to the unexpired portion of his contract.[12] In the present
case, the Contract of respondent was until July 26, 1995. Since his dismissal from service effective December 18,
1994, was not for a just cause, he is entitled to be paid his salary corresponding to the unexpired portion of his
Contract, in the total amount of US$9,447.

We now go to the Release and Quitclaim signed by respondent. The document, which was prepared by Petitioner
ABV Rock Group,[13] states:

KNOW ALL MEN BY THESE PRESENTS:

That for and in consideration of the sum of Saudi Riyals SR: TWENTY THREE THOUSAND ONE HUNDRED FIFTY
THREE (SR23,153) receipt of which is hereby acknowledged to my full and complete satisfaction, I, MARIANITO C.
ESQUILLO do discharge my employer, ABV ROCK GROUP KB, JEDDAH, & its recruitment agent, the LAND &
HOUSING DEVP. CORP., from any and all claims, demands, debts, dues, actions, or causes of action, arising from
my employment with aforesaid company/firm/entity.

I hereby certify that I am of legal age, that I fully understand this instrument and agree that this is a full and final
release and discharge of the parties referred to herein, and I further agree that this release may be pleaded as
absolute and final bar to any suit or suits or legal proceedings that may hereafter be prosecuted by me against
aforementioned companies/entities.

IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HANDS THIS 29 day of NOV, 1994 at JEDDAH.

SIGNED
MARIANITO C. ESQUILLO.[14]

Petitioners claim that the foregoing Release and Quitclaim has forever released them from any and all claims,
demands, dues, actions, or causes of action arising from respondents employment with them. They also contend that
the validity of the document can no longer be questioned.

Unfortunately for petitioners, jurisprudence does not support their stance. The fact that employees have signed a
release and/or quitclaim does not necessarily result in the waiver of their claims. The law strictly scrutinizes
agreements in which workers agree to receive less compensation than what they are legally entitled to. That
document does not always bar them from demanding benefits to which they are legally entitled.[15] The reason for
this policy was explained, inter alia, in Marcos v. National Labor Relations Commission, which we quote:

We have heretofore explained that the reason why quitclaims are commonly frowned upon as contrary to public
policy, and why they are held to be ineffective to bar claims for the full measure of the workers legal rights, is the fact
that the employer and the employee obviously do not stand on the same footing. The employer drove the employee
to the wall. The latter must have to get hold of money. Because, out of a job, he had to face the harsh necessities of
life. He thus found himself in no position to resist money proffered. His, then, is a case of adherence, not of choice.
One thing sure, however, is that petitioners did not relent on their claim. They pressed it. They are deemed not [to]
have waived any of their rights. Renuntiatio non praesumitur.

Along this line, we have more trenchantly declared that quitclaims and/or complete releases executed by the
employees do not estop them from pursuing their claims arising from unfair labor practices of the employer. The basic
reason for this is that such quitclaims and/or complete releases are against public policy and, therefore, null and void.
The acceptance of termination does not divest a laborer of the right to prosecute his employer for unfair labor practice
acts. While there may be possible exceptions to this holding, we do not perceive any in the case at bar.

We have pointed out in Veloso, et al. vs. Department of Labor and Employment, et al., that:

While rights may be waived, the same must not be contrary to law, public order, public policy, morals or good
customs or prejudicial to a third person with a right recognized by law.

Article 6 of the Civil Code renders a quitclaim agreement void ab initio where the quitclaim obligates the workers
concerned to forego their benefits while at the same time exempting the employer from any liability that it may choose
to reject. This runs counter to Art. 22 of the Civil Code which provides that no one shall be unjustly enriched at the
expense of another.[16]

In Periquet v. NLRC, this Court set the guidelines and the current doctrinal policy regarding quitclaims and waivers,
as follows:

Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a
change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible
person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable
transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what
he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized
as a valid and binding undertaking.[17]
Hence, quitclaims in which employees voluntarily accept a reasonable amount or consideration as settlement are
deemed valid. These agreements cannot be set aside merely because the parties have subsequently changed their
minds.[18] Consistent with this doctrine, a tribunal has the duty of scrutinizing quitclaims brought to its attention by
either party, in order to determine their validity.
In the present case, petitioners themselves offered the Release and Quitclaim as a defense. Even though respondent
-- in his pleadings before the labor arbiter -- was silent on the matter, he nonetheless filed this case and questioned
his dismissal immediately, a few days after setting foot in the Philippines. In asking for payment for the unexpired
portion of his employment Contract, he was eloquently taking issue with the validity of the quitclaim. His actions
spoke loudly enough; words were not necessary.
To determine whether the Release and Quitclaim is valid, one important factor that must be taken into account is the
consideration accepted by respondent; the amount must constitute a reasonable settlement. The NLRC considered
the amount of US$6,716 or SR23,153 reasonable, when compared with (1) $3,900, the three-month salary that he
would have been entitled to recover if RA 8042 were applied; and (2) US$9,447, his salaries for the unexpired portion
of his Contract.
It is relevant to point out, however, that respondent was dismissed prior to the effectivity of RA 8042. As discussed at
the outset, he is entitled to his salaries corresponding to the unexpired portion of his Contract. This amount is
exclusive of the SR23,153 that he received based on the November 29, 1994 Final Settlement. The latter amount
was comprised of overtime pay, vacation pay, indemnity, contract reward and notice pay -- items that were due him
under his employment Contract. For these reasons, the consideration stated in the Release and Quitclaim cannot be
deemed a reasonable settlement; hence, that agreement must be set aside.
That respondent is a professional structural engineer did not make him less susceptible to disadvantageous financial
offers, faced as he was with the prospect of unemployment in a country not his own. This Court has allowed
supervisory employees to seek payment of benefits and a manager to sue for illegal dismissal even though, for a
consideration, they executed deeds of quitclaims releasing their employers from liability.[19]

To stress, in case of doubt, laws should be interpreted to favor the working class -- whether in the government or in
the private sector -- in order to give flesh and vigor to the pro-poor and pro-labor provisions of our Constitution.[20]

WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Costs against
petitioners. SO ORDERED.
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. SUSAN PANTALEON, a.k.a. SUSAN FLORES, accused-
appellant.

ROMERO, J.:
Appellant Susan Pantaleon challenges the decision of the Regional Trial Court of Manila, Branch 16, convicting her of
the crime of illegal recruitment, the dispositive portion of which states:
"WHEREFORE, PREMISES CONSIDERED, judgments are hereby rendered:
I. The guilt of the accused for estafa in Criminal Cases No. 91-101478-80 not having been established beyond
reasonable doubt, she is hereby ACQUITTED of said offenses, but is ordered to indemnify complainants

LEANDRO ROSITA = P29,000

RICARDO ROSITA = P60,000
NONITO ABADILLOS = P75,000
the face values of the plane tickets to Saipan/Korea to be deducted therefrom.
II. The guilt of the accused for illegal recruitment having been established beyond reasonable doubt in Criminal Case
No. 91-101477, she is hereby CONVICTED of the offense of illegal recruitment committed in a large scale,
sentencing her to life imprisonment, to pay a fine of P100,000, and to pay costs."

The prosecution's version of the evidence is as follows:

Ricardo Rosita, with his wife met appellant at the Jollibee branch in Paco, Manila because he wanted to get a job in
Japan. Ricardo came to know of appellant through the latter's sister-in-law, whom appellant was able to send to
Japan. Appellant asked Ricardo for P75,000.00 for the plane ticket to Japan via Korea, and for the facilitation of other
papers and documents.[1] On March 13, 1991, Ricardo paid appellant P60,000.00 at his house in Paco. It was their
understanding that the balance of US$500 would be given by Ricardo to the person who would accompany him to
Japan.[2]

On April 4, 1991, using the name of Pedro Lorzano in his passport, Ricardo left for Korea aboard Korean Airlines. In
Korea, he stayed at the hotel indicated in the calling card given to him by appellant. He called appellant and was told
to wait for the person who would take him to Saitama, Japan. A certain Lulu Geronimo arrived in the afternoon of
April 14, 1991 and told him that she needed to arrange some documents for their departure to Japan.[3]

The next day Geronimo came back to the hotel and told him they were leaving for Japan at 5:00 o'clock the following
morning. However, while trying to get a boarding pass, they were apprehended by Korean immigration officers and
his passport was discovered to be fake. During the investigation at the immigration section, Ricardo saw several
other persons also recruited by appellant.

Nonito Abadillos, Ricardo's brother-in-law, also wanted to work as a factory worker in Saitama, Japan. On March 20,
1991, appellant came to their house in Paco, Manila and Ricardo introduced her to Nonito as a recruiter. He was
convinced to go to Japan as he was told that he would be receiving a salary of 180,000 yen with free board and
lodging. He paid the amount of P75,000 for his passport, ticket and other documents. His route was via Saipan.[4]

Leandro Rosita, Nonito's brother-in-law, likewise was recruited to work in Japan as a factory worker. He was asked to
pay P75,000.00 for his passport, tickets and other documents. On April 15, 1991, he paid P7,000.00 and on April 16,
1991, he paid appellant P20,000.00. On April 17, 1991, he paid an additional amount of P2,000.00. All payments
were duly receipted by appellant.[5]

Nonito and Leandro (who used the surname Abadillos) left for Saipan on April 18, 1991 aboard Continental Airlines,
together with George Samin and Kevin Kimbalita. The agreement was that appellant would send them the ticket for
Japan in Saipan. They stayed in a hotel owned by a Filipino instead of free lodging in barracks as appellant had
promised. When twenty seven days had passed and no plane tickets to Japan arrived for them in Saipan, they
decided to return to the Philippines.[6]

Upon arrival in the Philippines, Nonito reported the matter to the NBI,[7] which led to the filing of the criminal case.
On November 11, 1992, the trial court rendered judgment: (1) acquitting appellant of Estafa but nonetheless ordering
her to indemnify the complainants the amounts paid to her less the value of the plane tickets and (2) convicting her of
the crime of illegal recruitment.

Before this Court, appellant contends that the trial court erred in finding her guilty of the crime of illegal recruitment in
large scale and that it erred in believing the testimony of the prosecution witnesses who were actually impostors.
Appellant insists that she only tried to facilitate the processing of witnesses' travel papers to Japan.

We find the appeal devoid of merit.

Illegal recruitment is defined in Article 38 of the Labor Code, as amended as follows:

"ART. 38. Illegal Recruitment. -- (a) Any recruitment activities, including the prohibited practices enumerated under
Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority shall be deemed illegal and
punishable under Article 39 of this Code. The Ministry of Labor and Employment or any law enforcement officer may
initiate complaints under this Article.
(b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving
economic sabotage and shall be penalized in accordance with Article 39 hereof.

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons
conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or
scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed
against three (3) or more persons individually or as a group.

Article 13(b) of the same Code defines 'recruitment and placement' as: 'any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising
for employment, locally or abroad, whether for profit or not: Provided, that any person or entity which, in any manner,
offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and
placement.'"

In People v. de Leon,[8] we said that to prove illegal recruitment, only two elements need be shown: (1) the person
charged with the crime must have undertaken recruitment activities; and (2) the said person does not have a license
or authority to do so.

There is no question that appellant committed large scale illegal recruitment as she recruited at least three persons,
giving them the impression that she had the capability of sending them abroad. The fact that no documents
evidencing the recruitment activities were presented by the prosecution only strengthens, not weakens, its case
against appellant. This is because only a legitimate recruitment agency would have asked the complainants to sign
employment contracts, health certifications and applications for employment. Appellant took advantage of her victims'
gullibility in not knowing that the above documents were necessary for a valid overseas placement as the latter
believed that all they had to do to obtain employment in Japan was to pay a certain amount to appellant and
everything would be fixed.

From the large amounts appellant charged, it is obvious that those were to be used, not just for plane fare, but also
supposedly as placement fees. Certainly, a plane ticket to Japan will not cost P75,000.00, especially not in 1991
when these events transpired. In fact, even at present-day prices, the said amount could already cover plane fare to
Europe, the U.S. and back to the Philippines.

That the appellant offered to get them a job is clear from the testimony of the witnesses. Nonito Abadillos:
"Q Did you inquire from the accused where you are going to be employed?
A We asked her and she said Saitama, sir.
Q What kind of work will you do in that place?
A She said only as factory workers, sir.
Q And what are the requirements, if any, did the accused tell you in order that you can be deployed at Saitama,
Japan?
A Nothing, sir, except she said she will get a passport and to get us tourist visa and once we arrive in Japan, we will
be employed as factory workers.
Q Did you agree to her offer that you will be deployed?
A I agreed, sir, with the agreement that I will be sent to Japan.
Q And what is the consideration if any for the services to be rendered by the accused to you?
A The P75,000.00, sir."[9]

Ricardo Rosita:
"FISCAL DAING JR:
Q: Aside from what you have stated, when you met for what purpose were you going to pay the amount of P75,000?

WITNESS:
So that I will be able to work in Japan.
Q: Who told you you will be able to work to Japan?
A: Susan.
Q: When did she tell you that she can send you to Japan to work?
A: Before March 13, 1991."[10]
and Leandro Rosita:

"FISCAL
Q Mr. Witness, how did you come to know the accused?
A She comes to our house and she was recruiting us.

FISCAL
Q Where was she recruiting you for?

WITNESS
A Going to Japan.
Q What will you do in Japan?
A I will be given a job.
Q In connection with the promise given by the accused to you, what was the consideration, if any, with respect to
your going to Japan for employment?
A She promised that we will be given job for Japan and that the salary will be P1,800.00. I don't know the equivalent
of the Japanese money."[11]

After a meticulous review of the record, we find that the trial court's findings of fact are supported by the evidence and
its conclusions are in accord with law and jurisprudence.[12] We see no reason to disturb the same.

WHEREFORE, the decision appealed from is hereby AFFIRMED. Costs against the appellant.

SO ORDERED.
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. EDUARDO BALLESTEROS, Accused-Appellant.
CARPIO, J.:

The Case:
This is an appeal from the Decision 1 dated July 6, 1994 of the Regional Trial Court of Manila, Branch 49, in Criminal
Cases Nos. 93-121321, 93-121322, 93-121323 and 93-121324, convicting appellant Eduardo Ballesteros
("Appellant" for brevity) of the crimes of illegal recruitment in large-scale and estafa. The trial court sentenced
appellant to life imprisonment plus three indeterminate penalties ranging from two years, eleven months and ten days
of prision correccional as minimum to nine years, eight months and one day of prision mayor as maximum.

The Charge:
On May 26, 1993, the Assistant City Prosecutor of Manila filed an Information 2 charging appellant with the crime of
illegal recruitment in large-scale, 3 docketed as Criminal Case No. 93-121321, as follows:jgc:chanrobles.com.ph

"That on or about May 23, 1992, November 27, 1992 and January 3, 1993, in the City of Manila, Philippines, the said
accused representing himself to have the capacity to contract, enlist and transport Filipino workers for employment
abroad, did then and there wilfully and unlawfully for a fee, recruit and promise employment job placement in Japan
to the following persons: Arnel Viloria y Viloria, Santiago Ricamonte y Leocario and Nenita Sorita y Ramos, without
first having secured the required license or authority from the Department of Labor.

The Assistant City Prosecutor also charged appellant, based on the same incident, of three counts of estafa
committed on each of the private complainants under Criminal Cases Nos. 93-121322, 4 93-121323 5 and 93-
121324. 6 The Informations were identical, except for the name of the private complainants, as follows:
"That on or about May 23, 1992, the accused, did then and there willfully, unlawfully and feloniously defraud ARNEL
VILORIA Y VILORIA in the following manner, to wit: the said accused, by means of false manifestations and
fraudulent representation which he/they/she made to said ARNEL VILORIA Y VILORIA to the effect that he had the
power and capacity to recruit and employ ARNEL VILORIA Y VILORIA and could facilitate the processing of the
pertinent papers if given the necessary amount to meet the requirements thereof, and by means of other similar
deceits, induced and succeeded in inducing said ARNEL VILORIA Y VILORIA to give and deliver, as in fact he gave
and delivered to said accused the amount of P50,000.00 on the strength of said manifestations and representations,
said accused well knowing that the same were false and fraudulent and were made solely, to obtain, as in fact he did
obtain the amount of P50,000.00 which amount once in his possession, with intent to defraud, willfully, unlawfully and
feloniously misappropriated, misapplied and converted to his own personal use and benefit, to the damage and
prejudice of said ARNEL VILORIA Y VILORIA in the aforesaid amount of P50,000.00, Philippine Currency.

Arraignment and Plea

Upon arraignment on June 18, 1983 for each of the charges, appellant, assisted by counsel de parte, entered a plea
of "Not Guilty" to all the charges. Trial then followed.

The Trial
The prosecution presented as its witnesses the three private complainants, Arnel Viloria ("Viloria" for brevity),
Santiago Ricamonte ("Ricamonte" for brevity), and Nenita Sorita ("Sorita" for brevity), as well as SPO4 Benjamin
Lotivio. The defense presented appellant as its lone witness.

Version of the Prosecution

The facts 7 of the case are as follows:

Santiago Ricamonte, Arnel Viloria and Nenita Sorita all dreamt of seeking "greener pastures" in foreign shores. It was
most unfortunate for them to have fallen into the deceptive acts and machinations of the appellant who lured them
into a false sense of security with promises of foreign employment in Japan.

Santiago Ricamonte was a driver at the Monte Merchandizing when he thought of applying as a construction worker
in Japan. Ricky de la Torre (hereinafter "dela Torre"), who was a cousin of Ricamonte’s friend, introduced him to
Engineer Jose Mendoza, a recruiter of workers to Japan. On November, 1992, dela Torre and Mendoza brought
Ricamonte to an office in the Army and Navy Club, located at T.M. Kalaw St., Manila, and introduced him to
appellant, Cecilia Legarbes Zabala (hereinafter "Zabala") and Alfredo Hunsayan, Jr. (hereinafter "Hunsayan"). When
inside the office, Ricamonte saw, on one of the tables, a name plate bearing the name of ‘Judge Cornejo’. He found
out that the office belonged to a former fiscal named Crisanto Cornejo, who was on vacation at that time, and who
allowed the appellant to hold office there while he was away.

Once introduced, Ricamonte was informed of each of the person’s duties in that office. He found out that Zabala was
in charge of arranging papers of recruits to Japan while Hunsayan was the one who had contacts in Japan and that
both of them were associated in the business of recruiting workers for employment in Japan. The appellant told
Ricamonte that there was a job offer in Japan and that Zabala knew everything about the recruitment. The appellant
also impressed upon Ricamonte that the recruitment of persons for employment in Japan was a transaction of people
with money so that if he did not have any money, he might as well forget setting foot in Japan. The appellant added
that Ricamonte needed to prepare P80,000.00 for the processing of his employment papers and his plane ticket.

On November 23, 1992, in the office of the appellant, Ricamonte gave P20,000.00, as the first installment of his
payment, to de la Torre who counted the money and thereafter gave it to Zabala who then issued a receipt for the
amount (Exhibits ‘A’ and ‘3’). The appellant and Mendoza were present and witnessed the transaction. Ricamonte
thereafter signed an application for employment which would be allegedly sent by Zabala to his prospective employer
in Japan.

On another occasion, Ricamonte again went to the office of the appellant to give an additional P50,000.00. The same
process was followed. The money was given to Zabala who issued a receipt for the amount while the appellant,
Mendoza, dela Torre, and Hunsayan were present as witnesses. Zabala then told him that his visa would be released
soon and asked him to return on a specified date.

When Ricamonte returned to the office of the appellant on the specified date, Zabala was nowhere to be found. He
asked the appellant, who was in the office at that time, where Zabala was, but the appellant told him that he had
nothing to do with Zabala and that it was up to him to look for her. When Ricamonte returned to the office of the
appellant sometime in December 1992, he found the office already padlocked.chanrob1es virtual law library

Nenita Sorita was 56 years old and had already worked in Bahrain for some time, when she, too, was promised an
employment in Japan.

On April, 1992, Sorita’s nephew and niece borrowed money from her and asked her to pay the money to a certain
recruitment agency where she met Engineer Mendoza. Mendoza offered Sorita a job in Japan but she initially refused
since she was not yet interested at that time. However, it was not long after that first conversation when she gave in
to the offer of employment in a garment factory in Japan. Mendoza showed her a letter of invitation from his contact in
Japan for persons to work there and assured her that this contact person would be responsible for everything.

Convinced, Sorita paid P10,000.00 to Mendoza for the processing of her papers and her visa for which Mendoza
signed a receipt (Exhibits ‘G’ and ‘6’). He was able to get a passport for Sorita as a tourist but still, after a long wait,
failed to send her to Japan. Mendoza told Sorita that he had a misunderstanding with his Japanese contact so he
could not procure employment for her in Japan but, nevertheless, assured her that he had friends who could secure
employment for her in Japan.

So, on November 20, 1992, Mendoza brought Sorita to the house of the appellant in Singalong, Manila where she
met Cecilia Legarbes Zabala. The appellant and Zabala told Sorita that she would have to pay P60,000.00 for the
processing of her employment papers, visa and her plane tickets to and from Japan. However, the P10,000.00 which
she had earlier paid Mendoza would be deducted from the amount. After laying down the terms and conditions of
their agreement, Sorita was asked to deliver the money to the office of the appellant at the Army and Navy Club.

On January 3, 1993, Sorita went to the office of the appellant with only P21,500.00. This notwithstanding, the
appellant and Mendoza instructed her to give the money to Zabala. Once inside the office, Sorita saw the name plate
of "Judge Cornejo" on one table and that of the appellant, "Captain" on another table. After giving them the
P21,000.00, Sorita told the three that she could not produce the rest of the money because the person who was
supposed to buy her personal properties, the proceeds of which she would use to pay the balance of her recruitment
fee, failed to do so. Nevertheless, the three told Sorita to bring her personal properties to the office so that they could
buy them from her for P30,000.00.

On the same day, Sorita brought her personal properties to the office of the appellant consisting of: 1 Ladies’ ring with
Tampok; 1 wedding band; a 24 karat necklace; 1 14" colored TV (Goldmaster brand); and 1 Sony Walkman (Exhibits
‘5’ and ‘H’). The appellant, Zabala and Mendoza were still there when Sorita arrived. Zabala then gave Sorita a
signed receipt for the cash amount of P21,000.00 and her personal properties (Exhibits ‘H’ and ‘5’). However, Zabala
instructed Sorita to bring her Sony Walkman and television to the house of the appellant where he himself received
the items. Sorita, however, never got any receipt for the items since Zabala assured her that there was no more
problem. Zabala then told her that she would procure a tourist visa for her and enable her to work as a ‘TNT’ (tago ng
tago) in Japan and guaranteed her that she, together with the others, would endeavor to bring her to Japan.

However, the day of Sorita’s departure never came. Like Ricamonte, when she returned to the office of the appellant,
the office was already padlocked.

Arnel Viloria was a 5th year Engineering student at the Technological Institute of the Philippines when he fell into the
same "employment trap."

Viloria’s mother and Nenita Sorita were close friends. On one occasion when Viloria went to the house of Sorita, he
met Engineer Jose Mendoza. About a month thereafter, because of Mendoza’s incessant efforts, Viloria was
convinced to apply for a construction job in Japan. It was also upon the prodding of Mendoza that Viloria no longer
enrolled for the incoming semester in school.

On November 23, 1992, Viloria, together with his parents and Sorita, went to the office of the appellant at the Army
and Navy Club to apply as a construction worker in Japan. Once there, Mendoza introduced Viloria to the appellant
and Zabala and informed him that these people were his associates and that Zabala was the one responsible for the
processing and approval of his employment application. The appellant informed Viloria that he had to pay P80,000.00
for his employment papers and plane ticket. Viloria paid the total amount of P50,000.00 in three installments for which
he was given receipts by Zabala (Exhibits M-3, L, M, J) and was also given the same assurance that he would soon
be leaving for Japan.

However, as the same story goes, when Viloria returned to the office of the appellant to claim his visa and
employment papers, the office was already closed. Viloria then inquired from the Philippine Overseas Employment
Administration if the appellant, Zabala and Mendoza were licensed to procure workers for employment in Japan and
was informed that they were not. Upon learning this, Viloria tried to contact the appellant but, naturally, the latter
refused to see him. When Viloria finally managed to talk to the appellant over the telephone, the appellant got mad at
him and told him that he had nothing to do with his problem.

Finally, Santiago Ricamonte, Arnel Viloria and Nenita Sorita, after conferring with each other and realizing that they
were defrauded, executed a "Joint Affidavit of Complaint" against the appellant with the Western Police District
(Exhibit ‘D’) on May 11, 1993.

On the same date, members of the Western Police District arrested the appellant. After the Inquest Investigation, the
Investigator recommended that the appellant be charged of estafa and illegal recruitment (large-scale) (Exhibit ‘0 2’).
Two days after the appellant was arrested, Cecilia Zabala was also arrested upon information received by the police
that she was staying at the Arevalo Building in Manila. The police found the passports of Arnel Viloria and Santiago
Ricamonte and the receipts signed by the appellant (Exhibits ‘E’ and ‘E-2’) in her possession and turned them over to
Viloria and Ricamonte. An Inquest Investigation was conducted on May 14, 1993. However, a month thereafter,
Zabala managed to escape from the Western Police and is, up to now, still at large.

Version of the Defense

The facts, 8 according to the defense, are as follows:
Appellant categorically denies having recruited or having been involved in the recruitment of the offended parties to
Japan. He, however, admits that he and Mendoza were once close friends, having worked together in a vessel,
appellant as the Captain, and Mendoza, as his Engineer. However, appellant claims that the relations between them
became strained when Mendoza refused to repay appellant for his expenses in the baptism of Mendoza’s son.

Appellant narrates that he was the Chairman of the Board of Directors of PSBN Marine Salvage, Inc., a company he
established, with offices at No. 2336 Espiritu St., Singalong, Manila, which was also his residence at that time.
Appellant claims that his relations with Mendoza became further strained when he found out that the latter tampered
with his company’s Articles of Incorporation by erasing the name of one of the Directors and replacing it with his own
(Exhibits 19 and 19-B).

Appellant also states that he transferred his office to the Army and Navy Club upon the permission of a former
Assistant City Fiscal Crisanto Cornejo, who originally rented the office, and who was on vacation at that time.
Appellant claims that he arranged to pay for the rentals of the office, in exchange for its use since Cornejo was three
months in arrears in its payment.

Appellant narrates that sometime in November 1992, Mendoza, Zabala, and Almonte arrived in his office and sought
to rent one table for a monthly rental of P2,000.00. He claims that Mendoza and Zabala were brokers besides being
engaged in the recruitment of workers for employment abroad. However, appellant claims that he never meddled in
their business and tended to his own. Appellant also asserts that Cornejo knew of this arrangement and insisted that
money transactions should not be done inside the office. Accordingly, whenever Mendoza, Zabala and Almonte had
business conferences with their clients, they went to the canteen inside the club, about 25 meters away from the
office.

It was also in November 1992, on different occasions, that Sorita, Viloria and Ricamonte, who were applicants for
employment abroad, were brought to the office by Mendoza and the other recruiters. In the process, appellant
admitted that "he advised the three that if they had no money or somebody to finance their employment abroad they
might as well forget any plans of working abroad."

Appellant says that Mendoza and the others paid the rent for the use of the table promptly for the first three months or
until January 1993 (Exhibit Q-4). Appellant signed two receipts acknowledging the payment of the rent. At one point,
one of the applicants, Sorita, delivered to his house a television set and a Sony walkman. Appellant was surprised by
this act, but claims, that on the same day, Zabala took the said items. Sorita told him that Zabala had already signed
the receipt for the said goods.

Sometime in January or February of 1993, the office of the appellant was padlocked for non-payment of rent for 6
months. Subsequently, appellant entered into a contract for shipping services with a new company.

On May 3, 1993, appellant claims that police operatives of the Western Police District sought his help in locating
Mendoza, Zabala, and Alfredo Hunsayan, Jr., for defrauding Sorita, Viloria and Ricamonte. Appellant agreed to help
and informed them where Zabala could be found. After two days, Zabala was arrested by the police but managed to
escape after a month. Appellant, however, claims that, in spite of the help he gave to the police, he was still placed
under arrest and charged for the crime of illegal recruitment (large-scale) and estafa.

Ruling of the Trial Court

The trial court accorded full faith and credence to the testimony of the private complainants. The trial court was
"convinced, beyond a shadow of doubt, that they testified in a spontaneous, straight-forward and sincere manner,
bereft of the affectations and tell-tale signs of perjured and/or rehearsed witnesses." 9 The trial court held that
appellant was in cahoots with Cecilia Legarbes Zabala, Jose Mendoza, Perla Almonte, Ricky de la Torre and Alfredo
Hunsayan, Jr. in recruiting private complainants for employment in Japan. The trial court found that appellant
received various sums of money and personal properties from the private complainants as placement fees, expenses
for processing of employment papers, issuance of visas to Japan and for purchase of plane tickets.
After trial on the merits, the trial court convicted appellant of illegal recruitment in large-scale and three counts of
estafa, stating that: 10

"In view of the foregoing disquisitions of the Court, judgment is hereby rendered against the Accused as follows:
1. In ‘People versus Eduardo Ballesteros, Criminal Case No. 93-121321’, the Accused is hereby found guilty
beyond reasonable doubt of the crime of illegal recruitment defined in Article 13 (b) in relation to Article 38 of the
Labor Code as amended and hereby meted the penalty of life imprisonment and to pay a fine of P100,000.00 without
subsidiary imprisonment in case of insolvency;
2. In ‘People versus Eduardo Ballesteros, Criminal Case No. 93-121322’, the Accused is found guilty beyond
reasonable doubt of the crime of Estafa defined in Article 315, paragraph 2 (a) of the Revised Penal Code and hereby
meted an indeterminate penalty of from Two (2) Years, Eleven (11) Months and Ten (10) Days of Prision
Correccional as Minimum, to Eight (8) Years, Eight (8) Months and One (1) Day of Prision Mayor as Maximum, and
ordered to refund to Arnel Viloria the amount of P50,000.00; with interests thereon, at the legal rate from November
23, 1992 until the said amount is paid in full;
3. In ‘People versus Eduardo Ballesteros, Criminal Case Number 93-121323’, the Accused is hereby found
guilty beyond reasonable doubt of the crime of Estafa defined in Article 315 (2) (a) of the Revised Penal Code and
hereby meted an indeterminate penalty of from Two (2) Years, Eleven (11) Months and Ten (10) Days of Prision
Correccional as Minimum, to Eight (8) Years, Eight (8) Months and One (1) Day of Prision Mayor as Maximum and
ordered to refund to Santiago Ricamonte the amount of P50,000.00 plus interests thereon at the legal rate from
November 27, 1992, until the said amount is paid in full;
4. In ‘People versus Eduardo Ballesteros, Criminal Case Number 93-121324’, the Court found the Accused
guilty beyond reasonable doubt of the crime of Estafa defined in Article 315 (2) (a) of the Revised Penal Code and
hereby sentences the Accused to an indeterminate penalty of from Two (2) Years, Eleven Months and Ten (10) Days
of Prision Correccional, as Minimum, to Nine (9) Years, Eight (8) Months and One (1) Day of Prision Mayor, as
Maximum, and to refund to Nenita Sorita the amount of P31,000.00 and to return to her the following described
properties:
1 Ladies ring with tampok
1 Wedding band
1 Necklace — 24 karat
1 TV colored 14" Goldmaster brand
1 Sony Walkman
and if he is unable to do so, or refuses to do so, to pay to her the value thereof in the amount of P30,000.00, said
amounts with interests thereon at the legal rate from January 3, 1993, up to the time the said amounts are paid in full.

The Accused shall be entitled to the full credit of his detention at the City Jail of Manila provided that he agreed to
abide by and comply strictly with the rules and regulations of the said Jail. With costs against the Accused. SO
ORDERED.

In view of the penalty of life imprisonment, the appellant filed his appeal directly with this Court
Issues
The appeal is anchored on the following assigned errors:
THE TRIAL COURT ERRED IN CONCLUDING THAT THE ACCUSED CONSPIRED WITH CECILIA LEGARBES
ZABALA, ENGINEER JOSE MENDOZA, PERLA ALMONTE, RICKY DE LA TORRE AND ALFREDO HUNSAYAN,
JR., THE ALLEGED RECRUITERS, IN COMMITTING THE CRIME OF ILLEGAL RECRUITMENT ALLEGED IN THE
INFORMATIONS.

THE TRIAL COURT ERRED IN FINDING THAT THERE IS NO EVIDENCE ON RECORD ADDUCED BY THE
ACCUSED THAT PRIVATE COMPLAINANTS ARNEL VILORIA, SANTIAGO RICAMONTE AND NENITA SORITA,
HAD ANY DEVIOUS OR ILL-MOTIVE TO FABRICATE THE CHARGES AGAINST THE ACCUSED.

THE TRIAL COURT ERRED IN GIVING FULL FAITH AND CREDIT TO THE TESTIMONIAL EVIDENCE OF THE
PROSECUTION NOTWITHSTANDING THE INCREDIBLE AND UNBELIEVABLE TESTIMONIES OF THE
PROSECUTION WITNESSES.
THE TRIAL COURT ERRED IN NOT FINDING THAT THE COMPLAINTS BY THE PRIVATE COMPLAINANTS
BROUGHT AGAINST THE ACCUSED WERE MERELY AN AFTERTHOUGHT, AND THAT THE COMPLAINANTS’
TESTIMONY IN SUPPORT OF THE SAME WERE UNCONVINCING AND IMPLAUSIBLE AND FALL SHORT OF
THE REQUIRED PROOF BEYOND REASONABLE DOUBT.

THE TRIAL COURT ERRED IN NOT GIVING WEIGHT TO ACCUSED’S CLAIM THAT THE FACT THAT THE
GROUP OF CECILIA LEGARBES ZABALA HAD SUBLEASED A PORTION OF THE OFFICE AT THE ARMY AND
NAVY CLUB FROM THE ACCUSED AS CARETAKER OF THE OFFICE DOES NOT MEAN THAT ACCUSED HAD
KNOWLEDGE OR PARTICIPATION IN THEIR BUSINESS ACTIVITIES AS THEIR TRANSACTIONS WERE NOT
DONE IN THE OFFICE BUT IN THE CANTEEN OF THE CLUB.

THE TRIAL COURT ERRED IN PLACING HEAVY RELIANCE ON THE RECEIPTS, EXHIBITS ‘E’ AND ‘E-2’,
SHOWING THAT ACCUSED RECEIVED COMMISSIONS FROM CECILIA LEGARBES ZABALA AND OTHERS,
AND IN NOT HOLDING THAT THE SAID RECEIPTS WERE NOT FOR COMMISSIONS AS INDICATED IN THE
RECEIPTS BUT WERE ACTUALLY RECEIPTS OF PAYMENT OF RENTALS OF THE SAID PERSONS OF A
PORTION OF THE OFFICE FOR ABOUT THREE (3) MONTHS.

THE TRIAL COURT ERRED IN HOLDING, WITHOUT VALID, SUFFICIENT, CONVINCING AND SUBSTANTIAL
EVIDENCE, THAT THE AFOREMENTIONED RECEIPTS, EXHIBITS ‘E’ AND ‘E-2’, CONFIRMED THE
PROSECUTION’S CLAIM THAT THE ACCUSED WAS DIRECTLY INVOLVED IN THE ILLEGAL RECRUITMENT
ACTIVITIES OF THE SAID CECILIA LEGARBES ZABALA AND OTHERS CONSIDERING THAT ACCUSED HAD
NEVER ENGAGED AND HAD NOT ACTUALLY ENGAGED IN ILLEGAL RECRUITMENT ACTIVITIES.

THE TRIAL COURT ERRED IN NOT FINDING THAT ACCUSED WAS NOT GUILTY OF ILLEGAL RECRUITMENT
(LARGE-SCALE) CONSIDERING ITS ADMISSION THAT THE PROSECUTION HAS NOT ADDUCED ANY
EVIDENCE TO PROVE THAT THE ACCUSED RECEIVED FROM CECILIA LEGARBES ZABALA ANY CASH
AMOUNT FROM THE PAYMENTS OF PLACEMENT FEES BY PRIVATE COMPLAINANT NENITA SORITA.
MOREOVER, FURTHER PROOF THAT ACCUSED HAD NEVER ENGAGED AND HAS NOT ACTUALLY
ENGAGED IN ILLEGAL RECRUITMENT IS PLAIN AND EVIDENT FROM THE UNIFORM TESTIMONIES OF THE
COMPLAINANTS THAT ACCUSED HAD NEVER RECEIVED MONEY AS ALLEGED PLACEMENT FEES
PERSONALLY FROM THE SAID COMPLAINING WITNESSES.

THE TRIAL COURT ERRED IN NOT FINDING THAT THE ACCUSED IS NOT GUILTY OF ESTAFA.

THE TRIAL COURT ERRED IN CONVICTING THE ACCUSED OF THE CRIMES OF ILLEGAL RECRUITMENT
(LARGE-SCALE) AND THREE (3) COUNTS OF ESTAFA AND IN NOT ACQUITTING HIM OF THE CRIMES
CHARGED, THE SAME NOT HAVING BEEN PROVED BEYOND REASONABLE DOUBT." 11

The thrust of the appeal is two-fold. First, the trial court erred in finding appellant responsible for the illegal
recruitment of the complaining witnesses and in finding that there was conspiracy between appellant and his alleged
cohorts. Second, the trial court erred in convicting appellant of estafa despite the failure of the prosecution to prove
his guilt beyond reasonable doubt.

The Court’s Ruling

We find no reason to reverse appellant’s conviction. Hence, we affirm but with modification.

Illegal Recruitment In Large-Scale

Article 13, par. (b), of the Labor Code defines recruitment and placement as:

"(b) ‘Recruitment and placement’ refer to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or
abroad, whether for profit or not; Provided, that any person or entity which, in any manner, offers or promises for a
fee employment to two or more persons shall be deemed engaged in recruitment and placement."
Illegal recruitment is specifically defined in Article 38 of the same Code thus’
"Article 38. Illegal Recruitment:
(a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be
undertaken by non-licensees or non-holders of authority shall be deemed illegal and punishable under Article 39 of
this Code. . . .
(b) Illegal recruitment when committed by a syndicate or in large-scale shall be considered an offense involving
economic sabotage and shall be penalized in accordance with Article 39 hereof.

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons
conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or
scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large-scale if committed
against three (3) or more persons individually or as a group."

We have held that to constitute illegal recruitment in large-scale, three elements must concur:
1. The accused undertook any recruitment activity defined under Art. 13 (b) or any prohibited practice
enumerated under Art. 34 of the Labor Code.
2. He did not have the license or the authority to lawfully engage in the recruitment and placement of workers.
3. He committed the same against three or more persons, individually or as a group. 12
The prosecution sufficiently established the foregoing elements in the instant case. First, as found by the trial court:

"The Accused represented to and assured Santiago Ricamonte that, indeed, there was a job offer for a construction
worker in Japan and even told the latter to prepare and pay the amount of P80,000.00, payable in installments for the
processing of his papers for his employment in Japan and his plane ticket to Japan. The Accused even impressed on
Santiago Ricamonte that the matter of employment of workers in Japan was a transaction only of people with money
and unless the applicant has the amount demanded of him, he could not possibly procure employment in Japan.
Santiago Ricamonte gave and paid to Cecilia Legarbes Zabala the amount of P20,000.00 on November 23, 1992,
and the amount of P30,000.00 on December 3, 1992, in the presence of the Accused in the latter’s office at the Army
and Navy Club where Cecilia Legarbes Zabala signed the Receipts (Exhibits "A" and "B"). Santiago Ricamonte relied
on the assurances and representations of the Accused and his cohorts and was impressed by the office of the
Accused. After all, on one of the tables was the name plate of ‘Judge Cornejo’. The Court cannot then begrudge
Santiago Ricamonte into trusting the Accused and his cohorts and in believing that they would not deceive and
defraud him." 13

Second, there is no need to show that appellant represented himself as a licensed recruiter since it is enough to show
that he did not possess the requisite authority or license to undertake recruitment activities. 14 The prosecution
established that the Philippine Overseas Employment Administration (POEA) did not authorize or license appellant
and his cohorts to engage in recruitment Activities. 15 Despite the absence of such authority or license, appellant
recruited the complainants.
The appellant need not have expressly represented that he had authority or license from POEA. It is sufficient that
appellant gave the impression that he could find jobs for complainants in Japan, inducing complainants to agree to
pay him recruitment fees. 16 On several occasions, this Court has held that there is illegal recruitment when one,
without authority or license to do so, represents to others that he could send workers abroad for employment. 17
Assuming arguendo that appellant did not actually receive any fee, his representations that he had the capacity to
secure employment for private complainants made him liable for illegal recruitment since he had no authority or
license from the POEA. 18 In the recent case of People v. Arabia, 19 we held that:
"While it may be true that complainants herein were not able to present receipts to prove that they in fact paid the
placement fee of P16,000.00 each to accused Arabia with accused Tomas witnessing the payment, it has been ruled
that the absence of receipts in a criminal case for illegal recruitment does not warrant acquittal of the accused and is
not fatal to the case of the prosecution. As long as the witnesses had positively shown through their respective
testimonies that the accused is the one involved in the prohibited recruitment, he may be convicted of the offense
despite absence of receipts. (People v. Goce 247 SCRA 780; People v. Senden 228 SCRA 489; People v. Naparan
225 SCRA 714; People v. Pabala 262 SCRA 553)." (Emphasis supplied)
Clearly, the actual receipt of a fee is not an element of the crime.
Third, since there are at least three victims in this case, appellant thus committed large-scale illegal recruitment.
Appellant also argues that the prosecution failed to prove that he conspired with the others in the commission of the
crime of illegal recruitment and estafa. We find no cogent reason to disturb the findings of the lower court that there
was conspiracy among appellant, Cecilia Legarbes Zabala, Jose Mendoza, Perla Almonte, Ricky de la Torre and
Alfredo Hunsayan, Jr. The evidence on record indubitably shows that there was a delineation of roles among the
appellant and his cohorts, but with a common design and a unity of purpose. As aptly pointed out by the trial court:
"The Accused was at the forefront, not merely as a passive onlooker as the Accused wanted the Court to believe in
the recruitment of the Private Complainants. . . . In November, 1992, the Accused, Cecilia Legarbes Zabala and Jose
Mendoza, agreed to the use the office (sic) of former Assistant City Fiscal of Pasay City as their base of operations or
office in their recruitment activities. Jose Mendoza and Ricky de la Torre looked for applicants who sought
employment in Japan, Cecilia Legarbes Zabala was the one tasked to receive the sums of money paid by the recruits
signed and issued Receipts for said amounts. The Accused, on the other hand, fixed the amounts to be paid by the
recruits and directly negotiated and transacted with them and received his commissions from Cecilia Legarbes
Zabala from the payments of the recruits. All the actuations of the Accused, Cecilia Legarbes Zabala, Jose Mendoza,
Perla Almonte and Ricky de la Torre, were geared and designed to achieve a common purpose or objective — the
recruitment of persons for employment in Japan and eke out sums of money from them although the Accused was
not authorized to recruit workers for employment abroad. Under the circumstances, it is abundantly clear that the
Accused conspired with Jose Mendoza, Cecilia Legarbes Zabala, Perla Almonte, Ricky de la Torre and Alfredo
Hunsayan, Jr. and that, therefore, the Accused is liable for the wrongful acts and its consequences." 20

Direct proof of previous agreement to commit a crime is not necessary. 21 Such previous agreement may be
deduced from the mode and manner in which the offense was perpetrated, or inferred from the acts of the accused
which point to a joint purpose and design, concerted action and community of interest. 22

In his attempt to exculpate himself, appellant denies having received money from private complainants. However, as
against the positive assertion of complainants, the appellant’s denial is worthless and at most self-serving. Private
complainants testified that Cecilia Legarbes Zabala signed and issued receipts for the cash amount and other
personal properties complainants turned over as payment for processing their employment applications abroad. The
documentary evidence of the prosecution shows that appellant received his commission from recruitment fees paid
by the private complainants. Exhibits "E" and "E-2", which bear appellant’s signature, establish this fact, to wit:
"December 3, 1992
Received the amount of four thousand five hundred pesos (P4,500.00) from Cely Zabala as commission." 23
(Emphasis supplied) and
"December 7, 1992
Received the amount of Two Thousand Pesos from Cely Zabala as commission (P2,000.00)." 24 (Emphasis
supplied)
These receipts show no indication that the amounts were accepted as payment for the rental of the Army and Navy
Club office space as alleged by appellant. On the contrary, the testimonial and documentary evidence establish
beyond any doubt that appellant received the amounts stated as "commission" for his participation in the illegal
recruitment activities. As correctly observed by the trial court:

"When he testified before the Court, the Accused resolutely claimed that he was issued Receipts for the rentals of
Jose Mendoza and Cecilia Legarbes Zabala and the Accused readily referred to the Receipts, Exhibits "E" And "E-2"
bearing his signatures. Ironically, instead of buttressing his stance, the Receipts, Exhibits "E" and "E-2", in fact, belied
said claim and placed his defense in a quagmire of inconsistency. For, as can be easily gleaned from said Receipts,
the amounts of P4,500.00 and P2,000.00 mentioned therein were the "commissions" of the Accused from Cecilia
Legarbes Zabala which he received from her and not rentals . . .

The Court found the claim of the Accused puerile and preposterous. The Accused is a businessman, a Captain of a
vessel no less. If the amounts were, in fact, rental payments, the Accused, for sure, should have refused to sign the
Receipt and should have insisted, before he signed the Receipts, that the same be stated therein in unequivocal
terms. And then again, the Accused has not enlightened the Court why Cecilia Legarbes Zabala would have the
temerity and audacity to place the word "commission" in the Receipts instead of placing the word "rental" or the
motive of Cecilia Legarbes Zabala in placing "commission" in the Receipts. After all, the Accused even allowed her
and her companions to rent his office.

On the other hand, the Receipts, Exhibits "E" and "E-2" galvanized the case of the Prosecution and confirmed its
claim that, indeed, the Accused was directly involved in the illegal recruitment activities of Cecilia Legarbes Zabala,
more particularly the recruitment of the Private Complainants to Japan. This is so because, as the Receipts
indubitably show, the Accused received, from Cecilia Legarbes Zabala, the said amounts of P4,500.00 and
P2,000.00 as his commission for the recruitment of Santiago Ricamonte and Arnel Viloria. Indeed, the evidence of
the Prosecution shows that Cecilia Legarbes Zabala received, from Santiago Ricamonte, the amount of P30,000.00
on December 3, 1992 (Exhibit "B"). Arnel Viloria paid to Cecilia Legarbes Zabala, on December 7, 1992, the amount
of P10,000.00 (Exhibit "M"). The payments were made in the presence of the Accused. It was precisely on December
3, 1992 when the Accused received P4,500.00 from Cecilia Legarbes Zabala as his commission and on December 7,
1992, when the Accused received, from Cecilia Legarbes Zabala, the amount of P2,000.00 as his commission. The
only logical conclusion is that the amounts given to the Accused by Cecilia Legarbes Zabala on those dates must
have come from the amounts paid by Santiago Ricamonte and Arnel Viloria on those dates respectively. The
Accused has not adduced a morsel of evidence that the Accused transacted business with third persons as agent of
Cecilia Legarbes Zabala for which he was entitled to said amounts as commissions from her."25cralaw:red

We find no reason to disturb the findings of the trial court, which is in the best position to appreciate complainants’
truthfulness, honesty and candor. 26 As against the positive and categorical testimonies of the complainants,
appellant’s mere denial cannot prevail. 27

In light of these established facts, appellant is guilty beyond reasonable doubt of one count of illegal recruitment in
large-scale. The appellant should suffer the penalty of life imprisonment and a fine of One Hundred Thousand Pesos
(P100,000.00) for the crime of illegal recruitment in large-scale under Article 39(a) of the Labor Code. 28

Conviction for Estafa

The trial court also did not err in finding appellant guilty of estafa. It is well-settled that a person, for the same acts,
may be charged and convicted separately of the crime of illegal recruitment under the Labor Code and estafa under
paragraph 2(a) of Article 315 of the Revised Penal Code. 29 Illegal recruitment is malum prohibitum where the
criminal intent of the accused is not necessary for conviction, while estafa is malum in se where the criminal intent of
the accused is necessary for conviction. 30 In other words, a person convicted under the Labor Code may also be
convicted of offenses punishable by other laws for the same acts.
The elements of estafa are as follows: (1) the accused defrauded another by abuse of confidence or by means of
deceit; and (2) the offended party or a third party suffered damage or prejudice capable of pecuniary estimation. 31 In
the instant case, the prosecution proved beyond reasonable doubt that appellant and his cohorts Cecilia Legarbes
Zabala, Jose Mendoza, Perla Almonte, Ricky de la Torre and Alfredo Hunsayan, Jr. deceived private complainants
into believing that they had the authority and capability to send complainants to Japan for employment. Because of
the assurances given by appellant and his cohorts, private complainants parted with their hard-earned money in
exchange for what they thought was a promising future abroad. The acts of appellant and his cohorts constitute
estafa punishable under Article 315, paragraph 2(a) of the Revised Penal Code.
The penalty for estafa depends on the amount of the defraudation. 32 Article 315 of the Revised Penal Code
provides:
Art. 315. Swindling (estafa). — Any person who shall defraud another by any of the means mentioned hereinbelow
shall be punished by:
1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period, if the amount of
the fraud is over 12,000 pesos but does not exceed 22,000 pesos, and if such amount exceeds the latter sum, the
penalty provided in this paragraph shall be imposed in its maximum period, adding one year for each additional
10,000 pesos; but the total penalty which may be imposed shall not exceed twenty years. In such cases, and in
connection with the accessory penalties which may be imposed and for the purpose of the other provisions of this
Code, the penalty shall be termed prision mayor or reclusion temporal, as the case may be.
2nd. The penalty of prision correccional in its minimum and medium periods, if the amount of the fraud is over 6,000
pesos but does not exceed 12,000 pesos.
3rd. The penalty of arresto mayor in its maximum period to prision correccional in its minimum period, if such amount
is over 200 pesos but does not exceed 6,000 pesos; and
4th. By arresto mayor in its medium and maximum periods, if such amount does not exceed 200 pesos, provided that
in the four cases mentioned, the fraud be committed by any of the following means:chanrob1es virtual 1aw library
2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with
the commission of the fraud:
(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit,
agency, business or imaginary transactions; or by means of other similar deceits.
We ruled in People v. Gabres 33 that:
"The fact that the amounts involved in the instant case exceed P22,000.00 should not be considered in the initial
determination of the indeterminate penalty; instead, the matter should be so taken as analogous to modifying
circumstances in the imposition of the maximum term of the full indeterminate sentence. This interpretation of the law
accords with the rule that penal laws should be construed in favor of the accused. Since the penalty prescribed by
law for the estafa charge against accused-appellant is prision correccional maximum to prision mayor minimum, the
penalty next lower would then be prision correccional minimum to medium. Thus, the minimum term of the
indeterminate sentence should be anywhere within six (6) months and one (1) day to four (4) years and two (2)
months while the maximum term of the indeterminate sentence should at least be six (6) years and one (1) day
because the amounts involved exceeded P22,000.00, plus an additional one (1) year for each additional
P10,000.00."
In addition, appellant is liable to indemnify the private complainants in the amounts which they respectively paid him
and his cohorts: P50,000.00 to Arnel Viloria; P50,000.00 to Santiago Ricamonte; and P31,000.00 to Nenita Sorita
plus P30,000.00 as reparation 34 for her unrecovered personal properties. Hence, pursuant to Article 315 of the
Revised Penal Code and our ruling in Gabres, the penalties imposed on appellant for estafa should be modified as
follows:
In Criminal Case Nos. 93-121322 and 93-121323 (which pertain to private complainant Arnel Viloria and Santiago
Ricamonte), the amount involved is P50,000.00. 35 The minimum term of the indeterminate penalty, as fixed by the
trial court, is two (2) years, eleven (11) months and ten (10) days of prision correccional, which is within the lawful
range of the allowable minimum period of the indeterminate sentence, while the maximum term is six (6) years and
one (1) day of prision mayor plus a period of two (2) years (an additional of one year for every P10,000.00 in excess
of P22,000.00), or a maximum of eight (8) years and one day of prision mayor.
In Criminal Case No. 93-121324 (pertaining to private complainant Nenita Sorita), the total amount involved is
P61,000.00. The minimum term of the indeterminate penalty is two (2) years, eleven (11) months and ten (10) days of
prision correccional (which is within the lawful range of the allowable minimum period of the indeterminate sentence)
while the maximum term is nine (9) years and one day of prision mayor.
WHEREFORE, the assailed Decision dated July 6, 1994 of the Regional Trial Court of Manila, Branch 49, finding
appellant EDUARDO BALLESTEROS guilty beyond reasonable doubt of the crimes of Illegal Recruitment in Large-
Scale in Criminal Case No. 93-121321 and of Estafa in Criminal Cases Nos. 93-121322 to 93-121324, is AFFIRMED
with the following modifications:
1. In Criminal Case No. 93-121322 (for estafa involving P50,000.00), appellant is sentenced to suffer the
indeterminate penalty of two (2) years, eleven (11) months and ten (10) days of prision correccional, as minimum, to
eight (8) years and one day of prision mayor, as maximum, and ordered to refund Arnel Viloria the sum of P50,000.00
with legal interest from November 23, 1992 until the amount is fully paid.
2. In Criminal Case No. 93-121323 (for estafa involving P50,000.00), appellant is sentenced to suffer the
indeterminate penalty of two (2) years, eleven (11) months and ten (10) days of prision correccional, as minimum, to
eight (8) years and one day of prision mayor, as maximum, and ordered to refund Santiago Ricamonte the sum of
P50,000.00 with legal interest from November 27, 1992 until the amount is fully paid.
3. In Criminal Case No. 93-121324 (for estafa involving a total of P61,000.00), appellant is sentenced to suffer
the indeterminate penalty of two (2) years, eleven (11) months and ten (10) days of prision correccional, as minimum,
to nine (9) years and one day of prision mayor, as maximum, and ordered to pay Nenita Sorita the sum of P31,000.00
plus P30,000.00 as reparation for the unrecovered personal properties, all with legal interest from January 3, 1993
until the amount is fully paid.
4. In Criminal Case No. 93-121321 (for illegal recruitment in large-scale), appellant is sentenced to suffer the
penalty of life imprisonment, and to pay a fine of P100,000.00. SO ORDERED.