PRE-EMPLOYMENT Held: Yes, the ARB requirement and questioned Department Order related to
its issuance were issued by the Secretary of Labor pursuant to a valid exercise
A. Principles and Definitions (Art. 12-13)
1. JMM Promotion and Management, Inc. v. CA
Facts: The Federation of Entertainment Talent Managers of the Philippines
(FETMOP for brevity) filed a class suit on January 27, 1995 assailing that the
Department Order No. 3 which establishes various procedures and
requirements for screening performing artists under a new system of training,
testing, certification and deployment of the former and other related
issuance, principally contending that the said orders, 1.)violated the
constitutional right to travel; 2.) abridged existing contracts for employment;
and 3.) deprived individual artists of their licenses without due process of law.
FETMOP also averred that the issuance of the Artist Record Book (ARB) was
discriminatory and illegal and in gross violation of the constitutional right to
life liberty and property. FETMOP prayed for the issuance of the writ of
preliminary injunction against the orders.
JMM Promotion and Management, Inc. (JMM for brevity) and Kary
International, Inc. (Kary for brevity) filed a motion for intervention in the civil
case which was granted by the trial court on February 15, 1995. However, on
February 21, 1995, the trial court issued an order denying petitioner's prayer
for writ of preliminary injunction and dismissed the compliant. An appeal was
made to the trial court regarding its decision but it was also however,
dismissed. As a consequences, ARB requirement was issed. The Court of
Appeals upheld the trial court's decision and concluded that the said issuance
constituted a valid exercise of Police power.
Issue: Whether or not the said issuance is a valid exercise of Police Power.
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of Police Power by the State. The proper regulation of a profession, calling,
business or trade has always been upheld as a legitimate subject of a valid
exercise of police power by the state particularly when their conduct afffects
either the execution of a legitimate governmental functions, the preservation
of the State, the public health and welfare and public morals. According to
the maxim sic utere tuo ut alienum non laedas (use your property in such a
fashion so as to not disturb others) it must of course be within the legitimate
range of legislative action to define the mode and manner in which every one
may so use his own property so as not to pose injury to himself or others.
In any case, where the liberty curtailed affects at most the right of
property, the permissible scope of regulatory measures is certainly much
wider. To pretend that licensing or accreditation requirements violates due
process clause is to ignore the settled practice, under the mantle of the police
power, of regulating entry to the practice of various trades or profession.
Professional leaving for abroad are required to pass rigid written and practical
exams before they are deemed fit to practice their trade. It is not claimed
that these requirements pose an unwarranted deprivation of a property right
under the due process clause. So long as professionals and other workers
meet reasonable regulatory standards no such deprivation exists.
2. Philippine National Bank v. Cabansag
Facts: Florence Cabansag went to Singapore as a tourist. While she was there,
she looked for a job and eventually applied with the Singapore Branch of the
Philippine National Bank. PNB is a private banking corporation organized and
existing under Philippine laws.
 She was eventually employed and was issued an employment pass. In
her job offer, it was stated, among others, that she was to be put on
probation for 3 months and termination of her employment may be made by
either party after 1 day notice while on probation, and 1 month notice or 1
month pay in lieu of notice upon confirmation. She accepted the terms and
was issued an OEC by the POEA. She was commended for her good work.
However, she was informed by Ruben Tobias, the bank president, that
she would have to resign in line with some cost cutting and realignment
measures of the company. She refused but was informed by Tobias that if she
does not resign, he will terminate her instead.
Issue: 1. W/N the arbitration branch of the NLRC has jurisdiction
2. W/N the arbitration of the NLRC in the NCR is the proper venue
3. W/N Cabansag was illegally dismissed
Held: 1. Labor arbiters have original and exclusive jurisdiction over claims
arising from employer-employee relations including termination disputes
involving all workers, including OFWs. Here, Cabansag applied for and
secured an OEC from the POEA through the Philippine Embassy. The OEC
authorized her working status in a foreign country and entitled her to all
benefits and processes under our statutes. Although she may been a direct
hire at the commencement of her employment, she became an OFW who
was covered by Philippine labor laws and policies upon certification by the
POEA. When she was illegally terminated, she already possessed the POEA
employment certificate.
2. A migrant worker “refers to a person who is to be engaged, is
engaged or has been engaged in a remunerated activity in a state of which he
or she is not a legal resident; to be used interchangeably with overseas
Filipino worker.” Here, Cabansag was a Filipino, not a legal resident of
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Singapore, and employed by petitioner in its branch office in Singapore. She is
clearly an OFW/migrant worker. Thus, she has the option where to file her
Complaint for illegal dismissal. She can either file at the Regional Arbitration
Branch where she resides or the RAB where the employer is situated. Thus, in
filing her Complaint before the RAB office in Quezon City, she has made a
valid choice of proper venue.
3. The appellate court was correct in holding that respondent was
already a regular employee at the time of her dismissal, because her three-
month probationary period of employment had already ended. This ruling is
in accordance with Article 281 of the Labor Code: “An employee who is
allowed to work after a probationary period shall be considered a regular
employee.” Indeed, petitioner recognized respondent as such at the time it
dismissed her, by giving her one month’s salary in lieu of a one-month notice,
consistent with provision No. 6 of her employment Contract.
B. Recruitment and Placement
I. Illegal Recruitment, Prohibited Acts (Art. 13(b), 34, 35, 38, 39)
1. People v. Goce
Facts: On January 1988, an information for illegal recruitment committed by
a syndicate nd in large scale, punishable under Articles 38 and 39 of the labor
code as amended by PD 2018, filed against Dan and Loma Goce and Nelly
Agustin in the RTC of Manila, alleging that in or about during the period
comprised between May 1986 and June 25, 1987, both dates inclusive in the
City of Manila, the accused conspired and represent themsleves to have the
capacity to recruit Filipino workers for employment abroad.
 January 1987, a warrant of arrest was issued against the 3 accused bot
none of them was arrested. Hence, on February 1989, the RTC prdered the
case archived but issued a standing warrant os arrest against the accused.
Thereafter, knowing the whereabouts of the accused, Rogelio Salado
requested for a copy of the warrant of arrest and eventually Nelly Agustin
was apprehended by the Paranaque Police. Agustin's counsel filed a motion
to revive the case and requested to set a hearing for purpose of due process
and for accused to immediately have her day in court. On the arraignment,
Agustin pleaded not guilty and the trial went on with four complainants
testified for the prosecution and receipts of the processing fees they paid.
Agustin for the defense asserted that Goce couple were licensed
recruiters but denied her participation in the recruitment and denied
knowledge of the receipts as well.
On November 1993, trial court rendered judgment finding that
Agustin as a principal in the crime of illegal recruitment in large scale with
sentence of life imprisonment and pay P100,000.00.
Issue: Agustin appealed with the following arguments: (1) her act of
introducing the complainants to the couple does not fall within the meaning
of illegal recruitment and placement under Article 13 in relation to Article 34
of the labor code; (2) there is no proof of conspiracy and (3) there is no proof
that appellant offered/promised overseas employment to the complainants.
Held: YES. Under said Code, 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
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and placement. On the other hand, referral is the act of passing along or
forwarding of an applicant for employment after an initial interview of a
selected applicant for employment to a selected employer, placement officer
or bureau.
The testimonial evidence shows that she indeed further committed
acts constitutive of illegal recruitment. All four prosecution witnesses testified
that it was Agustin whom they initially approached regarding their plans of
working overseas. It was from her that they learned about the fees they had
to pay, as well as the papers that they had to submit. It was after they had
talked to her that they met the accused spouses who owned the placement
agency. As correctly held by the trial court, being an employee of the Goces,
it was therefore logical for appellant to introduce the applicants to said
spouses, they being the owners of the agency. As such, appellant was actually
making referrals to the agency of which she was a part. She was therefore
engaging in recruitment activity. Agustin played a pivotal role in the
operations of the recruitment agency, working together with the Goce
couple.
There is illegal recruitment when one gives the impression of having
the ability to send a worker abroad." It is undisputed that appellant gave
complainants the distinct impression that she had the power or ability to
send people abroad for work such that the latter were convinced to give her
the money she demanded in order to be so employed. It cannot be denied
that Agustin received from complainants various sums for purpose of their
applications. Her act of collecting from each of the complainants payment for
their respective passports, training fees, placement fees, medical tests and
other sundry expenses unquestionably constitutes an act of recruitment
within the meaning of the law.
2. Darvin v. CA
Facts: Accused-appellant used to be connected with Dale Travel Agency. In
1992, she was introduced to Macaria Toledo by a friend. Toledo sought to
help her secure a passport, US Visa, and airline tickets to the States. She did
not promise any employment in the US to Toledo. She, however, admitted
having received the amount of P150,000 from Toledo and contends that it
was used for necessary expenses of an intended trip to the US of Toledo and
her friend, Florencio Rivera.
After receiving the money, she told Toledo that the papers will be
released within 45 days. Appellant alleged that she was not engaged in illegal
recruitment but merely acted as a travel agent in assisting individuals to
secure passports and visa.
Charged with Estafa and Illegal Recruitment before the trial court, the
latter found her guilty of the crime of simple illegal recruitment but acquitted
her of estafa. The CA affirmed in toto the trial court’s decision.
Issue: WON Darvin committed the crime of illegal recruitment
Held: NO. Accused-appellant was acquitted on the ground of reasonable
doubt of the crime charged.
The Supreme Court held that to uphold the conviction of the crime of
illegal recruitment, two elements must concur: 1. The person charged must
have undertaken recruitment activities; and 2. He does not have a license or
authority to do so.
In this case, the Court finds no sufficient evidence to prove that
appellant offered a job to private respondent. It is not clear that she gave the
impression that she was capable of providing the private respondent work
abroad. By themselves, procuring a passport, airline tickets, and foreign visa
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for another individual, without more, can hardly qualify as recruitment
activities.
Aside from testimony of private respondent, there is nothing to show
that accused-appellant engaged in recruitment activities. We also not that
the prosecution did not present the testimonies of witnesses who could have
corroborated the charge of illegal recruitment, such as Florencio Rivera, and
Leionila Rivera, when it had the opportunity to do so.
As it stands. The claim of private respondent that accused-appellant
promised her employment abroad is uncorroborated. All these, taken
collectively, cast reasonable doubt on the guilt of the accused.
3. Athenna International Manpower v. Villanos
Facts: The petitioner is a domestic corporation engaged in recruitment and
placement of workers for overseas employment. Respondent applied to work
overseas as caretaker thru petitioner. The petitioner asked for a placement
fee amounting to P100,000 but the respondent begged to reduced the fee
and it was reduced to P94,000 with the petitioner paying only P30,000 and
the remaining will be paid through salary deductions.
Upon arrival on Taiwan, he was assigned to a mechanical shop, owned
by Hsien, as a hydraulic installer/repairer for car lifters, instead of the job for
which he was hired. He did not, however, complain because he needed
money to pay for the debts he incurred back home.
Barely a month after his placement, he was terminated by Hsien and
received his salary and instructed for departure to the Philippines. Upon
arrival, the respondent went to petitioner’s office and demanded for the
reimbursement of P30,000 but instead the petitioner gave him a summary of
expenses relating his deployment.
 The respondent filed a complaint before Adjudication Office of the On the first issue, An employee voluntarily resigns when he finds
POEA. However, because of financial constraints, he had to go home to himself in a situation where he believes that personal reasons cannot be
Polanco, Zamboanga del Norte and filed a complaint against petitioner for sacrificed in favor of the exigency of the service; thus, he has no other choice
illegal dismissal, violation of contract, and recovery of unpaid salaries and but to disassociate himself from his employment.
other benefits before the NLRC Sub-Regional Arbitration Branch No. 9, In this case respondent avers that petitioner did not explain why he
Dipolog City. was unqualified nor inform of any qualifications needed for the job prior to
In its defense, petitioner alleged that under the employment contract, his deployment as mandated by Art 281[9] of the Labor Code and failed to
respondent was to undergo a probationary period of forty (40) days. prove the legality of the dismissal, despite the fact that the burden of proof
However, at the job site, respondent was found to be unfit for his work, thus lies on the employment and recruitment agency.
he resigned from his employment and requested for his repatriation signing a On the second issue, the SC declared the petitioner solidarily liable
statement to that effect. with Wei Yu Hsien to pay the unexpired portion based on Sec 10 RA 8042.
The Labor Arbiter rendered a Decision holding petitioner and Wei Yu Lastly, because of the breach of contract and bad faith alleged against the
Hsien solidarily liable for the wages representing the unserved portion of the employer and the petitioner, we must sustain the award of P50,000 in moral
employment contract, the amount unlawfully deducted from respondent’s damages and P50,000 as exemplary damages, in addition to attorney’s fees of
monthly wage, moral damages, exemplary damages and attorney’s fees. On ten percent (10%) of the aggregate monetary awards.
appeal, the NLRC reversed the Labor Arbiter and dismissed the complaint for
lack of merit. It found that respondent was not at all dismissed, much less 4. Rodolfo v. People
illegally. Respondent seasonably filed a motion for reconsideration, which the
NLRC denied in its second resolution. respondent appealed to the Court of Principle: “Promises or offers for a fee employment” is sufficient to warrant
Appeals and granted the petition and reversing the questioned resolutions of conviction for illegal recruitment.
the NLRC.
Facts: Petitioner Rosa C. Rodolfo approached private complainants Necitas
Issue: 1. Did the respondent voluntarily resign or was he illegally dismissed? Ferre and Narciso Corpus individually and invited them to apply for overseas
2. Assuming that the respondent was illegally dismissed, was it proper for the employment in Dubai. Rodolfo, being their neighbor, Ferre and Corpus agreed
Court of Appeals to affirm in toto the monetary awards in the Decision of the and went to the former’s office. The office bore the business name ―Bayside
Labor Arbiter? Manpower Export Specialist‖. In that office, Ferre gave P1,000.00 as
processing fee and another P4,000.00. Likewise, Corpus gave Rodolfo
Held: The SC denied the petition and affirmed with modification the P7,000.00. Rodolfo then told Ferre and Corpus that they were scheduled to
resolution by the Court of Appeals. leave for Dubai. However, private complainants and all the other applicants

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were not able to depart on the scheduled date as their employer allegedly
did not arrive. Thus, their departure was rescheduled, but the result was the
same. Suspecting that they were being hoodwinked, Ferre and Corpus
demanded of Rodolfo to return their money. Except for the refund of
P1,000.00 to Ferre, Rodolfo was not able to return Ferre’s and Corpus’
money. Ferre, Corpus and three others then filed a case for illegal recruitment
in large scale with the Regional Trial Court (RTC) against Rodolfo.
The RTC rendered judgement against Rodolfo but in imposing the
penalty, the RTC took note of the fact that while the information reflected the
commission of illegal recruitment in large scale, only the complaint of two
(Ferre and Corpus) of the five complainants was proven. Rodolfo appealed to
the Court of Appeals (CA). The CA dismissed the petition but modified the
penalty imposed by the trial court. The CA also dismissed Rodolfo’s Motion
for Reconsideration.
Issue: Whether or not Rodolfo is guilty of illegal recruitment in large scale
Held: The elements of the offense of illegal recruitment, which must concur,
are: (1) that the offender has no valid license or authority required by law to
lawfully engage in recruitment and placement of workers; and (2) that the
offender undertakes any activity within the meaning of recruitment and
placement under Article 13(b), or any prohibited practices enumerated under
Article 34 of the Labor Code. If another element is present that the accused
commits the act against three or more persons, individually or as a group, it
becomes an illegal recruitment in a large scale.
Article 13 (b) of the Labor Code defines ―recruitment and placement‖
as ―[a]ny act of canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring workers, and includes referrals, contract services,
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promising or advertising for employment, locally or abroad, whether for
profit or not.‖
That the first element is present in the case at bar, there is no doubt.
Jose Valeriano, Senior Overseas Employment Officer of the Philippine
Overseas Employment Administration, testified that the records of the POEA
do not show that Rodolfo is authorized to recruit workers for overseas
employment. A Certification to that effect was in fact issued by Hermogenes
C. Mateo, Chief of the Licensing Division of POEA.
The second element is doubtless also present. The act of referral,
which is included in recruitment, is ―the act of passing along or forwarding
of an applicant for employment after an initial interview of a selected
applicant for employment to a selected employer, placement officer or
bureau.‖ Rodolfo’s admission that she brought private complainants to the
agency whose owner she knows and her acceptance of fees including those
for processing betrays her guilt.
Rodolfo issued provisional receipts indicating that the amounts she
received from the private complainants were turned over to Luzviminda
Marcos and Florante Hinahon does not free her from liability. For 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. Parenthetically, why Rodolfo accepted the payment of fees from
the private complainants when, in light of her claim that she merely brought
them to the agency, she could have advised them to directly pay the same to
the agency, she proferred no explanation.
On Rodolfo’s reliance on Señoron, true, the Court held that issuance
of receipts for placement fees does not make a case for illegal recruitment.
But it went on to state that it is ―rather the undertaking of recruitment
activities without the necessary license or authority‖ that makes a case for
illegal recruitment.
5. People v. Delos Reyes
Facts: Appellant was charged with six counts of Estafa in an Information
which alleges that accused conspiring together with other unidentified
accused, feloniously defraud the complainants on different occasions, by
means of false manifestations and fraudulent representation to the effect
that they had the power and capacity to recruit and employ the complainants
for employment abroad, and could facilitate the processing of the pertinent
papers if given the necessary amount to meet the requirements thereto, and
succeeded in inducing said complainants to give and deliver, as in fact gave
and delivered to said accused the sum of money, which amount once in
possession, with intent to defraud, willfully, unlawfully and feloniously
misappropriated, misapplied and converted to their own personal use and
benefit, to the damage and prejudice of the complainants.
For her part, appellant admitted that she was the Overseas Marketing
Director of All Care Travel & Consultancy, with All Care Travel & Consultancy
as its affiliate. She claimed that she did not know Suratos, Guillarte, Alayon,
Bagay, Jr., and Gloria. She likewise claimed that she neither signed nor issued
any receipt using the name "Manzie delos Reyes" in favor of the
complainants. She further claimed that she was not engaged in any
recruitment and placement activities. During the pre-trial, she admitted that
she had no license to recruit workers for overseas employment.
Issue: Whether or not appellant is guilty for the crime of estafa.
Here, appellant deceived private complainants into believing that she had the
authority and capability to send them abroad for employment, despite her
not being licensed by the POEA to recruit workers for overseas employment.
Because of the assurances given by accused-appellant, the private
complainants parted with their hard-earned money for the payment of the
agreed placement fee, for which accused-appellant issued petty cash
vouchers and used fictitious names evidencing her receipt of the payments.
A person, for the same acts, may be convicted separately of illegal
recruitment and estafa.
II. Regulation of Recruitment and Placement Activities (Art. 16, 18, 25-33,
35-37)
1. Trans Action Overseas Corp. v. Secretary of Labor
Facts: group of individuals sought employment as domestic helpers and paid
placement fee ranging from P1,000 to P14,000 but Transaction Overseas
Corporation failed to deploy them. Their demands for refund proved
unavailing, thus they were constrained to institute complaints against
petitioner for violation of Art. 32 and 34(a) of the Labor Code, as amended.
Petitioner denied having received the amounts allegedly collected
from respondents and averred that the company’s employee whose only duty
was to prescreen and interview applicants and was not authorized to collect
fees from the applicants. Petitioner maintains that it even warned
respondents not to give any money to unauthorized individuals.

Held: Yes. The elements of estafa are: (1) the accused defrauded another by Issue: Whether or not the Secretary of Labor and Employment has
abuse of confidence or by means of deceit; and (2) the offended party or a Jurisdiction to cancel or revoke the license of a private fee-charging
third party suffered damage or prejudice capable of pecuniary estimation. employment agency.

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Held: Yes, the power to suspend or cancel any license or authority to recruit
employees for overseas employment is vested upon the secretary of Labor
and Employment under Art.35 of the Labor Code as amended. This is in
connection in the case of Eastern Assurance and Surety Corp. v. Secretary of
Labor. The Secretary of Labor has also the authority conferred by Section 36,
not only to restrict and regulate the recruitment and placement of activities
of all agencies, but also to promulgate rules and regulations to carry out the
objectives and implement the provisions governing said activities
2. Salazar v. Achacoso
Facts: (This concerns the validity of the power of the Secretary of Labor to
issue warrants of arrest and seizure under Article 38 of the Labor Code,
prohibiting illegal recruitment.)
On October 21, 1987, Rosalie Tesoro filed with the Philippine Overseas
Employment Administration (POEA) a complaint against petitioner. Having
ascertained that the petitioner had no license to operate a recruitment
agency, public respondent Administrator Tomas D. Achacoso issued his
challenged CLOSURE AND SEIZURE ORDER.
The POEA brought a team to the premises of Salazar to implement the
order. There it was found that petitioner was operating Hannalie Dance
Studio. Before entering the place, the team served said Closure and Seizure
order on a certain Mrs. Flora Salazar who voluntarily allowed them entry into
the premises. Mrs. Flora Salazar informed the team that Hannalie Dance
Studio was accredited with Moreman Development (Phil.). However, when
required to show credentials, she was unable to produce any. Inside the
studio, the team chanced upon twelve talent performers — practicing a
dance number and saw about twenty more waiting outside, The team
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confiscated assorted costumes which were duly receipted for by Mrs.
Asuncion Maguelan and witnessed by Mrs. Flora Salazar.
A few days after, petitioner filed a letter with the POEA demanding the
return of the confiscated properties. They alleged lack of hearing and due
process, and that since the house the POEA raided was a private residence, it
was robbery.
On February 2, 1988, the petitioner filed this suit for prohibition.
Although the acts sought to be barred are already fait accompli, thereby
making prohibition too late, we consider the petition as one for certiorari in
view of the grave public interest involved.
Issue: May the Philippine Overseas Employment Administration (or the
Secretary of Labor) validly issue warrants of search and seizure (or arrest)
under Article 38 of the Labor Code?
Held: PETITION GRANTED. it is only a judge who may issue warrants of search
and arrest. Neither may it be done by a mere prosecuting body.
We reiterate that the Secretary of Labor, not being a judge, may no longer
issue search or arrest warrants. Hence, the authorities must go through the
judicial process. To that extent, we declare Article 38, paragraph (c), of the
Labor Code, unconstitutional and of no force and effect.
Moreover, the search and seizure order in question, assuming, ex
gratia argumenti, that it was validly issued, is clearly in the nature of a general
warrant. We have held that a warrant must identify clearly the things to be
seized, otherwise, it is null and void
For the guidance of the bench and the bar, we reaffirm the following
principles: Under Article III, Section 2, of the l987 Constitution, it is only
judges, and no other, who may issue warrants of arrest and search. The
exception is in cases of deportation of illegal and undesirable aliens, whom Issue: Whether the POEA can automatically disqualify officers and directors
the President or the Commissioner of Immigration may order arrested, from participating in the government's overseas employment program upon
following a final order of deportation, for the purpose of deportation. the cancellation of a license

3. Republic v. Human Link Development
Principle: Aware that overseas workers are vulnerable to exploitation, the
State sought to protect the interests and well-being of these workers with
creation of specialized bodies such as the POEA under the direct supervision
of the DOLE Secretary.
Facts: Renelson Carlos applied at Worldview Internation Services Corporation
as a heavy equipment driver with a salary of U$700 in Doha, Qatar. His
recruiting agency Humanlink Manpower Consultants, Inc. made him sign an
employment contract stating that he was going to work as a duct man instead
of the position he applied for but he was told that this is only for purposes of
entering the country. Humanlink promised that he would work as a heavy
equipment driver as applied for.
However, upon his arrival in Doha, he worked as a duct installer with a
salary of U$400. Carlos filed a complaint with the Philippine Overseas Labor
Office but the complaint was not acted upon. This prompted him to speak
with the Qatar Labor Office where he discussed his grievance. Consequently,
Carlos was informed that his visa was cancelled and that he was being
repatriated at his own expense.
POEA Adjudication Office found Carlos’ assertions credible. POEA
cancelled Humanlink’s license and automatically disqualified it from
participating in any overseas employment program.
Held: Yes. One of the roles of the POEA is the regulation and adjudication of
private sector participation in the recruitment and placement of overseas
workers. Article 25 of the Labor Code, as amended, reads that pursuant to
national development objectives and in order to harness and maximize the
use of private sector resources and initiative in the development and
implementation of a comprehensive employment program, the private
employment sector shall participate in the recruitment and placement of
workers, locally and overseas, under such guidelines, rules and regulations as
may be issued by the Secretary of Labor.
This is echoed in Article 35 of the Labor Code, as amended, and
Section 23(b.l), R.A. No. 8042 as amended by R.A. No. 9422, where the
legislature empowered the DOLE and POEA to regulate private sector
participation in the recruitment and overseas placement of workers, to wit:
The Secretary of Labor shall have the power to suspend or cancel any license
or authority to recruit employees for overseas employment for violation of
rules and regulations issued by the Secretary of Labor, the Overseas
Employment Development Board, and the National Seamen Board, or for
violation of the provisions of this and other applicable laws, General Orders
and Letters of Instruction.
Section 23 (b.1) states that the Philippine Overseas Employment
Administration shall regulate private sector participation in the recruitment
and overseas placement of workers by setting up a licensing and registration
system.
Sections 1 and 2, Rule I, Part II of the POEA Rules and Regulations
provide the qualifications and disqualifications for private sector participation

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in the overseas employment program. Section 1 of this rule provides that for
persons to participate in recruitment and placement of land-based overseas
Filipino workers, they must not possess any of the disqualifications as
provided in Section 2:
“Section 2. Disqualification. The following are not qualified to engage
in the business of recruitment and placement of Filipino workers overseas:
xxx
d. Persons, partnerships or corporations which have derogatory
records, such as but not limited to the following: xxx Those agencies whose
licenses have been previously revoked or cancelled by the Administration for
violation of RA 8042, PD 442 as amended and their implementing rules and
regulations as well as these rules and regulations.;
f. Persons or partners, officers and Directors of corporations whose
licenses have been previously cancelled or revoked for violation of
recruitment laws.”
Thus, upon the cancellation of a license, persons, officers and
directors of the concerned corporations are automatically prohibited from
engaging in recruiting and placement of land-based overseas Filipino workers.
The grant of a license is a privilege and not a right thus making it a proper
subject of its regulatory powers.

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 III. Contracts (Art. 34-35)
1. Virjen Shipping v. NLRC
Facts: Certain seamen entered into a contract of employment for a 12-month
period. Some three months after the commencement of their employment,
the seamen demanded a 50% increase of their salaries and benefits. The
seamen demanded this increase while their vessel was on route to a port in
Australia controlled by the International Transport Federation (ITP) where the
ITF could detain the vessels unless it paid its season ITF rates. The facts
showed that when the seamen boarded the vessel M/T Jannu, there was no
intention to send their ship to Australia but would trade in Carribean ports
only. The agent of the owner of the vessel agreed to a 25% increase, but
when the vessel arrived in Japan shortly afterwards, the seamen were
repatriated to Manila and their contracts terminated.
The seamen (private respondents) filed a complaint for illegal
dismissal with the National Seamen Board. The NSB rendered a decision
declaring that the seamen breached their employment contracts when they
demanded and received from Vir-Jen Shipping wages over and above their
contracted rates.
The NSB decision was appealed to the NLRC which reversed the
decision of the NSB and required the petitioner to pay wages and other
monetary benefits corresponding to the unexpired portion of the manning
contract on the ground that the termination of the seamen was without a
valid cause.
Two motions for reconsideration filed with Second Division were
denied by said Division. Another motion for reconsideration was filed with
the Supreme Court en banc which gave its due course, after finding that there
was a need to reconcile the decision of the Second Division with that of the
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First Division with the Wallem Decision (an earlier case having the same
facts). In that decision, the First Division had ruled that the termination of the
seamen was illegal.
Issue: Whether or not the termination of the seamen was illegal.
Held: Yes, the Supreme Court en banc found the termination of the seamen’s
contract illegal. The contention that the manning industries in the Philippines
would not survive if the instant case is not decided in favor of the petitioner
and would in effect “kill the hen that lays the golden egg” is not supported by
evidence. Filipino seamen are admittedly as competent and reliable as
seamen from any other country in the world. It is competence and reliability,
not cheap labor that makes our seamen so greatly in demand. Certainly the
seamen are entitled to government protection when they ask fair and decent
treatment by their employers and when they exercise the right to petition for
improved terms of employment, especially when they fell that these are
substandard or are capable of improvement according to internationally
accepted rules.
The seamen did not violate their contracts of employment. The form
contracts approved by the National Seamen Board (now POEA) are designed
to protect Filipinos, not foreign shipowners who can take care of themselves.
The standard forms embody the basic minimums which must be incorporated
as parts of the employment contract. To state, therefore, that the affected
seamen cannot petition their employer for higher salaries during the 12-
month duration of the contract runs counter to the established principles of
labor legislation.
2. Suzara v. Benipayo
Facts: Suzara et al entered into employment contracts with Magsaysay lines
to work aboard vessels owned/operated/manned by the latter for a period of
12 calendar months and with different rating/position, salary, overtime pay
and allowance. The contracts were approved by the National Seamen Board.
Upon arrival at the port of Vancouver, Canada, demands for increase
in wages were made through the help of the International Transport Worker’s
Federation (ITF), a militant worldwide especially in Canada, Australia,
Scandinavia, and various European countries, interdicting foreign vessels and
demanding wage increases for third world seamen.
Wages were increased but complaints were filed by Magsaysay before
the NSB. NSB ordered the return of the additional wages paid for being
obtained thru violent means and for lacking NSB approval. NLRC affirmed the
order.
Meanwhile, Magsaysay filed estafa charges against the seamen.
In this petition, the seamen seeks for the reversal of the NLRC decision
and the quashal of the complaints for estafa.
Issue: Whether the increase in wages needed the approval of the NSB to be
legal
Held: NO. There is nothing in the record supporting the finding that the
workers resorted to violent means to obtain an increase in their wages.
It is impractical for the NSB to require the petitioners, caught in the
middle of a labor struggle between the ITF and owners of ocean going vessels
halfway around the world in Vancouver, British Columbia to first secure the
approval of the NSB in Manila before signing an agreement which the
employer was willing to sign
In the case of VirJen: The form contracts approved by the National
Seamen Board are designed to protect Filipino seamen not foreign
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shipowners who can take care of themselves. The standard forms embody
the basic minimums which must be incorporated as parts of the employment
contract. (Section 15, Rule V, Rules and Regulations Implementing the Labor
Code) They are not collective bargaining agreements or immutable contracts
which the parties cannot improve upon or modify in the course of the agreed
period of time
The NSB, the Department of Labor and Employment and all its
agencies exist primarily for the workingman's interest and the nation's as a
whole.
3. Sunace International Management Services v. NLRC
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 A week before the date of departure, Capt. Pacifico Fernandez,
Affidavit of Desistance, copy of each document was annexed to said respondent’s Vice President, sent a facsimile message to the captain of “MSV
The Labor Arbiter, rejected Sunace's claim that the extension of Seaspread,”, saying that it received a phone call from Santiago’s wife and
Divina's contract for two more years was without its knowledge and consent. some other callers who did not reveal their identity and gave him some
feedbacks that Paul Santiago this time, if allowed to depart, will jump ship in
Issue: Whether the act of the foreigner-principal in renewing the contract of Canada like his brother Christopher Santiago. The captain of “MSV Seaspread
Divina be attributable to Sunace replied that it cancel plans for Santiago to return to Seaspread.
Held: No, the act of the foreigner-principal in renewing the contract of Divina Petitioner thus told that he would not be leaving for Canada anymore.
is not attributable to Sunace. Petitioner filed a complaint for illegal dismissal, damages, and attorney’s fees
against respondent and its foreign principal, Cable and Wireless (Marine) Ltd.
There being no substantial proof that Sunace knew of and consented The Labor Arbiter (LA) favored petitioner and ruled that the employment
to be bound under the 2-year employment contract extension, it cannot be contract remained valid but had not commenced since petitioner was not
said to be privy thereto. As such, it and its "owner" cannot be held solidarily deployed and that respondent violated the rules and regulations governing
liable for any of Divina's claims arising from the 2-year employment overseas employment when it did not deploy petitioner, causing petitioner to
extension. suffer actual damages. On appeal by respondent, NLRC ruled that there is no
Furthermore, as Sunace correctly points out, there was an implied employer-employee relationship between petitioner and respondent because
revocation of its agency relationship with its foreign principal when, after the the employment contract shall commence upon actual departure of the
termination of the original employment contract, the foreign principal seafarer from the airport or seaport at the point of hire and with a POEA-
directly negotiated with Divina and entered into a new and separate approved contract. In the absence of an employer-employee relationship
employment contract in Taiwan. between the parties, the claims for illegal dismissal, actual damages, and
attorney’s fees should be dismissed. But the NLRC found respondent’s
4. Santiago v. C.F Sharp decision not to deploy petitioner to be a valid exercise of its management
prerogative. Petitioner filed MR but it was denied. He went to CA. CA affirmed
Facts: Petitioner had been working as a seafarer for Smith Bell Management, the decision of NLRC. Petitioner’s MR was denied. Hence this case.
Inc. (respondent) for about 5 yrs. In February 3, 1998, petitioner signed a new
contract of employment with respondent, with the duration of 9 months. The Issue: When does an employer- employee relationship begin in the case at
contract was approved by POEA. Petitioner was to be deployed on board the bar.
“MSV Seaspread” which was scheduled to leave the port of Manila for
Canada on 13 February 1998.

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Held: There is some merit in the petition. The parties entered into an
employment contract whereby petitioner was contracted by respondent to
render services on board “MSV Seaspread” for the consideration of
US$515.00 per month for 9 months, plus overtime pay. However, respondent
failed to deploy petitioner from the port of Manila to Canada. Considering
that petitioner was not able to depart from the airport or seaport in the point
of hire, the employment contract did not commence, and no employer-
employee relationship was created between the parties. However, a
distinction must be made between the perfection of the employment
contract and the commencement of the employer-employee relationship.
The perfection of the contract, which in this case coincided with the date of
execution thereof, occurred when petitioner and respondent agreed on the
object and the cause, as well as the rest of the terms and conditions therein.
The commencement of the employer-employee relationship would have
taken place had petitioner been actually deployed from the point of hire.
Thus, even before the start of any employer-employee relationship,
contemporaneous with the perfection of the employment contract was the
birth of certain rights and obligations, the breach of which may give rise to a
cause of action against the erring party. Thus, if the reverse had happened,
that is the seafarer failed or refused to be deployed as agreed upon, he would
be liable for damages.
Neither the manning agent nor the employer can simply prevent a
seafarer from being deployed without a valid reason. Respondent’s act of
preventing petitioner from departing the port of Manila and boarding “MSV
Seaspread” constitutes a breach of contract, giving rise to petitioner’s cause
of action. Respondent unilaterally and unreasonably reneged on its obligation
to deploy petitioner and must therefore answer for the actual damages he
suffered.
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Despite the absence of an employer-employee relationship between
petitioner and respondent, the Court rules that the NLRC has jurisdiction over
petitioner’s complaint. The jurisdiction of labor arbiters is not limited to
claims arising from employer-employee relationships. Section 10 of R.A. No.
8042 (Migrant Workers Act), provides that: Sec. 10. Money Claims. –
Notwithstanding any provision of law to the contrary, the Labor Arbiters of
the NLR) shall have the original and exclusive jurisdiction to hear and decide,
within 90 calendar days after the filing of the complaint, the claims arising out
of an employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages.”
Since the present petition involves the employment contract entered
into by petitioner for overseas employment, his claims are cognizable by the
labor arbiters of the NLRC.
Respondent is liable to pay petitioner only the actual damages in the
form of the loss of nine (9) months’ worth of salary as provided in the
contract. He is not, however, entitled to overtime pay. While the contract
indicated a fixed overtime pay, it is not a guarantee that he would receive said
amount regardless of whether or not he rendered overtime work. Even
though petitioner was prevented without valid reason from rendering regular
much less overtime service, the fact remains that there is no certainty that
petitioner will perform overtime work had he been allowed to board the
vessel. The amount stipulated in the contract will be paid only if and when
the employee rendered overtime work. Realistically speaking, a seaman, by
the very nature of his job, stays on board a ship or vessel beyond the regular
eight-hour work schedule. For the employer to give him overtime pay for the
extra hours when he might be sleeping or attending to his personal chores or
even just lulling away his time would be extremely unfair and unreasonable.
 The Court also holds that petitioner is entitled to attorney’s fees in the
concept of damages and expenses of litigation. Respondent’s basis for not
deploying petitioner is the belief that he will jump ship just like his brother, a
mere suspicion that is based on alleged phone calls of several persons whose
identities were not even confirmed. This Court has upheld management
prerogatives so long as they are exercised in good faith for the advancement
of the employer’s interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid
agreements. Respondent’s failure to deploy petitioner is unfounded and
unreasonable However, moral damages cannot be awarded in this case.
because respondent’s action was not tainted with bad faith, or done
deliberately to defeat petitioner’s rights, as to justify the award of moral
damages.
Seafarers are considered contractual employees and cannot be
considered as regular employees under the Labor Code. Their employment is
governed by the contracts they sign every time they are rehired and their
employment is terminated when the contract expires. The exigencies of their
work necessitates that they be employed on a contractual basis.
WHEREFORE, petition is GRANTED IN PART.
5. Dagasdas v. Grand Placement and General Services Corporation
Facts: November 2007, Grand Placement and General Services Corporation
(GPGS), for and on behalf of Industrial & Management Technology Methods
Co. Ltd. (ITM), employed Dagasdas as Network Technician
o Deployed in Saudi Arabia under a one year contract with a monthly salary
of SR 5,112.00
o Before leaving the PH, he underwent skill training and predeparture
orientation as Network Technician
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 Job offer by Aramco and ITM as “Supt”
Dagasdas claimed that although his position under his contract was a
Network Technician, he actually applied for and was engaged as a Civil
Engineer
o Transcript, diploma, curriculum vitae showed he had a degree in CE
o Was made to show that he had a position of a Network Technician for the
purpose of securing a visa for Saudi because ITM could not support a visa
application for Civil Engineers
February 8 2008: Dagasdas arrived in Saudi Arabia
o Signed with ITM a new contract, stipulated that they contracted him as
Superintendent within the scope of his abilities w salary of SR 5,112.00 and
allowance of SR 2, 045.00 per month.
o Placed on probation for 3 mons, new contract shall cancel all contracts prior
to its date form any source
Feb 11 2008: While working in Khurais Saudi Arabi, he was given tasks
for Mechanical Engineers which were not within the scope of the job he
applied for.
o Dagasdas raised his concern to his supervisor and he was transferred to the
Civil Engineering Dept, was temporarily given a position as Civil Construction
Engineer and was issued an ID good for one month.
March 9, 2008: Dagasdas was directed to exit the worksite but Rashid
H. Siddiqui (Siddiqui), the Site Coordinator Manager, advised him to remain in
the prenises and promised to secure him the position he applied for.
o However, before Dagasdas’ case was investigated, Siddiqui had severed his
employment with ITM.
 April 2008: Dagasdas returned to Al-Khobar and stayed at the ITM Office
o ITM gave him a termination notice indicating that his last dat of work was
on April 30 2008
  DISMISSED pursuant to clause 17.4.3 of his contract: ITM has
reserved the right to terminate any employee within the three-month
probationary period without need of any notice to the employee
Before his repatriation, Dagasdas signed a Statement of Quitclaim
with Final Settlement
o Quitclaim stated that ITM paid him all the salaries and benefits for his
services from February 11, 2008 to April 30, 2008 in the total amount of
SR7,156.80, and ITM was relieved from all financial obligations due to
Dagasdas.
Upon return to the PH, Dagasdas filed an illegal dismissal case against
GPGS, ITM and Aramco
o Accused them of misrepresentation, resulted in the mismatch in the work
assigned to him.
o Claim was supported by exchanged of e-mail establishing that GPGS ITM
and Aramco were aware of the job mistmatch that had befallen him.
o He maintained that GPGS, ITM, and Aramco merely invented “imaginary
cause/s” to terminate him.
o dismissed without cause and due process of law
GPGS, ITM AND ARAMCO: Dagasdas was legally dismissed.
o Dagasdas was aware that he was employed as Network Technician but he
could not perform his work in accordance with the standards of his employer.
o Dagasdas was informed of his poor performance, and he conformed to his
termination as evidenced by his quitclaim.
o Dagasdas was only a probationary employee since he worked for ITM for
less than three months
LA: dismissed the case for lack of merit.
o LA pointed out that when Dagasdas signed his new employment contract in
Saudi Arabia, he accepted its stipulations, including the fact that he had to
undergo probationary status
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o This new contract was more advantageous for Dagasdas as his position was
upgraded to that of a Superintendent, and he was likewise given an
allowance of SR2,045.00 aside from his salary of SR5,112.00 per month.
 This new contract NOT prohibited by law
NLRC: Dagasdas was illegally dismissed
o Dagasdas, who was a Civil Engineering graduate, was “recruited on paper”
by GPGS as Network Technician but the real understanding between the
parties was to hire him as Superintendent
o GPGS erroneously recruited Dagasdas, and failed to inform him that he was
hired as a “Mechanical Superintendent” meant for a Mechanical Engineer
o It declared that while ITM has the prerogative to continue the employment
of individuals only if they were qualified, Dagasdas’ dismissal
o It declared that while ITM has the prerogative to continue the employment
of individuals only if they were qualified, Dagasdas’ dismissal amounted to
illegal termination since the mismatch between his qualifications and the job
given him was no fault of his.
o The NLRC added that Dagasdas should not be made to suffer the
consequences of the miscommunication between GPGS and ITM considering
that the government obligates employment agencies recruiting Filipinos for
overseas work to “select only medically and technically qualified recruits.
o MR: DENIED
CA: set aside NLRC and reinstated LA decision
o It stressed that Dagasdas left the Philippines pursuant to his employment
contract indicating that he was to work as a Network Technician; when he
arrived in Saudi Arabia and signed a new contract for the position of a
Superintendent, the agreement was with no participation of GPGS, and said
new contract was only between Dagasdas and ITM
Issue: W/N Dagasdas was validly dismissed from work

Held: NO. Well-settled that employers have the prerogative to impose
standards on the work quantity and quality of their employees and provide
measures to ensure compliance therewith.
o Noncompliance with work standards may thus be a valid cause for
dismissing an employee.
o to ensure that employers will not abuse their prerogatives, the same is
tempered by security of tenure whereby the employees are guaranteed
substantive and procedural due process before they are dismissed from wor
Security of tenure remains even if employees, particularly the
Overseas Filipino Workers (OFW), work in a different jurisdiction.
o Employment contract of OFWs are perfected in the PH and it follows the
principle of “lex loci contractus” (The law of the place where the contract is
made). These contracrs are governed by our laws, primarily the LC and its
IRR/
In the case at bar, prior to his deployment and while still in the
Philippines, Dagasdas was made to sign a POEAapproved contract with GPGS,
on behalf of ITM; and upon arrival in Saudi Arabia, ITM made him sign a new
employment contract.
o BUT, the basis used for dismissing Dagasdad is VOID
First, Dagasdas’ new contract is in clear violation of his right to
security of tenure.
o Just cause for dimissing an employee is listed in ART 297
o BUT, per the notice of termination given to Dagasdas, ITM terminated him
for violating clause 17.4.3 of his new contract, which states that the company
reserves the right to terminate this agreement without serving any notice to
he Consultant, if the Consultant is terminated by company or its client w/in
probation for the period of 3 months.
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o No clear justification for the dismissal of Dagasdas other than the exercise
of ITM’s right to terminate him within the probationary period
o While our Civil Code recognizes that parties may stipulate in their contracts
such terms and conditions as they may deem convenient, these terms and
conditions must not be contrary to law, morals, good customs, public order or
policy
 cited clause is contrary to law because as discussed, our Constitution
guarantees that employees, local or overseas, are entitled to security of
tenure.
o Even assuming that Dagasdas was still a probationary employee when he
was terminated, his dismissal must still be with a valid cause.
 Probationary employees: his or her dismissal may be allowed
 only if there is just cause or such reason to conclude that the
employee fails to qualify as regular employee pursuant to reasonable
standards made known to the employee at the time of engagement.
o Here, ITM failed to prove that it informed Dagasdas of any predetermined
standards from which his work will be gauged
 The contract he signed while still in the PH, he was employed as
Network Technician and on his new ontract he was employed as a
Superintendent BUT no job description was adduced in evidence.
o Dagasdas was not sufficiently informed of the work standards for which his
performance will be measured
 ITM failed to show that it set and communicated work standards for
Dagasdas to follow, and on which his efficiency (or the lack thereof) may be
determined.
SECOND, new contract was not shown to have been processed
through the POEA.
o Under LC, employers hiring OFWS may only do so through entities
authorized by the Sec of Dept of Labor and Employment.
  Unless the employment contract of an OFW is processed through
the POEA, the same does not
 Does bind the concerned OFW because if the contract is not
reviewed by the POEA
o This new contract also breached Dagasdas’ original contract as it was
entered into even before the expiration of the original contract approved by
the POEA. Therefore, it cannot supersede the original contract; its terms and
conditions, including reserving in favor of the employer the right to terminate
an employee without notice during the probationary period, are void
THIRD, under this new contract, Dagasdas was not afforded
procedural due process when he was dismissed from work.
o Employer must give the concerned employee at least two notices before his
or her termination. Specifically, the employer must inform the employee of
the cause or causes for his or her termination. And also must be accorded the
oppor. To be heard.
o Here, no prior notice of purported infraction, and such opportunity to
explain on any accusation against him was given to Dagasdas.
LASTLY, while it is shown that Dagasdas executed a waiver in favor of
his employer, the same does not preclude him from filing this suit.
o the employee’s waiver or quitclaim cannot prevent the employee from
demanding benefits to which he or she is entitled, and from filing an illegal
dismissal case.
o This is because waiver or quitclaim is looked upon with disfavor, and is
frowned upon for being contrary to public policy.
o Unless it can be established that the person executing the waiver
voluntarily did so, with full understanding of its contents, and with reasonable
and credible consideration, the same is not a valid and binding undertaking
o Burden of proof = employer
WHEREFORE, PETITION IS GRANTED.
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IV. Government Machinery (Art. 14, 16, 18,20-21, 24)
V. Other Matters incidental to Overseas Employment
a. Repatriation
1. Equi-Asia Placement, Inc. v. Department of Foreign Affairs
Facts: On September 2000, Manny dela Rosa Razon, a native of Lemery,
Batangas and an overseas Filipino worker, died of acute cardiac arrest while
asleep (bangungot) at the dormitory of the Samsong Textile Processing
Factory in South Korea. Informed thereof, the Philippine Overseas Labor
Office (POLO) at South Korea immediately relayed the incident to the
Philippine Embassy in South Korea. Forthwith, the [Labor] Attaché of the
Philippine Embassy dispatched a letter to Eleuterio Gardiner, administrator of
the Overseas Workers Welfare Administration (OWWA), telling him about
what happened and to inform the relatives of Razon.
In turn, the OWWA indorsed the matter, for appropriate action, to
Director R. Casco of the Welfare Employment Office of the Philippine
Overseas Employment Administration (WEO-POEA).
Upon verification by the WEO-POEA on its data base, it was
discovered that Manny Razon was recruited and deployed by Equi-Asia
Placement, and was sent to South Korea in April 2000 to work-train at
Yeongjin Machinery, Inc. Thereupon, POEA addressed the first assailed
telegram-directive to the President/GM of the petitioner. We quote the
telegram: "PLEASE PROVIDE PTA [Prepaid Ticket Advice] FOR THE
REPATRIATION OF REMAINS AND BELONGINGS OF OFW MANNY DELA ROSA
RAZON AS PER REQUEST OF PHILIPPINE EMBASSY, KOREA, YOU ARE GIVEN
TWO (2) DAYS FROM RECEIPT HEREOF WITHIN WHICH TO PROVIDE SAID
TICKET AND ASSISTANCE, FAILURE TO DO SO WILL CONSTRAIN US TO IMPOSE
APPROPRIATE SANCTION UNDER OUR RULES"
Responding thereto, petitioner, thru its President Daniel Morga, Jr.,
faxed the following message to the Assistance and Welfare Division of the
POEA: "In connection with your telegram, this is to report to your good office
the following: 2. He violated his employment/training/dispatching contracts
on June 25, 2000 by unlawfully escaping/running away (TNT) from his
company assignment without prior KFSMB authorization and working/staying
in unknown company/place; In view thereof, we cannot heed your requests
as embodied in your telegram. However, his relatives can avail of the benefits
provided for by OWWA in cases involving undocumented/illegal Filipino
workers abroad.
On the same date, Director Casco of the WEO-POEA sent to the
petitioner the second assailed letter-directive, which pertinently reads:
"Mmay we remind you that pursuant to Sections 52, 53, 54 and 55 of the
Implementing Rules Governing RA 8042, otherwise known as the Migrant
Workers and Overseas Filipino Act of 1995, the repatriation of OFW, his/her
remains and transport of his personal effects is the primary responsibility of
the principal or agency and to immediately advance the cost of plane fare
without prior determination of the cause of worker's repatriation. The Rules
further provide for the procedure to be followed in cases when the foreign
employer/agency fails to provide for the cost of the repatriation, compliance
of which is punishable by suspension of the license of the agency or such
sanction as the Administration shall deem proper. Hence, you are required to
provide the PTA for the deceased OFW in compliance with the requirement in
accordance with R.A. 8042. You are given forty-eight (48) hours upon receipt
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hereof within which to provide said ticket. Failure in this regard will constrain
us to impose the appropriate sanction under our rules.”
Petitioner wrote back Director Casco, thus: "Please be informed that
under the provisions of Section 53 as well as, and in relation to, Section 55 of
the Omnibus Rules and Regulations Implementing the Migrant Workers and
Overseas Filipinos Act of 1995, the action to be imposed by POEA for non-
compliance therewith within 48 hours are violative of due process and/or the
principle on due delegation of power. This is so because Sec. 15 of R.A. 8042
clearly contemplates prior notice and hearing before responsibility
thereunder could be established against the agency that sets up the defense
of sole fault – in avoidance of said responsibility. Besides, the sections in
question unduly grant the powers to require advance payment of the plane
fare, to impose the corresponding penalty of suspension in case of non-
compliance therewith, when the law itself does not expressly provide for the
grant of such powers.
Nonetheless, and apprehensive of the adverse repercussions which
may ensue on account of its non-compliance with the directive, petitioner
advanced under protest the costs for the repatriation of the remains of
Razon.
CA rendered a Decision dismissing the petition. CA stated that
petitioner was mainly accusing the POEA of grave abuse of discretion when it
ordered petitioner to pay, in advance, the costs for the repatriation of the
remains of Razon.CA ruled that POEA did not commit any grave abuse of
discretion as its directives to petitioner were issued pursuant to existing laws
and regulations. It likewise held that a petition for certiorari, which was the
remedy availed of by petitioner, is not the proper remedy as the same is only
available when "there is no appeal, or any plain, speedy, and adequate
remedy in the ordinary course of law." Section 62 of the Omnibus Rules and
Regulations Implementing the Migrant Workers and Overseas Filipinos Act of
1995 or Republic Act 8042 ("Omnibus Rules") states that "the Labor Arbiters
of NLRC shall have the original and exclusive jurisdiction to hear and decide
all claims arising out of employer-employee relationship or by virtue of any
law or contract involving Filipino workers for overseas deployment including
claims for actual, moral, exemplary and other forms of damages, subject to
the rules and procedures of the NLRC." There is, therefore, an adequate
remedy available to petitioner.
Lastly, the Court of Appeals declared that it could not strike down as
unconstitutional Sections 52, 53, 54, and 55 of the Omnibus Rules as the
unconstitutionality of a statute or rules may not be passed upon unless the
issue is directly raised in an appropriate proceeding.
Issue: W/N CA erred in dismissing the petition.
Held: NO. At the center of this petition are the following provisions of the
omnibus rules:
“Section 52. Primary Responsibility for Repatriation. – The repatriation
of the worker, or his/her remains, and the transport of his/her personal
effects shall be the primary responsibility of the principal or agency which
recruited or deployed him/her abroad. All costs attendant thereto shall be
borne by the principal or the agency concerned.
Section 53. Repatriation of Workers. – The primary responsibility to
repatriate entails the obligation on the part of principal or agency to advance
the cost of plane fare and to immediately repatriate the worker should the
need for it arise, without a prior determination of the cause of the
termination of the worker's employment. However, after the worker has
returned to the country, the principal or agency may recover the cost of
repatriation from the worker if the termination of employment was due
solely to his/her fault.
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Every contract for overseas employment shall provide for the primary
responsibility of agency to advance the cost of plane fare, and the obligation
of the worker to refund the cost thereof in case his/her fault is determined by
the Labor Arbiter.
Section 54. Repatriation Procedure. – When a need for repatriation
arises and the foreign employer fails to provide for it cost, the responsible
personnel at site shall simultaneously notify OWWA and the POEA of such
need. The POEA shall notify the agency concerned of the need for
repatriation. The agency shall provide the plane ticket or the prepaid ticket
advice (PTA) to the Filipinos Resource Center or to the appropriate Philippine
Embassy; and notify POEA of such compliance. The POEA shall inform OWWA
of the action of the agency.
Section 55. Action on Non-Compliance. – If the employment agency
fails to provide the ticket or PTA within 48 hours from receipt of the notice,
the POEA shall suspend the license of the agency or impose such sanctions as
it may deem necessary. Upon notice from the POEA, OWWA shall advance
the costs of repatriation with recourse to the agency or principal. The
administrative sanction shall not be lifted until the agency reimburses the
OWWA of the cost of repatriation with legal interest. “
Said provisions, on the other hand, are supposed to implement
Section 15 of Republic Act No. 8042 which provides: “SEC. 15. Repatriation of
Workers; Emergency Repatriation Fund. – The repatriation of the worker and
the transport of his personal belongings shall be the primary responsibility of
the agency which, recruited or deployed the worker overseas. All costs
attendant to repatriation shall be borne by or charged to the agency
concerned and/or its principal. Likewise, the repatriation of remains and
transport of the personal belongings of a deceased worker and all costs
attendant thereto shall be borne by the principal and/or the local agency.
However, in cases where the termination of employment is due solely to the
fault of the worker, the principal/employer or agency shall not in any manner
be responsible for the repatriation of the former and/or his belongings.”
It bears emphasizing that administrative bodies are vested with two
basic powers, the quasi-legislative and the quasi-judicial. In Abella, Jr. v. Civil
Service Commission, we discussed the nature of these powers to be – “In
exercising its quasi-judicial function, an administrative body adjudicates the
rights of persons before it, in accordance with the standards laid down by the
law. The determination of facts and the applicable law, as basis for official
action and the exercise of judicial discretion, are essential for the
performance of this function. On these considerations, it is elementary that
due process requirements, as enumerated in Ang Tibay, must be observed.
These requirements include prior notice and hearing.
On the other hand, quasi-legislative power is exercised by
administrative agencies through the promulgation of rules and regulations
within the confines of the granting statute and the doctrine of non-delegation
of certain powers flowing from the separation of the great branches of the
government. Prior notice to and hearing of every affected party, as elements
of due process, are not required since there is no determination of past
events or facts that have to be established or ascertained. As a general rule,
prior notice and hearing are not essential to the validity of rules or
regulations promulgated to govern future conduct.”
In this case, petitioner assails certain provisions of the Omnibus Rules.
However, these rules were clearly promulgated by DFA and DOLE the exercise
of their quasi-legislative powers or the authority to promulgate rules and
regulations. Because of this, petitioner was, thus, mistaken in availing himself
of the remedy of an original action for certiorari as obviously, only judicial or
quasi-judicial acts are proper subjects thereof. If only for these, the petition
deserves outright dismissal. Be that as it may, we shall proceed to resolve the
substantive issues raised in this petition for review in order to finally remove
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the doubt over the validity of Sections 52, 53, 54, and 55 of the Omnibus
Rules.
It is now well-settled that delegation of legislative power to various
specialized administrative agencies is allowed in the face of increasing
complexity of modern life. Hence, the need to delegate to administrative
bodies, as the principal agencies tasked to execute laws with respect to their
specialized fields, the authority to promulgate rules and regulations to
implement a given statute and effectuate its policies. All that is required for
the valid exercise of this power of subordinate legislation is that the
regulation must be germane to the objects and purposes of the law; and that
the regulation be not in contradiction to, but in conformity with, the
standards prescribed by the law. Under the first test or the so-called
completeness test, the law must be complete in all its terms and conditions
when it leaves the legislature such that when it reaches the delegate, the only
thing he will have to do is to enforce it. The second test or the sufficient
standard test, mandates that there should be adequate guidelines or
limitations in the law to determine the boundaries of the delegate's authority
and prevent the delegation from running riot.
Basically, petitioner is impugning the subject provisions of the
Omnibus Rules for allegedly expanding the scope of Section 15 of Republic
Act No. 8042 by: first, imposing upon it the primary obligation to repatriate
the remains of Razon including the duty to advance the cost of the plane fare
for the transport of Razon's remains; and second, by ordering it to do so
without prior determination of the existence of employer-employee
relationship between itself and Razon.
Petitioner's argument that Section 15 does not provide that it shall be
primarily responsible for the repatriation of a deceased OFW is specious and
plain nitpicking. While Republic Act No. 8042 does not expressly state that
petitioner shall be primarily obligated to transport back here to the
Philippines the remains of Razon, nevertheless, such duty is imposed upon
him as the statute clearly dictates that "the repatriation of remains and
transport of the personal belongings of a deceased worker and all costs
attendant thereto shall be borne by the principal and/or the local agency."
The mandatory nature of said obligation is characterized by the legislature's
use of the word "shall." That the concerned government agencies opted to
demand the performance of said responsibility solely upon petitioner does
not make said directives invalid as the law plainly obliges a local placement
agency to bear the burden of repatriating the remains of a deceased OFW
with or without recourse to the principal abroad.
Nor do we see any reason to stamp Section 53 of the Omnibus Rules
as invalid for allegedly contravening Section 15 of the law which states that a
placement agency shall not be responsible for a worker's repatriation should
the termination of the employer-employee relationship be due to the fault of
the OFW. To our mind, the statute merely states the general principle that in
case the severance of the employment was because of the OFW's own
undoing, it is only fair that he or she should shoulder the costs of his or her
homecoming. Section 15 of Republic Act No. 8042, however, certainly does
not preclude a placement agency from establishing the circumstances
surrounding an OFW's dismissal from service in an appropriate proceeding.
As such determination would most likely take some time, it is only proper
that an OFW be brought back here in our country at the soonest possible
time lest he remains stranded in a foreign land during the whole time that
recruitment agency contests its liability for repatriation. As aptly pointed out
by the Solicitor General – “Such a situation is unacceptable. 24. This is the
same reason why repatriation is made by law an obligation of the agency
and/or its principal without the need of first determining the cause of the
termination of the worker's employment. Repatriation is in effect an
unconditional responsibility of the agency and/or its principal that cannot be
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delayed by an investigation of why the worker was terminated from
employment. To be left stranded in a foreign land without the financial means
to return home and being at the mercy of unscrupulous individuals is a
violation of the OFW's dignity and his human rights. These are the same
rights R.A. No. 8042 seeks to protect. “
As for the sufficiency of standard test, this Court had, in the past,
accepted as sufficient standards the following: "public interest," "justice and
equity," "public convenience and welfare," and "simplicity, economy and
welfare
b. Foreign Exchange Remittance (Art. 22)
c. Exemption from Taxes and Fees; Scholarship
d. Migrant Workers Day
e. Incentives to Professional
f. Disciplinary Actions
VI. Dispute Settlement (Art. 36-37)
1. Acuña v. CA
Facts: Petitioners are Filipino overseas workers deployed by private
respondent Join International Corporation (JIC), a licensed recruitment
agency, to its principal, 3D Pre-Color Plastic, Inc., (3D) in Taiwan, Republic of
China, under a uniformly-worded employment contract for a period of two
years. Private respondent Elizabeth Alañon is the president of Join
International Corporation.
Sometime in September 1999, petitioners filed with private
respondents applications for employment abroad. After their papers were
processed, petitioners claimed they signed a uniformly-worded employment
contract with private respondents which stipulated that they were to work as
machine operators with a monthly salary of NT$15,840.00, exclusive of
overtime, for a period of two years.
On December 9, 1999, they left for Taiwan. Upon arriving at the job
site, a factory owned by 3D, they were made to sign another contract which
stated that their salary was only NT$11,840.00. They were informed that the
dormitory which would serve as their living quarters was still under
construction. They were requested to temporarily bear with the
inconvenience but were assured that their dormitory would be completed in
a short time. Petitioners alleged that they were brought to a "small room with
a cement floor so dirty and smelling with foul odor". Forty women were
jampacked in the room and each person was given a pillow. Since the ladies'
comfort room was out of order, they had to ask permission to use the men's
comfort room. Petitioners claim they were made to work twelve hours a day,
from 8:00 p.m. to 8:00 a.m.
On December 16, 1999, due to unbearable working conditions, they
were constrained to inform management that they were leaving. They
booked a flight home, at their own expense. Before they left, they were made
to sign a written waiver. In addition, petitioners were not paid any salary for
work rendered on December 11-15, 1999. Immediately upon arrival in the
Philippines, petitioners went to private respondents' office, narrated what
happened, and demanded the return of their placement fees and plane fare.
Private respondents refused.
On December 28, 1999, private respondents offered a settlement.
Petitioner Mendez received P15,080. The next day, petitioners Acuña and
Ramones went back and received P13,640 10 and P16,200, respectively. They
claim they signed a waiver, otherwise they would not be refunded.
On January 14, 2000, petitioners Acuña and Mendez invoking Republic
Act No. 8042 filed a complaint for illegal dismissal and
non-payment/underpayment of salaries or wages, overtime pay, refund of
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transportation fare, payment of salaries/wages for 3 months, moral and
exemplary damages, and refund of placement fee before the National Labor
Relations Commission (NLRC).
Issue: Whether or not petitioners were illegally dismissed under Rep. Act No.
8042, thus entitling them to benefits plus damages.
Held: No illegal dismissal. Constructive dismissal covers the involuntary
resignation 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. Court found that petitioners did not
deny that the accommodations were not as homely as expected. Petitioners'
admitted that they were told by the principal, upon their arrival, that the
dormitory was still under construction and were requested to bear with the
temporary inconvenience and the dormitory would soon be finished.
Petitioners did not refute private respondents' assertion that they had
deployed approximately sixty other workers to their principal, and to the best
of their knowledge, no other worker assigned to the same principal has
resigned, much less, filed a case for illegal dismissal. These cited
circumstances do not reflect malice by private respondents nor do they show
the principal's intention to subject petitioners to unhealthy accommodations.
Under these facts, we cannot rule that there was constructive dismissal.
Overtime pay is granted despite petitioners lack of proof that they
actually rendered overtime work, since their employment records were in the
custody of the principal employer. It is a time-honored rule that in
controversies between a worker and his employer, doubts reasonably arising
from the evidence, or in the interpretation of agreements and writing should
be resolved in the worker's favor. private respondents are solidarily liable
with the foreign principal for the overtime pay claims of petitioners.
On the award of moral and exemplary damages, we hold that such
award lacks legal basis. Moral and exemplary damages are recoverable only
where the dismissal of an employee was attended by bad faith or fraud, or
constituted an act oppressive to labor, or was done in a manner contrary to
morals, good customs or public policy. The person claiming moral damages
must prove the existence of bad faith by clear and convincing evidence, for
the law always presumes good faith. Petitioners failed to prove bad faith,
fraud or ill motive on the part of private respondents. Moral damages cannot
be awarded.
Without the award of moral damages, there can be no award of
exemplary damages, nor attorney's fees.
Quitclaims are valid. Quitclaims executed by the employees are
commonly frowned upon as contrary to public policy and ineffective to bar
claims for the full measure of the workers' legal rights, considering the
economic disadvantage of the employee and the inevitable pressure upon
him by financial necessity. Nonetheless, the socalled "economic difficulties
and financial crises" allegedly confronting the employee is not an acceptable
ground to annul the compromise agreement unless it is accompanied by a
gross disparity between the actual claim and the amount of the settlement.
Records reveal that petitioners were not in any way deceived, coerced
or intimidated into signing a quitclaim waiver in the amounts of P13,640,
P15,080 and P16,200 respectively. Nor was there a disparity between the
amount of the quitclaim and the amount actually due the petitioners. After
conversion to Philippine pesos, the amount of the quitclaim paid to
petitioners was actually higher than the amount due them.
WHEREFORE, the petition is DISMISSED, without prejudice to the filing
of illegal recruitment complaint against the respondents pursuant to Section
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6(i) of The Migrant Workers and Overseas Filipino Act of 1995 (Rep. Act No.
8042).
2. Serrano v. Gallant Maritime
Facts: Petitioner was hired by Gallant Maritime Services, Inc. and Marlow
Navigation Co., Ltd. (respondents) under a Philippine Overseas Employment
Administration (POEA)-approved Contract of Employment with the following
terms and conditions: “Duration of contract- 12 months; Position- Chief
Officer; Basic monthly salary- US$1,400.00; Hours of work- 48.0 hours per
week; Overtime- US$700.00 per month; and Vacation leave with pay- 7.00
days per month”
On March 19, 1998, the date of his departure, petitioner was
constrained to accept a downgraded employment contract for the position of
Second Officer with a monthly salary of US$1,000.00, upon the assurance and
representation of respondents that he would be made Chief Officer by the
end of April 1998.
Respondents did not deliver on their promise to make petitioner Chief
Officer. Hence, petitioner refused to stay on as Second Officer and was
repatriated to the Philippines on May 26, 1998.
Petitioner’s employment contract was for a period of 12 months or
from March 19, 1998 up to March 19, 1999, but at the time of his repatriation
on May 26, 1998, he had served only two (2) months and seven (7) days of his
contract, leaving an unexpired portion of nine (9) months and twenty-three
(23) days.
Petitioner filed with the Labor Arbiter (LA) a Complaint against
respondents for constructive dismissal and for payment of his money claims
in the total amount of US$26,442.73.
The LA rendered a Decision dated July 15, 1999, declaring the
dismissal of petitioner illegal and awarding him monetary benefits, to wit:

WHEREFORE, premises considered, judgment is hereby rendered
declaring that the dismissal of the complainant (petitioner) by the
respondents in the above-entitled case was illegal and the respondents are
hereby ordered to pay the complainant [petitioner], jointly and severally, in
Philippine Currency, based on the rate of exchange prevailing at the time of
payment, the amount of EIGHT THOUSAND SEVEN HUNDRED SEVENTY U.S.
DOLLARS (US $8,770.00), representing the complainant’s salary for three (3)
months of the unexpired portion of the aforesaid contract of employment.
The claims of the complainant for moral and exemplary damages are
hereby DISMISSED for lack of merit.
In awarding petitioner a lump-sum salary of US$8,770.00, the LA
based his computation on the salary period of three months only — rather
than the entire unexpired portion of nine months and 23 days of petitioner’s
employment contract – applying the subject clause. However, the LA applied
the salary rate of US$2,590.00, consisting of petitioner’s “[b]asic salary,
US$1,400.00/month + US$700.00/month, fixed overtime pay, +
US$490.00/month, vacation leave pay = US$2,590.00/compensation per
month.”
Respondents appealed to the National Labor Relations Commission
(NLRC) to question the finding of the LA that petitioner was illegally
dismissed.
The NLRC modified the LA Decision and corrected the LA’s
computation of the lump-sum salary awarded to petitioner by reducing the
applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No.
8042 “does not provide for the award of overtime pay, which should be
proven to have been actually performed, and for vacation leave pay.
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Petitioner filed a Motion for Partial Reconsideration, but this time he
questioned the constitutionality of the subject clause. The NLRC denied the
motion.
Petitioner filed a Petition for Certiorari with the CA, reiterating the
constitutional challenge against the subject clause. After initially dismissing
the petition on a technicality, the CA eventually gave due course to it, as
directed by this Court in its Resolution which granted the petition for
certiorari, filed by petitioner.
The CA affirmed the NLRC ruling on the reduction of the applicable
salary rate; however, the CA skirted the constitutional issue raised by
petitioner.
His Motion for Reconsideration having been denied by the CA,
petitioner brings his cause to this Court on the following grounds:
The Court of Appeals and the labor tribunals have decided the case in
a way not in accord with applicable decision of the Supreme Court involving
similar issue of granting unto the migrant worker back wages equal to the
unexpired portion of his contract of employment instead of limiting it to
three (3) months.
Even without considering the constitutional limitations [of] Sec. 10 of
Republic Act No. 8042, the Court of Appeals gravely erred in law in excluding
from petitioner’s award the overtime pay and vacation pay provided in his
contract since under the contract they form part of his salary.
The Court now takes up the full merit of the petition mindful of the
extreme importance of the constitutional question raised therein.
The unanimous finding of the LA, NLRC and CA that the dismissal of
petitioner was illegal is not disputed. Likewise not disputed is the salary
differential of US$45.00 awarded to petitioner in all three fora.
 Applying the subject clause, the NLRC and the CA computed the lump- 3. Whether the overtime and leave pay should form part of the salary basis in
sum salary of petitioner at the monthly rate of US$1,400.00 covering the the computation of his monetary award
period of three months out of the unexpired portion of nine months and 23
days of his employment contract or a total of US$4,200.00. Held: First Issue (Does the subject clause violate Section 1, Article III of the
Impugning the constitutionality of the subject clause, petitioner Constitution, and Section 18, Article II and Section 3, Article XIII on Labor as
contends that, in addition to the US$4,200.00 awarded by the NLRC and the protected sector?) YES
CA, he is entitled to US$21,182.23 more or a total of US$25,382.23, Section 1, Article III of the Constitution guarantees: No person shall be
equivalent to his salaries for the entire nine months and 23 days left of his
deprived of life, liberty, or property without due process of law nor shall any
employment contract, computed at the monthly rate of US$2,590.00.31 person be denied the equal protection of the law.
Arguments of the Petitioner- For Antonio Serrano (petitioner), a Section 18, Article II and Section 3, Article XIII accord all members of
Filipino seafarer, the last clause in the 5th paragraph of Section 10, Republic
the labor sector, without distinction as to place of deployment, full protection
Act (R.A.) No. 8042, violates the OFWs’ constitutional rights in that it impairs
of their rights and welfare.
the terms of their contract, deprives them of equal protection and denies To Filipino workers, the rights guaranteed under the foregoing
them due process. constitutional provisions translate to economic security and parity: all
The Arguments of Respondents- Respondents contend that the monetary benefits should be equally enjoyed by workers of similar category,
constitutional issue should not be entertained, for this was belatedly while all monetary obligations should be borne by them in equal degree;
interposed by petitioner in his appeal before the CA, and not at the earliest
none should be denied the protection of the laws which is enjoyed by, or
opportunity, which was when he filed an appeal before the NLRC.40 spared the burden imposed on, others in like circumstances.
The Arguments of the Solicitor General- The Solicitor General (OSG)41 Imbued with the same sense of “obligation to afford protection to
points out that as R.A. No. 8042 took effect on July 15, 1995, its provisions
labor,” the Court in the present case also employs the standard of strict
could not have impaired petitioner’s 1998 employment contract. Rather, R.A. judicial scrutiny, for it perceives in the subject clause a suspect classification
No. 8042 having preceded petitioner’s contract, the provisions thereof are prejudicial to OFWs.
deemed part of the minimum terms of petitioner’s employment, especially Upon cursory reading, the subject clause appears facially neutral, for it
on the matter of money claims, as this was not stipulated upon by the applies to all OFWs. However, a closer examination reveals that the subject
parties. clause has a discriminatory intent against, and an invidious impact on OFWs
The subject clause does not state or imply any definitive governmental
Issue: 1. Whether Section 10 (par 5) of RA 8042 is unconstitutional purpose; and it is for that precise reason that the clause violates not just
2. Proper computation of the Lump-sum salary to be awarded to petitioner by petitioner’s right to equal protection, but also her right to substantive due
reason of his illegal dismissal process under Section 1, Article III of the Constitution.

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Second Issue- It is plain that prior to R.A. No. 8042, all OFWs, regardless of these are fixed benefits that have been stipulated into his contract. Petitioner
contract periods or the unexpired portions thereof, were treated alike in is mistaken.
terms of the computation of their monetary benefits in case of illegal The word salaries in Section 10(5) does not include overtime and
dismissal. Their claims were subjected to a uniform rule of computation: their leave pay. For seafarers like petitioner, DOLE Department Order No. 33, series
basic salaries multiplied by the entire unexpired portion of their employment 1996, provides a Standard Employment Contract of Seafarers, in which salary
contracts. is understood as the basic wage, exclusive of overtime, leave pay and other
The enactment of the subject clause in R.A. No. 8042 introduced a bonuses; whereas overtime pay is compensation for all work “performed” in
differentiated rule of computation of the money claims of illegally dismissed excess of the regular eight hours, and holiday pay is compensation for any
OFWs based on their employment periods, in the process singling out one work “performed” on designated rest days and holidays.
category whose contracts have an unexpired portion of one year or more and In the same vein, the claim for the day’s leave pay for the unexpired
subjecting them to the peculiar disadvantage of having their monetary portion of the contract is unwarranted since the same is given during the
awards limited to their salaries for 3 months or for the unexpired portion actual service of the seamen.
thereof, whichever is less, but all the while sparing the other category from
such prejudice, simply because the latter’s unexpired contracts fall short of 3. Sunit v. OSM Maritime Services, Inc.
one year.
Prior to R.A. No. 8042, a uniform system of computation of the Facts: Respondent OSM Maritime Services, Inc. (OSM), hired petitioner
monetary awards of illegally dismissed OFWs was in place. This uniform Reynaldo Sunit (Sunit) to work onboard vessel Skandi Texel as Able Body
system was applicable even to local workers with fixed-term employment. Seaman for three months with a monthly salary of $689. Deemed
The subject clause does not state or imply any definitive governmental
incorporated in the employment contract is the 2010 Philippine Overseas
purpose; and it is for that precise reason that the clause violates not just Employment Agency Standard Employment Contract (POEA-SEC) and the NIS
petitioner’s right to equal protection, but also her right to substantive dueAMOSUP CBA.
process under Section 1, Article III of the Constitution. During his employment, petitioner fell from the vessel's tank and
The subject clause being unconstitutional, petitioner is entitled to his
suffered a broken right femur. He was immediately brought to a hospital for
salaries for the entire unexpired period of nine months and 23 days of his treatment and was eventually repatriated due to medical reason. Upon his
employment contract, pursuant to law and jurisprudence prior to the arrival in Manila on October 6, 2012, he immediately underwent a post-
enactment of R.A. No. 8042. employment medical examination and treatment wherein the company-
designated physician diagnosed him to be suffering from a "Fractured, Right
Third Issue- Petitioner contends that his overtime and leave pay should form Femur; S/P Intramedullary Nailing, Right Femur." After 92 days of treatment,
part of the salary basis in the computation of his monetary award, because

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the company-designated doctor issued a Medical Report giving petitioner an
interim disability Grade of 10.
Dissatisfied with the medical report, petitioner sought the opinion of
another doctor, Dr. Venancio Garduce, who recommended a disability Grade
of 3. After further medical treatment, petitioner was assessed with a final
disability grade of 10 by the company physician of respondent OSM, Dr.
William Chuasuan, Jr.
Respondents offered disability benefit of $30,225 in accordance with
the disability Grade 10 that the company-designated doctor issued. Petitioner
refused and filed a claim for a disability benefit of $150,000.00.
During the pendency of the case with the Labor Arbiter, the parties agreed to
consult Dr. Lyndon L. Bathan for a third opinion. Dr. Bathan issued a Medical
Certificate recommending a Grade 9 disability and stated therein that
petitioner is "not yet fit to work."
The LA awarded disability benefit in the amount of $13,060. The NLRC
modified the LA's findings and awarded permanent and total disability
benefit in the amount of $150,000. The NLRC reasoned that petitioner is
considered as totally and permanently disabled since Dr. Bathan, the third
doctor, issued the Grade 9 recommendation after the lapse of the 240-day
period required for the determination of a seafarer's fitness to work or
degree of disability under the POEA-SEC.
In reversing the NLRC, the CA held that the 240-day period for
assessing the degree of disability only applies to the company-designated
doctor, and not to the third doctor. It is only upon the company-designated
doctor's failure to render a final assessment of petitioner's condition within
240 days from repatriation that he will be considered permanently and totally
disabled and, hence, entitled to maximum disability benefit. In petitioner's
case, the company-designated doctor was able to make a determination of
his disability within the 240-day period; hence, he is not considered as totally
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and permanently disabled despite the opinion of the third doctor having
been rendered after the lapse of 240 days from repatriation.
Issue: 1. Whether or not the 120/240 day period applies only to the company
designated doctor.
2. Whether or not the third doctor’s assessment is binding.
3. Whether or not petitioner is entitled to permanent and total disability
benefits.
Held: 1. The 120/240-day period in Article 192 (c)(1) and Rule X, Section 2 of
the Amended Rules on Employees’ Compensation (AREC)1 only applies to the
company-designated doctor.
The parties, however, are free to disregard the findings of the
company doctor, as well as the chosen doctor of the seafarer, in case they
cannot agree on the disability gradings issued and jointly seek the opinion of
a third-party doctor pursuant to Section 20 (A)(3) of the 2010 POEA-SEC2.
The provision clearly does not state a specific period within which the
third doctor must render his or her disability assessment. This is only
reasonable since the parties may opt to resort to a third opinion even during
the conciliation and mediation stage to abbreviate the proceedings, which
usually transpire way beyond the 120/240 day period for medical treatment.
2. The third doctor's assessment of the extent of disability must be
definite and conclusive in order to be binding between the parties.
The employer and the seafarer are bound by the disability assessment
of the third-party physician in the event that they choose to appoint one.
Nonetheless, similar to what is required of the company-designated doctor,
the appointed third-party physician must likewise arrive at a definite and
conclusive assessment of the seafarer's disability or fitness to return to work
before his or her opinion can be valid and binding between the parties.
 A final and definite disability assessment is necessary in order to truly
reflect the true extent of the sickness or injuries of the seafarer and his or her
capacity to resume work as such. Otherwise, the corresponding disability
benefits awarded might not be commensurate with the prolonged effects of
the injuries suffered.
In the case at bench, despite the disability grading that Dr. Bathan
issued, petitioner's medical condition remained unresolved. The language of
Dr. Bathan's assessment brooks no argument that no final and definitive
assessment was made concerning petitioner's disability. If it were otherwise,
Dr. Bathan would not have recommended that he undergo further
rehabilitation. Dr. Bathan's assessment of petitioner's degree of disability,
therefore, is still inconclusive and indefinite.
3. Petitioner's disability is permanent and total despite the Grade 9
partial disability that Dr. Bathan issued since his incapacity to work lasted for
more than 240 days from his repatriation.
While the Court ruled that Dr. Bathan is not bound to render his
assessment within the 120/240 day period, and that the said period is
inconsequential and has no application on the third doctor, petitioner's
disability and incapacity to resume working clearly continued for more than
240 days. Applying Article 192 (c)(1) of the Labor Code, petitioner's disability
should be considered permanent and total.
In disability compensation, it is not the injury which is compensated,
but rather it is the incapacity to work resulting in the impairment of one's
earning capacity.
Note: Below are the procedural requisites under the rules and
established jurisprudence where the parties can opt to resort to the opinion
of a third doctor: First, when a seafarer sustains a work-related illness or
injury while on board the vessel, his fitness or unfitness for work shall be
determined by the company-designated physician.; Second, if the seafarer
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disagrees with the findings of the company doctor, then he has the right to
engage the services of a doctor of his choice. If the second doctor appointed
by the seafarer disagrees with the findings of the company doctor, and the
company likewise disagrees with the findings of the second doctor, then a
third doctor may be agreed jointly between the employer and the seafarer,
whose decision shall be final and binding on both of them. It must be
emphasized that the language of the POEA-SEC is clear in that both the
seafarer and the employer must mutually agree to seek the opinion of a third
doctor. In the event of disagreement on the services of the third doctor, the
seafarer has the right to institute a complaint with the LA or NLRC.; and Third,
despite the binding effect of the third doctor's assessment, a dissatisfied
party may institute a complaint with the LA to contest the same on the
ground of evident partiality, corruption of the third doctor, fraud, other
undue means, lack of basis to support the assessment, or being contrary to
law or settled jurisprudence.
4. TSM Shipping Phils, Inc. v. Daivipskibsselsakabet Norden A/S
Facts:
Issue:
Held:
5. Seapower Shipping Ent, Inc. v. Heirs of Warren M. Sabanal
Facts: During employment, the seafarer started exhibiting unusual behavior.
When the ship captain checked on him, he responded incoherently, though it
appeared that he had problems with his brother in the Philippines. This
prompted the captain to set double guards on the seafarer. The crew The Court explained that the burden rests on the employer to prove
watching over the seafarer reported that he wanted to board a life boat,by substantial evidence that seafarer’s death was directly attributable to his
citing danger in the ship's prow. Because of the seafarer’s condition, the
deliberate or willful act. On the part of the employer, they were able to
captain relieved him of his shift and allowed him to sleep in the cabin submit the ship log entries and master's report to prove that seafarer
guarded. The following day, the captain wanted to supervise the seafarersuddenly jumped overboard the ship. However, the Court of Appeals ruled
better, so he took him on deck and assigned to him simple tasks, such asthat seafarer’s act was not a willful one because he was not in his right
correcting maps and collecting and typing the crew's declarations. The mental state when he committed the act.
captain observed that the seafarer’s condition was "rather better" and he The Court further clarified that evidence of insanity or mental sickness
"did not appear to have any problems." Later that day, seafarer requested the
may be presented to negate the requirement of willfulness as a matter of
crew-on-guard that he be allowed to return to the deck for some fresh air.
counter-defense. But the burden of evidence is then shifted to the claimant
Once on deck, the seafarer suddenly ran to the stem and jumped to the sea.
to prove that the seafarer was of unsound mind. In this case, the claimant
The ship's rescue attempts proved futile, and seafarer’s body was never merely relied on the unusual behavior of the seafarer prior to the incident to
recovered. Eventually, a claim for death benefits was filed by the heirs of the
prove that the latter was of unsound mind or insane.
seafarer. The same was denied by the company as the cause of death was The Court held that the reliance on the strange behavior of the
suicide. seafarer, as detailed by the ship captain in the ship log and master's report,
The Labor Arbiter and the NLRC both dismissed the claim as they cannot be considered as substantial evidence to prove insanity. While such
found that the seafarer committed suicide. They held that when the death of
behavior may be indicative of a possible mental disorder, it is insufficient to
the seaman resulted from his own willful act, the death is not compensable.
prove that seafarer had lost full control of his mental faculties. In order for
The Court of Appeals granted the claim and held that seafarer’s strange insanity to prosper as a counter-defense, the claimant must substantially
conduct prior to jumping off ship would show that he was not in a properprove that the seafarer suffered from complete deprivation of intelligence in
mental state and as such, his jumping off the ship cannot be considered as a
committing the act or complete absence of the power to discern the
willful act. As such, the heirs of the seafarer should be entitled to death
consequences of his action. Mere abnormality of the mental faculties does
benefits. not foreclose willfulness. In fact, the ship log shows the seafarer was still able
to correct maps and type the declarations of the crew hours before he
Issue: jumped overboard. The captain observed that seafarer did not appear to
have any problems while performing these simple tasks, while the crew-on-
Held: Upon further petition, the Supreme Court eventually held that the guard reported that seafarer did not show any signs of unrest immediately
claim should be dismissed. before the incident. These circumstances, coupled with the legal

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presumption of sanity, tend to belie the claim that seafarer no longer
exercised any control over his own senses and mental faculties.

31 of 31 mgvd – pre-employment case digest compilation – labor law B – atty. chan-gonzaga