G.R. No.
L-48494 February 5, 1990 certain agreed upon by the parties for the commencement and termination of their employment relationship,
BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE, petitioners, 
vs.
RONALDO ZAMORA, the Presidential Assistant for Legal Affairs, Office of the President, and DOROTEO R.
ALEGRE, respondents.
Quasha, Asperilla, Ancheta, Peña & Nolasco for petitioners.
Mauricio G. Domogon for respondent Alegre.
Labor Relations; Termination of Employment; R.A. 1052; Before the advent of the Labor Code, term
employment was impliedly but clearly recognized under R.A. 1052, as amended by R.A. 1787.—The
employment contract between Brent School and Alegre was executed on July 18, 1971, at a time when the
Labor Code of the Philippines (P.D. 442) had not yet been promulgated. Indeed, the Code did not come into
effect until November 1, 1974, some three years after the perfection of the employment contract, and rights
and obligations thereunder had arisen and been mutually observed and enforced. At that time, i.e., before the
advent of the Labor Code, there was no doubt whatever about the validity of term employment. It was
impliedly but nonetheless clearly recognized by the Termination Pay Law, R.A. 1052, as amended by R.A. 1787.
Basically, this statute provided that—In cases of employment, without a definite period, in a commercial,
industrial, or agricultural establishment or enterprise, the employer or the employee may terminate at any
time the employment with just cause; or without just cause in the case of an employee by serving written
notice on the employer at least one month in advance, or in the case of an employer, by serving such notice to
the employee at least one month in advance or one-half month for every year of service of the employee,
whichever is longer, a fraction of at least six months being considered as one whole year. The employer, upon
whom no such notice was served in case of termination of employment without just cause, may hold the
employee liable for damages. The employee, upon whom no such notice was served in case of termination of
employment without just cause, shall be entitled to compensation from the date of termination of his
employment in an amount equiva-
_______________
* EN BANC.
703
VOL. 181, FEBRUARY 5, 1990 703
Brent School, Inc. vs. Zamora
lent to his salaries or wages corresponding to the required period of notice. There was, to repeat, clear
albeit implied recognition of the licitness of term employment. RA 1787 also enumerated what it considered
to be just causes for terminating an employment without a definite period,either by the employer or by the
employee without incurring any liability therefor.
Same; Same; The decisive determinant in term employment is not the nature of the activities
performed by the employee, but the “day certain” agreed upon by the parties for the commencement and
termination of their employment relationship.—The question immediately provoked by a reading of Article
319 is whether or not a voluntary agreement on a fixed term or period would be valid where the employee
“has been engaged to perform activities which are usually necessary or desirable in the usual business or trade
of the employer.” The definition seems a non sequitur. From the premise—that the duties of an employee
entail “activities which are usually necessary or desirable in the usual business or trade of the employer”—the
conclusion does not necessarily follow that the employer and employee should be forbidden to stipulate any
period of time for the performance of those activities. There is nothing essentially contradictory between a
definite period of an employment contract and the nature of the employee’s duties set down in that contract
as being “usually necessary or desirable in the usual business or trade of the employer.” The concept of the
employee’s duties as being “usually necessary or desirable in the usual business or trade of the employer” is
not synonymous with or identical to employment with a fixed term. Logically, the decisive determinant in term
employment should not be the activities that the employee is called upon to perform, but the day
a day certain being understood to be “that which must necessarily come, although it may not be known
when.” Seasonalemployment, and employment for a particular project are merely instances of employment in
which a period, where not expressly set down, is necessarily implied.
Same; Same; Same; Stipulations in employment contracts providing for “term employment” or “fixed
period employment” are valid when the period where agreed upon knowingly, and voluntarily by the parties
without force, duress or improper pressure exerted on the employee; and when such stipulations were not
designed to circumvent the laws on security of tenure.—Accordingly, and since the entire purpose behind the
development of legislation culminating in the present Article 280 of the Labor Code clearly appears to have
been, as already observed, to
704
70 SUPREME COURT REPORTS ANNOTATED
4
Brent School, Inc. vs. Zamora
prevent circumvention of the employee’s right to be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of
regular employment as defined therein should be construed to refer to the substantive evil that the Code itself
has singled out: agreements entered into precisely to circumvent security of tenure. It should have no
application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by
the parties, without any force, duress or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms with no moral dominance whatever being
exercised by the former over the latter. Unless thus limited in its purview, the law would be made to apply to
purposes other than those explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its
effects and apt to lead to absurd and unintended consequences.
SARMIENTO, J., Concurring in part and dissenting in part:
Contracts; Labor Law; Employment Contracts; Employment contracts should not be likened to ordinary
civil contracts where the relationship between the parties is established by stipulations agreed upon.—I am
agreed that the Labor Code has not foresaken “term employments”, held valid in Biboso v. Victorias Milling
Company, Inc.(No. L-44360, March 31, 1977, 76 SCRA 250). That notwithstanding, I can not liken employment
contracts to ordinary civil contracts in which the relationship is established by stipulations agreed upon. Under
the very Civil Code: ART. 1700. The relations between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts are subject to the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects. x
x x x x x x x x Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor
of the safety and decent living for the laborer. The courts (or labor officials) should nevertheless be vigilant as
to whether or not the termination of the employment contract is done by reason of expiration of the period or
to cheat the employee out of office. The latter amounts to circumvention of the law.
NARVASA, J.:
The question presented by the proceedings at bar 1 is whether or not the provisions of the Labor Code, 2 as
amended,3 have anathematized "fixed period employment" or employment for a term.
The root of the controversy at bar is an employment contract in virtue of which Doroteo R. Alegre was
engaged as athletic director by Brent School, Inc. at a yearly compensation of P20,000.00. 4 The contract fixed
a specific term for its existence, five (5) years, i.e., from July 18, 1971, the date of execution of the agreement,
to July 17, 1976. Subsequent subsidiary agreements dated March 15, 1973, August 28, 1973, and September
14, 1974 reiterated the same terms and conditions, including the expiry date, as those contained in the
original contract of July 18, 1971. 5
Some three months before the expiration of the stipulated period, or more precisely on April 20,1976, Alegre
was given a copy of the report filed by Brent School with the Department of Labor advising of the termination
of his services effective on July 16, 1976. The stated ground for the termination was "completion of contract,
expiration of the definite period of employment." And a month or so later, on May 26, 1976, Alegre accepted
the amount of P3,177.71, and signed a receipt therefor containing the phrase, "in full payment of services for
the period May 16, to July 17, 1976 as full payment of contract."
However, at the investigation conducted by a Labor Conciliator of said report of termination of his services,
Alegre protested the announced termination of his employment. He argued that although his contract did
stipulate that the same would terminate on July 17, 1976, since his services were necessary and desirable in
the usual business of his employer, and his employment had lasted for five years, he had acquired the status of
a regular employee and could not be removed except for valid cause. 6 The Regional Director considered Brent
School's report as an application for clearance to terminate employment (not a report of termination), and
accepting the recommendation of the Labor Conciliator, refused to give such clearance and instead required
the reinstatement of Alegre, as a "permanent employee," to his former position without loss of seniority rights
and with full back wages. The Director pronounced "the ground relied upon by the respondent (Brent) in
terminating the services of the complainant (Alegre) . . . (as) not sanctioned by P.D. 442," and, quite oddly, as
prohibited by Circular No. 8, series of 1969, of the Bureau of Private Schools. 7
Brent School filed a motion for reconsideration. The Regional Director denied the motion and forwarded the
case to the Secretary of Labor for review. 8 The latter sustained the Regional Director. 9 Brent appealed to the
Office of the President. Again it was rebuffed. That Office dismissed its appeal for lack of merit and affirmed
the Labor Secretary's decision, ruling that Alegre was a permanent employee who could not be dismissed
except for just cause, and expiration of the employment contract was not one of the just causes provided in
the Labor Code for termination of services. 10
The School is now before this Court in a last attempt at vindication. That it will get here.
The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time when
the Labor Code of the Philippines (P.D. 442) had not yet been promulgated. Indeed, the Code did not come
into effect until November 1, 1974, some three years after the perfection of the employment contract, and
rights and obligations thereunder had arisen and been mutually observed and enforced.
At that time, i.e., before the advent of the Labor Code, there was no doubt whatever about the validity of term
employment. It was impliedly but nonetheless clearly recognized by the Termination Pay Law, R.A. 1052, 11 as
amended by R.A. 1787. 12 Basically, this statute provided that—
In cases of employment, without a definite period, in a commercial, industrial, or
agricultural establishment or enterprise, the employer or the employee may terminate
at any time the employment with just cause; or without just cause in the case of an
employee by serving written notice on the employer at least one month in advance, or
in the case of an employer, by serving such notice to the employee at least one month
in advance or one-half month for every year of service of the employee, whichever is
longer, a fraction of at least six months being considered as one whole year.
The employer, upon whom no such notice was served in case of termination of
employment without just cause, may hold the employee liable for damages.
The employee, upon whom no such notice was served in case of termination of
employment without just cause, shall be entitled to compensation from the date of
termination of his employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice.
There was, to repeat, clear albeit implied recognition of the licitness of term employment. RA 1787 also
enumerated what it considered to be just causes for terminating an employment without a definite period,
either by the employer or by the employee without incurring any liability therefor.
Prior, thereto, it was the Code of Commerce which governed employment without a fixed period, and also
implicitly acknowledged the propriety of employment with a fixed period. Its Article 302 provided that —
In cases in which the contract of employment does not have a fixed period, any of the
parties may terminate it, notifying the other thereof one month in advance.
The factor or shop clerk shall have a right, in this case, to the salary corresponding to
said month.
The salary for the month directed to be given by the said Article 302 of the Code of Commerce to
the factor or shop clerk, was known as the mesada (from mes, Spanish for "month"). When Article
302 (together with many other provisions of the Code of Commerce) was repealed by the Civil
Code of the Philippines, Republic Act No. 1052 was enacted avowedly for the precise purpose of
reinstating the mesada.
Now, the Civil Code of the Philippines, which was approved on June 18, 1949 and became effective on August
30,1950, itself deals with obligations with a period in section 2, Chapter 3, Title I, Book IV; and with contracts
of labor and for a piece of work, in Sections 2 and 3, Chapter 3, Title VIII, respectively, of Book IV. No
prohibition against term-or fixed-period employment is contained in any of its articles or is otherwise
deducible therefrom.
It is plain then that when the employment contract was signed between Brent School and Alegre on July 18,
1971, it was perfectly legitimate for them to include in it a stipulation fixing the duration thereof Stipulations
for a term were explicitly recognized as valid by this Court, for instance, in Biboso v. Victorias Milling Co., Inc.,
promulgated on March 31, 1977, 13 and J. Walter Thompson Co. (Phil.) v. NLRC, promulgated on December 29,
1983. 14 The Thompson case involved an executive who had been engaged for a fixed period of three (3)
years. Biboso involved teachers in a private school as regards whom, the following pronouncement was made:
What is decisive is that petitioners (teachers) were well aware an the time that their
tenure was for a limited duration. Upon its termination, both parties to the employment
relationship were free to renew it or to let it lapse. (p. 254)
Under American law 15 the principle is the same. "Where a contract specifies the period of its duration, it
terminates on the expiration of such period." 16 "A contract of employment for a definite period terminates by
its own terms at the end of such period." 17
The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor Code
(Presidential Decree No. 442), which went into effect on November 1, 1974. The Code contained explicit
references to fixed period employment, or employment with a fixed or definite period. Nevertheless,
obscuration of the principle of licitness of term employment began to take place at about this time
Article 320, entitled "Probationary and fixed period employment," originally stated that the "termination of
employment of probationary employees and those employed WITH A FIXED PERIOD shall be subject to such
regulations as the Secretary of Labor may prescribe." The asserted objective to was "prevent the
circumvention of the right of the employee to be secured in their employment as provided . . . (in the Code)."
Article 321 prescribed the just causes for which an employer could terminate "an employment without a
definite period."
And Article 319 undertook to define "employment without a fixed period" in the following manner: 18
An employment shall be deemed to be without a definite period for purposes of this
Chapter where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except where the
employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the
employee or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.
The question immediately provoked by a reading of Article 319 is whether or not a voluntary agreement on a
fixed term or period would be valid where the employee "has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer." The definition seems a non
sequitur. From the premise — that the duties of an employee entail "activities which are usually necessary or
desirable in the usual business or trade of the employer the" — conclusion does not necessarily follow that
the employer and employee should be forbidden to stipulate any period of time for the performance of those
activities. There is nothing essentially contradictory between a definite period of an employment contract and
the nature of the employee's duties set down in that contract as being "usually necessary or desirable in the
usual business or trade of the employer." The concept of the employee's duties as being "usually necessary or
desirable in the usual business or trade of the employer" is not synonymous with or identical to employment
with a fixed term. Logically, the decisive determinant in term employment should not be the activities that the
employee is called upon to perform, but the day certain agreed upon by the parties for the commencement
and termination of their employment relationship, a day certain being understood to be "that which must
necessarily come, although it may not be known when." 19Seasonal employment, and employment for a
particular project are merely instances employment in which a period, where not expressly set down,
necessarily implied.
Of course, the term — period has a definite and settled signification. It means, "Length of existence; duration.
A point of time marking a termination as of a cause or an activity; an end, a limit, a bound; conclusion;
termination. A series of years, months or days in which something is completed. A time of definite length. . . .
the period from one fixed date to another fixed date . . ." 20 It connotes a "space of time which has an
influence on an obligation as a result of a juridical act, and either suspends its demandableness or produces its
extinguishment." 21 It should be apparent that this settled and familiar notion of a period, in the context of a
contract of employment, takes no account at all of the nature of the duties of the employee; it has absolutely
no relevance to the character of his duties as being "usually necessary or desirable to the usual business of the
employer," or not.
Subsequently, the foregoing articles regarding employment with "a definite period" and "regular"
employment were amended by Presidential Decree No. 850, effective December 16, 1975.
Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating the
reference to persons "employed with a fixed period," and was renumbered (becoming Article 271). The
article 22 now reads:
. . . Probationary employment.—Probationary employment shall not exceed six months
from the date the employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employee who has been
engaged in a probationary basis may be terminated for a just cause or when he fails to
qualify as a regular employee in accordance with reasonable standards made known by
the employer to the employee at the time of his engagement. An employee who is
allowed to work after a probationary period shall be considered a regular employee.
Also amended by PD 850 was Article 319 (entitled "Employment with a fixed period," supra) by
(a) deleting mention of employment with a fixed or definite period, (b) adding a general exclusion clause
declaring irrelevant written or oral agreements "to the contrary," and (c) making the provision treat
exclusively of "regular" and "casual" employment. As revised, said article, renumbered 270, 23 now reads:
. . . Regular and Casual Employment.—The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade
of the employer except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or service to be employed is
seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to he casual if it is not covered by the preceding
paragraph: provided,that, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee
with respect to the activity in which he is employed and his employment shall continue
while such actually exists.
The first paragraph is identical to Article 319 except that, as just mentioned, a clause has been
added, to wit: "The provisions of written agreement to the contrary notwithstanding and regardless
of the oral agreements of the parties . . ." The clause would appear to be addressed inter alia to
agreements fixing a definite period for employment. There is withal no clear indication of the intent
to deny validity to employment for a definite period. Indeed, not only is the concept of regular
employment not essentially inconsistent with employment for a fixed term, as above pointed
out, Article 272 of the Labor Code, as amended by said PD 850, still impliedly acknowledged the
propriety of term employment: it listed the "just causes" for which "an employer may
terminate employment without a definite period," thus giving rise to the inference that if the
employment be with a definite period, there need be no just cause for termination thereof if the
ground be precisely the expiration of the term agreed upon by the parties for the duration of such
employment.
Still later, however, said Article 272 (formerly Article 321) was further amended by Batas Pambansa
Bilang 130, 24 to eliminate altogether reference to employment without a definite period. As lastly amended,
the opening lines of the article (renumbered 283), now pertinently read: "An employer may terminate an
employment for any of the following just causes: . . . " BP 130 thus completed the elimination of every
reference in the Labor Code, express or implied, to employment with a fixed or definite period or term.
It is in the light of the foregoing description of the development of the provisions of the Labor Code bearing on
term or fixed-period employment that the question posed in the opening paragraph of this opinion should
now be addressed. Is it then the legislative intention to outlaw stipulations in employment contracts laying
down a definite period therefor? Are such stipulations in essence contrary to public policy and should not on
this account be accorded legitimacy?
On the one hand, there is the gradual and progressive elimination of references to term or fixed-period
employment in the Labor Code, and the specific statement of the rule 25 that—
. . . Regular and Casual Employment.— The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade
of the employer except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or service to be employed is
seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: provided,that, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee
 with respect to the activity in which he is employed and his employment shall continue
while such actually exists.
There is, on the other hand, the Civil Code, which has always recognized, and continues to recognize, the
validity and propriety of contracts and obligations with a fixed or definite period, and imposes no restraints on
the freedom of the parties to fix the duration of a contract, whatever its object, be it specie, goods or services,
except the general admonition against stipulations contrary to law, morals, good customs, public order or
public policy. 26 Under the Civil Code, therefore, and as a general proposition, fixed-term employment
contracts are not limited, as they are under the present Labor Code, to those by nature seasonal or for specific
projects with pre-determined dates of completion; they also include those to which the parties by free choice
have assigned a specific date of termination.
Some familiar examples may be cited of employment contracts which may be neither for seasonal work nor
for specific projects, but to which a fixed term is an essential and natural appurtenance: overseas employment
contracts, for one, to which, whatever the nature of the engagement, the concept of regular employment will
all that it implies does not appear ever to have been applied, Article 280 of the Labor Code not withstanding;
also appointments to the positions of dean, assistant dean, college secretary, principal, and other
administrative offices in educational institutions, which are by practice or tradition rotated among the faculty
members, and where fixed terms are a necessity, without which no reasonable rotation would be possible.
Similarly, despite the provisions of Article 280, Policy, Instructions No. 8 of the Minister of Labor 27 implicitly
recognize that certain company officials may be elected for what would amount to fixed periods, at the
expiration of which they would have to stand down, in providing that these officials," . . . may lose their jobs as
president, executive vice-president or vice-president, etc. because the stockholders or the board of directors
for one reason or another did not re-elect them."
There can of course be no quarrel with the proposition that where from the circumstances it is apparent that
periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck
down or disregarded as contrary to public policy, morals, etc. But where no such intent to circumvent the law
is shown, or stated otherwise, where the reason for the law does not exist, e.g., where it is indeed the
employee himself who insists upon a period or where the nature of the engagement is such that, without
being seasonal or for a specific project, a definite date of termination is a sine qua non, would an agreement
fixing a period be essentially evil or illicit, therefore anathema? Would such an agreement come within the
scope of Article 280 which admittedly was enacted "to prevent the circumvention of the right of the employee
to be secured in . . . (his) employment?"
As it is evident from even only the three examples already given that Article 280 of the Labor Code, under a
narrow and literal interpretation, not only fails to exhaust the gamut of employment contracts to which the
lack of a fixed period would be an anomaly, but would also appear to restrict, without reasonable distinctions,
the right of an employee to freely stipulate with his employer the duration of his engagement, it logically
follows that such a literal interpretation should be eschewed or avoided. The law must be given a reasonable
interpretation, to preclude absurdity in its application. Outlawing the whole concept of term employment and
subverting to boot the principle of freedom of contract to remedy the evil of employer's using it as a means to
prevent their employees from obtaining security of tenure is like cutting off the nose to spite the face or, more
relevantly, curing a headache by lopping off the head.
It is a salutary principle in statutory construction that there exists a valid presumption
that undesirable consequences were never intended by a legislative measure, and that a
construction of which the statute is fairly susceptible is favored, which will avoid all
objecionable mischievous, undefensible, wrongful, evil and injurious consequences. 28
Nothing is better settled than that courts are not to give words a meaning which would
lead to absurd or unreasonable consequences. That s a principle that does back to In re
Allen decided oil October 27, 1903, where it was held that a literal interpretation is to be
rejected if it would be unjust or lead to absurd results. That is a strong argument against
its adoption. The words of Justice Laurel are particularly apt. Thus: "The fact that the
construction placed upon the statute by the appellants would lead to an absurdity is
another argument for rejecting it. . . ." 29
. . . We have, here, then a case where the true intent of the law is clear that calls for the
application of the cardinal rule of statutory construction that such intent of spirit must
prevail over the letter thereof, for whatever is within the spirit of a statute is within the
statute, since adherence to the letter would result in absurdity, injustice and
contradictions and would defeat the plain and vital purpose of the statute. 30
Accordingly, and since the entire purpose behind the development of legislation culminating in the present
Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent circumvention of
the employee's right to be secure in his tenure, the clause in said article indiscriminately and completely ruling
out all written or oral agreements conflicting with the concept of regular employment as defined therein
should be construed to refer to the substantive evil that the Code itself has singled out: agreements entered
into precisely to circumvent security of tenure. It should have no application to instances where a fixed period
of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or
improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his
consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or
less equal terms with no moral dominance whatever being exercised by the former over the latter. Unless thus
limited in its purview, the law would be made to apply to purposes other than those explicitly stated by its
framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended
consequences.
Such interpretation puts the seal on Bibiso 31 upon the effect of the expiry of an agreed period of employment
as still good rule—a rule reaffirmed in the recent case of Escudero vs. Office of the President (G.R. No. 57822,
April 26, 1989) where, in the fairly analogous case of a teacher being served by her school a notice of
termination following the expiration of the last of three successive fixed-term employment contracts, the
Court held:
Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her
employment was probationary, contractual in nature, and one with a definitive period.
At the expiration of the period stipulated in the contract, her appointment was deemed
terminated and the letter informing her of the non-renewal of her contract is not a
condition sine qua non before Reyes may be deemed to have ceased in the employ of
petitioner UST. The notice is a mere reminder that Reyes' contract of employment was
due to expire and that the contract would no longer be renewed. It is not a letter of
termination. The interpretation that the notice is only a reminder is consistent with the
court's finding in Labajo supra. ...32
Paraphrasing Escudero, respondent Alegre's employment was terminated upon the expiration of his last
contract with Brent School on July 16, 1976 without the necessity of any notice. The advance written advice
given the Department of Labor with copy to said petitioner was a mere reminder of the impending expiration
of his contract, not a letter of termination, nor an application for clearance to terminate which needed the
approval of the Department of Labor to make the termination of his services effective. In any case, such
clearance should properly have been given, not denied.
WHEREFORE, the public respondent's Decision complained of is REVERSED and SET ASIDE. Respondent
Alegre's contract of employment with Brent School having lawfully terminated with and by reason of the
expiration of the agreed term of period thereof, he is declared not entitled to reinstatement and the other
relief awarded and confirmed on appeal in the proceedings below. No pronouncement as to costs.
SO ORDERED.
Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortés, Griño-Aquino,
Medialdea and Regalado, JJ., concur.
Fernan, C.J., took no part. The courts (or labor officials) should nevertheless be vigilant as to whether or not the termination of the
employment contract is done by reason of expiration of the period or to cheat the employee out of office. The
latter amounts to circumvention of the law.
 Separate Opinions

SARMIENTO, J., concurring and dissenting:

I am agreed that the Labor Code has not foresaken "term employments", held valid in Biboso V. Victorias
Milling Company, Inc. (No. L-44360, March 31, 1977, 76 SCRA 250). That notwithstanding, I can not liken
employment contracts to ordinary civil contracts in which the relationship is established by stipulations agreed
upon. Under the very Civil Code:

Art. 1700. The relations between capital and labor are not merely contractual. They are
so impressed with public interest that labor contracts are subject to the special laws on
labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.

x x x           x x x          x x x

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed
in favor of the safety and decent living for the laborer.

The courts (or labor officials) should nevertheless be vigilant as to whether or not the termination of the
employment contract is done by reason of expiration of the period or to cheat the employee out of office. The
latter amounts to circumvention of the law.

Separate Opinions

SARMIENTO, J., concurring and dissenting:

I am agreed that the Labor Code has not foresaken "term employments", held valid in Biboso V. Victorias
Milling Company, Inc. (No. L-44360, March 31, 1977, 76 SCRA 250). That notwithstanding, I can not liken
employment contracts to ordinary civil contracts in which the relationship is established by stipulations agreed
upon. Under the very Civil Code:

Art. 1700. The relations between capital and labor are not merely contractual. They are
so impressed with public interest that labor contracts are subject to the special laws on
labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.

x x x           x x x          x x x

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed
in favor of the safety and decent living for the laborer.
CHERRY J. PRICE, STEPHANIE G. DOMINGO AND   G.R. No. 178505
LOLITA ARBILERA, Petitioners,
Present:
- versus -
YNARES-SANTIAGO, J.,
INNODATA PHILS. INC.,/ INNODATA CORPORATION, Chairperson,
LEO RABANG AND JANE NAVARETTE, Respondents.
AUSTRIA-MARTINEZ,  employment in which a period, where not expressly set down, is necessarily implied.271
CHICO-NAZARIO,
NACHURA, and 
REYES, JJ.
Promulgated:
September 30, 2008
x------------------------------------------------x
DECISION
Labor Law; Regular Employees; Fixed-Term Employment; The employment status of a person is defined
and prescribed by law and not by what the parties say it should be.—After a painstaking review of the
arguments and evidences of the parties, the Court finds merit in the present Petition. There were no valid
fixed-term contracts and petitioners were regular employees of the INNODATA who could not be dismissed
except for just or authorized cause. The employment status of a person is defined and prescribed by law and
not by what the parties say it should be. Equally important to consider is that a contract of employment is
impressed with public interest such that labor contracts must yield to the common good. Thus, provisions of
applicable statutes are deemed written into the contract, and the parties are not at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations by simply contracting with
each other.
Same; Same; Same; The applicable test to determine whether an employment should be considered regular or
non-regular is the
_______________
* THIRD DIVISION.
270
27 SUPREME COURT REPORTS ANNOTATED
0 Same; Same; Same; Project Employees; Words and Phrases; “Project employees” are those workers
Price vs. Innodata Phils., Inc.
reasonable connection between the particular activity performed by the employee in relation to the usual
business or trade of the employer.—Under Article 280 of the Labor Code, the applicable test to determine
whether an employment should be considered regular or non-regular is the reasonable connection between
the particular activity performed by the employee in relation to the usual business or trade of the employer. In
the case at bar, petitioners were employed by INNODATA on 17 February 1999 as formatters. The primary
business of INNODATA is data encoding, and the formatting of the data entered into the computers is an
essential part of the process of data encoding. Formatting organizes the data encoded, making it easier to
understand for the clients and/or the intended end users thereof. Undeniably, the work performed by
petitioners was necessary or desirable in the business or trade of INNODATA.
Same; Same; Same; Under the Civil Code, fixed-term employment contracts are not limited, as they are
under the present Labor Code, to those by nature seasonal or for specific projects with predetermined dates of
completion; they also include those to which the parties by free choice have assigned a specific date of
termination—the decisive determinant in term employment is the day certain agreed upon by the parties for
the commencement and termination of their employment relationship, a day certain being understood to be
that which must necessarily come, although it may not be known when.—It is also true that while certain
forms of employment require the performance of usual or desirable functions and exceed one year, these do
not necessarily result in regular employment under Article 280 of the Labor Code. Under the Civil Code, fixed-
term employment contracts are not limited, as they are under the present Labor Code, to those by nature
seasonal or for specific projects with predetermined dates of completion; they also include those to which the
parties by free choice have assigned a specific date of termination. The decisive determinant in term
employment is the day certain agreed upon by the parties for the commencement and termination of their
employment relationship, a day certain being understood to be that which must necessarily come, although it
may not be known when. Seasonal employment and employment for a particular project are instances of
VOL. 567, SEPTEMBER 30, 2008 271
Price vs. Innodata Phils., Inc.
Same; Same; Same; Fixed-term employment contracts are the exception rather than the general rule. —
While this Court has recognized the validity of fixed-term employment contracts, it has consistently held that
this is the exception rather than the general rule. More importantly, a fixed-term employment is valid only
under certain circumstances. In Brent, the very same case invoked by respondents, the Court identified several
circumstances wherein a fixed-term is an essential and natural appurtenance, to wit: Some familiar examples
may be cited of employment contracts which may be neither for seasonal work nor for specific projects, but to
which a fixed term is an essential and natural appurtenance: overseas employment contracts, for one, to
which, whatever the nature of the engagement, the concept of regular employment with all that it implies
does not appear ever to have been applied, Article 280 of the Labor Code notwithstanding; also appointments
to the positions of dean, assistant dean, college secretary, principal, and other administrative offices in
educational institutions, which are by practice or tradition rotated among the faculty members, and where
fixed terms are a necessity without which no reasonable rotation would be possible. Similarly, despite the
provisions of Article 280, Policy Instructions No. 8 of the Minister of Labor implicitly recognize that certain
company officials may be elected for what would amount to fixed periods, at the expiration of which they
would have to stand down, in providing that these officials, “x x may lose their jobs as president, executive
vice-president or vice president, etc. because the stockholders or the board of directors for one reason or
another did not reelect them.”
Same; Same; Same; Contracts of Adhesion; Where a contract of employment, being a contract of
adhesion, is ambiguous, any ambiguity therein should be construed strictly against the party who prepared it.
—Even assuming that petitioners’ length of employment is material, given respondents’ muddled assertions,
this Court adheres to its pronouncement in Villanueva v. National Labor Relations Commission, 295 SCRA 326
(1998), to the effect that where a contract of employment, being a contract of adhesion, is ambiguous, any
ambiguity therein should be construed strictly against the party who prepared it. The Court is, thus, compelled
to conclude that petitioners’ contracts of employment became effective on 16 February 1999, and that they
were already working continuously for INNODATA for a year.272
27 SUPREME COURT REPORTS ANNOTATED
2
Price vs. Innodata Phils., Inc.
hired (1) for a specific project or undertaking, and wherein (2) the completion or termination of such project
has been determined at the time of the engagement of the employee.—Further attempting to exonerate itself
from any liability for illegal dismissal, INNODATA contends that petitioners were project employees whose
employment ceased at the end of a specific project or undertaking. This contention is specious and devoid of
merit. In Philex Mining Corp. v. National Labor Relations Commission, 312 SCRA 119 (1999), the Court defined
“project employees” as those workers hired (1) for a specific project or undertaking, and wherein (2) the
completion or termination of such project has been determined at the time of the engagement of the
employee.
Same; It is the policy of the State to assure the workers of security of tenure and free them from the
bondage of uncertainty of tenure woven by some employers into their contracts of employment.—Under
Section 3, Article XVI of the Constitution, it is the policy of the State to assure the workers of security of tenure
and free them from the bondage of uncertainty of tenure woven by some employers into their contracts of
employment. This was exactly the purpose of the legislators in drafting Article 280 of the Labor Code—to
prevent the circumvention by unscrupulous employers of the employee’s right to be secure in his tenure by
indiscriminately and completely ruling out all written and oral agreements inconsistent with the concept of
regular employment.
 Same; Corporation Law; Unless they have exceeded their authority, corporate officers are, as a general
rule, not personally liable for their official acts, because a corporation, by legal fiction, has a personality
separate and distinct from its officers, stockholders and members.—Unless they have exceeded their authority,
corporate officers are, as a general rule, not personally liable for their official acts, because a corporation, by
legal fiction, has a personality separate and distinct from its officers, stockholders and members. Although as
an exception, corporate directors and officers are solidarily held liable with the corporation, where
terminations of employment are done with malice or in bad faith, in the absence of evidence that they acted
with malice or bad faith herein, the Court exempts the individual respondents, Leo Rabang and Jane
Navarette, from any personal liability for the illegal dismissal of petitioners.
xxxx
TERMINATION
6.1 In the event that EMPLOYER shall discontinue operating its business, this CONTRACT shall also ipso facto
terminate on the last day of the month on which the EMPLOYER ceases operations with the same force and
effect as is such last day of the month were originally set as the termination date of this Contract. Further
should the Company have no more need for the EMPLOYEE’s services on account of completion of the project,
lack of work (sic) business losses, introduction of new production processes and techniques, which will negate
the need for personnel, and/or overstaffing, this contract maybe pre-terminated by the EMPLOYER upon
giving of three (3) days notice to the employee.

CHICO-NAZARIO, J.:
6.2 In the event period stipulated in item 1.2 occurs first vis-à-vis the completion of the project, this contract
shall automatically terminate.
This Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the Decision 1 dated 25
September 2006 and Resolution2 dated 15 June 2007 of the Court of Appeals in CA-G.R. SP No. 72795, which
6.3 COMPANY’s Policy on monthly productivity shall also apply to the EMPLOYEE.
affirmed the Decision dated 14 December 2001 of the National Labor Relations Commission (NLRC) in NLRC
NCR Case No. 30-03-01274-2000 finding that petitioners were not illegally dismissed by respondents.
6.4 The EMPLOYEE or the EMPLOYER may pre-terminate this CONTRACT, with or without cause, by giving at
least Fifteen – (15) notice to that effect. Provided, that such pre-termination shall be effective only upon
The factual antecedents of the case are as follows:
issuance of the appropriate clearance in favor of the said EMPLOYEE.

Respondent Innodata Philippines, Inc./Innodata Corporation (INNODATA) was a domestic corporation engaged
6.5 Either of the parties may terminate this Contract by reason of the breach or violation of the terms and
in the data encoding and data conversion business. It employed encoders, indexers, formatters, programmers,
conditions hereof by giving at least Fifteen (15) days written notice. Termination with cause under this
quality/quantity staff, and others, to maintain its business and accomplish the job orders of its clients.
paragraph shall be effective without need of judicial action or approval.4
Respondent Leo Rabang was its Human Resources and Development (HRAD) Manager, while respondent Jane
Navarette was its Project Manager. INNODATA had since ceased operations due to business losses in June
2002. During their employment as formatters, petitioners were assigned to handle jobs for various clients of
INNODATA, among which were CAS, Retro, Meridian, Adobe, Netlib, PSM, and Earthweb. Once they finished
the job for one client, they were immediately assigned to do a new job for another client.
Petitioners Cherry J. Price, Stephanie G. Domingo, and Lolita Arbilera were employed as formatters by
INNODATA. The parties executed an employment contract denominated as a "Contract of Employment for a
Fixed Period," stipulating that the contract shall be for a period of one year,3 to wit: On 16 February 2000, the HRAD Manager of INNODATA wrote petitioners informing them of their last day of
work. The letter reads:
CONTRACT OF EMPLOYMENT FOR A FIXED PERIOD
RE: End of Contract
xxxx
Date: February 16, 2000
WITNESSETH: That
Please be informed that your employment ceases effective at the end of the close of business hours on
February 16, 2000.5
WHEREAS, the EMPLOYEE has applied for the position of FORMATTER and in the course thereof and
represented himself/herself to be fully qualified and skilled for the said position;
According to INNODATA, petitioners’ employment already ceased due to the end of their contract.
WHEREAS, the EMPLOYER, by reason of the aforesaid representations, is desirous of engaging that the (sic)
services of the EMPLOYEE for a fixed period; On 22 May 2000, petitioners filed a Complaint6 for illegal dismissal and damages against respondents.
Petitioners claimed that they should be considered regular employees since their positions as formatters were
necessary and desirable to the usual business of INNODATA as an encoding, conversion and data processing
NOW, THEREFORE, for and in consideration of the foregoing premises, the parties have mutually agreed as
company. Petitioners also averred that the decisions in Villanueva v. National Labor Relations
follows:
Commission7 and Servidad v. National Labor Relations Commission, 8 in which the Court already purportedly
ruled "that the nature of employment at Innodata Phils., Inc. is regular,"9 constituted stare decisis to the
TERM/DURATION present case. Petitioners finally argued that they could not be considered project employees considering that
their employment was not coterminous with any project or undertaking, the termination of which was
predetermined.
The EMPLOYER hereby employs, engages and hires the EMPLOYEE and the EMPLOYEE hereby accepts such
appointment as FORMATTER effective FEB. 16, 1999 to FEB. 16, 2000 a period of ONE YEAR.
On the other hand, respondents explained that INNODATA was engaged in the business of data processing,
typesetting, indexing, and abstracting for its foreign clients. The bulk of the work was data processing, which
involved data encoding. Data encoding, or the typing of data into the computer, included pre-encoding,
encoding 1 and 2, editing, proofreading, and scanning. Almost half of the employees of INNODATA did data
encoding work, while the other half monitored quality control. Due to the wide range of services rendered to
its clients, INNODATA was constrained to hire new employees for a fixed period of not more than one year.
Respondents asserted that petitioners were not illegally dismissed, for their employment was terminated due
to the expiration of their terms of employment. Petitioners’ contracts of employment with INNODATA were
for a limited period only, commencing on 6 September 1999 and ending on 16 February 2000. 10 Respondents
further argued that petitioners were estopped from asserting a position contrary to the contracts which they
had knowingly, voluntarily, and willfully agreed to or entered into. There being no illegal dismissal,
respondents likewise maintained that petitioners were not entitled to reinstatement and backwages.
11 12
On 17 October 2000, the Labor Arbiter  issued its Decision  finding petitioners’ complaint for illegal dismissal
and damages meritorious. The Labor Arbiter held that as formatters, petitioners occupied jobs that were
necessary, desirable, and indispensable to the data processing and encoding business of INNODATA. By the
very nature of their work as formatters, petitioners should be considered regular employees of INNODATA,
who were entitled to security of tenure. Thus, their termination for no just or authorized cause was illegal. In
the end, the Labor Arbiter decreed:
FOREGOING PREMISES CONSIDERED, judgment is hereby rendered declaring complainants’ dismissal illegal
and ordering respondent INNODATA PHILS. INC./INNODATA CORPORATION to reinstate them to their former
or equivalent position without loss of seniority rights and benefits. Respondent company is further ordered to
pay complainants their full backwages plus ten percent (10%) of the totality thereof as attorney’s fees. The
monetary awards due the complainants as of the date of this decision are as follows:
A. Backwages
1. Cherry J. Price
2/17/2000 – 10/17/2000 at 223.50/day
P5,811.00/mo/ x 8 mos. P46,488.00
2. Stephanie Domingo 46,488.00
(same computation)
3. Lolita Arbilera 46,488.00
(same computation)
Total Backwages P139,464.00
B. Attorney’s fees (10% of total award) 13,946.40
Total Award P153,410.40
Respondent INNODATA appealed the Labor Arbiter’s Decision to the NLRC. The NLRC, in its Decision dated 14
December 2001, reversed the Labor Arbiter’s Decision dated 17 October 2000, and absolved INNODATA of the
charge of illegal dismissal.
The NLRC found that petitioners were not regular employees, but were fixed-term employees as stipulated in
their respective contracts of employment. The NLRC applied Brent School, Inc. v. Zamora 13 and St. Theresa’s
School of Novaliches Foundation v. National Labor Relations Commission, 14 in which this Court upheld the
validity of fixed-term contracts. The determining factor of such contracts is not the duty of the employee but
the day certain agreed upon by the parties for the commencement and termination of the employment
relationship. The NLRC observed that the petitioners freely and voluntarily entered into the fixed-term
employment contracts with INNODATA. Hence, INNODATA was not guilty of illegal dismissal when it
terminated petitioners’ employment upon the expiration of their contracts on 16 February 2000.
The dispositive portion of the NLRC Decision thus reads:
WHEREFORE, premises considered, the decision appealed from is hereby REVERSED and SET ASIDE and a new
one entered DISMISSING the instant complaint for lack of merit.15
The NLRC denied petitioners’ Motion for Reconsideration in a Resolution dated 28 June 2002.16
In a Petition for Certiorari under Rule 65 of the Rules of Court filed before the Court of Appeals, petitioners
prayed for the annulment, reversal, modification, or setting aside of the Decision dated 14 December 2001
and Resolution dated 28 June 2002 of the NLRC.lawphil.net
On 25 September 2006, the Court of Appeals promulgated its Decision sustaining the ruling of the NLRC that
petitioners were not illegally dismissed.
The Court of Appeals ratiocinated that although this Court declared in Villanueva and Servidad that the
employees of INNODATA working as data encoders and abstractors were regular, and not contractual,
petitioners admitted entering into contracts of employment with INNODATA for a term of only one year and
for a project called Earthweb. According to the Court of Appeals, there was no showing that petitioners
entered into the fixed-term contracts unknowingly and involuntarily, or because INNODATA applied force,
duress or improper pressure on them. The appellate court also observed that INNODATA and petitioners dealt
with each other on more or less equal terms, with no moral dominance exercised by the former on latter.
Petitioners were therefore bound by the stipulations in their contracts terminating their employment after the
lapse of the fixed term.
The Court of Appeals further expounded that in fixed-term contracts, the stipulated period of employment is
governing and not the nature thereof. Consequently, even though petitioners were performing functions that
are necessary or desirable in the usual business or trade of the employer, petitioners did not become regular
employees because their employment was for a fixed term, which began on 16 February 1999 and was
predetermined to end on 16 February 2000.
The appellate court concluded that the periods in petitioners’ contracts of employment were not imposed to
preclude petitioners from acquiring security of tenure; and, applying the ruling of this Court in Brent, declared
that petitioners’ fixed-term employment contracts were valid. INNODATA did not commit illegal dismissal for
terminating petitioners’ employment upon the expiration of their contracts.
The Court of Appeals adjudged:
WHEREFORE, the instant petition is hereby DENIED and the Resolution dated December 14, 2001 of the
National Labor Relations Commission declaring petitioners were not illegally dismissed is AFFIRMED.17
The petitioners filed a Motion for Reconsideration of the afore-mentioned Decision of the Court of Appeals,
which was denied by the same court in a Resolution dated 15 June 2007.
Petitioners are now before this Court via the present Petition for Review on Certiorari, based on the following
assignment of errors:
I.
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW AND GRAVE ABUSE OF
DISCRETION WHEN IT DID NOT APPLY THE SUPREME COURT RULING IN THE CASE OF NATIVIDAD &
QUEJADA THAT THE NATURE OF EMPLOYMENT OF RESPONDENTS IS REGULAR NOT FIXED, AND AS
SO RULED IN AT LEAST TWO OTHER CASES AGAINST INNODATA PHILS. INC.
II.
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW IN RULING THAT THE
STIPULATION OF CONTRACT IS GOVERNING AND NOT THE NATURE OF EMPLOYMENT AS DEFINED
BY LAW.
III.
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION WHEN IT DID NOT CONSIDER THE EVIDENCE ON RECORD SHOWING THAT
THERE IS CLEAR CIRCUMVENTION OF THE LAW ON SECURITY OF TENURE THROUGH CONTRACT
MANIPULATION.18
The issue of whether petitioners were illegally dismissed by respondents is ultimately dependent on the
question of whether petitioners were hired by INNODATA under valid fixed-term employment contracts.
After a painstaking review of the arguments and evidences of the parties, the Court finds merit in the present
Petition. There were no valid fixed-term contracts and petitioners were regular employees of the INNODATA
who could not be dismissed except for just or authorized cause.
The employment status of a person is defined and prescribed by law and not by what the parties say it should
be.19 Equally important to consider is that a contract of employment is impressed with public interest such
that labor contracts must yield to the common good.20 Thus, provisions of applicable statutes are deemed
written into the contract, and the parties are not at liberty to insulate themselves and their relationships from
the impact of labor laws and regulations by simply contracting with each other.21
Regular employment has been defined by Article 280 of the Labor Code, as amended, which reads:
Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the time of
engagement of the employee or where the work or services to be performed is seasonal in nature and
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph. Provided, That,
any employee who has rendered at least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists. (Underscoring ours).
Based on the afore-quoted provision, the following employees are accorded regular status: (1) those who are
engaged to perform activities which are necessary or desirable in the usual business or trade of the employer,
regardless of the length of their employment; and (2) those who were initially hired as casual employees, but
have rendered at least one year of service, whether continuous or broken, with respect to the activity in which
they are employed.
Undoubtedly, petitioners belong to the first type of regular employees.
Under Article 280 of the Labor Code, the applicable test to determine whether an employment should be
considered regular or non-regular is the reasonable connection between the particular activity performed by
the employee in relation to the usual business or trade of the employer.22
In the case at bar, petitioners were employed by INNODATA on 17 February 1999 as formatters. The primary
business of INNODATA is data encoding, and the formatting of the data entered into the computers is an
essential part of the process of data encoding. Formatting organizes the data encoded, making it easier to
understand for the clients and/or the intended end users thereof. Undeniably, the work performed by
petitioners was necessary or desirable in the business or trade of INNODATA.
However, it is also true that while certain forms of employment require the performance of usual or desirable
functions and exceed one year, these do not necessarily result in regular employment under Article 280 of the
Labor Code.23 Under the Civil Code, fixed-term employment contracts are not limited, as they are under the
present Labor Code, to those by nature seasonal or for specific projects with predetermined dates of
completion; they also include those to which the parties by free choice have assigned a specific date of
termination.24
The decisive determinant in term employment is the day certain agreed upon by the parties for the
commencement and termination of their employment relationship, a day certain being understood to be that
which must necessarily come, although it may not be known when. Seasonal employment and employment
for a particular project are instances of employment in which a period, where not expressly set down, is
necessarily implied.25
Respondents maintain that the contracts of employment entered into by petitioners with INNDOATA were
valid fixed-term employment contracts which were automatically terminated at the expiry of the period
stipulated therein, i.e., 16 February 2000.
The Court disagrees.
While this Court has recognized the validity of fixed-term employment contracts, it has consistently held that
this is the exception rather than the general rule. More importantly, a fixed-term employment is valid only
under certain circumstances. In Brent, the very same case invoked by respondents, the Court identified several
circumstances wherein a fixed-term is anessential and natural appurtenance, to wit:
Some familiar examples may be cited of employment contracts which may be neither for seasonal work nor
for specific projects, but to which a fixed term is an essential and natural appurtenance: overseas employment
contracts, for one, to which, whatever the nature of the engagement, the concept of regular employment with
all that it implies does not appear ever to have been applied, Article 280 of the Labor Code notwithstanding;
also appointments to the positions of dean, assistant dean, college secretary, principal, and other
administrative offices in educational institutions, which are by practice or tradition rotated among the faculty
members, and where fixed terms are a necessity without which no reasonable rotation would be possible.
Similarly, despite the provisions of Article 280, Policy Instructions No. 8 of the Minister of Labor implicitly
recognize that certain company officials may be elected for what would amount to fixed periods, at the
expiration of which they would have to stand down, in providing that these officials, "x x may lose their jobs as
president, executive vice-president or vice president, etc. because the stockholders or the board of directors
for one reason or another did not reelect them."26
As a matter of fact, the Court, in its oft-quoted decision in Brent, also issued a stern admonition that where,
from the circumstances, it is apparent that the period was imposed to preclude the acquisition of tenurial
security by the employee, then it should be struck down as being contrary to law, morals, good customs,
public order and public policy.27
After considering petitioners’ contracts in their entirety, as well as the circumstances surrounding petitioners’
employment at INNODATA, the Court is convinced that the terms fixed therein were meant only to circumvent
petitioners’ right to security of tenure and are, therefore, invalid.
The contracts of employment submitted by respondents are highly suspect for not only being ambiguous, but
also for appearing to be tampered with.
Petitioners alleged that their employment contracts with INNODATA became effective 16 February 1999, and
the first day they reported for work was on 17 February 1999. The Certificate of Employment issued by the
HRAD Manager of INNODATA also indicated that petitioners Price and Domingo were employed by INNODATA
on 17 February 1999.
However, respondents asserted before the Labor Arbiter that petitioners’ employment contracts were
effective only on 6 September 1999. They later on admitted in their Memorandum filed with this Court that
petitioners were originally hired on 16 February 1999 but the project for which they were employed was
completed before the expiration of one year. Petitioners were merely rehired on 6 September 1999 for a new
project. While respondents submitted employment contracts with 6 September 1999 as beginning date of
effectivity, it is obvious that in one of them, the original beginning date of effectivity, 16 February 1999, was
merely crossed out and replaced with 6 September 1999. The copies of the employment contracts submitted
by petitioners bore similar alterations.
The Court notes that the attempt to change the beginning date of effectivity of petitioners’ contracts was very
crudely done. The alterations are very obvious, and they have not been initialed by the petitioners to indicate
their assent to the same. If the contracts were truly fixed-term contracts, then a change in the term or period
agreed upon is material and would already constitute a novation of the original contract.
Such modification and denial by respondents as to the real beginning date of petitioners’ employment
contracts render the said contracts ambiguous. The contracts themselves state that they would be effective
until 16 February 2000 for a period of one year. If the contracts took effect only on 6 September 1999, then its
period of effectivity would obviously be less than one year, or for a period of only about five months.
Obviously, respondents wanted to make it appear that petitioners worked for INNODATA for a period of less
than one year. The only reason the Court can discern from such a move on respondents’ part is so that they
can preclude petitioners from acquiring regular status based on their employment for one year. Nonetheless,
the Court emphasizes that it has already found that petitioners should be considered regular employees of
INNODATA by the nature of the work they performed as formatters, which was necessary in the business or
trade of INNODATA. Hence, the total period of their employment becomes irrelevant.
Even assuming that petitioners’ length of employment is material, given respondents’ muddled assertions, this
Court adheres to its pronouncement in Villanueva v. National Labor Relations Commission, 28 to the effect that
where a contract of employment, being a contract of adhesion, is ambiguous, any ambiguity therein should be
construed strictly against the party who prepared it. The Court is, thus, compelled to conclude that
petitioners’ contracts of employment became effective on 16 February 1999, and that they were already
working continuously for INNODATA for a year.
Further attempting to exonerate itself from any liability for illegal dismissal, INNODATA contends that
petitioners were project employees whose employment ceased at the end of a specific project or undertaking.
This contention is specious and devoid of merit.
In Philex Mining Corp. v. National Labor Relations Commission, 29 the Court defined "project employees" as
those workers hired (1) for a specific project or undertaking, and wherein (2) the completion or termination of
such project has been determined at the time of the engagement of the employee.
Scrutinizing petitioners’ employment contracts with INNODATA, however, failed to reveal any mention therein
of what specific project or undertaking petitioners were hired for. Although the contracts made general
references to a "project," such project was neither named nor described at all therein. The conclusion by the
Court of Appeals that petitioners were hired for the Earthweb project is not supported by any evidence on
record. The one-year period for which petitioners were hired was simply fixed in the employment contracts
without reference or connection to the period required for the completion of a project. More importantly,
there is also a dearth of evidence that such project or undertaking had already been completed or terminated
to justify the dismissal of petitioners. In fact, petitioners alleged - and respondents failed to dispute that
petitioners did not work on just one project, but continuously worked for a series of projects for various
clients of INNODATA.
In Magcalas v. National Labor Relations Commission,30 the Court struck down a similar claim by the employer
therein that the dismissed employees were fixed-term and project employees. The Court here reiterates the
rule that all doubts, uncertainties, ambiguities and insufficiencies should be resolved in favor of labor. It is a
well-entrenched doctrine that in illegal dismissal cases, the employer has the burden of proof. This burden
was not discharged in the present case.
As a final observation, the Court also takes note of several other provisions in petitioners’ employment
contracts that display utter disregard for their security of tenure. Despite fixing a period or term of
employment, i.e., one year, INNODATA reserved the right to pre-terminate petitioners’ employment under the
following circumstances:
6.1 x x x Further should the Company have no more need for the EMPLOYEE’s services on account of
completion of the project, lack of work (sic) business losses, introduction of new production processes and
techniques, which will negate the need for personnel, and/or overstaffing, this contract maybe pre-terminated
by the EMPLOYER upon giving of three (3) days notice to the employee.
xxxx
6.4 The EMPLOYEE or the EMPLOYER may pre-terminate this CONTRACT, with or without cause, by giving at
least Fifteen – (15) [day] notice to that effect. Provided, that such pre-termination shall be effective only upon
issuance of the appropriate clearance in favor of the said EMPLOYEE. (Emphasis ours.)
Pursuant to the afore-quoted provisions, petitioners have no right at all to expect security of tenure, even for
the supposedly one-year period of employment provided in their contracts, because they can still be pre-
terminated (1) upon the completion of an unspecified project; or (2) with or without cause, for as long as they
are given a three-day notice. Such contract provisions are repugnant to the basic tenet in labor law that no
employee may be terminated except for just or authorized cause.
Under Section 3, Article XVI of the Constitution, it is the policy of the State to assure the workers of security of
tenure and free them from the bondage of uncertainty of tenure woven by some employers into their
contracts of employment. This was exactly the purpose of the legislators in drafting Article 280 of the Labor
Code – to prevent the circumvention by unscrupulous employers of the employee’s right to be secure in his
tenure by indiscriminately and completely ruling out all written and oral agreements inconsistent with the
concept of regular employment.
In all, respondents’ insistence that it can legally dismiss petitioners on the ground that their term of
employment has expired is untenable. To reiterate, petitioners, being regular employees of INNODATA, are
entitled to security of tenure. In the words of Article 279 of the Labor Code:
ART. 279. Security of Tenure. – In cases of regular employment, the employer shall not terminate the services
of an employee except for a just cause or when authorized by this Title. An employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and
to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed
from the time his compensation was withheld from him up to the time of his actual reinstatement.

By virtue of the foregoing, an illegally dismissed employee is entitled to reinstatement without loss of seniority
rights and other privileges, with full back wages computed from the time of dismissal up to the time of actual
reinstatement.

Considering that reinstatement is no longer possible on the ground that INNODATA had ceased its operations
in June 2002 due to business losses, the proper award is separation pay equivalent to one month pay 31 for
every year of service, to be computed from the commencement of their employment up to the closure of
INNODATA.

The amount of back wages awarded to petitioners must be computed from the time petitioners were illegally
dismissed until the time INNODATA ceased its operations in June 2002.32

Petitioners are further entitled to attorney’s fees equivalent to 10% of the total monetary award herein, for
having been forced to litigate and incur expenses to protect their rights and interests herein.

Finally, unless they have exceeded their authority, corporate officers are, as a general rule, not personally
liable for their official acts, because a corporation, by legal fiction, has a personality separate and distinct from
its officers, stockholders and members. Although as an exception, corporate directors and officers are
solidarily held liable with the corporation, where terminations of employment are done with malice or in bad
faith,33 in the absence of evidence that they acted with malice or bad faith herein, the Court exempts the
individual respondents, Leo Rabang and Jane Navarette, from any personal liability for the illegal dismissal of
petitioners.

WHEREFORE, the Petition for Review on Certiorari is GRANTED. The Decision dated 25 September 2006 and
Resolution dated 15 June 2007 of the Court of Appeals in CA-G.R. SP No. 72795are hereby REVERSED and SET
ASIDE. RespondentInnodata Philippines, Inc./Innodata Corporation is ORDERED to pay petitioners Cherry J.
Price, Stephanie G. Domingo, and Lolita Arbilera: (a) separation pay, in lieu of reinstatement, equivalent to one
month pay for every year of service, to be computed from the commencement of their employment up to the
date respondent Innodata Philippines, Inc./Innodata Corporation ceased operations; (b) full backwages,
computed from the time petitioners’ compensation was withheld from them up to the time respondent
Innodata Philippines, Inc./Innodata Corporation ceased operations; and (3) 10% of the total monetary award
as attorney’s fees. Costs against respondent Innodata Philippines, Inc./Innodata Corporation.

SO ORDERED.
G.R. No. 181974               February 1, 2012
LYNVIL FISHING ENTERPRISES, INC. and/or ROSENDO S. DE BORJA, Petitioners, 
vs.
ANDRES G. ARIOLA, JESSIE D. ALCOVENDAS, JIMMY B. CALINAO AND LEOPOLDO G. SEBULLEN,Respondents.
DECISION
Remedial Law; Civil Procedure; Appeals; Generally when supported by substantial evidence, the findings
of fact of the Court of Appeals are conclusive and binding on the parties and are  not reviewable by this Court;
Exceptions.—The Supreme Court is not a trier of facts. Under Rule 45, parties may raise only questions of law.
We are not duty-bound to analyze again and weigh the evidence introduced in and considered by the tribunals
below. Generally when supported by substantial evidence, the findings of fact of the CA are conclusive and
binding on the parties and are not reviewable by this Court, unless the case falls under any of the
following recognized exceptions: (1) When the conclusion is a finding grounded entirely on speculation,
surmises and conjectures; (2) When the inference made is manifestly mistaken, absurd or impossible; (3)
Where there is a grave abuse of discretion; (4) When the judgment is based on a misapprehension of
facts; (5) When the findings of fact are conflicting; (6) When the Court of Appeals, in making its findings, went
beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7)
When the findings are contrary to those of the trial court; (8) When the findings of fact are conclusions
without citation of specific evidence on which they are based; (9) When the facts set forth in the petition as
well as in the petitioners’ main and reply briefs are not disputed by the respondents; and (10) When the
findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted
by the evidence on record.
_______________
* SECOND DIVISION.
680
68 SUPREME COURT REPORTS ANNOTATED
0 trip, they will again be hired for another trip with new contracts; and (3) this arrangement continued for more
Lynvil Fishing Enterprises, Inc. vs. Ariola
Labor Law; Termination of Employees; Loss of Trust and Confidence; We ruled that proof beyond
reasonable doubt of an employee’s misconduct is not required when loss of confidence is the ground for
dismissal; The dropping of the qualified theft charges against the respondent is not binding upon a labor
tribunal.—Nasipit is about a security guard who was charged with qualified theft which charge was dismissed
by the Office of the Prosecutor. However, despite the dismissal of the complaint, he was still terminated from
his employment on the ground of loss of confidence. We ruled that proof beyond reasonable doubt of an
employee’s misconduct is not required when loss of confidence is the ground for dismissal. It is sufficient if the
employer has “some basis” to lose confidence or that the employer has reasonable ground to believe or to
entertain the moral conviction that the employee concerned is responsible for the misconduct and that the
nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded
by his position. It added that the dropping of the qualified theft charges against the respondent is not binding
upon a labor tribunal.
Same; Same; Same; An employee’s acquittal in a criminal case, especially one that is grounded on the
existence of reasonable doubt, will not preclude a determination in a labor case that he is guilty of acts
inimical to the employer’s interests.—In Nicolas v. National Labor Relations Commission, 258 SCRA 250 (1996),
we held that a criminal conviction is not necessary to find just cause for employment termination. Otherwise
stated, an employee’s acquittal in a criminal case, especially one that is grounded on the existence of
reasonable doubt, will not preclude a determination in a labor case that he is guilty of acts inimical to the
employer’s interests. In the reverse, the finding of probable cause is not followed by automatic adoption of
such finding by the labor tribunals. In other words, whichever way the public prosecutor disposes of a
complaint, the finding does not bind the labor tribunal.
Same; Same; Same; Loss of confidence as a just cause for termination of employment is premised on
the fact that the employee concerned holds a position of responsibility, trust and confidence or that the
employee concerned is entrusted with confidence with respect to delicate matters, such as the handling or care
and protection of the property and assets of the employer.—In illegal dismissal cases, the employer bears the
burden of proving that the termination was for a valid or authorized cause. Just cause is required for a valid
dismissal. The Labor Code provides that an employer may terminate an employment based on fraud or willful
breach of the trust reposed on the employee. Such breach is considered willful if it is done intentionally,
knowingly, and purposely, without justifiable excuse, as distinguished from an act
681
VOL. 664, FEBRUARY 1, 2012 681
Lynvil Fishing Enterprises, Inc. vs. Ariola
done carelessly, thoughtlessly, heedlessly or inadvertently. It must also be based on substantial evidence and
not on the employer’s whims or caprices or suspicions otherwise, the employee would eternally remain at the
mercy of the employer. Loss of confidence must not be indiscriminately used as a shield by the employer
against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for
dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to
continue working for the employer. In addition, loss of confidence as a just cause for termination of
employment is premised on the fact that the employee concerned holds a position of responsibility, trust and
confidence or that the employee concerned is entrusted with confidence with respect to delicate matters,
such as the handling or care and protection of the property and assets of the employer. The betrayal of this
trust is the essence of the offense for which an employee is penalized.
Same; Fixed-Contract Agreements; Conditions for the Validity of a Fixed-contract Agreement between
the Employer and Employee.—Jurisprudence, laid two conditions for the validity of a fixed-contract agreement
between the employer and employee: First, the fixed period of employment was knowingly and voluntarily
agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his consent; or Second, it satisfactorily appears that
the employer and the employee dealt with each other on more or less equal terms with no moral dominance
exercised by the former or the latter. Textually, the provision that: “NA ako ay sumasang-ayon na maglingkod
at gumawa ng mga gawain sang-ayon sa patakarang “por viaje” na magmumula sa pagalis sa Navotas
papunta sa pangisdaan at pagbabalik sa pondohan ng lantsa sa Navotas, Metro Manila” is for a fixed period
of employment. In the context, however, of the facts that: (1) the respondents were doing tasks necessarily to
Lynvil’s fishing business with positions ranging from captain of the vessel to bodegero; (2) after the end of a
than ten years, the clear intention is to go around the security of tenure of the respondents as regular
employees. And respondents are so by the express provisions of the second paragraph of Article 280, thus:
“xxx Provided, That any employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists.”682
68 SUPREME COURT REPORTS ANNOTATED
2
Lynvil Fishing Enterprises, Inc. vs. Ariola
Same; Termination of Employment; Two-Notice Rule; It is required that the employer furnish the
employee with two written notices: (1) a written notice served on the employee specifying the ground or
grounds for termination, and giving to said employee reasonable opportunity within which to explain his side;
and (2) a written notice of termination served on the employee indicating that upon due consideration of all
the circumstances, grounds have been established to justify his termination.—Having found that respondents
are regular employees who may be, however, dismissed for cause as we have so found in this case, there is a
need to look into the procedural requirement of due process in Section 2, Rule XXIII, Book V of the Rules
Implementing the Labor Code. It is required that the employer furnish the employee with two written notices:
(1) a written notice served on the employee specifying the ground or grounds for termination, and giving to
said employee reasonable opportunity within which to explain his side; and (2) a written notice of termination
served on the employee indicating that upon due consideration of all the circumstances, grounds have been
established to justify his termination.
Same; Same; Same; Due Process; The twin requirements of notice and hearing constitute the elements
of [due] process in cases of employee’s dismissal.—The twin requirements of notice and hearing constitute the
elements of [due] process in cases of employee’s dismissal. The requirement of notice is intended to inform
the employee concerned of the employer’s intent to dismiss and the reason for the proposed dismissal. Upon 7. On 12 November 1998, First Assistant City Prosecutor Rosauro Silverio found probable cause for
the other hand, the requirement of hearing affords the employee an opportunity to answer his employer’s the indictment of the dismissed employees for the crime of qualified theft9 under the Revised Penal
charges against him and accordingly, to defend himself therefrom before dismissal is effected. Obviously, the Code.
second written notice, as indispensable as the first, is intended to ensure the observance of due process.
Same; Same; Board of Directors; Damages; The corporate directors and officers are solidarily liable with
On the other hand, the story of the defense is:
the corporation for the termination of employment of employees done with malice or in bad faith.—In labor
cases, the corporate directors and officers are solidarily liable with the corporation for the termination of
employment of employees done with malice or in bad faith. Indeed, moral damages are recoverable when the 1. The private respondents were crew members of Lynvil’s vessel named Analyn VIII.10
dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done
in a manner contrary to good morals, good customs or public policy. 2. On 31 July 1998, they arrived at the Navotas Fishport on board Analyn VIII loaded with 1,241
bañeras of different kinds of fishes. These bañeras were delivered to a consignee named SAS and
Royale.11

PEREZ, J.:
Before the Court is a Petition for Review on Certiorari 1 of the Decision2 of the Fourteenth Division of the Court
of Appeals in CA-G.R. SP No. 95094 dated 10 September 2007, granting the Writ of Certiorari prayed for under
Rule 65 of the 1997 Revised Rules of Civil Procedure by herein respondents Andres G. Ariola, Jessie D.
Alcovendas, Jimmy B. Calinao and Leopoldo Sebullen thereby reversing the Resolution of the National Labor
Relations Commission (NLRC). The dispositive portion of the assailed decision reads:
WHEREFORE, premises considered, the Decision dated March 31, 2004 rendered by the National Labor
Relations Commission is hereby REVERSED and SET ASIDE. In lieu thereof, the Decision of the Labor Arbiter is
hereby REINSTATED, except as to the award of attorney’s fees, which is ordered DELETED.3
The version of the petitioners follows:
The following day, the private respondents reported back to Lynvil office to inquire about their new
job assignment but were told to wait for further advice. They were not allowed to board any
vessel.12
3. On 5 August 1998, only Alcovendas and Bañez received a memorandum from De Borja ordering
them to explain the incident that happened on 31 July 1998. Upon being informed about this,
Ariola, Calinao, Nubla and Sebullen went to the Lynvil office. However, they were told that their
employments were already terminated.13
Aggrieved, the employees filed with the Arbitration Branch of the National Labor Relations Commission-
National Capital Region on 25 August 1998 a complaint for illegal dismissal with claims for backwages, salary
differential reinstatement, service incentive leave, holiday pay and its premium and 13th month pay from
1996 to1998. They also claimed for moral, exemplary damages and attorney’s fees for their dismissal with bad
faith.14

1. Lynvil Fishing Enterprises, Inc. (Lynvil) is a company engaged in deep-sea fishing, operating along
They added that the unwarranted accusation of theft stemmed from their oral demand of increase of salaries
the shores of Palawan and other outlying islands of the Philippines.4 It is operated and managed by
three months earlier and their request that they should not be required to sign a blank payroll and vouchers.15
Rosendo S. de Borja.

2. On 1 August 1998, Lynvil received a report from Romanito Clarido, one of its employees, that on
31 July 1998, he witnessed that while on board the company vessel Analyn VIII, Lynvil employees,
namely: Andres G. Ariola (Ariola), the captain; Jessie D. Alcovendas (Alcovendas), Chief Mate;
Jimmy B. Calinao (Calinao), Chief Engineer; Ismael G. Nubla (Nubla), cook; Elorde Bañez (Bañez),
oiler; and Leopoldo D. Sebullen (Sebullen), bodegero, conspired with one another and stole eight
(8) tubs of "pampano" and "tangigue" fish and delivered them to another vessel, to the prejudice of
Lynvil.5
On 5 June 2002, Labor Arbiter Ramon Valentin C. Reyes found merit in complainants’ charge of illegal
dismissal.16The dispositive portion reads:
WHEREFORE, premises considered, judgment is hereby rendered finding that complainants were illegally
dismissed, ordering respondents to jointly and severally pay complainants (a) separation pay at one half
month pay for every year of service; (b) backwages; (c) salary differential; (d) 13th month pay; and (e)
attorney’s fees, as follows:

3. The said employees were engaged on a per trip basis or "por viaje" which terminates at the end "1) Andres Ariola
of each trip. Ariola, Alcovendas and Calinao were managerial field personnel while the rest of the Backwages P234,000.00
crew were field personnel.6
(P6,500.00 x 36 = P234,000.00)

4. By reason of the report and after initial investigation, Lynvil’s General Manager Rosendo S. De Separation Pay – P74,650.00
Borja (De Borja) summoned respondents to explain within five (5) days why they should not be
13th Month Pay – P6,500.00
dismissed from service. However, except for Alcovendas and Bañez, 7 the respondents refused to
sign the receipt of the notice.
P325,250.00
5. Failing to explain as required, respondents’ employment was terminated. "2) Jessie Alcovendas
Backwages P195,328.00
6. Lynvil, through De Borja, filed a criminal complaint against the dismissed employees for violation (P5,148.00 x 36 = P195,328.00)
of P.D. 532, or the Anti-Piracy and Anti-Highway Robbery Law of 1974 before the Office of the City
Prosecutor of Malabon City.8 Separation Pay – P44,304.00
 13th Month Pay – 5,538.00 The Labor Arbiter found that the procedural due process was not complied with and that the mere notice
given to the private respondents fell short of the requirement of "ample opportunity" to present the
Salary Differential – 1,547.52 employees’ side.21

P246,717.52 On appeal before the National Labor Relations Commission, petitioners asserted that private respondents
were only contractual employees; that they were not illegally dismissed but were accorded procedural due
"3) Jimmy Calinao
process and that De Borja did not commit bad faith in dismissing the employees so as to warrant his joint
Backwages P234,000.00
liability with Lynvil.22
(P6,500.00 x 36 = P234,000.00)
Separation Pay – 55,250.00 On 31 March 2004, the NLRC reversed and set aside the Decision of the Labor Arbiter. The dispositive portion
reads:
13th Month Pay – P6,500.00
WHEREFORE, judgment is hereby rendered REVERSING AND SETTING ASIDE the Decision of the Labor Arbiter a
P295,700.00 quo and a new one entered DISMISSING the present complaints for utter lack of merit;
"4) Leopoldo Sebullen
However as above discussed, an administrative fine of PhP5,000.00 for each complainant, Andres Ariola, Jessie
Backwages P154,440.00 Alcovendas, Jimmy Canilao, Leopoldo Sebullen and Ismael Nobla or a total of PhP25,000.00 is hereby
(P4, 290.00 x 36 = P154,440.00) awarded.23

Separation Pay – P44,073.00

The private respondents except Elorde Bañez filed a Petition for Certiorari24 before the Court of Appeals
13th Month Pay – 2,473.12 alleging grave abuse of discretion on the part of NLRC.

Salary Differential – 4,472.00

The Court of Appeals found merit in the petition and reinstated the Decision of the Labor Arbiter except as to
the award of attorney’s fees. The appellate court held that the allegation of theft did not warrant the dismissal
P208,455.12 of the employees since there was no evidence to prove the actual quantities of the missing kinds of fish loaded
"5) Ismael Nubla to Analyn VIII.25 It also reversed the finding of the NLRC that the dismissed employees were merely contractual
Backwages P199,640.12 employees and added that they were regular ones performing activities which are usually necessary or
desirable in the business and trade of Lynvil. Finally, it ruled that the two-notice rule provided by law and
Separation Pay – P58,149.00 jurisprudence is mandatory and non-compliance therewith rendered the dismissal of the employees illegal.
13th Month Pay – 2,473.12
The following are the assignment of errors presented before this Court by Lynvil:
Salary Differential – P5,538.00

I
P265, 28.12

THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO CONSIDER THE ESTABLISHED DOCTRINE
TOTAL P 1, 341, 650.76 LAID DOWN IN NASIPIT LUMBER COMPANY V. NLRC HOLDING THAT THE FILING OF A CRIMINAL
CASE BEFORE THE PROSECUTOR’S OFFICE CONSTITUTES SUFFICIENT BASIS FOR A VALID
TERMINATION OF EMPLOYMENT ON THE GROUNDS OF SERIOUS MISCONDUCT AND/OR LOSS OF
All other claims are dismissed for lack of merit."17 TRUST AND CONFIDENCE.

The Labor Arbiter found that there was no evidence showing that the private respondents received the 41 II
bañeras of "pampano" as alleged by De Borja in his reply-affidavit; and that no proof was presented that the 8
bañeras of pampano [and tangigue] were missing at the place of destination.18
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE TERMINATION OF
RESPONDENTS’ EMPLOYMENT WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.
The Labor Arbiter disregarded the Resolution of Assistant City Prosecutor Rosauro Silverio on the theft case.
He reasoned out that the Labor Office is governed by different rules for the determination of the validity of the
III
dismissal of employees.19

THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO CONSIDER THAT THE RESPONDENTS’
The Labor Arbiter also ruled that the contractual provision that the employment terminates upon the end of
EMPLOYMENT, IN ANY EVENT, WERE CONTRACTUAL IN NATURE BEING ON A PER VOYAGE BASIS.
each trip does not make the respondents’ dismissal legal. He pointed out that respondents and Lynvil did not
THUS, THEIR RESPECTIVE EMPLOYMENT TERMINATED AFTER THE END OF EACH VOYAGE
negotiate on equal terms because of the moral dominance of the employer.20

IV
 THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENTS WERE NOT
ACCORDED PROCEDURAL DUE PROCESS.
V
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENTS ARE ENTITLED TO
THE PAYMENT OF THEIR MONEY CLAIMS.
VI
THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO CONSIDER THAT PETITIONER ROSENDO
S. DE BORJA IS NOT JOINTLY AND SEVERALLY LIABLE FOR THE JUDGMENT WHEN THERE WAS NO
FINDING OF BAD FAITH.26
The Court’s Ruling
The Supreme Court is not a trier of facts. Under Rule 45, 27 parties may raise only questions of law. We are not
duty-bound to analyze again and weigh the evidence introduced in and considered by the tribunals below.
Generally when supported by substantial evidence, the findings of fact of the CA are conclusive and binding on
the parties and are not reviewable by this Court, unless the case falls under any of the following  recognized
exceptions:
(1) When the conclusion is a finding grounded entirely on speculation, surmises and conjectures;
(2) When the inference made is manifestly mistaken, absurd or impossible;
(3) Where there is a grave abuse of discretion;
(4) When the judgment is based on a misapprehension of facts;
(5) When the findings of fact are conflicting;
(6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the
same is contrary to the admissions of both appellant and appellee;
(7) When the findings are contrary to those of the trial court;
(8) When the findings of fact are conclusions without citation of specific evidence on which they
are based;
(9) When the facts set forth in the petition as well as in the petitioners' main and reply briefs are
not disputed by the respondents; and
(10) When the findings of fact of the Court of Appeals are premised on the supposed absence of
evidence and contradicted by the evidence on record. (Emphasis supplied)28
The contrariety of the findings of the Labor Arbiter and the NLRC prevents reliance on the principle of special
administrative expertise and provides the reason for judicial review, at first instance by the appellate court,
and on final study through the present petition.
In the first assignment of error, Lynvil contends that the filing of a criminal case before the Office of the
Prosecutor is sufficient basis for a valid termination of employment based on serious misconduct and/or loss
of trust and confidence relying on Nasipit Lumber Company v. NLRC.29
Nasipit is about a security guard who was charged with qualified theft which charge was dismissed by the
Office of the Prosecutor. However, despite the dismissal of the complaint, he was still terminated from his
employment on the ground of loss of confidence. We ruled that proof beyond reasonable doubt of an
employee's misconduct is not required when loss of confidence is the ground for dismissal. It is sufficient if the
employer has "some basis" to lose confidence or that the employer has reasonable ground to believe or to
entertain the moral conviction that the employee concerned is responsible for the misconduct and that the
nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded
by his position.30 It added that the dropping of the qualified theft charges against the respondent is not binding
upon a labor tribunal.31
In Nicolas v. National Labor Relations Commission,32 we held that a criminal conviction is not necessary to find
just cause for employment termination. Otherwise stated, an employee’s acquittal in a criminal case,
especially one that is grounded on the existence of reasonable doubt, will not preclude a determination in a
labor case that he is guilty of acts inimical to the employer’s interests. 33 In the reverse, the finding of probable
cause is not followed by automatic adoption of such finding by the labor tribunals.
In other words, whichever way the public prosecutor disposes of a complaint, the finding does not bind the
labor tribunal.
Thus, Lynvil cannot argue that since the Office of the Prosecutor found probable cause for theft the Labor
Arbiter must follow the finding as a valid reason for the termination of respondents’ employment. The proof
required for purposes that differ from one and the other are likewise different.
Nonetheless, even without reliance on the prosecutor’s finding, we find that there was valid cause for
respondents’ dismissal.
In illegal dismissal cases, the employer bears the burden of proving that the termination was for a valid or
authorized cause.34
Just cause is required for a valid dismissal. The Labor Code 35 provides that an employer may terminate an
employment based on fraud or willful breach of the trust reposed on the employee. Such breach is considered
willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an
act done carelessly, thoughtlessly, heedlessly or inadvertently. It must also be based on substantial evidence
and not on the employer’s whims or caprices or suspicions otherwise, the employee would eternally remain at
the mercy of the employer. Loss of confidence must not be indiscriminately used as a shield by the employer
against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for
dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to
continue working for the employer. In addition, loss of confidence as a just cause for termination of
employment is premised on the fact that the employee concerned holds a position of responsibility, trust and
confidence or that the employee concerned is entrusted with confidence with respect to delicate matters,
such as the handling or care and protection of the property and assets of the employer. The betrayal of this
trust is the essence of the offense for which an employee is penalized.36
Breach of trust is present in this case.
We agree with the ruling of the Labor Arbiter and Court of Appeals that the quantity of tubs expected to be
received was the same as that which was loaded. However, what is material is the kind of fish loaded and then
unloaded. Sameness is likewise needed.
We cannot close our eyes to the positive and clear narration of facts of the three witnesses to the commission
of qualified theft. Jonathan Distajo, a crew member of the Analyn VIII, stated in his letter addressed to De
Borja37dated 8 August 1998, that while the vessel was traversing San Nicolas, Cavite, he saw a small boat
approach them. When the boat was next to their vessel, Alcovendas went inside the stockroom while Sebullen
pushed an estimated four tubs of fish away from it. Ariola, on the other hand, served as the lookout and
negotiator of the transaction. Finally, Bañez and Calinao helped in putting the tubs in the small boat. He
further added that he received ₱800.00 as his share for the transaction. Romanito Clarido, who was also on
board the vessel, corroborated the narration of Distajo on all accounts in his 25 August 1998 affidavit. 38 He
added that Alcovendas told him to keep silent about what happened on that day. Sealing tight the credibility
of the narration of theft is the affidavit39 executed by Elorde Bañez dated 3 May 1999. Bañez was one of the
dismissed employees who actively participated in the taking of the tubs. He clarified in the affidavit that the
four tubs taken out of the stockroom in fact contained fish taken from the eight tubs. He further stated that
Ariola told everyone in the vessel not to say anything and instead file a labor case against the management.
Clearly, we cannot fault Lynvil and De Borja when it dismissed the employees.
The second to the fifth assignment of errors interconnect.
The nature of employment is defined in the Labor Code, thus:
Art. 280. Regular and casual employment. The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That
any employee who has rendered at least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.
Lynvil contends that it cannot be guilty of illegal dismissal because the private respondents were employed
under a fixed-term contract which expired at the end of the voyage. The pertinent provisions of the contract
are:
xxxx
1. NA ako ay sumasang-ayon na maglingkod at gumawa ng mga gawain sang-ayon sa patakarang "por viaje" na
magmumula sa pagalis sa Navotas papunta sa pangisdaan at pagbabalik sa pondohan ng lantsa sa Navotas,
Metro Manila;
xxxx
1. NA ako ay nakipagkasundo na babayaran ang aking paglilingkod sa paraang "por viaje" sa halagang
P__________ isang biyahe ng kabuuang araw xxxx.40
Lynvil insists on the applicability of the case of Brent School,41 to wit:
Accordingly, and since the entire purpose behind the development of legislation culminating in the present
Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent circumvention of
the employee's right to be secure in his tenure, the clause in said article indiscriminately and completely ruling
out all written or oral agreements conflicting with the concept of regular employment as defined therein
should be construed to refer to the substantive evil that the Code itself has singled out: agreements entered
into precisely to circumvent security of tenure. It should have no application to instances where a fixed period
of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or
improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his
consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or
less equal terms with no moral dominance whatever being exercised by the former over the latter. Unless thus
limited in its purview, the law would be made to apply to purposes other than those explicitly stated by its
framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended
consequences.
Contrarily, the private respondents contend that they became regular employees by reason of their
continuous hiring and performance of tasks necessary and desirable in the usual trade and business of Lynvil.
Jurisprudence,42 laid two conditions for the validity of a fixed-contract agreement between the employer and
employee:
First, the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any
force, duress, or improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent; or
Second, it satisfactorily appears that the employer and the employee dealt with each other on more or less
equal terms with no moral dominance exercised by the former or the latter.43
Textually, the provision that: "NA ako ay sumasang-ayon na maglingkod at gumawa ng mga gawain sang-ayon
sa patakarang "por viaje" na magmumula sa pagalis sa Navotas papunta sa pangisdaan at pagbabalik sa
pondohan ng lantsa sa Navotas, Metro Manila" is for a fixed period of employment. In the context, however,
of the facts that: (1) the respondents were doing tasks necessarily to Lynvil’s fishing business with positions
ranging from captain of the vessel to bodegero; (2) after the end of a trip, they will again be hired for another
trip with new contracts; and (3) this arrangement continued for more than ten years, the clear intention is to
go around the security of tenure of the respondents as regular employees. And respondents are so by the
express provisions of the second paragraph of Article 280, thus:
xxx Provided, That any employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists.
The same set of circumstances indicate clearly enough that it was the need for a continued source of income
that forced the employees’ acceptance of the "por viaje" provision.
Having found that respondents are regular employees who may be, however, dismissed for cause as we have
so found in this case, there is a need to look into the procedural requirement of due process in Section 2, Rule
XXIII, Book V of the Rules Implementing the Labor Code. It is required that the employer furnish the employee
with two written notices: (1) a written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to explain his side; and (2) a
written notice of termination served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination.
From the records, there was only one written notice which required respondents to explain within five (5) days
why they should not be dismissed from the service. Alcovendas was the only one who signed the receipt of
the notice. The others, as claimed by Lynvil, refused to sign. The other employees argue that no notice was
given to them. Despite the inconsistencies, what is clear is that no final written notice or notices of
termination were sent to the employees.
The twin requirements of notice and hearing constitute the elements of [due] process in cases of employee's
dismissal. The requirement of notice is intended to inform the employee concerned of the employer's intent
to dismiss and the reason for the proposed dismissal. Upon the other hand, the requirement of hearing ₱50,000.00 in favor of the employees representing nominal damages for petitioners’ non-compliance with
affords the employee an opportunity to answer his employer's charges against him and accordingly, to defend statutory due process. No cost.
himself therefrom before dismissal is effected.44 Obviously, the second written notice, as indispensable as the
first, is intended to ensure the observance of due process.
SO ORDERED.

Applying the rule to the facts at hand, we grant a monetary award of ₱50,000.00 as nominal damages, this,
pursuant to the fresh ruling of this Court in Culili v. Eastern Communication Philippines, Inc. 45 Due to the failure
of Lynvil to follow the procedural requirement of two-notice rule, nominal damages are due to respondents
despite their dismissal for just cause.

Given the fact that their dismissal was for just cause, we cannot grant backwages and separation pay to
respondents. However, following the findings of the Labor Arbiter who with the expertise presided over the
proceedings below, which findings were affirmed by the Court of Appeals, we grant the 13th month pay and
salary differential of the dismissed employees.

Whether De Borja is jointly and severally liable with Lynvil

As to the last issue, this Court has ruled that in labor cases, the corporate directors and officers are solidarily
liable with the corporation for the termination of employment of employees done with malice or in bad
faith.46 Indeed, moral damages are recoverable when the dismissal of an employee is attended by bad faith or
fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs
or public policy.

It has also been discussed in MAM Realty Development Corporation v. NLRC47 that:

x x x A corporation being a juridical entity, may act only through its directors, officers and employees.
Obligations incurred by them, acting as such corporate agents, are not theirs but the direct accountabilities of
the corporation they represent. True, solidary liabilities may at times be incurred but only when exceptional
circumstances warrant such as, generally, in the following cases:

1. When directors and trustees or, in appropriate cases, the officers of a corporation:

xxx

(b) act in bad faith or with gross negligence in directing the corporate affairs;

x x x 48

The term "bad faith" contemplates a "state of mind affirmatively operating with furtive design or with some
motive of self-interest or will or for ulterior purpose."49 1âwphi1

We agree with the ruling of both the NLRC and the Court of Appeals when they pronounced that there was no
evidence on record that indicates commission of bad faith on the part of De Borja. He is the general manager
of Lynvil, the one tasked with the supervision by the employees and the operation of the business. However,
there is no proof that he imposed on the respondents the "por viaje" provision for purpose of effecting their
summary dismissal.

WHEREFORE, the petition is partially GRANTED. The 10 September 2007 Decision of the Court of Appeals in
CA-G.R. SP No. 95094 reversing the Resolution dated 31 March 2004 of the National Labor Relations
Commission is hereby MODIFIED. The Court hereby rules that the employees were dismissed for just cause by
Lynvil Fishing Enterprises, Inc. and Rosendo S. De Borja, hence, the reversal of the award for backwages and
separation pay. However, we affirm the award for 13th month pay, salary differential and grant an additional
G.R. No. 122653 December 12, 1997
PURE FOODS CORPORATION, petitioner, 
vs.
NATIONAL LABOR RELATIONS COMMISSION, RODOLFO CORDOVA, VIOLETA CRUSIS, ET AL., *respondents.
Labor Law; Employer-Employee Relationship; Regular Employees; Security of Tenure; Words and
Phrases.—Thus, the two kinds of regular employees are, (1) those who are engaged to perform activities
which are necessary or desirable in the usual business or trade of the employer; and (2) those casual
employees who have rendered at least one year of service, whether continuous or broken, with respect to the
activity in which they are employed.
Same; Same; Same; Same; Same; “Specific Project or Undertaking,” Explained; The fact that an
employer repeatedly and continuously hired workers to do the same kind of work as that performed by those
whose contracts had expired negates its contention that those workers were hired for a specific project or
undertaking only.— Contrary to petitioner’s submission, the private respondents could not be regarded as
having been hired for a specific project or undertaking. The term “specific project or undertaking” under
Article 280 of the Labor Code contemplates an activity which is not commonly or habitually performed or such
type of work which is not done on a daily basis but only for a specific duration of time or until completion; the
services employed are then necessary and desirable in the employer’s usual business only for the period of
time it takes to complete the project. The fact that the petitioner repeatedly and continuously hired workers
to do the same kind of work as that performed by those whose contracts had expired negates petitioner’s
contention that those workers were hired for a specific project or undertaking only.
Same; Same; Same; Same; Criteria under which term employment cannot be said to be in
circumvention of the law on security of tenure.—Brent also laid down the criteria under which term
employment cannot be said to be in circumvention of the law on security of tenure: 1) The fixed period of
employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper
pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent;
or 2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal
terms with no moral dominance exercised by the former or the latter.
_______________
complainants in Case No. RAB-11-08-50284-91 whose caption only specifically mentioned five
employees and the rest as “901 other employees.”
135
VOL. 283, DECEMBER 12, 1997 135
Pure Foods Corporation vs. NLRC
Same; Same; Same; Same; The scheme of an employer in hiring workers on a uniformly fixed contract
basis and replacing them upon the expiration of their contracts with other workers on the same employment
status was apparently designed to prevent the “casual” employees from attaining the status of a regular
employee.—As a matter of fact, the petitioner even stated in its position paper submitted to the Labor Arbiter
that, according to its records, the previous employees of the company hired on a five-month basis numbered
about 10,000 as of July 1990. This confirms private respondents’ allegation that it was really the practice of the
company to hire workers on a uniformly fixed contract basis and replace them upon the expiration of their
contracts with other workers on the same employment duration. This scheme of the petitioner was apparently
designed to prevent the private respondents and the other “casual” employees from attaining the status of a
regular employee. It was a clear circumvention of the employees’ right to security of tenure and to other
benefits like minimum wage, cost-of-living allowance, sick leave, holiday pay, and 13th month pay. Indeed, the
petitioner succeeded in evading the application of labor laws. Also, it saved itself from the trouble or burden
of establishing a just cause for terminating employees by the simple expedient of refusing to renew the
employment contracts.
Same; Same; Same; Same; Workers’ contracts specifying five-month period of employment, which
have been imposed precisely to circumvent the constitutional guarantee on security of tenure, are considered
as contrary to public policy or morals.—The five-month period specified in private respondents’ employment
contracts having been imposed precisely to circumvent the constitutional guarantee on security of tenure
should, therefore, be struck down or disregarded as contrary to public policy or morals. To uphold the
contractual arrangement between the petitioner and the private respondents would, in effect, permit the
former to avoid hiring permanent or regular employees by simply hiring them on a temporary or casual basis,
thereby violating the employees’ security of tenure in their jobs.
Same; Same; Same; Same; Releases and Quitclaims; Generally, quitclaims by laborers are frowned
upon as contrary to public policy and are held to be ineffective to bar recovery for the full measure of the
workers’ rights.—The execution by the private respondents of a “Release and Quitclaim” did not preclude
them from questioning the
136
13 SUPREME COURT REPORTS ANNOTATED
6
Pure Foods Corporation vs. NLRC
termination of their services. Generally, quitclaims by laborers are frowned upon as contrary to public
policy and are held to be ineffective to bar recovery for the full measure of the workers’ rights. The reason for
the rule is that the employer and the employee do not stand on the same footing.
DAVIDE, JR., J.:
The crux of this petition for certiorari is the issue of whether employees hired for a definite period and whose
services are necessary and desirable in the usual business or trade of the employer are regular employees.
The private respondents (numbering 906) were hired by petitioner Pure Foods Corporation to work for a fixed
period of five months at its tuna cannery plant in Tambler, General Santos City. After the expiration of their
respective contracts of employment in June and July 1991, their services were terminated. They forthwith
executed a "Release and Quitclaim" stating that they had no claim whatsoever against the petitioner.
On 29 July 1991, the private respondents filed before the National Labor Relations Commission (NLRC) Sub-
Regional Arbitration Branch No. XI, General Santos City, a complaint for illegal dismissal against the petitioner
and its plant manager, Marciano Aganon. 1 This case was docketed as RAB-11-08-50284-91.
On 23 December 1992, Labor Arbiter Arturo P. Aponesto handed down a decision 2 dismissing the complaint
on the ground that the private respondents were mere contractual workers, and not regular employees;
hence, they could not avail of the law on security of tenure. The termination of their services by reason of the
expiration of their contracts of employment was, therefore, justified. He pointed out that earlier he had
dismissed a case entitled "Lakas ng Anak-Pawis-NOWM v. Pure Foods Corp." (Case No. RAB-11-02-00088-88)
because the complainants therein were not regular employees of Pure Foods, as their contracts of
employment were for a fixed period of five months. Moreover, in another case involving the same contractual
workers of Pure Foods (Case No. R-196-ROXI-MED-UR-55-89), then Secretary of Labor Ruben Torres held, in a
Resolution dated 30 April 1990, that the said contractual workers were not regular employees.
The Labor Arbiter also observed that an order for private respondents' reinstatement would result in the
reemployment of more than 10,000 former contractual employees of the petitioner. Beside, by executing a
"Release and Quitclaim," the private respondents had waived and relinquished whatever right they might
have against the petitioner.
The private respondents appealed from the decision to the National Labor Relations Commission (NLRC), Fifth
Division, in Cagayan de Oro City, which docketed the case as NLRC CA No. M-001323-93.
On 28 October 1994, the NLRC affirmed the Labor Arbiter's decision. 3 However, on private respondents'
motion for reconsideration, the NLRC rendered another decision on 30 January 1995 4 vacating and setting
aside its decision of 28 October 1994 and holding that the private respondent and their co-complainants were
regular employees. It declared that the contract of employment for five months was a "clandestine scheme
employed by [the petitioner] to stifle [private respondents'] right to security of tenure" and should therefore
be struck down and disregarded for being contrary to law, public policy, and morals. Hence, their dismissal on
account of the expiration of their respective contracts was illegal.
Accordingly, the NLRC ordered the petitioner to reinstate the private respondents to their former position
without loss of seniority rights and other privileges, with full back wages; and in case their reinstatement
would no longer be feasible, the petitioner should pay them separation pay equivalent to one-month pay or
one-half-month pay for every year of service, whichever is higher, with back wages and 10% of the monetary
award as attorney's fees.
Its motion for reconsideration having been denied, 5 the petitioner came to this Court contending that
respondent NLRC committed grave abuse of discretion amounting to lack of jurisdiction in reversing the
decision of the Labor Arbiter.
The petitioner submits that the private respondents are now estopped from questioning their separation from
petitioner's employ in view of their express conformity with the five-month duration of their employment
contracts. Besides, they fell within the exception provided in Article 280 of the Labor Code which reads:
"[E]xcept where the employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee." Moreover, the
first paragraph of the said article must be read and interpreted in conjunction with the proviso in the second
paragraph, which reads: "Provided that any employee who has rendered at least one year of service, whether
such service is continuous or broken, shall be considered a regular employee with respect to the activity in
which he is employed . . ." In the instant case, the private respondents were employed for a period of five
months only. In any event, private respondents' prayer for reinstatement is well within the purview of the
"Release and Quitclaim" they had executed wherein they unconditionally released the petitioner from any and
all other claims which might have arisen from their past employment with the petitioner.
In its Comment, the Office of the Solicitor General (OSG) advances the argument that the private respondents
were regular employees, since they performed activities necessary and desirable in the business or trade of
the petitioner. The period of employment stipulated in the contracts of employment was null and void for
being contrary to law and public policy, as its purpose was to circumvent the law on security of tenure. The
expiration of the contract did not, therefore, justify the termination of their employment.
The OSG further maintains that the ruling of the then Secretary of Labor and Employment in LAP-NOWM
v. Pure Foods Corporation is not binding on this Court; neither is that ruling controlling, as the said case
involved certification election and not the issue of the nature of private respondents' employment. It also
considers private respondents' quitclaim as ineffective to bar the enforcement for the full measure of their
legal rights.
The private respondents, on the other hand, argue that contracts with a specific period of employment may
be given legal effect provided, however, that they are not intended to circumvent the constitutional guarantee
on security of tenure. They submit that the practice of the petitioner in hiring workers to work for a fixed
duration of five months only to replace them with other workers of the same employment duration was
apparently to prevent the regularization of these so-called "casuals," which is a clear circumvention of the law
on security of tenure.
We find the petition devoid of merit.
Article 280 of the Labor Code defines regular and casual employment as follows:
Art. 280. Regular and Casual Employment. — The provisions of written agreement to the
contrary notwithstanding and regardless of the oral argument of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph; Provided, That, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee
with respect to the activity in which he is employed and his employment shall continue
while such activity exists.
Thus, the two kinds of regular employees are (1) those who are engaged to perform activities which are
necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who
have rendered at least one year of service, whether continuous or broken, with respect to the activity in which
they are employed.6
In the instant case, the private respondents' activities consisted in the receiving, skinning, loining, packing, and
casing-up of tuna fish which were then exported by the petitioner. Indisputably, they were performing
activities which were necessary and desirable in petitioner's business or trade.
Contrary to petitioner's submission, the private respondents could not be regarded as having been hired for a
specific project or undertaking. The term "specific project or undertaking" under Article 280 of the Labor Code
contemplates an activity which is not commonly or habitually performed or such type of work which is not
done on a daily basis but only for a specific duration of time or until completion; the services employed are
then necessary and desirable in the employer's usual business only for the period of time it takes to complete
the project.7
The fact that the petitioner repeatedly and continuously hired workers to do the same kind of work as that
performed by those whose contracts had expired negates petitioner's contention that those workers were
hired for a specific project or undertaking only.
Now on the validity of private respondents' five-month contracts of employment. In the leading case of Brent
School, Inc. v. Zamora, 8 which was reaffirmed in numerous subsequent cases, 9 this Court has upheld the
legality of fixed-term employment. It ruled that the decisive determinant in term employment should not be
the activities that the employee is called upon to perform but the day certain agreed upon by the parties for
the commencement and termination of their employment relationship. But, this Court went on to say that
where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of
tenurial security by the employee, they should be struck down or disregarded as contrary to public policy and
morals.
Brent also laid down the criteria under which term employment cannot be said to be in circumvention of the
law on security of tenure:
1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any
force, duress, or improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal other privileges, with full back wages computed from the time of dismissal up to the time of actual
terms with no moral dominance exercised by the former over the latter. 10 reinstatement, without deducting the earnings derived elsewhere pending the resolution of the case.

None of these criteria had been met in the present case. As pointed out by the private respondents: However, since reinstatement is no longer possible because the petitioner's tuna cannery plant had,
admittedly, been close in November 1994, 18 the proper award is separation pay equivalent to one month pay
or one-half month pay for every year of service, whichever is higher, to be computed from the
[I]t could not be supposed that private respondents and all other so-called "casual"
commencement of their employment up to the closure of the tuna cannery plant. The amount of back wages
workers of [the petitioner] KNOWINGLY and VOLUNTARILY agreed to the 5-month
must be computed from the time the private respondents were dismissed until the time petitioner's cannery
employment contract. Cannery workers are never on equal terms with their employers.
plant ceased operation. 19
Almost always, they agree to any terms of an employment contract just to get employed
considering that it is difficult to find work given their ordinary qualifications. Their
freedom to contract is empty and hollow because theirs is the freedom to starve if they WHEREFORE, for lack of merit, the instant petition is DISMISSED and the challenged decision of 30 January
refuse to work as casual or contractual workers. Indeed, to the unemployed, security of 1995 of the National Labor Relations Commission in NLRC CA No. N-001323-93 is hereby AFFIRMED subject to
tenure has no value. It could not then be said that petitioner and private respondents the above modification on the computation of the separation pay and back wages.
"dealt with each other on more or less equal terms with no moral dominance whatever
being exercised by the former over the latter. 10
SO ORDERED.

The petitioner does not deny or rebut private respondents' averments (1) that the main bulk of its workforce
consisted of its so-called "casual" employees; (2) that as of July 1991, "casual" workers numbered 1,835; and
regular employee, 263; (3) that the company hired "casual" every month for the duration of five months, after
which their services were terminated and they were replaced by other "casual" employees on the same five-
month duration; and (4) that these "casual" employees were actually doing work that were necessary and
desirable in petitioner's usual business.

As a matter of fact, the petitioner even stated in its position paper submitted to the Labor Arbiter that,
according to its records, the previous employees of the company hired on a five-month basis numbered about
10,000 as of July 1990. This confirms private respondents' allegation that it was really the practice of the
company to hire workers on a uniformly fixed contract basis and replace them upon the expiration of their
contracts with other workers on the same employment duration.

This scheme of the petitioner was apparently designed to prevent the private respondents and the other
"casual" employees from attaining the status of a regular employee. It was a clear circumvention of the
employees' right to security of tenure and to other benefits like minimum wage, cost-of-living allowance, sick
leave, holiday pay, and 13th month pay. 11 Indeed, the petitioner succeeded in evading the application of labor
laws. Also, it saved itself from the trouble or burden of establishing a just cause for terminating employees by
the simple expedient of refusing to renew the employment contracts.

The five-month period specified in private respondents' employment contracts having been imposed precisely
to circumvent the constitutional guarantee on security of tenure should, therefore, be struck down or
disregarded as contrary to public policy or morals. 12 To uphold the contractual arrangement between the
petitioner and the private respondents would, in effect, permit the former to avoid hiring permanent or
regular employees by simply hiring them on a temporary or casual basis, thereby violating the employees'
security of tenure in their jobs. 13

The execution by the private respondents of a "Release and Quitclaim" did not preclude them from
questioning the termination of their services. Generally, quitclaims by laborers are frowned upon as contrary
to public policy and are held to be ineffective to bar recovery for the full measure of the workers' rights. 14 The
reason for the rule is that the employer and the employee do not stand on the same footing. 15

Notably, the private respondents lost not time in filing a complaint for illegal dismissal. This act is hardly
expected from employees who voluntarily and freely consented to their dismissal. 16

The NLRC was, thus, correct in finding that the private respondents were regular employees and that they
were illegally dismissed from their jobs. Under Article 279 of the Labor Code and the recent
jurisprudence, 17 the legal consequence of illegal dismissal is reinstatement without loss of seniority rights and
G.R. No. 186439               January 15, 2014
UNIVERSAL ROBINA SUGAR MILLING CORPORATION and RENE CABATI, Petitioners, 
vs.
FERDINAND ACIBO, ROBERTO AGUILAR, EDDIE BALDOZA, RENE ABELLAR, DIOMEDES ALICOS, MIGUEL
ALICOS, ROGELIO AMAHIT, LARRY AMASCO, FELIPE BALANSAG, ROMEO BALANSAG, MANUEL BANGOT,
ANDY BANJAO, DIONISIO BENDIJO, JR., JOVENTINO BROCE, ENRICO LITERAL, RODGER RAMIREZ,
BIENVENIDO RODRIGUEZ, DIOCITO PALAGTIW, ERNIE SABLAN, RICHARD PANCHO, RODRIGO ESTRABELA,
DANNY KADUSALE and ALLYROBYL OLPUS, Respondents.
DECISION
Labor Law; Regular Employees; Words and Phrases; Regular employment refers to that arrangement
whereby the employee “has
_______________
* SECOND DIVISION.
597been engaged to perform activities which are usually necessary or desirable in the usual business or trade
of the employer.”—As the CA has explained in its challenged decision, Article 280 of the Labor Code provides
for three kinds of employment arrangements, namely: regular, project/seasonal and casual. Regular
employment refers to that arrangement whereby the employee “has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer[.]” Under the definition,
the primary standard that determines regular employment is the reasonable connection between the
particular activity performed by the employee and the usual business or trade of the employer; the emphasis
is on the necessity or desirability of the employee’s activity. Thus, when the employee performs activities
considered necessary and desirable to the overall business scheme of the employer, the law regards the
employee as regular. By way of an exception, paragraph 2, Article 280 of the Labor Code also considers regular
a casual employment arrangement when the casual employee’s engagement has lasted for at least one year,
regardless of the engagement’s continuity. The controlling test in this arrangement is the length of time during
which the employee is engaged.
Same; Project Employees; Words and Phrases; A project employment contemplates on arrangement
whereby “the employment has been fixed for a specific project or undertaking whose completion or
termination has been determined at the time of the engagement of the employee. —A project employment, on
the other hand, contemplates on arrangement whereby “the employment has been fixed for a specific project
or undertaking whose completion or termination has been determined at the time of the engagement of the
employee[.]” Two requirements, therefore, clearly need to be satisfied to remove the engagement from the
presumption of regularity of employment, namely: (1) designation of a specific project or undertaking for
which the employee is hired; and (2) clear determination of the completion or termination of the project at
the time of the employee’s engagement. The services of the project employees are legally and automatically
terminated upon the end or completion of the project as the employee’s services are coterminous with the
project.
Same; Same; The length of time of the asserted “project” employee’s engagement is not controlling as
the employment may, in fact, last for more than a year, depending on the needs or circum-
598stances of the project.—Unlike in a regular employment under Article 280 of the Labor Code, however, the
length of time of the asserted “project” employee’s engagement is not controlling as the employment may, in
fact, last for more than a year, depending on the needs or circumstances of the project. Nevertheless, this
length of time (or the continuous rehiring of the employee even after the cessation of the project) may serve
as a badge of regular employment when the activities performed by the purported “project” employee are
necessary and indispensable to the usual business or trade of the employer. In this latter case, the law will
regard the arrangement as regular employment.
Same; Seasonal Employees; When the “seasonal” workers are continuously and repeatedly hired to
perform the same tasks or activities for several seasons or even after the cessation of the season, this length
of time may likewise serve as badge of regular employment.—Seasonal employment operates much in the
same way as project employment, albeit it involves work or service that is seasonal in nature or lasting for the
duration of the season. As with project employment, although the seasonal employment arrangement
involves work that is seasonal or periodic in nature, the employment itself is not automatically considered
seasonal so as to prevent the employee from attaining regular status. To exclude the asserted “seasonal”
employee from those classified as regular employees, the employer must show that: (1) the employee must be
performing work or services that are seasonal in nature; and (2) he had been employed for the duration of the
season. Hence, when the “seasonal” workers are continuously and repeatedly hired to perform the same tasks
or activities for several seasons or even after the cessation of the season, this length of time may likewise
serve as badge of regular employment. In fact, even though denominated as “seasonal workers,” if these
workers are called to work from time to time and are only temporarily laid off during the off-season, the law
does not consider them separated from the service during the off-season period. The law simply considers
these seasonal workers on leave until re-employed.
Same; Regular Employees; The Labor Code does not mention another employment arrangement–
contractual or fixed term employment (or employment for a term)–which, if not for the fixed term, should fall
under the category of regular employment in view of the
599nature of the employee’s engagement, which is to perform an activity usually necessary or desirable in the
employer’s business.—Interestingly, the Labor Code does not mention another employment arrangement —
contractual or fixed term employment (or employment for a term) — which, if not for the fixed term, should
fall under the category of regular employment in view of the nature of the employee’s engagement, which is
to perform an activity usually necessary or desirable in the employer’s business.
Same; The nature of the employment does not depend solely on the will or word of the employer or on
the procedure for hiring and the manner of designating the employee.—Nevertheless, “where the
circumstances evidently show that the employer imposed the period precisely to preclude the employee from
acquiring tenurial security, the law and this Court will not hesitate to strike down or disregard the period as
contrary to public policy, morals, etc.” In such a case, the general restrictive rule under Article 280 of the Labor
Code will apply and the employee shall be deemed regular. Clearly, therefore, the nature of the employment
does not depend solely on the will or word of the employer or on the procedure for hiring and the manner of
designating the employee. Rather, the nature of the employment depends on the nature of the activities to be
performed by the employee, considering the nature of the employer’s business, the duration and scope to be
done, and, in some cases, even the length of time of the performance and its continued existence.
Same; Seasonal Employees; Regular seasonal employees, like the respondents in this case, should not
be confused with the regular employees of the sugar mill such as the administrative or office personnel who
perform their tasks for the entire year regardless of the season.—The respondents were regularly and
repeatedly hired to perform the same tasks year after year. This regular and repeated hiring of the same
workers (two different sets) for two separate seasons has put in place, principally through jurisprudence, the
system of regular seasonal employment in the sugar industry and other industries with a similar nature of
operations. Under the system, the plantation workers or the mill employees do not work continuously for one
whole year but only for the duration of the growing of the sugarcane or the milling season. Their seasonal
work, however, does not detract from considering them in regular employment since in a litany of cases, this
Court has already settled that
600seasonal workers who are called to work from time to time and are temporarily laid off during the off-
season are not separated from the service in said period, but are merely considered on leave until re-
employment. Be this as it may, regular seasonal employees, like the respondents in this case, should not be
confused with the regular employees of the sugar mill such as the administrative or office personnel who
perform their tasks for the entire year regardless of the season. The NLRC, therefore, gravely erred when it
declared the respondents regular employees of URSUMCO without qualification and that they were entitled
to the benefits granted, under the CBA, to URSUMCO’S regular employees.
Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; In this jurisdiction, only
questions of law are allowed in a petition for review on certiorari.—At this point, we reiterate the settled rule
that in this jurisdiction, only questions of law are allowed in a petition for review on certiorari. This Court’s
power of review in a Rule 45 petition is limited to resolving matters pertaining to any perceived legal errors,
which the CA may have committed in issuing the assailed decision. In reviewing the legal correctness of the
CA’s Rule 65 decision in a labor case, we examine the CA decision in the context that it determined, i.e., the
presence or absence of grave abuse of discretion in the NLRC decision before it and not on the basis of
whether the NLRC decision on the merits of the case was correct. In other words, we have to be keenly aware
that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it.
BRION, J.:
We resolve in this petition for review on certiorari 1 the challenge to the November 29, 2007 decision 2 and the
January 22, 2009 resolution3 of the Court of Appeals (CA) in CA-G.R. CEB-SP No. 02028. This CA decision
affirmed with modification the July 22, 2005 decision4 and the April 28, 2006 resolution5 of the National Labor
Relations Commission (NLRC) in NLRC Case No. V-00006-03 which, in turn, reversed the October 9, 2002
decision6 of the Labor Arbiter (LA). The LA’s decision dismissed the complaint filed by complainants Ferdinand
Acibo, et al.7 against petitioners Universal Robina Sugar Milling Corporation (URSUMCO) and Rene Cabati.
The Factual Antecedents
URSUMCO is a domestic corporation engaged in the sugar cane milling business; Cabati is URSUMCO’s
Business Unit General Manager.
The complainants were employees of URSUMCO. They were hired on various dates (between February 1988
and April 1996) and on different capacities,8 i.e., drivers, crane operators, bucket hookers, welders, mechanics,
laboratory attendants and aides, steel workers, laborers, carpenters and masons, among others. At the start of
their respective engagements, the complainants signed contracts of employment for a period of one (1)
month or for a given season. URSUMCO repeatedly hired the complainants to perform the same duties and,
for every engagement, required the latter to sign new employment contracts for the same duration of one
month or a given season.
9 them. The CA pointed out that while the complainants were considered regular, albeit seasonal, workers, the
On August 23, 2002,  the complainants filed before the LA complaints for regularization, entitlement to the
benefits under the existing Collective Bargaining Agreement (CBA),and attorney’s fees.
In the decision10 dated October 9, 2002, the LA dismissed the complaint for lack of merit. The LA held that the
complainants were seasonal or project workers and not regular employees of URSUMCO. The LA pointed out
that the complainants were required to perform, for a definite period, phases of URSUMCO’s several projects
that were not at all directly related to the latter’s main operations. As the complainants were project
employees, they could not be regularized since their respective employments were coterminous with the
phase of the work or special project to which they were assigned and which employments end upon the
completion of each project. Accordingly, the complainants were not entitled to the benefits granted under the
CBA that, as provided, covered only the regular employees of URSUMCO.
Of the twenty-two original complainants before the LA, seven appealed the LA’s ruling before the NLRC,
namely: respondents Ferdinand Acibo, Eddie Baldoza, Andy Banjao, Dionisio Bendijo, Jr., Rodger Ramirez,
Diocito Palagtiw, Danny Kadusale and Allyrobyl Olpus.
The Ruling of the NLRC
In its decision11 of July 22, 2005, the NLRC reversed the LA’s ruling; it declared the complainants as regular
URSUMCO employees and granted their monetary claims under the CBA. The NLRC pointed out that the
complainants performed activities which were usually necessary and desirable in the usual trade or business
of URSUMCO, and had been repeatedly hired for the same undertaking every season. Thus, pursuant to Article
280 of the Labor Code, the NLRC declared that the complainants were regular employees. As regular
employees, the NLRC held that the complainants were entitled to the benefits granted, under the CBA, to the
regular URSUMCO employees.
The petitioners moved to reconsider this NLRC ruling which the NLRC denied in its April 28, 2006
resolution.12 The petitioners elevated the case to the CA via a petition for certiorari.13
The Ruling of the CA
In its November 29, 2007 decision, 14 the CA granted in part the petition; it affirmed the NLRC’s ruling finding
the complainants to be regular employees of URSUMCO, but deleted the grant of monetary benefits under the
CBA.
The CA pointed out that the primary standard for determining regular employment is the reasonable
connection between a particular activity performed by the employee vis-à-vis the usual trade or business of
the employer. This connection, in turn, can be determined by considering the nature of the work performed
and the relation of this work to the business or trade of the employer in its entirety.
In this regard, the CA held that the various activities that the complainants were tasked to do were necessary,
if not indispensable, to the nature of URSUMCO’s business. As the complainants had been performing their
respective tasks for at least one year, the CA held that this repeated and continuing need for the
complainants’ performance of these same tasks, regardless of whether the performance was continuous or
intermittent, constitutes sufficient evidence of the necessity, if not indispensability, of the activity to
URSUMCO’s business.
Further, the CA noted that the petitioners failed to prove that they gave the complainants opportunity to work
elsewhere during the off-season, which opportunity could have qualified the latter as seasonal workers. Still,
the CA pointed out that even during this off-season period, seasonal workers are not separated from the
service but are simply considered on leave until they are re-employed. Thus, the CA concluded that the
complainants were regular employees with respect to the activity that they had been performing and while
the activity continued.
On the claim for CBA benefits, the CA, however, ruled that the complainants were not entitled to receive
CBA-covered regular employees of URSUMCO were performing tasks needed by the latter for the entire year
with no regard to the changing sugar milling season. Hence, the complainants did not belong to and could not
be grouped together with the regular employees of URSUMCO, for collective bargaining purposes; they
constitute a bargaining unit separate and distinct from the regular employees. Consequently, the CA declared
that the complainants could not be covered by the CBA.
The petitioners filed the present petition after the CA denied their motion for partial reconsideration 15 in the
CA’s January 22, 2009 resolution.16
The Issues
The petition essentially presents the following issues for the Court’s resolution: (1) whether the respondents
are regular employees of URSUMCO; and (2) whether affirmative relief can be given to the fifteen (15) of the
complainants who did not appeal the LA’s decision.17
The Court’s Ruling
We resolve to partially GRANT the petition.
On the issue of the status of the respondents’ employment
The petitioners maintain that the respondents are contractual or project/seasonal workers and not regular
employees of URSUMCO. They thus argue that the CA erred in applying the legal parameters and guidelines
for regular employment to the respondents’ case. They contend that the legal standards – length of the
employee’s engagement and the desirability or necessity of the employee’s work in the usual trade or
business of the employer – apply only to regular employees under paragraph 1, Article 280 of the Labor Code,
and, under paragraph 2 of the same article, to casual employees who are deemed regular by their length of
service.
The respondents, the petitioners point out, were specifically engaged for a fixed and predetermined duration
of, on the average, one (1) month at a time that coincides with a particular phase of the company’s business
operations or sugar milling season. By the nature of their engagement, the respondents’ employment legally
ends upon the end of the predetermined period; thus, URSUMCO was under no legal obligation to rehire the Casual employment, the third kind of employment arrangement, refers to any other employment
respondents. arrangement that does not fall under any of the first two categories, i.e., regular or project/seasonal.

In their comment,18 the respondents maintain that they are regular employees of URSUMCO. Relying on the Interestingly, the Labor Code does not mention another employment arrangement – contractual or fixed term
NLRC and the CA rulings, they point out that they have been continuously working for URSUMCO for more employment (or employment for a term) – which, if not for the fixed term, should fall under the category of
than one year, performing tasks which were necessary and desirable to URSUMCO’s business. Hence, under regular employment in view of the nature of the employee’s engagement, which is to perform an activity
the above-stated legal parameters, they are regular employees. usually necessary or desirable in the employer’s business.

We disagree with the petitioners’ position.1âwphi1 We find the respondents to be regular seasonal employees In Brent School, Inc. v. Zamora,29 the Court, for the first time, recognized and resolved the anomaly created by
of URSUMCO. a narrow and literal interpretation of Article 280 of the Labor Code that appears to restrict the employee’s
right to freely stipulate with his employer on the duration of his engagement. In this case, the Court upheld
the validity of the fixed-term employment agreed upon by the employer, Brent School, Inc., and the
As the CA has explained in its challenged decision, Article 280 of the Labor Code provides for three kinds of
employee, Dorotio Alegre, declaring that the restrictive clause in Article 280 "should be construed to refer to
employment arrangements, namely: regular, project/seasonal and casual. Regular employment refers to that
the substantive evil that the Code itself x x x singled out: agreements entered into precisely to circumvent
arrangement whereby the employee "has been engaged to perform activities which are usually necessary or
security of tenure. It should have no application to instances where [the] fixed period of employment was
desirable in the usual business or trade of the employer[.]"19 Under the definition, the primary standard that
agreed upon knowingly and voluntarily by the parties x x x absent any x x x circumstances vitiating [the
determines regular employment is the reasonable connection between the particular activity performed by
employee’s] consent, or where [the facts satisfactorily show] that the employer and [the] employee dealt with
the employee and the usual business or trade of the employer; 20 the emphasis is on the necessity or
each other on more or less equal terms[.]"30 The indispensability or desirability of the activity performed by
desirability of the employee’s activity. Thus, when the employee performs activities considered necessary and
the employee will not preclude the parties from entering into an otherwise valid fixed term employment
desirable to the overall business scheme of the employer, the law regards the employee as regular.
agreement; a definite period of employment does not essentially contradict the nature of the employees
duties31 as necessary and desirable to the usual business or trade of the employer.
By way of an exception, paragraph 2, Article 280 of the Labor Code also considers regular a casual
employment arrangement when the casual employee’s engagement has lasted for at least one year,
Nevertheless, "where the circumstances evidently show that the employer imposed the period precisely to
regardless of the engagement’s continuity. The controlling test in this arrangement is the length of time during
preclude the employee from acquiring tenurial security, the law and this Court will not hesitate to strike down
which the employee is engaged.
or disregard the period as contrary to public policy, morals, etc."32 In such a case, the general restrictive rule
under Article 280 of the Labor Code will apply and the employee shall be deemed regular.
A project employment, on the other hand, contemplates on arrangement whereby "the employment has been
fixed for a specific project or undertaking whose completion or termination has been determined at the time
Clearly, therefore, the nature of the employment does not depend solely on the will or word of the employer
of the engagement of the employee[.]"21 Two requirements, therefore, clearly need to be satisfied to remove
or on the procedure for hiring and the manner of designating the employee. Rather, the nature of the
the engagement from the presumption of regularity of employment, namely: (1) designation of a specific
employment depends on the nature of the activities to be performed by the employee, considering the nature
project or undertaking for which the employee is hired; and (2) clear determination of the completion or
of the employer’s business, the duration and scope to be done, 33 and, in some cases, even the length of time
termination of the project at the time of the employee’s engagement. 22 The services of the project employees
of the performance and its continued existence.
are legally and automatically terminated upon the end or completion of the project as the employee’s services
are coterminous with the project.
In light of the above legal parameters laid down by the law and applicable jurisprudence, the respondents are
neither project, seasonal nor fixed-term employees, but regular seasonal workers of URSUMCO. The following
Unlike in a regular employment under Article 280 of the Labor Code, however, the length of time of the
factual considerations from the records support this conclusion:
asserted "project" employee’s engagement is not controlling as the employment may, in fact, last for more
than a year, depending on the needs or circumstances of the project. Nevertheless, this length of time (or the
continuous rehiring of the employee even after the cessation of the project) may serve as a badge of regular First, the respondents were made to perform various tasks that did not at all pertain to any specific phase of
employment when the activities performed by the purported "project" employee are necessary and URSUMCO’s strict milling operations that would ultimately cease upon completion of a particular phase in the
indispensable to the usual business or trade of the employer. 23 In this latter case, the law will regard the milling of sugar; rather, they were tasked to perform duties regularly and habitually needed in URSUMCO’s
arrangement as regular employment.24 operations during the milling season. The respondents’ duties as loader operators, hookers, crane operators
and drivers were necessary to haul and transport the sugarcane from the plantation to the mill; laboratory
attendants, workers and laborers to mill the sugar; and welders, carpenters and utility workers to ensure the
Seasonal employment operates much in the same way as project employment, albeit it involves work or
smooth and continuous operation of the mill for the duration of the milling season, as distinguished from the
service that is seasonal in nature or lasting for the duration of the season. 25 As with project employment,
production of the sugarcane which involves the planting and raising of the sugarcane until it ripens for milling.
although the seasonal employment arrangement involves work that is seasonal or periodic in nature, the
The production of sugarcane, it must be emphasized, requires a different set of workers who are experienced
employment itself is not automatically considered seasonal so as to prevent the employee from attaining
in farm or agricultural work. Needless to say, they perform the activities that are necessary and desirable in
regular status. To exclude the asserted "seasonal" employee from those classified as regular employees, the
sugarcane production. As in the milling of sugarcane, the plantation workers perform their duties only during
employer must show that: (1) the employee must be performing work or services that are seasonal in nature;
the planting season.
and (2) he had been employed for the duration of the season. 26 Hence, when the "seasonal" workers are
continuously and repeatedly hired to perform the same tasks or activities for several seasons or even after the
cessation of the season, this length of time may likewise serve as badge of regular employment.27 In fact, even Second, the respondents were regularly and repeatedly hired to perform the same tasks year after year. This
though denominated as "seasonal workers," if these workers are called to work from time to time and are only regular and repeated hiring of the same workers (two different sets) for two separate seasons has put in place,
temporarily laid off during the off-season, the law does not consider them separated from the service during principally through jurisprudence, the system of regular seasonal employment in the sugar industry and other
the off-season period. The law simply considers these seasonal workers on leave until re-employed.28 industries with a similar nature of operations.
Under the system, the plantation workers or the mill employees do not work continuously for one whole year
but only for the duration of the growing of the sugarcane or the milling season. Their seasonal work, however,
does not detract from considering them in regular employment since in a litany of cases, this Court has already
settled that seasonal workers who are called to work from time to time and are temporarily laid off during the
off-season are not separated from the service in said period, but are merely considered on leave until re-
employment.34 Be this as it may, regular seasonal employees, like the respondents in this case, should not be
confused with the regular employees of the sugar mill such as the administrative or office personnel who
perform their tasks for the entire year regardless of the season. The NLRC, therefore, gravely erred when it
declared the respondents regular employees of URSUMCO without qualification and that they were entitled to
the benefits granted, under the CBA, to URSUMCO’S regular employees.
Third, while the petitioners assert that the respondents were free to work elsewhere during the off-season,
the records do not support this assertion. There is no evidence on record showing that after the completion of
their tasks at URSUMCO, the respondents sought and obtained employment elsewhere.
Contrary to the petitioners’ position, Mercado, Sr. v. NLRC, 3rd Div. 35 is not applicable to the respondents as
this case was resolved based on different factual considerations. In Mercado, the workers were hired to
perform phases of the agricultural work in their employer’s farm for a definite period of time; afterwards, they
were free to offer their services to any other farm owner. The workers were not hired regularly and repeatedly
for the same phase(s) of agricultural work, but only intermittently for any single phase. And, more importantly,
the employer in Mercado sufficiently proved these factual circumstances. The Court reiterated these same
observations in Hda. Fatima v. Nat’l Fed. of Sugarcane Workers-Food and Gen. Trade36 and Hacienda
Bino/Hortencia Starke, Inc. v. Cuenca.37
Based on the established facts, we find that the CA grossly misread the NLRC ruling and missed the
implications of the respondents’ regularization. To reiterate, the respondents are regular seasonal employees,
as the CA itself opined when it declared that "private respondents who are regular workers with respect to
their seasonal tasks or activities and while such activities exist, cannot automatically be governed by the CBA
between petitioner URSUMCO and the authorized bargaining representative of the regular and permanent
employees."44 Citing jurisprudential standards,45 it then proceeded to explain that the respondents cannot be
lumped with the regular employees due to the differences in the nature of their duties and the duration of
their work vis-a-vis the operations of the company.
The NLRC was well aware of these distinctions as it acknowledged that the respondents worked only during
the milling season, yet it ignored the distinctions and declared them regular employees, a marked departure
from existing jurisprudence. This, to us, is grave abuse of discretion, as it gave no reason for disturbing the
system of regular seasonal employment already in place in the sugar industry and other industries with similar
seasonal operations. For upholding the NLRC’s flawed decision on the respondents’ employment status, the
CA committed a reversible error of judgment.
In sum, we find the complaint to be devoid of merit. The issue of granting affirmative relief to the
complainants who did not appeal the CA ruling has become academic.
WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. Except for the denial of the
respondents' claim for CBA benefits, the November 29, 2007 decision and the January 22, 2009 resolution of
the Court of Appeals are SET ASIDE. The complaint is DISMISSED for lack of merit.

SO ORDERED.
At this point, we reiterate the settled rule that in this jurisdiction, only questions of law are allowed in a
petition for review on certiorari.38 This Court’s power of review in a Rule 45 petition is limited to resolving
matters pertaining to any perceived legal errors, which the CA may have committed in issuing the assailed
decision.39 In reviewing the legal correctness of the CA’s Rule 65 decision in a labor case, we examine the CA
decision in the context that it determined, i.e., the presence or absence of grave abuse of discretion in the
NLRC decision before it and not on the basis of whether the NLRC decision on the merits of the case was
correct.40 In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review
on appeal, of the NLRC decision challenged before it.41

Viewed in this light, we find the need to place the CA’s affirmation, albeit with modification, of the NLRC
decision of July 22, 2005 in perspective. To recall, the NLRC declared the respondents as regular employees of
URSUMCO.42With such a declaration, the NLRC in effect granted the respondents’ prayer for regularization
and, concomitantly, their prayer for the grant of monetary benefits under the CBA for URSUMCO’s regular
employees. In its challenged ruling, the CA concurred with the NLRC finding, but with the respondents
characterized as regular seasonal employees of URSUMCO.

The CA misappreciated the real import of the NLRC ruling. The labor agency did not declare the respondents
as regular seasonal employees, but as regular employees. This is the only conclusion that can be drawn from
the NLRC decision’s dispositive portion, thus:

WHEREFORE, premises considered, the appeal is hereby GRANTED. Complainants are declared regular
employees of respondent.1âwphi1 As such, they are entitled to the monetary benefits granted to regular
employees of respondent company based on the CBA, reckoned three (3) years back from the filing of the
above-entitled case on 23 August 2002 up to the present or to their entire service with respondent after the
date of filing of the said complaint if they are no longer connected with respondent company.43

It is, therefore, clear that the issue brought to the CA for resolution is whether the NLRC gravely abused its
discretion in declaring the respondents regular employees of URSUMCO and, as such, entitled to the benefits
under the CBA for the regular employees.
G.R. No. 204944-45               December 3, 2014
FUJI TELEVISION NETWORK, INC., Petitioner,  Fuji Television Network, Inc. vs. Espiritu
vs.
ARLENE S. ESPIRITU, Respondent.
DECISION
Remedial Law; Civil Procedure; Verification; Certification Against Forum Shopping; Rule 7, Section 4 of
the 1997 Rules of Civil Procedure provides the requirement of verification, while Section 5 of the same rule
provides the requirement of certification against forum shopping.—Rule 7, Section 4 of the 1997 Rules of Civil
Procedure provides the requirement of verification, while Section 5 of the same rule provides the requirement
of certification against forum shopping. x x x Section 4(e) of Rule 45 requires that petitions for review should
“contain a sworn certification against forum shopping as provided in the last paragraph of Section 2, Rule 42.”
Section 5 of the same rule provides that failure to comply with any requirement in Section 4 is sufficient
ground to dismiss the petition.
Same; Same; Same; Same; Although the general rule is that failure to attach a verification and
certification against forum shopping is a ground for dismissal, there are cases where this court al-
_______________
*  SECOND DIVISION.
32
32 SUPREME COURT REPORTS ANNOTATED
Fuji Television Network, Inc. vs. Espiritu
lowed substantial compliance.—Although the general rule is that failure to attach a verification and
certification against forum shopping is a ground for dismissal, there are cases where this court allowed
substantial compliance.
Same; Same; Same; Same; The physical act of signing the verification and certification against forum
shopping can only be done by natural persons duly authorized either by the corporate bylaws or a board
resolution.—Being a corporation, Fuji exercises its power to sue and be sued through its board of directors or
duly authorized officers and agents. Thus, the physical act of signing the verification and certification against
forum shopping can only be done by natural persons duly authorized either by the corporate bylaws or a
board resolution. In its petition for review on certiorari, Fuji attached Hideaki Ota’s secretary’s certificate,
authorizing Shuji Yano and Jin Eto to represent and sign for and on behalf of Fuji. The secretary’s certificate
was duly authenticated by Sulpicio Confiado, Consul-General of the Philippines in Japan. Likewise attached to
the petition is the special power of attorney executed by Shuji Yano, authorizing Corazon to sign on his behalf.
The verification and certification against forum shopping was signed by Corazon.
Same; Same; Same; Same; The Supreme Court (SC) has recognized that there are instances when
officials or employees of a corporation can sign the verification and certification against forum shopping
without a board resolution.—This court has recognized that there are instances when officials or employees of
a corporation can sign the verification and certification against forum shopping without a board resolution.
In Cagayan Valley Drug Corporation v. CIR, 545 SCRA 10 (2008), it was held that: In sum, we have held that the
following officials or employees of the company can sign the verification and certification without need of a
board resolution: (1) the Chairperson of the Board of Directors, (2) the President of a corporation, (3) the
General Manager or Acting General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a
labor case. While the above cases do not provide a complete listing of authorized signatories to the
verification and certification required by the rules, the determination of the sufficiency of the authority was
done on a case to case basis. The rationale applied in the foregoing cases is to justify the authority of
corporate officers or representatives of the corporation to sign the verification or certificate against forum
shop-
33
VOL. 744, DECEMBER 3, 2014 33
ping, being ‘in a position to verify the truthfulness and correctness of the allegations in the petition.’
Corazon’s affidavit states that she is the “office manager and resident interpreter of the Manila Bureau of Fuji
Television Network, Inc.” and that she has “held the position for the last twenty-three years.” As the office
manager for 23 years, Corazon can be considered as having knowledge of all matters in Fuji’s Manila Bureau
Office and is in a position to verify “the truthfulness and the correctness of the allegations in the Petition.”
Thus, Fuji substantially complied with the requirements of verification and certification against forum
shopping.
Labor Law; Appeals; Article 223 of the Labor Codedoes not provide any mode of appeal for decisions of
the National Labor Relations Commission (NLRC).—Article 223 of the Labor Code does not provide any mode
of appeal for decisions of the National Labor Relations Commission. It merely states that “[t]he decision of the
Commission shall be final and executory after ten (10) calendar days from receipt thereof by the parties.”
Being final, it is no longer appealable. However, the finality of the National Labor Relations Commission’s
decisions does not mean that there is no more recourse for the parties.
Same; Same; The Supreme Court (SC) clarified that judicial review of National Labor Relations
Commission’s (NLRC’s) decisions shall be by way of a petition for certiorari under Rule 65. Citing the doctrine of
hierarchy of courts, it further ruled that such petitions shall be filed before the Court of Appeals (CA). From the
CA, an aggrieved party may file a petition for review on certiorari under Rule 45.—In St. Martin Funeral Home
v. National Labor Relations Commission, 295 SCRA 494 (1998), this court cited several cases and rejected the
notion that this court had no jurisdiction to review decisions of the National Labor Relations Commission. It
stated that this court had the power to review the acts of the National Labor Relations Commission to see if it
kept within its jurisdiction in deciding cases and also as a form of check and balance. This court then clarified
that judicial review of National Labor Relations Commission’s decisions shall be by way of a petition
for certiorari under Rule 65. Citing the doctrine of hierarchy of courts, it further ruled that such petitions shall
be filed before the Court of Appeals. From the Court of Appeals, an aggrieved party may file a petition for
review on certiorari under Rule 45. A petition for certiorari under Rule 65 is
34
34 SUPREME COURT REPORTS ANNOTATED
Fuji Television Network, Inc. vs. Espiritu
 an original action where the issue is limited to grave abuse of discretion. As an original action, it
cannot be considered as a continuation of the proceedings of the labor tribunals. On the other hand, a petition
for review on certiorari under Rule 45 is a mode of appeal where the issue is limited to questions of law. In
labor cases, a Rule 45 petition is limited to reviewing whether the Court of Appeals correctly determined the
presence or absence of grave abuse of discretion and deciding other jurisdictional errors of the National Labor
Relations Commission.
Same; Employer-Employee Relationship; The Supreme Court (SC) has often used the four (4)-fold test to
determine the existence of an employer-employee relationship.—This court has often used the four-fold test to
determine the existence of an employer-employee relationship. Under the four-fold test, the “control test” is
the most important. As to how the elements in the four-fold test are proven, this court has discussed that:
[t]here is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant
evidence to prove the relationship may be admitted. Identification cards, cash vouchers, social security
registration, appointment letters or employment contracts, payrolls, organization charts, and personnel lists,
serve as evidence of employee status.
Same; Same; Independent Contractors; There is no employer-employee relationship between the
contractor and principal who engages the contractor’s services, but there is an employer-employee
relationship between the contractor and workers hired to accomplish the work for the principal.—In
Department Order No. 18-A, Series of 2011, of the Department of Labor and Employment, a contractor is
defined as having: Section 3. . . . . . . . (c) . . . an arrangement whereby a principal agrees to put out or farm
out with a contractor the performance or completion of a specific job, work or service within a definite or
predetermined period, regardless of whether such job, work or service is to be performed or completed within
or outside the premises of the principal. This department order also states that there is a trilateral relationship
in legitimate job contracting and subcontracting arrangements among the principal, contractor, and
employees of the contractor. There is no employer-employee relationship between the contractor and
principal who engages the contractor’s services, but there is an employer-employee
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Fuji Television Network, Inc. vs. Espiritu
 relationship between the contractor and workers hired to accomplish the work for the principal.
Same; Same; Same; Since no employer-employee relationship exists between independent contractors
and their principals, their contracts are governed by the Civil Code provisions on contracts and other applicable
laws.—Since no employer-employee relationship exists between independent contractors and their principals,
their contracts are governed by the Civil Code provisions on contracts and other applicable laws. A contract is
defined as “a meeting of minds between two persons whereby one binds himself, with respect to the other, to
give something or to render some service.” Parties are free to stipulate on terms and conditions in contracts as
long as these “are not contrary to law, morals, good customs, public order, or public policy.” This presupposes
that the parties to a contract are on equal footing. They can bargain on terms and conditions until they are
able to reach an agreement.
Same; Same; Same; Employees under fixed-term contracts cannot be independent contractors because
in fixed-term contracts, an employer-employee relationship exists.—Fuji’s argument that Arlene was an
independent contractor under a fixed-term contract is contradictory. Employees under fixed-term contracts
cannot be independent contractors because in fixed-term contracts, an employer-employee relationship
exists. The test in this kind of contract is not the necessity and desirability of the employee’s activities, “but
the day certain agreed upon by the parties for the commencement and termination of the employment
relationship.” For regular employees, the necessity and desirability of their work in the usual course of the
employer’s business are the determining factors. On the other hand, independent contractors do not have
employer-employee relationships with their principals.
Same; Same; Same; Wages should not be the conclusive factor in determining whether one is an
employee or an independent contractor.—The Court of Appeals did not err when it relied on the ruling
in Dumpit-Murillo v. Court of Appeals, 524 SCRA 290 (2007), and affirmed the ruling of the National Labor
Relations Commission finding that Arlene was a regular employee.Arlene was hired by Fuji as a news producer,
but there was no showing that she was hired because of unique skills that would distinguish her from ordi-
36
36 SUPREME COURT REPORTS ANNOTATED
Fuji Television Network, Inc. vs. Espiritu
nary employees. Neither was there any showing that she had a celebrity status. Her monthly salary
amounting to US$1,900.00 appears to be a substantial sum, especially if compared to her salary when she was
still connected with GMA. Indeed, wages may indicate whether one is an independent contractor. Wages may
also indicate that an employee is able to bargain with the employer for better pay. However, wages should not
be the conclusive factor in determining whether one is an employee or an independent contractor.
Same; Same; Regular Employees; The test for determining regular employment is whether there is a
reasonable connection between the employee’s activities and the usual business of the employer.—The test for
determining regular employment is whether there is a reasonable connection between the employee’s
activities and the usual business of the employer. Article 280 provides that the nature of work must be
“necessary or desirable in the usual business or trade of the employer” as the test for determining regular
employment. As stated in ABS-CBN Broadcasting Corporation v. Nazareno, 503 SCRA 204 (2006): In
determining whether an employment should be considered regular or non-regular, the applicable test is the
reasonable connection between the particular activity performed by the employee in relation to the usual
business or trade of the employer. The standard, supplied by the law itself, is whether the work undertaken is
necessary or desirable in the usual business or trade of the employer, a fact that can be assessed by looking
into the nature of the services rendered and its relation to the general scheme under which the business or
trade is pursued in the usual course. It is distinguished from a specific undertaking that is divorced from the
normal activities required in carrying on the particular business or trade.
Same; Same; Same; An employee can be a regular employee with a fixed-term contract .—An employee
can be a regular employee with a fixed-term contract. The law does not preclude the possibility that a regular
employee may opt to have a fixed-term contract for valid reasons. This was recognized in Brent School, Inc. v.
Zamora, 181 SCRA 702 (1990): For as long as it was the employee who requested, or bargained, that the
contract have a “definite date of termination,” or that the fixed-term contract be freely entered into by the
employer and the employee, then the validity of the fixed-term contract will be upheld.
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Fuji Television Network, Inc. vs. Espiritu
Same; Same; Probationary Employees; Security of Tenure; Even probationary employees are entitled to
the right to security of tenure.—Even probationary employees are entitled to the right to security of tenure.
This was explained in Philippine Daily Inquirer, Inc. v. Magtibay, Jr., 528 SCRA 355 (2007): Within the limited
legal six-month probationary period, probationary employees are still entitled to security of tenure. It is
expressly provided in the aforequoted Article 281 that a probationary employee may be terminated only on
two grounds: (a) for just cause, or (b) when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of his engagement. (Citation
omitted) The expiration of Arlene’s contract does not negate the finding of illegal dismissal by Fuji. The
manner by which Fuji informed Arlene that her contract would no longer be renewed is tantamount to
constructive dismissal. To make matters worse, Arlene was asked to sign a letter of resignation prepared by
Fuji. The existence of a fixed-term contract should not mean that there can be no illegal dismissal. Due process
must still be observed in the pretermination of fixed-term contracts of employment.
Same; Termination of Employment; Disease; Requirements for Termination of Employment on the
Ground of Disease Under Article 284 of the Labor Code.—For dismissal under Article 284 to be valid, two
requirements must be complied with: (1) the employee’s disease cannot be cured within six (6) months and
his “continued employment is prohibited by law or prejudicial to his health as well as to the health of his co-
employees”; and (2) certification issued by a competent public health authority that even with proper medical
treatment, the disease cannot be cured within six (6) months. The burden of proving compliance with these
requisites is on the employer. Noncompliance leads to the conclusion that the dismissal was illegal.
Same; Same; Illegal Dismissals; The law itself provides that illegally dismissed employees are entitled to
reinstatement, backwages including allowances, and all other benefits.—The Court of Appeals’ modification of
the National Labor Relations Commission’s decision was proper because the law itself provides that illegally
dismissed employees are entitled to reinstatement, backwages including allowances, and all other benefits.
On reinstatement, the National Labor Relations Commission ordered payment of separation pay in lieu of
38
38 SUPREME COURT REPORTS ANNOTATED
Fuji Television Network, Inc. vs. Espiritu
 
reinstatement, reasoning “that the filing of the instant suit may have seriously abraded the relationship
of the parties so as to render reinstatement impractical.” The Court of Appeals reversed this and ordered
reinstatement on the ground that separation pay in lieu of reinstatement is allowed only in several instances
such as (1) when the employer has ceased operations; (2) when the employee’s position is no longer available;
(3) strained relations; and (4) a substantial period has lapsed from date of filing to date of finality.
Same; Quitclaims; Quitclaims in labor cases do not bar illegally dismissed employees from filing labor
complaints and money claim.—Quitclaims in labor cases do not bar illegally dismissed employees from filing
labor complaints and money claim. As explained by Arlene, she signed the nonrenewal agreement out of
necessity. In Land and Housing Development Corporation v. Esquillo, 471 SCRA 488 (2005), this court
explained: We have heretofore explained that the reason why quitclaims are commonly frowned upon as
contrary to public policy, and why they are held to be ineffective to bar claims for the full measure of the
workers’ legal rights, is the fact that the employer and the employee obviously do not stand on the same
footing. The employer drove the employee to the wall. The latter must have to get hold of money. Because,
out of a job, he had to face the harsh necessities of life. He thus found himself in no position to resist money
proffered. His, then, is a case of adherence, not of choice.
Same; Moral Damages; Exemplary Damages; Moral damages are awarded “when the dismissal is
attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to
good morals, good customs or public policy.” On the other hand, exemplary damages may be awarded when
the dismissal was effected “in a wanton, oppressive or malevolent manner.”—With regard to the Court of
Appeals’ award of moral and exemplary damages and attorney’s fees, this court has recognized in several
cases that moral damages are awarded “when the dismissal is attended by bad faith or fraud or constitutes an
act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy.” On
the other hand, exemplary damages may be awarded when the dismissal was effected “in a wanton,
oppressive or malevolent manner.” The Court of Appeals and National Labor Relations Commission found that
after Arlene had informed Fuji of her cancer, she was
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Fuji Television Network, Inc. vs. Espiritu
informed that there would be problems in renewing her contract on account of her condition. This
information caused Arlene mental anguish, serious anxiety, and wounded feelings that can be gleaned from
the tenor of her email dated March 11, 2009. A portion of her email reads: I WAS SO SURPRISED . . . that at a
time when I am at my lowest, being sick and very weak, you suddenly came to deliver to me the NEWS that
you will no longer renew my contract. I knew this will come but I never thought that you will be so ‘heartless’
and insensitive to deliver that news just a month after I informed you that I am sick. I was asking for patience
and understanding and your response was not to RENEW my contract. Apart from Arlene’s illegal dismissal,
the manner of her dismissal was effected in an oppressive approach with her salary and other benefits being
withheld until May 5, 2009, when she had no other choice but to sign the nonrenewal contract. Thus, there
was legal basis for the Court of Appeals to modify the National Labor Relations Commission’s decision.
Same; Attorney’s Fees; Article 111 of the Labor Code states that “[i]n cases of unlawful withholding of
wages, the culpable party may be assessed attorney’s fees equivalent to ten percent (10%) of the amount of
wages recovered”; Where an employee was forced to litigate and, thus, incur expenses to protect his rights
and interest, the award of attorney’s fees is legally and morally justifiable.—With regard to the award of
attorney’s fees, Article 111 of the Labor Code states that “[i]n cases of unlawful withholding of wages, the
culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered.”
Likewise, this court has recognized that “in actions for recovery of wages or where an employee was forced to
litigate and, thus, incur expenses to protect his rights and interest, the award of attorney’s fees is legally and
morally justifiable.” Due to her illegal dismissal, Arlene was forced to litigate.
LEONEN, J.:
It is the burden of the employer to prove that a person whose services it pays for is an independent contractor
rather than a regular employee with or without a fixed term. That a person has a disease does not per se
entitle the employer to terminate his or her services. Termination is the last resort. At the very least, a
competent public health authority must certify that the disease cannot be cured within six ( 6) months, even
with appropriate treatment.
We decide this petition for review1 on certiorari filed by Fuji Television Network, Inc., seeking the reversal of
the Court of Appeals’ Decision2 dated June 25, 2012, affirming with modification the decision3 of the National
Labor Relations Commission.
In 2005, Arlene S. Espiritu ("Arlene") was engaged by Fuji Television Network, Inc. ("Fuji") asa news
correspondent/producer4 "tasked to report Philippine news to Fuji through its Manila Bureau field
office."5 Arlene’s employment contract initially provided for a term of one (1) year but was successively
renewed on a yearly basis with salary adjustment upon every renewal. 6 Sometime in January 2009, Arlenewas
diagnosed with lung cancer.7She informed Fuji about her condition. In turn, the Chief of News Agency of Fuji,
Yoshiki Aoki, informed Arlene "that the company will have a problem renewing her contract" 8 since it would
be difficult for her to perform her job. 9 She "insisted that she was still fit to work as certified by her attending
physician."10
After several verbal and written communications,11 Arlene and Fuji signed a non-renewal contract on May 5,
2009 where it was stipulated that her contract would no longer be renewed after its expiration on May 31,
2009. The contract also provided that the parties release each other from liabilities and responsibilities under
the employment contract.12
In consideration of the non-renewal contract, Arlene "acknowledged receipt of the total amount of
US$18,050.00 representing her monthly salary from March 2009 to May 2009, year-end bonus, mid-year
bonus, and separation pay."13 However, Arlene affixed her signature on the nonrenewal contract with the
initials "U.P." for "under protest."14
On May 6, 2009, the day after Arlene signed the non-renewal contract, she filed a complaint for illegal
dismissal and attorney’s fees with the National Capital Region Arbitration Branch of the National Labor
Relations Commission. She alleged that she was forced to sign the nonrenewal contract when Fuji came to
know of her illness and that Fuji withheld her salaries and other benefits for March and April 2009 when she
refused to sign.15
Arlene claimed that she was left with no other recourse but to sign the non-renewal contract, and it was only
upon signing that she was given her salaries and bonuses, in addition to separation pay equivalent to four (4)
years.16
In the decision17 dated September 10, 2009, Labor Arbiter Corazon C. Borbolla dismissed Arlene’s
complaint.18Citing Sonza v. ABS-CBN19 and applying the four-fold test, the Labor Arbiter held that Arlene was
not Fuji’s employee but an independent contractor.20
Arlene appealed before the National Labor Relations Commission. In its decision dated March 5, 2010, the
National Labor Relations Commission reversed the Labor Arbiter’s decision. 21 It held that Arlene was a regular
employee with respect to the activities for which she was employed since she continuously rendered services
that were deemednecessary and desirable to Fuji’s business. 22 The National Labor Relations Commission
ordered Fuji to pay Arlene backwages, computed from the date of her illegal dismissal.23 The dispositive
portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered GRANTING the instant appeal. The Decision
of the Labor Arbiter dated 19 September 2009 is hereby REVERSED and SET ASIDE, and a new one is issued
ordering respondents-appellees to pay complainant-appellant backwages computed from the date of her
illegal dismissal until finality of this Decision.
SO ORDERED.24
Arlene and Fuji filed separat emotions for reconsideration. 25 Both motions were denied by the National Labor
Relations Commission for lack of merit in the resolution dated April 26, 2010. 26 From the decision of the
National Labor Relations Commission, both parties filed separate petitions for certiorari27 before the Court of
Appeals. The Court of Appeals consolidated the petitions and considered the following issues for resolution:
1) Whether or not Espirituis a regular employee or a fixed-term contractual employee;
2) Whether or not Espiritu was illegally dismissed; and
3) Whether or not Espirituis entitled to damages and attorney’s fees.28
In the assailed decision, the Court of Appeals affirmed the National Labor Relations Commission
with the modification that Fuji immediately reinstate Arlene to her position as News Producer
without loss of seniority rights, and pay her backwages, 13th-month pay, mid-year and year-end
bonuses, sick leave and vacation leave with pay until reinstated, moral damages, exemplary
damages, attorney’sfees, and legal interest of 12% per annum of the total monetary awards. 29 The
Court of Appeals ruled that:
WHEREFORE, for lack of merit, the petition of Fuji Television Network, Inc. and Yoshiki Aoki is DENIED and the
petition of Arlene S. Espiritu is GRANTED. Accordingly, the Decision dated March 5, 2010 of the National Labor
Relations Commission, 6th Division in NLRC NCR Case No. 05-06811-09 and its subsequent Resolution dated
April 26, 2010 are hereby AFFIRMED with MODIFICATIONS, as follows:
Fuji Television, Inc. is hereby ORDERED to immediately REINSTATE Arlene S. Espiritu to her position as News
Producer without loss of seniority rights and privileges and to pay her the following:
1. Backwages at the rate of $1,900.00 per month computed from May 5, 2009 (the date of
dismissal), until reinstated;
2. 13th Month Pay at the rate of $1,900.00 per annum from the date of dismissal, until reinstated;
3. One and a half (1 1/2) months pay or $2,850.00 as midyear bonus per year from the date of
dismissal, until reinstated;
4. One and a half (1 1/2) months pay or $2,850.00 as year-end bonus per year from the date of
dismissal, until reinstated;
5. Sick leave of 30 days with pay or $1,900.00 per year from the date of dismissal, until reinstated;
and
6. Vacation leave with pay equivalent to 14 days or $1,425.00 per annum from date of dismissal,
until reinstated.
7. The amount of ₱100,000.00 as moral damages;
8. The amount of ₱50,000.00 as exemplary damages;
9. Attorney’s fees equivalent to 10% of the total monetary awards herein stated; and
10. Legal interest of twelve percent (12%) per annum of the total monetary awards computed from
May 5, 2009, until their full satisfaction.
The Labor Arbiter is hereby DIRECTED to make another recomputation of the above monetary awards
consistent with the above directives.
SO ORDERED.30
In arriving at the decision, the Court of Appeals held that Arlene was a regular employee because she was
engaged to perform work that was necessary or desirable in the business of Fuji, 31 and the successive renewals
of her fixed-term contract resulted in regular employment.32
According to the Court of Appeals, Sonzadoes not apply in order to establish that Arlene was an independent
contractor because she was not contracted on account of any peculiar ability, special talent, or skill. 33 The fact
that everything used by Arlene in her work was owned by Fuji negated the idea of job contracting.34
The Court of Appeals also held that Arlene was illegally dismissed because Fuji failed to comply with the
requirements of substantive and procedural due process necessary for her dismissal since she was a regular
employee.35
The Court of Appeals found that Arlene did not sign the non-renewal contract voluntarily and that the contract
was a mere subterfuge by Fuji to secure its position that it was her choice not to renew her contract. She was
left with no choice since Fuji was decided on severing her employment.36
Fuji filed a motion for reconsideration that was denied in the resolution37 dated December 7, 2012 for failure
to raise new matters.38
Aggrieved, Fuji filed this petition for review and argued that the Court of Appeals erred in affirming with
modification the National Labor Relations Commission’s decision, holding that Arlene was a regular employee
and that she was illegally dismissed. Fuji also questioned the award of monetary claims, benefits, and
damages.39
Fuji points out that Arlene was hired as a stringer, and it informed her that she would remain one. 40 She was
hired as an independent contractor as defined in Sonza.41 Fuji had no control over her work.42 The employment
contracts were executed and renewed annually upon Arlene’s insistence to which Fuji relented because she
had skills that distinguished her from ordinary employees.43 Arlene and Fuji dealt on equal terms when they
negotiated and entered into the employment contracts. 44 There was no illegal dismissal because she freely
agreed not to renew her fixed-term contract as evidenced by her e-mail correspondences with Yoshiki
Aoki.45 In fact, the signing of the non-renewal contract was not necessary to terminate her employment since
"such employment terminated upon expiration of her contract."46 Finally, Fuji had dealt with Arlene in good
faith, thus, she should not have been awarded damages.47
Fuji alleges that it did not need a permanent reporter since the news reported by Arlene could easily be
secured from other entities or from the internet. 48 Fuji "never controlled the manner by which she performed
her functions."49It was Arlene who insisted that Fuji execute yearly fixed-term contracts so that she could
negotiate for annual increases in her pay.50
Fuji points out that Arlene reported for work for only five (5) days in February 2009, three (3) days in March
2009, and one (1) day in April 2009.51 Despite the provision in her employment contract that sick leaves in
excess of 30 days shall not be paid, Fuji paid Arlene her entire salary for the months of March, April, and May;
four(4) months of separation pay; and a bonus for two and a half months for a total of US$18,050.00.52 Despite
having received the amount of US$18,050.00, Arlene still filed a case for illegal dismissal.53
Fuji further argues that the circumstances would show that Arlene was not illegally dismissed. The decision
tonot renew her contract was mutually agreed upon by the parties as indicated in Arlene’s e-mail 54 dated
March 11, 2009 where she consented to the non-renewal of her contract but refused to sign anything. 55 Aoki
informed Arlene in an e-mail56 dated March 12, 2009 that she did not need to sign a resignation letter and that
Fuji would pay Arlene’s salary and bonus until May 2009 as well as separation pay.57
Arlene sent an e-mail dated March 18, 2009 with her version of the non-renewal agreement that she agreed
to sign this time.58 This attached version contained a provision that Fuji shall re-hire her if she was still
interested to work for Fuji.59 For Fuji, Arlene’s e-mail showed that she had the power to bargain.60
Fuji then posits that the Court of Appeals erred when it held that the elements of an employer-employee
relationship are present, particularly that of control; 61 that Arlene’s separation from employment upon the
expiration of her contract constitutes illegal dismissal; 62 that Arlene is entitled to reinstatement;63 and that Fuji
is liable to Arlene for damages and attorney’s fees.64
This petition for review on certiorari under Rule 45 was filed on February 8, 2013. 65 On February 27, 2013,
Arlene filed a manifestation66 stating that this court may not take jurisdiction over the case since Fuji failed to
authorize Corazon E. Acerden to sign the verification. 67 Fuji filed a comment on the manifestation 68 on March
9, 2013.
Based on the arguments of the parties, there are procedural and substantive issues for resolution:
 I. Whether the petition for review should be dismissed as Corazon E. Acerden, the signatory of the
verification and certification of non forum shopping of the petition, had no authority to sign the
verification and certification on behalf of Fuji;
II. Whether the Court of Appeals correctly determined that no grave abuse of discretion was
committed by the National Labor Relations Commission when it ruled that Arlene was a regular
employee, not an independent contractor, and that she was illegally dismissed; and
III. Whether the Court of Appeals properly modified the National Labor Relations Commission’s
decision by awarding reinstatement, damages, and attorney’s fees.
The petition should be dismissed.
I
Validity of the verification and certification against forum shopping
In its comment on Arlene’s manifestation, Fuji alleges that Corazon was authorized to sign the verification and
certification of non-forum shopping because Mr. Shuji Yano was empowered under the secretary’s certificate
to delegate his authority to sign the necessary pleadings, including the verification and certification against
forum shopping.69
On the other hand, Arlene points outthat the authority given to Mr. Shuji Yano and Mr. Jin Eto in the
secretary’s certificate is only for the petition for certiorari before the Court of Appeals. 70 Fuji did not attach any
board resolution authorizing Corazon orany other person tofile a petition for review on certiorari with this
court.71 Shuji Yano and Jin Eto could not re-delegate the power thatwas delegated to them. 72 In addition, the
special power of attorney executed by Shuji Yano in favor of Corazon indicated that she was empowered to
sign on behalf of Shuji Yano, and not on behalf of Fuji.73
The Rules of Court requires the
submission of verification and
certification against forum shopping
Rule 7, Section 4 of the 1997 Rules of Civil Procedure provides the requirement of verification, while Section 5
of the same rule provides the requirement of certification against forum shopping. These sections state:
SEC. 4. Ver if ica tio n. — Except when otherwise specifically required by law or rule, pleadings need not be
under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are
true and correct of his knowledge and belief.
A pleading required to be verifiedwhich containsa verification based on "information and belief," or upon
"knowledge, information and belief," or lacks a proper verification, shall be treated as an unsigned pleading.
SEC. 5. Certification against forum shopping.— The plaintiff or principal party shall certify under oath in the
complaint orother initiatory pleading asserting a claim for relief or in a sworn certification annexed thereto
and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim
involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no
such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete
statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or
claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein
his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint
or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise
provided, upon motion and after hearing. The submission of a false certification or non-compliance with any of
the undertakings therein shall constitute indirect contempt ofcourt, without prejudice to the corresponding
administrative and criminalactions. If the acts of the party or his counsel clearly constitute willful and
deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall
constitute direct contempt, as well as a cause for administrative sanctions.
Section 4(e) of Rule 4574 requires that petitions for review should "contain a sworn certification against forum
shopping as provided in the last paragraph of section 2, Rule 42." Section 5 of the same rule provides that
failure to comply with any requirement in Section 4 is sufficient ground to dismiss the petition.
Effects of non-compliance
Uy v. Landbank75 discussed the effect of non-compliance with regard to verification and stated that:
[t]he requirement regarding verification of a pleading is formal, not jurisdictional. Such requirement is simply a
condition affecting the form of pleading, the non-compliance of which does not necessarily render the
pleading fatally defective. Verification is simply intended to secure an assurance that the allegations in the
pleading are true and correct and not the product of the imagination or a matter of speculation, and that the
pleading is filed in good faith. The court may order the correction of the pleading if the verification is lacking or
act on the pleading although it is not verified, if the attending circumstances are such that strict compliance
with the rules may be dispensed with inorder that the ends of justice may thereby be served. 76 (Citations
omitted)
Shipside Incorporated v. Court of Appeals77 cited the discussion in Uy and differentiated its effect from non-
compliance with the requirement of certification against forum shopping:
On the other hand, the lack of certification against forum shopping is generally not curable by the submission
thereof after the filing of the petition. Section 5, Rule 45 of the 1997 Rules of Civil Procedure provides that the
failure of the petitioner tosubmit the required documents that should accompany the petition, including the
certification against forum shopping, shall be sufficient ground for the dismissal thereof. The same rule applies
to certifications against forum shopping signed by a person on behalf of a corporation which are
unaccompanied by proof that said signatory is authorized to file a petition on behalf of the
corporation.78 (Emphasis supplied) Effects of substantial compliance with the requirement of verification and
certification against forum shopping
Although the general rule is that failure to attach a verification and certification against forum shopping isa
ground for dismissal, there are cases where this court allowed substantial compliance.
In Loyola v. Court of Appeals,79 petitioner Alan Loyola submitted the required certification one day after filing
his electoral protest.80 This court considered the subsequent filing as substantial compliance since the purpose
of filing the certification is to curtail forum shopping.81
In LDP Marketing, Inc. v. Monter,82 Ma. Lourdes Dela Peña signed the verification and certification against
forum shopping but failed to attach the board resolution indicating her authority to sign.83 In a motion for
reconsideration, LDP Marketing attached the secretary’s certificate quoting the board resolution that
authorized Dela Peña.84 Citing Shipside, this court deemed the belated submission as substantial compliance
since LDP Marketing complied with the requirement; what it failed to do was to attach proof of Dela Peña’s
authority to sign.85 Havtor Management Phils., Inc. v. National Labor Relations Commission 86 and General
Milling Corporation v. National Labor Relations Commission87 involved petitions that were dismissed for failure
to attach any document showing that the signatory on the verification and certification against forum-
shopping was authorized.88 In both cases, the secretary’s certificate was attached to the motion for
reconsideration.89 This court considered the subsequent submission of proof indicating authority to sign as
substantial compliance.90 Altres v. Empleo91 summarized the rules on verification and certification against
forum shopping in this manner:
For the guidance of the bench and bar, the Court restates in capsule form the jurisprudential pronouncements
. . . respecting non-compliance with the requirement on, or submission of defective, verification and
certification against forum shopping:
1) A distinction must be made between non-compliance with the requirement on or submission of
defective verification, and noncompliance with the requirement on or submission of defective
certification against forum shopping.
2) As to verification, non-compliance therewith or a defect therein does not necessarily render the
pleading fatally defective. The court may order its submission or correction or act on the pleading if
the attending circumstances are such that strict compliance with the Rule may be dispensed with in
order that the ends of justice may be served thereby.
3) Verification is deemed substantially complied with when one who has ample knowledge to
swear to the truth of the allegations in the complaint or petition signs the verification, and when
matters alleged in the petition have been made in good faith or are true and correct.
4) As to certification against forum shopping, non-compliance therewith or a defect therein, unlike
in verification, is generally not curable by its subsequent submission or correction thereof, unless
there is a need to relax the Rule on the ground of "substantial compliance" or presence of "special
circumstances or compelling reasons."
5) The certification against forum shopping must be signed by all the plaintiffs or petitioners in a
case; otherwise, those who did not sign will be dropped as parties to the case. Under reasonable or
justifiable circumstances, however, as when all the plaintiffs or petitioners share a common interest
and invoke a common cause of action or defense, the signature of only one of them inthe
certification against forum shopping substantially complies with the Rule.
6) Finally, the certification against forum shopping must be executed by the party-pleader, not by
his counsel. If, however, for reasonable or justifiable reasons, the party-pleader is unable to sign,
he must execute a Special Power of Attorney designating his counsel of record to sign on his
behalf.92
There was substantial compliance
by Fuji Television Network, Inc.
Being a corporation, Fuji exercises its power to sue and be sued through its board of directors or duly
authorized officers and agents. Thus, the physical act of signing the verification and certification against forum
shopping can only be done by natural persons duly authorized either by the corporate by-laws or a board
resolution.93
In its petition for review on certiorari, Fuji attached Hideaki Ota’s secretary’s certificate, 94 authorizing Shuji
Yano and Jin Eto to represent and sign for and on behalf of Fuji. 95 The secretary’s certificate was duly
authenticated96 by Sulpicio Confiado, Consul-General of the Philippines in Japan. Likewise attached to the
petition is the special power of attorney executed by Shuji Yano, authorizing Corazon to sign on his
behalf.97 The verification and certification against forum shopping was signed by Corazon.98
Arlene filed the manifestation dated February 27, 2013, arguing that the petition for review should be
dismissed because Corazon was not duly authorized to sign the verification and certification against forum
shopping.
Fuji filed a comment on Arlene’s manifestation, stating that Corazon was properly authorized to sign. On the
basis of the secretary’s certificate, Shuji Yano was empowered to delegate his authority.
Quoting the board resolution dated May 13, 2010, the secretary's certificate states:
(a) The Corporation shall file a Petition for Certiorari with the Court of Appeals, against Philippines’
National Labor Relations Commission ("NLRC") and Arlene S. Espiritu, pertaining to NLRC-NCR Case
No. LAC 00-002697-09, RAB No. 05-06811-00 and entitled "Arlene S. Espiritu v. Fuji Television
Network, Inc./Yoshiki Aoki", and participate in any other subsequent proceeding that may
necessarily arise therefrom, including but not limited to the filing of appeals in the appropriate
venue;
(b) Mr. Shuji Yano and Mr. Jin Etobe authorized, as they are hereby authorized, to verify and
execute the certification against nonforum shopping which may be necessary or required to be
attached to any pleading to [sic] submitted to the Court of Appeals; and the authority to so verify
and certify for the Corporation in favor of the said persons shall subsist and remain effective until
the termination of the said case;
....
(d) Mr. Shuji Yano and Mr. Jin Etobe authorized, as they are hereby authorized, to represent and
appear on behalf the [sic] Corporation in all stages of the [sic] this case and in any other proceeding
that may necessarily arise thereform [sic], and to act in the Corporation’s name, place and stead to
determine, propose, agree, decide, do, and perform any and all of the following:
1. The possibility of amicable settlement or of submission to alternative mode of dispute
resolution;
2. The simplification of the issue;
3. The necessity or desirability of amendments to the pleadings;
4. The possibility of obtaining stipulation or admission of facts and documents; and
5. Such other matters as may aid in the prompt disposition of the action. 99 (Emphasis in
the original; Italics omitted)
Shuji Yano executed a special power of attorney appointing Ms. Ma. Corazon E. Acerden and Mr. Moises A.
Rollera as his attorneys-in-fact.100 The special power of attorney states:
That I, SHUJI YANO, of legal age, Japanese national, with office address at 2-4-8 Daiba, Minato-Ku, Tokyo, 137-
8088 Japan, and being the representative of Fuji TV, INc., [sic] (evidenced by the attached Secretary’s
Certificate) one of the respondents in NLRC-NCR Case No. 05-06811-00 entitled "Arlene S. Espiritu v. Fuji
Television Network, Inc./Yoshiki Aoki", and subsequently docketed before the Court of Appeals asC.A. G.R. S.P.
No. 114867 (Consolidated with SP No. 114889) do hereby make, constitute and appoint Ms. Ma. Corazon E.
Acerden and Mr. Moises A. Rolleraas my true and lawful attorneys-infact for me and my name, place and
stead to act and represent me in the above-mentioned case, with special power to make admission/s and
stipulations and/or to make and submit as well as to accept and approve compromise proposals upon such
terms and conditions and under such covenants as my attorney-in-fact may deem fit, and to engage the
services of Villa Judan and Cruz Law Officesas the legal counsel to represent the Company in the Supreme
Court;
The said Attorneys-in-Fact are hereby further authorized to make, sign, execute and deliver such papers
ordocuments as may be necessary in furtherance of the power thus granted, particularly to sign and execute
the verification and certification of non-forum shopping needed to be filed.101 (Emphasis in the original)
In its comment102 on Arlene’s manifestation, Fuji argues that Shuji Yano could further delegate his authority
because the board resolution empowered him to "act in the Corporation’s name, place and stead to
determine, propose, agree, decided [sic], do and perform any and all of the following: . . . such other matters
as may aid in the prompt disposition of the action."103 To clarify, Fuji attached a verification and certification
against forum shopping, but Arlene questions Corazon’s authority to sign. Arlene argues that the secretary’s
certificate empowered Shuji Yano to file a petition for certiorari before the Court of Appeals, and not a
petition for review before this court, and that since Shuji Yano’s authority was delegated to him, he could not
further delegate such power. Moreover, Corazon was representing Shuji Yano in his personal capacity, and not
in his capacity as representative of Fuji.
A review of the board resolution quoted in the secretary’s certificate shows that Fuji shall "file a Petition for
Certiorari with the Court of Appeals" 104 and "participate in any other subsequent proceeding that may
necessarily arise therefrom, including but not limited to the filing of appeals in the appropriate venue,"105 and
that Shuji Yano and Jin Eto are authorized to represent Fuji "in any other proceeding that may necessarily arise
thereform [sic]."106 As pointed out by Fuji, Shuji Yano and Jin Eto were also authorized to "act in the
Corporation’s name, place and stead to determine, propose, agree, decide, do, and perform anyand all of the
following: . . . 5. Such other matters as may aid in the prompt disposition of the action."107
Considering that the subsequent proceeding that may arise from the petition for certiorari with the Court of
Appeals is the filing of a petition for review with this court, Fuji substantially complied with the procedural
requirement.
On the issue of whether Shuji Yano validly delegated his authority to Corazon, Article 1892 of the Civil Code of
the Philippines states:
ART. 1892. The agent may appoint a substitute if the principal has not prohibited him from doing so; but he
shall be responsible for the acts of the substitute:
(1) When he was not given the power to appoint one;
(2) When he was given such power, but without designating the person, and the person appointed
was notoriously incompetent or insolvent. All acts of the substitute appointed against the
prohibition of the principal shall be void.
The secretary’s certificate does not state that Shuji Yano is prohibited from appointing a substitute. In fact,
heis empowered to do acts that will aid in the resolution of this case.
This court has recognized that there are instances when officials or employees of a corporation can sign the
verification and certification against forum shopping without a board resolution. In Cagayan Valley Drug
Corporation v. CIR,108 it was held that:
In sum, we have held that the following officials or employees of the company can sign the verification and
certification without need of a board resolution: (1) the Chairperson of the Board of Directors, (2) the
President of a corporation, (3) the General Manager or Acting General Manager, (4) Personnel Officer, and (5)
an Employment Specialist in a labor case.
While the above cases109 do not provide a complete listing of authorized signatories to the verification and
certification required by the rules, the determination of the sufficiency of the authority was done on a case to
case basis. The rationale applied in the foregoing cases is to justify the authority of corporate officers or
representatives of the corporation to sign the verification or certificate against forum shopping, being ‘in a
position to verify the truthfulness and correctness of the allegations in the petition.’110
Corazon’s affidavit111 states that she is the "office manager and resident interpreter of the Manila Bureau of
Fuji Television Network, Inc."112 and that she has "held the position for the last twenty-three years."113
As the office manager for 23 years,Corazon can be considered as having knowledge of all matters in Fuji’s
Manila Bureau Office and is in a position to verify "the truthfulness and the correctness of the allegations in
the Petition."114
Thus, Fuji substantially complied with the requirements of verification and certification against forum
shopping.
Before resolving the substantive issues in this case, this court will discuss the procedural parameters of a Rule
45 petition for review in labor cases.
II
Procedural parameters of petitions for review in labor cases
Article 223 of the Labor Code115 does not provide any mode of appeal for decisions of the National Labor
Relations Commission. It merely states that "[t]he decision of the Commission shall be final and executory
after ten (10) calendar days from receipt thereof by the parties." Being final, it is no longer appealable.
However, the finality of the National Labor Relations Commission’s decisions does not mean that there is no
more recourse for the parties.
In St. Martin Funeral Home v. National Labor Relations Commission,116 this court cited several cases117 and
rejected the notion that this court had no jurisdiction to review decisions of the National Labor Relations
Commission. It stated that this court had the power to review the acts of the National Labor Relations
Commission to see if it kept within its jurisdiction in deciding cases and alsoas a form of check and
balance.118 This court then clarified that judicial review of National Labor Relations Commission decisions shall
be by way of a petition for certiorari under Rule 65. Citing the doctrine of hierarchy of courts, it further ruled
that such petitions shall be filed before the Court of Appeals. From the Court of Appeals, an aggrieved party
may file a petition for review on certiorari under Rule 45.
A petition for certiorari under Rule 65 is an original action where the issue is limited to grave abuse of
discretion. As an original action, it cannot be considered as a continuation of the proceedings of the labor
tribunals.
On the other hand, a petition for review on certiorari under Rule 45 is a mode of appeal where the issue is
limited to questions of law. In labor cases, a Rule 45 petition is limited toreviewing whether the Court of
Appeals correctly determined the presence or absence of grave abuse of discretion and deciding other
jurisdictional errors of the National Labor Relations Commission.119
In Odango v. National Labor Relations Commission, 120 this court explained that a petition for certiorari is an
extraordinary remedy that is "available only and restrictively in truly exceptional cases"121 and that its sole
office "is the correction of errors of jurisdiction including commission of grave abuse of discretion amounting
to lack or excess of jurisdiction."122 A petition for certiorari does not include a review of findings of fact since
the findings of the National Labor Relations Commission are accorded finality. 123 In cases where the aggrieved
party assails the National Labor Relations Commission’s findings, he or she must be able to show that the
Commission "acted capriciously and whimsically or in total disregard of evidence material to the
controversy."124
When a decision of the Court of Appeals under a Rule 65 petition is brought to this court by way of a petition
for review under Rule 45, only questions of law may be decided upon. As held in Meralco Industrial v. National
Labor Relations Commission:125
This Court is not a trier of facts. Well-settled is the rule that the jurisdiction of this Court ina petition for review
on certiorari under Rule 45 of the Revised Rules of Court is limited to reviewing only errors of law, not of fact,
unless the factual findings complained of are completely devoid of support from the evidence on record, or
the assailed judgment is based on a gross misapprehension of facts. Besides, factual findings of quasi-judicial
agencies like the NLRC, when affirmed by the Court of Appeals, are conclusive upon the parties and binding on
this Court.126
Career Philippines v. Serna,127 citing Montoya v. Transmed,128 is instructive on the parameters of judicial review
under Rule 45:
As a rule, only questions of law may be raised in a Rule 45 petition. In one case, we discussed the particular
parameters of a Rule 45 appeal from the CA’s Rule 65 decision on a labor case, as follows:
In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast with the review for
jurisdictional error that we undertake under Rule 65. Furthermore, Rule 45 limits us to the review of questions
of law raised against the assailed CA decision. In ruling for legal correctness, we have to view the CA decision
in the same context that the petition for certiorari it ruled upon was presented to it; we have to examine the
CA decision from the prism of whether it correctly determined the presence or absence of grave abuse of
discretion in the NLRC decision before it, not on the basis of whether the NLRC decision on the merits of the
case was correct. In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a
review on appeal, of the NLRC decision challenged before it.129 (Emphasis in the original)
Justice Brion’s dissenting opinion in Abott Laboratories, PhiIippines v. Aicaraz 130 discussed that in petitions for
review under Rule 45, "the Court simply determines whether the legal correctness of the CA’s finding that the
NLRC ruling . . . had basis in fact and in Iaw."131 In this kind of petition, the proper question to be raised is, "Did
the CA correctly determine whether the NLRC committed grave abuse of discretion in ruling on the case?"132
Justice Brion’s dissenting opinion also laid down the following guidelines:
If the NLRC ruling has basis in the evidence and the applicable law and jurisprudence, then no grave abuse of
discretion exists and the CA should so declare and, accordingly, dismiss the petition. If grave abuse of
discretion exists, then the CA must grant the petition and nullify the NLRC ruling, entering at the same time
the ruling that isjustified under the evidence and the governing law, rules and jurisprudence. In our Rule 45
review, this Court must denythe petition if it finds that the CA correctly acted.133 (Emphasis in the original)
These parameters shall be used in resolving the substantive issues in this petition.
III
Determination of employment status; burden of proof
In this case, there is no question thatArlene rendered services to Fuji. However, Fuji alleges that Arlene was an
independent contractor, while Arlene alleges that she was a regular employee. To resolve this issue, we
ascertain whether an employer-employee relationship existed between Fuji and Arlene.
This court has often used the four-fold test to determine the existence of an employer-employee relationship.
Under the four-fold test, the "control test" is the most important.134 As to how the elements in the four-fold
test are proven, this court has discussed that:
[t]here is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant
evidence to prove the relationship may be admitted. Identification cards, cash vouchers, social security
registration, appointment letters or employment contracts, payrolls, organization charts, and personnel lists,
serve as evidence of employee status.135
If the facts of this case vis-à-vis the four-fold test show that an employer-employee relationship existed, we
then determine the status of Arlene’s employment, i.e., whether she was a regular employee. Relative to this,
we shall analyze Arlene’s fixed-term contract and determine whether it supports her argument that she was a
regular employee, or the argument of Fuji that she was an independent contractor. We shall scrutinize
whether the nature of Arlene’s work was necessary and desirable to Fuji’s business or whether Fuji only
needed the output of her work. If the circumstances show that Arlene’s work was necessary and desirable to
Fuji, then she is presumed to be a regular employee. The burden of proving that she was an independent
contractor lies with Fuji.
In labor cases, the quantum of proof required is substantial evidence. 136 "Substantial evidence" has been
defined as "such amount of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion."137
If Arlene was a regular employee, we then determine whether she was illegally dismissed. In complaints for
illegal dismissal, the burden of proof is on the employee to prove the fact of dismissal. 138 Once the employee
establishes the fact of dismissal, supported by substantial evidence, the burden of proof shifts tothe employer
to show that there was a just or authorized cause for the dismissal and that due process was observed.139
IV
Whether the Court of Appeals correctly affirmed the National Labor
Relations Commission’s finding that Arlene was a regular employee
Fuji alleges that Arlene was anindependent contractor, citing Sonza v. ABS-CBN and relying on the following
facts: (1) she was hired because of her skills; (2) her salary was US$1,900.00, which is higher than the normal
rate; (3) she had the power to bargain with her employer; and (4) her contract was for a fixed term. According
to Fuji, the Court of Appeals erred when it ruled that Arlene was forcedto sign the non-renewal agreement,
considering that she sent an email with another version of the non-renewal agreement.140 Further, she is not
entitled tomoral damages and attorney’s fees because she acted in bad faith when she filed a labor complaint
against Fuji after receiving US$18,050.00 representing her salary and other benefits.141 Arlene argues that she
was a regular employee because Fuji had control and supervision over her work. The news events that she
covered were all based on the instructions of Fuji.142 She maintains that the successive renewal of her
employment contracts for four (4) years indicates that her work was necessary and desirable. 143 In addition,
Fuji’s payment of separation pay equivalent to one (1) month’s pay per year of service indicates that she was a
regular employee.144 To further support her argument that she was not an independent contractor, she states
that Fuji owns the laptop computer and mini-camera that she used for work.145 Arlene also argues that Sonza
is not applicable because she was a plain reporter for Fuji, unlike Jay Sonza who was a news anchor, talk show
host, and who enjoyed a celebrity status.146 On her illness, Arlene points outthat it was not a ground for her
dismissal because her attending physician certified that she was fit to work.147
Arlene admits that she signed the non-renewal agreement with quitclaim, not because she agreed to itsterms,
but because she was not in a position to reject the non-renewal agreement. Further, she badly needed the
salary withheld for her sustenance and medication.148 She posits that her acceptance of separation pay does
not bar filing of a complaint for illegal dismissal.149
Article 280 of the Labor Code provides that:
Art. 280. Regular and casual employment.The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph; Provided, That,
any employee who has rendered at least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in which heis employed and his
employment shall continue while such activity exist.
This provision classifies employees into regular, project, seasonal, and casual. It further classifies regular
employees into two kinds: (1) those "engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer"; and (2) casual employees who have "rendered at least one year
of service, whether such service is continuous or broken."
Another classification of employees, i.e., employees with fixed-term contracts, was recognized in Brent School,
Inc. v. Zamora150 where this court discussed that:
Logically, the decisive determinant in the term employment should not be the activities that the employee is
called upon to perform, but the day certain agreed upon by the parties for the commencement and
termination of their employment relationship, a day certainbeing understood to be "that which must
necessarily come, although it may not be known when."151 (Emphasis in the original)
This court further discussed that there are employment contracts where "a fixed term is an essential and
natural appurtenance"152 such as overseas employment contracts and officers in educational institutions.153
Distinctions among fixed-term
employees, independent contractors,
and regular employees
GMA Network, Inc. v. Pabriga154 expounded the doctrine on fixed term contracts laid down in Brentin the
following manner:
Cognizant of the possibility of abuse in the utilization of fixed term employment contracts, we emphasized in
Brentthat where from the circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down as contrary to public policy or
morals. We thus laid down indications or criteria under which "term employment" cannot be said to be in
circumvention of the law on security of tenure, namely:
1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any
force, duress, or improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal
terms with no moral dominance exercised by the former or the latter.
These indications, which must be read together, make the Brent doctrine applicable only in a few special cases
wherein the employer and employee are on more or less in equal footing in entering into the contract. The
reason for this is evident: whena prospective employee, on account of special skills or market forces, is in a
position to make demands upon the prospective employer, such prospective employee needs less protection
than the ordinary worker. Lesser limitations on the parties’ freedom of contract are thus required for the
protection of the employee.155(Citations omitted)
For as long as the guidelines laid down in Brentare satisfied, this court will recognize the validity of the fixed-
term contract.
In Labayog v. M.Y. San Biscuits, Inc.,156 this court upheld the fixedterm employment of petitioners because
from the time they were hired, they were informed that their engagement was for a specific period. This court
stated that:
[s]imply put, petitioners were notregular employees. While their employment as mixers, packers and machine
operators was necessary and desirable in the usual business ofrespondent company, they were employed
temporarily only, during periods when there was heightened demand for production. Consequently, there
could have been no illegal dismissal when their services were terminated on expiration of their contracts.
There was even no need for notice of termination because they knew exactly when their contracts would end.
Contracts of employment for a fixed period terminate on their own at the end of such period.
Contracts of employment for a fixed period are not unlawful. What is objectionable is the practice of some
scrupulous employers who try to circumvent the law protecting workers from the capricious termination of
employment.157 (Citation omitted)
Caparoso v. Court of Appeals158 upheld the validity of the fixed-term contract of employment. Caparoso and
Quindipan were hired as delivery men for three (3) months. At the end of the third month, they were hired on
a monthly basis. In total, they were hired for five (5) months. They filed a complaint for illegal dismissal. 159 This
court ruled that there was no evidence indicating that they were pressured into signing the fixed-term
contracts. There was likewise no proof that their employer was engaged in hiring workers for five (5) months
onlyto prevent regularization. In the absence of these facts, the fixed-term contracts were upheld as
valid.160 On the other hand, an independent contractor is defined as:
. . . one who carries on a distinct and independent business and undertakes to perform the job, work, or
service on its own account and under one’s own responsibility according to one’s own manner and method,
free from the control and direction of the principal in all matters connected with the performance of the work
except as to the results thereof.161
In view of the "distinct and independent business" of independent contractors, no employer-employee
relationship exists between independent contractors and their principals. Independent contractors are
recognized under Article 106 of the Labor Code:
Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for
the performance of the former’s work, the employees of the contractor and of the latter’s subcontractor, if
any, shall be paid in accordance with the provisions of this Code.
....
The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting-
out of labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he
may make appropriate distinctions between labor-only contracting and job contracting as well as
differentiations within these types of contracting and determine who among the parties involved shall be
considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision
of this Code.
There is "labor-only" contracting where the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries, work premises, among others,
and the workers recruited and placed by such person are performing activities which are directly related to
the principal business of such employer. In such cases, the person or intermediary shall be considered merely
as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the
latterwere directly employed by him.
In Department Order No. 18-A, Seriesof 2011, of the Department of Labor and Employment, a contractor is
defined as having:
Section 3. . . .
....
(c) . . . an arrangement whereby a principal agrees to put out or farm out with a contractor the performance or
completion of a specific job, work or service within a definite or predetermined period, regardless of whether
such job, work or service is to be performed or completed within oroutside the premises of the principal.
This department order also states that there is a trilateral relationship in legitimate job contracting and
subcontracting arrangements among the principal, contractor, and employees of the contractor. There is no
employer-employee relationship between the contractor and principal who engages the contractor’s services,
but there is an employer-employee relationship between the contractor and workers hired to accomplish the
work for the principal.162
Jurisprudence has recognized another kind of independent contractor: individuals with unique skills and
talents that set them apart from ordinary employees. There is no trilateral relationship in this case because
the independent contractor himself or herself performs the work for the principal. In other words, the
relationship is bilateral.
In Orozco v. Court of Appeals,163 Wilhelmina Orozco was a columnist for the Philippine Daily Inquirer. This
court ruled that she was an independent contractor because of her "talent, skill, experience, and her unique
viewpoint as a feminist advocate."164 In addition, the Philippine Daily Inquirer did not have the power of
control over Orozco, and she worked at her own pleasure.165
Semblante v. Court of Appeals166 involved a masiador167 and a sentenciador.168 This court ruled that
"petitioners performed their functions as masiadorand sentenciador free from the direction and control of
respondents"169 and that the masiador and sentenciador "relied mainly on their ‘expertise that is characteristic
of the cockfight gambling.’"170 Hence, no employer-employee relationship existed.
Bernarte v. Philippine Basketball Association171 involved a basketball referee. This court ruled that "a referee is
an independent contractor, whose special skills and independent judgment are required specifically for such
position and cannot possibly be controlled by the hiring party."172
In these cases, the workers were found to be independent contractors because of their unique skills and
talents and the lack of control over the means and methods in the performance of their work.
In other words, there are different kinds of independent contractors: those engaged in legitimate job
contracting and those who have unique skills and talents that set them apart from ordinary employees.
Since no employer-employee relationship exists between independent contractors and their principals, their
contracts are governed by the Civil Code provisions on contracts and other applicable laws.173
A contract is defined as "a meeting of minds between two persons whereby one binds himself, with respect to
the other, to give something or to render some service."174 Parties are free to stipulate on terms and
conditions in contracts as long as these "are not contrary to law, morals, good customs, public order, or public
policy."175 This presupposes that the parties to a contract are on equal footing. Theycan bargain on terms and
conditions until they are able to reach an agreement.
On the other hand, contracts of employment are different and have a higher level of regulation because they
are impressed with public interest. Article XIII, Section 3 of the 1987 Constitution provides full protection to
labor:
ARTICLE XIII. SOCIAL JUSTICE AND HUMAN RIGHTS
....
LABOR
Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor to its just
share in the fruits of production and the right of enterprises to reasonable returns on investments, and to
expansion and growth.
Apart from the constitutional guarantee of protection to labor, Article 1700 of the Civil Code states:
ART. 1700. The relations between capital and labor are not merely contractual. They are so impressed with
public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to
the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.
In contracts of employment, the employer and the employee are not on equal footing. Thus, it is subject to
regulatory review by the labor tribunals and courts of law. The law serves to equalize the unequal. The labor
force is a special class that is constitutionally protected because of the inequality between capital and
labor.176 This presupposes that the labor force is weak. However, the level of protection to labor should vary
from case to case; otherwise, the state might appear to be too paternalistic in affording protection to labor. As
stated in GMA Network, Inc. v. Pabriga, the ruling in Brent applies in cases where it appears that the employer
and employee are on equal footing.177 This recognizes the fact that not all workers are weak. To reiterate the
discussion in GMA Network v. Pabriga:
The reason for this is evident: when a prospective employee, on account of special skills or market forces, is in
a position to make demands upon the prospective employer, such prospective employee needs less protection
than the ordinary worker. Lesser limitations on the parties’ freedom of contract are thus required for the
protection of the employee.178
The level of protection to labor mustbe determined on the basis of the nature of the work, qualifications of
the employee, and other relevant circumstances.
For example, a prospective employee with a bachelor’s degree cannot be said to be on equal footing witha
grocery bagger with a high school diploma. Employees who qualify for jobs requiring special qualifications
such as "[having] a Master’s degree" or "[having] passed the licensure exam" are different from employees
who qualify for jobs that require "[being a] high school graduate; withpleasing personality." In these
situations, it is clear that those with special qualifications can bargain with the employer on equal footing.
Thus, the level of protection afforded to these employees should be different.
Fuji’s argument that Arlene was an independent contractor under a fixed-term contract is contradictory.
Employees under fixed-term contracts cannot be independent contractors because in fixed-term contracts, an
employer-employee relationship exists. The test in this kind of contract is not the necessity and desirability of
the employee’s activities, "but the day certain agreed upon by the parties for the commencement and
termination of the employment relationship."179 For regular employees, the necessity and desirability of their
work in the usual course of the employer’s business are the determining factors. On the other hand,
independent contractors do not have employer-employee relationships with their principals. Hence, before
the status of employment can be determined, the existence of an employer-employee relationship must be
established.
Sonza was unable to prove that ABS-CBN could terminate his services apart from breach of contract. There
was no indication that he could be terminated based on just or authorized causes under the Labor Code. In
addition, ABS-CBN continued to pay his talent fee under their agreement, even though his programs were no
longer broadcasted.193 Dumpit-Murillo was found to have beenillegally dismissed by her employer when they
did not renew her contract on her fourth year with ABC.194
In Sonza, this court ruled that ABS-CBN did not control how Sonza delivered his lines, how he appeared on
television, or how he sounded on radio.195 All that Sonza needed was his talent.196 Further, "ABS-CBN could not
terminate or discipline SONZA even if the means and methods of performance of his work . . . did not meet
ABS-CBN’s approval."197 In Dumpit-Murillo, the duties and responsibilities enumerated in her contract was a
clear indication that ABC had control over her work.198
Application of the four-fold test

The four-fold test180 can be used in determining whether an employeremployee relationship exists. The
The Court of Appeals did not err when it relied on the ruling in Dumpit-Murillo and affirmed the ruling of the
elements of the four-fold test are the following: (1) the selection and engagement of the employee; (2) the
National Labor Relations Commission finding that Arlene was a regular employee. Arlene was hired by Fuji as a
payment of wages; (3) the power of dismissal; and (4) the power of control, which is the most important
news producer, but there was no showing that she was hired because of unique skills that would distinguish
element.181
her from ordinary employees. Neither was there any showing that she had a celebrity status. Her monthly
salary amounting to US$1,900.00 appears tobe a substantial sum, especially if compared to her salary
The "power of control" was explained by this court in Corporal, Sr. v. National Labor Relations Commission:182 whenshe was still connected with GMA.199 Indeed, wages may indicate whether oneis an independent
contractor. Wages may also indicate that an employee is able to bargain with the employer for better pay.
However, wages should not be the conclusive factor in determining whether one is an employee or an
The power to control refers to the existence of the power and not necessarily to the actual exercise thereof,
independent contractor.
nor is it essential for the employer to actually supervise the performance of duties of the employee. It is
enough that the employer has the right to wield that power.183 (Citation omitted)
Fuji had the power to dismiss Arlene, as provided for in paragraph 5 of her professional employment
contract.200Her contract also indicated that Fuji had control over her work because she was required to work
Orozco v. Court of Appeals further elucidated the meaning of "power of control" and stated the following:
for eight (8) hours from Monday to Friday, although on flexible time. 201 Sonza was not required to work for
eight (8) hours, while Dumpit-Murillo had to be in ABC to do both on-air and off-air tasks.
Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of
the mutually desired result without dictating the means or methods to be employed in attaining it, and those
On the power to control, Arlene alleged that Fuji gave her instructions on what to report. 202 Even the mode of
that control or fix the methodology and bind or restrict the party hired to the use of such means. The first,
transportation in carrying out her functions was controlled by Fuji. Paragraph 6 of her contract states:
which aim only to promote the result, create no employer-employee relationship unlike the second, which
address both the result and the means used to achieve it. . . .184 (Citation omitted)
6. During the travel to carry out work, if there is change of place or change of place of work, the train, bus, or
185 public transport shall be used for the trip. If the Employee uses the private car during the work and there is an
In Locsin, et al. v. Philippine Long Distance Telephone Company,  the "power of control" was defined as
accident the Employer shall not be responsible for the damage, which may be caused to the Employee.203
"[the] right to control not only the end to be achieved but also the means to be used in reaching such end."186

Thus, the Court of Appeals did not err when it upheld the findings of the National Labor Relations Commission
Here, the Court of Appeals applied Sonza v. ABS-CBN and Dumpit Murillo v. Court of Appeals187 in determining
that Arlene was not an independent contractor.
whether Arlene was an independent contractor or a regular employee.

Having established that an employer-employee relationship existed between Fuji and Arlene, the next
In deciding Sonza and Dumpit-Murillo, this court used the four-fold test. Both cases involved newscasters and
questions for resolution are the following: Did the Court of Appeals correctly affirm the National Labor
anchors. However, Sonza was held to be an independent contractor, while Dumpit-Murillo was held to be a
Relations Commission that Arlene had become a regular employee? Was the nature of Arlene’s work
regular employee.
necessary and desirable for Fuji’s usual course of business?

Comparison of the Sonza and

Arlene was a regular employee
Dumpit-Murillo cases using
with a fixed-term contract
the four-fold test

The test for determining regular employment is whether there is a reasonable connection between the
Sonza was engaged by ABS-CBN in view of his "unique skills, talent and celebrity status not possessed by
employee’s activities and the usual business of the employer. Article 280 provides that the nature of work
ordinary employees."188 His work was for radio and television programs.189 On the other hand, Dumpit-Murillo
must be "necessary or desirable in the usual business or trade of the employer" as the test for determining
was hired by ABC as a newscaster and co-anchor. 190 Sonza’s talent fee amounted to ₱317,000.00 per month,
regular employment. As stated in ABS-CBN Broadcasting Corporation v. Nazareno:204
which this court found to be a substantial amount that indicatedhe was an independent contractor rather
than a regular employee.191Meanwhile, Dumpit-Murillo’s monthly salary was ₱28,000.00, a very low amount
compared to what Sonza received.192 In determining whether an employment should be considered regular or non-regular, the applicable test is the
reasonable connection between the particular activity performed by the employee in relation to the usual
business or trade of the employer. The standard, supplied by the law itself, is whether the work undertaken is
necessary or desirable in the usual business or trade of the employer, a fact that can be assessed by looking
into the nature of the services rendered and its relation to the general scheme under which the business or
trade is pursued in the usual course. It is distinguished from a specific undertaking that is divorced from the
normal activities required incarrying on the particular business or trade.205
However, there may be a situation where an employee’s work is necessary but is not always desirable inthe
usual course of business of the employer. In this situation, there is no regular employment.
In San Miguel Corporation v. National Labor Relations Commission, 206 Francisco de Guzman was hired to repair
furnaces at San Miguel Corporation’s Manila glass plant. He had a separate contract for every furnace that he
repaired. He filed a complaint for illegal dismissal three (3) years after the end of his last contract. 207 In ruling
that de Guzman did not attain the status of a regular employee, this court explained:
Note that the plant where private respondent was employed for only seven months is engaged in the
manufacture of glass, an integral component of the packaging and manufacturing business of petitioner. The
process of manufacturing glass requires a furnace, which has a limited operating life. Petitioner resorted to
hiring project or fixed term employees in having said furnaces repaired since said activity is not regularly
performed. Said furnaces are to be repaired or overhauled only in case of need and after being used
continuously for a varying period of five (5) to ten (10) years. In 1990, one of the furnaces of petitioner
required repair and upgrading. This was an undertaking distinct and separate from petitioner's business of
manufacturing glass. For this purpose, petitioner must hire workers to undertake the said repair and
upgrading. . . .
....
Clearly, private respondent was hired for a specific project that was not within the regular business of the
corporation. For petitioner is not engaged in the business of repairing furnaces. Although the activity was
necessary to enable petitioner to continue manufacturing glass, the necessity therefor arose only when a
particular furnace reached the end of its life or operating cycle. Or, as in the second undertaking, when a
particular furnace required an emergency repair. In other words, the undertakings where private respondent
was hired primarily as helper/bricklayer have specified goals and purposes which are fulfilled once the
designated work was completed. Moreover, such undertakings were also identifiably separate and distinct
from the usual, ordinary or regular business operations of petitioner, which is glass manufacturing. These
undertakings, the duration and scope of which had been determined and made known to private respondent
at the time of his employment, clearly indicated the nature of his employment as a project employee.208
209 210 211
Fuji is engaged in the business of broadcasting,  including news programming.  It is based in Japan  and
has overseas offices to cover international news.212
Based on the record, Fuji’s Manila Bureau Office is a small unit 213 and has a few employees.214 As such, Arlene
had to do all activities related to news gathering. Although Fuji insists that Arlene was a stringer, it alleges that
her designation was "News Talent/Reporter/Producer."215
A news producer "plans and supervises newscast . . . [and] work[s] with reporters in the field planning and
gathering information. . . ."216 Arlene’s tasks included "[m]onitoring and [g]etting [n]ews [s]tories, [r]eporting
interviewing subjects in front of a video camera,"217 "the timely submission of news and current events reports
pertaining to the Philippines[,] and traveling [sic] to [Fuji’s] regional office in Thailand." 218 She also had to
report for work in Fuji’s office in Manila from Mondays to Fridays, eight (8) hours per day. 219 She had no
equipment and had to use the facilities of Fuji to accomplish her tasks.
The Court of Appeals affirmed the finding of the National Labor Relations Commission that the successive
renewals of Arlene’s contract indicated the necessity and desirability of her work in the usual course of Fuji’s
business. Because of this, Arlene had become a regular employee with the right to security of tenure. 220 The
Court of Appeals ruled that:
Here, Espiritu was engaged by Fuji as a stinger [sic] or news producer for its Manila Bureau. She was hired for
the primary purpose of news gathering and reporting to the television network’s headquarters. Espiritu was
not contracted on account of any peculiar ability or special talent and skill that she may possess which the
network desires to make use of. Parenthetically, ifit were true that Espiritu is an independent contractor, as
claimed by Fuji, the factthat everything that she uses to perform her job is owned by the company including
the laptop computer and mini camera discounts the idea of job contracting.221
Moreover, the Court of Appeals explained that Fuji’s argument that no employer-employee relationship
existed in view of the fixed-term contract does not persuade because fixed-term contracts of employment are
strictly construed.222 Further, the pieces of equipment Arlene used were all owned by Fuji, showing that she
was a regular employee and not an independent contractor.223
The Court of Appeals likewise cited Dumpit-Murillo, which involved fixed-term contracts that were
successively renewed for four (4) years.224 This court held that "[t]his repeated engagement under contract of
hire is indicative of the necessity and desirability of the petitioner’s work in private respondent ABC’s
business."225
With regard to Fuji’s argument that Arlene’s contract was for a fixed term, the Court of Appeals cited Philips
Semiconductors, Inc. v. Fadriquela226 and held that where an employee’s contract "had been continuously
extended or renewed to the same position, with the same duties and remained in the employ without any
interruption,"227 then such employee is a regular employee. The continuous renewal is a scheme to prevent
regularization. On this basis, the Court of Appeals ruled in favor of Arlene.
As stated in Price, et al. v. Innodata Corp., et al.:228
The employment status of a person is defined and prescribed by law and not by what the parties say it should
be. Equally important to consider is that a contract of employment is impressed with public interest such that
labor contracts must yield to the common good. Thus, provisions of applicable statutes are deemed written
into the contract, and the parties are not at liberty to insulate themselves and their relationships from the
impact of labor laws and regulations by simply contracting with each other.229 (Citations omitted)
Arlene’s contract indicating a fixed term did not automatically mean that she could never be a regular
employee. This is precisely what Article 280 seeks to avoid. The ruling in Brent remains as the exception rather
than the general rule.
Further, an employee can be a regular employee with a fixed-term contract. The law does not preclude the
possibility that a regular employee may opt to have a fixed-term contract for valid reasons. This was
recognized in Brent: For as long as it was the employee who requested, or bargained, that the contract have a
"definite date of termination," or that the fixed-term contract be freely entered into by the employer and the
employee, then the validity of the fixed-term contract will be upheld.230
V
Whether the Court of Appeals correctly affirmed
the National Labor Relations Commission’s finding of illegal dismissal
Fuji argues that the Court of Appeals erred when it held that Arlene was illegally dismissed, in view of the non-
renewal contract voluntarily executed by the parties. Fuji also argues that Arlene’s contract merely expired;
hence, she was not illegally dismissed.231
Arlene alleges that she had no choice but to sign the non-renewal contract because Fuji withheldher salary
and benefits.
With regard to this issue, the Court of Appeals held:
We cannot subscribe to Fuji’s assertion that Espiritu’s contract merely expired and that she voluntarily agreed
not to renew the same. Even a cursory perusal of the subject Non-Renewal Contract readily shows that the
same was signed by Espiritu under protest. What is apparent is that the Non-Renewal Contract was crafted
merely as a subterfuge to secure Fuji’s position that it was Espiritu’s choice not to renew her contract.232
As a regular employee, Arlene was entitled to security of tenure and could be dismissed only for just or
authorized causes and after the observance of due process.
The right to security of tenureis guaranteed under Article XIII, Section 3 of the 1987 Constitution: ARTICLE XIII.
SOCIAL JUSTICE AND HUMAN RIGHTS
....
LABOR
....
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by law.
Article 279 of the Labor Code also provides for the right to security of tenure and states the following:
Art. 279. Security of tenure.In cases of regular employment, the employer shall not terminate the services of
an employee except for a just cause of when authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement.
Thus, on the right to security of tenure, no employee shall be dismissed, unless there are just orauthorized
causes and only after compliance with procedural and substantive due process is conducted.
Even probationary employees are entitled to the right to security of tenure. This was explained in Philippine
Daily Inquirer, Inc. v. Magtibay, Jr.:233
Within the limited legal six-month probationary period, probationary employees are still entitled to security of
tenure. It is expressly provided in the afore-quoted Article 281 that a probationary employee may be
terminated only on two grounds: (a) for just cause, or (b) when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the time of his
engagement.234 (Citation omitted)
The expiration of Arlene’s contract does not negate the finding of illegal dismissal by Fuji. The manner by
which Fuji informed Arlene that her contract would no longer be renewed is tantamount to constructive
dismissal. To make matters worse, Arlene was asked to sign a letter of resignation prepared by Fuji. 235 The
existence of a fixed-term contract should not mean that there can be no illegal dismissal. Due process must
still be observed in the pre-termination of fixed-term contracts of employment.
In addition, the Court of Appeals and the National Labor Relations Commission found that Arlene was
dismissed because of her health condition. In the non-renewal agreement executed by Fuji and Arlene, it is
stated that:
WHEREAS, the SECOND PARTY is undergoing chemotherapy which prevents her from continuing to effectively
perform her functions under the said Contract such as the timely submission of news and current events
reports pertaining to the Philippines and travelling [sic] to the FIRST PARTY’s regional office in
Thailand.236 (Emphasis supplied)
Disease as a ground for termination is recognized under Article 284 of the Labor Code:
Art. 284. Disease as ground for termination. An employer may terminate the services of an employee who has
been found to be suffering from any disease and whose continued employment is prohibited by law or is
prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay
equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service,
whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year.
Book VI, Rule 1, Section 8 of the Omnibus Rules Implementing the Labor Code provides:
Sec. 8. Disease as a ground for dismissal.– Where the employee suffers from a disease and his continued
employment is prohibited by law or prejudicial to his healthor to the health of his coemployees, the employer
shall not terminate his employment unless there is a certification by a competent public health authority that
the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even
with proper medical treatment. If the disease or ailment can be cured within the period, the employer shall
not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such
employee to his former position immediately upon the restoration of his normal health.
For dismissal under Article 284 to bevalid, two requirements must be complied with: (1) the employee’s
disease cannot be cured within six (6) months and his "continued employment is prohibited by law or
prejudicial to his health as well as to the health of his co-employees"; and (2) certification issued by a
competent public health authority that even with proper medical treatment, the disease cannot be cured
within six (6) months.237 The burden of proving compliance with these requisites is on the
employer.238 Noncompliance leads to the conclusion that the dismissal was illegal.239
There is no evidence showing that Arlene was accorded due process. After informing her employer of her lung
cancer, she was not given the chance to present medical certificates. Fuji immediately concluded that Arlene
could no longer perform her duties because of chemotherapy. It did not ask her how her condition would
affect her work. Neither did it suggest for her to take a leave, even though she was entitled to sick leaves.
Worse, it did not present any certificate from a competent public health authority. What Fuji did was to inform
her thather contract would no longer be renewed, and when she did not agree, her salary was withheld. Thus,
the Court of Appeals correctly upheld the finding of the National Labor Relations Commission that for failure
of Fuji to comply with due process, Arlene was illegally dismissed.240
VI
Whether the Court of Appeals properly modified
the National Labor Relations Commission’s decision
when it awarded reinstatement, damages, and attorney’s fees
The National Labor Relations Commission awarded separation pay in lieu of reinstatement, on the ground that
the filing of the complaint for illegal dismissal may have seriously strained relations between the parties.
Backwages were also awarded, to be computed from date of dismissal until the finality of the National Labor
Relations Commission’s decision. However, only backwages were included in the dispositive portion because
the National Labor Relations Commission recognized that Arlene had received separation pay in the amount of
US$7,600.00. The Court of Appeals affirmed the National Labor Relations Commission’s decision but modified
it by awarding moral and exemplary damages and attorney’s fees, and all other benefits Arlene was entitled to
under her contract with Fuji. The Court of Appeals also ordered reinstatement, reasoning that the grounds
when separation pay was awarded in lieu of reinstatement were not proven.241
Article 279 of the Labor Code provides:
Art. 279. Security of tenure. In cases of regular employment, the employer shall not terminate the services of
an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement. (Emphasis supplied)
The Court of Appeals’ modification of the National Labor Relations Commission’s decision was proper because
the law itself provides that illegally dismissed employees are entitled to reinstatement, backwages including
allowances, and all other benefits.
On reinstatement, the National Labor Relations Commission ordered payment of separation pay in lieu of
reinstatement, reasoning "that the filing of the instant suit may have seriously abraded the relationship of the
parties so as to render reinstatement impractical."242 The Court of Appeals reversed this and ordered
reinstatement on the ground that separation pay in lieu of reinstatement is allowed only in several instances
such as (1) when the employer has ceased operations; (2) when the employee’s position is no longer available;
(3) strained relations; and (4) a substantial period has lapsed from date of filing to date of finality.243
On this matter, Quijano v. Mercury Drug Corp.244 is instructive:
customs or public policy."250 On the other hand, exemplary damages may be awarded when the dismissal was
effected "in a wanton, oppressive or malevolent manner."251
The Court of Appeals and National Labor Relations Commission found that after Arlene had informed Fuji of
her cancer, she was informed that there would be problems in renewing her contract on account of her
condition. This information caused Arlene mental anguish, serious anxiety, and wounded feelings that can be
gleaned from the tenor of her email dated March 11, 2009. A portion of her email reads:
I WAS SO SURPRISED . . . that at a time when I am at my lowest, being sick and very weak, you suddenly came
to deliver to me the NEWS that you will no longer renew my contract.1awp++i1 I knew this will come but I
never thought that you will be so ‘heartless’ and insensitive to deliver that news just a month after I informed
you that I am sick. I was asking for patience and understanding and your response was not to RENEW my
contract.252
Apart from Arlene’s illegal dismissal, the manner of her dismissal was effected in an oppressive approach
withher salary and other benefits being withheld until May 5, 2009, when she had no other choice but to sign
the non-renewal contract. Thus, there was legal basis for the Court of Appeals to modify the National Labor
Relations Commission’s decision.
However, Arlene receivedher salary for May 2009.253 Considering that the date of her illegal dismissal was May
5, 2009,254 this amount may be subtracted from the total monetary award. With regard to the award of
attorney’s fees, Article 111 of the Labor Code states that "[i]n cases of unlawful withholding of wages, the
culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered."
Likewise, this court has recognized that "in actions for recovery of wages or where an employee was forced to
litigate and, thus, incur expenses to protect his rights and interest, the award of attorney’s fees is legallyand
morally justifiable."255 Due to her illegal dismissal, Arlene was forced to litigate.

Well-entrenched is the rule that an illegally dismissed employee is entitled to reinstatement as a matter of
In the dispositive portion of its decision, the Court of Appeals awarded legal interest at the rate of 12% per
right. . . .
annum.256 In view of this court’s ruling in Nacar v. Gallery Frames, 257 the legal interest shall be reducd to a rate
of 6% per annum from July 1, 2013 until full satisfaction.
To protect labor’s security of tenure, we emphasize that the doctrine of "strained relations" should be strictly
applied so as not to deprive an illegally dismissed employee of his right to reinstatement. Every labor dispute
WHEREFORE, the petition is DENIED. The assailed Court of Appeals decision dated June 25, 2012 is AFFIRMED
almost always results in "strained relations" and the phrase cannot be given an overarching interpretation,
with the modification that backwages shall be computed from June 2009. Legal interest shall be computed at
otherwise, an unjustly dismissed employee can never be reinstated.245 (Citations omitted)
the rate of 6% per annum of the total monetary award from date of finality of this decision until full
satisfaction.
The Court of Appeals reasoned that strained relations are a question of fact that must be supported by
evidence.246No evidence was presented by Fuji to prove that reinstatement was no longer feasible. Fuji did not
SO ORDERED.
allege that it ceased operations or that Arlene’s position was no longer available. Nothing in the records shows
that Arlene’s reinstatement would cause an atmosphere of antagonism in the workplace. Arlene filed her
complaint in 2009. Five (5) years are not yet a substantial period247 to bar reinstatement.

On the award of damages, Fuji argues that Arlene is notentitled to the award of damages and attorney’s fees
because the non-renewal agreement contained a quitclaim, which Arlene signed. Quitclaims in labor cases do
not bar illegally dismissed employees from filing labor complaints and money claim. As explained by Arlene,
she signed the non-renewal agreement out of necessity. In Land and Housing Development Corporation v.
Esquillo,248 this court explained: We have heretofore explained that the reason why quitclaims are commonly
frowned upon as contrary to public policy, and why they are held to be ineffective to bar claims for the full
measure of the workers’ legal rights, is the fact that the employer and the employee obviously do not stand on
the same footing. The employer drove the employee to the wall. The latter must have to get holdof money.
Because, out of a job, he had to face the harsh necessities of life. He thus found himself in no position to resist
money proffered. His, then, is a case of adherence, not of choice.249

With regard to the Court of Appeals’ award of moral and exemplary damages and attorney’s fees, this court
has recognized in several cases that moral damages are awarded "when the dismissal is attended by bad faith
or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good
G.R. No. 205300 termination.—Foremost, respondents were fixed-term employees. As previously held by this Court, fixed-term
employment contracts are not limited, as they are under the present Labor Code, to those by nature seasonal
or for specific projects with predetermined dates of completion; they also include those to which the parties by
FONTERRA BRANDS PHILS., INC., Petitioner, 
free choice have assigned a specific date of termination. The determining factor of such contracts is not the
vs.
duty of the employee but the day certain agreed upon by the parties for the commencement and termination
LEONARDO1 LARGADO and TEOTIMO ESTRELLADO, Respondents.
of the employment relationship.

DECISION

Labor Law; Termination of Employment; Resignation; Resignation is the voluntary act of employees
VELASCO, JR., J.:
who are compelled by personal reasons to dissociate themselves from their employment, done with the
intention of relinquishing an office, accompanied by the act of abandonment.—As correctly held by the Labor
Arbiter and the NLRC, the termination of respondents’ employment with Zytron was brought about by the The Case
cessation of their contracts with the latter. We give credence to the Labor Arbiter’s conclusion that
respondents were the ones who refused to renew their contracts with Zytron, and the NLRC’s finding that they
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal and setting
themselves acquiesced to their transfer to A.C. Sicat. By refusing to renew their contracts with Zytron,
aside of the Decision of the Court of Appeals (CA) dated September 6, 2012, as well as its January 11, 2013
respondents effectively resigned from the latter. Resignation is the voluntary act of employees who are
Resolution denying reconsideration thereof, in CA-G.R. SP No. 114227, entitled Leonardo Largado and
compelled by personal reasons to dissociate themselves from their employment, done with the intention of
Teotimo P. Estrellado v. National Labor Relations Commission (NLRC), Fonterra Brands Phils., lnc./Carlo
relinquishing an office, accompanied by the act of abandonment.
Mendoza, Zytron Marketing & Promotions Corp./Francisco Valencia, A. C. Sicat Marketing & Promotional
Services/Arturo Sicat.
Same; Labor-Only Contracting; In labor-only contracting, the law creates an employer-employee
relationship between the principal and the labor-only contractor’s employees as if such employees are directly
employed by the principal employer, and considers the contractor as merely the agent of he principal .—As The Facts
regards respondents’ employment with A.C. Sicat and its termination via nonrenewal of their contracts,
considering that in labor-only contracting, the law creates an employer-employee relationship between the Petitioner Fonterra Brands Phils., Inc. (Fonterra) contracted the services of Zytron Marketing and Promotions
principal and the labor-only contractor’s employee as if such employees are directly employed by the principal Corp. (Z)rtron) for the marketing and promotion of its milk and dairy products. Pursuant to the contract,
employer, and considers the contractor as merely the agent of the principal, it is proper to dispose of the issue Zytron provided Fonterra with trade merchandising representatives (TMRs), including respondents Leonardo
on A.C. Sicat’s status as a job contractor first before resolving the issue on the legality of the cessation of Largado (Largado) and Teotimo Estrellado (Estrellado). The engagement of their services began on September
respondents’ employment. In this regard, We defer to the findings of the CA anent A.C. Sicat’s status as a 15, 2003 and May 27, 2002, respectively, and ended on June 6, 2006.
legitimate job contractor, seeing that it is consistent with the rules on job contracting and is sufficiently
supported by the evidence on record.
Same; Job Contracting; Conditions that Must Concur to Consider a Person as Engaged in Legitimate Job On May 3, 2006, Fonterra sent Zytron a letter terminating its promotions contract, effective June 5, 2006.
Contracting.—A person is considered engaged in legitimate job contracting or subcontracting if the following Fonterra then entered into an agreement for manpower supply with A.C. Sicat Marketing and Promotional
conditions concur: 1. The contractor or subcontractor carries on a distinct and independent business and Services (A.C. Sicat). Desirous of continuing their work as TMRs, respondents submitted their job applications
undertakes to perform the job, work or service on its own account and under its own responsibility according with A.C. Sicat, which hired them for a term of five (5) months, beginning June 7, 2006 up to November 6,
to its own manner and method, and free from the control and direction of the principal in all matters con- 2006.

651 When respondents’ 5-month contracts with A.C. Sicat were about to expire, they allegedly sought renewal
VOL. 753, MARCH 18, 2015 651 thereof, but were allegedly refused. This prompted respondents to file complaints for illegal dismissal,
regularization, non-payment of service incentive leave and 13th month pay, and actual and moral damages,
Fonterra Brands Phils., Inc. vs. Largado against petitioner, Zytron, and A.C. Sicat.
nected with the performance of the work except as to the results thereof; 2. The contractor or
subcontractor has substantial capital or investment; and 3. The agreement between the principal and
The Labor Arbiter dismissed the complaint and ruled that: (1) respondents were not illegally dismissed. As a
contractor or subcontractor assures the contractual employees entitlement to all labor and occupational
matter of fact, they were the ones who refused to renew their contract and that they voluntarily complied
safety and health standards, free exercise of the right to self-organization, security of tenure, and social and
with the requirements for them to claim their corresponding monetary benefits in relation thereto; and (2)
welfare benefits.
they were consecutively employed by Zytron and A.C. Sicat, not by Fonterra. The dispositive portion of the
Same; Labor-Only Contracting; Contracting is prohibited when the contractor or subcontractor merely
Decision2 reads:
recruits, supplies or places workers to perform a job, work or service for a principal.—Contracting is prohibited
when the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or
service for a principal and if any of the following elements are present, thus: 1. The contractor or WHEREFORE, in view of the foregoing, judgment is hereby rendered DISMISSING the instant case for utter lack
subcontractor does not have substantial capital or investment which relates to the job, work or service to be of merit.
performed and the employees recruited, supplied or placed by such contractor or subcontractor are
performing activities which are directly related to the main business of the principal; or 2. The contractor does SO ORDERED.
not exercise the right to control over the performance of the work of the contractual employee.
Same; Fixed-Term Employment; Fixed-term employment contracts are not limited, as they are under
the present Labor Code, to those by nature seasonal or for specific projects with predetermined dates of The NLRC affirmed the Labor Arbiter, finding that respondents’ separation from Zytron was brought about by
completion; they also include those to which the parties by free choice have assigned a specific date of the execution of the contract between Fonterra and A.C. Sicat where the parties agreed to absorb Zytron’s
personnel, including respondents. Too, respondents failed to present any evidence that they protested this
set-up. Furthermore, respondents failed to refute the allegation that they voluntarily refused to renew their
contract with A.C. Sicat. Also, respondents did not assert any claim against Zytron and A.C. Sicat. The NLRC
disposed of the case in this wise:
WHEREFORE, premises considered, the appeals are hereby ordered DISMISSED and the Decision of the Labor
Arbiter is AFFIRMED [in] toto.
SO ORDERED.3
The NLRC decision was assailed in a petition under Rule 65 before the CA.
Ruling on the petition, the CA, in the questioned Decision,4 found that A.C. Sicat satisfies the requirements of
legitimate job contracting, but Zytron does not. According to the CA: (1) Zytron’s paid-in capital of 250,000
cannot be considered as substantial capital; (2) its Certificate of Registration was issued by the DOLE months
after respondents’ supposed employment ended; and (3) its claim that it has the necessary tools and
equipment for its business is unsubstantiated. Therefore, according to the CA, respondents were Fonterra’s
employees.
Additionally, the CA held that respondents were illegally dismissed since Fonterra itself failed to prove that
their dismissal is lawful. However, the illegal dismissal should be reckoned from the termination of their
supposed employment with Zytron on June 6, 2006. Furthermore, respondents’ transfer to A.C. Sicat is
tantamount to a completely new engagement by another employer. Lastly, the termination of their contract
with A.C. Sicat arose from the expiration of their respective contracts with the latter. The CA, thus, ruled that
Fonterra is liable to respondents and ordered the reinstatement of respondents without loss of seniority
rights, with full backwages, and other benefits from the time of their illegal dismissal up to the time of their
actual reinstatement. The fallo of the Decision reads:
WHEREFORE, premises considered, the petition is hereby GRANTED. The assailed Decision dated 20
November 2009 and Resolution dated 5 March 2010 of the National Labor Relations Commission (NLRC),
Seventh Division, are hereby ANULLED and SET ASIDE. Private respondent Fonterra Brand, Inc. is hereby
ordered to REINSTATE [respondents] without loss of seniority rights. Private respondents Fonterra Brand, Inc.
and Zytron Marketing and Promotional Corp. are hereby further ORDERED to jointly and severally pay
petitioners their full backwages and other benefits from the time of their illegal dismissal up to the time of
their actual reinstatement; and attorney’s fees.
SO ORDERED.
Zytron and Fonterra moved for reconsideration, but to no avail. Hence, this petition.
The Issues
Petitioner presents the following issues for Our resolution:
I.The CA erred in ruling that Zytron was a mere labor-only contractor to petitioner Fonterra, in that:
a.As held by the Court, there is no absolute figure that constitutes "substantial" capital for an
independent contractor, and the same should instead be measured against the type of work it is
obligated to do for the principal. It is most respectfully submitted that, here, the merchandising
work undertaken by Zytron’s paid-in capital of 250,000 was as of 1990, the year it was
incorporated;
b.As shown in its Articles of Incorporation, Zytron had been in business since 1990, or more than a
decade before it signed a merchandising agreement with petitioner Fonterra;
c.Very importantly, petitioner Fonterra never exercised the right to control respondents and other
employees of Zytron. Indeed, respondents neither alleged that petitioner exercised control over
them nor presented proof in support thereof in any of their previous pleadings.
II.Respondents never claimed nor adduced evidence that they were dismissed from employment by Zytron. In
fact, Zytron denies terminating them from work. The CA, thus, erred in finding that respondents were "illegally
dismissed."
Succinctly, the issues in the case at bar are: (1) whether or not Zytron and A.C. Sicat are labor-only contractors,
making Fonterra the employer of herein respondents; and (2) whether or not respondents were illegally
dismissed.
Our Ruling
We find merit in the petition.
As regards the CA’s conclusion that Zytron is not a legitimate job contractor, We are of the view that such is
immaterial to the resolution of the illegal dismissal issue for one reason: We find that respondents voluntarily
terminated their employment with Zytron, contrary to their allegation that their employment with Zytron was
illegally terminated.
We do not agree with the CA that respondents’ employment with Zytron was illegally terminated.
As correctly held by the Labor Arbiter and the NLRC, the termination of respondents’ employment with Zytron
was brought about by the cessation of their contracts with the latter. We give credence to the Labor Arbiter’s
conclusion that respondents were the ones who refused to renew their contracts with Zytron, and the NLRC’s
finding that they themselves acquiesced to their transfer to A.C. Sicat.
By refusing to renew their contracts with Zytron, respondents effectively resigned from the latter. Resignation
is the voluntary act of employees who are compelled by personal reasons to dissociate themselves from their
employment, done with the intention of relinquishing an office, accompanied by the act of abandonment.5
Here, it is obvious that respondents were no longer interested in continuing their employment with Zytron.
Their voluntary refusal to renew their contracts was brought about by their desire to continue their
assignment in Fonterra which could not happen in view of the conclusion of Zytron’s contract with Fonterra.
Hence, to be able to continue with their assignment, they applied for work with A.C. Sicat with the hope that
they will be able to continue rendering services as TMRs at Fonterra since A.C. Sicat is Fonterra’s new
manpower supplier. This fact is even acknowledged by the CA in the assailed Decision where it recognized the
reason why respondents applied for work at A.C. Sicat. The CA stated that "[t]o continuously work as
merchandisers of Fonterra products, [respondents] submitted their job applications to A.C. Sicat x x x." 6 This is
further bolstered by the fact that respondents voluntarily complied with the requirements for them to claim
their corresponding monetary benefits in relation to the cessation of their employment contract with Zytron.
In short, respondents voluntarily terminated their employment with Zytron by refusing to renew their
employment contracts with the latter, applying with A.C. Sicat, and working as the latter’s employees, thereby
abandoning their previous employment with Zytron. Too, it is well to mention that for obvious reasons,
resignation is inconsistent with illegal dismissal. This being the case, Zytron cannot be said to have illegally
dismissed respondents, contrary to the findings of the CA.
As regards respondents’ employment with A.C. Sicat and its termination via non-renewal of their contracts,
considering that in labor-only contracting, the law creates an employer-employee relationship between the
principal and the labor-only contractor’s employee as if such employees are directly employed by the principal
employer, and considers the contractor as merely the agent of the principal, 7 it is proper to dispose of the
issue on A.C. Sicat’s status as a job contractor first before resolving the issue on the legality of the cessation of
respondents’ employment.
In this regard, We defer to the findings of the CA anent A.C. Sicat’s status as a legitimate job contractor, seeing
that it is consistent with the rules on job contracting and is sufficiently supported by the evidence on record.
A person is considered engaged in legitimate job contracting or subcontracting if the following conditions
concur:
1.The contractor or subcontractor carries on a distinct and independent business and undertakes to
perform the job, work or service on its own account and under its own responsibility according to
its own manner and method, and free from the control and direction of the principal in all matters
connected with the performance of the work except as to the results thereof;
2.The contractor or subcontractor has substantial capital or investment; and
3.The agreement between the principal and contractor or subcontractor assures the contractual
employees entitlement to all labor and occupational safety and health standards, free exercise of
the right to self-organization, security of tenure, and social and welfare benefits.8
On the other hand, contracting is prohibited when the contractor or subcontractor merely recruits, supplies or
places workers to perform a job, work or service for a principal and if any of the following elements are
present, thus:
1.The contractor or subcontractor does not have substantial capital or investment which relates to
the job, work or service to be performed and the employees recruited, supplied or placed by such
contractor or subcontractor are performing activities which are directly related to the main
business of the principal; or
2.The contractor does not exercise the right to control over the performance of the work of the
contractual employee.9
The CA correctly found that A.C. Sicat is engaged in legitimate job contracting. It duly noted that A.C. Sicat was
able to prove its status as a legitimate job contractor for having presented the following evidence, to wit:
1.Certificate of Business Registration;
2.Certificate of Registration with the Bureau of Internal Revenue;
3.Mayor’s Permit;
4.Certificate of Membership with the Social Security System;
5.Certificate of Registration with the Department of Labor and Employment;
6.Company Profile; and
7.Certifications issued by its clients.10
Furthermore, A.C. Sicat has substantial capital, having assets totaling 5,926,155.76 as of December 31, 2006.
Too, its Agreement with Fonterra clearly sets forth that A.C. Sicat shall be liable for the wages and salaries of
its employees or workers, including benefits, premiums, and protection due them, as well as remittance to the
proper government entities of all withholding taxes, Social Security Service, and Medicare premiums, in
accordance with relevant laws.
The appellate court further correctly held that Fonterra’s issuance of Merchandising Guidelines, stock
monitoring and inventory forms, and promo mechanics, for compliance and use of A.C. Sicat’s employees
assigned to them, does not establish that Fonterra exercises control over A.C. Sicat. We agree with the CA’s
conclusion that these were imposed only to ensure the effectiveness of the promotion services to be rendered
by the merchandisers as it would be risky, if not imprudent, for any company to completely entrust the
performance of the operations it has contracted out.
These sufficiently show that A.C. Sicat carries out its merchandising and promotions business, independent of
Fonterra’s business.1âwphi1 Thus, having settled that A.C. Sicat is a legitimate job contractor, We now
determine whether the termination of respondents’ employment with the former is valid.
We agree with the findings of the CA that the termination of respondents’ employment with the latter was
simply brought about by the expiration of their employment contracts.
Foremost, respondents were fixed-term employees. As previously held by this Court, fixed-term employment
contracts are not limited, as they are under the present Labor Code, to those by nature seasonal or for specific
projects with predetermined dates of completion; they also include those to which the parties by free choice
have assigned a specific date of termination.11 The determining factor of such contracts is not the duty of the
employee but the day certain agreed upon by the parties for the commencement and termination of the
employment relationship.12
In the case at bar, it is clear that respondents were employed by A.C. Sicat as project employees. In their
employment contract with the latter, it is clearly stated that "[A.C. Sicat is] temporarily employing
[respondents] as TMR[s] effective June 6[, 2006] under the following terms and conditions: The need for your
service being only for a specific project, your temporary employment will be for the duration only of said
project of our client, namely to promote FONTERRA BRANDS products x x x which is expected to be finished on
or before Nov. 06, 2006."13
Respondents, by accepting the conditions of the contract with A.C. Sicat, were well aware of and even acceded
to the condition that their employment thereat will end on said pre-determined date of termination. They
cannot now argue that they were illegally dismissed by the latter when it refused to renew their contracts
after its expiration. This is so since the non-renewal of their contracts by A.C. Sicat is a management
prerogative, and failure of respondents to prove that such was done in bad faith militates against their
contention that they were illegally dismissed. The expiration of their contract with A.C. Sicat simply caused the
natural cessation of their fixed-term employment thereat. We, thus, see no reason to disturb the ruling of the
CA in this respect.
With these, We need not belabor the other assigned errors.
IN VIEW OF THE FOREGOING, the instant Petition for Review is GRANTED. The assailed Decision of the Court
of Appeals dated September 6, 2012 and its January 11, 2013 Resolution denying reconsideration thereof, in
CA-G.R. SP No. 114227, are hereby REVERSED and SET ASIDE. The Decision of the National Labor Relations
Commission dated November 20, 2009 and its Resolution dated March 5, 2010 in NLRC Case No. RAB IV 12-
23927-06-Q are hereby REINSTATED.
SO ORDERED.
G.R. No. 152894               August 17, 2007
CENTURY CANNING CORPORATION, Petitioner,  Century Canning Corporation vs. Court of Appeals
vs.
COURT OF APPEALS and GLORIA C. PALAD, Respondents.
DECISION
Labor Law; Apprenticeship; One of the objectives of Title II (Training and Employment of Special
Workers) of the Labor Code is to establish apprenticeship standards for the protection of apprentices; an
apprenticeship program should first be approved by the Department of Labor and Employment (DOLE) before
an apprentice may be hired, otherwise the person hired will be considered a regular employee; An
apprenticeship program should first be approved by the Department of Labor and Employment (DOLE) before
an apprentice may be hired, otherwise the person hired will be considered a regular employee.—The Labor
Code defines an apprentice as a worker who is covered by a written apprenticeship agreement with an
employer. One of the objectives of Title II (Training and Employment of Special Workers) of the Labor Code is
to establish apprenticeship standards for the protection of apprentices. In line with this objective, Articles 60
and 61 of the Labor Code provide: ART. 60. Employment of apprentices.—Only employers in the highly
technical industries may employ apprentices and only in apprenticeable occupations approved by the
Minister of Labor and Employment.
_______________
* Same; Same; Same; Where a worker is not considered an apprentice because the apprenticeship
 SECOND DIVISION.
502
50 SUPREME COURT REPORTS ANNOTATED
2
Century Canning Corporation vs. Court of Appeals
(Emphasis supplied) ART. 61. Contents of apprenticeship agree-ments.—Apprenticeship agreements,
including the wage rates of apprentices, shall conform to the rules issued by the Minister of Labor and
Employment. The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing
for wage rates below the legal minimum wage, which in no case shall start below 75 percent of the
applicable minimum wage, may be entered into only in accordance with apprenticeship programs duly
approved by the Minister of Labor and Employment.The Ministry shall develop standard model programs of
apprenticeship. (Emphasis supplied) In Nitto Enterprises v. National Labor Relations Commission, 248 SCRA 654
(1995), the Court cited Article 61 of the Labor Code and held that an apprenticeship program should first be
approved by the DOLE before an apprentice may be hired, otherwise the person hired will be considered a
regular employee.
Same; Same; Technical Education and Skills Development Authority (TESDA); Republic Act No. 7796
(RA 7796), which created the Technical Education and Skills Development Authority (TESDA), has transferred
the authority over apprenticeship programs from the Bureau of Local Employment of the Department of Labor
and Employment (DOLE) to the Technical Education and Skills Development Authority (TESDA).—Republic Act
No. 7796 (RA 7796), which created the TESDA, has transferred the authority over apprenticeship programs
from the Bureau of Local Employment of the DOLE to the TESDA. RA 7796 emphasizes TESDA’s approval of the
apprenticeship program as a pre-requisite for the hiring of apprentices. Such intent is clear under Section 4 of
RA 7796: SEC. 4. Definition of Terms.—As used in this Act: x x x j) “Apprenticeship” training within
employment with compulsory related theoretical instructions involving a contract between an apprentice and
an employer on an approved apprenticeable occupation;k)“Apprentice” is a person undergoing training for
an approved apprenticeable occupationduring an established period assured by an apprenticeship
agreement; l) “Apprentice Agreement” is a contract wherein a prospective employer binds himself to train the
apprentice who in turn accepts the terms of training for a recognized apprentice-able occupation
emphasizing the rights, duties and responsibilities of each party; m) “Apprenticeable Occupation” is an
503
VOL. 530, AUGUST 17, 2007 503
occupation officially endorsed by a tripartite body and approved for apprenticeship by the Authority
[TESDA]; (Emphasis supplied)
Same; Same; Same; An apprenticeship agreement which lacks prior approval from the Technical
Education and Skills Development Authority (TESDA) is void; Prior approval from the Technical Education and
Skills Development Authority (TESDA) is necessary to ensure that only employers in the highly technical
industries may employ apprentices and only in apprenticeable occupations.—In this case, the apprenticeship
agreement was entered into between the parties before petitioner filed its apprenticeship program with the
TESDA for approval. Petitioner and Palad executed the apprenticeship agreement on 17 July 1997 wherein it
was stated that the training would start on 17 July 1997 and would end approximately in December 1997. On
25 July 1997, petitioner submitted for approval its apprenticeship program, which the TESDA subsequently
approved on 26 September 1997. Clearly, the apprenticeship agreement was enforced even before the TESDA
approved petitioner’s apprenticeship program. Thus, the apprenticeship agreement is void because it lacked
prior approval from the TESDA. The TESDA’s approval of the employer’s apprenticeship program is required
before the employer is allowed to hire apprentices. Prior approval from the TESDA is necessary to ensure that
only employers in the highly technical industries may employ apprentices and only in apprentice-able
occupations. Thus, under RA 7796, employers can only hire apprentices for apprenticeable occupations which
must be officially endorsed by a tripartite body and approved for apprenticeship by the TESDA. This is to
ensure the protection of apprentices and to obviate possible abuses by prospective employers who may want
to take advantage of the lower wage rates for apprentices and circumvent the right of the employees to be
secure in their employment.
agreement was enforced before the TESDA’s approval of the apprenticeship program, the worker is deemed a
regular employee.—Since Palad is not considered an apprentice because the apprenticeship agreement was
enforced before the TESDA’s approval of petitioner’s apprenticeship program, Palad is deemed a regular
employee performing the job of a “fish cleaner.” Clearly, the job of a “fish cleaner” is necessary in petitioner’s
business as a tuna and sardines factory. Under Article 280 of the Labor
504
50 SUPREME COURT REPORTS ANNOTATED
4
Century Canning Corporation vs. Court of Appeals
Code, an employment is deemed regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer.
Same; Same; Dismissals; Absenteeism and Inefficiency; Habitual absenteeism and poor efficiency of
performance are among the valid causes for which the employer may terminate the apprenticeship agreement
after the probationary period.—In this case, the Labor Arbiter held that petitioner terminated Palad for
habitual absenteeism and poor efficiency of performance. Under Section 25, Rule VI, Book II of the
Implementing Rules of the Labor Code, habitual absenteeism and poor efficiency of performance are among
the valid causes for which the employer may terminate the apprenticeship agreement after the probationary
period.
Same; Same; Same; When the alleged valid cause for the termination of employment is not clearly
proven, as in this case, the law considers the matter a case of illegal dismissal.—Under Article 227 of the Labor
Code, the employer has the burden of proving that the termination was for a valid or authorized cause.
Petitioner failed to substantiate its claim that Palad was terminated for valid reasons. In fact, the NLRC found
that petitioner failed to prove the authenticity of the performance evaluation which petitioner claims to have
conducted on Palad, where Palad received a performance rating of only 27.75%. Petitioner merely relies on
the performance evaluation to prove Palad’s inefficiency. It was likewise not shown that petitioner ever
apprised Palad of the performance standards set by the company. When the alleged valid cause for the
termination of employment is not clearly proven, as in this case, the law considers the matter a case of illegal
dismissal.
CARPIO, J.:
The Case
This is a petition for review1 of the Decision2 dated 12 November 2001 and the Resolution dated 5 April 2002
of the Court of Appeals in CA-G.R. SP No. 60379.
The Facts
On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad (Palad) as "fish cleaner" at
petitioner’s tuna and sardines factory. Palad signed on 17 July 1997 an apprenticeship agreement3 with
petitioner. Palad received an apprentice allowance of ₱138.75 daily. On 25 July 1997, petitioner submitted its
apprenticeship program for approval to the Technical Education and Skills Development Authority (TESDA) of
the Department of Labor and Employment (DOLE). On 26 September 1997, the TESDA approved petitioner’s
apprenticeship program.4
According to petitioner, a performance evaluation was conducted on 15 November 1997, where petitioner
gave Palad a rating of N.I. or "needs improvement" since she scored only 27.75% based on a 100%
performance indicator. Furthermore, according to the performance evaluation, Palad incurred numerous
tardiness and absences. As a consequence, petitioner issued a termination notice 5 dated 22 November 1997 to
Palad, informing her of her termination effective at the close of business hours of 28 November 1997.
Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-payment of pro-rated 13th
month pay for the year 1997.
On 25 February 1999, the Labor Arbiter dismissed the complaint for lack of merit but ordered petitioner to pay
Palad her last salary and her pro-rated 13th month pay. The dispositive portion of the Labor Arbiter’s decision
reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring that the complaint for illegal
dismissal filed by the complainant against the respondents in the above-entitled case should be, as it is hereby
DISMISSED for lack of merit. However, the respondents are hereby ordered to pay the complainant the
amount of ONE THOUSAND SIX HUNDRED THIRTY-TWO PESOS (₱1,632.00), representing her last salary and
the amount of SEVEN THOUSAND TWO HUNDRED TWENTY EIGHT (₱7,228.00) PESOS representing her
prorated 13th month pay.
All other issues are likewise dismissed.
SO ORDERED.6
On appeal, the National Labor Relations Commission (NLRC) affirmed with modification the Labor Arbiter’s
decision, thus:
WHEREFORE, premises considered, the decision of the Arbiter dated 25 February 1999 is hereby MODIFIED in
that, in addition, respondents are ordered to pay complainant’s backwages for two (2) months in the amount
of ₱7,176.00 (₱138.75 x 26 x 2 mos.). All other dispositions of the Arbiter as appearing in the dispositive
portion of his decision are AFFIRMED.
SO ORDERED.7
Upon denial of Palad’s motion for reconsideration, Palad filed a special civil action for certiorari with the Court
of Appeals. On 12 November 2001, the Court of Appeals rendered a decision, the dispositive portion of which
reads:
WHEREFORE, in view of the foregoing, the questioned decision of the NLRC is hereby SET ASIDE and a new one
entered, to wit:
(a) finding the dismissal of petitioner to be illegal;
(b) ordering private respondent to pay petitioner her underpayment in wages;
(c) ordering private respondent to reinstate petitioner to her former position without loss of
seniority rights and to pay her full backwages computed from the time compensation was withheld
from her up to the time of her reinstatement;
(d) ordering private respondent to pay petitioner attorney’s fees equivalent to ten (10%) per cent
of the monetary award herein; and
(e) ordering private respondent to pay the costs of the suit.
SO ORDERED.8
The Ruling of the Court of Appeals
The Court of Appeals held that the apprenticeship agreement which Palad signed was not valid and binding
because it was executed more than two months before the TESDA approved petitioner’s apprenticeship
program. The Court of Appeals cited Nitto Enterprises v. National Labor Relations Commission,9 where it was
held that prior approval by the DOLE of the proposed apprenticeship program is a condition sine qua
non before an apprenticeship agreement can be validly entered into.
The Court of Appeals also held that petitioner illegally dismissed Palad. The Court of Appeals ruled that
petitioner failed to show that Palad was properly apprised of the required standard of performance. The Court
of Appeals likewise held that Palad was not afforded due process because petitioner did not comply with the
twin requirements of notice and hearing.
The Issues
Petitioner raises the following issues:
1. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT PRIVATE
RESPONDENT WAS NOT AN APPRENTICE; and
2. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT
PETITIONER HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING
THE SERVICE OF PRIVATE RESPONDENT.10
The Ruling of the Court
The petition is without merit.
Registration and Approval by the TESDA of Apprenticeship Program Required Before Hiring of Apprentices
The Labor Code defines an apprentice as a worker who is covered by a written apprenticeship agreement with emphasizes TESDA’s approval of the apprenticeship program as a pre-requisite for the hiring of apprentices.
an employer.11 One of the objectives of Title II (Training and Employment of Special Workers) of the Labor Such intent is clear under Section 4 of RA 7796:
Code is to establish apprenticeship standards for the protection of apprentices. 12 In line with this objective,
Articles 60 and 61 of the Labor Code provide:
SEC. 4. Definition of Terms. — As used in this Act:

ART. 60. Employment of apprentices. — Only employers in the highly technical industries may employ
apprentices and only in apprenticeable occupations approved by the Minister of Labor and Employment.
(Emphasis supplied)
ART. 61. Contents of apprenticeship agreements. — Apprenticeship agreements, including the wage rates of
apprentices, shall conform to the rules issued by the Minister of Labor and Employment. The period of
apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the
legal minimum wage, which in no case shall start below 75 percent of the applicable minimum wage, may
be entered into only in accordance with apprenticeship programs duly approved by the Minister of Labor
and Employment. The Ministry shall develop standard model programs of apprenticeship. (Emphasis supplied)
In Nitto Enterprises v. National Labor Relations Commission,13 the Court cited Article 61 of the Labor Code and
held that an apprenticeship program should first be approved by the DOLE before an apprentice may be hired,
otherwise the person hired will be considered a regular employee. The Court held:
In the case at bench, the apprenticeship agreement between petitioner and private respondent was executed
on May 28, 1990 allegedly employing the latter as an apprentice in the trade of "care maker/molder." On the
same date, an apprenticeship program was prepared by petitioner and submitted to the Department of Labor
and Employment. However, the apprenticeship agreement was filed only on June 7, 1990. Notwithstanding
the absence of approval by the Department of Labor and Employment, the apprenticeship agreement was
enforced the day it was signed.
Based on the evidence before us, petitioner did not comply with the requirements of the law. It is mandated
that apprenticeship agreements entered into by the employer and apprentice shall be entered only in
accordance with the apprenticeship program duly approved by the Minister of Labor and Employment.
Prior approval by the Department of Labor and Employment of the proposed apprenticeship program is,
therefore, a condition sine qua non before an apprenticeship agreement can be validly entered into.
The act of filing the proposed apprenticeship program with the Department of Labor and Employment is a
preliminary step towards its final approval and does not instantaneously give rise to an employer-apprentice
relationship.
xxx
j) "Apprenticeship" training within employment with compulsory related theoretical instructions
involving a contract between an apprentice and an employer on an approved apprenticeable
occupation;
k) "Apprentice" is a person undergoing training for an approved apprenticeable occupation during
an established period assured by an apprenticeship agreement;
l) "Apprentice Agreement" is a contract wherein a prospective employer binds himself to train the
apprentice who in turn accepts the terms of training for a recognized apprenticeable occupation
emphasizing the rights, duties and responsibilities of each party;
m) "Apprenticeable Occupation" is an occupation officially endorsed by a tripartite body
and approved for apprenticeship by the Authority [TESDA]; (Emphasis supplied)
In this case, the apprenticeship agreement was entered into between the parties before petitioner filed its
apprenticeship program with the TESDA for approval. Petitioner and Palad executed the apprenticeship
agreement on 17 July 1997 wherein it was stated that the training would start on 17 July 1997 and would end
approximately in December 1997.17 On 25 July 1997, petitioner submitted for approval its apprenticeship
program, which the TESDA subsequently approved on 26 September 1997.18 Clearly, the apprenticeship
agreement was enforced even before the TESDA approved petitioner’s apprenticeship program. Thus, the
apprenticeship agreement is void because it lacked prior approval from the TESDA.
The TESDA’s approval of the employer’s apprenticeship program is required before the employer is allowed to
hire apprentices. Prior approval from the TESDA is necessary to ensure that only employers in the highly
technical industries may employ apprentices and only in apprenticeable occupations.19 Thus, under RA 7796,
employers can only hire apprentices for apprenticeable occupations which must be officially endorsed by a
tripartite body and approved for apprenticeship by the TESDA.1avvphil This is to ensure the protection of
apprentices and to obviate possible abuses by prospective employers who may want to take advantage of the
lower wage rates for apprentices and circumvent the right of the employees to be secure in their employment.

The requisite TESDA approval of the apprenticeship program prior to the hiring of apprentices was further
Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship program
emphasized by the DOLE with the issuance of Department Order No. 68-04 on 18 August 2004. Department
through the participation of employers, workers and government and non-government agencies" and "to
Order No. 68-04, which provides the guidelines in the implementation of the Apprenticeship and Employment
establish apprenticeship standards for the protection of apprentices." To translate such objectives into
Program of the government, specifically states that no enterprise shall be allowed to hire apprentices unless
existence, prior approval of the DOLE to any apprenticeship program has to be secured as a condition sine qua
its apprenticeship program is registered and approved by TESDA.20
non before any such apprenticeship agreement can be fully enforced. The role of the DOLE in apprenticeship
programs and agreements cannot be debased.
Since Palad is not considered an apprentice because the apprenticeship agreement was enforced before the
TESDA’s approval of petitioner’s apprenticeship program, Palad is deemed a regular employee performing the
Hence, since the apprenticeship agreement between petitioner and private respondent has no force and
job of a "fish cleaner." Clearly, the job of a "fish cleaner" is necessary in petitioner’s business as a tuna and
effect in the absence of a valid apprenticeship program duly approved by the DOLE, private respondent’s
sardines factory. Under Article 280 21 of the Labor Code, an employment is deemed regular where the
assertion that he was hired not as an apprentice but as a delivery boy ("kargador" or "pahinante") deserves
employee has been engaged to perform activities which are usually necessary or desirable in the usual
credence. He should rightly be considered as a regular employee of petitioner as defined by Article 280 of the
business or trade of the employer.
Labor Code x x x. (Emphasis supplied)14

Illegal Termination of Palad

Republic Act No. 779615 (RA 7796), which created the TESDA, has transferred the authority over
apprenticeship programs from the Bureau of Local Employment of the DOLE to the TESDA.16 RA 7796
We shall now resolve whether petitioner illegally dismissed Palad.
Under Article 27922 of the Labor Code, an employer may terminate the services of an employee for just
causes23 or for authorized causes.24 Furthermore, under Article 277(b)25 of the Labor Code, the employer must
send the employee who is about to be terminated, a written notice stating the causes for termination and
must give the employee the opportunity to be heard and to defend himself. Thus, to constitute valid dismissal
from employment, two requisites must concur: (1) the dismissal must be for a just or authorized cause; and (2)
the employee must be afforded an opportunity to be heard and to defend himself.26
Furthermore, Palad was not accorded due process. Even if petitioner did conduct a performance evaluation on
Palad, petitioner failed to warn Palad of her alleged poor performance. In fact, Palad denies any knowledge of
the performance evaluation conducted and of the result thereof. Petitioner likewise admits that Palad did not
receive the notice of termination30 because Palad allegedly stopped reporting for work. The records are bereft
of evidence to show that petitioner ever gave Palad the opportunity to explain and defend herself. Clearly, the
two requisites for a valid dismissal are lacking in this case.

In this case, the Labor Arbiter held that petitioner terminated Palad for habitual absenteeism and poor WHEREFORE, we AFFIRM the Decision dated 12 November 2001 and the Resolution dated 5 April 2002 of the
efficiency of performance. Under Section 25, Rule VI, Book II of the Implementing Rules of the Labor Code, Court of Appeals in CA-G.R. SP No. 60379.
habitual absenteeism and poor efficiency of performance are among the valid causes for which the employer
may terminate the apprenticeship agreement after the probationary period.
SO ORDERED.

However, the NLRC reversed the finding of the Labor Arbiter on the issue of the legality of Palad’s termination:

As to the validity of complainant’s dismissal in her status as an apprentice, suffice to state that the findings of
the Arbiter that complainant was dismissed due to failure to meet the standards is nebulous. What clearly
appears is that complainant already passed the probationary status of the apprenticeship agreement of 200
hours at the time she was terminated on 28 November 1997 which was already the fourth month of the
apprenticeship period of 1000 hours. As such, under the Code, she can only be dismissed for cause, in this
case, for poor efficiency of performance on the job or in the classroom for a prolonged period despite
warnings duly given to the apprentice.

We noted that no clear and sufficient evidence exist to warrant her dismissal as an apprentice during the
agreed period. Besides the absence of any written warnings given to complainant reminding her of "poor
performance," respondents’ evidence in this respect consisted of an indecipherable or unauthenticated
xerox of the performance evaluation allegedly conducted on complainant. This is of doubtful authenticity
and/or credibility, being not only incomplete in the sense that appearing thereon is a signature (not that of
complainant) side by side with a date indicated as "1/16/98". From the looks of it, this signature is close to
and appertains to the typewritten position of "Division/Department Head", which is below the signature of
complainant’s immediate superior who made the evaluation indicated as "11-15-97."

The only conclusion We can infer is that this evaluation was made belatedly, specifically, after the filing of
the case and during the progress thereof in the Arbitral level, as shown that nothing thereon indicate that
complainant was notified of the results. Its authenticity therefor, is a big question mark, and hence lacks
any credibility. Evidence, to be admissible in administrative proceedings, must at least have a modicum of
authenticity. This, respondents failed to comply with. As such, complainant is entitled to the payment of her
wages for the remaining two (2) months of her apprenticeship agreement.27 (Emphasis supplied)

Indeed, it appears that the Labor Arbiter’s conclusion that petitioner validly terminated Palad was based
mainly on the performance evaluation allegedly conducted by petitioner. However, Palad alleges that she had
no knowledge of the performance evaluation conducted and that she was not even informed of the result of
the alleged performance evaluation. Palad also claims she did not receive a notice of dismissal, nor was she
given the chance to explain. According to petitioner, Palad did not receive the termination notice because
Palad allegedly stopped reporting for work after being informed of the result of the evaluation.

Under Article 227 of the Labor Code, the employer has the burden of proving that the termination was for a
valid or authorized cause.28 Petitioner failed to substantiate its claim that Palad was terminated for valid
reasons. In fact, the NLRC found that petitioner failed to prove the authenticity of the performance evaluation
which petitioner claims to have conducted on Palad, where Palad received a performance rating of only
27.75%. Petitioner merely relies on the performance evaluation to prove Palad’s inefficiency. It was likewise
not shown that petitioner ever apprised Palad of the performance standards set by the company. When the
alleged valid cause for the termination of employment is not clearly proven, as in this case, the law considers
the matter a case of illegal dismissal.29
G.R. No. 114337 September 29, 1995 the process injured his left thumb. Petitioner spent the amount of P1,023.04 to cover the medication of
private respondent.
NITTO ENTERPRISES, petitioner, 
vs. The following day, Roberto Capili was asked to resign in a letter3 which reads:
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO CAPILI, respondents.
August 2, 1990
Labor Law; Apprenticeship Agreements; Prior approval by the Department of Labor and Employment of
the proposed apprenticeship program is a condition sine qua non before an apprenticeship agreement can be
Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung
validly entered into.—In the case at bench, the apprenticeship agreement between petitioner and private
papaano gamitin and "TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang
respondent was executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of
paggamit ng tool at may disgrasya at nadamay pa ang isang sekretarya ng kompanya.
“care maker/molder.” On the same date, an apprenticeship program was prepared by petitioner and
submitted to the Department of Labor and Employment. However, the apprenticeship Agreement was filed
only on June 7, 1990. Notwithstanding the absence of approval by the Department of Labor and Employment, Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng hapon siya ay
the apprenticeship agreement was enforced the day it was signed. Based on the evidence before us, petitioner pumasok sa shop na hindi naman sakop ng kanyang trabaho. Pinakialaman at kinalikot
did not comply with the requirements of the law. It is mandated that apprenticeship agreements entered into ang makina at nadisgrasya niya ang kanyang sariling kamay.
by the employer and apprentice shall be entered only in accordance with the apprenticeship program duly
approved by the Minister of Labor and Employment. Prior approval by the Department of Labor and Nakagastos ang kompanya ng mga sumusunod:
Employment of the proposed apprenticeship program is, therefore, a condition sine qua non before an
apprenticeship agreement can be validly entered into.
Same; Same; Where the apprenticeship agreement has no force and effect, the worker hired as Emergency and doctor fee P715.00
apprentice should be considered as a regular employee.—Hence, since the apprenticeship agreement between Medecines (sic) and others 317.04
petitioner and private respondent has no force and effect in the absence of a valid apprenticeship program
duly approved by the DOLE, private respondent’s assertion that he was hired not as an apprentice but as a Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang matanggal ang
delivery boy (“kargador” or “pahinante”) deserves credence. He should rightly be considered as a regular tahi ng kanyang kamay.
employee of petitioner as defined by Article 280 of the Labor Code.
Same; Dismissals; Due Process; The twin requirements of due process, substantive and procedural,
must be complied with before valid dismissal exists, otherwise the dismissal becomes void.—There is an Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4 ng
abundance of cases wherein the Court ruled that the twin requirements of due process, substantive and Agosto, 1990.
procedural, must be complied with, before valid dismissal exists. Without which, the dismissal becomes void.
The twin requirements of notice and hearing constitute the essential elements of due process. This simply Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang
means that the employer shall afford the worker ample opportunity to be heard and to defend himself with kamay, pagkatapos ng siyam na araw mula ika-2 ng Agosto.
the assistance of his representative, if he so desires. Ample opportunity connotes every kind of assistance that
management must accord the employee to enable him to prepare adequately for his defense including legal
Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon, kasama
representation.
ng kanyang comfirmasyon at pag-ayon na ang lahat sa itaas ay totoo.

 
KAPUNAN, J.:

Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking pagkakasala
This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the decision1 rendered by
sa hindi pagsunod sa alintuntunin ng kompanya.
public respondent National Labor Relations Commission, which reversed the decision of the Labor Arbiter.

(Sgd.) Roberto Capili

Briefly, the facts of the case are as follows:
Roberto Capili

Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products, hired Roberto
On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for and in
Capili sometime in May 1990 as an apprentice machinist, molder and core maker as evidenced by an
consideration of the sum of P1,912.79.4
apprenticeship agreement2 for a period of six (6) months from May 28, 1990 to November 28, 1990 with a
daily wage rate of P66.75 which was 75% of the applicable minimum wage.
Three days after, or on August 6, 1990, private respondent formally filed before the NLRC Arbitration Branch,
National Capital Region a complaint for illegal dismissal and payment of other monetary benefits.
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass which he was working
on, accidentally hit and injured the leg of an office secretary who was treated at a nearby hospital.
On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of private respondent as
valid and dismissing the money claim for lack of merit. The dispositive portion of the ruling reads:
Later that same day, after office hours, private respondent entered a workshop within the office premises
which was not his work station. There, he operated one of the power press machines without authority and in
 WHEREFORE, premises considered, the termination is valid and for cause, and the
money claims dismissed for lack of merit.
The respondent however is ordered to pay the complainant the amount of P500.00 as
financial assistance.
SO ORDERED.5
Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto Capilian was valid.
First, private respondent who was hired as an apprentice violated the terms of their agreement when he acted
with gross negligence resulting in the injury not only to himself but also to his fellow worker. Second, private
respondent had shown that "he does not have the proper attitude in employment particularly the handling of
machines without authority and proper training.6
On July 26, 1993, the National Labor Relations Commission issued an order reversing the decision of the Labor
Arbiter, the dispositive portion of which reads:
WHEREFORE, the appealed decision is hereby set aside. The respondent is hereby
directed to reinstate complainant to his work last performed with backwages computed
from the time his wages were withheld up to the time he is actually reinstated. The
Arbiter of origin is hereby directed to further hear complainant's money claims and to
dispose them on the basis of law and evidence obtaining.
SO ORDERED.7
The NLRC declared that private respondent was a regular employee of petitioner by
ruling thus:
As correctly pointed out by the complainant, we cannot understand how an
apprenticeship agreement filed with the Department of Labor only on June 7, 1990
could be validly used by the Labor Arbiter as basis to conclude that the complainant was
hired by respondent as a plain "apprentice" on May 28, 1990. Clearly, therefore, the
complainant was respondent's regular employee under Article 280 of the Labor Code, as
early as May 28,1990, who thus enjoyed the security of tenure guaranteed in Section 3,
Article XIII of our 1987 Constitution.
The complainant being for illegal dismissal (among others) it then behooves upon
respondent, pursuant to Art. 227(b) and as ruled in Edwin Gesulgon vs. NLRC, et al. (G.R.
No. 90349, March 5, 1993, 3rd Div., Feliciano, J.) to prove that the dismissal of
complainant was for a valid cause. Absent such proof, we cannot but rule that the
complainant was illegally dismissed.8
On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only private respondent's
representative was present.
On April 22, 1994, a Writ of Execution was issued, which reads:
NOW, THEREFORE, finding merit in [private respondent's] Motion for Issuance of the
Writ, you are hereby commanded to proceed to the premises of [petitioner] Nitto
Enterprises and Jovy Foster located at No. l 74 Araneta Avenue, Portero, Malabon,
Metro Manila or at any other places where their properties are located and effect the
reinstatement of herein [private respondent] to his work last performed or at the option
of the respondent by payroll reinstatement.
You are also to collect the amount of P122,690.85 representing his backwages as called
for in the dispositive portion, and turn over such amount to this Office for proper
disposition.
Petitioner filed a motion for reconsideration but the same was denied.
Hence, the instant petition — for certiorari.
The issues raised before us are the following:
I
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF
DISCRETION IN HOLDING THAT PRIVATE RESPONDENT WAS NOT AN APPRENTICE.
II
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF
DISCRETION IN HOLDING THAT PETITIONER HAD NOT ADEQUATELY PROVEN THE
EXISTENCE OF A VALID CAUSE IN TERMINATING THE SERVICE OF PRIVATE RESPONDENT.
We find no merit in the petition.
Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly be considered an
apprentice since no apprenticeship program had yet been filed and approved at the time the agreement was
executed.
Petitioner further insists that the mere signing of the apprenticeship agreement already established an
employer-apprentice relationship.
Petitioner's argument is erroneous.
The law is clear on this matter. Article 61 of the Labor Code provides:
Contents of apprenticeship agreement. — Apprenticeship agreements, including the
main rates of apprentices, shall conform to the rules issued by the Minister of Labor and
Employment. The period of apprenticeship shall not exceed six months. Apprenticeship
agreements providing for wage rates below the legal minimum wage, which in no case
shall start below 75% per cent of the applicable minimum wage, may be entered into
only in accordance with apprenticeship program duly approved by the Minister of Labor
and Employment. The Ministry shall develop standard model programs of
apprenticeship. (emphasis supplied)
In the case at bench, the apprenticeship agreement between petitioner and private respondent was executed
on May 28, 1990 allegedly employing the latter as an apprentice in the trade of "care maker/molder." On the
same date, an apprenticeship program was prepared by petitioner and submitted to the Department of Labor
and Employment. However, the apprenticeship Agreement was filed only on June 7, 1990. Notwithstanding
the absence of approval by the Department of Labor and Employment, the apprenticeship agreement was
enforced the day it was signed.
Based on the evidence before us, petitioner did not comply with the requirements of the law. It is mandated As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12
that apprenticeship agreements entered into by the employer and apprentice shall be entered only in
accordance with the apprenticeship program duly approved by the Minister of Labor and Employment.
The law requires that the employer must furnish the worker sought to be dismissed with
two (2) written notices before termination of employee can be legally effected: (1)
Prior approval by the Department of Labor and Employment of the proposed apprenticeship program is, notice which apprises the employee of the particular acts or omissions for which his
therefore, a condition sine quo non before an apprenticeship agreement can be validly entered into. dismissal is sought; and (2) the subsequent notice which informs the employee of the
employer's decision to dismiss him (Sec. 13, BP 130; Sec. 2-6 Rule XIV, Book V, Rules and
Regulations Implementing the Labor Code as amended). Failure to comply with the
The act of filing the proposed apprenticeship program with the Department of Labor and Employment is a
requirements taints the dismissal with illegality. This procedure is mandatory, in the
preliminary step towards its final approval and does not instantaneously give rise to an employer-apprentice
absence of which, any judgment reached by management is void and in existent
relationship.
(Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990]; National Service Corp. vs. NLRC, 168 SCRA
122; Ruffy vs. NLRC. 182 SCRA 365 [1990]).
Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship program
through the participation of employers, workers and government and non-government agencies" and "to
The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three days after he
establish apprenticeship standards for the protection of apprentices." To translate such objectives into
was made to sign a Quitclaim, a clear indication that such resignation was not voluntary and deliberate.
existence, prior approval of the DOLE to any apprenticeship program has to be secured as a condition sine qua
non before any such apprenticeship agreement can be fully enforced. The role of the DOLE in apprenticeship
programs and agreements cannot be debased. Private respondent averred that he was actually employed by petitioner as a delivery boy ("kargador" or
"pahinante").
Hence, since the apprenticeship agreement between petitioner and private respondent has no force and
effect in the absence of a valid apprenticeship program duly approved by the DOLE, private respondent's He further asserted that petitioner "strong-armed" him into signing the aforementioned resignation letter and
assertion that he was hired not as an apprentice but as a delivery boy ("kargador" or "pahinante") deserves quitclaim without explaining to him the contents thereof. Petitioner made it clear to him that anyway, he did
credence. He should rightly be considered as a regular employee of petitioner as defined by Article 280 of the not have a choice. 13
Labor Code:
Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the latter's alleged
Art. 280. Regular and Casual Employment. — The provisions of written agreement to the resignation and subsequent execution of a Quitclaim and Release. A judicious examination of both events
contrary notwithstanding and regardless of the oral agreement of the parties, an belies any spontaneity on private respondent's part.
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade
WHEREFORE, finding no abuse of discretion committed by public respondent National Labor Relations
of the employer, except where the employment has been fixed for a specific project or
Commission, the appealed decision is hereby AFFIRMED.
undertaking the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season. SO ORDERED

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee
with respect to the activity in which he is employed and his employment shall continue
while such activity exists. (Emphasis supplied)

and pursuant to the constitutional mandate to "protect the rights of workers and promote their
welfare."9

Petitioner further argues that, there is a valid cause for the dismissal of private respondent.

There is an abundance of cases wherein the Court ruled that the twin requirements of due process,
substantive and procedural, must be complied with, before valid dismissal exists. 10 Without which, the
dismissal becomes void.

The twin requirements of notice and hearing constitute the essential elements of due process. This simply
means that the employer shall afford the worker ample opportunity to be heard and to defend himself with
the assistance of his representative, if he so desires.

Ample opportunity connotes every kind of assistance that management must accord the employee to enable
him to prepare adequately for his defense including legal representation. 11
G.R. No. 93666             April 22, 1991
GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners, 
vs.
HON. RUBEN D. TORRES, in his capacity as Secretary of Labor and Employment, HON. BIENVENIDO E.
LAGUESMA, in his capacity as Acting Secretary of Labor and Employment, and BASKETBALL COACHES
ASSOCIATION OF THE PHILIPPINES, respondents.
Sobrevinas, Diaz, Hayudini & Bodegon Law Office for petitioners.
Rodrigo, Cuevas & De Borja for respondent BCAP.
Contracts; Provisions of applicable laws especially those relating to matters affected with public policy, are
deemed written into contracts.—Neither can petitioners validly claim that implementation of respondent
Secretary’s decision would amount to an impairment of the obligations of contracts. The provisions of the
Labor Code and its Implementing Rules and Regulations requiring alien employment permits were in existence
long before petitioners entered into their contract of employment. It is firmly settled that provisions of
applicable laws, especially provisions relating to matters affected with public policy, are deemed written into
contracts. Private parties cannot constitutionally contract away the otherwise applicable provisions of law.
Labor Law; The Department of Labor is the agency vested with jurisdiction to determine the question of
availability of local workers.—Petitioners’ contention that respondent Secretary of Labor should have deferred
to the findings of Commission on Immigration and Deportation as to the necessity of employing petitioner
Cone, is again, bereft of legal basis. The Labor Code itself specifically empowers respondent Secretary to make
a determination as to the availability of the services of a “person in the Philippines who is competent, able and
willing at the time of application to perform the services for which an alien is desired.” In short, the
Department of Labor is the agency vested with jurisdiction to determine the question of availability of local
workers. The constitutional validity of legal provisions granting such jurisdiction and authority and requiring
proof of non-availability of local nationals able to carry out the duties of the position involved, cannot be
seriously questioned.
RESOLUTION
FELICIANO, J.:
On 1 May 1989, the National Capital Region of the Department of Labor and Employment issued Alien
Employment Permit No. M-0689-3-535 in favor of petitioner Earl Timothy Cone, a United States citizen, as
sports consultant and assistant coach for petitioner General Milling Corporation ("GMC").
On 27 December 1989, petitioners GMC and Cone entered into a contract of employment whereby the latter
undertook to coach GMC's basketball team.
On 15 January 1990, the Board of Special Inquiry of the Commission on Immigration and Deportation
approved petitioner Cone's application for a change of admission status from temporary visitor to pre-
arranged employee.
On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien employment permit. GMC
also requested that it be allowed to employ Cone as full-fledged coach. The DOLE Regional Director, Luna
Piezas, granted the request on 15 February 1990.
On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25 December 1990, was issued.
Private respondent Basketball Coaches Association of the Philippines ("BCAP") appealed the issuance of said
alien employment permit to the respondent Secretary of Labor who, on 23 April 1990, issued a decision
ordering cancellation of petitioner Cone's employment permit on the ground that there was no showing that
there is no person in the Philippines who is competent, able and willing to perform the services required nor
that the hiring of petitioner Cone would redound to the national interest.
Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental Motions for Reconsideration but
said Motions were denied by Acting Secretary of Labor Bienvenido E. Laguesma in an Order dated 8 June 1990.
Petitioners are now before the Court on a Petition for Certiorari, dated 14 June 1990, alleging that:
1. respondent Secretary of Labor gravely abused his discretion when he revoked petitioner Cone's
alien employment permit; and
2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor Code is null and void
as it is in violation of the enabling law as the Labor Code does not empower respondent Secretary
to determine if the employment of an alien would redound to national interest.
Deliberating on the present Petition for Certiorari, the Court considers that petitioners have failed to show any
grave abuse of discretion or any act without or in excess of jurisdiction on the part of respondent Secretary of
Labor in rendering his decision, dated 23 April 1990, revoking petitioner Cone's Alien Employment Permit.
The alleged failure to notify petitioners of the appeal filed by private respondent BCAP was cured when
petitioners were allowed to file their Motion for Reconsideration before respondent Secretary of Labor.1
Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative has no legal basis at all.
Under Article 40 of the Labor Code, an employer seeking employment of an alien must first obtain an
employment permit from the Department of Labor. Petitioner GMC's right to choose whom to employ is, of
course, limited by the statutory requirement of an alien employment permit.
Petitioners will not find solace in the equal protection clause of the Constitution. As pointed out by the
Solicitor-General, no comparison can be made between petitioner Cone and Mr. Norman Black as the latter is
"a long time resident of the country," and thus, not subject to the provisions of Article 40 of the Labor Code
which apply only to "non-resident aliens." In any case, the term "non-resident alien" and its obverse "resident
alien," here must be given their technical connotation under our law on immigration.
Neither can petitioners validly claim that implementation of respondent Secretary's decision would amount to
an impairment of the obligations of contracts. The provisions of the Labor Code and its Implementing Rules
and Regulations requiring alien employment permits were in existence long before petitioners entered into
their contract of employment. It is firmly settled that provisions of applicable laws, especially provisions
relating to matters affected with public policy, are deemed written into contracts.2 Private parties cannot
constitutionally contract away the otherwise applicable provisions of law.
Petitioners' contention that respondent Secretary of Labor should have deferred to the findings of
Commission on Immigration and Deportation as to the necessity of employing petitioner Cone, is, again, bereft
of legal basis. The Labor Code itself specifically empowers respondent Secretary to make a determination as to
the availability of the services of a "person in the Philippines who is competent, able and willing at the time of
application to perform the services for which an alien is desired."3
In short, the Department of Labor is the agency vested with jurisdiction to determine the question of
availability of local workers. The constitutional validity of legal provisions granting such jurisdiction and
authority and requiring proof of non-availability of local nationals able to carry out the duties of the position
involved, cannot be seriously questioned.
Petitioners apparently also question the validity of the Implementing Rules and Regulations, specifically
Section 6 (c), Rule XIV, Book I of the Implementing Rules, as imposing a condition not found in the Labor Code
itself. Section 6 (c), Rule XIV, Book I of the Implementing Rules, provides as follows:
Section 6. Issuance of Employment Permit –– the Secretary of Labor may issue an employment
permit to the applicant based on:
a) Compliance by the applicant and his employer with the requirements of Section 2 hereof;
b) Report of the Bureau Director as to the availability or non-availability of any person in the
Philippines who is competent and willing to do the job for which the services of the applicant are
desired.
the exercise of discretion on the part of the issuing authority. In the second place, Article 12 of the Labor Code
sets forth a statement of objectives that the Secretary of Labor should, and indeed must, take into account in
exercising his authority and jurisdiction granted by the Labor Code,
Art. 12. Statement of Objectives. –– It is the policy of the State:
a) To promote and maintain a state of full employment through improved manpower training,
allocation and utilization;
x x x           x x x          x x x
c) To facilitate a free choice of available employment by persons seeking work in conformity with
the national interest;
d) To facilitate and regulate the movement of workers in conformity with the national interest;

(c) His assessment as to whether or not the employment of the applicant will redound to the
e) To regulate the employment of aliens, including the establishment of a registration and/or work
national interest;
permit system;

(d) Admissibility of the alien as certified by the Commission on Immigration and Deportation;
x x x           x x x          x x x

(e) The recommendation of the Board of Investments or other appropriate government agencies if
Thus, we find petitioners' arguments on the above points of constitutional law too insubstantial to require
the applicant will be employed in preferred areas of investments or in accordance with the
further consideration.1avvphi1
imperative of economic development;

x x x           x x x          x x x
(Emphasis supplied)
Article 40 of the Labor Code reads as follows:
Art. 40. Employment per unit of non-resident aliens. –– Any alien seeking admission to the
Philippines for employment purposes and any domestic or foreign employer who desires to engage
an alien for employment in the Philippines shall obtain an employment permit from the
Department of Labor.
The employment permit may be issued to a non-resident alien or to the applicant employer after a
determination of the non-availability of a person in the Philippines who is competent, able and
willing at the time of application to perform the services for which the alien is desired.
Petitioners have very recently manifested to this Court that public respondent Secretary of Labor has reversed
his earlier decision and has issued an Employment Permit to petitioner Cone. Petitioners seek to withdraw
their Petition for Certiorari on the ground that it has become moot and academic.
While ordinarily this Court would dismiss a petition that clearly appears to have become moot and academic,
the circumstances of this case and the nature of the questions raised by petitioners are such that we do not
feel justified in leaving those questions unanswered.4
Moreover, assuming that an alien employment permit has in fact been issued to petitioner Cone, the basis of
the reversal by the Secretary of Labor of his earlier decision does not appear in the record. If such reversal is
based on some view of constitutional law or labor law different from those here set out, then such
employment permit, if one has been issued, would appear open to serious legal objections.
ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack of merit. Costs against
petitioners.

For an enterprise registered in preferred areas of investments, said employment permit may be
issued upon recommendation of the government agency charged with the supervision of said
registered enterprise. (Emphasis supplied)

Petitioners apparently suggest that the Secretary of Labor is not authorized to take into account the question
of whether or not employment of an alien applicant would "redound to the national interest" because Article
40 does not explicitly refer to such assessment. This argument (which seems impliedly to concede that the
relationship of basketball coaching and the national interest is tenuous and unreal) is not persuasive. In the
first place, the second paragraph of Article 40 says: "[t]he employment permit may be issued to a non-resident
alien or to the applicant employer after a determination of the non-availability of a person in the Philippines
who is competent, able and willing at the time of application to perform the services for which the alien is
desired." The permissive language employed in the Labor Code indicates that the authority granted involves
G.R. No. 100641 June 14, 1993
FARLE P. ALMODIEL, petitioner, 
vs.
NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), RAYTHEON PHILS., INC., respondents.
Apolinario Lomabao, Jr. for petitioner.
Vicente A. Cruz, Jr., for private respondent.
Labor Law; Termination of Employment; Redundancy; Redundancy, for purposes of our Labor Code,
exists where the services of an employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise.—Whether petitioner’s functions as Cost Accounting Manager have been
dispensed with or merely absorbed by another is however immaterial. Thus, notwithstanding the dearth of
evidence on the said question, a resolution of this case can be arrived at without delving into this matter. For
even conceding that the functions of petitioner’s position were merely transferred, no malice or bad faith can
be imputed from said act. A survey of existing case law will disclose that in Wiltshire File Co., Inc. v. NLRC, the
position of Sales Manager was abolished on the ground of redundancy as the duties previously discharged by
the Sales Manager simply added to the duties of the General Manager to whom the Sales Manager used to
report. In adjudging said termination as legal, this Court said that redundancy, for purposes of our Labor Code,
exists where the services of an employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise. The characterization of an employee’s services as no longer necessary or
sustainable, and therefore, properly terminable, was an exercise of business judgment on the part of the
employer. The wisdom or soundness of such characterization or decision was not subject to discretionary
review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely
arbitrary and malicious action is not shown.
Same; Same; Same; Discretion in terminating employment; An employer has a much wider discretion
in terminating employment relationship of managerial personnel compared to rank and file employees.—
Considering further that petitioner herein held a position which was definitely managerial in character,
Raytheon had a broad latitude of discretion in abolishing his position. An employer has a much wider
discretion in terminating employment relationship of managerial personnel compared to rank and file
employees. The reason obviously is that officers in such key positions perform not only func-
________________
*
 SECOND DIVISION.
342
34 SUPREME COURT REPORTS ANNOTATED
2 the services of a Cost Accounting Manager allegedly entailed only the submission of periodic reports that
Almodiel vs. National Labor Relations Commission
tions which by nature require the employer’s full trust and confidence but also functions that spell the
success or failure of an enterprise.
Same; Same; Same; Prerogatives of Management; The determination of the qualification and fitness
of workers for hiring and firing, promotion or reassignment are exclusive prerogatives of management.—
Petitioner also assails Raytheon’s choice of Ang Tan Chai to head the Payroll/Mis/Finance Department,
claiming that he is better qualified for the position. It should be noted, however, that Ang Tan Chai was
promoted to the position during the middle part of 1988 or before the abolition of petitioner’s position in
early 1989. Besides the fact that Ang Tan Chai’s promotion thereto is a settled matter, it has been consistently
held that an objection founded on the ground that one has better credentials over the appointee is frowned
upon so long as the latter possesses the minimum qualifications for the position. In the case at bar, since
petitioner does not allege that Ang Tan Chai does not qualify for the position, the Court cannot substitute its
discretion and judgment for that which is clearly and exclusively management prerogative. To do so would
take away from the employer what rightly belongs to him as aptly explained in National Federation of Labor
Unions v. NLRC: “It is a well-settled rule that labor laws do not authorize interference with the employer’s
judgment in the conduct of his business. The determination of the qualification and fitness of workers for
hiring and firing, promotion or reassignment are exclusive prerogatives of management. The Labor Code and
its implementing Rules do not vest in the Labor Arbiters nor in the different Divisions of the NLRC (nor in the
courts) managerial authority. The employer is free to determine, using his own discretion and business
judgment, all elements of employment, “from hiring to firing” except in cases of unlawful discrimination or
those which may be provided by law. There is none in the instant case.”
NOCON, J.:
Subject of this petition for certiorari is the decision dated March 21, 1991 of the National Labor Relations
Commission in NLRC Case No. 
00-00645-89 which reversed and set aside the Labor Arbiter's decision dated September 27, 1989 and ordered
instead the payment of separation pay and financial assistance of P100,000.00. Petitioner imputes grave abuse
of discretion on the part of the Commission and prays for the reinstatement of the Labor Arbiter's decision
which declared his termination on the ground of redundancy illegal.
Petitioner Farle P. Almodiel is a certified public accountant who was hired in October, 1987 as Cost Accounting
Manager of respondent Raytheon Philippines, Inc. through a reputable placement firm, John Clements
Consultants, Inc. with a starting monthly salary of P18,000.00. Before said employment, he was the accounts
executive of Integrated Microelectronics, Inc. for several years. He left his lucrative job therein in view of the
promising career offered by Raytheon. He started as a probationary or temporary employee. As Cost
Accounting Manager, his major duties were: (1) plan, coordinate and carry out year and physical inventory; (2)
formulate and issue out hard copies of Standard Product costing and other cost/pricing analysis if needed and
required and (3) set up the written Cost Accounting System for the whole company. After a few months, he
was given a regularization increase of P1,600.00 a month. Not long thereafter, his salary was increased to
P21,600.00 a month.
On August 17, 1988, he recommended and submitted a Cost Accounting/Finance Reorganization, affecting the
whole finance group but the same was disapproved by the Controller. However, he was assured by the
Controller that should his position or department which was apparently a one-man department with no staff
becomes untenable or unable to deliver the needed service due to manpower constraint, he would be given a
three (3) year advance notice.
In the meantime, the standard cost accounting system was installed and used at the Raytheon plants and
subsidiaries worldwide. It was likewise adopted and installed in the Philippine operations. As a consequence,
would use computerized forms prescribed and designed by the international head office of the Raytheon
Company in California, USA.
On January 27, 1989, petitioner was summoned by his immediate boss and in the presence of IRD Manager,
Mr. Rolando Estrada, he was told of the abolition of his position on the ground of redundancy. He pleaded
with management to defer its action or transfer him to another department, but he was told that the decision
of management was final and that the same has been conveyed to the Department of Labor and Employment.
Thus, he was constrained to file the complaint for illegal dismissal before the Arbitration Branch of the
National Capital Region, NLRC, Department of Labor and Employment.
On September 27, 1989, Labor Arbiter Daisy Cauton-Barcelona rendered a decision, the dispositive portion of
which reads as follows:
 WHEREFORE, judgment is hereby rendered declaring that complainant's termination on
the ground of redundancy is highly irregular and without legal and factual basis, thus
ordering the respondents to reinstate complainant to his former position with full
backwages without lost of seniority rights and other benefits. Respondents are further
ordered to pay complainant P200,000.00 as moral damages and P20,000.00 as
exemplary damages, plus ten percent (10%) of the total award as attorney's fees.1
Raytheon appealed therefrom on the grounds that the Labor Arbiter committed grave abuse of discretion in
denying its rights to dismiss petitioner on the ground of redundancy, in relying on baseless surmises and self-
serving assertions of the petitioner that its act was tainted with malice and bad faith and in awarding moral
and exemplary damages and attorney's fees.
On March 21, 1991, the NLRC reversed the decision and directed Raytheon to pay petitioner the total sum of
P100,000.00 as separation pay/financial assistance. The dispositive portion of which is hereby quoted as
follows:
WHEREFORE, the appealed decision is hereby set aside. In its stead, Order is hereby
issued directing respondent to pay complainant the total separation pay/financial
assistance of One Hundred Thousand Pesos (P100,000.00).
SO ORDERED.2
From this decision, petitioner filed the instant petition averring that:
The public respondent committed grave abuse of discretion amounting to (lack of) or in
excess of jurisdiction in declaring as valid and justified the termination of petitioner on
the ground of redundancy in the face of clearly established finding that petitioner's
termination was tainted with malice, bad faith and irregularity.3
Termination of an employee's services because of redundancy is governed by Article 283 of the Labor Code
which provides as follows:
Art. 283. Closure of establishment and reduction of personnel. — The employer may also
terminate the employment of any employee due to installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of
the establishment or undertaking unless the closing is for the purpose of circumventing
the provisions of this Title, by serving a written notice on the worker and the
Department of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to installation of labor-saving devices or redundancy,
the worker affected thereby shall be entitled to a separation pay equivalent to at least
one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closure or cessation of operations of
establishment or undertaking not due to serious business losses or financial reverses,
the separation pay shall be equivalent to at least one (1) month pay or at least one-half
(1/2) month pay for every year of service, whichever is higher. A fraction of at least six
(6) months shall be considered as one (1) whole year.
There is no dispute that petitioner was duly advised, one (1) month before, of the termination of his
employment on the ground of redundancy in a written notice by his immediate superior, Mrs. Magdalena B.D.
Lopez sometime in the afternoon of January 27, 1989. He was issued a check for P54,863.00 representing
separation pay but in view of his refusal to acknowledge the notice and the check, they were sent to him thru
registered mail on January 30, 1989. The Department of Labor and Employment was served a copy of the
notice of termination of petitioner in accordance with the pertinent provisions of the Labor Code and the
implementing rules.
The crux of the controversy lies on whether bad faith, malice and irregularity crept in the abolition of
petitioner's position of Cost Accounting Manager on the ground of redundancy. Petitioner claims that the
functions of his position were absorbed by the Payroll/Mis/Finance Department under the management of
Danny Ang Tan Chai, a resident alien without any working permit from the Department of Labor and
Employment as required by law. Petitioner relies on the testimony of Raytheon's witness to the effect that
corollary functions appertaining to cost accounting were dispersed to other units in the Finance Department.
And granting that his department has to be declared redundant, he claims that he should have been the
Manager of the Payroll/Mis/Finance Department which handled general accounting, payroll and encoding. As
a B. S. Accounting graduate, a CPA with M.B.A. units, 21 years of work experience, and a natural born Filipino,
he claims that he is better qualified than Ang Tan Chai, a B.S. Industrial Engineer, hired merely as a Systems
Analyst Programmer or its equivalent in early 1987, promoted as MIS Manager only during the middle part of
1988 and a resident alien.
On the other hand, Raytheon insists that petitioner's functions as Cost Accounting Manager had not been
absorbed by Ang Tan Chai, a permanent resident born in this country. It claims to have established below that
Ang Tan Chai did not displace petitioner or absorb his functions and duties as they were occupying entirely
different and distinct positions requiring different sets of expertise or qualifications and discharging functions
altogether different and foreign from that of petitioner's abolished position. Raytheon debunks petitioner's
reliance on the testimony of Mr. Estrada saying that the same witness testified under oath that the functions
of the Cost Accounting Manager had been completely dispensed with and the position itself had been totally
abolished.
Whether petitioner's functions as Cost Accounting Manager have been dispensed with or merely absorbed by
another is however immaterial. Thus, notwithstanding the dearth of evidence on the said question, a
resolution of this case can be arrived at without delving into this matter. For even conceding that the functions
of petitioner's position were merely transferred, no malice or bad faith can be imputed from said act. A survey
of existing case law will disclose that in Wiltshire File Co., Inc. v. NLRC,4 the position of Sales Manager was
abolished on the ground of redundancy as the duties previously discharged by the Sales Manager simply
added to the duties of the General Manager to whom the Sales Manager used to report. In adjudging said
termination as legal, this Court said that redundancy, for purposes of our Labor Code, exists where the
services of an employee are in excess of what is reasonably demanded by the actual requirements of the
enterprise. The characterization of an employee's services as no longer necessary or sustainable, and
therefore, properly terminable, was an exercise of business judgment on the part of the employer. The
wisdom or soundness of such characterization or decision was not subject to discretionary review on the part
of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious
action is not shown.
In the case of International Macleod, Inc. v. Intermediate Appellate Court,5 this Court also considered the
position of Government Relations Officer to have become redundant in view of the appointment of the
International Heavy Equipment Corporation as the company's dealer with the government. It held therein that
the determination of the need for the phasing out of a department as a labor and cost saving device because it
was no longer economical to retain said services is a management prerogative and the courts will not interfere
with the exercise thereof as long as no abuse of discretion or merely arbitrary or malicious action on the part
of management is shown.
In the same vein, this Court ruled in Bondoc v. People's Bank and Trust Co.,6 that the bank's board of directors
possessed the power to remove a department manager whose position depended on the retention of the
trust and confidence of management and whether there was need for his services. Although some vindictive
motivation might have impelled the abolition of his position, this Court expounded that it is undeniable that
the bank's board of directors possessed the power to remove him and to determine whether the interest of
the bank justified the existence of his department.
Indeed, an employer has no legal obligation to keep more employees than are necessary for the operation of
its business. Petitioner does not dispute the fact that a cost accounting system was installed and used at
Raytheon subsidiaries and plants worldwide; and that the functions of his position involve the submission of
periodic reports utilizing computerized forms designed and prescribed by the head office with the installation
of said accounting system. Petitioner attempts to controvert these realities by alleging that some of the
functions of his position were still indispensable and were actually dispersed to another department. What
these indispensable functions that were dispersed, he failed however, to specify and point out. Besides, the
fact that the functions of a position were simply added to the duties of another does not affect the legitimacy
of the employer's right to abolish a position when done in the normal exercise of its prerogative to adopt
sound business practices in the management of its affairs.

Considering further that petitioner herein held a position which was definitely managerial in character,
Raytheon had a broad latitude of discretion in abolishing his position. An employer has a much wider
discretion in terminating employment relationship of managerial personnel compared to rank and file
employees.7 The reason obviously is that officers in such key positions perform not only functions which by
nature require the employer's full trust and confidence but also functions that spell the success or failure of an
enterprise.

Likewise destitute of merit is petitioner's imputation of unlawful discrimination when Raytheon caused
corollary functions appertaining to cost accounting to be absorbed by Danny Ang Tan Chai, a resident alien
without a working permit. Article 40 of the Labor Code which requires employment permit refers to non-
resident aliens. The employment permit is required for entry into the country for employment purposes and is
issued after determination of the non-availability of a person in the Philippines who is competent, able and
willing at the time of application to perform the services for which the alien is desired. Since Ang Tan Chai is a
resident alien, he does not fall within the ambit of the provision.

Petitioner also assails Raytheon's choice of Ang Tan Chai to head the Payroll/Mis/Finance Department,
claiming that he is better qualified for the position. It should be noted, however, that Ang Tan Chai was
promoted to the position during the middle part of 1988 or before the abolition of petitioner's position in
early 1989. Besides the fact that Ang Tan Chai's promotion thereto is a settled matter, it has been consistently
held that an objection founded on the ground that one has better credentials over the appointee is frowned
upon so long as the latter possesses the minimum qualifications for the position. In the case at bar, since
petitioner does not allege that Ang Tan Chai does not qualify for the position, the Court cannot substitute its
discretion and judgment for that which is clearly and exclusively management prerogative. To do so would
take away from the employer what rightly belongs to him as aptly explained in National Federation of Labor
Unions v. NLRC:8

It is a well-settled rule that labor laws do not authorize interference with the employer's
judgment in the conduct of his business. The determination of the qualification and
fitness of workers for hiring and firing, promotion or reassignment are exclusive
prerogatives of management. The Labor Code and its implementing Rules do not vest in
the Labor Arbiters nor in the different Divisions of the NLRC (nor in the courts)
managerial authority. The employer is free to determine, using his own discretion and
business judgment, all elements of employment, "from hiring to firing" except in cases
of unlawful discrimination or those which may be provided by law. There is none in the
instant case.

Finding no grave abuse of discretion on the part of the National Labor Relations Commission in reversing and
annulling the decision of the Labor Arbiter and that on the contrary, the termination of petitioner's
employment was anchored on a valid and authorized cause under Article 283 of the Labor Code, the instant
petition for certiorari must fail.

SO ORDERED.
G.R. No. 166920             February 19, 2007
PACIFIC CONSULTANTS INTERNATIONAL ASIA, INC. and JENS PETER HENRICHSEN, Petitioners, 
vs.
KLAUS K. SCHONFELD, Respondent.
DECISION
Remedial Law; Appeals; Under Section 9 of Batas Pambansa Blg. 129, as amended by R.A. No. 7902,
the Court of Appeals is empowered to pass upon the evidence, if and when necessary, to resolve factual issues.
—It must be stressed that in resolving a petition for certiorari, the CA is not proscribed from reviewing the
evidence on record. Under Section 9 of Batas Pambansa Blg. 129, as amended by R.A. No. 7902, the CA is
empowered to pass upon the evidence, if and when necessary, to resolve factual issues. If it appears that the
Labor Arbiter and the NLRC misappreciated the evidence to such an extent as to compel a contrary conclusion
if such evidence had been properly appreciated, the factual findings of such tribunals cannot be given great
respect and finality.
Labor Law; Dismissals; Employer-Employee Relationship; Elements constituting the reliable yardstick
whenever the existence of an employment relationship is in dispute; An employer-employee relationship exists
where the person for whom the services are performed reserves the right to control not only the end to be
achieved but also the means to be used in reaching such end.—Jurisprudence is firmly settled that whenever
the existence of an employment relationship is in dispute, four elements constitute the reliable yardstick: (a)
the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d)
the employer’s power to control the employee’s conduct. It is the so-called “control test” which constitutes
the most important index of the existence of the employeremployee relationship—that is, whether the
employer controls or has reserved the right to control the employee not only as to the result of the work to be
done but also as to the means and methods by which the same is to be accomplished. Stated otherwise, an
employeremployee relationship exists where the person for whom the services are performed reserves the
right to control not only the end to be achieved but also the means to be used in reaching such end.
_______________
*
 THIRD DIVISION.
210
21 SUPREME COURT REPORTS ANNOTATED
0 Letter of Employment
Pacific Consultants International Asia, Inc. vs. Schonfeld
Venue; Venue stipulations in a contract do not, as a rule, supersede the general rule set forth in Rule 4
of the Revised Rules of Court in the absence of qualifying or restrictive words.—The settled rule on stipulations
regarding venue, as held by this Court in the vintage case of Philippine Banking Corporation v. Tensuan, 230
SCRA 413 (1994), is that while they are considered valid and enforceable, venue stipulations in a contract do
not, as a rule, supersede the general rule set forth in Rule 4 of the Revised Rules of Court in the absence of
qualifying or restrictive words. They should be considered merely as an agreement or additional forum, not as
limiting venue to the specified place. They are not exclusive but, rather permissive. If the intention of the
parties were to restrict venue, there must be accompanying language clearly and categorically expressing their
purpose and design that actions between them be litigated only at the place named by them.
CALLEJO, SR., J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court of the Decision 1 of
the Court of Appeals (CA) in CA-G.R. SP No. 76563. The CA decision reversed the Resolution of the National
Labor Relations Commission (NLRC) in NLRC NCR CA No. 029319-01, which, in turn, affirmed the Decision of
the Labor Arbiter in NLRC NCR Case No. 30-12-04787-00 dismissing the complaint of respondent Klaus K.
Schonfeld.
The antecedent facts are as follows:
Respondent is a Canadian citizen and was a resident of New Westminster, British Columbia, Canada. He had
been a consultant in the field of environmental engineering and water supply and sanitation. Pacicon
Philippines, Inc. (PPI) is a corporation duly established and incorporated in accordance with the laws of the
Philippines. The primary purpose of PPI was to engage in the business of providing specialty and technical
services both in and out of the Philippines.2 It is a subsidiary of Pacific Consultants International of Japan (PCIJ).
The president of PPI, Jens Peter Henrichsen, who was also the director of PCIJ, was based in Tokyo, Japan.
Henrichsen commuted from Japan to Manila and vice versa, as well as in other countries where PCIJ had
business.
In 1997, PCIJ decided to engage in consultancy services for water and sanitation in the Philippines. In October
1997, respondent was employed by PCIJ, through Henrichsen, as Sector Manager of PPI in its Water and
Sanitation Department. However, PCIJ assigned him as PPI sector manager in the Philippines. His salary was to
be paid partly by PPI and PCIJ.
On January 7, 1998, Henrichsen transmitted a letter of employment to respondent in Canada, requesting him
to accept the same and affix his conformity thereto. Respondent made some revisions in the letter of
employment and signed the contract.3 He then sent a copy to Henrichsen. The letter of employment reads:
Mr. Klaus K. Schonfeld
II-365 Ginger Drive
New Westminster, B.C.
Canada V3L 5L5
Tokyo 7
January 1998
Dear Mr. Schonfeld,
This Letter of Employment with the attached General Conditions of Employment constitutes the agreement
under which you will be engaged by our Company on the terms and conditions defined hereunder. In case of
any discrepancies or contradictions between this Letter of Employment and the General Conditions of
Employment, this Letter of Employment will prevail.
You will, from the date of commencement, be ["seconded"] to our subsidiary Pacicon Philippines, Inc. in
Manila, hereinafter referred as Pacicon. Pacicon will provide you with a separate contract, which will define
that part of the present terms and conditions for which Pacicon is responsible. In case of any discrepancies or
contradictions between the present Letter of Employment and the contract with Pacicon Philippines, Inc. or in
the case that Pacicon should not live up to its obligations, this Letter of Employment will prevail.
1. Project Country: The Philippines with possible short-term assignments in other countries.
2. Duty Station: Manila, the Philippines.
 3. Family Status: Married. Any question of interpretation, understanding or fulfillment of the conditions of employment, as well as any
question arising between the Employee and the Company which is in consequence of or connected with his
employment with the Company and which can not be settled amicably, is to be finally settled, binding to both
4. Position: Sector Manager, Water and Sanitation.
parties through written submissions, by the Court of Arbitration in London.5

5. Commencement: 1st October 1997.

Respondent arrived in the Philippines and assumed his position as PPI Sector Manager. He was accorded the
status of a resident alien.
6. Remuneration: US$7,000.00 per month. The amount will be paid partly as a local salary
(US$2,100.00 per month) by Pacicon and partly as an offshore salary (US$4,900.00) by PCI to bank
As required by Rule XIV (Employment of Aliens) of the Omnibus Rules Implementing the Labor Code, PPI
accounts to be nominated by you.
applied for an Alien Employment Permit (Permit) for respondent before the Department of Labor and
Employment (DOLE). It appended respondent’s contract of employment to the application.1awphi1.net
A performance related component corresponding to 17.6% of the total annual remuneration,
subject to satisfactory performance against agreed tasks and targets, paid offshore.
On February 26, 1999, the DOLE granted the application and issued the Permit to respondent. It reads:

7. Accommodation: The company will provide partly furnished accommodation to a rent including
Republic of the Philippines
association fees, taxes and VAT not exceeding the Pesos equivalent of US$2,900.00 per month.
Department of Labor & Employment
National Capital Region
8. Transportation: Included for in the remuneration.
ALIEN EMPLOYMENT PERMIT
9. Leave Travels: You are entitled to two leave travels per year.
ISSUED TO: SCHONFELD, KLAUS KURT
10. Shipment of Personal
DATE OF BIRTH: January 11, 1942 NATIONALITY: Canadian
Effects: The maximum allowance is US$4,000.00.
POSITION: VP – WATER & SANITATION
11. Mobilization
EMPLOYER: PACICON PHILIPPINES, INC.
Travel: Mobilization travel will be from New Westminster, B.C., Canada.
ADDRESS: 27/F Rufino Pacific Towers Bldg., Ayala Ave., Makati City
This letter is send (sic) to you in duplicate; we kindly request you to sign and return one copy to us.
PERMIT
Yours sincerely,
ISSUED ON: February 26, 1999 SIGNATURE OF BEARER:
Pacific Consultants International
Jens Peter Henrichsen
VALID UNTIL: January 7, 2000 (Sgd.)

Above terms and conditions accepted

APPROVED: BIENVENIDO S. LAGUESMA

Date: 2 March 1998

By: MAXIMO B. ANITO
REGIONAL DIRECTOR
(Sgd.)
Klaus Schonfeld
(Emphasis supplied)6

as annotated and initialed4

Respondent received his compensation from PPI for the following periods: February to June 1998, November
to December 1998, and January to August 1999. He was also reimbursed by PPI for the expenses he incurred
Section 21 of the General Conditions of Employment appended to the letter of employment reads: in connection with his work as sector manager. He reported for work in Manila except for occasional
assignments abroad, and received instructions from Henrichsen.7
21 Arbitration
On May 5, 1999, respondent received a letter from Henrichsen informing him that his employment had been
terminated effective August 4, 1999 for the reason that PCIJ and PPI had not been successful in the water and
sanitation sector in the Philippines.8 However, on July 24, 1999, Henrichsen, by electronic mail,9 requested
respondent to stay put in his job after August 5, 1999, until such time that he would be able to report on Respondent adduced in evidence the following contract of employment dated January 9, 1998 which he had
certain projects and discuss all the opportunities he had developed. 10 Respondent continued his work with PPI entered into with Henrichsen:
until the end of business hours on October 1, 1999.
Mr. Klaus K. Schonfeld
Respondent filed with PPI several money claims, including unpaid salary, leave pay, air fare from Manila to
Canada, and cost of shipment of goods to Canada. PPI partially settled some of his claims (US$5,635.99), but
II-365 Ginger Drive
refused to pay the rest.
New Westminster, B.C.
Canada V3L 5L5
On December 5, 2000, respondent filed a Complaint 11 for Illegal Dismissal against petitioners PPI and
Henrichsen with the Labor Arbiter. It was docketed as NLRC-NCR Case No. 30-12-04787-00.
Manila 9 January, 1998

In his Complaint, respondent alleged that he was illegally dismissed; PPI had not notified the DOLE of its
Dear Mr. Schonfeld,
decision to close one of its departments, which resulted in his dismissal; and they failed to notify him that his
employment was terminated after August 4, 1999. Respondent also claimed for separation pay and other
unpaid benefits. He alleged that the company acted in bad faith and disregarded his rights. He prayed for the Letter of Employment
following reliefs:
This Letter of Employment with the attached General Conditions of Employment constitutes the agreement,
1. Judgment be rendered in his favor ordering the respondents to reinstate complainant to his under which you will be engaged by Pacicon Philippines, Inc. on the terms and conditions defined hereunder.
former position without loss of seniority and other privileges and benefits, and to pay his full
backwages from the time compensation was with held (sic) from him up to the time of his actual 1. Project Country: The Philippines with possible assignments in other countries.
reinstatement. In the alternative, if reinstatement is no longer feasible, respondents must pay the
complainant full backwages, and separation pay equivalent to one month pay for every year of
service, or in the amount of US$16,400.00 as separation pay; 2. Duty Station: Manila, the Philippines.

2. Judgment be rendered ordering the respondents to pay the outstanding monetary obligation to 3. Family Status: Married.
complainant in the amount of US$10,131.76 representing the balance of unpaid salaries, leave pay,
cost of his air travel and shipment of goods from Manila to Canada; and 4. Position: Sector Manager – Water and Sanitation Sector.

3. Judgment be rendered ordering the respondent company to pay the complainant damages in the 5. Commencement: 1 January, 1998.
amount of no less than US $10,000.00 and to pay 10% of the total monetary award as attorney’s
fees, and costs.
6. Remuneration: US$3,100.00 per month payable to a bank account to be nominated by you.

Other reliefs just and equitable under the premises are, likewise, prayed for.12 1awphi1.net
7. Accommodation: The company will provide partly furnished accommodation to a rent including
association fees, taxes and VAT not exceeding the Pesos equivalent of US$2300.00 per month.
Petitioners filed a Motion to Dismiss the complaint on the following grounds: (1) the Labor Arbiter had no
jurisdiction over the subject matter; and (2) venue was improperly laid. It averred that respondent was a
Canadian citizen, a transient expatriate who had left the Philippines. He was employed and dismissed by PCIJ, 8. Transportation: Included for in the remuneration.
a foreign corporation with principal office in Tokyo, Japan. Since respondent’s cause of action was based on his
letter of employment executed in Tokyo, Japan dated January 7, 1998, under the principle of lex loci 9. Shipment of Personal The maximum allowance is US$2500.00 in Effects: connection with initial
contractus, the complaint should have been filed in Tokyo, Japan. Petitioners claimed that respondent did not shipment of personal effects from Canada.
offer any justification for filing his complaint against PPI before the NLRC in the Philippines. Moreover, under
Section 12 of the General Conditions of Employment appended to the letter of employment dated January 7,
10. Mobilization Travel: Mobilization travel will be from New Westminster, B.C., Canada.
1998, complainant and PCIJ had agreed that any employment-related dispute should be brought before the
London Court of Arbitration. Since even the Supreme Court had already ruled that such an agreement on
venue is valid, Philippine courts have no jurisdiction.13 This letter is send (sic) to you in duplicate; we kindly request you to sign and return one copy to us.

Respondent opposed the Motion, contending that he was employed by PPI to work in the Philippines under Yours sincerely,
contract separate from his January 7, 1998 contract of employment with PCIJ. He insisted that his employer
was PPI, a Philippine-registered corporation; it is inconsequential that PPI is a wholly-owned subsidiary of PCIJ Pacicon Philippines, Inc.
because the two corporations have separate and distinct personalities; and he received orders and Jens Peter Henrichsen
instructions from Henrichsen who was the president of PPI. He further insisted that the principles of forum President14
non conveniens and lex loci contractus do not apply, and that although he is a Canadian citizen, Philippine
Labor Laws apply in this case.
According to respondent, the material allegations of the complaint, not petitioners’ defenses, determine
which quasi-judicial body has jurisdiction. Section 21 of the Arbitration Clause in the General Conditions of
Employment does not provide for an exclusive venue where the complaint against PPI for violation of the
Philippine Labor Laws may be filed. Respondent pointed out that PPI had adopted two inconsistent positions:
it was first alleged that he should have filed his complaint in Tokyo, Japan; and it later insisted that the
complaint should have been filed in the London Court of Arbitration.15
In their reply, petitioners claimed that respondent’s employer was PCIJ, which had exercised supervision and
control over him, and not PPI. Respondent was dismissed by PPI via a letter of Henrichsen under the
letterhead of PCIJ in Japan.16 The letter of employment dated January 9, 1998 which respondent relies upon
did not bear his (respondent’s) signature nor that of Henrichsen.
On August 2, 2001, the Labor Arbiter rendered a decision granting petitioners’ Motion to Dismiss. The
dispositive portion reads:
WHEREFORE, finding merit in respondents’ Motion to Dismiss, the same is hereby granted. The instant
complaint filed by the complainant is dismissed for lack of merit.
SO ORDERED.17
The Labor Arbiter found, among others, that the January 7, 1998 contract of employment between
respondent and PCIJ was controlling; the Philippines was only the "duty station" where Schonfeld was
required to work under the General Conditions of Employment. PCIJ remained respondent’s employer despite
his having been sent to the Philippines. Since the parties had agreed that any differences regarding employer-
employee relationship should be submitted to the jurisdiction of the court of arbitration in London, this
agreement is controlling.
On appeal, the NLRC agreed with the disquisitions of the Labor Arbiter and affirmed the latter’s decision in
toto.18
Respondent then filed a petition for certiorari under Rule 65 with the CA where he raised the following
arguments:
I
WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT AFFIRMED THE LABOR ARBITER’S
DECISION CONSIDERING THAT:
A. PETITIONER’S TRUE EMPLOYER IS NOT PACIFIC CONSULTANTS INTERNATIONAL OF JAPAN BUT
RESPONDENT COMPANY, AND THEREFORE, THE LABOR ARBITER HAS JURISDICTION OVER THE INSTANT CASE;
AND
B. THE PROPER VENUE FOR THE PRESENT COMPLAINT IS THE ARBITRATION BRANCH OF THE NLRC AND NOT
THE COURT OF ARBITRATION IN LONDON.
II
WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT AFFIRMED THE DISMISSAL OF THE
COMPLAINT CONSIDERING THAT PETITIONER’S TERMINATION FROM EMPLOYMENT IS ILLEGAL:
A. THE CLOSURE OF RESPONDENT COMPANY’S WATER AND SANITATION SECTOR WAS NOT BONA
FIDE.
B. ASSUMING ARGUENDO THAT THE CLOSURE OF RESPONDENT COMPANY’S WATER AND
SANITATION SECTOR WAS JUSTIFIABLE, PETITIONER’S DISMISSAL WAS INEFFECTUAL AS THE
DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) AND PETITIONER WAS NOT NOTIFIED THIRTY
(30) DAYS BEFORE THE ALLEGED CLOSURE.19
Respondent averred that the absence or existence of a written contract of employment is not decisive of
whether he is an employee of PPI. He maintained that PPI, through its president Henrichsen, directed his
work/duties as Sector Manager of PPI; proof of this was his letter-proposal to the Development Bank of the
Philippines for PPI to provide consultancy services for the Construction Supervision of the Water Supply and
Sanitation component of the World Bank-Assisted LGU Urban Water and Sanitation Project. 20 He emphasized
that as gleaned from Alien Employment Permit (AEP) No. M-029908-5017 issued to him by DOLE on February
26, 1999, he is an employee of PPI. It was PPI president Henrichsen who terminated his employment; PPI also
paid his salary and reimbursed his expenses related to transactions abroad. That PPI is a wholly-owned
subsidiary of PCIJ is of no moment because the two corporations have separate and distinct personalities.
The CA found the petition meritorious. Applying the four-fold test21 of determining an employer-employee
relationship, the CA declared that respondent was an employee of PPI. On the issue of venue, the appellate
court declared that, even under the January 7, 1998 contract of employment, the parties were not precluded
from bringing a case related thereto in other venues. While there was, indeed, an agreement that issues
between the parties were to be resolved in the London Court of Arbitration, the venue is not exclusive, since
there is no stipulation that the complaint cannot be filed in any other forum other than in the Philippines.
On November 25, 2004, the CA rendered its decision granting the petition, the decretal portion of which
reads:
WHEREFORE, the petition is GRANTED in that the assailed Resolutions of the NLRC are hereby REVERSED and
SET ASIDE. Let this case be REMANDED to the Labor Arbiter a quo for disposition of the case on the merits.
SO ORDERED.22
A motion for the reconsideration of the above decision was filed by PPI and Henrichsen, which the appellate
court denied for lack of merit.23
In the present recourse, PPI and Henrichsen, as petitioners, raise the following issues:
I
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT AN EMPLOYMENT RELATIONSHIP EXISTED
BETWEEN PETITIONERS AND RESPONDENT DESPITE THE UNDISPUTED FACT THAT RESPONDENT, A FOREIGN
NATIONAL, WAS HIRED ABROAD BY A FOREIGN CORPORATION, EXECUTED HIS EMPLOYMENT CONTRACT
ABROAD, AND WAS MERELY "SECONDED" TO PETITIONERS SINCE HIS WORK ASSIGNMENT WAS IN MANILA.
II
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE LABOR ARBITER A QUO HAS JURISDICTION
OVER RESPONDENT’S CLAIM DESPITE THE UNDISPUTED FACT THAT RESPONDENT, A FOREIGN NATIONAL, WAS
HIRED ABROAD BY A FOREIGN CORPORATION, EXECUTED HIS EMPLOYMENT CONTRACT ABROAD, AND HAD
AGREED THAT ANY DISPUTE BETWEEN THEM "SHALL BE FINALLY SETTLED BY THE COURT OF ARBITRATION IN
LONDON."24
Petitioners fault the CA for reversing the findings of the Labor Arbiter and the NLRC. Petitioners aver that the
findings of the Labor Arbiter, as affirmed by the NLRC, are conclusive on the CA. They maintain that it is not
within the province of the appellate court in a petition for certiorari to review the facts and evidence on
record since there was no conflict in the factual findings and conclusions of the lower tribunals. Petitioners
assert that such findings and conclusions, having been made by agencies with expertise on the subject matter,
should be deemed binding and conclusive. They contend that it was the PCIJ which employed respondent as
an employee; it merely seconded him to petitioner PPI in the Philippines, and assigned him to work in Manila
as Sector Manager. Petitioner PPI, being a wholly-owned subsidiary of PCIJ, was never the employer of
respondent.
Petitioners assert that the January 9, 1998 letter of employment which respondent presented to prove his
employment with petitioner PPI is of doubtful authenticity since it was unsigned by the purported parties.
They insist that PCIJ paid respondent’s salaries and only coursed the same through petitioner PPI. PPI, being its
subsidiary, had supervision and control over respondent’s work, and had the responsibilities of monitoring the
"daily administration" of respondent. Respondent cannot rely on the pay slips, expenses claim forms, and
reimbursement memoranda to prove that he was an employee of petitioner PPI because these documents are
of doubtful authenticity.
Petitioners further contend that, although Henrichsen was both a director of PCIJ and president of PPI, it was
he who signed the termination letter of respondent upon instructions of PCIJ. This is buttressed by the fact
that PCIJ’s letterhead was used to inform him that his employment was terminated. Petitioners further assert
that all work instructions came from PCIJ and that petitioner PPI only served as a "conduit." Respondent’s
Alien Employment Permit stating that petitioner PPI was his employer is but a necessary consequence of his
being "seconded" thereto. It is not sufficient proof that petitioner PPI is respondent’s employer. The entry was
only made to comply with the DOLE requirements.
There being no evidence that petitioner PPI is the employer of respondent, the Labor Arbiter has no
jurisdiction over respondent’s complaint.
Petitioners aver that since respondent is a Canadian citizen, the CA erred in ignoring their claim that the
principlesof forum non conveniens and lex loci contractus are applicable. They also point out that the principal
office, officers and staff of PCIJ are stationed in Tokyo, Japan; and the contract of employment of respondent
was executed in Tokyo, Japan.
Moreover, under Section 21 of the General Conditions for Employment incorporated in respondent’s January
7, 1998 letter of employment, the dispute between respondent and PCIJ should be settled by the court of
arbitration of London. Petitioners claim that the words used therein are sufficient to show the exclusive and
restrictive nature of the stipulation on venue.
Petitioners insist that the U.S. Labor-Management Act applies only to U.S. workers and employers, while the
Labor Code of the Philippines applies only to Filipino employers and Philippine-based employers and their
employees, not to PCIJ. In fine, the jurisdictions of the NLRC and Labor Arbiter do not extend to foreign
workers who executed employment agreements with foreign employers abroad, although "seconded" to the
Philippines.25
In his Comment,26 respondent maintains that petitioners raised factual issues in their petition which are
proscribed under Section 1, Rule 45 of the Rules of Court. The finding of the CA that he had been an employee
of petitioner PPI and not of PCIJ is buttressed by his documentary evidence which both the Labor Arbiter and
the NLRC ignored; they erroneously opted to dismiss his complaint on the basis of the letter of employment
and Section 21 of the General Conditions of Employment. In contrast, the CA took into account the evidence
on record and applied case law correctly.
The petition is denied for lack of merit.
It must be stressed that in resolving a petition for certiorari, the CA is not proscribed from reviewing the
evidence on record. Under Section 9 of Batas Pambansa Blg. 129, as amended by R.A. No. 7902, the CA is
empowered to pass upon the evidence, if and when necessary, to resolve factual issues. 27 If it appears that the
Labor Arbiter and the NLRC misappreciated the evidence to such an extent as to compel a contrary conclusion
if such evidence had been properly appreciated, the factual findings of such tribunals cannot be given great
respect and finality.28
Inexplicably, the Labor Arbiter and the NLRC ignored the documentary evidence which respondent appended
to his pleadings showing that he was an employee of petitioner PPI; they merely focused on the January 7,
1998 letter of employment and Section 21 of the General Conditions of Employment.
Petitioner PPI applied for the issuance of an AEP to respondent before the DOLE. In said application, PPI
averred that respondent is its employee. To show that this was the case, PPI appended a copy of respondent’s
employment contract. The DOLE then granted the application of PPI and issued the permit.
It bears stressing that under the Omnibus Rules Implementing the Labor Code, one of the requirements for
the issuance of an employment permit is the employment contract. Section 5, Rule XIV (Employment of Aliens)
of the Omnibus Rules provides:
SECTION 1. Coverage. – This rule shall apply to all aliens employed or seeking employment in the Philippines
and the present or prospective employers.
SECTION 2. Submission of list. – All employers employing foreign nationals, whether resident or non-resident,
shall submit a list of nationals to the Bureau indicating their names, citizenship, foreign and local address,
nature of employment and status of stay in the Philippines.
SECTION 3. Registration of resident aliens. – All employed resident aliens shall register with the Bureau under
such guidelines as may be issued by it.
SECTION 4. Employment permit required for entry. – No alien seeking employment, whether as a resident or
non-resident, may enter the Philippines without first securing an employment permit from the Ministry. If an
alien enters the country under a non-working visa and wishes to be employed thereafter, he may only be
allowed to be employed upon presentation of a duly approved employment permit.
SECTION 5. Requirements for employment permit applicants. – The application for an employment permit
shall be accompanied by the following:
(a) Curriculum vitae duly signed by the applicant indicating his educational background, his work
experience and other data showing that he possesses technical skills in his trade or profession.
(b) Contract of employment between the employer and the principal which shall embody the
following, among others:
1. That the non-resident alien worker shall comply with all applicable laws and rules and
regulations of the Philippines;
2. That the non-resident alien worker and the employer shall bind themselves to train at
least two (2) Filipino understudies for a period to be determined by the Minister; and
3. That he shall not engage in any gainful employment other than that for which he was
issued a permit.
(c) A designation by the employer of at least two (2) understudies for every alien worker. Such
understudies must be the most ranking regular employees in the section or department for which
the expatriates are being hired to insure the actual transfer of technology.
Under Section 6 of the Rule, the DOLE may issue an alien employment permit based only on the following: cannot be said that the court of arbitration in London is an exclusive venue to bring forth any complaint arising
out of the employment contract.
(a) Compliance by the applicant and his employer with the requirements of Section 2 hereof;
Petitioners contend that respondent should have filed his Complaint in his place of permanent residence, or
where the PCIJ holds its principal office, at the place where the contract of employment was signed, in London
(b) Report of the Bureau Director as to the availability or non-availability of any person in the
as stated in their contract. By enumerating possible venues where respondent could have filed his complaint,
Philippines who is competent and willing to do the job for which the services of the applicant are
however, petitioners themselves admitted that the provision on venue in the employment contract is indeed
desired;
merely permissive.

(c) His assessment as to whether or not the employment of the applicant will redound to the
Petitioners’ insistence on the application of the principle of forum non conveniens must be rejected. The bare
national interest;
fact that respondent is a Canadian citizen and was a repatriate does not warrant the application of the
principle for the following reasons:
(d) Admissibility of the alien as certified by the Commission on Immigration and Deportation;
First. The Labor Code of the Philippines does not include forum non conveniens as a ground for the
(e) The recommendation of the Board of Investments or other appropriate government agencies if dismissal of the complaint.34
the applicant will be employed in preferred areas of investments or in accordance with the
imperative of economic development.
Second. The propriety of dismissing a case based on this principle requires a factual determination;
hence, it is properly considered as defense.35
Thus, as claimed by respondent, he had an employment contract with petitioner PPI; otherwise, petitioner PPI
would not have filed an application for a Permit with the DOLE. Petitioners are thus estopped from alleging
Third. In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of Appeals, 36 this
that the PCIJ, not petitioner PPI, had been the employer of respondent all along.
Court held that:

We agree with the conclusion of the CA that there was an employer-employee relationship between
x x x [a] Philippine Court may assume jurisdiction over the case if it chooses to do so; provided, that the
petitioner PPI and respondent using the four-fold test. Jurisprudence is firmly settled that whenever the
following requisites are met: (1) that the Philippine Court is one to which the parties may conveniently resort
existence of an employment relationship is in dispute, four elements constitute the reliable yardstick: (a) the
to; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and,
selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
(3) that the Philippine Court has or is likely to have power to enforce its decision. x x x
employer’s power to control the employee’s conduct. It is the so-called "control test" which constitutes the
most important index of the existence of the employer-employee relationship–that is, whether the employer
controls or has reserved the right to control the employee not only as to the result of the work to be done but Admittedly, all the foregoing requisites are present in this case.
also as to the means and methods by which the same is to be accomplished. Stated otherwise, an employer-
employee relationship exists where the person for whom the services are performed reserves the right to
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 76563 is
control not only the end to be achieved but also the means to be used in reaching such end. 29 We quote with
AFFIRMED. This case is REMANDED to the Labor Arbiter for disposition of the case on the merits. Cost against
approval the following ruling of the CA:
petitioners.

[T]here is, indeed, substantial evidence on record which would erase any doubt that the respondent company
SO ORDERED.
is the true employer of petitioner. In the case at bar, the power to control and supervise petitioner’s work
performance devolved upon the respondent company. Likewise, the power to terminate the employment
relationship was exercised by the President of the respondent company. It is not the letterhead used by the
company in the termination letter which controls, but the person who exercised the power to terminate the
employee. It is also inconsequential if the second letter of employment executed in the Philippines was not
signed by the petitioner. An employer-employee relationship may indeed exist even in the absence of a
written contract, so long as the four elements mentioned in the Mafinco case are all present.30

The settled rule on stipulations regarding venue, as held by this Court in the vintage case of Philippine Banking
Corporation v. Tensuan,31 is that while they are considered valid and enforceable, venue stipulations in a
contract do not, as a rule, supersede the general rule set forth in Rule 4 of the Revised Rules of Court in the
absence of qualifying or restrictive words. They should be considered merely as an agreement or additional
forum, not as limiting venue to the specified place. They are not exclusive but, rather permissive. If the
intention of the parties were to restrict venue, there must be accompanying language clearly and categorically
expressing their purpose and design that actions between them be litigated only at the place named by
them.32

In the instant case, no restrictive words like "only," "solely," "exclusively in this court," "in no other court save
—," "particularly," "nowhere else but/except —," or words of equal import were stated in the contract.33 It
G.R. No. 169207               March 25, 2010 The Case

WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN, MARK WEBSTER, and NOMINADA G.R. Nos. 169207 and 169239 are petitions for review1 assailing the Decision2 promulgated on 14 April 2005 as
LANSANG, Petitioners,  well as the Resolution3 promulgated on 1 August 2005 of the Court of Appeals (appellate court) in CA-G.R. SP
vs. No. 78721. The appellate court granted and gave due course to the petition filed by Jocelyn M. Galera
JOCELYN M. GALERA, Respondent. (Galera). The appellate court’s decision reversed and set aside that of the National Labor Relations
Commission (NLRC), and directed WPP Marketing Communications, Inc. (WPP) to pay Galera backwages,
separation pay, unpaid housing benefit, unpaid personal and accident insurance benefits, cash value under the
x - - - - - - - - - - - - - - - - - - - - - - -x
company’s pension plan, 30 days paid holiday benefit, moral damages, exemplary damages, 10% of the total
judgment award as attorney’s fees, and costs of the suit.
G.R. No. 169239
The Facts
JOCELYN M. GALERA, Petitioner, 
vs.
The appellate court narrated the facts as follows:
WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN, MARK WEBSTER, and NOMINADA
LANSANG, Respondents.
Petitioner is Jocelyn Galera (GALERA), a [sic] American citizen who was recruited from the United States of
America by private respondent John Steedman, Chairman-WPP Worldwide and Chief Executive Officer of
DECISION
Mindshare, Co., a corporation based in Hong Kong, China, to work in the Philippines for private respondent
WPP Marketing Communications, Inc. (WPP), a corporation registered and operating under the laws of
Corporation Law; Corporate Officers; Under Section 25 of the Corporation Code, the corporate officers Philippines. GALERA accepted the offer and she signed an Employment Contract entitled "Confirmation of
are the president, secretary, treasurer and such other officers as may be provided in the by-laws. —Corporate Appointment and Statement of Terms and Conditions" (Annex B to Petition for Certiorari). The relevant
officers are given such character either by the Corporation Code or by the corporation’s by-laws. Under portions of the contract entered into between the parties are as follows:
Section 25 of the Corporation Code, the corporate officers are the president, secretary, treasurer and such
other officers as may be provided in the by-laws. Other officers are sometimes created by the charter or by-
laws of a corporation, or the board of directors may be empowered under the by-laws of a corporation to Particulars:
create additional offices as may be necessary.
Name : Jocelyn M. Galera
Labor Law; Termination of Employment; Employer must furnish the worker sought to be dismissed with Address : 163 Mediterranean Avenue
two written notices before termination of employment can be legally effected; Failure to comply with the Hayward, CA 94544
requirements taints the dismissal with illegality.—The law further requires that the employer must furnish the
worker sought to be dismissed with two written notices before termination of employment can be legally Position : Managing Director 
effected: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is Mindshare Philippines
sought; and (2) the subsequent notice which informs the employee of the employer’s decision to dismiss him. Annual Salary : Peso 3,924,000
Failure to comply with the requirements taints the dismissal with illegality. WPP’s acts clearly show that
Galera’s dismissal did not comply with the two-notice rule. Start Date : 1 September 1999
_______________
Commencement Date : 1 September 1999
(for continuous service)
* SECOND DIVISION.
Office : Mindshare Manila
423
VOL. 616, MARCH 25, 2010 423 6. Housing Allowance
WPP Marketing Communications, Inc. vs. Galera
Same; Labor Code; Recruitment; Employment Permit; The law and the rules are consistent in stating The Company will provide suitable housing in Manila at a maximum cost (including management
that the employment permit must be acquired prior to employment.—This is Galera’s dilemma: Galera worked fee and other associated costs) of Peso 576,000 per annum.
in the Philippines without a proper work permit but now wants to claim employee’s benefits under Philippine
labor laws. The law and the rules are consistent in stating that the employment permit must be
7. Other benefits.
acquired prior to employment. The Labor Code states: “Any alien seeking admission to the Philippines for
employment purposes and any domestic or foreign employer who desires to engage an alien for employment
in the Philippines shall obtain an employment permit from the Department of Labor.” The Company will provide you with a fully maintained company car and a driver.

The Company will continue to provide medical, health, life and personal accident insurance plans,
to an amount not exceeding Peso 300,000 per annum, in accordance with the terms of the
respective plans, as provided by JWT Manila.
CARPIO, Acting C.J.:
 The Company will reimburse you and your spouse one way business class air tickets from USA to
Manila and the related shipping and relocation cost not exceeding US$5,000 supported by proper
documentation. If you leave the Company within one year, you will reimburse the Company in full
for all costs of the initial relocation as described therein.
You will participate in the JWT Pension Plan under the terms of this plan, the Company reserves the
right to transfer this benefit to a Mindshare Pension Plan in the future, if so required.
8. Holidays
You are entitled to 20 days paid holiday in addition to public holidays per calendar year to be taken
at times agreed with the Company. Carry-over of unused accrued holiday entitlement into a new
holiday year will not normally be allowed. No payment will be made for holidays not taken. On
termination of your employment, unless you have been summarily dismissed, you will be entitled
to receive payment for unused accrued holiday pay. Any holiday taken in excess of your
entitlement shall be deducted from your final salary payment.
9. Leave Due to Sickness or Injury
The maximum provision for sick leave is 15 working days per calendar year.
12. Invention/Know-How
Any discovery, invention, improvement in procedure, trademark, trade name, designs, copyrights
or get-ups made, discovered or created by you during the continuance of your employment
hereunder relating to the business of the Company shall belong to and shall be the absolute
property of the Company. If required to do so by the Company (whether during or after the
termination of your employment) you shall at the expense of the company execute all instruments
and do all things necessary to vest in ownership for all other rights, title and interests (including any
registered rights therein) in such discovery, invention, improvement in procedure, trademark, trade
name, design, copyright or get-up in the Company (or its Nominee) absolutely and as sole beneficial
owner.
Petitioner alleged that she was constrained to sign the application in order that she could remain in the
Philippines and retain her employment.
Then, on December 14, 2000, petitioner GALERA alleged she was verbally notified by private respondent
STEEDMAN that her services had been terminated from private respondent WPP. A termination letter
followed the next day.4
On 3 January 2001, Galera filed a complaint for illegal dismissal, holiday pay, service incentive leave pay, 13th
month pay, incentive plan, actual and moral damages, and attorney’s fees against WPP and/or John Steedman
(Steedman), Mark Webster (Webster) and Nominada Lansang (Lansang). The case was docketed as NLRC NCR
Case No. 30-01-00044-01.
The Labor Arbiter’s Ruling
In his Decision dated 31 January 2002, Labor Arbiter Edgardo M. Madriaga (Arbiter Madriaga) held WPP,
Steedman, Webster, and Lansang liable for illegal dismissal and damages. Arbiter Madriaga stated that Galera
was not only illegally dismissed but was also not accorded due process. Arbiter Madriaga explained, thus:
[WPP] failed to observe the two-notice rule. [WPP] through respondent Steedman for a five (5) minute
meeting on December 14, 2000 where she was verbally told that as of that day, her employment was being
terminated. [WPP] did not give [Galera] an opportunity to defend herself and explain her side. [Galera] was
even prohibited from reporting for work that day and was told not to report for work the next day as it would
be awkward for her and respondent Steedman to be in the same premises after her termination. [WPP] only
served [Galera] her written notice of termination only on 15 December 2001, one day after she was verbally
apprised thereof.
The law mandates that the dismissal must be properly done otherwise, the termination is gravely defective
and may be declared unlawful as we hereby hold [Galera’s] dismissal to be illegal and unlawful. Where there is
no showing of a clear, valid and legal cause for the termination of employment, the law considers the matter a
case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid or
authorized cause. The law mandates that both the substantive and procedural aspects of due process should
be observed. The facts clearly show that respondents were remiss on both aspects. Perforce, the dismissal is
void and unlawful.

14. Notice.
xxxx

The first three months of your employment will be a trial period during which either you or the
Considering the work performance and achievements of [Galera] for the year 2000, we do not find any basis
Company may terminate your employment on one week’s notice. If at the end of that period, the
for the alleged claim of incompetence by herein respondents. Had [Galera] been really incompetent, she
Company is satisfied with your performance, you will become a permanent employee. Thereafter
would not have been able to generate enormous amounts [sic] of revenues and business for [WPP]. She also
you will give Company and the Company will give you three months notice of termination of
appears to be well liked as a leader by her subordinates, who have come forth in support of [Galera]. These
employment. The above is always subject to the following: (1) the Company’s right to terminate
facts remain undisputed by respondents.
the contract of employment on no or short notice where you are in breach of contract; (2) your
employment will at any event cease without notice on your retirement date when you are 60 years
of age. A man’s job being a property right duly protected by our laws, an employer who deprives an employee [of] the
right to defend himself is liable for damages consistent with Article 32 of the Civil Code. To allow an employer
to terminate the employment of his worker based merely on allegations without proof places the [employee]
SIGNED JOCELYN M. GALERA 8-16-99
in an uncertain situation. The unflinching rule in illegal dismissal cases is that the employer bears the burden
Date of Birth [sic] 12-25-55
of proof.

Employment of GALERA with private respondent WPP became effective on September 1, 1999 solely on the
In the instant case, respondents have not been able to muster evidence to counter [Galera’s] allegations.
instruction of the CEO and upon signing of the contract, without any further action from the Board of Directors
[Galera’s] allegations remain and stand absent proof from respondents rebutting them. Hence, our finding of
of private respondent WPP.
illegal dismissal against respondents who clearly have conspired in bad faith to deprive [Galera] of her right to
substantive and procedural due process.5
Four months had passed when private respondent WPP filed before the Bureau of Immigration an application
for petitioner GALERA to receive a working visa, wherein she was designated as Vice President of WPP.
The dispositive portion of Arbiter Madriaga’s decision reads as follows:
WHEREFORE, premises considered, we hereby hold herein respondents liable for illegal dismissal and Directors. In this case, the position of comptroller was not even expressly mentioned in the By-Laws of the
damages, and award to [Galera], by virtue of her expatriate status, the following: corporation, and yet, the Supreme Court found him to be a corporate officer. The Court ruled that —

a. Reinstatement without loss of seniority rights. (since) petitioner’s appointment as comptroller required the approval and formal action of IBC’s Board of
Directors to become valid, it is clear therefore that petitioner is a corporate officer whose dismissal may be the
subject of a controversy cognizable by the SEC... Had the petitioner been an ordinary employee, such board
b. Backwages amounting to $120,000 per year at ₱50.00 to US $1 exchange rate, 13th month pay,
action would not have been required.
transportation and housing benefits.

Such being the case, the imperatives of law require that we hold that the Arbiter below had no jurisdiction
c. Remuneration for business acquisitions amounting to Two Million Eight Hundred Fifty Thousand
over Galera’s case as, again, she was a corporate officer at the time of her removal.
Pesos (₱2,850,000.00) and Media Plowback Incentive equivalent to Three Million Pesos
(₱3,000,000.00) or a total of not less than One Hundred Thousand US Dollars ($100,000.00).
WHEREFORE, the appeals of petitioner from the Decision of Labor Arbiter Edgardo Madriaga dated January 31,
2002 and his Order dated March 21, 2002, respectively, are granted. The January 31, 2002 decision of the
d. US Tax Protection of up to 35% coverage equivalent to Thirty Eight Thousand US Dollars
Labor Arbiter is set aside for being null and void and the temporary restraining order we issued on April 24,
($38,000).
2002 is hereby made permanent. The complaint of Jocelyn Galera is dismissed for lack of jurisdiction.

e. Moral damages including implied defamation and punitive damages equivalent to Two Million
SO ORDERED.8
Dollars (US$2,000,000.00).

In its Resolution9 promulgated on 4 June 2003, the NLRC further stated:

f. Exemplary damages equivalent to One Million Dollars ($1,000,000.00).

We are fully convinced that this is indeed an intra-corporate dispute which is beyond the labor arbiter’s
g. Attorney’s fees of 10% of the total award herein.
jurisdiction. These consolidated cases clearly [involve] the relationship between a corporation and its officer
and is properly within the definition of an intra-corporate relationship which, under P.D. No. 902-A, is within
SO ORDERED.6 the jurisdiction of the SEC (now the commercial courts). Such being the case, We are constrained to rule that
the Labor Arbiter below had no jurisdiction over Ms. Galera’s complaint for illegal dismissal.
The Ruling of the NLRC
WHEREFORE, the motion for reconsideration filed by Ms. Galera is hereby denied for lack of merit. We
The First Division of the NLRC reversed the ruling of Arbiter Madriaga. In its Decision7 promulgated on 19 reiterate our February 19, 2003 Decision setting aside the Labor Arbiter’s Decision dated January 31, 2002 for
February 2003, the NLRC stressed that Galera was WPP’s Vice-President, and therefore, a corporate officer at being null and void.
the time she was removed by the Board of Directors on 14 December 2000. The NLRC stated thus:
SO ORDERED.10
It matters not that her having been elected by the Board to an added position of being a member of the Board
of Directors did not take effect as her May 31, 2000 election to such added position was conditioned to be Galera assailed the NLRC’s decision and resolution before the appellate court and raised a lone assignment of
effective upon approval by SEC of the Amended By-Laws, an approval which took place only in February 21, error.
2001, i.e., after her removal on December 14, 2000. What counts is, at the time of her removal, she continued
to be WPP’s Vice-President, a corporate officer, on hold over capacity.
The National Labor Relations Commission acted with grave abuse of discretion amounting to lack or excess of
jurisdiction when it reversed the decision of the Labor Arbiter not on the merits but for alleged lack of
Ms. Galera’s claim that she was not a corporate officer at the time of her removal because her May 31, 2000 jurisdiction.11
election as Vice President for Media, under WPP’s Amended By-Laws, was subject to the approval by the
Securities and Exchange Commission and that the SEC approved the Amended By-Laws only in February 2001.
The Decision of the Appellate Court
Such claim is unavailing. Even if Ms. Galera’s subsequent election as Vice President for Media on May 31, 2000
was subject to approval by the SEC, she continued to hold her previous position as Vice President under the
December 31, 1999 election until such time that her successor is duly elected and qualified. It is a basic The appellate court reversed and set aside the decision of the NLRC. The appellate court ruled that the NLRC’s
principle in corporation law, which principle is also embodied in WPP’s by-laws, that a corporate officer dismissal of Galera’s appeal is not in accord with jurisprudence. A person could be considered a "corporate
continues to hold his position as such until his successor has been duly elected and qualified. When Ms. Galera officer" only if appointed as such by a corporation’s Board of Directors, or if pursuant to the power given them
was elected as Vice President on December 31, 1999, she was supposed to have held that position until her by either the Articles of Incorporation or the By-Laws.12
successor has been duly elected and qualified. The record shows that Ms. Galera was not replaced by anyone.
She continued to be Vice President of WPP with the same operational title of Managing Director for
The appellate court explained:
Mindshare and continued to perform the same functions she was performing prior to her May 31, 2000
election.
A corporation, through its board of directors, could only act in the manner and within the formalities, if any,
prescribed by its charter or by the general law. If the action of the Board is ultra vires such is motu proprio
In the recent case of Dily Dany Nacpil v. International Broadcasting Corp., the definition of corporate officer for
void ab initio and without legal effect whatsoever. The by-laws of a corporation are its own private laws which
purposes of intra-corporate controversy was even broadened to include a Comptroller/Assistant Manager
substantially have the same effect as the laws of the corporation. They are, in effect, written into the charter.
who was appointed by the General Manager, and whose appointment was later approved by the Board of
In this sense, they beome part of the fundamental law of the corporation with which the corporation and its
directors and officers must comply.
Even if petitioner GALERA had been appointed by the Board of Directors on December 31, 1999, private
respondent WPP’s By-Laws provided for only one Vice-President, a position already occupied by private
respondent Webster. The same defect also stains the Board of Directors’ appointment of petitioner GALERA as
a Director of the corporation, because at that time the By-Laws provided for only five directors. In addition,
the By-laws only empowered the Board of Directors to appoint a general manager and/or assistant general
manager as corporate officers in addition to a chairman, president, vice-president and treasurer. There is no
mention of a corporate officer entitled "Managing Director."
Hence, when the Board of Directors enacted the Resolutions of December 31, 1999 and May 31, 2000, it
exceeded its authority under the By-Laws and are, therefore, ultra vires. Although private respondent WPP
sought to amend these defects by filing Amended By-Laws with the Securities and Exchange Commission, they
did not validate the ultra vires resolutions because the Amended By-Laws did not take effect until February 16,
2001, when it was approved by the SEC. Since by-laws operate only prospectively, they could not validate
the ultra vires resolutions.13
The dispositive portion of the appellate court’s decision reads:
WHEREFORE, the petition is hereby GRANTED and GIVEN DUE COURSE. The assailed Decision of the National
Labor Relations Commission is hereby REVERSED and SET ASIDE and a new one is entered DIRECTING private
respondent WPP MARKETING COMMUNICATIONS, INC. to:
1. Pay [Galera] backwages at the peso equivalent of US$120,000.00 per annum plus three months
from her summary December 14, 2000 dismissal up to March 14, 2001 because three months
notice is required under the contract, plus 13th month pay, bonuses and general increases to which
she would have been normally entitled, had she not been dismissed and had she not been forced
to stop working, including US tax protection of up to 35% coverage which she had been enjoying as
an expatriate;
2. Pay x x x GALERA the peso equivalent of US$185,000.00 separation pay (1 ½ years);
3. Pay x x x GALERA any unpaid housing benefit for the 18 ½ months of her employment in the
service to the Company as an expatriate in Manila, Philippines at the rate of ₱576,000 per year;
unpaid personal and accident insurance benefits for premiums at the rate of ₱300,000.00 per year;
whatever cash value in the JWT Pension Plan; and thirty days paid holiday benefit under the
contract for the 1 ½ calendar years with the Company;
4. Pay x x x GALERA the reduced amount of PhP2,000,000.00 as moral damages;
5. Pay [Galera] the reduced amount of PhP1,000,000.00 as exemplary damages;
6. Pay [Galera] an amount equivalent to 10% of the judgment award as attorney’s fees;
7. Pay the cost of the suit.
SO ORDERED.14
Respondents filed a motion for reconsideration on 5 May 2005. Galera filed a motion for partial
reconsideration and/or clarification on the same date. The appellate court found no reason to revise or
reverse its previous decision and subsequently denied the motions in a Resolution promulgated on 1 August
2005.15
The Issues
WPP, Steedman, Webster, and Lansang raised the following grounds in G.R. No. 169207:
I. The Court of Appeals seriously erred in ruling that the NLRC has jurisdiction over [Galera’s]
complaint because she was not an employee. [Galera] was a corporate officer of WPP from the
beginning of her term until her removal from office.
II. Assuming arguendo that the Court of Appeals correctly ruled that the NLRC has jurisdiction over
[Galera’s] complaint, it should have remanded the case to the Labor Arbiter for reception of
evidence on the merits of the case.
III. [Galera] is an alien, hence, can never attain a regular or permanent working status in the
Philippines.
IV. [Galera] is not entitled to recover backwages, other benefits and damages from WPP.16
On the other hand, in G.R. No. 169239, Galera raised the following grounds in support of her petition:
The CA decision should be consistent with Article 279 of the Labor Code and applicable jurisprudence, that full
backwages and separation pay (when in lieu of reinstatement), should be reckoned from time of dismissal up
to time of reinstatement (or payment of separation pay, in case separation instead of reinstatement is
awarded).
Accordingly, petitioner Galera should be awarded full backwages and separation pay for the period from 14
December 2000 until the finality of judgment by the respondents, or, at the very least, up to the promulgation
date of the CA decision.
The individual respondents Steedman, Webster and Lansang must be held solidarily liable with respondent
WPP for the wanton and summary dismissal of petitioner Galera, to be consistent with law and jurisprudence
as well as the specific finding of the CA of bad faith on the part of respondents.17
This Court ordered the consolidation of G.R. Nos. 169207 and 169239 in a resolution dated 16 January 2006.18
The Ruling of the Court
In its consolidated comment, the Office of the Solicitor General (OSG) recommended that (A) the Decision
dated 14 April 2005 of the appellate court finding (1) Galera to be a regular employee of WPP; (2) the NLRC to
have jurisdiction over the present case; and (3) WPP to have illegally dismissed Galera, be affirmed; and (B)
the case remanded to the Labor Arbiter for the computation of the correct monetary award. Despite the
OSG’s recommendations, we see that Galera’s failure to seek an employment permit prior to her employment
poses a serious problem in seeking relief before this Court. Hence, we settle the various issues raised by the
parties for the guidance of the bench and bar.
Whether Galera is an Employee or a Corporate Officer
Galera, on the belief that she is an employee, filed her complaint before the Labor Arbiter. On the other hand,
WPP, Steedman, Webster and Lansang contend that Galera is a corporate officer; hence, any controversy
regarding her dismissal is under the jurisdiction of the Regional Trial Court. We agree with Galera.
Corporate officers are given such character either by the Corporation Code or by the corporation’s by-laws.
Under Section 25 of the Corporation Code, the corporate officers are the president, secretary, treasurer and
such other officers as may be provided in the by-laws.19 Other officers are sometimes created by the charter or
by-laws of a corporation, or the board of directors may be empowered under the by-laws of a corporation to
create additional offices as may be necessary.
An examination of WPP’s by-laws resulted in a finding that Galera’s appointment as a corporate officer (Vice-
President with the operational title of Managing Director of Mindshare) during a special meeting of WPP’s
Board of Directors is an appointment to a non-existent corporate office. WPP’s by-laws provided for only one
Vice-President. At the time of Galera’s appointment on 31 December 1999, WPP already had one Vice-
President in the person of Webster. Galera cannot be said to be a director of WPP also because all five
directorship positions provided in the by-laws are already occupied. Finally, WPP cannot rely on its Amended
By-Laws to support its argument that Galera is a corporate officer. The Amended By-Laws provided for more
than one Vice-President and for two additional directors. Even though WPP’s stockholders voted for the
amendment on 31 May 2000, the SEC approved the amendments only on 16 February 2001. Galera was
dismissed on 14 December 2000. WPP, Steedman, Webster, and Lansang did not present any evidence that
Galera’s dismissal took effect with the action of WPP’s Board of Directors.1avvphi1
The appellate court further justified that Galera was an employee and not a corporate officer by subjecting
WPP and Galera’s relationship to the four-fold test: (a) the selection and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee with
respect to the means and methods by which the work is to be accomplished. The appellate court found:
x x x Sections 1 and 4 of the employment contract mandate where and how often she is to perform her work;
sections 3, 5, 6 and 7 show that wages she receives are completely controlled by x x x WPP; and sections 10
and 11 clearly state that she is subject to the regular disciplinary procedures of x x x WPP.
Another indicator that she was a regular employee and not a corporate officer is Section 14 of the contract,
which clearly states that she is a permanent employee — not a Vice-President or a member of the Board of
Directors.
xxxx
Another indication that the Employment Contract was one of regular employment is Section 12, which states
that the rights to any invention, discovery, improvement in procedure, trademark, or copyright created or
discovered by petitioner GALERA during her employment shall automatically belong to private respondent
WPP. Under Republic Act 8293, also known as the Intellectual Property Code, this condition prevails if the
creator of the work subject to the laws of patent or copyright is an employee of the one entitled to the patent
or copyright.
Another convincing indication that she was only a regular employee and not a corporate officer is the
disciplinary procedure under Sections 10 and 11 of the Employment Contract, which states that her right of
redress is through Mindshare’s Chief Executive Officer for the Asia-Pacific. This implies that she was not under
the disciplinary control of private respondent WPP’s Board of Directors (BOD), which should have been the
case if in fact she was a corporate officer because only the Board of Directors could appoint and terminate
such a corporate officer.
Although petitioner GALERA did sign the Alien Employment Permit from the Department of Labor and
Employment and the application for a 9(g) visa with the Bureau of Immigration – both of which stated that she
was private respondent’s WPP’ Vice President – these should not be considered against her.
Assurming arguendo that her appointment as Vice-President was a valid act, it must be noted that these
appointments occurred afater she was hired as a regular employee. After her appointments, there was no
appreciable change in her duties.20
Whether the Labor Arbiter and the NLRC
have jurisdiction over the present case
Galera being an employee, then the Labor Arbiter and the NLRC have jurisdiction over the present case. Article
217 of the Labor Code provides:
Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code, the
Labor Arbiters shall have original and exclusive jurisdiction to hear and decide x x x the following cases
involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare and other maternity
benefits, all other claims, arising from employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding five thousand pesos (₱5,000.00)
regardless of whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by
Labor Arbiters.
(c) Cases arising from the interpretation of collective bargaining agreements and those
arising from the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitration as may be provided in said agreements.
In contrast, Section 5.2 of Republic Act No. 8799, or the Securities Regulation Code, states:
The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is
hereby transferred to the courts of general jurisdiction or the appropriate Regional Trial Court: Provided, That
the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall
exercise jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases involving
intra-corporate disputes submitted for final resolution which should be resolved within one year from the
enactment of this Code. The Commission shall retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.
The pertinent portions of Section 5 of Presidential Decree No. 902-A, mentioned above, states:
b) Controversies arising out of intra-corporate or partnership relations, between and among
stockholders, members or associates; between any or all of them and the corporation, partnership
or association of which they are stockholders, members or associates, respectively; and between
such corporation, partnership or association and the state insofar as it concerns their individual
franchise or right to exist as such entity;
 c) Controversies in the election or appointments of directors, trustees, officers or managers of such
corporations, partnerships or associations.
Whether WPP illegally dismissed Galera
WPP’s dismissal of Galera lacked both substantive and procedural due process.
Apart from Steedman’s letter dated 15 December 2000 to Galera, WPP failed to prove any just or authorized
cause for Galera’s dismissal. Steedman’s letter to Galera reads:
The operations are currently in a shamble. There is lack of leadership and confidence in your abilities from
within, our agency partners and some clients.
Most of the staff I spoke with felt they got more guidance and direction from Minda than yourself. In your role
as Managing Director, that is just not acceptable.
I believe your priorities are mismanaged. The recent situation where you felt an internal strategy meeting was
more important than a new business pitch is a good example.
Employment of GALERA with private respondent WPP became effective on September 1, 1999 solely on the
instruction of the CEO and upon signing of the contract, without any further action from the Board of Directors
of private respondent WPP.
Four months had passed when private respondent WPP filed before the Bureau of Immigration an
application for petitioner GALERA to receive a working visa, wherein she was designated as Vice President of
WPP. Petitioner alleged that she was constrained to sign the application in order that she could remain in the
Philippines and retain her employment.24
The law and the rules are consistent in stating that the employment permit must be acquired prior to
employment. The Labor Code states: "Any alien seeking admission to the Philippines for employment
purposes and any domestic or foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of Labor." 25 Section 4, Rule XIV, Book 1 of
the Implementing Rules and Regulations provides:
Employment permit required for entry. — No alien seeking employment, whether as a resident or non-
resident, may enter the Philippines without first securing an employment permit from the Ministry. If an alien
enters the country under a non-working visa and wishes to be employed thereafter, he may only be allowed to
be employed upon presentation of a duly approved employment permit.

You failed to lead and advise on the two new business pitches. In both cases, those involved sort (sic) Minda’s Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is to sanction the violation of
input. As I discussed with you back in July, my directive was for you to lead and review all business pitches. It is the Philippine labor laws requiring aliens to secure work permits before their employment. We hold that the
obvious [that] confusion existed internally right up until the day of the pitch. status quo must prevail in the present case and we leave the parties where they are. This ruling, however,
does not bar Galera from seeking relief from other jurisdictions.

The quality output is still not to an acceptable standard, which was also part of my directive that you needed
to focus on back in July. WHEREFORE, we PARTIALLY GRANT the petitions in G.R. Nos. 169207 and 169239. We SET ASIDE the Decision
of the Court of Appeals promulgated on 14 April 2005 as well as the Resolution promulgated on 1 August 2005
in CA-G.R. SP No. 78721.
I do not believe you understand the basic skills and industry knowledge required to run a media special
operation.21
SO ORDERED.

WPP, Steedman, Webster, and Lansang, however, failed to substantiate the allegations in Steedman’s letter.
Galera, on the other hand, presented documentary evidence 22 in the form of congratulatory letters, including
one from Steedman, which contents are diametrically opposed to the 15 December 2000 letter.

The law further requires that the employer must furnish the worker sought to be dismissed with two written
notices before termination of employment can be legally effected: (1) notice which apprises the employee of
the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs
the employee of the employer’s decision to dismiss him. Failure to comply with the requirements taints the
dismissal with illegality.23WPP’s acts clearly show that Galera’s dismissal did not comply with the two-notice
rule.

Whether Galera is entitled to the monetary award

WPP, Steedman, Webster, and Lansang argue that Galera is not entitled to backwages because she is an alien.
They further state that there is no guarantee that the Bureau of Immigration and the Department of Labor and
Employment will continue to grant favorable rulings on the applications for a 9(g) visa and an Alien
Employment Permit after the expiry of the validity of Galera’s documents on 31 December 2000. WPP’s
argument is a circular argument, and assumes what it attempts to prove. Had WPP not dismissed Galera, there
is no doubt in our minds that WPP would have taken action for the approval of documents required for
Galera’s continued employment.

This is Galera’s dilemma: Galera worked in the Philippines without a proper work permit but now wants to
claim employee’s benefits under Philippine labor laws.
G.R. No. 191455               March 12, 2014 parties. Separation pay in lieu of reinstatement may likewise be awarded if the employee decides not to be
reinstated.” x x x Under the doctrine of strained relations, the payment of separation pay is considered an
acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On one hand,
DREAMLAND HOTEL RESORT and WESTLEY J. PRENTICE, Petitioners, 
such payment liberates the employee from what could be a highly oppressive work environment. On the other
vs.
hand, it releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it
STEPHEN B. JOHNSON, Respondent.
could no longer trust. In the present case, the NLRC found that due to the strained relations between the
parties, separation pay is to be awarded to Johnson in lieu of his reinstatement.
DECISION
Same; Same; Separation Pay; Separation pay is computed from the commencement of employment up
Procedural Rules and Technicalities; The relaxation of procedural rules, or saving a particular case from to the time of termination, including the imputed service for which the employee is entitled to backwages.—
the operation of technicalities when substantial justice requires it, as in the instant case, should no longer be Accordingly, the award of backwages should be computed from November 3, 2007 to August 1, 2010 — which
subject to cavil.—While it is desirable that the Rules of Court be faithfully observed, courts should not be so is three years from August 1, 2007. Furthermore, separation pay is computed from the commencement of
strict about procedural lapses that do not really impair the proper administration of justice. If the rules are employment up to the time of termination, including the imputed service for which the employee is entitled to
intended to ensure the proper and orderly conduct of litigation, it is because of the higher objective they seek backwages. As one-month salary is awarded as separation pay for every year of service, including imputed
which are the attainment of justice and the protection of substantive rights of the parties. Thus, the relaxation service, Johnson should be paid separation pay equivalent to his three-month salary for the three-year
of procedural rules, or saving a particular case from the operation of technicalities when substantial justice contract. 
requires it, as in the instant case, should no longer be subject to cavil.

Same; It is true that procedural rules may be waived or dispensed with in the interest of substantial
justice.—Time and again, this Court has emphasized that procedural rules should be treated with utmost
REYES, J.:
respect and due regard, since they are designed to facilitate the adjudication of cases to remedy the
worsening problem of delay in the resolution of rival claims and in the administration of justice. “From time to
time, however, we have recognized exceptions to the Rules but only for the most compelling reasons where Before the Court is a Petition for Review on Certiorari 1 assailing the December 14, 20092 and February 11,
stubborn obedience to the Rules would defeat rather than serve the ends of justice.” “It is true that 20103Resolutions of the Court of Appeals (CA) in CA-G.R. SP No. 111693 which dismissed outright the petition
procedural rules may be waived or dispensed with in the interest of substantial justice.” for certiorari on technical grounds.
Labor Law; The consistent rule is that if doubt exists between the evidence presented by the employer
and that by the employee, the scales of justice must be tilted in favor of the latter. —As it could not be
Dreamland Hotel Resort (Dreamland) and its President, Westley J. Prentice (Prentice) (petitioners) alleged the
determined with absolute certainty whether or not Johnson rendered the services he mentioned during the
following facts in the instant petition:
material time, doubt must be construed in his favor for the reason that “the consistent rule is that if doubt
exists between the evidence presented by the employer and that by the employee, the scales of justice must
be tilted in favor of the latter.” What is clear upon the records is that Johnson had already taken his place in 9. Dreamland is a corporation duly registered with the Securities and Exchange Commission on January 15,
the hotel since July 2007. 2003 to exist for a period of fifty [50] years with registration number SEC A 1998-6436. Prentice is its current
President and Chief Executive Officer. It is engaged in the hotel, restaurant and allied businesses. Dreamland is
Same; Termination of Employment; Illegal Dismissals; Reinstatement; Backwages; Separation Pay; The presently undertaking operations of its business at National Highway, Sto. Tomas, Matain Subic, Zambales,
normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights, 2209.
and payment of backwages computed from the time compensation was withheld up to the date of actual
reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) 10. Respondent Stephen B. Johnson is an Australian citizen who came to the Philippines as a
month salary for every year of service should be awarded as an alternative.—The above preceding statement businessman/investor without the authority to be employed as the employee/officer of any business as he
only goes to show that while it was Johnson who tendered his resignation, it was due to the petitioners’ acts was not able to secure his Alien Employment Permit ["AEP" for brevity], which fact was duly supported by the
that he was constrained to resign. The petitioners cannot expect Johnson to tolerate working for them without Certification dated March 14, 2008 of the Department of Labor and Employment ["DOLE" for brevity] Regional
any compensation. Since Johnson was constructively dismissed, he was illegally dismissed. As to the reliefs Director, Regional Office No. III, San Fernando City, Pampanga,
granted to an employee who is illegally dismissed, Golden Ace Builders v. Talde, 620 SCRA 283 (2010),
referring to Macasero v. Southern Industrial Gases Philippines, 577 SCRA 500 (2009), is instructive: Thus,
an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement.  The two reliefs x x x.
provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained
relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed 11. As a fellow Australian citizen, Johnson was able to convince Prentice to accept his offer to invest in
employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, Dreamland and at the same time provide his services as Operations Manager of Dreamland with a promise
and backwages. The normal consequences of respondents’ illegal dismissal, then, are reinstatement without that he will secure an AEP and Tax Identification Number ["TIN" for brevity] prior to his assumption of work.
loss of seniority rights, and payment of backwages computed from the time compensation was withheld up
to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay
equivalent to one (1) month salary for every year of service should be awarded as an alternative.   The 12. Sometime on June 21, 2007, Prentice and Johnson entered into an Employment Agreement, which
payment of separation pay is in addition to payment of backwages. stipulates among others, that the [sic] Johnson shall serve as Operations Manager of Dreamland from August
1, 2007 and shall serve as such for a period of three (3) years.
Same; Same; Doctrine of Strained Relations; Under the doctrine of strained relations, the payment of
separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer 13. Before entering into the said agreement[,] Prentice required the submission of the AEP and TIN from
desirable or viable.—The case of Golden Ace further provides: “The accepted doctrine is that separation pay Johnson. Johnson promised that the same shall be supplied within one (1) month from the signing of the
may avail in lieu  of reinstatement if reinstatement is no longer practical or in the best interest of the
contract because the application for the TIN and AEP were still under process. Thus[,] it was agreed that the
efficacy of the said agreement shall begin after one (1) month or on August 1, 2007. x x x.
14. On or about October 8, 2007, Prentice asked on several occasions the production of the AEP and TIN from
Johnson. Johnson gave excuses and promised that he is already in possession of the requirements. Believing
the word of Johnson, Dreamland commenced a dry run of its operations.
11. However, in an SMS or text message sent by Prentice to [Johnson] on the same day at around 8:20 pm, he
was informed that "… I consider [yo]ur resignation as immediate". Despite demand, petitioners refused to pay
[Johnson] the salaries and benefits due him.5
On January 31, 2008, Johnson filed a Complaint for illegal dismissal and non-payment of salaries, among
others, against the petitioners.

15. Johnson worked as a hotel and resort Operations Manager only at that time. He worked for only about On May 23, 2008, the Labor Arbiter (LA) rendered a Decision6 dismissing Johnson’s complaint for lack of merit
three (3) weeks until he suddenly abandoned his work and subsequently resigned as Operations Manager with the finding that he voluntarily resigned from his employment and was not illegally dismissed. We quote:
starting November 3, 2007. He never reported back to work despite several attempts of Prentice to clarify his
issues. x x x.4
There [is] substantial evidence on record that [Johnson] indeed resigned voluntarily from his position by his
mere act of tendering his resignation and immediately abandoned his work as Operations Manager from the
On the other hand, respondent Stephen B. Johnson (Johnson) averred that: time that he filed said resignation letter on November 3, 2007 and never returned to his work up to the filing
of this case. Evidence on record also show that [Johnson] only served as Operations Manager for a period of
three (3) weeks after which he tendered his voluntary resignation and left his job. This fact was not denied or
4. There is also no truth to the allegation that it was [Johnson] who "offered" and "convinced" petitioner
questioned by him. His claim that there was breach of employment contract committed by the respondents
Prentice to "invest" in and provide his services to petitioner Dreamland Hotel Resort x x x. The truth of the
and that he was not refunded his alleged investment with the respondent Dreamland Hotel and Resort were
matter is that it was petitioners who actively advertised for a resort manager for Dreamland Hotel. x x x
not properly supported with substantial evidence and besides these issues are not within the ambit of
jurisdiction of this Commission.
5. It was in response to these advertisements that private respondent Johnson contacted petitioners to
inquire on the terms for employment offered. It was Prentice who offered employment and convinced
There being competent, concrete and substantial evidence to confirm the voluntary resignation of [Johnson]
Johnson to give out a loan, purportedly so the resort can be completed and operational by August 2007.
from his employment, there was no illegal dismissal committed against him and for him to be entitled to
Believing the representations of petitioner Prentice, private respondent Johnson accepted the employment as
reinstatement to his former position and backwages.
Resort Manager and loaned money to petitioners [consisting of] his retirement pay in the amount of One
Hundred Thousand US Dollars (USD 100,000.00) to finish construction of the resort. x x x.
xxxx
6. From the start of August 2007, as stipulated in the Employment Agreement, respondent Johnson already
reported for work. It was then that he found out to his dismay that the resort was far from finished. However, WHEREFORE, premises considered, let this case be as it is hereby ordered DISMISSED for lack of merit.
he was instructed to supervise construction and speak with potential guests. He also undertook the overall
preparation of the guestrooms and staff for the opening of the hotel, even performing menial tasks (i.e.
All the money claims of the complainant are likewise ordered dismissed for lack of legal basis.
inspected for cracked tiles, ensured proper grout installation, proper lighting and air-conditioning unit
installation, measured windows for curtain width and showers for shower curtain rods, unloaded and installed
mattresses, beddings, furniture and appliances and even ironed and hung guest room curtains). SO ORDERED.7

xxxx
8. As [Johnson] remained unpaid since August 2007 and he has loaned all his money to petitioners, he asked
for his salary after the resort was opened in October 2007 but the same was not given to him by petitioners.
[Johnson] became very alarmed with the situation as it appears that there was no intention to pay him his
salary, which he now depended on for his living as he has been left penniless. He was also denied the benefits
promised him as part of his compensation such as service vehicles, meals and insurance.
Dissatisfied, Johnson appealed to the National Labor Relations Commission (NLRC). The NLRC rendered its
Decision8 on April 30, 2009, the dispositive portion of which reads:
WHEREFORE, the decision appeared from is hereby REVERSED. Respondent Wes[t]ley Prentice and/or
Dreamland Resort & Hotel, Inc[.] are hereby ordered to pay [Johnson] the following:
1. Backwages computed at [P]60,000.00 monthly from November

9. [Johnson] was also not given the authority due to him as resort manager. Prentice countermanded his 3, 2007 up to the finality of this decision;
orders to the staff at every opportunity. Worse, he would even be berated and embarrassed in front of the
staff. Prentice would go into drunken tiffs, even with customers and [Johnson] was powerless to prohibit
Prentice. It soon became clear to him that he was only used for the money he loaned and there was no real 2. Separation pay equivalent to one month’s salary, or [P]60,000.00;
intention to have him as resort manager of Dreamland Hotel.
3. Unpaid salaries from August 1, 2007 to November 1, 2007 amounting to a total of [P]172,800.00.
10. Thus, on November 3, 2007, after another embarrassment was handed out by petitioner Prentice in front
of the staff, which highlighted his lack of real authority in the hotel and the disdain for him by petitioners, SO ORDERED.9
respondent Johnson was forced to submit his resignation, x x x. In deference to the Employment Agreement
signed, [Johnson] stated that he was willing to continue work for the three month period stipulated therein.
The NLRC also noted the following:
Insofar as the charge of abandonment against [Johnson] is concerned, it is significant that the contention that
[Johnson] received a total of [P]172,000.00 from the [petitioners] since July 2007 is not supported by the
evidence x x x submitted by the [petitioners]. Except for a promissory note x x x for [P]2,200.00, the pieces of
evidence in question do not bear [Johnson’s] signature, and do not therefore constitute proof of actual receipt
by him of the amounts stated therein. Thus, based on the evidence and on the admission by [Johnson] that he
received the amount of [P]5,000.00 from the [petitioners], it appears that [Johnson] received a total of only
[P]7,200.00 from the [petitioners]. Since based on the Employment Agreement, his employment commenced
on August 1, 2007, it follows that as of November 3, 2007, when he tendered his resignation, the [petitioners]
had failed to pay him a total of [P]172,800.00 representing his unpaid salaries for three months ([P]60,000.00
x 3 mos. = [P]180,000.00 – [P]7,200 = [P]172,800.00). Even the most reasonable employee would consider
quitting his job after working for three months and receiving only an insignificant fraction of his salaries. There
was, therefore, not an abandonment of employment nor a resignation in the real sense, but a constructive
dismissal, which is defined as an involuntary resignation resorted to when continued employment is rendered
impossible, unreasonable or unlikely x x x. Consequently, [Johnson] is entitled to reinstatement with full
backwages. However, due to the strained relation between the parties, which renders his reinstatement
inadvisable, separation pay may be awarded in lieu of reinstatement.10
Consequently, the petitioners elevated the NLRC decision to the CA by way of Petition for Certiorari with
Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction under Rule 47.
In the assailed Resolution11 dated December 14, 2009, the CA dismissed the petition for lack of proof of
authority and affidavit of service of filing as required by Section 13 of the 1997 Rules of Procedure. The
subsequent motion for reconsideration filed by the petitioners was likewise denied by the CA in a
Resolution12 dated February 11, 2010.
Undaunted, the petitioners filed before this Court the present Petition for Review on Certiorari, raising the
following issues, viz:
A.
THE HONORABLE [CA] COMMITTED A REVERSIBLE ERROR IN PROMULGATING ITS FIRST
RESOLUTION (DECEMBER 14, 2009) WHICH OUTRIGHTLY DISMISSED PETITIONERS’ PETITION FOR
CERTIORARI.
B.
THE HONORABLE [CA] COMMITTED A REVERSIBLE ERROR IN PROMULGATING ITS SECOND
RESOLUTION (FEBRUARY 11, 2010) WHICH DENIED FOR LACK OF MERIT PETITIONERS’ MOTION FOR
RECONSIDERATION.
C.
THE HONORABLE [CA] COMMITTED A REVERSIBLE ERROR IN NOT GIVING DUE CONSIDERATION TO
THE MERITS OF THE PETITIONERS’ PETITION AND IN NOT GRANTING THEIR PRAYER FOR
TEMPORARY RESTRAINING ORDER[.]13
The petition is partially granted.
At its inception, the Court takes note of the Resolutions dated December 14, 2009 and February 11, 2010 of
the CA dismissing the Petition for Certiorari due to the following infirmities:
1. The affiant has no proof of authority to file the petition in behalf of petitioner Dreamland.
2. The petition has no appended affidavit of service to show proof of service of filing as required by
Sec. 13 of the 1997 Rules of Civil Procedure.14
To justify their stance that the CA should have considered the merits of the case, instead of dismissing merely
on procedural grounds, the petitioners cited numerous cases wherein the Court has decided to waive the
strict application of the Rules in the interest of substantial justice. 15 While "[u]tter disregard of [the rules of
procedure] cannot justly be rationalized by harking on the policy of liberal construction," 16 the Court
recognizes badges of inequity present in the case at bar, which would be seemingly branded with approval
should the Court turn a blind eye and dismiss this petition on procedural grounds alone.
"While it is desirable that the Rules of Court be faithfully observed, courts should not be so strict about
procedural lapses that do not really impair the proper administration of justice. If the rules are intended to
ensure the proper and orderly conduct of litigation, it is because of the higher objective they seek which are
the attainment of justice and the protection of substantive rights of the parties. Thus, the relaxation of
procedural rules, or saving a particular case from the operation of technicalities when substantial justice
requires it, as in the instant case, should no longer be subject to cavil."17
Time and again, this Court has emphasized that procedural rules should be treated with utmost respect and
due regard, since they are designed to facilitate the adjudication of cases to remedy the worsening problem of
delay in the resolution of rival claims and in the administration of justice. "From time to time, however, we
have recognized exceptions to the Rules but only for the most compelling reasons where stubborn obedience
to the Rules would defeat rather than serve the ends of justice."18 "It is true that procedural rules may be
waived or dispensed with in the interest of substantial justice."19
Brushing aside technicalities, in the utmost interest of substantial justice and taking into consideration the
varying and conflicting factual deliberations by the LA and the NLRC, the Court shall now delve into the merits
of the case.
The petitioners contend that the employment of Johnson as operations manager commenced only on October
8, 2007 and not on August 1, 2007. However, the employment contract categorically stated that the "term of
employment shall commence on [August 1, 2007]." Furthermore, the factual allegations of Johnson that he
actually worked from August 1, 2007 were neither sufficiently rebutted nor denied by the petitioners. As
Johnson has specifically set forth in his reply before the LA:
Although the resort did not open until approximately 8th October 2007, [Johnson’s] employment began, as
per Employment Agreement, on 1st August 2007. During the interim period[, Johnson] was frequently
instructed by [Prentice] to supervise the construction staff and speak with potential future guests who visited
the site out of curiosity. Other duties carried out by [Johnson] prior to [the] opening included the overall
preparation of the guest rooms for eventual occupation ensuring cracked tiles were replaced, ensuring grout
was properly installed between tiles, ensuring all lighting and air conditioning [were] functioning, measuring
windows for curtain width, measuring showers for shower curtain rods and installing shower curtains. Other
duties included the unloading, carrying and installation of mattresses, bedding[s], TV’s, refrigerators and other
furnishings and ironing curtains x x x.20
Notably, it was only in their Motion for Reconsideration21 of the NLRC decision where the petitioners belatedly
disagreed that Johnson performed the abovementioned tasks and argued that had Johnson done the tasks he
enumerated, those were tasks foreign and alien to his position as operations manager and [were done]
without their knowledge and consent.22
Nevertheless, Prentice did not deny that he ordered Johnson to speak with potential guests of the hotel. In
fact, the petitioners admitted and submitted documents23 which showed that Johnson has already taken his
residence in the hotel as early as July 2007—a part of Johnson’s remuneration as the hotel operations
manager. In presenting such documents, the petitioners would want to impress upon the Court that their act
of accommodating Johnson was merely due to his being a fellow Australian national.
As it could not be determined with absolute certainty whether or not Johnson rendered the services he
mentioned during the material time, doubt must be construed in his favor for the reason that "the consistent
rule is that if doubt exists between the evidence presented by the employer and that by the employee, the
scales of justice must be tilted in favor of the latter."24 What is clear upon the records is that Johnson had
already taken his place in the hotel since July 2007.
For the petitioners’ failure to disprove that Johnson started working on August 1, 2007, as stated on the
employment contract, payment of his salaries on said date, even prior to the opening of the hotel is
warranted.
The petitioners also maintain that they have paid the amount of ₱7,200.00 to Johnson for his three weeks of
service from October 8, 2007 until November 3, 2007, the date of Johnson’s resignation,25 which Johnson did
not controvert. Even so, the amount the petitioners paid to Johnson as his three-week salary is significantly
deficient as Johnson’s monthly salary as stipulated in their contract is ₱60,000.00 26. Thus, the amount which
Johnson should have been paid is ₱45,000.00 and not ₱7,200.00. In light of this deficiency, there is more
reason to believe that the petitioners withheld the salary of Johnson without a valid reason. If they indeed
believed that Johnson deserves to be paid only for three-week worth of service as operations manager, then
they should still have paid him the amount due for three weeks of work rendered.
Another argument posited by the petitioners is that the employment contract executed by the parties is
inefficacious because the employment contract is subject to the presentation of Johnson of his Alien
Employment Permit (AEP) and Tax Identification Number (TIN).
Again, this statement is wanting of merit.
Johnson has adduced proof that as a permanent resident, he is exempted from the requirement of securing an
AEP as expressed under Department Order No. 75-06, Series of 2006 of the Department of Labor and
Employment (DOLE), which we quote:
Rule I- Coverage and Exemption
xxxx
2. Exemption. The following categories of foreign nationals are exempt from securing an employment permit:
xxxx
2.7 Resident foreign nationals
Furthermore, Johnson submitted a Certification27 from DOLE Regional Office III, stating that he is exempted
from securing an AEP as a holder of Permanent Resident Visa. Consequently, the condition imposed upon
Johnson’s employment, if there is any, is in truth without effect to its validity.
Anent the requirement of securing a TIN to make the contract of employment efficacious, records show that
Johnson secured his TIN only on December 2007 28 after his resignation as operations manager. Nevertheless,
this does not negate the fact that the contract of employment had already become effective even prior to
such date.
In addition to the foregoing, there is no stipulation in the employment contract itself that the same shall only
be effective upon the submission of AEP and TIN. The petitioners did not present any proof to support this
agreement prior to the execution of the employment contract. In the case of Ortañez v. CA29, the Court held:
Spoken words could be notoriously unreliable unlike a written contract which speaks of a uniform language.
Thus, under the general rule in Section 9 of Rule 130 of the Rules of Court, when the terms of an agreement
were reduced to writing, as in this case, it is deemed to contain all the terms agreed upon and no evidence of
such terms can be admitted other than the contents thereof. x x x.30 (Citations omitted)
As regards the NLRC findings that Johnson was constructively dismissed and did not abandon his work, the
Court is in consonance with this conclusion with the following basis:
Even the most reasonable employee would consider quitting his job after working for three months and
receiving only an insignificant fraction of his salaries. There was, therefore, not an abandonment of
employment nor a resignation in the real sense, but a constructive dismissal, which is defined as an
involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or
unlikely x x x.31
The petitioners aver that considering that Johnson tendered his resignation and abandoned his work, it is his
burden to prove that his resignation was not voluntary on his part.32
With this, the Court brings to mind its earlier ruling in the case of SHS Perforated Materials, Inc. v. Diaz33 where
it held that:
"There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer
becomes so unbearable on the part of the employee that it would foreclose any choice by him except to
forego his continued employment. It exists where there is cessation of work because continued employment is
rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in
pay."34
It is impossible, unreasonable or unlikely that any employee, such as Johnson would continue working for an
employer who does not pay him his salaries. Applying the Court’s pronouncement in Duldulao v. CA 35, the
Court construes that the act of the petitioners in not paying Johnson his salaries for three months has become
unbearable on the latter’s part that he had no choice but to cede his employment with them. The Court
quotes the pertinent sections of Johnson’s resignation letter which reflects the real reason why he was
resigning as operations manager of the hotel:
I hereby tender my resignation to you, Mr[.] Wes Prentice, Dreamland Resort, Subic, Zambales, Philippines.
Since joining Dreamland Resort & Hotel over three months ago I have put my heart and soul into the business.
I have donated many hours of my personal time. I have frequently worked seven days a week and twelve to
thirteen hours a day. I am now literally penniless, due totally to the fact that I have lent you and your
resort/hotel well over $200,000AU (approx 8million pesos) and your non-payment of wages to me from 1st
August 2007 as per Employment Agreement. x x x.36 (Emphasis and underscoring ours)
The above preceding statement only goes to show that while it was Johnson who tendered his resignation, it
was due to the petitioners’ acts that he was constrained to resign. The petitioners cannot expect Johnson to
tolerate working for them without any compensation.
Since Johnson was constructively dismissed, he was illegally dismissed. As to the reliefs granted to an
employee who is illegally dismissed, Golden Ace Builders v. Talde 37 referring to Macasero v. Southern
Industrial Gases Philippines38 is instructive:
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs
provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained
relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed
employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable,
and backwages.
The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority
rights, and payment of backwages computed from the time compensation was withheld up to the date of
actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one
(1) month salary for every year of service should be awarded as an alternative. The payment of separation pay
is in addition to payment of backwages.39 (Emphasis and underscoring supplied)

The case of Golden Ace further provides:

"The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer
practical or in the best interest of the parties. Separation pay in lieu of reinstatement may likewise be awarded
if the employee decides not to be reinstated." x x x

Under the doctrine of strained relations, the payment of separation pay is considered an acceptable
alternative to reinstatement when the latter option is no longer desirable or viable. On one hand, such
payment liberates the employee from what could be a highly oppressive work environment.1âwphi1 On the
other hand, it releases the employer from the grossly unpalatable obligation of maintaining in its employ a
worker it could no longer trust.40

In the present case, the NLRC found that due to the strained relations between the parties, separation pay is
to be awarded to Johnson in lieu of his reinstatement.

The NLRC held that Johnson is entitled to backwages from November 3, 2007 up to the finality of the decision;
separation pay equivalent to one month salary; and unpaid salaries from August 1, 2007 to November 1, 2007
amounting to a total of ₱172,800.00.41

While the Court agrees with the NLRC that the award of separation pay and unpaid salaries is warranted, the
Court does not lose sight of the fact that the employment contract states that Johnson's employment is for a
term of three years.

Accordingly, the award of backwages should be computed from November 3, 2007 to August 1, 2010 - which
is three years from August 1, 2007. Furthermore, separation pay is computed from the commencement of
employment up to the time of termination, including the imputed service for which the employee is entitled
to backwages.42 As one-month salary is awarded as separation pay for every year of service, including imputed
service, Johnson should be paid separation pay equivalent to his three-month salary for the three-year
contract.

WHEREFORE, the Resolutions dated December 14, 2009 and February 11, 2010 of the Court of Appeals in CA-
G.R. SP No. 111693 are hereby SET ASIDE. The Decision of the NLRC dated April 30, 2009 in NLRC LAC No. 07-
002711-08 is REINSTATED and AFFIRMED with MODIFICATIONS in the computation of backwages and
separation pay. Dreamland Hotel Resort and Westley Prentice are ORDERED to PAY Stephen Johnson
backwages of ₱60,000.00 per month which should be computed from November 3, 2007 to August 1, 2010
less the P.7,200.00 already paid to him. Likewise, separation pay of ₱180.000.00, representing Stephen
Johnson's three-year contract should be awarded.

SO ORDERED.
G.R. No. 192076               November 21, 2012
MICHELLE T. TUASON, Petitioner, 
vs.
BANK OF COMMERCE, RAUL B. DE MESA AND MARIO J. PADILLA, Respondents.
DECISION
Labor Law; Transfers; Even though transfers or reassignments per se are indeed valid and fall within
the ambit of management prerogatives, the exercise of these rights must remain within the boundaries of
justice and fair play.—Even though transfers or reassignments per seare indeed valid and fall within the ambit
of management prerogatives, the exercise of these rights must remain within the boundaries of justice and
fair play. Thus, the Court has previously held that While it is true that an employer is free to regulate,
according to his own discretion and judgment, all aspects of employment, including hiring, work assignments,
working methods, time, place and manner of work, tools to be used, processes to be
_______________
* THIRD DIVISION.
175
VOL. 686, NOVEMBER 21, 2012 175
Tuason vs. Bank of Commerce
followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of
workers and the discipline, dismissal and recall of workers, and this right to transfer employees forms part of
management prerogatives, the employee’s transfer should not be unreasonable, nor inconvenient, nor
prejudicial to him. It should not involve a demotion in rank or diminution of his salaries, benefits and other
privileges, as to constitute constructive dismissal.
Same; Termination of Employment; Constructive Dismissal; The test of constructive dismissal is whether
a reasonable person in the employee’s position would have felt compelled to give up his position under the
circumstances.—This is clearly a case of constructive dismissal. Like Tuason, any reasonable person similarly
situated would have felt compelled to give up her post as she was, in fact, stripped of it considering that
someone else was already discharging her functions and occupying her office. Thus, in Dimagan v. Dacworks
United, Inc., 661 SCRA 438 (2011), the Court held, The test of constructive dismissal is whether a reasonable
person in the employee’s position would have felt compelled to give up his position under the circumstances.
It is an act amounting to dismissal but is made to appear as if it were not. Constructive dismissal is therefore a
dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to protect
their rights and interests from the coercive acts of the employer.
MENDOZA, J.:
This Petition for Review on Certiorari under Rule 45 seeks to vacate, reverse and set aside the March 31, 2010
Decision1 of the Court of Appeals (CA), in CA-G.R. SP No. 111956, reversing the April 30, 2009 Decision 2 and
October 27, 2009 Resolution3 of the National Labor Relations Commission (NLRC; which earlier ruled in favor of
the petitioner.
The Facts:
Petitioner Michelle T. Tuason (Tuason) was hired by respondent Bank of Commerce (BOC) on January 1, 2002
to head the Marketing Department of its Property Management Group (PMG) with the rank of Assistant Vice
President. On May 2, 2002, she was designated the officer-in-charge of the whole PMG. On January 2, 2003,
she was officially appointed as the head of PMG. Tuason’s duties included developing and proposing ways of
disposing BOC’s real and acquired properties and assets (ROPOA), "in the soonest possible time with the least
possible cost, and with the best possible price."4
Tuason’s problems started on February 28, 2005 when she was administratively charged with irregularities
regarding the sale of ROPOA properties to a certain Ana Liza Cuizon. On September 9, 2005, through its
committee on Fraud, Shortages, and Overages, BOC found Tuason to have violated its Code of Discipline on
Work Performance, and imposed on her a 30-day suspension. Then, in 2006, BOC gave her a sixty-three (63%)
percent overall performance rating.5
On July 5, 2007, Tuason wrote a letter to her sector head, Mario Padilla (Padilla). In that letter, she referred to
the latter’s previous phone call requesting her to resign and manifested that she had no intention of resigning
as she described herself as very much happy with her work. In the same letter, however, she made known her
being stressed and uncomfortable with the situation and "in order to diffuse the otherwise tensed situation"
requested for a leave of absence from July 6-17, 2007, as paid vacation leave, and from July 18 to August 17,
2007, as leave without pay.6
On July 6, 2007, the head of BOC’s Human Resources Management and Development Group (HRMDG), Susan
R. Alcala-Uranza (Uranza), informed Tuason that her request for leave of absence was disapproved. Instead,
she advised Tuason to go back to work and report to BOC’s EVP Arturo Manuel (Manuel). Another letter 7 was
sent to Tuason on July 13, 2007 reiterating the directive to report for work on July 16, 2007. This time though,
she was asked to report to Padilla.8
On July 16, 2007, Tuason wrote Uranza, pointing out that she did go to the office on July 9, 2007 and that she
even met with her (Uranza) and Manuel. The said meeting ended with talks on her supposed "graceful exit"
from BOC’s PMG. She likewise pointed out that in addition to receiving a second return to work order for July
16, 2007, she also received a BOC-wide flyer welcoming a new PMG Head effective also on July 16, 2007. For
Tuason, these developments were contrary to the earlier planned "graceful exit" and were causing her stress
and anxiety. For this reason, Tuason reiterated her request to continue her leave.9
On July 18, 2007, Tuason sent another letter to Uranza inquiring about the status of her employment as she
was effectively relieved of her position with the designation of another person to head PMG. The following
day, Tuason sent a similar letter manifesting her desire to continue her leave as she awaited BOC’s answer to
the query regarding her status.10
On July 26, 2007, Uranza informed Tuason that her application for leave from July 6, 2007 to August 17, 2007
was finally approved but she was to report to Padilla on August 20, 2007 to discuss her "new assignment."
When Tuason failed to report for work, on August 23, 2007, Uranza sent a letter informing the former to get in
touch with Padilla otherwise she would be deemed to have lost interest in her employment.11
On August 24, 2007, Tuason informed Uranza that she was confused by the five letters sent by BOC. In any
event, she had already filed a case for constructive dismissal against it. In reply, Uranza wrote that BOC had
not taken any definitive steps against her and that her non-reporting for work would be considered
unauthorized leave of absence.12
The Labor Arbiter (LA) dismissed Tuason’s complaint for lack of merit.13 On appeal, the National Labor
Relations Commission (NLRC) found that there was constructive dismissal and, thus, reversed and set aside the
LA’s decision.14 The NLRC decision reads:
WHEREFORE, premises considered, the appeal filed by complainant is GRANTED. The Decision of Labor Arbiter
Jovencio Ll. Mayor, Jr. dated January 31, 2008 is REVERSED and SET ASIDE, and a NEW ONE is rendered finding
that complainant have been constructively dismissed by respondents. Accordingly, respondents are hereby
ordered, jointly and severally, to pay complainant the following:
 1. Separation pay computed from January 1, 2002 (date of employment) up to the finality of the
Decision; and
2. Full backwages inclusive of allowances and other benefits computed from July 16, 2007 (date of
dismissal) up to the finality of the Decision;
All other claims are DISMISSED for lack of merit.
SO ORDERED.15
With the denial of its motion for reconsideration, BOC went to the CA via Rule 65. This time, the CA found that
Tuason’s reassignment was a valid exercise of management prerogative on the part of BOC thereby reversing
and setting aside the NLRC’s decision and further upholding that of the LA’s.16 The CA decision17 reads:
WHEREFORE, the petition is hereby GRANTED. The assailed Decision dated April 30, 2009 and the Resolution
dated October 27, 2009, respectively, promulgated by the National Labor Relations Commission (First Division)
in NLRC NCR CASE NO. 08-08774-07; NLRC LAC NO. 03-00-1058-08 are hereby REVERSED and SET ASIDE.
Accordingly, the Decision of the Labor Arbiter dated January 31, 2008 is REINSTATED.
SO ORDERED.
Before this Court, Tuason raises this lone issue for consideration:
The basic issue to consider is whether or not the pressure exerted upon petitioner (Tuason) to resign without
reason, as well as the belated feigned transfer of petitioner to another assignment constitutes constructive
dismissal.
Foremost in the assailed CA decision is its finding that there was no evidence to prove Tuason’s "barren" claim
that she was asked to resign.18
The Court finds Itself unable to agree.
Had the CA rigorously and thoroughly examined the records at hand, as it claimed it did, 19 it would have found
otherwise. BOC, acting through Padilla, was consistently exerting pressure on Tuason to resign as early as June
19, 2007. This was documented in the July 5, 2007 Office Memo 20 of Tuason addressed and sent to Padilla, a
copy of which was sent to Uranza. The letter chronicled the exchanges between Padilla and Tuason regarding
her employment with BOC. Tuason first mentioned that Padilla had already hired someone to head the PMG.
Then she said that she had been asked to resign without any explanation as to why. Save for the offer of
consultancy work after her resignation, she was never offered a transfer or movement within BOC. The above-
mentioned developments being stressful on her, Tuason then wrote that she would be filing for a leave of
absence in order to diffuse the situation.
However, due to the stressful and uncomfortable working environment this situation has caused me, I am
filing for a leave of absence as follows: July 6-17, 2007 as paid vacation leave, July 18-August 17, 2007 as leave
without pay, in order to diffuse the otherwise tense situation. We can then discuss the situation when I report
back to work on August 20, 2007. x x x.21
The probative/ evidentiary value of this Memo was, in turn, considered and discussed by the NLRC in its
decision in this wise:
In the case at bar, we are persuaded that complainant was indeed asked to resign by respondent Padilla as
respondents opted to keep silent by not replying to complainant’s memorandum dated July 5, 2007 addressed
to respondent Padilla, depicting the act of respondent Padilla in requiring complainant to file her courtesy
resignation and have a graceful exit to save face and avoid embarrassment due to the hiring of Maximo V.
Estrada as her replacement. Considering respondent’s continued silence on the said memo, there can be no
other conclusion that can be drawn therefrom, except that the contents of the said memo are true and
actually transpired. Stated otherwise, we view such silence as respondent Padilla’s undoubted admission of
the contents of the said memo. As such, by requiring complainant to resign from her position without
respondents offering any valid reason therefor only reveals and confirms the fact that respondents’ offer of
complainant’s reassignment to the Business Segment, which came after when she refused to resign, was a
mere afterthought to cover up respondents’ disdainful treatment towards complainant.22
The Court notes that in the exhaustive exchanges of memos and letters between Tuason and BOC, this was
one instance that it chose not to refute, reply or even offer some clarification over this serious charge of
Tuason.
After this July 5, 2007 memo of Tuason, Uranza wrote her a letter the next day, July 6, 2007, 23 but the letter
only touched on her application for leave which was disallowed with the directive to report to Manuel.
We were requested by your immediate supervisor, Mr. Mario J. Padilla/ EVP, to reiterate that your leave of
absence, which you applied for to start on July 6, was disapproved.24
Uranza wrote another letter to Tuason on July 13, 2007 reiterating the "disapproval" of her leave application.
This time though, she was asked to report to Padilla.25 What was clear in these two letters of Uranza was that
her leave application was denied and that there had been no mention at all of any new assignment for her.
Next, the July 16, 2007 letter of Tuason to Uranza recounted anew the meeting between her, Uranza and
Manuel held on July 9, 2007. After sharing her plight with Uranza and Manuel, the two offered to spare her
the embarrassment by allowing her not to return for the turnover of her responsibilities to her
"replacement."26 Tuason also mentioned getting hold of a BOC wide memo/news announcement heralding the
"new PMG Head effective Monday, July 16."27 These developments clearly intensified the pressure to resign.
Ironically, her replacement was scheduled to take over the PMG on July 16, 2007, the very same day that she
was directed to report back to work. Up to this point, there was still no mention of any transfer or
reassignment being offered to her.
On July 18, 2007, Tuason reported for work. She personally saw the flyers announcing the appointment of
Maximo V. Estrada (Estrada) as the new head of PMG posted in the elevators and the common areas of the
office. And when she got to her office, Estrada was occupying it and having a meeting with her officers and
staff. This was documented in another letter addressed and sent to Uranza on even date. As BOC never
formally informed her that she had been replaced, she also sought clarification in that letter regarding her
employment status.28
The following day, July 19, 2007, Tuason wrote Uranza again. Aside from the repeat of her narration about her
replacement, she again mentioned her request to continue her leave while awaiting BOC’s position on her
status.29
In response, Uranza wrote a letter on July 20, 2007. She informed Tuason that her request for leave had been
formally endorsed to Padilla. In the same letter, Uranza clarified that Tuason did not strictly comply with her
July 13, 2007 directives. First, Tuason came to the office only on July 18. Second, Tuason only went to Uranza
and did not report to Padilla. Thus, Uranza again directed Tuason to report to Padilla the "soonest, so he can
discuss his plans" for her.30 Again, there was no mention of any transfer or reassignment.
On July 26, 2007, Uranza wrote another letter to Tuason. According to Uranza, Padilla agreed to consider
Tuason’s absences from July 6 to July 19, 2007 as "paid vacation leave" while her leave from July 20 to August
17, 2007 would be "leave without pay." The Court takes note that this was almost the same proposal found in
Tuason’s July 5, 2007 memo. Back to the July 26, 2007 letter, Uranza then enjoined Tuason to report to Padilla
on August 20, 2007 to discuss her "assignment in the Business Segment."31 It was the first time that a new
assignment in the Business Segment was mentioned. Significantly, a good ten days had lapsed from the day appointment and assumption of Estrada to the very same position that she was still occupying. Still, what was
Estrada took over and replaced Tuason as head of PMG to the time that BOC mentioned about an assignment more embarrassing and painful for Tuason was when she saw Estrada already occupying her office and
in the Business Segment. This could only mean that she had been replaced or booted out of her position meeting with her subordinate officers and staff.
before any transfer or even the suggestion of a transfer was made or offered to her.
This is clearly a case of constructive dismissal. Like Tuason, any reasonable person similarly situated would
After Tuason failed to report for work on August 21, 2007, 32 Uranza sent another letter to her on August 23, have felt compelled to give up her post as she was, in fact, stripped of it considering that someone else was
2007. Aside from mentioning her now approved leave application, Uranza reminded Tuason once again to already discharging her functions and occupying her office. Thus, in Dimagan v. Dacworks United, Inc., the
report to or at least communicate with Padilla by August 28, 2007, otherwise, BOC would consider her failure Court held,
to do so as loss of interest to work with BOC. Expectedly, Tuason replied to this letter the following day,
August 24, 2007, and in her letter, she expressed her confusion in the contradicting letters of BOC. First, she
The test of constructive dismissal is whether a reasonable person in the employee's position would have felt
pointed out the disapproval and then the endorsement and eventual approval of her application for leave by
compelled to give up his position under the circumstances. It is an act amounting to dismissal but is made to
Padilla. Next, she mentioned about the directive to return to work while a new PMG head was already
appear as if it were not. Constructive dismissal is therefore a dismissal in disguise. The law recognizes and
occupying her office. She then added that Padilla, Manuel or Uranza never offered her any new assignment or
resolves this situation in favor of employees in order to protect their rights and interests from the coercive
any other position in BOC. Finally, she told her (Uranza) that she had already filed a case for constructive
acts of the employer.38
dismissal.33 BOC, through Uranza, replied to this on August 29, 2007. Uranza said that they found Tuason’s
reaction to their attempt to place her in a new assignment regrettable. She pointed out, however, that BOC
had "not taken any definite action against (her), to date."34 Contrary to the CA’s summation, on July 16, 2007, when Estrada assumed Tuason’s position and functions,
there was still no new appointment or assignment clearly and categorically offered to her that she "adamantly
refused." At this point, Tuason was on leave, eagerly awaiting the approval of the same by · BOC. Without any
This cannot be any farther from the truth. The exchange of memos and letters above readily shows that
official or formal communication that she had been replaced by Estrada, she still intended to return to her old
Tuason’s July 5, 2007 memo spoke the truth. BOC wanted her out. They sought her resignation. When this was
position after her leave of absence. Unfortunately there was no more position to go back to as Estrada had
not forthcoming, and instead of offering her some viable options or alternatives for her exit, BOC simply
already taken over. Simply put, she was just left in the cold, left to find out that she had been replaced. Worst,
proceeded to install Estrada as the head of PMG. BOC’s act of hiring Estrada and having him take over the
she was left without any option or choice. Undoubtedly, she was constructively dismissed. With her future
position of Tuason on July 16, 2007 was certainly a definitive act, categorical and complete in itself, to
uncertain, she should not be faulted for filing this case for constructive dismissal as any reasonable person
effectively oust her from her post.
would have done so. With this, the assailed CA decision must be discarded and the NLRC decision
revived.1âwphi1
Next, the CA held that Tuason’s reassignment to BOC’s Business Segment was a valid exercise of management
prerogative.35 It also added that BOC never dismissed her and that it was she who "adamantly refused to
The Court is fully aware of the right of management to transfer its employees as part of management
accept her new appointment in the Business Segment."36
prerogative. But like all rights, the same cannot be exercised with unbridled discretion. The managerial
prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the
Again, the Court cannot agree. basic element of justice and fair play.39

Even though transfers or reassignments per se are indeed valid and fall within the ambit of management WHEREFORE, the petition is GRANTED. The March 31, 2010 Decision of the Court of Appeals, in CA-G.R. SP No.
prerogatives, the exercise of these rights must remain within the boundaries of justice and fair play. Thus, the 111956, is REVERSED and SET ASIDE. In its place, the April 30, 2009 NLRC Decision, in NLRC NCR Case No. 08-
Court has previously held that 08774-2007, is REINSTATED.

While it is true that an employer is free to regulate, according to his own discretion and judgment, all aspects SO ORDERED.
of employment, including hiring, work assignments, working methods, time, place and manner of work, tools
to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work
supervision, layoff of workers and the discipline, dismissal and recall of workers, and this right to transfer
employees forms part of management prerogatives, the employee's transfer should not be unreasonable, nor
inconvenient, nor prejudicial to him. It should not involve a demotion in rank or diminution of his salaries,
benefits and other privileges, as to constitute constructive dismissal.37

In this case, BOC submitted that in 2005, Tuason was administratively charged and eventually meted out a 30-
day suspension. This, however, happened two years earlier. Besides, she had paid her dues for that infraction.
She was suspended. BOC then mentioned that in 2006, Tuason got a poor 63% performance rating.
Unfortunately for BOC, it failed to present or establish any connection that it was taking proper steps to either
transfer/reassign or sever Tuason’s services altogether because of this dismal rating.

Instead, BOC totally shied away from owning up the attempts to convince Tuason to resign. There was no offer
or even mention of a transfer or reassignment until July 26, 2007. By this time, it was too late. BOC had hired
Estrada to head the PMG. Estrada had assumed the functions of the post and taken over her office on July 16,
2007. This all happened while Tuason was on leave, without a formal or official communication or advice if she
was fired, transferred or reassigned. Worse, at the time that this was happening, Tuason went to the office
upon Uranza’s several directives. At the office, she saw for herself the flyers boldly announcing the
G.R. No. 168081              October 17, 2008
ARMANDO G. YRASUEGUI, petitioners, 
vs.
PHILIPPINE AIRLINES, INC., respondents.
DECISION
Labor Law; Termination of Employment; Common Carriers; Air Transportation; Weight Standards;
Obesity; An employee may be dismissed the moment he is unable to comply with his ideal weight as prescribed
by the weight standards—the dismissal would fall under Article 282(e) of the Labor Code.—A reading of the
weight standards of PAL would lead to no other conclusion than that they constitute a continuing qualification
of an employee in order to keep the job. Tersely put, an employee may be dismissed the moment he is unable
to comply with his ideal weight as prescribed by the weight standards. The dismissal of the employee would
thus fall under Article 282(e) of the Labor Code. As explained by the CA: x x x
_______________
* THIRD DIVISION.
468
46 SUPREME COURT REPORTS ANNOTATED
8
Yrasuegui vs. Philippine Airlines, Inc.
[T]he standards violated in this case were not mere “orders” of the employer; they were the “prescribed
weights” that a cabin crew must maintain in order to qualify for and keep his or her position in the
company. In other words, they were standards that establish continuing qualifications for an employee’s
position. In this sense, the failure to maintain these standards does not fall under Article 282(a) whose express
terms require the element of willfulness in order to be a ground for dismissal. The failure to meet the
employer’s qualifying standards is in fact a ground that does not squarely fall under grounds (a) to (d) and is
therefore one that falls under Article 282(e)—the “other causes analogous to the foregoing.” By its nature,
these “qualifying standards” are norms that apply prior to and after an employee is hired. They apply prior to
employment because these are the standards a job applicant must initially meet in order to be hired. They
apply after hiring because an employee must continue to meet these standards while on the job in order to
keep his job. Under this perspective, a violation is not one of the faults for which an employee can be
dismissed pursuant to pars. (a) to (d) of Article 282; the employee can be dismissed simply because he no
longer “qualifies” for his job irrespective of whether or not the failure to qualify was willful or intentional. x x x
Same; Same; Same; Same; Same; Same; The obesity of a cabin crew, when placed in the context of his
work as flight attendant, becomes an analogous cause under Article 282(e) of the Labor Code that justifies his
dismissal from the service—his obesity may not be unintended, but is nonetheless voluntary. —In fine, We hold
that the obesity of petitioner, when placed in the context of his work as flight attendant, becomes an
analogous cause under Article 282(e) of the Labor Code that justifies his dismissal from the service. His obesity
may not be unintended, but is nonetheless voluntary. As the CA correctly puts it, “[v]oluntariness basically
means that the just cause is solely attributable to the employee without any external force influencing or
controlling his actions. This element runs through all just causes under Article 282, whether they be in the
nature of a wrongful action or omission. Gross and habitual neglect, a recognized just cause, is considered
voluntary although it lacks the element of intent found in Article 282(a), (c), and (d).”
Same; Same; Same; Same; Same; Same; Bona Fide Occupational Qualification (BFOQ) Defense; Words and
Phrases; Employment in particular jobs may not be limited to persons of a particular sex, religion, or national
origin unless the employer can show that sex, religion, or national469
VOL. 569, OCTOBER 17, 2008 469
Yrasuegui vs. Philippine Airlines, Inc.
origin is an actual qualification for performing the job—qualification referred to as bona fide occupational
qualification (BFOQ).—Employment in particular jobs may not be limited to persons of a particular sex,
religion, or national origin unless the employer can show that sex, religion, or national origin is an actual
qualification for performing the job. The qualification is called a bona fideoccupational qualification (BFOQ). In
the United States, there are a few federal and many state job discrimination laws that contain an exception
allowing an employer to engage in an otherwise unlawful form of prohibited discrimination when the action is
based on a BFOQ necessary to the normal operation of a business or enterprise.
Same; Same; Same; Same; Same; Same; Same; Same; “Meiorin Test”; The Constitution, the Labor Code, and RA
No. 7277 or the Magna Carta for Disabled Persons contain provisions similar to Bona Fide Occupational
Qualification (BFOQ); The test of reasonableness of the company policy is used because it is parallel to Bona
Fide Occupational Qualification (BFOQ)—Bona Fide Occupational Qualification (BFOQ) is valid “provided it
reflects an inherent quality reasonably necessary for satisfactory job performance; Under the “Meiorin Test,”
(1) the employer must show that it adopted the standard for a purpose rationally connected to the
performance of the job, (2) the employer must establish that the standard is reasonably necessary to the
accomplishment of that work-related purpose, and, (3) the employer must establish that the standard is
reasonably necessary in order to accomplish the legitimate work-related purpose. —Petitioner contends that
BFOQ is a statutory defense. It does not exist if there is no statute providing for it. Further, there is no existing
BFOQ statute that could justify his dismissal. Both arguments must fail. First, the Constitution, the Labor Code,
and RA No. 7277 or the Magna Carta for Disabled Persons contain provisions similar to BFOQ. Second,
in British Columbia Public Service Employee Commission (BSPSERC) v. The British Columbia Government and
Service Employee’s Union (BCGSEU), 3 SCRA 3 (1999), the Supreme Court of Canada adopted the so-called
“Meiorin Test” in determining whether an employment policy is justified. Under this test, (1) the employer
must show that it adopted the standard for a purpose rationally connected to the performance of the job; (2)
the employer must establish that the standard is reasonably necessary to the accomplishment of that work-
related purpose; and (3) the employer must establish that the standard is reasonably necessary in order to
accomplish the legitimate work-related purpose. Similarly, in Star Paper Corporation v. Simbol, 487 SCRA 228
(2006), this Court held that in order to justify a BFOQ, the470
47 SUPREME COURT REPORTS ANNOTATED
0
Yrasuegui vs. Philippine Airlines, Inc.
employer must prove that (1) the employment qualification is reasonably related to the essential operation of
the job involved; and (2) that there is factual basis for believing that all or substantially all persons meeting the
qualification would be unable to properly perform the duties of the job. In short, the test of reasonableness of
the company policy is used because it is parallel to BFOQ. BFOQ is valid “provided it reflects an inherent
quality reasonably necessary for satisfactory job performance.”
Same; Same; Same; Civil Law; A common carrier, from the nature of its business and for reasons of
public policy, is bound to observe extraordinary diligence for the safety of the passengers it transports.—There
is no merit to the argument that BFOQ cannot be applied if it has no supporting statute. Too, the Labor
Arbiter, NLRC, and CA are one in holding that the weight standards of PAL are reasonable. A common carrier,
from the nature of its business and for reasons of public policy, is bound to observe extraordinary diligence for
the safety of the passengers it transports. It is bound to carry its passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances. The law leaves no room for mistake or oversight on the part of a common carrier. Thus, it is
only logical to hold that the weight standards of PAL show its effort to comply with the exacting obligations
imposed upon it by law by virtue of being a common carrier.
Same; Same; Same; Same; The weight standards of an airline should be viewed as imposing strict norms of
discipline upon its employees—the primary objective of said airline in the imposition of the weight standards
for cabin crew is flight safety, for it cannot be gainsaid that cabin attendants must maintain agility at all times
in order to inspire passenger confidence on their ability to care for the passengers when something goes
wrong.—The business of PAL is air transportation. As such, it has committed itself to safely transport its
passengers. In order to achieve this, it must necessarily rely on its employees, most particularly the cabin flight
deck crew who are on board the aircraft. The weight standards of PAL should be viewed as imposing strict
norms of discipline upon its employees. In other words, the primary objective of PAL in the imposition of the
weight standards for cabin crew is flight safety. It cannot be gainsaid that cabin attendants must maintain
agility at all times in order to inspire passenger confidence on their ability to care for the passengers when
something goes wrong. It is not farfetched to say that airline companies, just like all common carriers, thrive
due to public confidence on their471

VOL. 569, OCTOBER 17, 2008 471
Yrasuegui vs. Philippine Airlines, Inc.
safety records. People, especially the riding public, expect no less than that airline companies transport their
passengers to their respective destinations safely and soundly. A lesser performance is unacceptable.
Same; Same; Same; Same; The task of a cabin crew or flight attendant is not limited to serving meals or
attending to the whims and caprices of the passengers—passenger safety goes to the core of the job of a cabin
attendant; On board an aircraft, the body weight and size of a cabin attendant are important factors to
consider in case of emergency—aircrafts have constricted cabin space, and narrow aisles and exit doors. —The
task of a cabin crew or flight attendant is not limited to serving meals or attending to the whims and caprices
of the passengers. The most important activity of the cabin crew is to care for the safety of passengers and the
evacuation of the aircraft when an emergency occurs. Passenger safety goes to the core of the job of a cabin
attendant. Truly, airlines need cabin attendants who have the necessary strength to open emergency doors,
the agility to attend to passengers in cramped working conditions, and the stamina to withstand grueling flight
schedules. On board an aircraft, the body weight and size of a cabin attendant are important factors to
consider in case of emergency. Aircrafts have constricted cabin space, and narrow aisles and exit doors. Thus,
the arguments of respondent that “[w]hether the airline’s flight attendants are overweight or not has no
direct relation to its mission of transporting passengers to their destination”; and that the weight standards
“has nothing to do with airworthiness of respondent’s airlines,” must fail.
Same; Same; Same; Same; Judicial Notice; That an obese cabin attendant occupies more space than a slim one
is an unquestionable fact which courts can judicially recognize without introduction of evidence—it would also
be absurd to require airline companies to reconfigure the aircraft in order to widen the aisles and exit doors
just to accommodate overweight cabin attendants; The biggest problem with an overweight cabin attendant is
the possibility of impeding passengers from evacuating the aircraft, should the occasion call for it— being
overweight necessarily impedes mobility.—There is no need to individually evaluate their ability to perform
their task. That an obese cabin attendant occupies more space than a slim one is an unquestionable fact which
courts can judicially recognize without introduction of evidence. It would also be absurd to require airline
companies to reconfigure the aircraft in order to widen the aisles and exit doors just to accommodate
overweight cabin attendants like petitioner. The biggest problem with an overweight cabin attendant is
the472
47 SUPREME COURT REPORTS ANNOTATED
2
Yrasuegui vs. Philippine Airlines, Inc.
possibility of impeding passengers from evacuating the aircraft, should the occasion call for it. The job of a
cabin attendant during emergencies is to speedily get the passengers out of the aircraft safely. Being
overweight necessarily impedes mobility. Indeed, in an emergency situation, seconds are what cabin
attendants are dealing with, not minutes. Three lost seconds can translate into three lost lives. Evacuation
might slow down just because a wide-bodied cabin attendant is blocking the narrow aisles. These possibilities
are not remote.
Estoppel; Good faith demands that what is agreed upon shall be done.—Petitioner is also in estoppel.
He does not dispute that the weight standards of PAL were made known to him prior to his employment. He is
presumed to know the weight limit that he must maintain at all times. In fact, never did he question the
authority of PAL when he was repeatedly asked to trim down his weight. Bona fides exigit ut quod convenit
fiat. Good faith demands that what is agreed upon shall be done. Kung ang tao ay tapat kanyang tutuparin
ang napagkasunduan.
Administrative Law; Appeals; Factual findings of administrative agencies do not have infallibility and
must be set aside when they fail the test of arbitrariness. —We are not unmindful that findings of facts of
administrative agencies, like the Labor Arbiter and the NLRC, are accorded respect, even finality. The reason is
simple: administrative agencies are experts in matters within their specific and specialized jurisdiction. But the
principle is not a hard and fast rule. It only applies if the findings of facts are duly supported by substantial
evidence. If it can be shown that administrative bodies grossly misappreciated evidence of such nature so as
to compel a conclusion to the contrary, their findings of facts must necessarily be reversed. Factual findings of
administrative agencies do not have infallibility and must be set aside when they fail the test of arbitrariness.
Bill of Rights; Equal Protection Clause; In the absence of governmental interference, the liberties guaranteed by
the Constitution cannot be invoked—the Bill of Rights is not meant to be invoked against acts of private
individuals.—To make his claim more believable, petitioner invokes the equal protection clause guaranty of
the Constitution. However, in the absence of governmental interference, the liberties guaranteed by the
Constitution cannot be invoked. Put differently, the Bill of Rights is not meant to be invoked against acts of
private individuals. Indeed, the United States Supreme Court, in interpreting the Fourteenth Amendment,
which is the source of our equal protection guarantee, is consistent in saying that473
VOL. 569, OCTOBER 17, 2008 473
Yrasuegui vs. Philippine Airlines, Inc.
the equal protection erects no shield against private conduct, however discriminatory or wrongful. Private
actions, no matter how egregious, cannot violate the equal protection guarantee.
Labor Law; Payroll Reinstatement; The option to exercise actual reinstatement or payroll reinstatement
belongs to the employer.—The law is very clear. Although an award or order of reinstatement is self-executory
and does not require a writ of execution, the option to exercise actual reinstatement or payroll reinstatement
belongs to the employer. It does not belong to the employee, to the labor tribunals, or even to the courts.
Same; Separation Pay; Exceptionally, separation pay is granted to a legally dismissed employee as an
act “social justice,” or based on “equity”—in both instances, it is required that the dismissal (1) was not for
serious misconduct, and (2) does not reflect on the moral character of the employee.—A legally dismissed
employee is not entitled to separation pay. This may be deduced from the language of Article 279 of the Labor
Code that “[a]n employee who is unjustly dismissed from work shall be entitled to reinstatement without loss
of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation was withheld from him up to
the time of his actual reinstatement.” Luckily for petitioner, this is not an ironclad rule. Exceptionally,
separation pay is granted to a legally dismissed employee as an act “social justice,” or based on “equity.” In
both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) does not reflect on
the moral character of the employee. Here, We grant petitioner separation pay equivalent to one-half (1/2)
month’s pay for every year of service. It should include regular allowances which he might have been
receiving. We are not blind to the fact that he was not dismissed for any serious misconduct or to any act
which would reflect on his moral character. We also recognize that his employment with PAL lasted for more
or less a decade.
REYES, R.T., J.:
THIS case portrays the peculiar story of an international flight steward who was dismissed because of his
failure to adhere to the weight standards of the airline company.
He is now before this Court via a petition for review on certiorari claiming that he was illegally dismissed. To
buttress his stance, he argues that (1) his dismissal does not fall under 282(e) of the Labor Code; (2) continuing
adherence to the weight standards of the company is not a bona fide occupational qualification; and (3) he
was discriminated against because other overweight employees were promoted instead of being disciplined.
After a meticulous consideration of all arguments pro and con, We uphold the legality of dismissal. Separation
pay, however, should be awarded in favor of the employee as an act of social justice or based on equity. This is
so because his dismissal is not for serious misconduct. Neither is it reflective of his moral character.
The Facts
Petitioner Armando G. Yrasuegui was a former international flight steward of Philippine Airlines, Inc. (PAL). He
stands five feet and eight inches (5’8") with a large body frame. The proper weight for a man of his height and
body structure is from 147 to 166 pounds, the ideal weight being 166 pounds, as mandated by the Cabin and
Crew Administration Manual1 of PAL.
The weight problem of petitioner dates back to 1984. Back then, PAL advised him to go on an extended
vacation leave from December 29, 1984 to March 4, 1985 to address his weight concerns. Apparently,
petitioner failed to meet the company’s weight standards, prompting another leave without pay from March
5, 1985 to November 1985.
After meeting the required weight, petitioner was allowed to return to work. But petitioner’s weight problem From then on, nothing was heard from petitioner until he followed up his case requesting for leniency on the
recurred. He again went on leave without pay from October 17, 1988 to February 1989. latter part of 1992. He weighed at 219 pounds on August 20, 1992 and 205 pounds on November 5, 1992.

On April 26, 1989, petitioner weighed 209 pounds, 43 pounds over his ideal weight. In line with company
policy, he was removed from flight duty effective May 6, 1989 to July 3, 1989. He was formally requested to
trim down to his ideal weight and report for weight checks on several dates. He was also told that he may avail
of the services of the company physician should he wish to do so. He was advised that his case will be
evaluated on July 3, 1989.2
On February 25, 1989, petitioner underwent weight check. It was discovered that he gained, instead of losing,
weight. He was overweight at 215 pounds, which is 49 pounds beyond the limit. Consequently, his off-duty
status was retained.
On October 17, 1989, PAL Line Administrator Gloria Dizon personally visited petitioner at his residence to
check on the progress of his effort to lose weight. Petitioner weighed 217 pounds, gaining 2 pounds from his
previous weight. After the visit, petitioner made a commitment3 to reduce weight in a letter addressed to
Cabin Crew Group Manager Augusto Barrios. The letter, in full, reads:
Dear Sir:
I would like to guaranty my commitment towards a weight loss from 217 pounds to 200 pounds from today
until 31 Dec. 1989.
From thereon, I promise to continue reducing at a reasonable percentage until such time that my ideal weight
is achieved.
Likewise, I promise to personally report to your office at the designated time schedule you will set for my
weight check.
Respectfully Yours,
On November 13, 1992, PAL finally served petitioner a Notice of Administrative Charge for violation of
company standards on weight requirements. He was given ten (10) days from receipt of the charge within
which to file his answer and submit controverting evidence.8
On December 7, 1992, petitioner submitted his Answer.9 Notably, he did not deny being overweight. What he
claimed, instead, is that his violation, if any, had already been condoned by PAL since "no action has been
taken by the company" regarding his case "since 1988." He also claimed that PAL discriminated against him
because "the company has not been fair in treating the cabin crew members who are similarly situated."
On December 8, 1992, a clarificatory hearing was held where petitioner manifested that he was undergoing a
weight reduction program to lose at least two (2) pounds per week so as to attain his ideal weight.10
On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his ideal weight,
"and considering the utmost leniency" extended to him "which spanned a period covering a total of almost
five (5) years," his services were considered terminated "effective immediately."11
His motion for reconsideration having been denied,12 petitioner filed a complaint for illegal dismissal against
PAL.
Labor Arbiter, NLRC and CA Dispositions
On November 18, 1998, Labor Arbiter Valentin C. Reyes ruled 13 that petitioner was illegally dismissed. The
dispositive part of the Arbiter ruling runs as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered, declaring the complainant’s dismissal
illegal, and ordering the respondent to reinstate him to his former position or substantially equivalent one,
and to pay him:

F/S Armando Yrasuegui4 a. Backwages of Php10,500.00 per month from his dismissal on June 15, 1993 until reinstated, which for
purposes of appeal is hereby set from June 15, 1993 up to August 15, 1998 at ₱651,000.00;
Despite the lapse of a ninety-day period given him to reach his ideal weight, petitioner remained overweight.
On January 3, 1990, he was informed of the PAL decision for him to remain grounded until such time that he b. Attorney’s fees of five percent (5%) of the total award.
satisfactorily complies with the weight standards. Again, he was directed to report every two weeks for weight
checks.
SO ORDERED.14

Petitioner failed to report for weight checks. Despite that, he was given one more month to comply with the
The Labor Arbiter held that the weight standards of PAL are reasonable in view of the nature of the job of
weight requirement. As usual, he was asked to report for weight check on different dates. He was reminded
petitioner.15 However, the weight standards need not be complied with under pain of dismissal since his
that his grounding would continue pending satisfactory compliance with the weight standards.5
weight did not hamper the performance of his duties. 16 Assuming that it did, petitioner could be transferred to
other positions where his weight would not be a negative factor.17 Notably, other overweight employees, i.e.,
Again, petitioner failed to report for weight checks, although he was seen submitting his passport for Mr. Palacios, Mr. Cui, and Mr. Barrios, were promoted instead of being disciplined.18
processing at the PAL Staff Service Division.
Both parties appealed to the National Labor Relations Commission (NLRC).19
On April 17, 1990, petitioner was formally warned that a repeated refusal to report for weight check would be
dealt with accordingly. He was given another set of weight check dates.6 Again, petitioner ignored the directive
On October 8, 1999, the Labor Arbiter issued a writ of execution directing the reinstatement of petitioner
and did not report for weight checks. On June 26, 1990, petitioner was required to explain his refusal to
without loss of seniority rights and other benefits.20
undergo weight checks.7

On February 1, 2000, the Labor Arbiter denied21 the Motion to Quash Writ of Execution22 of PAL.
When petitioner tipped the scale on July 30, 1990, he weighed at 212 pounds. Clearly, he was still way over his
ideal weight of 166 pounds.
On March 6, 2000, PAL appealed the denial of its motion to quash to the NLRC.23
On June 23, 2000, the NLRC rendered judgment24 in the following tenor:
WHEREFORE, premises considered[,] the Decision of the Arbiter dated 18 November 1998 as modified by our
findings herein, is hereby AFFIRMED and that part of the dispositive portion of said decision concerning
complainant’s entitlement to backwages shall be deemed to refer to complainant’s entitlement to his full
backwages, inclusive of allowances and to his other benefits or their monetary equivalent instead of simply
backwages, from date of dismissal until his actual reinstatement or finality hereof. Respondent is enjoined to
manifests (sic) its choice of the form of the reinstatement of complainant, whether physical or through payroll
within ten (10) days from notice failing which, the same shall be deemed as complainant’s reinstatement
through payroll and execution in case of non-payment shall accordingly be issued by the Arbiter. Both appeals
of respondent thus, are DISMISSED for utter lack of merit.25
According to the NLRC, "obesity, or the tendency to gain weight uncontrollably regardless of the amount of
food intake, is a disease in itself." 26 As a consequence, there can be no intentional defiance or serious
misconduct by petitioner to the lawful order of PAL for him to lose weight.27
Like the Labor Arbiter, the NLRC found the weight standards of PAL to be reasonable. However, it found as
unnecessary the Labor Arbiter holding that petitioner was not remiss in the performance of his duties as flight
steward despite being overweight. According to the NLRC, the Labor Arbiter should have limited himself to the
issue of whether the failure of petitioner to attain his ideal weight constituted willful defiance of the weight
standards of PAL.28
PAL moved for reconsideration to no avail. 29 Thus, PAL elevated the matter to the Court of Appeals (CA) via a
petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.30
By Decision dated August 31, 2004, the CA reversed31 the NLRC:
WHEREFORE, premises considered, we hereby GRANT the petition. The assailed NLRC decision is declared
NULL and VOID and is hereby SET ASIDE. The private respondent’s complaint is hereby DISMISSED. No costs.
SO ORDERED. 32
The CA opined that there was grave abuse of discretion on the part of the NLRC because it "looked at wrong
and irrelevant considerations"33 in evaluating the evidence of the parties. Contrary to the NLRC ruling, the
weight standards of PAL are meant to be a continuing qualification for an employee’s position.34 The failure to
adhere to the weight standards is an analogous cause for the dismissal of an employee under Article 282(e) of
the Labor Code in relation to Article 282(a). It is not willful disobedience as the NLRC seemed to suggest. 35 Said
the CA, "the element of willfulness that the NLRC decision cites is an irrelevant consideration in arriving at a
conclusion on whether the dismissal is legally proper."36 In other words, "the relevant question to ask is not
one of willfulness but one of reasonableness of the standard and whether or not the employee qualifies or
continues to qualify under this standard."37
Just like the Labor Arbiter and the NLRC, the CA held that the weight standards of PAL are reasonable.38 Thus,
petitioner was legally dismissed because he repeatedly failed to meet the prescribed weight standards. 39 It is
obvious that the issue of discrimination was only invoked by petitioner for purposes of escaping the result of
his dismissal for being overweight.40
On May 10, 2005, the CA denied petitioner’s motion for reconsideration. 41 Elaborating on its earlier ruling, the
CA held that the weight standards of PAL are a bona fide occupational qualification which, in case of violation,
"justifies an employee’s separation from the service."42
Issues
In this Rule 45 petition for review, the following issues are posed for resolution:
I.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER’S OBESITY CAN BE
A GROUND FOR DISMISSAL UNDER PARAGRAPH (e) OF ARTICLE 282 OF THE LABOR CODE OF THE PHILIPPINES;
II.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER’S DISMISSAL FOR
OBESITY CAN BE PREDICATED ON THE "BONA FIDE OCCUPATIONAL QUALIFICATION (BFOQ) DEFENSE";
III.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER WAS NOT UNDULY
DISCRIMINATED AGAINST WHEN HE WAS DISMISSED WHILE OTHER OVERWEIGHT CABIN ATTENDANTS WERE
EITHER GIVEN FLYING DUTIES OR PROMOTED;
IV.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED WHEN IT BRUSHED ASIDE PETITIONER’S CLAIMS
FOR REINSTATEMENT [AND] WAGES ALLEGEDLY FOR BEING MOOT AND ACADEMIC.43 (Underscoring supplied)
Our Ruling
I. The obesity of petitioner is a ground for dismissal under Article 282(e) 44 of the Labor Code.
A reading of the weight standards of PAL would lead to no other conclusion than that they constitute a
continuing qualification of an employee in order to keep the job. Tersely put, an employee may be dismissed
the moment he is unable to comply with his ideal weight as prescribed by the weight standards. The dismissal
of the employee would thus fall under Article 282(e) of the Labor Code. As explained by the CA:
x x x [T]he standards violated in this case were not mere "orders" of the employer; they were the "prescribed
weights" that a cabin crew must maintain in order to qualify for and keep his or her position in the company.
In other words, they were standards that establish continuing qualifications for an employee’s position. In this
sense, the failure to maintain these standards does not fall under Article 282(a) whose express terms require
the element of willfulness in order to be a ground for dismissal. The failure to meet the employer’s qualifying
standards is in fact a ground that does not squarely fall under grounds (a) to (d) and is therefore one that falls
under Article 282(e) – the "other causes analogous to the foregoing."
By its nature, these "qualifying standards" are norms that apply prior to and after an employee is hired. They
apply prior to employment because these are the standards a job applicant must initially meet in order to be
hired. They apply after hiring because an employee must continue to meet these standards while on the job in
order to keep his job. Under this perspective, a violation is not one of the faults for which an employee can be
dismissed pursuant to pars. (a) to (d) of Article 282; the employee can be dismissed simply because he no
longer "qualifies" for his job irrespective of whether or not the failure to qualify was willful or intentional. x x
x45
Petitioner, though, advances a very interesting argument. He claims that obesity is a "physical abnormality
and/or illness."46 Relying on Nadura v. Benguet Consolidated, Inc.,47 he says his dismissal is illegal:
Conscious of the fact that Nadura’s case cannot be made to fall squarely within the specific causes
enumerated in subparagraphs 1(a) to (e), Benguet invokes the provisions of subparagraph 1(f) and says that
Nadura’s illness – occasional attacks of asthma – is a cause analogous to them.
Even a cursory reading of the legal provision under consideration is sufficient to convince anyone that, as the
trial court said, "illness cannot be included as an analogous cause by any stretch of imagination."
It is clear that, except the just cause mentioned in sub-paragraph 1(a), all the others expressly enumerated in
the law are due to the voluntary and/or willful act of the employee. How Nadura’s illness could be considered
as "analogous" to any of them is beyond our understanding, there being no claim or pretense that the same
was contracted through his own voluntary act.48
The reliance on Nadura is off-tangent. The factual milieu in Nadura is substantially different from the case at
bar. First, Nadura was not decided under the Labor Code. The law applied in that case was Republic Act (RA)
No. 1787. Second, the issue of flight safety is absent in Nadura, thus, the rationale there cannot apply
here. Third, in Nadura, the employee who was a miner, was laid off from work because of illness, i.e., asthma.
Here, petitioner was dismissed for his failure to meet the weight standards of PAL. He was not dismissed due
to illness. Fourth, the issue in Nadura is whether or not the dismissed employee is entitled to separation pay
and damages. Here, the issue centers on the propriety of the dismissal of petitioner for his failure to meet the
weight standards of PAL. Fifth, in Nadura, the employee was not accorded due process. Here, petitioner was
accorded utmost leniency. He was given more than four (4) years to comply with the weight standards of PAL.
In the case at bar, the evidence on record militates against petitioner’s claims that obesity is a disease. That he
was able to reduce his weight from 1984 to 1992 clearly shows that it is possible for him to lose weight given
the proper attitude, determination, and self-discipline. Indeed, during the clarificatory hearing on December 8,
1992, petitioner himself claimed that "[t]he issue is could I bring my weight down to ideal weight which is 172,
then the answer is yes. I can do it now."49
True, petitioner claims that reducing weight is costing him "a lot of expenses."50 However, petitioner has only
himself to blame. He could have easily availed the assistance of the company physician, per the advice of
PAL.51 He chose to ignore the suggestion. In fact, he repeatedly failed to report when required to undergo
weight checks, without offering a valid explanation. Thus, his fluctuating weight indicates absence of willpower
rather than an illness.
Petitioner cites Bonnie Cook v. State of Rhode Island, Department of Mental Health, Retardation and
Hospitals,52decided by the United States Court of Appeals (First Circuit). In that case, Cook worked from 1978
to 1980 and from 1981 to 1986 as an institutional attendant for the mentally retarded at the Ladd Center that
was being operated by respondent. She twice resigned voluntarily with an unblemished record. Even
respondent admitted that her performance met the Center’s legitimate expectations. In 1988, Cook re-applied
for a similar position. At that time, "she stood 5’2" tall and weighed over 320 pounds." Respondent claimed
that the morbid obesity of plaintiff compromised her ability to evacuate patients in case of emergency and it
also put her at greater risk of serious diseases.
Cook contended that the action of respondent amounted to discrimination on the basis of a handicap. This
was in direct violation of Section 504(a) of the Rehabilitation Act of 1973, 53 which incorporates the remedies
contained in Title VI of the Civil Rights Act of 1964. Respondent claimed, however, that morbid obesity could
never constitute a handicap within the purview of the Rehabilitation Act. Among others, obesity is a mutable
condition, thus plaintiff could simply lose weight and rid herself of concomitant disability.
The appellate Court disagreed and held that morbid obesity is a disability under the Rehabilitation Act and
that respondent discriminated against Cook based on "perceived" disability. The evidence included expert
testimony that morbid obesity is a physiological disorder. It involves a dysfunction of both the metabolic
system and the neurological appetite – suppressing signal system, which is capable of causing adverse effects
within the musculoskeletal, respiratory, and cardiovascular systems. Notably, the Court stated that "mutability
is relevant only in determining the substantiality of the limitation flowing from a given impairment," thus
"mutability only precludes those conditions that an individual can easily and quickly reverse by behavioral
alteration."
Unlike Cook, however, petitioner is not morbidly obese. In the words of the District Court for the District of
Rhode Island, Cook was sometime before 1978 "at least one hundred pounds more than what is considered
appropriate of her height." According to the Circuit Judge, Cook weighed "over 320 pounds" in 1988. Clearly,
that is not the case here. At his heaviest, petitioner was only less than 50 pounds over his ideal weight.
In fine, We hold that the obesity of petitioner, when placed in the context of his work as flight attendant,
becomes an analogous cause under Article 282(e) of the Labor Code that justifies his dismissal from the
service. His obesity may not be unintended, but is nonetheless voluntary. As the CA correctly puts it,
"[v]oluntariness basically means that the just cause is solely attributable to the employee without any external
force influencing or controlling his actions. This element runs through all just causes under Article 282,
whether they be in the nature of a wrongful action or omission. Gross and habitual neglect, a recognized just
cause, is considered voluntary although it lacks the element of intent found in Article 282(a), (c), and (d)."54
II. The dismissal of petitioner can be predicated on the bona fide occupational qualification defense.
Employment in particular jobs may not be limited to persons of a particular sex, religion, or national origin
unless the employer can show that sex, religion, or national origin is an actual qualification for performing the
job. The qualification is called a bona fide occupational qualification (BFOQ).55 In the United States, there are a
few federal and many state job discrimination laws that contain an exception allowing an employer to engage
in an otherwise unlawful form of prohibited discrimination when the action is based on a BFOQ necessary to
the normal operation of a business or enterprise.56
Petitioner contends that BFOQ is a statutory defense. It does not exist if there is no statute providing for
it.57 Further, there is no existing BFOQ statute that could justify his dismissal.58
Both arguments must fail.
First, the Constitution,59 the Labor Code,60 and RA No. 727761 or the Magna Carta for Disabled
Persons62 contain provisions similar to BFOQ.
Second, in British Columbia Public Service Employee Commission (BSPSERC) v. The British Columbia
Government and Service Employee’s Union (BCGSEU), 63 the Supreme Court of Canada adopted the so-called
"Meiorin Test" in determining whether an employment policy is justified. Under this test, (1) the employer
must show that it adopted the standard for a purpose rationally connected to the performance of the job; 64 (2)
the employer must establish that the standard is reasonably necessary65 to the accomplishment of that work-
related purpose; and (3) the employer must establish that the standard is reasonably necessary in order to
accomplish the legitimate work-related purpose. Similarly, in Star Paper Corporation v. Simbol,66 this Court
held that in order to justify a BFOQ, the employer must prove that (1) the employment qualification is
reasonably related to the essential operation of the job involved; and (2) that there is factual basis for
believing that all or substantially all persons meeting the qualification would be unable to properly perform
the duties of the job.67
In short, the test of reasonableness of the company policy is used because it is parallel to BFOQ. 68 BFOQ is
valid "provided it reflects an inherent quality reasonably necessary for satisfactory job performance."69
In Duncan Association of Detailman-PTGWTO v. Glaxo Wellcome Philippines, Inc., 70 the Court did not hesitate
to pass upon the validity of a company policy which prohibits its employees from marrying employees of a
rival company. It was held that the company policy is reasonable considering that its purpose is the protection
of the interests of the company against possible competitor infiltration on its trade secrets and procedures.
Verily, there is no merit to the argument that BFOQ cannot be applied if it has no supporting statute. Too, the
Labor Arbiter,71 NLRC,72 and CA73 are one in holding that the weight standards of PAL are reasonable. A
common carrier, from the nature of its business and for reasons of public policy, is bound to observe
extraordinary diligence for the safety of the passengers it transports.74 It is bound to carry its passengers safely
as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due
regard for all the circumstances.75
The law leaves no room for mistake or oversight on the part of a common carrier. Thus, it is only logical to
hold that the weight standards of PAL show its effort to comply with the exacting obligations imposed upon it
by law by virtue of being a common carrier.
The business of PAL is air transportation. As such, it has committed itself to safely transport its passengers. In
order to achieve this, it must necessarily rely on its employees, most particularly the cabin flight deck crew
who are on board the aircraft. The weight standards of PAL should be viewed as imposing strict norms of
discipline upon its employees.
lost seconds can translate into three lost lives. Evacuation might slow down just because a wide-bodied cabin
attendant is blocking the narrow aisles. These possibilities are not remote.
Petitioner is also in estoppel. He does not dispute that the weight standards of PAL were made known to him
prior to his employment. He is presumed to know the weight limit that he must maintain at all times. 78 In fact,
never did he question the authority of PAL when he was repeatedly asked to trim down his weight.  Bona fides
exigit ut quod convenit fiat. Good faith demands that what is agreed upon shall be done. Kung ang tao ay
tapat kanyang tutuparin ang napagkasunduan.
Too, the weight standards of PAL provide for separate weight limitations based on height and body frame for
both male and female cabin attendants. A progressive discipline is imposed to allow non-compliant cabin
attendants sufficient opportunity to meet the weight standards. Thus, the clear-cut rules obviate any
possibility for the commission of abuse or arbitrary action on the part of PAL.
III. Petitioner failed to substantiate his claim that he was discriminated against by PAL.

In other words, the primary objective of PAL in the imposition of the weight standards for cabin crew is  flight
Petitioner next claims that PAL is using passenger safety as a convenient excuse to discriminate against
safety. It cannot be gainsaid that cabin attendants must maintain agility at all times in order to inspire
him.79 We are constrained, however, to hold otherwise. We agree with the CA that "[t]he element of
passenger confidence on their ability to care for the passengers when something goes wrong. It is not
discrimination came into play in this case as a secondary position for the private respondent in order to escape
farfetched to say that airline companies, just like all common carriers, thrive due to public confidence on their
the consequence of dismissal that being overweight entailed. It is a confession-and-avoidance position that
safety records. People, especially the riding public, expect no less than that airline companies transport their
impliedly admitted the cause of dismissal, including the reasonableness of the applicable standard and the
passengers to their respective destinations safely and soundly. A lesser performance is unacceptable.
private respondent’s failure to comply." 80It is a basic rule in evidence that each party must prove his
affirmative allegation.81
The task of a cabin crew or flight attendant is not limited to serving meals or attending to the whims and
caprices of the passengers. The most important activity of the cabin crew is to care for the safety of
Since the burden of evidence lies with the party who asserts an affirmative allegation, petitioner has to prove
passengers and the evacuation of the aircraft when an emergency occurs. Passenger safety goes to the core of
his allegation with particularity. There is nothing on the records which could support the finding of
the job of a cabin attendant. Truly, airlines need cabin attendants who have the necessary strength to open
discriminatory treatment. Petitioner cannot establish discrimination by simply naming the supposed cabin
emergency doors, the agility to attend to passengers in cramped working conditions, and the stamina to
attendants who are allegedly similarly situated with him. Substantial proof must be shown as to how and why
withstand grueling flight schedules.
they are similarly situated and the differential treatment petitioner got from PAL despite the similarity of his
situation with other employees.
On board an aircraft, the body weight and size of a cabin attendant are important factors to consider in case of
emergency. Aircrafts have constricted cabin space, and narrow aisles and exit doors. Thus, the arguments of
Indeed, except for pointing out the names of the supposed overweight cabin attendants, petitioner miserably
respondent that "[w]hether the airline’s flight attendants are overweight or not has no direct relation to its
failed to indicate their respective ideal weights; weights over their ideal weights; the periods they were
mission of transporting passengers to their destination"; and that the weight standards "has nothing to do
allowed to fly despite their being overweight; the particular flights assigned to them; the discriminating
with airworthiness of respondent’s airlines," must fail.
treatment they got from PAL; and other relevant data that could have adequately established a case of
discriminatory treatment by PAL. In the words of the CA, "PAL really had no substantial case of discrimination
The rationale in Western Air Lines v. Criswell 76 relied upon by petitioner cannot apply to his case. What was to meet."82
involved there were two (2) airline pilots who were denied reassignment as flight engineers upon reaching the
age of 60, and a flight engineer who was forced to retire at age 60. They sued the airline company, alleging
We are not unmindful that findings of facts of administrative agencies, like the Labor Arbiter and the NLRC, are
that the age-60 retirement for flight engineers violated the Age Discrimination in Employment Act of
accorded respect, even finality.83 The reason is simple: administrative agencies are experts in matters within
1967. Age-based BFOQ and being overweight are not the same. The case of overweight cabin attendants is
their specific and specialized jurisdiction.84 But the principle is not a hard and fast rule. It only applies if the
another matter. Given the cramped cabin space and narrow aisles and emergency exit doors of the airplane,
findings of facts are duly supported by substantial evidence. If it can be shown that administrative bodies
any overweight cabin attendant would certainly have difficulty navigating the cramped cabin area.
grossly misappreciated evidence of such nature so as to compel a conclusion to the contrary, their findings of
facts must necessarily be reversed. Factual findings of administrative agencies do not have infallibility and
In short, there is no need to individually evaluate their ability to perform their task. That an obese cabin must be set aside when they fail the test of arbitrariness.85
attendant occupies more space than a slim one is an unquestionable fact which courts can judicially recognize
without introduction of evidence.77 It would also be absurd to require airline companies to reconfigure the
Here, the Labor Arbiter and the NLRC inexplicably misappreciated evidence. We thus annul their findings.
aircraft in order to widen the aisles and exit doors just to accommodate overweight cabin attendants like
petitioner.
To make his claim more believable, petitioner invokes the equal protection clause guaranty 86 of the
Constitution. However, in the absence of governmental interference, the liberties guaranteed by the
The biggest problem with an overweight cabin attendant is the possibility of impeding passengers from
Constitution cannot be invoked.87 Put differently, the Bill of Rights is not meant to be invoked against acts of
evacuating the aircraft, should the occasion call for it. The job of a cabin attendant during emergencies is to
private individuals.88 Indeed, the United States Supreme Court, in interpreting the Fourteenth
speedily get the passengers out of the aircraft safely. Being overweight necessarily impedes mobility.
Amendment,89 which is the source of our equal protection guarantee, is consistent in saying that the equal
Indeed, in an emergency situation, seconds are what cabin attendants are dealing with, not minutes. Three
protection erects no shield against private conduct, however discriminatory or wrongful. 90 Private actions, no
matter how egregious, cannot violate the equal protection guarantee.91
IV. The claims of petitioner for reinstatement and wages are moot. fact that he was not dismissed for any serious misconduct or to any act which would reflect on his moral
character. We also recognize that his employment with PAL lasted for more or less a decade.
As his last contention, petitioner avers that his claims for reinstatement and wages have not been mooted. He
is entitled to reinstatement and his full backwages, "from the time he was illegally dismissed" up to the time WHEREFORE, the appealed Decision of the Court of Appeals is AFFIRMED but MODIFIED in that petitioner
that the NLRC was reversed by the CA.92 Armando G. Yrasuegui is entitled to separation pay in an amount equivalent to one-half (1/2) month’s pay for
every year of service, which should include his regular allowances.
At this point, Article 223 of the Labor Code finds relevance:
SO ORDERED.
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the
reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall
either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or
separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the
employer shall not stay the execution for reinstatement provided herein.

The law is very clear. Although an award or order of reinstatement is self-executory and does not require a
writ of execution,93 the option to exercise actual reinstatement or payroll reinstatement belongs to the
employer. It does not belong to the employee, to the labor tribunals, or even to the courts.

Contrary to the allegation of petitioner that PAL "did everything under the sun" to frustrate his "immediate
return to his previous position,"94 there is evidence that PAL opted to physically reinstate him to a substantially
equivalent position in accordance with the order of the Labor Arbiter.95 In fact, petitioner duly received the
return to work notice on February 23, 2001, as shown by his signature.96

Petitioner cannot take refuge in the pronouncements of the Court in a case 97 that "[t]he unjustified refusal of
the employer to reinstate the dismissed employee entitles him to payment of his salaries effective from the
time the employer failed to reinstate him despite the issuance of a writ of execution" 98 and ""even if the order
of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to
reinstate and pay the wages of the employee during the period of appeal until reversal by the higher
court."99 He failed to prove that he complied with the return to work order of PAL. Neither does it appear on
record that he actually rendered services for PAL from the moment he was dismissed, in order to insist on the
payment of his full backwages.

In insisting that he be reinstated to his actual position despite being overweight, petitioner in effect wants to
render the issues in the present case moot. He asks PAL to comply with the impossible. Time and again, the
Court ruled that the law does not exact compliance with the impossible.100

V. Petitioner is entitled to separation pay.

Be that as it may, all is not lost for petitioner.

Normally, a legally dismissed employee is not entitled to separation pay. This may be deduced from the
language of Article 279 of the Labor Code that "[a]n employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement." Luckily for petitioner, this is
not an ironclad rule.

Exceptionally, separation pay is granted to a legally dismissed employee as an act "social justice," 101 or based
on "equity."102 In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2)
does not reflect on the moral character of the employee.103

Here, We grant petitioner separation pay equivalent to one-half (1/2) month’s pay for every year of
service.104 It should include regular allowances which he might have been receiving.105 We are not blind to the
G.R. No. 162994             September 17, 2004
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON, petitioners,  Confronting the Court in this petition is a novel question, with constitutional overtones, involving the validity
vs.
GLAXO WELLCOME PHILIPPINES, INC., Respondent.
RESOLUTION
Labor Law; Dismissals; Glaxo’s policy prohibiting an employee from having a relationship with an
employee of a competitior company is a valid exercise of management prerogative.—No reversible error can
be ascribed to the Court of Appeals when it ruled that Glaxo’s policy prohibiting an employee from having a
relationship with an employee of a competitor company is a valid exercise of management prerogative. Glaxo
has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential
programs and information from competitors, especially so that it and Astra are rival companies in the highly
competitive pharmaceutical industry.
Same; Same; While our laws endeavor to give life to the constitutional policy on social justice and the
protection of labor, it does not mean that every labor dispute will be decided in favor of the workers; The law
also recognizes that management has rights which are also entitled to respect and enforcement in the interest
of fair play.—That Glaxo possesses the right to protect its economic interests cannot be denied. No less than
the Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its right to
reasonable returns on investments and to expansion and growth. Indeed, while our laws endeavor to give life
to the constitutional policy on social justice and the protection of labor, it does not mean that every labor
dispute will be decided in favor of the workers. The law also recognizes that management has rights which are
also entitled to respect and enforcement in the interest of fair play.
Same; Same; The challenged company policy does not violate the equal protection clause of the
Constitution.—The challenged company policy does not violate the equal protection clause of the Constitution
as petitioners erroneously suggest. It is a settled principle that the commands of the equal protection clause
are addressed only to the state or those acting under color of its authority. Corollarily, it has been held in a
long array of U.S. Supreme Court decisions that the equal protection clause erects no shield against merely
private conduct, however, discriminatory or wrongful. The only exception occurs when the state in any of its
manifestations or actions has been found to have become entwined or involved in the wrongful private
conduct. Obviously, however, the exception is not present in this case.
Same; Same; Glaxo does not impose an absolute prohibition against relationships between its
employees and those of competitor companies; What the company merely seeks to avoid is a conflict of
interest between the employee and the company that may arise out of such relationships .—From the wordings
of the contractual provision and the policy in its employee handbook, it is clear that Glaxo does not impose an
absolute prohibition against relationships between its employees and those of competitor companies. Its
employees are free to cultivate relationships with and marry persons of their own choosing. What the
company merely seeks to avoid is a conflict of interest between the employee and the company that may arise
out of such relationships.
Same; Same; Constructive Dismissal; Definition of Constructive Dismissal.—The Court finds no merit in
petitioners’ contention that Tecson was constructively dismissed when he was transferred from the Camarines
Norte-Camarines Sur sales area to the Butuan City-Surigao City-Agusan del Sur sales area, and when he was
excluded from attending the company’s seminar on new products which were directly competing with similar
products manufactured by Astra. Constructive dismissal is defined as a quitting, an involuntary resignation
resorted to when continued employment becomes impossible, unreasonable, or unlikely; when there is a
demotion in rank or diminution in pay; or when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to the employee. None of these conditions are present in the instant case. The record
does not show that Tecson was demoted or unduly discriminated upon by reason of such transfer.
TINGA, J.:
of the policy of a pharmaceutical company prohibiting its employees from marrying employees of any
competitor company.
This is a Petition for Review on Certiorari assailing the Decision1 dated May 19, 2003 and the Resolution dated
March 26, 2004 of the Court of Appeals in CA-G.R. SP No. 62434.2
Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome Philippines, Inc. (Glaxo) as
medical representative on October 24, 1995, after Tecson had undergone training and orientation.
Thereafter, Tecson signed a contract of employment which stipulates, among others, that he agrees to study
and abide by existing company rules; to disclose to management any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing drug companies and should
management find that such relationship poses a possible conflict of interest, to resign from the company.
The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform
management of any existing or future relationship by consanguinity or affinity with co-employees or
employees of competing drug companies. If management perceives a conflict of interest or a potential conflict
between such relationship and the employee’s employment with the company, the management and the
employee will explore the possibility of a "transfer to another department in a non-counterchecking position"
or preparation for employment outside the company after six months.
Tecson was initially assigned to market Glaxo’s products in the Camarines Sur-Camarines Norte sales area.
Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of Astra
Pharmaceuticals3(Astra), a competitor of Glaxo. Bettsy was Astra’s Branch Coordinator in Albay. She
supervised the district managers and medical representatives of her company and prepared marketing
strategies for Astra in that area.
Even before they got married, Tecson received several reminders from his District Manager regarding the
conflict of interest which his relationship with Bettsy might engender. Still, love prevailed, and Tecson married
Bettsy in September 1998.
In January 1999, Tecson’s superiors informed him that his marriage to Bettsy gave rise to a conflict of interest.
Tecson’s superiors reminded him that he and Bettsy should decide which one of them would resign from their
jobs, although they told him that they wanted to retain him as much as possible because he was performing
his job well.
Tecson requested for time to comply with the company policy against entering into a relationship with an
employee of a competitor company. He explained that Astra, Bettsy’s employer, was planning to merge with
Zeneca, another drug company; and Bettsy was planning to avail of the redundancy package to be offered by
Astra. With Bettsy’s separation from her company, the potential conflict of interest would be eliminated. At
the same time, they would be able to avail of the attractive redundancy package from Astra.
In August 1999, Tecson again requested for more time resolve the problem. In September 1999, Tecson
applied for a transfer in Glaxo’s milk division, thinking that since Astra did not have a milk division, the
potential conflict of interest would be eliminated. His application was denied in view of Glaxo’s "least-
movement-possible" policy.
In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales area. Tecson
asked Glaxo to reconsider its decision, but his request was denied.
Tecson sought Glaxo’s reconsideration regarding his transfer and brought the matter to Glaxo’s Grievance
Committee. Glaxo, however, remained firm in its decision and gave Tescon until February 7, 2000 to comply
with the transfer order. Tecson defied the transfer order and continued acting as medical representative in the
Camarines Sur-Camarines Norte sales area.
During the pendency of the grievance proceedings, Tecson was paid his salary, but was not issued samples of
products which were competing with similar products manufactured by Astra. He was also not included in
product conferences regarding such products.
Because the parties failed to resolve the issue at the grievance machinery level, they submitted the matter for
voluntary arbitration. Glaxo offered Tecson a separation pay of one-half (½) month pay for every year of
service, or a total of ₱50,000.00 but he declined the offer. On November 15, 2000, the National Conciliation
and Mediation Board (NCMB) rendered its Decision declaring as valid Glaxo’s policy on relationships between
its employees and persons employed with competitor companies, and affirming Glaxo’s right to transfer
Tecson to another sales territory.
Aggrieved, Tecson filed a Petition for Review with the Court of Appeals assailing the NCMB Decision.
On May 19, 2003, the Court of Appeals promulgated its Decision denying the Petition for Review on the
ground that the NCMB did not err in rendering its Decision. The appellate court held that Glaxo’s policy
prohibiting its employees from having personal relationships with employees of competitor companies is a
valid exercise of its management prerogatives.4
Tecson filed a Motion for Reconsideration of the appellate court’s Decision, but the motion was denied by the
appellate court in its Resolution dated March 26, 2004.5
Petitioners filed the instant petition, arguing therein that (i) the Court of Appeals erred in affirming the
NCMB’s finding that the Glaxo’s policy prohibiting its employees from marrying an employee of a competitor
company is valid; and (ii) the Court of Appeals also erred in not finding that Tecson was constructively
dismissed when he was transferred to a new sales territory, and deprived of the opportunity to attend
products seminars and training sessions.6
Petitioners contend that Glaxo’s policy against employees marrying employees of competitor companies
violates the equal protection clause of the Constitution because it creates invalid distinctions among
employees on account only of marriage. They claim that the policy restricts the employees’ right to marry.7
They also argue that Tecson was constructively dismissed as shown by the following circumstances: (1) he was
transferred from the Camarines Sur-Camarines Norte sales area to the Butuan-Surigao-Agusan sales area, (2)
he suffered a diminution in pay, (3) he was excluded from attending seminars and training sessions for medical
representatives, and (4) he was prohibited from promoting respondent’s products which were competing with
Astra’s products.8
In its Comment on the petition, Glaxo argues that the company policy prohibiting its employees from having a
relationship with and/or marrying an employee of a competitor company is a valid exercise of its management
prerogatives and does not violate the equal protection clause; and that Tecson’s reassignment from the
Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City and Agusan del Sur sales area does
not amount to constructive dismissal.9
Glaxo insists that as a company engaged in the promotion and sale of pharmaceutical products, it has a
genuine interest in ensuring that its employees avoid any activity, relationship or interest that may conflict
with their responsibilities to the company. Thus, it expects its employees to avoid having personal or family
interests in any competitor company which may influence their actions and decisions and consequently
deprive Glaxo of legitimate profits. The policy is also aimed at preventing a competitor company from gaining
access to its secrets, procedures and policies.10
It likewise asserts that the policy does not prohibit marriage per se but only proscribes existing or future
relationships with employees of competitor companies, and is therefore not violative of the equal protection
clause. It maintains that considering the nature of its business, the prohibition is based on valid grounds.11
According to Glaxo, Tecson’s marriage to Bettsy, an employee of Astra, posed a real and potential conflict of
interest. Astra’s products were in direct competition with 67% of the products sold by Glaxo. Hence, Glaxo’s
enforcement of the foregoing policy in Tecson’s case was a valid exercise of its management prerogatives.12 In
any case, Tecson was given several months to remedy the situation, and was even encouraged not to resign
but to ask his wife to resign form Astra instead.13
Glaxo also points out that Tecson can no longer question the assailed company policy because when he signed
his contract of employment, he was aware that such policy was stipulated therein. In said contract, he also
agreed to resign from respondent if the management finds that his relationship with an employee of a
competitor company would be detrimental to the interests of Glaxo.14
Glaxo likewise insists that Tecson’s reassignment to another sales area and his exclusion from seminars
regarding respondent’s new products did not amount to constructive dismissal.
It claims that in view of Tecson’s refusal to resign, he was relocated from the Camarines Sur-Camarines Norte
sales area to the Butuan City-Surigao City and Agusan del Sur sales area. Glaxo asserts that in effecting the
reassignment, it also considered the welfare of Tecson’s family. Since Tecson’s hometown was in Agusan del
Sur and his wife traces her roots to Butuan City, Glaxo assumed that his transfer from the Bicol region to the
Butuan City sales area would be favorable to him and his family as he would be relocating to a familiar
territory and minimizing his travel expenses.15
In addition, Glaxo avers that Tecson’s exclusion from the seminar concerning the new anti-asthma drug was
due to the fact that said product was in direct competition with a drug which was soon to be sold by Astra, and
hence, would pose a potential conflict of interest for him. Lastly, the delay in Tecson’s receipt of his sales
paraphernalia was due to the mix-up created by his refusal to transfer to the Butuan City sales area (his
paraphernalia was delivered to his new sales area instead of Naga City because the supplier thought he
already transferred to Butuan).16
The Court is tasked to resolve the following issues: (1) Whether the Court of Appeals erred in ruling that
Glaxo’s policy against its employees marrying employees from competitor companies is valid, and in not
holding that said policy violates the equal protection clause of the Constitution; (2) Whether Tecson was
constructively dismissed.
The Court finds no merit in the petition.
The stipulation in Tecson’s contract of employment with Glaxo being questioned by petitioners provides:
…
10. You agree to disclose to management any existing or future relationship you may have, either
by consanguinity or affinity with co-employees or employees of competing drug companies. Should
it pose a possible conflict of interest in management discretion, you agree to resign voluntarily
from the Company as a matter of Company policy.
…17
The same contract also stipulates that Tescon agrees to abide by the existing company rules of Glaxo, and to
study and become acquainted with such policies. 18 In this regard, the Employee Handbook of Glaxo expressly
informs its employees of its rules regarding conflict of interest:
1. Conflict of Interest
Employees should avoid any activity, investment relationship, or interest that may run counter to
the responsibilities which they owe Glaxo Wellcome.
Specifically, this means that employees are expected:
a. To avoid having personal or family interest, financial or otherwise, in any competitor
supplier or other businesses which may consciously or unconsciously influence their
actions or decisions and thus deprive Glaxo Wellcome of legitimate profit.
b. To refrain from using their position in Glaxo Wellcome or knowledge of Company
plans to advance their outside personal interests, that of their relatives, friends and
other businesses.
c. To avoid outside employment or other interests for income which would impair their
effective job performance.
d. To consult with Management on such activities or relationships that may lead to
conflict of interest.
1.1. Employee Relationships
Employees with existing or future relationships either by consanguinity or affinity with co-
employees of competing drug companies are expected to disclose such relationship to the
Management. If management perceives a conflict or potential conflict of interest, every effort shall
be made, together by management and the employee, to arrive at a solution within six (6) months,
either by transfer to another department in a non-counter checking position, or by career
preparation toward outside employment after Glaxo Wellcome. Employees must be prepared for
possible resignation within six (6) months, if no other solution is feasible.19
No reversible error can be ascribed to the Court of Appeals when it ruled that Glaxo’s policy prohibiting an
employee from having a relationship with an employee of a competitor company is a valid exercise of
management prerogative.
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other
confidential programs and information from competitors, especially so that it and Astra are rival companies in
the highly competitive pharmaceutical industry.
The prohibition against personal or marital relationships with employees of competitor companies upon
Glaxo’s employees is reasonable under the circumstances because relationships of that nature might
compromise the interests of the company. In laying down the assailed company policy, Glaxo only aims to
protect its interests against the possibility that a competitor company will gain access to its secrets and
procedures.
That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the
Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its right to
reasonable returns on investments and to expansion and growth. 20 Indeed, while our laws endeavor to give
life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor
dispute will be decided in favor of the workers. The law also recognizes that management has rights which are
also entitled to respect and enforcement in the interest of fair play.21
As held in a Georgia, U.S.A case,22 it is a legitimate business practice to guard business confidentiality and
protect a competitive position by even-handedly disqualifying from jobs male and female applicants or
employees who are married to a competitor. Consequently, the court ruled than an employer that discharged
an employee who was married to an employee of an active competitor did not violate Title VII of the Civil
Rights Act of 1964.23 The Court pointed out that the policy was applied to men and women equally, and noted
that the employer’s business was highly competitive and that gaining inside information would constitute a
competitive advantage.
The challenged company policy does not violate the equal protection clause of the Constitution as petitioners
erroneously suggest. It is a settled principle that the commands of the equal protection clause are addressed
only to the state or those acting under color of its authority. 24 Corollarily, it has been held in a long array of
U.S. Supreme Court decisions that the equal protection clause erects no shield against merely private conduct,
however, discriminatory or wrongful.25 The only exception occurs when the state29 in any of its manifestations
or actions has been found to have become entwined or involved in the wrongful private conduct. 27 Obviously,
however, the exception is not present in this case. Significantly, the company actually enforced the policy after
repeated requests to the employee to comply with the policy. Indeed, the application of the policy was made
in an impartial and even-handed manner, with due regard for the lot of the employee.
In any event, from the wordings of the contractual provision and the policy in its employee handbook, it is
clear that Glaxo does not impose an absolute prohibition against relationships between its employees and
those of competitor companies. Its employees are free to cultivate relationships with and marry persons of
their own choosing. What the company merely seeks to avoid is a conflict of interest between the employee
and the company that may arise out of such relationships. As succinctly explained by the appellate court, thus:
The policy being questioned is not a policy against marriage. An employee of the company remains
free to marry anyone of his or her choosing. The policy is not aimed at restricting a personal
prerogative that belongs only to the individual. However, an employee’s personal decision does not
detract the employer from exercising management prerogatives to ensure maximum profit and
business success. . .28
The Court of Appeals also correctly noted that the assailed company policy which forms part of respondent’s
Employee Code of Conduct and of its contracts with its employees, such as that signed by Tescon, was made
known to him prior to his employment. Tecson, therefore, was aware of that restriction when he signed his
employment contract and when he entered into a relationship with Bettsy. Since Tecson knowingly and
voluntarily entered into a contract of employment with Glaxo, the stipulations therein have the force of law
between them and, thus, should be complied with in good faith." 29 He is therefore estopped from questioning
said policy.
The Court finds no merit in petitioners’ contention that Tescon was constructively dismissed when he was
transferred from the Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City-Agusan del Sur
sales area, and when he was excluded from attending the company’s seminar on new products which were
directly competing with similar products manufactured by Astra. Constructive dismissal is defined as a quitting,
an involuntary resignation resorted to when continued employment becomes impossible, unreasonable, or
unlikely; when there is a demotion in rank or diminution in pay; or when a clear discrimination, insensibility or
disdain by an employer becomes unbearable to the employee. 30 None of these conditions are present in the
instant case. The record does not show that Tescon was demoted or unduly discriminated upon by reason of
such transfer. As found by the appellate court, Glaxo properly exercised its management prerogative in
reassigning Tecson to the Butuan City sales area:
. . . In this case, petitioner’s transfer to another place of assignment was merely in keeping with the
policy of the company in avoidance of conflict of interest, and thus valid…Note that [Tecson’s] wife
holds a sensitive supervisory position as Branch Coordinator in her employer-company which
requires her to work in close coordination with District Managers and Medical Representatives. Her
 duties include monitoring sales of Astra products, conducting sales drives, establishing and
furthering relationship with customers, collection, monitoring and managing Astra’s inventory…she
therefore takes an active participation in the market war characterized as it is by stiff competition
among pharmaceutical companies. Moreover, and this is significant, petitioner’s sales territory
covers Camarines Sur and Camarines Norte while his wife is supervising a branch of her employer in
Albay. The proximity of their areas of responsibility, all in the same Bicol Region, renders the
conflict of interest not only possible, but actual, as learning by one spouse of the other’s market
strategies in the region would be inevitable. [Management’s] appreciation of a conflict of interest is
therefore not merely illusory and wanting in factual basis…31

In Abbott Laboratories (Phils.), Inc. v. National Labor Relations Commission, 32 which involved a complaint filed
by a medical representative against his employer drug company for illegal dismissal for allegedly terminating
his employment when he refused to accept his reassignment to a new area, the Court upheld the right of the
drug company to transfer or reassign its employee in accordance with its operational demands and
requirements. The ruling of the Court therein, quoted hereunder, also finds application in the instant case:

By the very nature of his employment, a drug salesman or medical representative is expected to
travel. He should anticipate reassignment according to the demands of their business. It would be a
poor drug corporation which cannot even assign its representatives or detail men to new markets
calling for opening or expansion or to areas where the need for pushing its products is great. More
so if such reassignments are part of the employment contract.33

As noted earlier, the challenged policy has been implemented by Glaxo impartially and disinterestedly for a
long period of time. In the case at bar, the record shows that Glaxo gave Tecson several chances to eliminate
the conflict of interest brought about by his relationship with Bettsy. When their relationship was still in its
initial stage, Tecson’s supervisors at Glaxo constantly reminded him about its effects on his employment with
the company and on the company’s interests. After Tecson married Bettsy, Glaxo gave him time to resolve the
conflict by either resigning from the company or asking his wife to resign from Astra. Glaxo even expressed its
desire to retain Tecson in its employ because of his satisfactory performance and suggested that he ask Bettsy
to resign from her company instead. Glaxo likewise acceded to his repeated requests for more time to resolve
the conflict of interest. When the problem could not be resolved after several years of waiting, Glaxo was
constrained to reassign Tecson to a sales area different from that handled by his wife for Astra. Notably, the
Court did not terminate Tecson from employment but only reassigned him to another area where his home
province, Agusan del Sur, was included. In effecting Tecson’s transfer, Glaxo even considered the welfare of
Tecson’s family. Clearly, the foregoing dispels any suspicion of unfairness and bad faith on the part of Glaxo.34

WHEREFORE, the Petition is DENIED for lack of merit. Costs against petitioners.

SO ORDERED.
G.R. No. 121179 July 2, 1998
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.
ANTONINE B. SALEY a.k.a. ANNIE B. SALEY, accused-appellant.
Criminal Law; Illegal Recruitment; Criminal Procedure; Appeals; The Supreme Court has appellate
jurisdiction over ordinary appeals in criminal cases directly from the Regional Trial Courts when the penalty
imposed is reclusion perpetua or higher but appeals of criminal cases involving penalties lower than reclusion
perpetua or life imprisonment may likewise be brought to the Supreme Court where the offenses were
committed on the same occasion or arising out of the same occurrence that gave rise to the more serious
offense for which the penalty of death or life imprisonment is imposed.— At the outset, it might be explained
that this appeal involves the con-
________________
*
 FIRST DIVISION.
716
71 SUPREME COURT REPORTS ANNOTATED
6
People vs. Saley
viction of appellant not only for the crime of illegal recruitment in large scale for which the penalty of
life imprisonment is imposed but also for other offenses for which lesser penalties have been meted by the
trial court upon appellant. This Court has appellate jurisdiction over ordinary appeals in criminal cases directly
from the Regional Trial Courts when the penalty imposed is reclusion perpetua or higher. The Rules of Court,
allows, however, the appeal of criminal cases involving penalties lower than reclusion perpetua or life
imprisonment under the circumstances stated in Section 3, Rule 122, of the Revised Rules of Criminal
Procedure. Thus-“(c) The appeal to the Supreme Court in cases where the penalty imposed is life
imprisonment, or where a lesser penalty is imposed but involving offenses committed on the same occasion or
arising out of the same occurrence that gave rise to the more serious offense for which the penalty of death or
life imprisonment is imposed shall be by filing a notice of appeal in accordance with paragraph (a) of this
Section.”
Same; Same; Elements of Illegal Recruitment.—Illegal recruitment is committed when two elements
concur: 1) That the offender has no valid license or authority required by law to enable one to lawfully engage
in recruitment and placement of workers; and 2) That the offender undertakes either any activity within the
meaning of recruitment and placement defined under Article 13(b), or any prohibited practices enumerated
under Article 34.
Same; Same; Same; Words and Phrases; Recruitment includes the act of referral or “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.”—Any person who commits the prohibited
acts enumerated in Article 13(b) of the Labor Code shall be liable under Article 38(a) thereof. The proviso in
Article 13(b) “lays down a rule of evidence that where a fee is collected in consideration of a promise or offer
of employment to two or more prospective workers, the individual or entity dealing with them shall be
deemed to be engaged in the act of recruitment and placement.” The article also provides that recruitment
includes the act of referral or “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.”
717
VOL. 291, JULY 2, 1998 717
People vs. Saley
Same; Same; Evidence; Witnesses; The rule has always been that the testimony of witnesses is to be
weighed, not that the witnesses be numbered, and it is not an uncommon experience to have a conclusion of
guilt reached on the basis of the testimony of a single witness.—The fact that, with the exception of the cases
involving Cherry Pi-ay and Corazon del Rosario, only the complainant in each of the cases, have testified
against appellant in the illegal recruitment cases does not thereby make the case for the prosecution weak.
The rule has always been that the testimony of witnesses is to be weighed, not that the witnesses be
numbered, and it is not an uncommon experience to have a conclusion of guilt reached on the basis of the
testimony of a single witness. Corroborative evidence is necessary only when there are reasons to warrant the
suspicion that the witness has perjured himself or that his observations have veered from the truth.
Same; Same; Same; The absence of receipts to evidence payment to an indictee in a criminal case for
illegal recruitment does not warrant an acquittal of the accused, and it is not necessarily fatal to the
prosecution’s cause.—The absence of receipts to evidence payment to an indictee in a criminal case for illegal
recruitment does not warrant an acquittal of the accused, and it is not necessarily fatal to the prosecution’s
cause. As long as the prosecution is able to establish through credible testimonial evidence that the accused
has involved himself in an act of illegal recruitment, a conviction for the offense can very well be justified.
Same; Same; Aggravating and Mitigating Circumstances; The provisions of the Revised Penal Code on
the application of the circumstances that could modify the criminal liability of an accused are inapplicable to
special laws.—Altogether, the evidence against appellant has established beyond any discernible shadow of
doubt that appellant is indeed guilty of illegal recruitment on various counts. Being neither a licensee nor a
holder of authority to recruit, appellant must suffer under Article 39(c) of the Labor Code the penalty of
imprisonment of not less than four years nor more than eight years or a fine of not less than P20,000.00 nor
more than P100,000.00 or both such imprisonment and fine, at the discretion of the court. In imposing the
penalty, the provisions of the Revised Penal Code on the application of the circumstances that could modify
the criminal liability of an accused cannot be considered, these provisions being inapplicable to special laws.
718
71 SUPREME COURT REPORTS ANNOTATED
8
People vs. Saley
Same; Illegal Recruitment in Large Scale; Requisites.—Illegal recruitment is committed in large scale if
it is perpetrated against three or more persons “individually or as a group.” Its requisites are that: (1) the
person charged with the crime must have undertaken recruitment activities as so defined by law, (2) the same
person does not have a license or authority to do that, and (3) the questioned act is committed against three
or more persons. The prosecution has been able to successfully show that, for a fee, appellant, not being
authorized to recruit workers for abroad, did so in Criminal Case No. 93-CR-1645 against seven complainants.
For this offense, Article 39(a) of the Labor Code imposes the penalty of life imprisonment and a fine of one
hundred thousand pesos (P100,000.00). This penalty was thus likewise aptly meted out upon appellant by the
trial court.
Same; Estafa; Illegal Recruitment; Double Jeopardy; Conviction for illegal recruitment under the Labor
Code does not bar the punishment of the offender for estafa.—Conviction for these various offenses under the
Labor Code does not bar the punishment of the offender for estafa. Illegal recruitment is a malum
prohibitum offense where criminal intent of the accused is not necessary for conviction while estafa is malum
in se which requires criminal intent to warrant conviction. Under Article 315, paragraph 2(a), of the Revised
Penal Code, the elements of the offense (estafa) are that (1) the accused has defrauded another by abuse of
confidence or by means of deceit and (2) damage or prejudice capable of pecuniary estimation is caused to
the offended party or third person. Clearly, these elements have sufficiently been shown in the cases under
review.
Same; Same; Penalties; Indeterminate Sentence Law; The penalty next lower should be based on the
penalty prescribed by the Revised Penal Code for the offense, without first considering any modifying
circumstance attendant to the commission of the crime—the modifying circumstances are considered only in
the imposition of the maximum term of the indeterminate sentence.—In the case of People vs. Gabres, the
Court has had occasion to so state that—“Under the Indeterminate Sentence Law, the maximum term of the
penalty shall be ‘that which, in view of the attending circumstances, could be properly imposed’ under the
Revised Penal Code, and the minimum shall be ‘within the range of the penalty next lower to that prescribed’
for the offense. The penalty next lower should be based on the penalty prescribed by the Code for the offense,
without first
719
VOL. 291, JULY 2, 1998 719
People vs. Saley
considering any modifying circumstance attendant to the commission of the crime. The determination
of the minimum penalty is left by law to the sound discretion of the court and it can be anywhere within the
range of the penalty next lower without any reference to the periods into which it might be subdivided. The
modifying circumstances are considered only in the imposition of the maximum term of the indeterminate
sentence. “The fact that the amounts involved in the instant case exceed P22,000.00 should not be considered
in the initial determination of the indeterminate penalty; instead, the matter should be so taken as analogous
to modifying circumstances in the imposition of the maximum term of the full indeterminate sentence. This
interpretation of the law accords with the rule that penal laws should be construed in favor of the accused.
VITUG, J.:
The case before the Court focuses on the practice of some "illegal recruiters" who would even go to the extent
of issuing forged tourist visas to aspiring overseas contract workers. These unsuspecting job applicants are
made to pay exorbitant "placement" fees for nothing really since, almost invariably, they find themselves
unable to leave for their purported country of employment or, if they are able to, soon find themselves
unceremoniously repatriated. This Court once described their plight in a local proverb as being "naghangad ng
kagitna, isang salop ang nawala." 1
In this appeal from the 3rd March 1995 decision of the Regional Trial Court of La Trinidad, Benguet, Branch
10, 2appellant Antonine B. Saley, a.k.a. Annie B. Saley, seeks a reversal of the verdict finding her guilty beyond
reasonable doubt of eleven counts of estafa punishable under the Revised Penal Code and six counts of illegal
recruitment, one committed in large scale, proscribed by the Labor Code.
Appellant was indicted in eleven separate informations for estafa under Article 315, paragraph 2(1), of the
Revised Penal Code. The cases (naming the complainants and stating the amounts therein involved) include:
(1) Criminal Case No. 92-CR-1397 3 (Francisco T. Labadchan — P45,000.00); (2) Criminal Case No. 92-CR-1414
(Victoria Asil — P33,000.00); (3) Criminal Case No. 92-CR-1415 (Cherry Pi-ay — P18,000.00); (4) Criminal Case
No. 92-CR-1426 (Corazon del Rosario — P40,000.00); (5) Criminal Case No. 92-CR-1428 (Arthur Juan —
P24,200.00); (6) Criminal Case No. 93-CR-1644 (Alfredo C. Arcega — P25,000.00); (7) Criminal Case No. 93-CR-
1646 (Brando B. Salbino — P25,000.00); (8) Criminal Case No. 93-CR-1647 (Mariano Damolog — P25,000.00);
(9) Criminal Case No. 93-CR-1649 (Lorenzo Belino — P25,000.00); (10) Criminal Case No. 93-CR-1651 (Peter
Arcega — P25,000.00) and (11) Criminal Case No. 93-CR-1652 (Adeline Tiangge — P18,500.00).
Except for the name of the offended party, the amount involved and the date of the commission of the crime,
the following information in Criminal Case No. 93-CR-1652 typified the other informations for the crime of
estafa:
That in or about the month of December, 1991, and sometime prior to or subsequent
thereto, at Buyagan, Municipality of La Trinidad, Province of Benguet, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused, with intent to
defraud ADELINE TIANGGE y MARCOS and by means of deceit through false
representations and pretenses made by her prior to or simultaneous with the
commission of the fraud, did then and there willfully, unlawfully and feloniously defraud
said ADELINE TIANGGE y MARCOS, by then and there representing herself as a duly
authorized or licensed recruiter for overseas employment, when in truth and in fact she
was not, thereby inducing the said ADELINE TIANGGE y MARCOS to give and deliver to
her the total amount of EIGHTEEN THOUSAND FIVE HUNDRED PESOS (P18,500.00),
Philippine Currency, for placement abroad and after having received it, she appropriated
and misappropriated the same for her own use and benefit and despite-repeated
demands made upon (her) to return the same, she refused, failed, neglected, and still
refuses, fails and neglects to comply therewith, all to the damage and prejudice of
ADELINE TIANGGE y MARCOS in the total sum aforesaid.
Contrary to law. 4
For the violation of Article 38, in relation to Article 39, of the Labor Code, five separate informations were also
instituted against appellant on various dates. These cases (with the names of the complainants) include: (1)
Criminal Case No. 92-CR-1396 (Francisco T. Labadchan); (2) Criminal Case No. 92-CR-1413 (Cherry Pi-ay); (3)
Criminal Case No. 92-CR-1416 (Victoria Asil); (4) Criminal Case No. 92-CR-1425 (Corazon del Rosario) and (5)
Criminal Case No. 92-CR-1427 (Arthur Juan). The typical information in these indictments read:
That sometime in the month of April, 1991 and subsequent thereto at Buyagan,
Municipality of La Trinidad, Province of Benguet, Philippines, and within the jurisdiction
of this Honorable Court, the above-named accused, did then and there willfully,
unlawfully and knowingly recruit one ARTHUR JUAN for overseas employment, by then
and there ably misrepresenting herself as a duly authorized or licensed recruiter when in
truth and in fact she fully knew it to be false but by reason of her said
misrepresentations which were completely relied upon by Arthur Juan, she was able to
obtain from the latter the total amount of TWENTY FOUR THOUSAND TWO HUNDRED
PESOS (P24,200.00), Philippine Currency, all to the damage and prejudice of Arthur Juan
in the total sum aforesaid.
Contrary to Law. 5
The information in Criminal Case No. 93-CR-1645 for illegal recruitment in large scale under Article 38,
paragraph 1, of Presidential Decree No. 442 (Labor Code), as amended, filed on 16 April 1993, read:
That in or about the months of August and September, 1992, in the Municipality of La
Trinidad, Province of Benguet, Philippines, and within the jurisdiction of this Honorable
Court, the above-named accused, did then and there willfully, unlawfully and knowingly
recruit the following: PETER ARCEGA, LORENZO BELINO, MARIANO DAMOLOG, FIDEL
OPDAS, BRANDO B. SALBINO, DEMBER LEON and ALFREDO C. ARCEGA for overseas
employment, by then and there misrepresenting herself as a duly authorized or licensed
recruiter when in truth and in fact she was not and by reason of her said
misrepresentation which was completely relied upon by the said complainants whom
she recruited, either individually or as a group amounting to illegal recruitment in large
scale causing economic sabotage, she was able to obtain and received from them the
aggregate total amount of ONE HUNDRED SEVENTY FIVE THOUSAND PESOS
(P175,000.00), Philippine Currency, all to the damage and prejudice of the foregoing
complainants in the total sum aforesaid.
Contrary to law. 6
Appellant pleaded not guilty to all the charges of illegal recruitment and estafa. The criminal cases filed were
raffled off to two (2) branches of the Regional Trial Court of Benguet; later, however, the cases were
consolidated at the instance of the prosecution.
Parenthetically, appellant jumped bail pending trial but she was soon arrested by agents of the Criminal
Investigation Service ("CIS").
The Evidence for the Prosecution. —
In Criminal Case No. 92-CR-1397 and Criminal Case No. 92-CR-1396
Francisco Labadchan, a 25-year-old employee in the Navy Base in Pacdal, Baguio City, was introduced to
appellant by Crispin Perez. In September 1991, the two went to the house of Conchita Tagle at Kilometer 3, La
Trinidad, Benguet, who was known to be recruiting workers for abroad. After Labadchan had expressed
interest in applying for a job in Korea, Tagle told Labadchan to prepare P45,000.00, P30,000.00 of which was
to be paid that month and the balance of P15,000.00 before his departure for abroad. Labadchan paid Tagle
the amount of P30,000.00 on 23 September 1991. Appellant, in turn, received that amount when she went to
La Trinidad to "brief" him. She told Labadchan that his flight would be on the 9th of October 1991 and that he
should have paid by then the balance of P15,000.00 of the fees. He paid Tagle the P15,000.00 balance on 05
October 1991. When he requested her to make a receipt, Tagle included the amount in the old receipt for the
P30,000.00 previously given. Appellant handed over to Labadchan some papers to fill up and gave last-minute
instructions before she boarded a green-colored aircraft.
On 08 October 1991, Labadchan and his wife went to Manila and stayed, as so instructed by Tagle, at the
Prince Hotel near the terminal of the Dangwa bus company in Dimasalang, Manila. There, he met other
people, among them, his co-complainant Arthur Juan. In the morning of 09 October 1991, Labadchan and the
others were told to go to the airport with Tagle, where appellant was supposed to give the travel papers
including passports and plane tickets for Korea. At the airport, however, appellant told the group that their
flight had been re-scheduled for 11 October 1991. Labadchan returned to Baguio City.
On 11 October 1991, Labadchan returned to the airport only to be told this time, however, that his passport
was still with the Department of Foreign Affairs. Appellant told her husband to accompany Labadchan to the
Foreign Affairs office. When Labadchan received the passport, he saw that while his picture appeared on it,
the passport was made out in the name of a person from Negros Occidental. Labadchan had to imitate the
signature on the passport just so he could get it. Back at the airport, he was allowed inside the terminal but
only to be later sent out because the ticket he had was one intended for passage from Korea and not to Korea.
Asserting that he and company were mere "chance passengers," appellant sent them all home with a promise
that another departure date would be set. She also took back the "show money" of US$1,000.00.
Appellant would repeatedly schedule a departure date but nothing tangible came out of her assurances.
Finally, Labadchan was able to get appellant to promise that the money he had given her would be refunded.
When this promise neither materialized, Labadchan finally reported the matter to the National Bureau of
Investigation ("NBI"). In that office, appellant executed a promissory note stating that she would return the
amount of P46,500.00, which included the amount of P1,500.00 allegedly used for getting a passport, to
Labadchan. 7
In Criminal Case No. 92-CR-1414 and Criminal Case No. 92-CR-1416
Victoria Asil, a 40-year-old housewife from Imelda Village, Roxas Street, Baguio City, heard from her elder
sister, Feling Derecto, that appellant was recruiting workers for abroad. During the second week of January
1992, she, along with her husband Gabriel, went to appellant's house in Buyagan, La Trinidad. Appellant
assured her that she could have a job in a factory in Korea. Appellant asked for an advance fee of P25,000.00
of the P40,000.00 agreed fee. Victoria gave appellant the "advance fee" on 13 January 1992 at her (Victoria's)
shop in Shopper's Lane, Baguio City which appellant acknowledged by issuing a receipt for the amount. She
told Victoria to be at appellant's house in Buyagan after three weeks.
When Victoria went to appellant's house as so directed, appellant told her that her flight had been postponed
supposedly because prior applicants had to be accommodated first. Victoria met appellant seven more times
only to be ultimately told that the latter had been allegedly "fooled" by the "main office" in Manila. Appellant,
nevertheless, demanded an additional P5,000.00 from Victoria so that she could leave on 18 April 1992.
Victoria gave appellant the amount of P5,000.00 at her shop on 31 March 1992 for which appellant gave a
corresponding receipt.
When on 18 April 1992 still "nothing happened," Victoria demanded from appellant a refund. Appellant gave
her an "advance" of P15,000.00. An acknowledgment receipt with appellant's signature affixed thereon would
evidence that payment. Appellant, however, failed to return the rest of the promised refund. 8
In Criminal Case No. 92-CR-1413 and Criminal Case No 92-CR-1415
Cherry Pi-ay, a 26-year-old nursing student from Acop, Tublay, Benguet, was visited once in March 1991 by
appellant who encouraged Cherry to apply for work in a textile or a plastic factory in Korea with a monthly
salary of US$800.00. Appellant told Cherry that the moment she would pay the amount of P45,000.00, she
could be deployed in Korea. Cherry prepared her bio-data and gave it to appellant at the latter's residence
during the first week of April 1991.
Cherry was able to leave the country on 04 July 1991 after having paid the total amount of P45,000.00.
Appellant told her that a certain Ramil would meet her at the airport in Korea. When she arrived, a Filipina,
named Marlyn, instead met her. Marlyn introduced herself as appellant's friend and accompanied Cherry to a
certain house owned by a Korean. There, Cherry met, among other compatriots, Corazon del Rosario and Jane
Kipas. Cherry soon realized that she was not going to have a job in the factory promised by appellant. Instead,
she was made to work for the Korean applying rugby on and folding leather jackets. About a month later, men
from the Korean Immigration accosted her and the others. Brought in for questioning by Immigration officials,
Cherry and her companions were informed that they were illegal workers. After the investigation, Cherry and
her group were allowed to go but on 08 August 1991, all were deported.
Back to the Philippines, the deportees were assured by appellant that they would get a refund of their money.
Cherry executed a sworn statement narrating her experience in Korea. 9
Ayson Acbaya-an, Cherry's "boyfriend" who later was to become her husband, corroborated Cherry's
testimony that appellant first received P18,000.00 from Cherry. Thereafter, appellant also received P27,000.00
from Cherry, fifteen thousand pesos (P15,000.00) of which amount came from him. In both instances,
appellant signed receipts for the payments. The receipts were among Cherry's papers confiscated in Korea. 10
In Criminal Case No. 92-CR-1425 and Criminal Case No. 92-CR-1426
Corazon del Rosario, a 34-year-old housemaid from 48 Happy Homes, Baguio City, had known appellant, an
acquaintance, since 1980. One day in December 1990, she happened to chance upon appellant at a PLDT
telephone booth in Kilometer 4, La Trinidad, Baguio City. Appellant, representing herself to be an authorized
recruiter, tried to persuade Corazon to work abroad. Corazon showed interest. From then on, appellant would
visit Corazon in her brother's house in Kilometer 4. Ultimately, appellant was able to convince Corazon that,
for a fee of P40,000.00, she could be sent to Korea. Corazon gave appellant the amount of P15,000.00. She
paid the balance of P25,000.00 in May 1991. The payments were both made in the presence of Cherry Pi-ay
and Jane Kipas. Appellant issued the corresponding receipts for these amounts.
Corazon took the flight for Korea on 28 June 1991. Appellant had instructed Corazon, upon landing in Korea, to
call up a certain Ramil. At the airport, Corazon, including her companions among them Jane Kipas, kept on
dialing the number but each time only a Korean woman would answer the call. Later, that evening, a certain
Marlyn, who introduced herself as appellant's friend, took them to a hotel. There, Marlyn took their "show
money" of US$1,000.00. The group stayed overnight in the hotel and the following morning, a Korean took
them to a house proximately two hours away by car from the airport. For about a month, they did nothing but
apply rugby on leather jackets, for which they were not paid, until a policeman arrived and took all ten of
them to the airport. All that the immigration and airport personnel would tell them was that they should be
thankful they were only being repatriated home. Immigration and airport authorities confiscated everything
that they had.
At home, appellant promised to return Corazon's money. Not having received the promised refund, Corazon
went to the CIS stationed at Camp Dangwa where, on 28 July 1992, she executed her sworn statement. 11
Avelina Velasco Samidan, a friend of Corazon and in whose house the latter would stay whenever she was in
Baguio, corroborated the testimony of Corazon that she gave to appellant the amount of P15,000.00, ten
thousand pesos of which amount Corazon borrowed from Avelina, and that some time in April 1991, Corazon
withdrew P25,000.00 from the bank which she likewise paid to appellant. 12
In Criminal Case No. 92-CR-1427 and Criminal Case No. 92-CR-1428
Arthur Juan, a 30-year-old farmer from Dumulpot, Tublay, Benguet, first met appellant in her house at
Buyagan, La Trinidad, Benguet, when he, together with Maxima Gomez, Tirso Gomez and Francisco
Labadchan, went to see appellant who was said to be recruiting workers for Korea. Juan promptly submitted
his bio-data form after being told that he could work in a factory in Korea at US$400.00 a month. Appellant
quoted a processing fee of P40,000.00. Juan initially paid the amount of P6,500.00 in April 1991. On 09
October 1991, the scheduled date of the flight, Juan went to the airport and gave appellant another
P15,000.00; the final balance of the fees were, by their agreement, to be remitted to appellant on a salary
deduction basis. Appellant then told Juan that he could not leave on that day (09 October 1991) because the
airplane was already full. Appellant took back Juan's passport, telling Juan that he should be able to depart in a
few days. Appellant, however, kept on rescheduling the flight for about five more times until it became clear
to Juan that he had been deceived. Juan paid out a total amount of P24,200.00, including the US$100.00 that
would have been his pocket money, to appellant. The latter executed receipts for the amounts.
Juan executed a sworn statement narrating the unfortunate incident. 13
In Criminal Case No. 93-CR-1652
Adeline Tiangge, a 43-year-old housekeeper from Bangao, Buguias, Benguet, learned that appellant was
recruiting workers for abroad. Adeline, accompanied by her sister, went to see appellant at her house in
Buyagan some time in December 1991. There were others, like her, who also went to see appellant. When she
produced the required identification pictures and P1,500.00 for passport processing, appellant told Adeline
that she could be a factory worker in Korea with a monthly salary of US$350.00. Appellant agreed to be paid
by Adeline the additional P35,000.00 balance by installment. The first installment of P17,000.00 was paid on
15 February 1992, evidenced by a receipt signed by "Antonine Saley," with the remaining P18,000.00 being
payable before getting on her flight for abroad.
Adeline waited in Baguio City for word on her departure. Adeline, together with some other applicants, thrice
went to appellant's office at the Shopper's Lane to check. She also went to Dimasalang, Manila, in front of the
Dangwa terminal, for a like purpose. Appellant informed her that she just had to wait for her flight. Adeline,
exasperated, finally demanded a refund of the amount she had paid but appellant merely gave her P100.00
for her fare back to
Benguet. 14
—0—
The sum of the evidence, infra., in Criminal Case No. 93-CR-1645 for illegal recruitment in large scale had been
submitted to likewise constitute the evidence to establish the People's case, respectively, in —
Criminal Case No. 93-CR-1644
Alfredo Arcega, a 42-year-old hotel employee from 16 Q.M. Subdivision, Baguio City, heard from a former co-
worker, Fidel Opdas, that appellant was recruiting workers for overseas employment. Interested, he, in the
company of his nephew, Peter Arcega, went to appellant's house in Buyagan, La Trinidad. There, he met job
applicants Dembert Leon, Mariano Damolog and Brando Salbino. Appellant assured the group that they could
get employed in Taiwan for a monthly salary of P12,000.00 to P15,000.00. She told them that the processing
and placement fees would amount to P40,000.00 each. Arcega and his companions agreed.
On 17 August 1992, Arcega paid appellant P10,000.00 in Dimasalang, Manila. Appellant issued a cash voucher
for the amount. She told Arcega to just wait "for the results." On 30 September 1992, appellant asked Arcega
for another P15,000.00 which amount he paid. With him at the time were his nephew Peter Arcega, as well as
Dembert Leon, Mariano Damolog, Lorenzo Belino and Brando Salbino. Appellant issued a receipt and affixed
thereon her signature. Appellant told Arcega that with the payment, his employment abroad was assured. She
stressed, however, that the balance of P15,000.00 should be paid before his departure for Taiwan. After
following up the matter with appellant in October 1992 and then in December 1992, he finally gave up. Arcega
went to the POEA office in Magsaysay Avenue, Baguio City, and when he learned that appellant had pending
cases for illegal recruitment, he also filed his own complaint and executed an affidavit before Atty. Justinian
Licnachan. 15
Criminal Case No. 93-CR-1646
Brando Salbino, a 36-year-old resident of East Quirino Hill, Baguio City, used to be a "forester" of the DENR. In
July 1992, he met appellant at her Buyagan residence after his brother-in-law, Fidel Opdas, had said that she
was recruiting workers for abroad. Appellant told him that she could help him get employed in Taiwan with a
P12,000.00 monthly salary. Salbino submitted various documents required by appellant. On 11 August 1992,
Salbino paid appellant the amount of P10,000.00 at her Dimasalang "temporary office" so that, according to
her, his travel papers could be processed. The payment was receipted. On 30 September 1992, he paid her
another P15,000.00, for which appellant again issued an acknowledgment receipt.
Appellant told Salbino to merely wait in Baguio City. When she failed to show up, he went to appellant's house
in Buyagan to verify. She was not there. The following week, he went to Manila with Fidel Opdas hoping to see
her. Appellant's where abouts could not be determined. Having failed to locate her, Salbino and his
companions went to the POEA office in Magsaysay, Baguio City. It was at the POEA office that they were to
learn that appellant was not in the list of licensed recruiters. He, along with the others, then executed an
affidavit-complaint before Atty. Licnachan. 16
Criminal Case No. 93-CR-1647
Mariano Damolog, a 33 year-old farmer from 26 P. Burgos Street, Baguio City, went to appellant's residence in
Buyagan in July 1992 when informed by Fidel Opdas, his co-worker at the MIDO Restaurant, that appellant
was recruiting workers for Taiwan. Appellant herself later told Damolog that she was licensed to recruit
workers. He forthwith applied for a position at a factory in Taiwan with a salary of between US$400.00 and
US$500.00 a month. He, after being required to pay a processing fee, paid the amount of P10,000.00 to
appellant at her Manila office. Appellant gave him a cash voucher. Damolog was then supposed to just wait in
Baguio City for a telegram.
When he did not receive word from appellant, Damolog went to Manila to see what had happened to his
application. Appellant was again told to simply stand by in Baguio City. After several days, Opdas, who had
meanwhile gone to Manila, told Damolog to see appellant in Manila. In Manila, appellant told Damolog to sign
a bio-data form for "screening purposes." Like Peter Arcega, Fred Arcega, Brando Salbino and Lorenzo Belino,
he was also asked to pay another P15,000.00. The group went back to Baguio City to raise the amount of
P15,000.00 each. On 30 September 1992, he, together with Fred and Peter Arcega, Brando Salbino and
Lorenzo Belino, returned to Manila. Damolog handed over his P15,000.00 to appellant who issued an
acknowledgment receipt, signed by "Annie Saley" which, according to appellant, was her name. Appellant
assured him that he would be among the first to go to Taiwan by December 1992.
December 1992 came but no word was received prompting Damolog and his companions to repair to
appellant's house in Buyagan. She was not home. Damolog proceeded to Manila where appellant told him to
wait a few more days. When still "nothing happened," Damolog and his companions went to the POEA office
where Atty. Licnachan issued a certification stating that appellant was not authorized to recruit workers.
Damolog and his companions filed a joint affidavit-complaint executed before Atty. Licnachan 17against
appellant.
Criminal Case No. 93-CR-1649
Lorenzo Belino, a 37-year-old farmer from Tawang, La Trinidad, Benguet, was in Manila in August 1992 looking
for employment. Fidel Opdas, a companion in his trip to Manila, mentioned that perhaps appellant could help.
Belino saw appellant who then told him about the prospect of getting employed in Taiwan. Appellant invited
him to see her on 20 September 1992 in Buyagan.
On the appointed date, Belino found Mariano Damolog, Fidel Opdas, Brando Salbino, Dembert Leon, Alfredo
Arcega and Peter Arcega already in appellant's residence in Buyagan. Appellant asked P10,000.00 from each of
them if they wanted her to be "responsible for representing" them to get themselves employed in Taiwan
with a monthly income of P15,000.00. When the group agreed, appellant made them fill up and sign a bio-
data form. Appellant also made them understand that they would each have to pay her the total amount of
P40,000.00, P10,000.00 of which was to be forthwith paid and the balance to be paid as and when everything
would have been arranged for their flight to Taiwan.
On 23 September 1992, Belino paid appellant the amount of P10,000.00 at her Dimasalang office. Appellant
issued a cash voucher therefor. Belino returned to Baguio City. Five days later, Belino went down to Manila
after appellant had sent word that he had to come to Manila. On 30 September 1992, Belino paid in Manila
the amount of P15,000.00 demanded by appellant. Appellant signed her name as "Annie Saley" on the receipt.
Appellant informed Belino that he should wait for her telephone call regarding the schedule of his flight. He
waited but when no calls came, Belino and Opdas decided to visit appellant in her house in Buyagan. Appellant
asked to be given until January to deploy them in Taiwan. February 1993 came, and still there was no news
from appellant. In March 1993, Belino and others, namely, Fidel Opdas, Brando Salbino, Dembert Leon and
Alfredo Arcega, 18 decided to file a complaint against appellant with the POEA in Magsaysay Avenue, Baguio
City, where their sworn statements were taken.
Criminal Case No. 93-CR-1651
Peter Arcega, a 27-year-old cashier from 317 Magsaysay Avenue, Baguio City, also paid the amount of
P10,000.00 to appellant for a promised job overseas. A cash voucher was signed by appellant to acknowledge
the payment. Peter, subsequently, also paid the amount of P15,000.00 to appellant for which the latter issued
a receipt signed by "Annie Saley." He was among those who signed the affidavit-complaint before the POEA.
Testifying in Criminal Case No. 93-CN-1645, 19 as a corroborative witness, Dembert Leon, a 25 year-old
unemployed from 52-F Tandang Sora Street, Baguio City, said that he, desiring to get an employment abroad,
likewise went to see appellant at her residence in Buyagan. Accompanied by Fidel Opdas, Leon was told by
appellant to complete the necessary papers, including his bio-data, barangay clearance, ID and NBI clearance.
Leon applied to be a factory worker in Taiwan. He was assured a monthly salary of P12,000.00, but first,
appellant told him, he should commit to pay a placement fee of P40,000.00 of which amount P10,000.00 had
to be paid forthwith. Leon paid and a cash voucher, dated 08 September 1992, was issued by appellant. On 30
September 1992, he paid appellant another P15,000.00 for which another acknowledgment receipt was
issued. The remaining P15,000.00 was agreed to be paid at the airport before his flight to Taiwan. No further
word came from appellant. Finally, in December 1992, when he and the others called her up, appellant
informed them to wait until January 1993. January came and still nothing happened. In March 1993, Leon and
the others went to the POEA office to lodge a complaint against appellant. 20
Jose B. Matias, an Attorney II at the POEA Regional Station Unit in Baguio City, received a request for
verification on whether or not appellant was a licensed recruiter. In response, he advised that appellant was
not authorized to recruit "in the City of Baguio and in the region" from 1989 "to the present." Atty. Matias
issued a certification to that effect.
—0—
The Case for the Defense. —
The defense posited the theory that appellant merely assisted the complainants in applying for overseas
employment with duly accredited travel agencies for and from which she derived a commission. 21
According to the 37-year-old appellant, she used to be the liaison officer of the Friendship Recruitment Agency
from 1983 to 1986. In that capacity, she would submit to the POEA "contracts for processing job orders for
applicants" and assist applicants prior to their departure at the airport. When the licensed agency closed in
1986, she went to Baguio where she engaged in the purchase and sale of vegetables and flowers. Even then,
however, she would not hesitate extending help to applicants for overseas employment by recommending
licensed agencies which could assist said applicants in going abroad. She named the Dynasty Travel and Tours
and the Mannings International as such licensed agencies. She had, in the process, been able to help workers,
like Cherry Pi-ay, Corazon del Rosario, Arthur Juan and Francisco Labadchan to name some, sent abroad. 22
Cherry Pi-ay was able to leave for Kuwait. In 1991, Cherry went to see her again, this time asking for assistance
in getting an employment in Korea. She accompanied Cherry to the Dynasty Travel and Tours in Manila that
enabled her to get a tourist visa to Korea. Appellant herself later gave Cherry her tourist visa. For
Cherry's visa and plane ticket, appellant received from Cherry P15,000.00 and US$250.00. Appellant issued a
receipt therefor and delivered the amounts to the Dynasty Travel and Tours which, in turn, issued her a
receipt. The CIS men who arrested her in Manila confiscated that receipt. In August 1991, Cherry came back
and asked her to look for another travel agency saying she did not like the work she had in Korea. 23
Norma Bao-idang, a former client of the Friendship Recruitment Agency, introduced Corazon del Rosario to
appellant. Since the agency had already been closed, appellant referred Corazon to Mannings International in
Kalaw Street, Ermita, Manila. Corazon was able to leave for Abu Dhabi where she worked as a domestic
helper. In 1991, Corazon again sought appellant's assistance in getting an employment in Korea. Appellant
introduced her to Dynasty Travel and Tours which, in turn, helped Corazon get a tourist visa for Korea. She did
ask for P15,000.00 and US$250.00 from Corazon but these amounts, being for Corazon's ticket and hotel
accommodation, were turned over to Dynasty Travel and Tours. She also knew that Corazon was able to leave
for Korea because she herself handed over to Corazon her tourist visa and ticket. Appellant received P2,000.00
from Dynasty Travel and Tours by way of commission. She was also issued a receipt by that travel agency
showing that she had turned over to it the amounts received from Corazon but the CIS men took the receipts
and other documents from her. When Corazon returned home in 1991 after going to Korea, she again sought
appellant's help in looking for a travel agency that could assist her in going back to that country. 24
Appellant came to know Arthur Juan through a vegetable vendor named Maxima Gomez. He asked her for
help in securing a tourist visa. Appellant was able to assist him and others, like Francisco Labadchan, Tirso
Gomez and Romeo Balao, by referring them to the Dynasty Travel and Tours. Appellant asked from them the
amounts of P15,000.00 and US$250.00 which she turned over to the travel agency. Again, she was issued a
receipt by that agency but that, too, was confiscated by the CIS agents who arrested her. Of the men who
sought her help in going abroad, seven "were able to leave." The others had been re-scheduled to leave but
they failed to arrive at the airport.
Labadchan and Juan met appellant during the first week of January 1993. She gave them back the plane ticket
and the amount of US$250.00 so that they could ask for a refund from the travel agency. The next time she
saw Labadchan was at the NBI office when NBI Director Limmayog invited her for questioning. Appellant tried
her best to look for a job for Labadchan but the transaction she had with Fast International failed to push
through. 25
Appellant helped Victoria Asil secure a tourist visa. The latter's sister was a former client at the Friendship
Recruitment Agency who was able to work in Saudi Arabia in 1985. She introduced Victoria to the Dynasty
Travel and Tours. Appellant asked Victoria to advance P15,000.00 and US$250.00 for her ticket and hotel
accommodation. Victoria gave appellant the amount, and the latter issued corresponding receipts. She turned
over the amount to the travel agency which, in turn, issued a receipt to appellant. The CIS, however,
confiscated all the documents in her attache case. 26 Appellant was able to process Victoria's visa for Korea but
when someone informed the latter that she could have a visa for Taiwan, Victoria opted to change her
destination. Appellant told Victoria that her visa and ticket for Korea had already been obtained but Victoria
insisted on a refund of her money. Appellant returned to her P15,000.00 that was supposed to be the amount
to be exchanged into dollars for her "show money." Victoria issued a receipt for the amount but appellant for possible amendment of the decision as the private complainants had already testified." It agreed with the
entrusted it to her former lawyer. Appellant handed over the plane ticket to Victoria. 27 prosecutor that "the affidavits of desistance only (had) the effect of satisfying the civil liability." 35

Mercedes Quimson (Kimson) introduced appellant to Adeline Tiangge. When Adeline said that she was The Judgment of the Trial Court. —
interested in securing a tourist visa for Korea, appellant took her to the Dynasty Travel and Tours. Appellant
asked from Adeline the amount of P17,000.00 for her plane ticket. Appellant was able to buy a plane ticket
On 03 March 1995, the trial court rendered its decision finding appellant guilty beyond reasonable doubt of
and to get a passport for Adeline. The latter, however, later said that she was no longer interested in going to
the crimes charged. It found implausible appellant's claim that she was merely an agent of Dynasty Travel and
Korea and that her passport application should, instead, be "diverted to Hongkong." In fact, Adeline was able
Tours and/or Maritess Tapia and Carol Cornelio. If what she claimed were true, said the court, appellant could
to leave for Hongkong. Adeline filed a case against appellant because when Adeline sought a refund from
have presented her principals; instead, that failure exposed her to the "adverse inference and legal
Dynasty Travel and Tours, the agency only gave her P5,000.00 or just a half of the P10,000.00 she wanted. 28
presumption that evidence suppressed would be adverse if produced." It also found "hard to believe," the
"self-serving" claim of appellant that her brief case, supposedly containing receipts of her remittances to the
Fidel Opdas was appellant's client at the Friendship Agency who was able to leave for Saudi Arabia. He asked travel agencies, was confiscated by the CIS and remained unaccounted for. The trial court concluded:
her if she could find a job for him in Taiwan. When appellant told him that she knew someone who could help,
Opdas brought along Mariano Damolog. Appellant introduced them to Marites Tapia and Carol Cornelio of
In fine, accused gave the distinct assurance, albeit false, that she had the ability to send
Dynasty Travel and Tours who told Opdas and Damolog to submit the necessary documents for their
the complainants abroad for work deployment, thereby employing false pretenses to
application for work in Taiwan. In May 1993, Opdas returned with Brando Salbino who also talked to Marites
defraud them. This was despite her knowing very well that she was not legally
and Carol. Opdas submitted to appellant the documents required by Marites and Carol. Appellant, in turn,
authorized. The complainants willingly parted with their money in the hope of overseas
gave the papers to Marites and Carol. When, later, Opdas went to see appellant, he brought along Dembert
employment deceitfully promised them by the accused. What makes matters worse is
Leon and Lorenzo Belino. Appellant requested Opdas to accompany the two to Marites and Carol with whom
that these amounts given to the accused come from hard-earned money, or worse,
they discussed what would be necessary "for their application for Taiwan. Still later when Opdas came back
could have been borrowed from money lenders who have no qualms about collecting
with Peter and Alfredo Arcega to see appellant, she again referred them to Marites and Carol. The job
usurious interest rates. Complainants who faithfully relied on the accused did not
applicants each gave appellant P10,000.00 which the latter turned over to Marites and Carol. The two gave
hesitate to painstakingly raise or even beg or borrow money just so they could give a
her receipts but these were in the same attache case that was seized by the CIS agents and never returned.
decent future to their families even to the extent of leaving them for far-off lands. But
The group subsequently withdrew their applications although it was only Opdas who received a P15,000.00
now, all their dreams are gone, their hopes shattered. Some may not have even been
refund. 29
able to pay back what they borrowed nor recoup their losses. Now, more than ever,
their future appears bleaker. But this time, a glimmering light appears at the end of the
In a bid to prove that CIS agents indeed took away her attache case containing documents that could bail her tunnel as the Court steps in to lay down the iron fist of the law so as to serve the
out of the charges, appellant presented Danilo A. Deladia, one of the three policemen who arrested her. accused a lesson, a bitter one, with the hope that those who are trekking or those who
Equipped with a warrant of arrest issued by Judge Luis Dictado of Branch 8, the policemen went to the house are about to trek the same pilfered path that the accused took will reconsider their
of appellant's cousin at 2320-B San Antonio, Sampaloc, Manila at 3:00 p.m. of 25 August 1993. According to pursuits before it would be too late, and in the end, this form of fraud which invariably
Deladia, however, they did not get anything from appellant because their mission was only to arrest her. At victimizes the poor will forever be stopped. 36
the counter intelligence branch of the CIS, he did not even hear appellant requesting for the return of a brief
case. 30 Apparently because of what had turned out to be Deladia's adverse testimony, the defense presented
All given, the trial court then decreed as follows:
George Santiago who claimed to be at the boarding house when appellant was arrested. Santiago said that he
had allowed the CIS agents to enter the boarding house. Santiago did not see what might have happened in
appellant's room but what he did see was that when the agents all came out, they had with them an attache WHEREFORE, in all the above-mentioned cases, the Court finds accused Antonine B.
case. Santiago, accompanied by his cousin Atty. Lomboan, went to the CIS in Camp Crame where one of the Saley, also known as Annie B. Saley, GUILTY beyond reasonable doubt of the
men asked P50,000.00 for the release of appellant. Santiago did not see any brief case in the office but one of corresponding crime as charged in the informations and hereby sentences her in each
the men told them that they would "produce" appellant and the attache case if they could "produce" the case, except in Criminal Case NO. 93-CR-1645 where an indeterminate sentence is not
amount of P50,000.00. 31 applicable, to suffer an indeterminate sentence for the duration hereunder given, and to
pay the costs, as well as the damages due the private complainants, to wit:
On cross-examination, however, Santiago admitted that the P50,000.00 was meant for "bonding purposes"
and that they did not make a formal request for the release of the brief case. 32 Criminal Case No. 92-CR-1396

The defense next attempted to shift, albeit unsuccessfully, the responsibility for the crime from appellant to Imprisonment from Four (4) Years as MINIMUM to Six (6) Years as
Maritess and Carol. Presented at the witness stand was Oscar Gaoyen, a 30-year-old farmer, who testified that MAXIMUM and to pay Francisco T. Labadchan P45,000.00 for
appellant had failed to assist him in going to Korea to work "because it was difficult." While following up his actual damages, plus costs.
application in Manila, he met Marites and Carol in front of the Dangwa station in Dimasalang and he was told
that they knew someone who could "transfer his application to Taiwan." He said that even after he had paid Criminal Case No. 92-CR-1397
appellant P50,000.00, nothing happened constraining him to file charges against her. Appellant returned
P15,000.00 of the money to him. 33
Imprisonment from Three (3) Years, Six (6) Months and Twenty-
One (21) Days ofprision correccional as MINIMUM to Seven (7)
Appellant filed, before the trial court could promulgate its decision, a "Motion to Reopen Trial" with an urgent Years, Four (4) Months and One (1) Day of prision mayor as
motion to defer promulgation on the ground of newly discovered evidence. 34 In its order of 03 March 1995, MAXIMUM and to pay Francisco T. Labadchan P45,000.00 for
the trial court, noting that the "newly discovered evidence" consisted of affidavits of desistance of seven actual damages, plus costs.
complainants, found no merit in the motion. It held that "presentation of the same does not give valid ground
Criminal Case No. 92-CR-1413
Imprisonment from Four (4) Years as MINIMUM to Six (6) Years as
MAXIMUM and to pay Cherry Pi-ay P20,000.00 for moral
damages, plus costs.
Criminal Case No. 92-CR-1414
Imprisonment from One (1) Year, Eight (8) Months and Twenty-
One (21) Days ofprision correccional as MINIMUM to Five (5)
Years, Five (5) Months and Eleven (11) Days of prision
correccional as MAXIMUM and to pay Victoria As-il P15,000.00
for actual damages, plus costs.
Criminal Case No. 92-CR-1415
Imprisonment from One (1) Year, Eight (8) Months and Twenty-
One (21) Days ofprision correccional as MINIMUM to Five (5)
Years, Five (5) Months and Eleven (11) Days of prision
correccional as MAXIMUM and to pay Cherry Pi-ay P20,000.00 for
moral damages, plus costs.
Years, Five (5) Months and Eleven (11) Days of prision
correccional as MAXIMUM and to pay the costs.
Criminal Case No. 93-CR-1644
Imprisonment from One (1) Year, Eight (8) Months and Twenty-
One (21) Days ofprision correccional as MINIMUM to Five (5)
Years, Five (5) Months and Eleven (11) Days of prision
correccional as MAXIMUM and to pay Alfredo C. Arcega
P25,000.00 for actual damages, plus costs.
Criminal Case No. 93-CR-1645
To suffer the penalty of life imprisonment and to pay a fine of One
Hundred Thousand Pesos (P100,000.00), with subsidiary
imprisonment in case of insolvency, and to pay the costs. She shall
also pay Twenty-Five Thousand Pesos (P25,000.00) each to Peter
Arcega, Lorenzo Belino, Mariano Damolog, Brando Salbino,
Dembert Leon and Alfredo Arcega for actual damages, plus costs.
Criminal Case No. 93-CR-1646

Criminal Case No. 92-CR-1416 Imprisonment from One (1) Year, Eight (8) Months and Twenty-
One (21) Days ofprision correccional as MINIMUM to Five (5)
Years, Five (5) Months and Eleven (11) Days of prision
Imprisonment from Four (4) Years as MINIMUM to Six (6) Years as
correccional as MAXIMUM and to pay Brando B. Salbino
MAXIMUM and to pay Victoria As-il P15,000.00 for actual
P25,000.00 for actual damages, plus costs.
damages, plus costs.

Criminal Case No. 93-CR-1647

Criminal Case No. 92-CR-1425

Imprisonment from One (1) Year, Eight (8) Months and Twenty-
Imprisonment from Four (4) Years as MINIMUM to Six (6) Years as
One (21) Days ofprision correccional as MINIMUM to Five (5)
MAXIMUM and to pay Corazon del Rosario P20,000.00 for moral
Years, Five (5) Months and Eleven (11) Days of prision
damages, plus costs.
correccional as MAXIMUM and to pay Mariano Damolog
P25,000.00 for actual damages, plus costs.
Criminal Case No. 92-CR-1426
Criminal Case No. 93-CR-1649
Imprisonment from One (1) Year, Seven (7) Months and Eleven
(11) Days of prision correccional as MINIMUM to Six (6) Years,
Imprisonment from One (1) Year, Eight (8) Months and Twenty-
Five (5) Months and Eleven (11) Days ofprision mayor as
One (21) Days ofprision correccional as MINIMUM to Five (5)
MAXIMUM and to pay Corazon del Rosario P20,000.00 for moral
Years, Five (5) Months and Eleven (11) Days of prision
damages, plus costs.
correccional as MAXIMUM and to pay Lorenzo Belino P25,000.00
for actual damages, plus costs.
Criminal Case No. 92-CR-1427
Criminal Case No. 93-CR-1651
Imprisonment from Four (4) Years as MINIMUM to Six (6) Years as
MAXIMUM and to pay the costs.
Imprisonment from One (1) Year, Eight (8) Months and Twenty-
One (21) Days ofprision correccional as MINIMUM to Five (5)
Criminal Case No. 92-CR-1428 Years, Five (5) Months and Eleven (11) Days of prision
correccional as MAXIMUM and to pay Peter Arcega P25,000.00
Imprisonment from One (1) Year, Eight (8) Months and Twenty- for actual damages, plus costs.
One (21) Days ofprision correccional as MINIMUM to Five (5)
Criminal Case No. 93-CR-1652
 Imprisonment from One (1) Year, Eight (8) Months and Twenty-
One (21) Days ofprision correccional as MINIMUM to Five (5)
Years, Five (5) Months and Eleven (11) Days of prision
correccional as MAXIMUM and to pay Adeline Tiangge y Marcos
P17,000.00 for actual damages, plus costs.
With respect to accused Conchita Tagle in Criminal Cases Nos. 92-CR-1396 and 92-CR-
1397, let these cases be sent to the files without prejudice to their revival as soon as she
shall have been arrested and brought to the jurisdiction of this Court.
In order that Conchita Tagle may not escape the clutches of the law, let Alias Warrants
of Arrest issue addressed to the PNP Chief of Police, La Trinidad, Benguet and the
National Bureau of Investigation (NBI) in Manila and in Baguio City. Further, the
Commission of Immigration and Deportation (CID), Manila is ordered to include her
name in the its Hold-Departure List.
SO ORDERED. 37
Appellant filed a motion for reconsideration of the decision asserting that the trial court had erred in giving
credence to the testimonies of the complaining witnesses and in finding her guilty of the crimes charged
despite the "failure" of the prosecution to fully establish the elements of the crimes beyond reasonable
doubt. 38 Finding no merit in the motion, the trial court, on 03 April 1995, denied a reconsideration of its
decision. 39 The following day, appellant filed a notice of appeal. 40 The trial court gave due course to the
appeal on 17 April 1995. 41
The Instant Appeal. —
Appellant continues to profess before this Court her innocence of the accusation. She reiterates her assertion
that the trial court has erred in giving credence to the testimonies of the complaining witnesses and in finding
her guilty beyond reasonable doubt of the various offenses she has been charged with by the
prosecution. 42 She avers that her transactions with the complainants have been "limited to her assisting them
secure their respective travel visa specifically for tourist" and that "her assistance to them (has been) only to
refer them to travel agencies" such as the Dynasty Travel and Tours and the Mannings International. She
insists that she has remitted the amounts solicited from the complainants to the travel agencies, or to
Maritess Tapia and Carol Cornelio, earning only the commissions "for bringing in clients interested in getting
tourist visas." 43
At the outset, it might be explained that this appeal involves the conviction of appellant not only for the crime
of illegal recruitment in large scale for which the penalty of life imprisonment is imposed but also for other
offenses for which lesser penalties have been meted by the trial court upon appellant. This Court has appellate
jurisdiction over ordinary appeals in criminal cases directly from the Regional Trial Courts when the penalty
imposed is reclusion perpetua or
higher. 44 The Rules of Court, allows, however, the appeal of criminal cases involving penalties lower
than reclusion perpetua or life imprisonment under the circumstances stated in Section 3, Rule 122, of the
Revised Rules of Criminal Procedure. Thus —
(c) The appeal to the Supreme Court in cases where the penalty imposed is life
imprisonment, or where a lesser penalty is imposed but involving offenses committed
on the same occasion or arising out of the same occurrence that gave rise to the more
serious offense for which the penalty of death or life imprisonment is imposed shall be
by filing a notice of appeal in accordance with paragraph (a) of this Section.
In giving due course to the notice of appeal filed by appellant, the trial court has directed that the
"entire records of the seventeen cases" should be forwarded to this Court. 45 It might be observed
that this appeal, which has been assigned only one docket number, involves cases, although
spawned under different circumstances could be said to somehow be linked to the incident giving
rise to the case for illegal recruitment in large scale. The cases have thus been correctly
consolidated and heard jointly below. The appeal made directly to this Court of the seventeen
cases, each of which incidentally should have been assigned a separate docket number in this
Court, is properly taken.
Art. 38 (a) of the Labor Code considers illegal any recruitment activity "undertaken by non-licensees or non-
holders of authority." Recruitment is defined by Article 13, paragraph (b), of the same Code as referring —
. . . to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not; Provided, That any person or
entity which, in any manner, offers or promises for a fee employment to two or more
persons shall be deemed engaged in recruitment and placement.
Illegal recruitment is committed when two elements concur:
1) That the offender has no valid license or
authority required by law to enable one to
lawfully engage in recruitment and
placement of workers; and
2) That the offender undertakes either any
activity within the meaning of recruitment
and placement defined under Article 13(b),
or any prohibited practices enumerated
under Article 34.  46
Any person who commits the prohibited acts enumerated in Article 13(b) of the Labor Code shall
be liable under Article 38(a) thereof. 47 The proviso in Article 13(b) "lays down a rule of evidence
that where a fee is collected in consideration of a promise or offer of employment to two or more
prospective workers, the individual or entity dealing with them shall be deemed to be engaged in
the act of recruitment and placement." 48 The article also provides that recruitment includes the act
of referral or "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." 49
The Court agrees with the trial court that appellant, indeed, violated the law against illegal recruitment.
The prosecution was able to prove by overwhelming evidence that appellant did represent herself as being in
a position to get for the aspiring overseas contract workers good-paying jobs abroad. Appellant was thus able
to demand and receive various amounts from the applicants. The latter would then be briefed by appellant on
the requirements for employment overseas. Appellant herself testified, thus:
Q From 1986 when separated from Friendship Recruitment
Agency and before you were put to jail did you have any
occupation?
A Yes, sometimes we brought vegetables and flowers to Manila
for resale.
Q Aside from buying and selling vegetables down in Manila did
you have any other source of income?
 A Sometimes I helped some applicants who are interested to go
abroad and asked if I know some agencies who can assist them to
go abroad.
Q Were you able to assist some people to look for an agency to
assist them to go abroad?
A Yes, sir.
Q Were you being paid when you assist these people applying for
overseas employment?
A Yes, sir.
Q By whom?
A The travel agencies give me some amount of commission.
Q What are the names of these agencies which you know?
A Dynasty Travel and Tours and Mannings International.
x x x           x x x          x x x
Q Do you know also if this Dynasty Travel and Tours and Mannings
International is duly licensed by the government to recruit
applicants abroad?
A Yes, sir.
Q Do you have any document to prove that it is registered?
A Yes, sir.
Q Where is that?
A Mannings International is a licensed agency and Dynasty Travel
and Tours is licensed to issue tickets for applicants to go abroad.
Q You said that Dynasty Travel and Tours is licensed to issue
tickets for applicants going abroad what do you mean by
applicants going abroad?
A Those applicants to work as a contract worker and who are
ready to leave for abroad and they are being issued tickets.
Q Were you actually able to help or assist some overseas worker-
applicants?
A Yes, sir.
Q Do you remember some of them?
A Cherry Piay, Corazon del Rosario, Arthur Juan, Francisco
Labadchan and others." (Emphasis supplied.) 50
Appellant at one point claimed that she had helped complainants only in acquiring for them plane
tickets and tourist visas. On cross-examination, however, she admitted that she had made referrals
of job applicants to recruitment agencies. 51 She evidently knew all along that the persons she was
dealing with were applicants for employment abroad.
The law requires that the above activities of appellant should have first been authorized by the POEA. 52Rule II,
Book II, of the POEA Rules and Regulations Governing Overseas Employment provides:
Sec. 11. Appointment of Representatives. — Every appointment of representatives or
agents of licensed agency shall be subject to prior approval or authority of the
Administration.
The approval may be issued upon submission of or compliance with the following
requirements:
a. Proposed appointment or special power
of attorney;
b. Clearances of the proposed
representative or agent from NBI;
c. A sworn or verified statement by the
designating or appointing person or
company assuming full responsibility for all
acts of the agent or representative done in
connection with the recruitment and
placement of workers.
Approval by the Administration of the appointment or designation does not authorize
the agent or representative to establish a branch or extension office of the licensed
agency represented.
Any revocation or amendment in the appointment should be communicated to the
Administration. Otherwise, the designation or appointment shall be deemed as not
revoked or amended.
The claim that appellant did not categorically represent herself as a licensed recruiter, or that she merely
helped the complainants secure "tourist visas," could not make her less guilty of illegal recruitment, 53 it being
enough that he or she gave the impression of having had the authority to recruit workers for deployment
abroad. 54
The fact that, with the exception of the cases involving Cherry Pi-ay and Corazon del Rosario, only the
complainant in each of the cases, have testified against appellant in the illegal recruitment cases does not
thereby make the case for the prosecution weak. The rule has always been that the testimony of witnesses is
to be weighed, not that the witnesses be numbered, and it is not an uncommon experience to have a
conclusion of guilt reached on the basis of the testimony of a single witness. 55 Corroborative evidence is
necessary only when there are reasons to warrant the suspicion that the witness has perjured himself or that
his observations have veered from the truth. 56
The absence of receipts to evidence payment to an indictee in a criminal case for illegal recruitment does not
warrant an acquittal of the accused, and it is not necessarily fatal to the prosecution's cause. As long as the
prosecution is able to establish through credible testimonial evidence that the accused has involved himself in
an act of illegal recruitment, a conviction for the offense can very well be justified. 57
Altogether, the evidence against appellant has established beyond any discernible shadow of doubt that
appellant is indeed guilty of illegal recruitment on various counts. Being neither a licensee nor a holder of
authority to recruit, appellant must suffer under Article 39(c) of the Labor Code the penalty of imprisonment
of not less than four years nor more than eight years or a fine of not less than P20,000.00 nor more than
P100,000.00 or both such imprisonment and fine, at the discretion of the court. In imposing the penalty, the
provisions of the Revised Penal Code on the application of the circumstances that could modify the criminal
liability of an accused cannot be considered, these provisions being inapplicable to special laws. 58
Under the Indeterminate Sentence Law, 59 whenever the offense is punishable by a special law, the court shall
impose on the accused an indeterminate sentence, "the maximum term of which shall not exceed the
maximum fixed by said law and the minimum shall not be less than the minimum term prescribed by the
same." 60 Accordingly, in imposing the penalty of four (4) years to six (6) years on appellant for each of the five
cases of illegal recruitment, the trial court has acted correctly.
Illegal recruitment is committed in large scale if it is perpetrated against three or more persons "individually or
as a group." Its requisites are that: (1) the person charged with the crime must have undertaken recruitment
activities as so defined by law, (2) the same person does not have a license or authority to do that, and (3) the
questioned act is committed against three or more persons. 61 The prosecution has been able to successfully
show that, for a fee, appellant, not being authorized to recruit workers for abroad, did so in Criminal Case No.
93-CR-1645 against seven complainants. For this offense, Article 39(a) of the Labor Code imposes the penalty
of life imprisonment and a fine of one hundred thousand pesos (P100,000.00). This penalty was thus likewise
aptly meted out upon appellant by the trial court.
Conviction for these various offenses under the Labor Code does not bar the punishment of the offender for
estafa. Illegal recruitment is a malum prohibitum offense where criminal intent of the accused is not necessary
for conviction while estafa is malum in se which requires criminal intent to warrant conviction. 62Under Article
315, paragraph 2(a), 63 of the Revised Penal Code, the elements of the offense (estafa) are that (1) the accused
has defrauded another by abuse of confidence or by means of deceit and (2) damage or prejudice capable of
pecuniary estimation is caused to the offended party or third person. 64 Clearly, these elements have
sufficiently been shown in the cases under review.
The penalty for the crime is prescribed by Article 315, first to fourth paragraphs, of the Revised Penal Code as
follows:
1st. The penalty of prision correccional in its maximum period to prision mayor in its
minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed
22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year for each additional
10,000 pesos; but the total penalty which may be imposed shall not exceed twenty
years. In such cases, and in connection with the accessory penalties which may be
imposed and for the purpose of the other provisions of this Code, the penalty shall be
termed prision mayor or reclusion temporal, as the case may be.
2nd. The penalty of prision correccional in its minimum and medium periods, if the
amount of the fraud is over 6,000 pesos but does not exceed 12,000 pesos;
3rd. The penalty of arresto mayor in its maximum period to prision correccional in its
minimum period if such amount is over 200 pesos but does not exceed 6,000 pesos; and
4th. By arresto mayor in its maximum period, if such amount does not exceed 200
pesos, provided that in the four cases mentioned, the fraud be committed by any of the
following means: . . . .
In the case of People vs. Gabres, 65 the Court has had occasion to so state that —
Under the Indeterminate Sentence Law, the maximum term of the penalty shall be "that
which, in view of the attending circumstances, could be properly imposed" under the
Revised Penal Code, and the minimum shall be "within the range of the penalty next
lower to that prescribed" for the offense. The penalty next lower should be based on
the penalty prescribed by the Code for the offense, without first considering any
modifying circumstance attendant to the commission of the crime. The determination of
the minimum penalty is left by law to the sound discretion of the court and it can be
anywhere within the range of the penalty next lower without any reference to the
periods into which it might be subdivided. The modifying circumstances are considered
only in the imposition of the maximum term of the indeterminate sentence.
The fact that the amounts involved in the instant case exceed P22,000.00 should not be
considered in the initial determination of the indeterminate penalty; instead, the matter
should be so taken as analogous to modifying circumstances in the imposition of the
maximum term of the full indeterminate sentence. This interpretation of the law
accords with the rule that penal laws should be construed in favor of the accused. Since
the penalty prescribed by law for the estafa charge against accused-appellant is prision
correccional maximum to prision mayorminimum, the penalty next lower would then
be prision correccional minimum to medium. Thus, the minimum term of the
indeterminate sentence should be anywhere within six (6) months and one (1) day to
four (4) years and two (2) months . . . . 66
The Court reiterates the above rule, however, in fixing the maximum term, the prescribed penalty
ofprision correccional maximum period to prision mayor minimum period should be divided into
"three equal portions of time," each of which portion shall be deemed to form one period; hence
—
Minimum Period Medium Period Maximum Period
From 4 years, 2 months From 5 years, 5 months From 6 years, 8 months
and 1 day to 5 years, and 11 days to 6 years, and 21 days to 8 years
5 months and 10 days 8 months and 20 days —
in consonance with Article 65, 67 in relation to Article 64, 68 of the Revised Penal Code.
When the amount involved in the offense exceeds P22,000.00, the penalty prescribed in Article 315 of the
Code "shall be imposed in its maximum period," adding one year for each additional P10,000.00 although the
total penalty which may be imposed shall not exceed 20 years. The maximum penalty should then be termed
as prision mayor or reclusion temporal as the case may be. In fine, the one year period, whenever applicable,
shall be added to the maximum period of the principal penalty of anywhere from 6 years, 8 months and 21
days to 8 years.
Accordingly, with respect to the cases of estafa filed by the complainants who individually charged appellant
with illegal recruitment, the applicable penalties would, respectively, be, as follows:
In Criminal Case No. 92-CR-1397 where appellant defrauded Francisco T. Labadchan in the amount of WHEREFORE, the Decision finding appellant guilty beyond reasonable doubt of the crimes of illegal
P45,000.00, two years for the additional amount of P23,000.00 in excess of P22,000.00 provided for in Article recruitment, illegal recruitment in large scale and estafa is hereby AFFIRMED subject to the modifications
315 shall be added to the maximum period of the prescribed penalty of prision correccional maximum hereunder specified, and only to the extent thereof, in the following cases:
toprision mayor minimum (or added to anywhere from 6 years, 8 months and 21 days to 8 years). As such,
aside from paying Labadchan the amount of P45,000.00 by way of actual damages, the Court deems it proper
1) In Criminal Case No. 92-CR-1397, accused-appellant is sentenced to an indeterminate penalty of
to sentence appellant to the indeterminate penalty of three (3) years, six (6) months and twenty-one (21) days
imprisonment of from three (3) years, six (6) months and twenty-one (21) days of prision correccionalmedium
of prision correccional medium to eight (8) years, eight (8) months and twenty-one (21) days ofprision
period as MINIMUM, to eight (8) years, eight (8) months and twenty-one (21) days of prision mayormedium
mayor medium.
period as MAXIMUM and to pay Francisco T. Labadchan the amount of P45,000.00 by way of actual damages.

In Criminal Case No. 92-CR-1414, appellant defrauded Victoria Asil in the amount of P15,000.00. Hence, aside
2) In Criminal Case No. 92-CR-1414, accused-appellant is sentenced to an indeterminate penalty of from one
from paying Victoria Asil the amount of P15,000.00 by way of actual damages, appellant shall also suffer the
(1) year, eight (8) months and twenty-one (21) days of prision correccional minimum period as MINIMUM, to
indeterminate penalty of one (1) year, eight (8) months and twenty-one (21) days of prision
five (5) years, five (5) months and eleven (11) days of prision correccional maximum period as MAXIMUM and
correccional medium to five (5) years, five (5) months and eleven (11) days of prision correccionalmaximum.
to pay Victoria Asil the amount of P15,000.00 by way of actual damages.

In Criminal Case No. 92-CR-1415 where appellant defrauded Cherry Pi-ay in the amount of P18,000.00,
3) In Criminal Case No. 92-CR-1415, accused-appellant is sentenced to an indeterminate penalty of from one
appellant, besides paying Cherry Pi-ay that amount by way of actual damages, shall also suffer the
(1) year, eight (8) months and twenty-one (21) days of prision correccional minimum period as MINIMUM, to
indeterminate penalty of one (1) year, eight (8) months and twenty-one (21) days of prision
five (5) years, five (5) months and eleven (11) days of prision correccional maximum period as MAXIMUM.
correccionalminimum to five (5) years, five (5) months and eleven (11) days of prision correccional maximum.

4) In Criminal Case No. 92-CR-1426, accused-appellant is sentenced to an indeterminate penalty of

In Criminal Case No. 92-CR-1426 where appellant defrauded Corazon del Rosario in the amount of P40,000.00,
imprisonment of from two (2) years, four (4) months and one (1) day of prision correccional medium period as
appellant shall suffer the indeterminate penalty of two (2) years, four (4) months and one (1) day of prision
MINIMUM, to seven (7) years, eight (8) months and twenty-one (21) days of prision mayor minimum period as
correccional medium to seven (7) years, eight (8) months and twenty-one (21) days of prision
MAXIMUM.
mayor minimum.

In Criminal Case No. 92-CR-1428 where appellant fraudulently solicited the amount of P24,200.00 from Arthur
Juan, appellant shall pay him actual damages in that amount and shall suffer the indeterminate penalty of
from one (1) year, eight (8) months and twenty-one (21) days (imposed by the court a quo) of prision
correccional minimum period to six (6) years, eight (8) months and twenty-one (21) days of prision
mayor minimum.
In Criminal Case No. 92-CR-1652 where appellant defrauded Adeline Tiangge the amount of P18,500.00,
appellant shall pay her the same amount as actual damages and shall suffer the indeterminate penalty of from
one (1) year, eight (8) months and twenty-one (21) days of prision correccional minimum to five (5) years, five
(5) months and eleven (11) days of prision correccional maximum.
In Criminal Case No. 93-CR-1645, the prosecution has successfully established its case against appellant for
illegal recruitment in large scale. Evidently banking on her reputation in the community as a job recruiter,
appellant was able to make the seven complainants believe that they could land various jobs in Taiwan.
Confident of her assurances, each complainant parted with P25,000.00 for supposed processing and
placement fees.
It would appear that of the seven complainants for illegal recruitment in large scale, only five 69 of them filed
separate charges of estafa against appellant. Accordingly, appellant was only and could only be held liable for
five counts of estafa arising from the charge of illegal recruitment in large scale. Since appellant collected the
amount of P25,000.00 from each of the five (5) victims, she must be held subject to the penalty in its
maximum period or prision mayor in its minimum period (not any higher on account of the fact that the
amount in excess of P22,000.00 provided for by Article 315 of the Revised Penal Code is less than
P10,000.00). 70 Applying the Indeterminate Sentence Law, and there being no attending circumstances,
appellant shall bear, the indeterminate penalty of one (1) year, eight (8) months and twenty-one (21) days
ofprision correccional medium as minimum penalty to six (6) years, eight (8) months and twenty-one (21) days
of prision mayor minimum as maximum penalty for each offense. In addition, appellant should pay the five (5)
victims the amount of P25,000.00 each as actual damages.
5) In Criminal Case No. 92-CR-1428, accused-appellant is sentenced to an indeterminate penalty of from one
(1) year, eight (8) months and twenty-one (21) days of prision correccional minimum period as MINIMUM, to
six (6) years, eight (8) months and twenty-one (21) days of prision mayor minimum period as MAXIMUM.
6) In Criminal Case No. 93-CR-1644, accused-appellant is sentenced to an indeterminate penalty of from one
(1) year, eight (8) months and twenty-one (21) days of prision correccional minimum period as MINIMUM, to
six (6) years, eight (8) months and twenty-one (21) days of prision mayor minimum period as MAXIMUM and
to pay Alfredo Arcega the amount of P25,000.00 by way of actual damages.
7) In Criminal Case No. 93-CR-1646, accused-appellant is sentenced to an indeterminate penalty of from one
(1) year, eight (8) months and twenty-one (21) days of prision correccional minimum period as MINIMUM, to
six (6) years, eight (8) months and twenty-one (21) days of prision mayor minimum period as MAXIMUM and
to pay Brando Salbino the amount of P25,000.00 by way of actual damages.
8) In Criminal Case No. 93-CR-1647, accused-appellant is sentenced to an indeterminate penalty of from one
(1) year, eight (8) months and twenty-one (21) days of prision correccional minimum period as MINIMUM, to
six (6) years, eight (8) months and twenty-one (21) days of prision mayor minimum period as MAXIMUM and
to pay Mariano Damolog the amount of P25,000.00 by way of actual damages.
9) In Criminal Case No. 93-CR-1649, accused-appellant is sentenced to an indeterminate penalty of from one
(1) year, eight (8) months and twenty-one (21) days of prision correccional minimum period as MINIMUM, to
six (6) years, eight (8) months and twenty-one (21) days of prision mayor minimum period as MAXIMUM and
to pay Lorenzo Belino the amount of P25,000.00 by way of actual damages.
10) In Criminal Case No. 93-CR-1651, accused-appellant is sentenced to an indeterminate penalty of from one
(1) year, eight (8) months and twenty-one (21) days of prision correccional minimum period as MINIMUM, to
six (6) years, eight (8) months and twenty-one (21) days of prision mayor minimum period as MAXIMUM and
to pay Peter Arcega the amount of P25,000.00 by way of actual damages.

The actual damages awarded here shall be subject to diminution or cancellation should it be shown that 11) In Criminal Case No. 92-CR-1652, accused-appellant is sentenced to an indeterminate penalty of from one
appellant had already paid the complainants. (1) year, eight (8) months and twenty-one (21) days of prision correccional minimum period as MINIMUM, to
five (5) years, five (5) months and eleven (11) days of prision correccional maximum period as MAXIMUM and
to pay Adeline Tiangge the amount of P17,000.00 by way of actual damages.

The awards of damages in Criminal Cases No. 92-CR-1396, No. 92-CR-1413, No. 92-CR-1416, No. 92-CR-1425,
and No. 92-CR-1427, all for illegal recruitment, as well as No. 93-CR-1645 for illegal recruitment in large scale,
except for the award of P25,000.00 by way of actual damages to Dember Leon (no estafa case having been
instituted), are DELETED, either because similar awards have already been provided for by the trial court, or
for insufficiency of proof, in the estafa cases aforenumbered.

Costs against accused-appellant.

SO ORDERED.
G.R. No. 113161 August 29, 1995
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, 
vs.
LOMA GOCE y OLALIA, DAN GOCE and NELLY D. AGUSTIN, accused. NELLY D. AGUSTIN, accused-appellant.
Labor Law; Criminal Law; Illegal Recruitment; Circumstances that qualify illegal recruitment as an
offense involving economic sabotage.—Herein appellant is accused of violating Articles 38 and 39 of the Labor
Code. Article 38 of the Labor Code, as amended by Presidential Decree No. 2018, provides that any
recruitment activity, including the prohibited practices enumerated in Article 34 of said Code, undertaken by
non-licensees or non-holders of authority shall be deemed illegal and punishable under Article 39 thereof. The
same article further provides that illegal recruitment shall be considered an offense involving economic
sabotage if any of these qualifying circumstances exist, namely, (a) when illegal recruitment is committed by a
syndicate, i.e., if it is carried out by a group of three or more persons conspiring and/or confederating with
one another; or (b) when illegal recruitment is committed in large scale, i.e., if it is committed against three or
more persons individually or as a group.
Same; Same; Same; Words and Phrases; “Recruitment and Placement” and “Referral,” Defined.—
Under said Code, recruitment and placement refer to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not; provided, that any person or entity
which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed
engaged in recruitment and placement. 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.
Same; Same; Same; An employee who actually makes referrals to the agency of which she is a part is
engaged in recruitment activity.—Hence, the inevitable query is whether or not appellant Agustin merely
introduced complainants to the Goce couple or her actions went beyond that. The testimonial evidence
hereon show that
_______________
*
 SECOND DIVISION.
781
VOL. 247, AUGUST 29, 1995 781
People vs. Goce
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.
Same; Same; Same; There is illegal recruitment when one gives the impression of having the ability to
send a worker abroad.—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.
Same; Same; Same; The 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.—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. In fact,
appellant demanded and received from complainants amounts beyond the allowable limit of P5,000.00 under
government regulations. It is true that the mere act of a cashier in receiving money far exceeding the amount
allowed by law was not considered per se as “recruitment and placement” in contemplation of law, but that
was because the recipient had no other participation in the transactions and did not conspire with her co-
accused in defrauding the victims. That is not the case here.
Same; Same; Same; Evidence; Documentary Evidence; Xerox Copies; Where original copies of the
receipts/vouchers were lost, xerox copies thereof may be presented and admitted.—Apparently, the original
copies of said receipts/vouchers were lost, hence only xerox copies thereof were presented and which, under
the circumstances, were admissible in evidence. When the original writing has been lost or destroyed or
cannot be produced in court, upon proof of its execution and loss or destruction, or unavailability, its contents
may be proved by a copy or a recital of its contents in some authentic document, or by the recollection of
witnesses.
Same; Same; Same; Same; Same; Witnesses; Even in the absence of receipts, the testimonies of
complainants that the accused was involved in recruitment may suffice to establish the factum probandum .—
Even assuming arguendo that the xerox copies presented by the prosecution as secondary evidence are not
allowable in court, still the absence thereof does not warrant the acquittal of appellant. In People vs. Comia,
where this particular issue was involved, the Court held that the complainants’ failure to ask for receipts for
the fees they paid to the accused therein, as well as their consequent failure to present receipts before the
trial court as proof of the said payments, is not fatal to their case. The complainants duly proved by their
respective testimonies that said accused was involved in the entire recruitment process. Their testimonies in
this regard, being clear and positive, were declared sufficient to establish that factum probandum.
Same; Same; Same; Same; Same; Same; Denials; The positive and affirmative statements of the
prosecution witnesses is more worthy of credit than the mere uncorroborated and self-serving denials of the
accused.—Indeed, the trial court was justified and correct in accepting the version of the prosecution
witnesses, their statements being positive and affirmative in nature. This is more worthy of credit than the
mere uncorroborated and self-serving denials of appellant. The lame defense consisting of such bare denials
by appellant cannot overcome the evidence presented by the prosecution proving her guilt beyond reasonable
doubt.
Same; Same; Same; Same; Same; Same; Where the issue essentially involves the credibility of
witnesses, this is best left to the judgment of the trial court.—The presence of documentary evidence
notwithstanding, this case essentially involves the credibility of witnesses which is best left to the judgment of
the trial court, in the absence of abuse of discretion therein. The findings of fact of a trial court, arrived at only
after a hearing and evaluation of what can usually be expected to be conflicting testimonies of witnesses,
certainly deserve respect by an appellate court. Generally, the findings of fact of the trial court on the matter
of credibility of witnesses will not be disturbed on appeal.
Constitutional Law; Equal Protection; Criminal Law; Criminal Procedure; The non-prosecution of
another suspect provides no ground for the accused to fault the decision of the trial court convicting him.—In
783
VOL. 247, AUGUST 29, 1995 783
People vs. Goce
People vs. Sendon, we held that the non-prosecution of another suspect therein provided no ground
for the appellant concerned to fault the decision of the trial court convicting her. The prosecution of other
persons, equally or more culpable than herein appellant, may come later after their true identities and
addresses shall have been ascertained and said malefactors duly taken into custody. We see no reason why
the same doctrinal rule and course of procedure should not apply in this case.
REGALADO, J.:
On January 12, 1988, an information for illegal recruitment committed by a syndicate and in large scale,
punishable under Articles 38 and 39 of the Labor Code (Presidential Decree No. 442) as amended by Section
1(b) of Presidential Decree No. 2018, was filed against spouses Dan and Loma Goce and herein accused-
appellant Nelly Agustin in the Regional Trial Court of Manila, Branch 5, alleging —
That in or about and during the period comprised between May 1986 and June 25,
1987, both dates inclusive, in the City of Manila, Philippines, the said accused,
conspiring and confederating together and helping one another, representing
 themselves to have the capacity to contract, enlist and transport Filipino workers for
employment abroad, did then and there willfully and unlawfully, for a fee, recruit and
promise employment/job placement abroad, to (1) Rolando Dalida y Piernas, (2) Ernesto
Alvarez y Lubangco, (3) Rogelio Salado y Savillo, (4) Ramona Salado y Alvarez, (5)
Dionisio Masaya y de Guzman, (6) Dave Rivera y de Leon, (7) Lorenzo Alvarez y Velayo,
and (8) Nelson Trinidad y Santos, without first having secured the required license or
authority from the Department of Labor.1
On January 21, 1987, a warrant of arrest was issued against the three accused but not one of them was
arrested. 2Hence, on February 2, 1989, the trial court ordered the case archived but it issued a standing
warrant of arrest against the accused.3
Thereafter, on learning of the whereabouts of the accused, one of the offended parties, Rogelio Salado,
requested on March 17, 1989 for a copy of the warrant of arrest. 4 Eventually, at around midday of February
26, 1993, Nelly Agustin was apprehended by the Parañaque police. 5 On March 8, 1993, her counsel filed a
motion to revive the case and requested that it be set for hearing "for purposes of due process and for the
accused to immediately have her day in court" 6 Thus, on April 15, 1993, the trial court reinstated the case and
set the arraignment for May 3, 1993,7 on which date of Agustin pleaded not guilty8 and the case subsequently
went to trial.
Four of the complainants testified for the prosecution. Rogelio Salado was the first to take the witness stand
and he declared that sometime in March or April, 1987, he was introduced by Lorenzo Alvarez, his brother-in-
law and a co-applicant, to Nelly Agustin in the latter's residence at Factor, Dongalo, Parañaque, Metro Manila.
Representing herself as the manager of the Clover Placement Agency, Agustin showed him a job order as
proof that he could readily be deployed for overseas employment. Salado learned that he had to pay
P5,000.00 as processing fee, which amount he gave sometime in April or May of the same year. He was issued
the corresponding receipt.9
Also in April or May, 1987, Salado, accompanied by five other applicants who were his relatives, went to the
office of the placement agency at Nakpil Street, Ermita, Manila where he saw Agustin and met the spouses
Dan and Loma Goce, owners of the agency. He submitted his bio-data and learned from Loma Goce that he
had to give P12,000.00, instead of the original amount of P5,000.00 for the placement fee. Although surprised
at the new and higher sum, they subsequently agreed as long as there was an assurance that they could leave
for abroad.10
Thereafter, a receipt was issued in the name of the Clover Placement Agency showing that Salado and his
aforesaid co-applicants each paid P2,000.00, instead of the P5,000.00 which each of them actually paid.
Several months passed but Salado failed to leave for the promised overseas employment. Hence, in October,
1987, along with the other recruits, he decided to go to the Philippine Overseas Employment Administration
(POEA) to verify the real status of Clover Placement Agency. They discovered that said agency was not duly
licensed to recruit job applicants. Later, upon learning that Agustin had been arrested, Salado decided to see
her and to demand the return of the money he had paid, but Agustin could only give him P500.00. 11
Ramona Salado, the wife of Rogelio Salado, came to know through her brother, Lorenzo Alvarez, about Nelly
Agustin. Accompanied by her husband, Rogelio, Ramona went to see Agustin at the latter's residence. Agustin
persuaded her to apply as a cutter/sewer in Oman so that she could join her husband. Encouraged by Agustin's
promise that she and her husband could live together while working in Oman, she instructed her husband to
give Agustin P2,000.00 for each of them as placement fee, or the total sum of P4,000.00. 12
Much later, the Salado couple received a telegram from the placement agency requiring them to report to its
office because the "NOC" (visa) had allegedly arrived. Again, around February, or March, 1987, Rogelio gave
P2,000.00 as payment for his and his wife's passports. Despite follow-up of their papers twice a week from
February to June, 1987, he and his wife failed to leave for abroad. 13
Complainant Dionisio Masaya, accompanied by his brother-in-law, Aquiles Ortega, applied for a job in Oman
with the Clover Placement Agency at Parañaque, the agency's former office address. There, Masaya met Nelly
Agustin, who introduced herself as the manager of the agency, and the Goce spouses, Dan and Loma, as well
as the latter's daughter. He submitted several pertinent documents, such as his bio-data and school
credentials. 14
In May, 1986, Masaya gave Dan Goce P1,900.00 as an initial downpayment for the placement fee, and in
September of that same year, he gave an additional P10,000.00. He was issued receipts for said amounts and
was advised to go to the placement office once in a while to follow up his application, which he faithfully did.
Much to his dismay and chagrin, he failed to leave for abroad as promised. Accordingly, he was forced to
demand that his money be refunded but Loma Goce could give him back only P4,000.00 in installments. 15
As the prosecution's fourth and last witness, Ernesto Alvarez took the witness stand on June 7, 1993. He
testified that in February, 1987, he met appellant Agustin through his cousin, Larry Alvarez, at her residence in
Parañaque. She informed him that "madalas siyang nagpapalakad sa Oman" and offered him a job as an
ambulance driver at the Royal Hospital in Oman with a monthly salary of about $600.00 to $700.00. 16
On March 10, 1987, Alvarez gave an initial amount of P3,000.00 as processing fee to Agustin at the latter's
residence. In the same month, he gave another P3,000.00, this time in the office of the placement agency.
Agustin assured him that he could leave for abroad before the end of 1987. He returned several times to the
placement agency's office to follow up his application but to no avail. Frustrated, he demanded the return of
the money he had paid, but Agustin could only give back P500.00. Thereafter, he looked for Agustin about
eight times, but he could no longer find her. 17
Only herein appellant Agustin testified for the defense. She asserted that Dan and Loma Goce were her
neighbors at Tambo, Parañaque and that they were licensed recruiters and owners of the Clover Placement
Agency. Previously, the Goce couple was able to send her son, Reynaldo Agustin, to Saudi Arabia. Agustin met
the aforementioned complainants through Lorenzo Alvarez who requested her to introduce them to the Goce
couple, to which request she acceded. 18
Denying any participation in the illegal recruitment and maintaining that the recruitment was perpetrated only
by the Goce couple, Agustin denied any knowledge of the receipts presented by the prosecution. She insisted
that the complainants included her in the complaint thinking that this would compel her to reveal the
whereabouts of the Goce spouses. She failed to do so because in truth, so she claims, she does not know the
present address of the couple. All she knew was that they had left their residence in 1987. 19
Although she admitted having given P500.00 each to Rogelio Salado and Alvarez, she explained that it was
entirely for different reasons. Salado had supposedly asked for a loan, while Alvarez needed money because
he was sick at that time. 20
On November 19, 1993, the trial court rendered judgment finding herein appellant guilty as a principal in the
crime of illegal recruitment in large scale, and sentencing her to serve the penalty of life imprisonment, as well
as to pay a fine of P100,000.00. 21
In her present appeal, appellant Agustin raises the following arguments: (1) her act of introducing
complainants to the Goce couple does not fall within the meaning of illegal recruitment and placement under
Article 13(b) in relation to Article 34 of the Labor Code; (2) there is no proof of conspiracy to commit illegal
recruitment among appellant and the Goce spouses; and (3) there is no proof that appellant offered or
promised overseas employment to the complainants. 22 These three arguments being interrelated, they will be
discussed together.
Herein appellant is accused of violating Articles 38 and 39 of the Labor Code. Article 38 of the Labor Code, as
amended by Presidential Decree No. 2018, provides that any recruitment activity, including the prohibited
practices enumerated in Article 34 of said Code, undertaken by non-licensees or non-holders of authority shall
be deemed illegal and punishable under Article 39 thereof. The same article further provides that illegal
recruitment shall be considered an offense involving economic sabotage if any of these qualifying
circumstances exist, namely, (a) when illegal recruitment is committed by a syndicate, i.e., if it is carried out by
a group of three or more persons conspiring and/or confederating with one another; or (b) when illegal
recruitment is committed in large scale, i.e., if it is committed against three or more persons individually or as
a group.
At the outset, it should be made clear that all the accused in this case were not authorized to engage in any
recruitment activity, as evidenced by a certification issued by Cecilia E. Curso, Chief of the Licensing and
Regulation Office of the Philippine Overseas Employment Administration, on November 10, 1987. Said
certification states that Dan and Loma Goce and Nelly Agustin are neither licensed nor authorized to recruit
workers for overseas
employment. 23 Appellant does not dispute this. As a matter of fact her counsel agreed to stipulate that she
was neither licensed nor authorized to recruit applicants for overseas employment. Appellant, however,
denies that she was in any way guilty of illegal recruitment. 24
It is appellant's defensive theory that all she did was to introduce complainants to the Goce spouses. Being a
neighbor of said couple, and owing to the fact that her son's overseas job application was processed and
facilitated by them, the complainants asked her to introduce them to said spouses. Allegedly out of the
goodness of her heart, she complied with their request. Such an act, appellant argues, does not fall within the
meaning of "referral" under the Labor Code to make her liable for illegal recruitment.
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 and placement. 25 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. 26
Hence, the inevitable query is whether or not appellant Agustin merely introduced complainants to the Goce
couple or her actions went beyond that. The testimonial evidence hereon show 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. 27
Despite Agustin's pretensions that she was but a neighbor of the Goce couple, the testimonies of the
prosecution witnesses paint a different picture. Rogelio Salado and Dionisio Masaya testified that appellant
represented herself as the manager of the Clover Placement Agency. Ramona Salado was offered a job as a
cutter/sewer by Agustin the first time they met, while Ernesto Alvarez remembered that when he first met
Agustin, the latter represented herself as "nagpapaalis papunta sa Oman." 28 Indeed, 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." 29 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. 30
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. In fact, appellant demanded and received from complainants amounts beyond
the allowable limit of P5,000.00 under government regulations. It is true that the mere act of a cashier in
receiving money far exceeding the amount allowed by law was not considered per se as "recruitment and
placement" in contemplation of law, but that was because the recipient had no other participation in the
transactions and did not conspire with her co-accused in defrauding the victims. 31 That is not the case here.
Appellant further argues that "there is no evidence of receipts of collections/payments from complainants to
appellant." On the contrary, xerox copies of said receipts/vouchers were presented by the prosecution. For
instance, a cash voucher marked as Exhibit D, 32 showing the receipt of P10,000.00 for placement fee and duly
signed by appellant, was presented by the prosecution. Another receipt, identified as Exhibit E, 33 was issued
and signed by appellant on February 5, 1987 to acknowledge receipt of P4,000.00 from Rogelio and Ramona
Salado for "processing of documents for Oman." Still another receipt dated March 10, 1987 and presented in
evidence as Exhibit F, shows that appellant received from Ernesto Alvarez P2,000.00 for "processing of
documents for Oman." 34
Apparently, the original copies of said receipts/vouchers were lost, hence only xerox copies thereof were
presented and which, under the circumstances, were admissible in evidence. When the original writing has
been lost or destroyed or cannot be produced in court, upon proof of its execution and loss or destruction, or
unavailability, its contents may be proved by a copy or a recital of its contents in some authentic document, or
by the recollection of witnesses. 35
Even assuming arguendo that the xerox copies presented by the prosecution as secondary evidence are not
allowable in court, still the absence thereof does not warrant the acquittal of appellant. In People
vs. Comia, 36where this particular issue was involved, the Court held that the complainants' failure to ask for
receipts for the fees they paid to the accused therein, as well as their consequent failure to present receipts
before the trial court as proof of the said payments, is not fatal to their case. The complainants duly proved by
their respective testimonies that said accused was involved in the entire recruitment process. Their
testimonies in this regard, being clear and positive, were declared sufficient to establish that factum
probandum.
Indeed, the trial court was justified and correct in accepting the version of the prosecution witnesses, their
statements being positive and affirmative in nature. This is more worthy of credit than the mere
uncorroborated and self-serving denials of appellant. The lame defense consisting of such bare denials by
appellant cannot overcome the evidence presented by the prosecution proving her guilt beyond reasonable
doubt. 37
The presence of documentary evidence notwithstanding, this case essentially involves the credibility of
witnesses which is best left to the judgment of the trial court, in the absence of abuse of discretion therein.
The findings of fact of a trial court, arrived at only after a hearing and evaluation of what can usually be
expected to be conflicting testimonies of witnesses, certainly deserve respect by an appellate
court. 38 Generally, the findings of fact of the trial court on the matter of credibility of witnesses will not be
disturbed on appeal. 39
In a last-ditch effort to exculpate herself from conviction, appellant argues that there is no proof of conspiracy
between her and the Goce couple as to make her liable for illegal recruitment. We do not agree. The evidence
presented by the prosecution clearly establish that appellant confabulated with the Goces in their plan to
deceive the complainants. Although said accused couple have not been tried and convicted, nonetheless there
is sufficient basis for appellant's conviction as discussed above.
In People vs. Sendon, 40 we held that the non-prosecution of another suspect therein provided no ground for
the appellant concerned to fault the decision of the trial court convicting her. The prosecution of other
persons, equally or more culpable than herein appellant, may come later after their true identities and
addresses shall have been ascertained and said malefactors duly taken into custody. We see no reason why
the same doctrinal rule and course of procedure should not apply in this case.
WHEREFORE, the appealed judgment of the court a quo is hereby AFFIRMED in toto, with costs against
accused-appellant Nelly D. Agustin.

SO ORDERED.
G.R. Nos. L-58674-77 July 11, 1990
PEOPLE OF THE PHILIPPINES, petitioner, 
vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of Zambales & Olongapo City, Branch
III and SERAPIO ABUG, respondents.
Labor; Recruitment and placement; Interpretation; Article 13(b) of P.D. 442, interpreted; Presumption
that the individual or entity is engaged in recruitment and placement whenever two or more persons are
involved; Number of persons, not an essential ingredient of the act of recruitment and placement of workers.—
As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide an
exception thereto but merely to create a presumption. The presumption is that the individual or entity is
engaged in recruitment and placement whenever he or it is dealing with two or more persons to whom, in
consideration of a fee, an offer or promise of employment is made in the course of the “canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring (of) workers.” The number of persons dealt with is not
an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in the
basic rule in Article 13(b) will constitute recruitment and placement even if only one prospective worker is
involved. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a
promise or offer of employment to two or more prospective workers, the individual or entity dealing with
them shall be deemed to be engaged in the act of recruitment and placement. The words “shall be deemed”
create that presumption.
Same; Same; Same; Same; Words “shall be deemed” in Art. 13(b) of P.D. 442, meaning of.—In the
instant case, the word “shall be deemed” should by the same token be given the force of a disputable
presumption or of prima facie evidence of engaging in recruitment and placement. (Klepp v. Odin Tp.,
McHenry County 40 ND N.W. 313, 314.)
CRUZ, J:
The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise known as the
Labor Code, reading as follows:
(b) Recruitment and placement' refers to any act of canvassing, enlisting, contracting,
transporting, hiring, or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged in recruitment and
placement.
Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and Olongapo City
alleging that Serapio Abug, private respondent herein, "without first securing a license from the Ministry of
Labor as a holder of authority to operate a fee-charging employment agency, did then and there wilfully,
unlawfully and criminally operate a private fee charging employment agency by charging fees and expenses
(from) and promising employment in Saudi Arabia" to four separate individuals named therein, in violation of
Article 16 in relation to Article 39 of the Labor Code. 1
Abug filed a motion to quash on the ground that the informations did not charge an offense because he was
accused of illegally recruiting only one person in each of the four informations. Under the proviso in Article
13(b), he claimed, there would be illegal recruitment only "whenever two or more persons are in any manner
promised or offered any employment for a fee. " 2
Denied at first, the motion was reconsidered and finally granted in the Orders of the trial court dated June 24
and September 17, 1981. The prosecution is now before us on certiorari. 3
The posture of the petitioner is that the private respondent is being prosecuted under Article 39 in relation to
Article 16 of the Labor Code; hence, Article 13(b) is not applicable. However, as the first two cited articles
penalize acts of recruitment and placement without proper authority, which is the charge embodied in the
informations, application of the definition of recruitment and placement in Article 13(b) is unavoidable.
The view of the private respondents is that to constitute recruitment and placement, all the acts mentioned in
this article should involve dealings with two or mre persons as an indispensable requirement. On the other
hand, the petitioner argues that the requirement of two or more persons is imposed only where the
recruitment and placement consists of an offer or promise of employment to such persons and always in
consideration of a fee. The other acts mentioned in the body of the article may involve even only one person
and are not necessarily for profit.
Neither interpretation is acceptable. We fail to see why the proviso should speak only of an offer or promise of
employment if the purpose was to apply the requirement of two or more persons to all the acts mentioned in
the basic rule. For its part, the petitioner does not explain why dealings with two or more persons are needed
where the recruitment and placement consists of an offer or promise of employment but not when it is done
through "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers.
As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide an
exception thereto but merely to create a presumption. The presumption is that the individual or entity is
engaged in recruitment and placement whenever he or it is dealing with two or more persons to whom, in
consideration of a fee, an offer or promise of employment is made in the course of the "canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring (of) workers. "
The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of
workers. Any of the acts mentioned in the basic rule in Article 13(b) win constitute recruitment and placement
even if only one prospective worker is involved. The proviso merely lays down a rule of evidence that where a
fee is collected in consideration of a promise or offer of employment to two or more prospective workers, the
individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement.
The words "shall be deemed" create that presumption.
This is not unlike the presumption in article 217 of the Revised Penal Code, for example, regarding the failure
of a public officer to produce upon lawful demand funds or property entrusted to his custody. Such failure
shall be prima facie evidence that he has put them to personal use; in other words, he shall be deemed to
have malversed such funds or property. In the instant case, the word "shall be deemed" should by the same
token be given the force of a disputable presumption or of prima facie evidence of engaging in recruitment
and placement. (Klepp vs. Odin Tp., McHenry County 40 ND N.W. 313, 314.)
It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of records of
debates and deliberations that would otherwise have been available if the Labor Code had been enacted as a
statute rather than a presidential decree. The trouble with presidential decrees is that they could be, and
sometimes were, issued without previous public discussion or consultation, the promulgator heeding only his
own counsel or those of his close advisers in their lofty pinnacle of power. The not infrequent results are
rejection, intentional or not, of the interest of the greater number and, as in the instant case, certain esoteric
provisions that one cannot read against the background facts usually reported in the legislative journals.
At any rate, the interpretation here adopted should give more force to the campaign against illegal
recruitment and placement, which has victimized many Filipino workers seeking a better life in a foreign land,
and investing hard- earned savings or even borrowed funds in pursuit of their dream, only to be awakened to
the reality of a cynical deception at the hands of theirown countrymen.
WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are set aside and the four informations
against the private respondent reinstated. No costs.
SO ORDERED.
G.R. No. 152642               November 13, 2012 SPOUSES SIMPLICIO AND MILA CUARESMA (for and in behalf of deceased daughter, Jasmin G.
Cuaresma), Petitioners, 
vs.
HON. PATRICIA A. STO.TOMAS, ROSALINDA BALDOZ and LUCITA LAZO, Petitioners, 
WHITE FALCON SERVICES, INC. and BECMEN SERVICES EXPORTER AND PROMOTION, INC., Respondents.
vs.
REY SALAC, WILLIE D. ESPIRITU, MARIO MONTENEGRO, DODGIE BELONIO, LOLIT SALINEL and BUDDY
BONNEVIE, Respondents. DECISION

x-----------------------x ABAD, J.:

G.R. No. 152710 These consolidated cases pertain to the constitutionality of certain provisions of Republic Act 8042, otherwise
known as the Migrant Workers and Overseas Filipinos Act of 1995.
HON. PATRICIA A. STO. TOMAS, in her capacity as Secretary of Department of Labor and Employment
(DOLE), HON. ROSALINDA D. BALDOZ, in her capacity as Administrator, Philippine Overseas Employment The Facts and the Case
Administration (POEA), and the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION GOVERNING
BOARD, Petitioners, 
On June 7, 1995 Congress enacted Republic Act (R.A.) 8042 or the Migrant Workers and Overseas Filipinos Act
vs.
of 1995 that, for among other purposes, sets the Government’s policies on overseas employment and
HON. JOSE G. PANEDA, in his capacity as the Presiding Judge of Branch 220, Quezon City, ASIAN
establishes a higher standard of protection and promotion of the welfare of migrant workers, their families,
RECRUITMENT COUNCIL PHILIPPINE CHAPTER, INC. (ARCOPHIL), for itself and in behalf of its members:
and overseas Filipinos in distress.
WORLDCARE PHILIPPINES SERVIZO INTERNATIONALE, INC., STEADFAST INTERNATIONAL RECRUITMENT
CORP., VERDANT MANPOWER MOBILIZATION CORP., BRENT OVERSEAS PERSONNEL, INC., ARL MANPOWER
SERVICES, INC., DAHLZEN INTERNATIONAL SERVICES, INC., INTERWORLD PLACEMENT CENTER, INC., LAKAS G.R. 152642 and G.R. 152710
TAO CONTRACT SERVICES LTD. CO., SSC MULTI-SERVICES, DMJ INTERNATIONAL, and MIP INTERNATIONAL
MANPOWER SERVICES, represented by its proprietress, MARCELINA I. PAGSIBIGAN, Respondents. (Constitutionality of Sections 29 and 30, R.A. 8042)

x-----------------------x
G.R. No. 167590
REPUBLIC OF THE PHILIPPINES, represented by the HONORABLE EXECUTIVE SECRETARY, the HONORABLE
SECRETARY OF LABOR AND EMPLOYMENT (DOLE), the PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION (POEA), the OVERSEAS WORKERS WELFARE ADMINISTRATION (OWWA), the LABOR
ARBITERS OF THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), the HONORABLE SECRETARY OF
JUSTICE, the HONORABLE SECRETARY OF FOREIGN AFFAIRS and the COMMISSION ON AUDIT
(COA), Petitioners,  before the Regional Trial Court (RTC) of Quezon City, Branch 96.2
vs.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. (P ASEI), Respondent.
x-----------------------x
G.R. Nos. 182978-79
Sections 29 and 30 of the Act 1 commanded the Department of Labor and Employment (DOLE) to begin
deregulating within one year of its passage the business of handling the recruitment and migration of overseas
Filipino workers and phase out within five years the regulatory functions of the Philippine Overseas
Employment Administration (POEA).
On January 8, 2002 respondents Rey Salac, Willie D. Espiritu, Mario Montenegro, Dodgie Belonio, Lolit Salinel,
and Buddy Bonnevie (Salac, et al.) filed a petition for certiorari, prohibition and mandamus with application for
temporary restraining order (TRO) and preliminary injunction against petitioners, the DOLE Secretary, the
POEA Administrator, and the Technical Education and Skills Development Authority (TESDA) Secretary-General
Salac, et al. sought to: 1) nullify DOLE Department Order 10 (DOLE DO 10) and POEA Memorandum Circular 15
(POEA MC 15); 2) prohibit the DOLE, POEA, and TESDA from implementing the same and from further issuing
rules and regulations that would regulate the recruitment and placement of overseas Filipino workers (OFWs);
and 3) also enjoin them to comply with the policy of deregulation mandated under Sections 29 and 30 of
Republic Act 8042.

On March 20, 2002 the Quezon City RTC granted Salac, et al.’s petition and ordered the government agencies
BECMEN SERVICE EXPORTER AND PROMOTION, INC., Petitioner, 
mentioned to deregulate the recruitment and placement of OFWs. 3 The RTC also annulled DOLE DO 10, POEA
vs.
MC 15, and all other orders, circulars and issuances that are inconsistent with the policy of deregulation under
SPOUSES SIMPLICIO AND MILA CUARESMA (for and in behalf of daughter, Jasmin G. Cuaresma), WHITE
R.A. 8042.
FALCON SERVICES, INC., and JAIME ORTIZ (President of White Falcon Services, Inc.), Respondents.

Prompted by the RTC’s above actions, the government officials concerned filed the present petition in G.R.
x-----------------------x
152642 seeking to annul the RTC’s decision and have the same enjoined pending action on the petition.

G.R. Nos. 184298-99

On April 17, 2002 the Philippine Association of Service Exporters, Inc. intervened in the case before the Court,
claiming that the RTC March 20, 2002 Decision gravely affected them since it paralyzed the deployment
abroad of OFWs and performing artists. The Confederated Association of Licensed Entertainment Agencies, On August 20, 2009 respondents Salac, et al. told the Court in G.R. 152642 that they agree 9 with the Republic’s
Incorporated (CALEA) intervened for the same purpose.4 view that the repeal of Sections 29 and 30 of R.A. 8042 renders the issues they raised by their action moot and
academic. The Court has no reason to disagree. Consequently, the two cases, G.R. 152642 and 152710, should
be dismissed for being moot and academic.
On May 23, 2002 the Court5 issued a TRO in the case, enjoining the Quezon City RTC, Branch 96, from
enforcing its decision.
G.R. 167590
In a parallel case, on February 12, 2002 respondents Asian Recruitment Council Philippine Chapter, Inc. and
others (Arcophil, et al.) filed a petition for certiorari and prohibition with application for TRO and preliminary (Constitutionality of Sections 6, 7, and 9 of R.A. 8042)
injunction against the DOLE Secretary, the POEA Administrator, and the TESDA Director-General,6 before the
RTC of Quezon City, Branch 220, to enjoin the latter from implementing the 2002 Rules and Regulations
On August 21, 1995 respondent Philippine Association of Service Exporters, Inc. (PASEI) filed a petition for
Governing the Recruitment and Employment of Overseas Workers and to cease and desist from issuing other
declaratory relief and prohibition with prayer for issuance of TRO and writ of preliminary injunction before the
orders, circulars, and policies that tend to regulate the recruitment and placement of OFWs in violation of the
RTC of Manila, seeking to annul Sections 6, 7, and 9 of R.A. 8042 for being unconstitutional. (PASEI also sought
policy of deregulation provided in Sections 29 and 30 of R.A. 8042.
to annul a portion of Section 10 but the Court will take up this point later together with a related case.)

On March 12, 2002 the Quezon City RTC rendered an Order, granting the petition and enjoining the
Section 6 defines the crime of "illegal recruitment" and enumerates the acts constituting the same. Section 7
government agencies involved from exercising regulatory functions over the recruitment and placement of
provides the penalties for prohibited acts. Thus:
OFWs. This prompted the DOLE Secretary, the POEA Administrator, and the TESDA Director-General to file the
present action in G.R. 152710. As in G.R. 152642, the Court issued on May 23, 2002 a TRO enjoining the
Quezon City RTC, Branch 220 from enforcing its decision. SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, procuring workers and includes referring, contract services,
promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-license
On December 4, 2008, however, the Republic informed7 the Court that on April 10, 2007 former President
or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended,
Gloria Macapagal-Arroyo signed into law R.A. 94228 which expressly repealed Sections 29 and 30 of R.A. 8042
otherwise known as the Labor Code of the Philippines: Provided, That such non-license or non-holder, who, in
and adopted the policy of close government regulation of the recruitment and deployment of OFWs. R.A. 9422
any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so
pertinently provides:
engaged. It shall likewise include the following acts, whether committed by any person, whether a non-
licensee, non-holder, licensee or holder of authority:
xxxx
xxxx
SEC. 1. Section 23, paragraph (b.1) of Republic Act No. 8042, otherwise known as the "Migrant Workers and
Overseas Filipinos Act of 1995" is hereby amended to read as follows:
SEC. 7. Penalties. –

(b.1) Philippine Overseas Employment Administration – The Administration shall regulate private sector
(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not
participation in the recruitment and overseas placement of workers by setting up a licensing and registration
less than six (6) years and one (1) day but not more than twelve (12) years and a fine not less than
system. It shall also formulate and implement, in coordination with appropriate entities concerned, when
two hundred thousand pesos (₱200,000.00) nor more than five hundred thousand pesos
necessary, a system for promoting and monitoring the overseas employment of Filipino workers taking into
(₱500,000.00).
consideration their welfare and the domestic manpower requirements.

(b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos
In addition to its powers and functions, the administration shall inform migrant workers not only of their rights
(₱500,000.00) nor more than one million pesos (₱1,000,000.00) shall be imposed if illegal
as workers but also of their rights as human beings, instruct and guide the workers how to assert their rights
recruitment constitutes economic sabotage as defined herein.
and provide the available mechanism to redress violation of their rights.

In the recruitment and placement of workers to service the requirements for trained and competent Filipino
workers of foreign governments and their instrumentalities, and such other employers as public interests may
require, the administration shall deploy only to countries where the Philippines has concluded bilateral labor
agreements or arrangements: Provided, That such countries shall guarantee to protect the rights of Filipino
migrant workers; and: Provided, further, That such countries shall observe and/or comply with the
international laws and standards for migrant workers.
Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than
eighteen (18) years of age or committed by a non-licensee or non-holder of authority.10
Finally, Section 9 of R.A. 8042 allowed the filing of criminal actions arising from "illegal recruitment" before the
RTC of the province or city where the offense was committed or where the offended party actually resides at
the time of the commission of the offense.

SEC. 2. Section 29 of the same law is hereby repealed. The RTC of Manila declared Section 6 unconstitutional after hearing on the ground that its definition of "illegal
recruitment" is vague as it fails to distinguish between licensed and non-licensed recruiters11 and for that
reason gives undue advantage to the non-licensed recruiters in violation of the right to equal protection of
SEC. 3. Section 30 of the same law is also hereby repealed.
those that operate with government licenses or authorities.

xxxx
But "illegal recruitment" as defined in Section 6 is clear and unambiguous and, contrary to the RTC’s finding,
actually makes a distinction between licensed and non-licensed recruiters. By its terms, persons who engage in
"canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers" without the
appropriate government license or authority are guilty of illegal recruitment whether or not they commit the
wrongful acts enumerated in that section. On the other hand, recruiters who engage in the canvassing,
enlisting, etc. of OFWs, although with the appropriate government license or authority, are guilty of illegal
recruitment only if they commit any of the wrongful acts enumerated in Section 6.
The Manila RTC also declared Section 7 unconstitutional on the ground that its sweeping application of the
penalties failed to make any distinction as to the seriousness of the act committed for the application of the
penalty imposed on such violation. As an example, said the trial court, the mere failure to render a report
under Section 6(h) or obstructing the inspection by the Labor Department under Section 6(g) are penalized by
imprisonment for six years and one day and a minimum fine of ₱200,000.00 but which could unreasonably go
even as high as life imprisonment if committed by at least three persons.
Apparently, the Manila RTC did not agree that the law can impose such grave penalties upon what it believed
were specific acts that were not as condemnable as the others in the lists. But, in fixing uniform penalties for
each of the enumerated acts under Section 6, Congress was within its prerogative to determine what
individual acts are equally reprehensible, consistent with the State policy of according full protection to labor,
and deserving of the same penalties. It is not within the power of the Court to question the wisdom of this
kind of choice. Notably, this legislative policy has been further stressed in July 2010 with the enactment of R.A.
1002212 which increased even more the duration of the penalties of imprisonment and the amounts of fine for
the commission of the acts listed under Section 7.
Obviously, in fixing such tough penalties, the law considered the unsettling fact that OFWs must work outside
the country’s borders and beyond its immediate protection. The law must, therefore, make an effort to
somehow protect them from conscienceless individuals within its jurisdiction who, fueled by greed, are willing
to ship them out without clear assurance that their contracted principals would treat such OFWs fairly and
humanely.
As the Court held in People v. Ventura,13 the State under its police power "may prescribe such regulations as in
its judgment will secure or tend to secure the general welfare of the people, to protect them against the
consequence of ignorance and incapacity as well as of deception and fraud." Police power is "that inherent
and plenary power of the State which enables it to prohibit all things hurtful to the comfort, safety, and
welfare of society."14
The Manila RTC also invalidated Section 9 of R.A. 8042 on the ground that allowing the offended parties to file
the criminal case in their place of residence would negate the general rule on venue of criminal cases which is
the place where the crime or any of its essential elements were committed. Venue, said the RTC, is
jurisdictional in penal laws and, allowing the filing of criminal actions at the place of residence of the offended
parties violates their right to due process. Section 9 provides:
SEC. 9. Venue. – A criminal action arising from illegal recruitment as defined herein shall be filed with the
Regional Trial Court of the province or city where the offense was committed or where the offended party
actually resides at the time of the commission of the offense: Provided, That the court where the criminal
action is first filed shall acquire jurisdiction to the exclusion of other courts: Provided, however, That the
aforestated provisions shall also apply to those criminal actions that have already been filed in court at the
time of the effectivity of this Act.
But there is nothing arbitrary or unconstitutional in Congress fixing an alternative venue for violations of
Section 6 of R.A. 8042 that differs from the venue established by the Rules on Criminal Procedure. Indeed,
Section 15(a), Rule 110 of the latter Rules allows exceptions provided by laws. Thus:
SEC. 15. Place where action is to be instituted.— (a) Subject to existing laws, the criminal action shall be
instituted and tried in the court of the municipality or territory where the offense was committed or where
any of its essential ingredients occurred. (Emphasis supplied)
xxxx
Section 9 of R.A. 8042, as an exception to the rule on venue of criminal actions is, consistent with that law’s
declared policy15 of providing a criminal justice system that protects and serves the best interests of the
victims of illegal recruitment.
G.R. 167590, G.R. 182978-79,16 and G.R. 184298-9917
(Constitutionality of Section 10, last sentence of 2nd paragraph)
G.R. 182978-79 and G.R. 184298-99 are consolidated cases. Respondent spouses Simplicio and Mila Cuaresma
(the Cuaresmas) filed a claim for death and insurance benefits and damages against petitioners Becmen
Service Exporter and Promotion, Inc. (Becmen) and White Falcon Services, Inc. (White Falcon) for the death of
their daughter Jasmin Cuaresma while working as staff nurse in Riyadh, Saudi Arabia.
The Labor Arbiter (LA) dismissed the claim on the ground that the Cuaresmas had already received insurance
benefits arising from their daughter’s death from the Overseas Workers Welfare Administration (OWWA). The
LA also gave due credence to the findings of the Saudi Arabian authorities that Jasmin committed suicide.
On appeal, however, the National Labor Relations Commission (NLRC) found Becmen and White Falcon jointly
and severally liable for Jasmin’s death and ordered them to pay the Cuaresmas the amount of US$113,000.00
as actual damages. The NLRC relied on the Cabanatuan City Health Office’s autopsy finding that Jasmin died of
criminal violence and rape.
Becmen and White Falcon appealed the NLRC Decision to the Court of Appeals (CA).18 On June 28, 2006 the CA
held Becmen and White Falcon jointly and severally liable with their Saudi Arabian employer for actual
damages, with Becmen having a right of reimbursement from White Falcon. Becmen and White Falcon
appealed the CA Decision to this Court.
On April 7, 2009 the Court found Jasmin’s death not work-related or work-connected since her rape and death
did not occur while she was on duty at the hospital or doing acts incidental to her employment. The Court
deleted the award of actual damages but ruled that Becmen’s corporate directors and officers are solidarily
liable with their company for its failure to investigate the true nature of her death. Becmen and White Falcon
abandoned their legal, moral, and social duty to assist the Cuaresmas in obtaining justice for their daughter.
Consequently, the Court held the foreign employer Rajab and Silsilah, White Falcon, Becmen, and the latter’s
corporate directors and officers jointly and severally liable to the Cuaresmas for: 1) P2,500,000.00 as moral
damages; 2) P2,500,000.00 as exemplary damages; 3) attorney’s fees of 10% of the total monetary award; and
4) cost of suit.
On July 16, 2009 the corporate directors and officers of Becmen, namely, Eufrocina Gumabay, Elvira Taguiam,
Lourdes Bonifacio and Eddie De Guzman (Gumabay, et al.) filed a motion for leave to Intervene. They
questioned the constitutionality of the last sentence of the second paragraph of Section 10, R.A. 8042 which
holds the corporate directors, officers and partners jointly and solidarily liable with their company for money
claims filed by OFWs against their employers and the recruitment firms. On September 9, 2009 the Court
allowed the intervention and admitted Gumabay, et al.’s motion for reconsideration.
The key issue that Gumabay, et al. present is whether or not the 2nd paragraph of Section 10, R.A. 8042,
which holds the corporate directors, officers, and partners of recruitment and placement agencies jointly and
solidarily liable for money claims and damages that may be adjudged against the latter agencies, is
unconstitutional.
In G.R. 167590 (the PASEI case), the Quezon City RTC held as unconstitutional the last sentence of the 2nd
paragraph of Section 10 of R.A. 8042. It pointed out that, absent sufficient proof that the corporate officers
and directors of the erring company had knowledge of and allowed the illegal recruitment, making them
automatically liable would violate their right to due process of law.

The pertinent portion of Section 10 provides:

SEC. 10. Money Claims. – x x x

The liability of the principal/employer and the recruitment/placement agency for any and all claims under this
section shall be joint and several. This provision shall be incorporated in the contract for overseas employment
and shall be a condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that
may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate
officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the
corporation or partnership for the aforesaid claims and damages. (Emphasis supplied)

But the Court has already held, pending adjudication of this case, that the liability of corporate directors and
officers is not automatic. To make them jointly and solidarily liable with their company, there must be a
finding that they were remiss in directing the affairs of that company, such as sponsoring or tolerating the
conduct of illegal activities.19 In the case of Becmen and White Falcon, 20 while there is evidence that these
companies were at fault in not investigating the cause of Jasmin’s death, there is no mention of any evidence
in the case against them that intervenors Gumabay, et al., Becmen’s corporate officers and directors, were
personally involved in their company’s particular actions or omissions in Jasmin’s case.

As a final note, R.A. 8042 is a police power measure intended to regulate the recruitment and deployment of
OFWs. It aims to curb, if not eliminate, the injustices and abuses suffered by numerous OFWs seeking to work
abroad. The rule is settled that every statute has in its favor the presumption of constitutionality. The Court
cannot inquire into the wisdom or expediency of the laws enacted by the Legislative Department. Hence, in
the absence of a clear and unmistakable case that the statute is unconstitutional, the Court must uphold its
validity.

WHEREFORE, in G.R. 152642 and 152710, the Court DISMISSES the petitions for having become moot and
academic.1âwphi1

In G.R. 167590, the Court SETS ASIDE the Decision of the Regional Trial Court ofManila dated December 8,
2004 and DECLARES Sections 6, 7, and 9 of Republic Act 8042 valid and constitutional.

In G.R. 182978-79 and G.R. 184298-99 as well as in G.R. 167590, the Court HOLDS the last sentence of the
second paragraph of Section 10 of Republic Act 8042 valid and constitutional. The Court, however,
RECONSIDERS and SETS ASIDE the portion of its Decision in G.R. 182978-79 and G.R. 184298-99 that held
intervenors Eufrocina Gumabay, Elvira Taguiam, Lourdes Bonifacio, and Eddie De Guzman jointly and solidarily
liable with respondent Becmen Services Exporter and Promotion, Inc. to spouses Simplicia and Mila Cuaresma
for lack of a finding in those cases that such intervenors had a part in the act or omission imputed to their
corporation.

SO ORDERED.
G.R. No. 112175 July 26, 1996
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, 
vs.
ENGINEER RODOLFO DIAZ, accused-appellant.
 Labor Law; Criminal Law; Illegal Recruitment; Words and Phrases; The crime of illegal recruitment is
any recruitment activity, including the prohibited practices enumerated under Article 34 of the Labor Code, as
amended, undertaken by a non-licensee or non-holder of authority.—The crime of illegal recruitment, as
defined under Article 38(a) in relation to Articles 13(b) and 34 and penalized under Article 39 of the Labor
Code, as amended by Presidential Decree 1920 and Presidential Decree 2018, is any recruitment activity,
including the prohibited practices enumerated under Article 34, undertaken by a non-licensee or non-holder
of authority.
Same; Same; Same; Same; Elements of Illegal Recruitment.—Thus, in People v. Cabacang this Court
ruled that the crime of illegal recruitment is committed when two elements concur, namely: 1] That the
offender has no valid license or authority required by law to enable one to lawfully engage in recruitment and
placement of workers; and, 2] That the offender undertakes either any activity within the meaning of
recruitment and placement defined under Article 13(b), or any prohibited practices enumerated under Article
34.
Same; Same; Same; Same; “Recruitment and Placement,” Defined.—Article 13(b) of the Labor Code,
provides for the statutory definition of “recruitment and placement,” as follows: “Recruitment and placement
refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for
profit or not; Provided that any person or entity which in any manner offers or promises for a fee employment
to two or more persons shall be deemed engaged in recruitment and placement.”
Same; Same; Same; Same; “Non-Licensee” or “Non-Holder of Authority,” Defined.—A non-licensee or
non-holder of authority means any person, corporation or entity which has not been issued a valid license or
authority to engage in recruitment and placement by the Secretary of Labor, or whose license or authority has
been suspended, revoked or cancelled by the POEA or the Secretary.
Same; Same; Same; Elements of the Crime of Illegal Recruitment in Large Scale.—The elements of the
crime of illegal recruitment in large scale, which are undoubtedly present in this case are: 1] the offender is a
non-licensee or non-holder of authority to engage in recruitment and placement activity, 2] the offender
undertakes recruitment and placement activity defined under Article 13(b), or any prohibited practices
enumerated under Article 34, and 3] illegal recruitment is committed against three or more persons
individually or as a group.
Same; Same; Same; Evidence; Witnesses; Greater weight must generally be given to the positive
testimonies of the prosecution witnesses than to the denial of the defendant in weighing contradictory
declarations and statements.—Evidently, greater weight must generally be given to the positive testimonies of
the prosecution witnesses than to the denial of the defendant in weighing contradictory declarations and
statements. We stated this rule with curt emphasis in Goce, 247 SCRA 780 that—“The lame defense consisting
of such bare denials by appellant cannot overcome the evidence presented by the prosecution proving her
guilt beyond reasonable doubt.”
Same; Same; Same; Same; Same; Findings of the trial court as to the credibility of witnesses are to be
given great weight and a high degree of respect by the Appellate Court.—Admittedly, the findings of the trial
court as to the credibility of witnesses are to be given great weight and a high degree of respect by the
Appellate Court. In People vs. Reyes (242 SCRA 264), we enunciated the rule that—“When
443
VOL. 259, JULY 26, 1996 443
People vs. Diaz
the issue is the credibility of witnesses, appellate courts will in general not disturb the findings of the
trial court unless certain facts or circumstances of weight have been overlooked, misunderstood or misapplied
which, if considered, might affect the result of the case. This is because the trial court heard the testimony of
the witnesses and observed their deportment and manner of testifying during trial.”
Same; Same; Same; It is settled rule that a person is guilty of illegal recruitment when he gives the
impression that he has the power to send workers abroad.—Likewise, it is the settled rule that a person is
guilty of illegal recruitment when he gives the impression that he has the power to send workers abroad.
Appellant Diaz manifestly gave that impression to the three complainants that he had the ability to send
workers abroad. Misrepresenting himself as a recruiter of workers for Brunei, he promised them work for a
fee and convinced them to give their money for the purpose of getting an employment overseas.
Same; Same; Same; Statutes; Ex Post Facto Laws; This new law, R.A. 8042, amends the pertinent
provisions of the Labor Code and gives a new definition of the crime of illegal recruitment and provides for its
higher penalty; Crimes are punishable by the laws in force at the time of their commission.—This Court is
aware of a new law, RA 8042, otherwise known as Migrant Workers for Overseas Employment, which was
approved on June 07, 1995. It is An Act to Institute the Policies of Overseas Employment and Establish a Higher
Standard of Protection and Promotion of the Welfare of Migrant Workers, their Families and Overseas
Filipinos in Distress and for Other Purposes. This new law, amends the pertinent provisions of the Labor Code
of the Philippines and gives a new definition of the crime of illegal recruitment and provides for its higher
penalty. We are not in anyway applying the otherwise restrictive provisions of this new law as it is not
applicable in the case at bar, considering the rule that crimes are punishable by the laws in force at the time of
their commission.
TORRES, JR., J.:p
Rodolfo 'Erwin' Diaz seeks the mandate of this Court to review the decision dated September 2, 1993, of the
Regional Trial Court, 11th Judicial Region, Branch 10, Davao City, 1 in Criminal Case No. 26, 993-92 convicting
him of the crime of Illegal Recruitment in Large Scale, and sentencing him to suffer life imprisonment and to
pay a fine of P100,000.00 plus the costs.
In an Information dated August 15, 1992, Assistant City Prosecutor David W. Natividad of Davao City charged
appellant of violating Articles 38 (a) and 38 (b) in relation to Article 39 of the Labor Code, as amended, as
follows:
That sometime in the month of July 1992, in the City of Davao, and within the
jurisdiction of this Honorable Court, the abovementioned accused, purporting himself to
have the capacity to contract, enlist and transport Filipino workers for employment
abroad, particularly Brunei and Japan, did then and there, willfully, unlawfully recruit
and promise employment/job placement abroad to Mary Anne Navarro, Maria Theresa
Fabricante and Maria Elena Ramirez, without first securing the required license and/or
authority from the Department of Labor and Employment.
CONTRARY TO LAW. 2
The antecedent facts found by the Court a quo reads:
Mary Anne Navarro was 22 years old, single and a student of the University of the
Immaculate Concepcion in 1992, taking up bachelor of science in music, Davao City.
Maria Theresa Fabricante was 23 years old, single and jobless in 1992. She is accordingly
a commerce graduate of the Notre Dame University in Cotabato City.
Maria Elena Ramirez was 27 years old, married and a businesswoman in 1992. She is
accordingly a college graduate of the University of Mindanao in Davao City where she
finished the course of bachelor of science in commerce, major in management.
From the combined testimonies of these three complainants, the Court has gathered
that this is what happened, which gave rise to this case:
Mary Anne Navarro paid P2,300.00 to Engr. Diaz at his residence
on July 22, 1992 (Exh. "C"). There is no explanation by her why she
paid only P2,300.00 and not P2,500.00.
Maria Theresa Fabricante paid only P2,000.00 to Engr. Diaz also
on July 22, 1992 (Exh. "E"). She paid only that amount because,
according to her testimony, she already had a passport and Engr.
Diaz said she was required to pay only P2,000.00 (tsn 9-8-92 p.
35).

Maria Elena Ramirez paid to Engr. Diaz P2,500.00 but she lost her
In June 1992 they were all enrolled at the Henichi Techno
receipt (tsn 9-8-92 p. 59). However, it was returned to her by
Exchange Cultural Foundation in Davao City, studying Niponggo.
Engr. Diaz on August 17, 1992 (Exh. "G").
Their teacher was Mrs. Remedios Aplicador.

Exhibit "G" is a RECEIPT signed by the three complainants

One day Mrs. Aplicador told them that if they wanted to go and
acknowledging the return to them respectively of the amounts of
work abroad, particularly Brunei where they could earn a salary of
P2,300.00, P2,000.00 and P2,500.00 by the accused and his wife
"$700.00 for four hours daily work," she would refer them to Mr.
who also signed it as witnesses (tsn 9-8-92 p. 43).
Paulo Lim who knew one Engr. Erwin Diaz who was recruiting
applicants for Brunei (tsn 9-7-92 pp. 10-11 & tsn 9-8-92 p. 34).
After submitting to the accused all the required papers and
undergoing medical examination (before the return of said
Accompanied by Mrs. Aplicador, the three complainants went to
amounts to the complainants), they asked him when they could
Mr. Paulo Lim who explained to them that he was not the one
leave. The accused told them to wait for three to four weeks as
recruiting workers but Engr. Diaz (tsn 9-8-92 p. 34). Mr. Lim
his papers were still being processed by the CIS (tsn 9-7-92 p. 15).
informed them that his children had already applied with Engr.
During this period when the accused had already been released
Diaz and that the requirements were bio-data, passport, medical
from detention (testimony of the accused, tsn 4-27-93 pp. 16-17),
checkup, I.D. and income tax return, and P2,500.00 for processing
the complainants kept inquiring from him when they would be
of their papers (tsn 9-7-92 pp. 11 & 23-24 & 9-8-92 pp. 46 & 58).
leaving for Brunei, going to his house several times where they
Telling them that he knew "pretty well the recruiter" Engr. Diaz
saw many other applicants like them. But the accused just kept
and that "We don't have to worry we can really go abroad and as
saying that his papers were still with the CIS (tsn 9-7-92 p. 15).
a matter of fact he said that his three children were applying (to
go) to Brunei," he offered to accompany them to Engr. Erwin Diaz
at the office of the CIS (tsn 9-7-92 p.11). They asked Mr. Lim when When he was still detained, he told the complainants that "the
he was available, and he said July 18 (1992), Saturday morning name of his agency is confidential but the owner thereof is Erlinda
(tsn 9-8-92 p. 34). Romualdez" who "used to be her (sic) mistress" assuring them
that "we don't have to worry about it because he said it is
government project and then he said he will escort us to
On July 18, Mr. Paulo Lim and Mrs. Remedios Aplicador
Philippine Plaza Hotel for briefing before leaving for abroad and
accompanied the three complainants to Engr. Diaz who was then
after the briefing at the Philippine Plaza Hotel we will proceed to
being detained in the CIS Detention Center in Davao City and
POEA where we will sign a contract that is the time we will give
introduced them to him. The complainants asked Engr. Diaz why
him the amount of P20,000.00 and then we will proceed to the
he was "inside the cell." and he explained that four applicants had
residence of Erlinda Romualdez where we will be staying for three
filed a case against him "because they could not accept that they
days" (tsn 9-8-92 pp. 40-41).
were sick of hepatitis and that the CIS elements are just making
money out of it" (tsn 9-8-92 p. 35). They asked him if he was
"recruiting applicants for Brunei" and "he said yes"; they also Mary Anne Navarro asked her father for P20,000.00 for her plane
inquired what were the requirements, and he said four passport fare, and so they mortgaged their piano for P30,000.00 to Serve
size pictures of each applicant, bio-data, income tax return, Loan Mart as evidenced by a promissory note for P30,000.00 (Exh.
medical certificate, NBI clearance, passport, P2,500.00 for "D" & tsn 9-7-92 p. 16).
processing of the papers of each applicant, and P65,000.00 as
placement fee, but only P20,000.00 for plane fare was to be paid
From the borrowed P30,000.00, Mary Anne Navarro set aside
by each applicant, the balance of P45,000.00 was to be paid by
P20,000.00 "for placement fee and the remaining P10,000.00 I
means of salary deductions (tsn 9-7-92 p. 12; tsn 9-8-92 p. 35 & p.
used in buying travelling bag, dresses, shoes and of course make
59). The P2,500.00 for processing of their respective applications
up (sic) because we were told that we will be working there as
was to be paid at the house of Engr. Diaz at 14 Aries Street, GSIS
salesgirls. Then hairband, pair of earrings and ring" (tsn 9-7-92 pp.
Heights, Davao City, with telephone no. 8-46-71 (tsn 9-7-92 p. 12).
16-17). It was the accused who told them that they would be
working in one of the department stores in Brunei and receiving a
monthly pay of $700.00 for working only four hours a day (tsn 9-
7-92 p. 17). Earlier, she said Engr. Diaz told her and her co-
complainants herein that the P20,000.00 was for plane fare (tsn 9-
7-92 p. 12).
Maria theresa Fabricante went home to Cotabato to secure the
required P20,000.00. Her father sold a horse for P5,000.00. As for
the balance of P15,000.00 "Our plan was to mortgage our five
hectare land to a friend of my father."
Q Was the land actually mortgage?
A The money was ready for release.
Q Now, was the money release?
A No sir.
Q Why?
A The money was supposed to be released on August 6, but
before that date August 3, I came back to Davao and went to the
office of POEA and verify whether Engr. Diaz was indeed a
licensed recruiter.
Q What did you find out when you go there?
A He is not registered or in the list. His name does not appear on
the list.
Q With whom did you talk to with the POEA?
A Atty. Evangelio.
Q Now, upon learning that Mr. Diaz is not included in the masters
list, what did you do?
A After knowing that I went to my two companions Ma. Elena
Ramirez and Mary Anne Navarro and informed them of what I
found out that the agency represented by Engr. Diaz was a fake
agency and I advised them they too should follow it up by
themselves.
Q Now, of your own knowledge, did they do?
A Yes sir.
Q What about you?
A Yes sir, we set a date to go to the POEA but before that we
agreed that we will go and see Engr. Diaz to get back the money
that we paid as well as the papers.
Q Did you actually go to Engr. Diaz?
A Yes sir.
Q What happened?
A We went to see Eng. Diaz and when we met him, he greet us by
saying: "If you are ready to leave?" But we told him that we are
not going to leave and we are withdrawing our applications
because we found from the office of the POEA that he is a fake
recruiter and so he got angry and said that if our purpose in going
there was to withdraw, he said we can and we can get back our
documents the next day but he said we will have to pay him
charges. And we said, what for? He said for labor because he
already secured a plane ticket for us and when I asked where the
plane tickets are? He said it is in Cagayan (tsn 9-8-92 pp. 38-39)
At the POEA the three complainants learned that the "agency represented by Engr. Diaz was a fake agency"
(tsn 9-8-92 p. 38). The Philippine Overseas Employment Administration issued a CERTIFICATION (Exh. "A")
which reads:
This is to certify that Eng'r. Diaz a.k.a. Erwin, Rudy, Edwin, Rodolfo, Ariel Mateo of Aries
St., GSIS Subd., Matina, Davao City; Mr. Paulo Lim and Remedios Aplicador both of Sto.
Rosario St., Buhangin, Davao City were never granted an authority to conduct
recruitment for overseas employment in Davao City or in any part of Region XI, and that
the agency of the former known as Phil Jap Constr'n and Tanaka and Diaz Asso. were
never been a licensed agency for overseas recruitment.
This certification is being issued upon the written request of Ma. Elena Ramirez, Mary
Anne Navarro and Ma. Theresa Fabricante for whatever legal purpose it may serve them
best.
14 August 1992 Davao City, Philippines.
(Sgd) GAUDENCIO DELA PEÑA
Unit Coordinator
The three complainants withdrew their applications from Engr. Diaz without paying his
charges. The mounts they paid for processing fees were all returned to them by Engr.
Diaz (Exh. "G"). 3
On September 2, 1993 the trial court rendered a decision finding the appellant guilty of the crime charged, the
dispositive portion of which states:
WHEREFORE, this Court finds the accused Rodolfo "Erwin" Diaz guilty beyond
reasonable doubt of the offense of large scale illegal recruitment and sentences him to
suffer life imprisonment and to pay a fine of P100,000.00, plus the costs.
Accused appellant Diaz predicated the instant appeal on the following assignment of errors:
I
 THE LOWER COURT ERRED IN FINDING THAT THE ACCUSED NOT ONLY CONFINED Moreover, recruitment and placement activities of agents or representatives whose appointments by a license
HIMSELF TO FACILITATING THE PASSPORT AND MEDICAL EXAMINATION OF THE or holder of authority were not previously authorized by the POEA shall likewise constitute illegal
COMPLAINANTS BUT ALSO PROMISED THEM EMPLOYMENT ABROAD. recruitment. 8

II We ruled in People vs. Goce, in this wise:

THE LOWER COURT ERRED IN NOT FINDING THAT THE ACCUSED WAS MERELY A
FACILITATOR OF TRAVEL DOCUMENTS AND NOT AN ILLEGAL RECRUITER.
III
"Article 38 (b) of the Labor Code, as amended by Presidential Decree No. 2018, provides that any recruitment
activity, including the prohibited practices enumerated in Article 34 of said Code, undertaken by non-licensees
or non-holders of authority shall be deemed illegal and punishable under Article 39 thereof. The same article
further provides that illegal recruitment shall be considered an offense involving economic sabotage if any of
the qualifying circumstances exist, namely,

THE LOWER COURT ERRED IN CONVICTING THE ACCUSED OF THE CRIME CHARGED. 4
a] when illegal recruitment is committed by a syndicate, that is, if carried out by a group
of three or more persons conspiring or confederating with one another; or,
The foregoing assigned errors, being intertwined, shall be discussed together.
b] when illegal recruitment is committed in large scale, that is, if committed against
The crime of illegal recruitment, as defined under Articles 38 (a) in relation to Articles 13 (b) and 34 and three or more persons individually or as a group. 9
penalized under Article 39 of the Labor Code, as amended by Presidential Decree 1920 and Presidential
Decree 2018, is any recruitment activity, including the prohibited practices enumerated under Article 34,
Considering the clear import of the foregoing doctrine which spells the unmistakable intent of the specific
undertaken by a non-licensee or non-holder of authority.
provision applicable at bar, the instant case without doubt involves illegal recruitment in large scale.

Thus, in People v. Cabacang 5 this Court ruled that the crime of illegal recruitment is committed when two
The elements of the crime of illegal recruitment in large scale, which are undoubtedly present in this case are:
elements concur, namely:

1] the offender is a non-licensee or non-holder of authority to engage in recruitment

1] That the offender has no valid license or authority required by law to enable one to
and placement activity,
lawfully engage in recruitment and placement of workers; and,

2] the offender undertakes recruitment and placement activity defined under Article 13
2] That the offender undertakes either any activity within the meaning of recruitment
(b), or any prohibited practices enumerated under Article 34, and
and placement defined under Article 13 (b), or any prohibited practices enumerated
under Article 34.
3] illegal recruitment is committed against three or more persons individually or as a
group. 10
Article 13 (b) of the Labor Code, provides for the statutory definition of "recruitment and placement", as
follows:
As can be ascertained after a thorough reading of the records, appellant Diaz was neither a licensee nor a
holder of authority to qualify him to lawfully engage in recruitment and placement activity.
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 Pursuant to the Certification issued by the POEA dated 14th of August 1992, 11 duly signed by Gaudencio de la
or not; Provided that any person or entity which in any manner offers or promises for a Pena, Unit Coordinator, appellant was never granted an authority to conduct recruitment for overseas
fee employment to two or more persons shall be deemed engaged in recruitment and employment.
placement.
As to the third element of the crime, there were obviously three persons who were victims of the appellant's
In People v. Panis, 6 we made the pronouncement that any of the acts mentioned in Article 13(b) will nefarious act of large scale illegal recruitment.
constitute recruitment and placement even if only one prospective worker is involved. The number of persons
dealt with is not an essential ingredient of the act of recruitment and placement.
Relative to the question of whether or not appellant Diaz was engaged in recruitment activity, it is clear from
the testimonies of the three complaints that appellant undertook to recruit them, thus:
Article 38 (a) clearly shows that illegal recruitment is an offense which is essentially committed by a non-
licensee or non-holder of authority.
Maria Elena Ramirez testified in the following tenor:

A non-licensee or non-holder of authority means any person, corporation or entity which has not been issued
Q: When you went to see Mr. Diaz, what happened?
a valid license or authority to engage in recruitment and placement by the Secretary of Labor, or whose
license or authority has been suspended, revoked or cancelled by the POEA or the Secretary. 7
A: We were introduced by Mr. Lim to Diaz, and then we asked
Diaz if it is true that he's recruiting applicants for abroad. He said
that he is recruiting applicants for Japan or Brunei and if we have
 P20,000 we can go to Brunei and we will be given priority if we
have the amount.
Q: What else did you ask Mr. Diaz?
A: We asked him what were the requirements.
The same thing was testified to by Mary Anne Navarro. Appellant told her that he was recruiting contract
workers for abroad, particularly Brunei, and promised her a job opportunity if she can produce various
amounts of money for expenses and processing of documents. 15
Testifying in his behalf, appellant denied these complainants' allegations. He asserted that he never made a
promise in favor of complainants for employment abroad but assisted them in the procurement of passports
and medical certificates.

Q: And what did he answer?

This Court is not, however, persuaded by appellant's bare denials.

A: Well, he told us that we are required to submit 8 copies of

Evidently, greater weight must generally be given to the positive testimonies of the prosecution witnesses
passport, ID photos, income tax return, passport, medical
than to the denial of the defendant in weighing contradictory declarations and statements. 16 We stated this
certificate and the the amount of P2,500 and he further said that
rule with curt emphasis in Goce (supra) that —
our placement fee will be P65,000 but all we have to pay in
advance is the amount of P20,000 and the remaining balance of
P45,000 shall be given through salary deductions. 12 The lame defense consisting of such bare denials by appellant cannot overcome the
evidence presented by the prosecution proving her guilt beyond reasonable doubt. 17
Maria Theresa Fabricante testified in the following manner:
The acts of the appellant, which were clearly described in the lucid testimonies of the three victims, such as
collecting from each of the complainants payment for passport, medical tests, placement fee, plane tickets
She declared:
and other sundry expenses, promising them employment abroad, contracting and advertising for
employment, unquestionably constitute acts of large scale illegal recruitment.
Q: What else did you ask Mr. Diaz?
Appellant sought refuge in the testimonies of his three witnesses that would give credence to the claim that
A: We asked him if he is indeed recruiting applicants for Brunei. he was only a facilitator of travel documents and not a recruiter.
And he said, Yes. After that we asked him what are the
requirements and he told us that we need passport, four passport
The trial court did not give weight to appellant's allegations.
size ID pictures, income tax return and NBI clearance, and if we
have diplomas to attach with the other documents.
As observed by the trial court, the testimony of Edgar Macomao, is incredible which would raise serious
doubts about his motive as a witness. 18 It also describes the testimony of Paulo Lim as unclear and
Q: What else did Mr. Diaz tell you to do?
confusing. 19 Neither was the testimony of Abednigo Neri given much credit by the trial court.

A: He said that if we are interested, he will take care of the

Admittedly, the findings of the trial court as to the credibility of witnesses are to be given great weight and a
processing of the documents by giving him the amount of P2,500,
high degree of respect by the Appellate Court.
and that he explained that our placement fee will be in the sum of
P65,000 and we will just have to raise P20,000 for the processing
of our visa, plane tickets and POEA expenses. 13 In People vs. Reyes (242 SCRA 264), we enunciated the rule that —

She continued: When the issue is the credibility of witnesses, appellate courts will in general not disturb
the findings of the trial court unless certain facts or circumstances of weight have been
overlooked, misunderstood or misapplied which, if considered, might affect the result of
Q: What about your work in Brunei, what did you ask him?
the case. This is because the trial court heard the testimony of the witnesses and
observed their deportment and manner of testifying during trial. 20
A: I asked Engr. Diaz whether our work would be contract worker
and he said yeas and we did not have to worry about it because
In the case at bar, we see no reason to disturb these observations of the trial court. A careful scrutiny of the
he said it was a government project and then he said he would
records reveals that no facts or circumstances had been overlooked or misapplied by the trial court which
escort us to Philippine Plaza Hotel for briefing before leaving for
might affect the result of the case when considered.
abroad and after the briefing we will proceed to the POEA where
we would sign our contract and after signing that is the time we
would give the amount of P20,000 and then we would proceed to As aptly pointed out by the Solicitor General, to wit:
the residence of Erlinda Romualdez where we would be staying
for three days. 14
With the evidence on record, it is hard to believe that services promised by the
appellant to the three complainants were to consists only of his assistance in the
procurement of passports and medical certificates for each of them for they themselves
could have easily secured these documents at a lesser cost. Moreover, the fact that the
 appellant still collected P2,000 from Theresa Fabricante who already had a passport In synthesis, considering the positive testimonies of the complainants against the negative bare denials of
belies his claim that his services were limited only to procuring a passport and medical accused-appellant, no other conclusion could be arrived at but to sustain the conviction of accused-appellant
certificate. 21 finding the latter guilty of large scale illegal recruitment beyond reasonable doubt.

The accused's assertion that he only assisted in the processing of passport and medical certificate is nothing IN VIEW OF THE FOREGOING PREMISES, the Decision appealed from dated September 2, 1993 is hereby
more than a frivolous excuse to divert the truth. AFFIRMED in all respects, with costs against accused-appellant Rodolfo Diaz.

Likewise, it is the settled rule that a person is guilty of illegal recruitment when he gives the impression that he SO ORDERED.
has the power to send workers abroad. 22 Appellant Diaz manifestly gave that impression to the three
complainants that he had the ability to send workers abroad. Misrepresenting himself as a recruiter of
workers for Brunei, he promised them work for a fee and convinced them to give their money for the purpose
of getting an employment overseas.

The findings of the trial court, to which we agree, were arrived at with meticulous care, to wit:

There is no direct and express denial by Mr. Diaz of the following testimonies of the
complainants:

1] That they had asked Mr. Diaz if he was "recruiting applicants for Brunei" and he said
"Yes".

2] That when asked what his requirements were, he said four passport size pictures, bio-
data, income tax returns, medical certificates, NBI clearance, passport, P2,500 for
processing fee, and P65,000 as placement fee, but only P20,000 for plane fare was to be
paid as the balance of P45,000 was payable by salary deductions.

3] That he was asked by the complainants as to what agency he would be referring

them, he said "the name of the agency is confidential but the owner thereof is one
Erlinda Romualdez, who used to be his mistress"; that the complainants did not have to
worry because "it is a government project and then he said he'd escort us to the
Philippine Plaza Hotel for briefing before leaving for abroad and after the briefing we
will proceed to POEA where we will sign our contract and after the signing that is the
time we will give the P20,000, and then we will proceed to the residence of Erlinda
Romualdez where we will be staying for three days."

4] That Mr. Diaz told me the complainants that they would be working "as salesgirls in
one of the department stores in Brunei, that they will be getting $700 a month and they
will be only working four hours a day"

These are definitely prohibited practices or activities constituting large scale illegal
recruitment according to the above quoted provisions of the law. There is no denial of
these by the accused. 23

This Court is aware of a new law, RA 8042, otherwise known as Migrant Workers for Overseas Employment,
which was approved on June 07, 1995. It is An Act to Institute the Policies of Overseas Employment and
Establish a Higher Standard of Protection and Promotion of the Welfare of Migrant Workers, their Families
and Overseas Filipinos in Distress and for Other Purposes. This new law, amends the pertinent provisions of
the Labor Code of the Philippines and gives a new definition of the crime of illegal recruitment and provides
for its higher penalty.

We are not in anyway applying the otherwise restrictive provisions of this new law as it is not applicable in the
case at bar, considering the rule that crimes are punishable by the laws in force at the time of their
commission.
G.R. No. 195419               October 12, 2011
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,  The findings of fact of the RTC, which were affirmed in toto by the CA, are as follows:
vs.
HADJA JARMA LALLI y PURIH, RONNIE ARINGOY y MASION, and NESTOR RELAMPAGOS (at large),Accused.
HADJA JARMA LALLI y PURIH and RONNIE ARINGOY Accused-Appellants.
DECISION
Evidence; Witnesses; The Court has ruled that inconsistencies pointed out by the accused in the
testimony of prosecution witnesses relating to minor details do not destroy the credibility of witnesses. On the
contrary, they indicate that the witnesses were telling the truth and not previously rehearsed. —Both Aringoy
and Lalli, in their respective Appeal Briefs, assail the testimony of Lolita due to its alleged inconsistency on
immaterial facts, such as the status of Lolita’s grandfather, the name of the village she was in, the date she
was brought to Labuan, Malaysia, and the like. In a long line of cases, the Court has ruled that inconsistencies
pointed out by the accused in the testimony of prosecution witnesses relating to minor details do not destroy
the credibility of witnesses. On the contrary, they indicate that the witnesses were telling the truth and not
previously rehearsed.
Labor Law; Illegal Recruitment; Illegal Recruitment is commited by persons who, without authority
from the government, give the impression that they have the power to send workers abroad for employment
purposes.—Given the broad definition of recruitment and placement, even the mere act of referring someone
for placement abroad can be considered recruitment. Such act of referral, in connivance with someone
without the requisite authority or POEA license, constitutes illegal recruitment. In its simplest terms, illegal
recruitment is committed by persons who, without authority from the government, give the impression that
they have the power to send workers abroad for employment purposes.
Same; Syndicated Illegal Recruitment; Elements; (1) the accused have no valid license or authority
required by law to enable them to lawfully engage in the recruitment and placement of workers; (2) the
accused engaged in this activity of recruitment and placement by actually recruiting, deploying and
transporting; (3) illegal recruitment was committed by three persons, conspiring and confederating with one
another.—In this case, the trial court, as affirmed by the appellate court, found Lalli, Aringoy and Relampagos
to have conspired and confederated with one another to recruit and place Lolita for work in Malaysia, without
a POEA license. The three elements of syndicated illegal recruitment are present in this case, in particular: (1)
the accused have no valid license or authority required by law to enable them to lawfully engage in the
recruitment and placement of workers; (2) the accused engaged in this activity of recruitment and placement
by actually recruiting, deploying and transporting Lolita to Malaysia; and (3) illegal recruitment was committed
by three persons (Aringoy, Lalli and Relampagos), conspiring and confederating with one another.
CARPIO, J.:
The Case
This is a consolidated criminal case filed against the accused-appellants for the crimes of Illegal Recruitment
(Criminal Case No. 21930) and Trafficking in Persons (Criminal Case No. 21908).
The Regional Trial Court (RTC) of Zamboanga City, in its Decision dated 29 November 2005 (RTC
Decision),1 found accused-appellants guilty beyond reasonable doubt of the crimes of Illegal Recruitment and
Trafficking in Persons committed by a syndicate, and sentenced each of the accused to suffer the penalty of
life imprisonment plus payment of fines and damages. On appeal, the Court of Appeals (CA) in Cagayan de
Oro, in its Decision dated 26 February 2010 (CA Decision), 2 affirmed in toto the RTC Decision. The accused-
appellants appealed to this Court by filing a Notice of Appeal3 in accordance with Section 3(c), Rule 122 of the
Rules of Court.
The Facts
In the evening of June 3, 2005, while Lolita Sagadsad Plando, 23 years old, single, was in Tumaga, Zamboanga
City on her way to the house of her grandfather, she met Ronnie Masion Aringoy and Rachel Aringoy Cañete.
Ronnie greeted Lolita, "Oy, it’s good you are here" ("oy, maayo kay dia ka"). Rachel asked Lolita if she is
interested to work in Malaysia. x x x Lolita was interested so she gave her cellphone number to Ronnie. After
their conversation, Lolita proceeded to her grandfather’s house.
xxx
On June 4, 2005, at about 7:00 o’clock in the morning, Lolita received a text message from Ronnie Aringoy
inviting her to go to the latter’s house. At 7:30 in the morning, they met at Tumaga on the road near the place
where they had a conversation the night before. Ronnie brought Lolita to the house of his sister in Tumaga.
Lolita inquired what job is available in Malaysia. Ronnie told her that she will work as a restaurant entertainer.
All that is needed is a passport. She will be paid 500 Malaysian ringgits which is equivalent to ₱7,000.00 pesos
in Philippine currency. Lolita told Ronnie that she does not have a passport. Ronnie said that they will look for
a passport so she could leave immediately. Lolita informed him that her younger sister, Marife Plando, has a
passport. Ronnie chided her for not telling him immediately. He told Lolita that she will leave for Malaysia on
June 6, 2005 and they will go to Hadja Jarma Lalli who will bring her to Malaysia. Ronnie sent a text message
to Lalli but the latter replied that she was not in her house. She was at the city proper.
On June 5, 2005, at about 6:00 o’clock in the evening, Ronnie Aringoy and Rachel Aringoy Cañete arrived on
board a tricycle driven by Ronnie at the house where Lolita was staying at Southcom Village. Ronnie asked if
Lolita already had a passport. Lolita said that she will borrow her sister’s passport. Ronnie, Rachel and Lolita
went to Buenavista where Lolita’s other sister, Gina Plando was staying. Her sister Marife Plando was there at
that time. Lolita asked Marife to let her use Marife’s passport. Marife refused but Lolita got the passport.
Marife cried. Ronnie, Rachel and Lolita proceeded to Tumaga. Ronnie, Rachel and Lolita went to the house of
Hadja Jarma Lalli just two hundred meters away from the house of Ronnie in Tumaga. Ronnie introduced Lolita
to Hadja Jarma, saying "Ji, she is also interested in going to Malaysia." Lolita handed a passport to Hadja Jarma
telling her that it belongs to her sister Marife Plando. Hadja Jarma told her it is not a problem because they
have a connection with the DFA (Department of Foreign Affairs) and Marife’s picture in the passport will be
substituted with Lolita’s picture. Nestor Relampagos arrived driving an owner-type jeep. Hadja Jarma
introduced Nestor to Lolita as their financier who will accompany them to Malaysia. x x x Lolita noticed three
other women in Hadja Jarma’s house. They were Honey, about 20 years old; Michele, 19 years old, and
another woman who is about 28 years old. The women said that they are from Ipil, Sibugay Province. Ronnie
told Lolita that she will have many companions going to Malaysia to work. They will leave the next day, June 6,
and will meet at the wharf at 2:30 in the afternoon.
On June 6, 2005, Lolita went to Zamboanga City wharf at 2:00 o’clock in the afternoon bringing a bag
containing her make-up and powder. She met at the wharf Hadja Jarma Lalli, Ronnie Aringoy, Honey and
Michele. Ronnie gave to Lolita her boat ticket for the vessel M/V Mary Joy bound for Sandakan, Malaysia; a
passport in the name of Marife Plando but with Lolita’s picture on it, and ₱1,000.00 in cash. Hadja Jarma,
Lolita, Honey, Michele and two other women boarded the boat M/V Mary Joy bound for Sandakan. Ronnie
Aringoy did not go with them. He did not board the boat. x x x After the boat sailed, Hadja Jarma Lalli and
Nestor Relampagos approached Lolita and her companions. Nestor told them that they will have a good job in
Malaysia as restaurant entertainers. They will serve food to customers. They will not be harmed.
M/V Mary Joy arrived at the port of Sandakan, Malaysia at 10:00 o’clock in the morning of June 7, 2005. After
passing through the immigration office, Hadja Jarma Lalli, Nestor Relampagos, Lolita, Honey, Michele and two
other women boarded a van for Kota Kinabalu. x x x At the hotel, Nestor Relampagos introduced to Lolita and
her companions a Chinese Malay called "Boss" as their employer. After looking at the women, "Boss" brought
Lolita, Honey, Diane and Lorraine to a restaurant near the hotel. Diane and Lorraine were also on baord M/V
Mary Joy when it left the port of Zamboanga for Sandakan on June 6, 2005. When they were already at the
restaurant, a Filipina woman working there said that the place is a prostitution den and the women there are
used as prostitutes. Lolita and her companions went back to the hotel. They told Hadja Jarma and Nestor that
they do not like to work as prostitutes. x x x After about five minutes, another person called "boss" arrived. x x
x [T]hey were fetched by a van at about 7:00 o’clock in the evening and brought to Pipen Club owned by "Boss
Awa", a Malaysian. At the club, they were told that they owe the club 2,000 ringgits each as payment for the
amount given by the club to Hadja Jarma Lalli and Nestor Relampagos. They will pay for the said amount by
entertaining customers. The customers will pay 300 ringgits for short time services of which 50 ringgits will go
to the entertainer, and 500 ringgits for over night service of which 100 ringgits will be given to the entertainer.
Pipen Club is a big club in a two-storey building. There were about 100 women working in the club, many of
them were Filipina women.
Lolita Plando was forced to work as entertainer at Pipen Club. She started working at 8:30 in the evening of
June 14, 2005. She was given the number 60 which was pinned on her. That night, she had her first customer
who selected her among the other women at the club. He was a very big man, about 32 years old, a Chinese-
Malay who looked like a wrestler. The man paid for short time service at the counter. Lolita was given by the
cashier a small pink paper. She was instructed to keep it. A small yellow paper is given to the entertainer for
overnight services. The customer brought Lolita to a hotel. She did not like to go with him but a "boss" at the
club told her that she could not do anything. At the hotel, the man poked a gun at Lolita and instructed her to
undress. She refused. The man boxed her on the side of her body. She could not bear the pain. The man
undressed her and had sexual intercourse with her. He had sexual intercourse with her every fifteen minutes
or four times in one hour. When the customer went inside the comfort room, Lolita put on her clothes and
left. The customer followed her and wanted to bring her back to the hotel but Lolita refused. At about 1:00
o’clock in the morning of June 15, 2005, Lolita was chosen by another customer, a tall dark man, about 40
years old. The customer paid for an overnight service at the counter and brought Lolita to Mariner Hotel which
is far from Pipen Club. At the hotel, the man told Lolita to undress. When she refused, the man brought her to
the comfort room and bumped her head on the wall. Lolita felt dizzy. The man opened the shower and said
that both of them will take a bath. Lolita’s clothes got wet. She was crying. The man undressed her and had
sexual intercourse with her. They stayed at the hotel until 11:00 o’clock in the morning of June 15, 2005. The
customer used Lolita many times. He had sexual intercourse with her every hour.
Lolita worked at Pipen Club from June 14 to July 8, 2005. Every night, a customer used her. She had at least
one customer or more a night, and at most, she had around five customers a night. They all had sexual
intercourse with her. On July 9, 2005, Lolita was able to contact by cellphone at about 10:00 o’clock in the
morning her sister Janet Plando who is staying at Sipangkot Felda x x x. Janet is married to Said Abubakar, an
Indonesian national who is working as a driver in the factory. x x x Lolita told Janet that she is in Labuan,
Malaysia and beg Janet to save her because she was sold as a prostitute. Janet told Lolita to wait because her
husband will go to Pipen Club to fetch Lolita at 9:00 o’clock that evening of that day. x x x She told Janet to
instruct her husband to ask for No. 60 at Pipen Club. x x x At 9:00 o’clock in the evening, Lolita was told by
Daddy Richard, one of the bosses at the club, that a customer requested for No. 60. The man was seated at
one of the tables. Lolita approached the man and said, "good evening." The man asked her is she is the sister
of Janet Plando. Lolita replied that she is, and asked the man if he is the husband of her sister. He said, "yes."
The man had already paid at the counter. He stood up and left the place. Lolita got her wallet and followed
him. x x x Lolita told her sister about her ordeal. She stayed at her sister’s house until July 22, 2005. On July 21,
2005 at 7:00 o’clock in the evening, a policeman went to her sisters house and asked if there is a woman
staying in the house without a passport. Her sister told the policeman that she will send Lolita home on July
22. At dawn on July 22, Lolita and her brother-in-law took a taxi from Sipangkot Felda to Mananamblas where
Lolita will board a speedboat to Sibuto, Tawi-Tawi. x x x
Upon arrival in Zamboanga City on July 24, 2005, Lolita went directly to the house of her eldest sister
Alejandra Plando Maywila at Sta. Catalina, Zamboanga City. She left her things at her sister’s house and
immediately went to the sister of Ronnie Aringoy in Tumaga. Ronnie was not there. She asked Russel, niece of
Ronnie, to call for the latter. Ronnie arrived and said to her, "so you are here, you arrived already." He said he
is not involved in what happened to her. Lolita asked Ronnie to accompany her to the house of Nestor
Relampagos because she has something to get from him. Ronnie refused. He told Lolita not to let them know
that she had already arrived from Malaysia.
Lolita was advised to file a complaint with the police regarding her ordeal in Malaysia. On August 2, 2005, at
past 9:00 o’clock in the morning, Lolita Plando went to Zamboanga Police Office at Gov. Lim Avenue to file her
complaint. x x x
In her Counter-Affidavit (Exh. "1"; "1-A"-Lalli), Hadja Jarma Lalli admitted that she met Lolita Plando on June 6,
2005 on board M/V Mary Joy while the said vessel was at sea on its way to Sandakan, Malaysia. The meeting
was purely coincidental. By coincidence also, Hadja Jarma, Nestor Relampagos and Lolita Plando boarded the
same van for Kota Kinabalu, Malaysia. Upon arrival, they parted ways. They did not see each other anymore at
Kota Kinabalu, Malaysia. She did not know what happened to them. She went to Kota Kinabalu to visit his son-
in-law. She denied having recruited Lolita Plando for employment abroad (Exh. "1"; "1-A"). x x x
In his Counter-Affidavit (Exh. "1"-Aringoy), Ronnie Aringoy affirmed that he personally knows Lolita Plando
since she was a teenager and he knows for a fact that her name is Cristine and not Marife "as she purports it
to appear." Sometime in the first week of June 2005, Lolita borrowed ₱1,000.00 from Ronnie because she
wanted to go to Malaysia to work as a guest relation officer (GRO). Ronnie lent her ₱1,000.00. He told her that
he knows "a certain Hadja Jarma Lalli, distant neighbor, who frequents to Malaysia and with whom she can ask
pertinent information on job opportunities." The entries in Philippine Passport No. MM401136 issued to Hadja
Jarma Lalli on January 29, 2004 (Exh. "2"; "2-A" to "2-Q") showed that she traveled to Malaysia no less than
nine (9) times within the period from March 2004 to June 2005.
xxx
Nora Mae Adling, ticketing clerk of Aleson Shipping Lines, owner of the vessel M/V Mary Joy 2 plying
Zamboanga City to Sandakan, Malaysia route and of M/V Kristel Jane 3, testified that Hadja Jarma Lalli bought
passenger tickets for her travel to Sandakan, not only for herself but also for other women passengers.
xxx
Ronnie Aringoy submitted the Affidavit of his witness Rachel Cañete (Exh. "2") and the Joint Affidavits of
witnesses Mercedita Salazar and Estrella Galgan. Rachel Canete declared that Lolita Plando whom she knows
as Cristine Plando worked as a GRO (guest relation officer) and massage attendant at Magic 2 Videoke and
Massage Parlor, that Lolita Plando has four children sired by different men; and that she knows for a fact that
Lolita Plando has been going to and from Malaysia to work in bars. When she testified in court, Rachel did not
present other evidence to substantiate her allegations. Mercedita Salazar and Estrella Galgan declared in their
Joint Affidavit that Lolita Plando who is known to them as Marife Plando was their co-worker as massage
attendant and GRO (guest relation officer) at Magic 2 Massage Parlor and Karaoke bar where she used the
names Gina Plando and Cristine Plando. She worked in the said establishment for nine months from February
to October 2002. She has four children from four different men. No other evidence was submitted in court to
prove their assertions.4
The Decision of the Trial Court
The Regional Trial Court rendered its Decision on 29 November 2005, with its dispositive portion declaring:
WHEREFORE, the Court finds accused HADJA JARMA LALLI y PURIH and RONNIE ARINGOY y MASION GUILTY
beyond reasonable doubt in Criminal Case No. 21908 of the Crime of Trafficking in Persons defined in Section
3(a) and penalized under Section 10(c) in relation to Sections 4(a) and 6(c) of Republic Act No. 9208 known as
the "Anti-Trafficking in Persons Act of 2003" and in Criminal Case No. 21930 of the crime of Illegal Recruitment
defined in Section 6 and penalized under Section 7(b) of Republic Act No. 8042 known as the "Migrant
Workers and Overseas Filipinos Act of 1995" and SENTENCES each of said accused:
1. In Criminal Case No. 21908, to suffer the penalty of LIFE IMPRISONMENT and to pay a fine of
₱2,000,000.00 pesos;
 2. In Criminal Case No. 21930, to suffer the penalty of LIFE IMPRISONMENT and to pay a fine of
₱500,000.00 pesos;
3. To pay the offended party Lolita Plando y Sagadsad, jointly and severally, the sum of ₱50,000.00
as moral damages, and ₱50,000.00 as exemplary damages; and
4. To pay the costs.
SO ORDERED.5
The trial court did not find credible the denials of the accused-appellants over the candid, positive and
convincing testimony of complainant Lolita Plando (Lolita). The accused, likewise, tried to prove that Lolita was
a Guest Relations Officer (GRO) in the Philippines with four children fathered by four different men. However,
the trial court found these allegations irrelevant and immaterial to the criminal prosecution. These
circumstances, even if true, would not exempt or mitigate the criminal liability of the accused. The trial court
found that the accused, without a POEA license, conspired in recruiting Lolita and trafficking her as a
prostitute, resulting in crimes committed by a syndicate.6 The trial court did not pronounce the liability of
accused-at-large Nestor Relampagos (Relampagos) because jurisdiction was not acquired over his person.
The Decision of the Court of Appeals
On 26 February 2010, the Court of Appeals affirmed in toto the RTC Decision and found accused-appellants
guilty beyond reasonable doubt of the crimes of Illegal Recruitment and Trafficking in Persons.
The Issue
The only issue in this case is whether the Court of Appeals committed a reversible error in affirming in toto the
RTC Decision.
The Ruling of this Court
We dismiss the appeal for lack of merit.
We modify and increase the payment of damages in the crime of Trafficking in Persons from ₱50,000 to
₱500,000 for moral damages and ₱50,000 to ₱100,000 for exemplary damages.
Grounds for Appeal
In his Appeal Brief,7 Ronnie Aringoy (Aringoy) admits that he referred Lolita to a certain Hadja Jarma Lalli
(Lalli), Aringoy’s neighbor who frequents Malaysia and from whom Lolita could ask pertinent information on
job opportunities.8 Aringoy claims that he learned later that Lolita left for Malaysia.9 He denies knowing
Relampagos to whom Lolita paid ₱28,000 as placement fee for finding her work in Malaysia.10
Aringoy presented three witnesses: his niece Rachel Aringoy Cañete (Rachel), Mercedita Salazar (Mercedita),
and Estrella Galgan (Estrella). In her testimony, Rachel declared that: (1) Lolita is a GRO and Massage
Attendant at Magic 2 Videoke and Massage Parlor; (2) Lolita has four children sired by different men; and (3)
Lolita has been travelling to Malaysia to work in bars. Mercedita and Estrella, on the other hand, declared in
their testimonies that Lolita was their co-worker as Massage Attendant and GRO in Magic 2 Massage Parlor
and Karaoke Bar from February to October 2002.11
Aringoy assailed the credibility of Lolita’s testimony because of inconsistencies with regard to: (1) Lolita’s
grandfather’s status and name; (2) the persons (Ronnie and Rachel) who approached Lolita to talk about the
job opportunity in Malaysia; (3) certain statements in Lolita’s testimony that were not alleged in her Sworn
Statement; (4) payment of placement fee of ₱ 28,000; and (5) names of the other female recruits who were
with Lolita in the boat going to Sandakan and Kota Kinabalu. 12 Aringoy likewise claims that he was never
included in the initial complaint filed by Lolita, and Lolita’s statements about her meetings with him, Lalli and
Relampagos on 3, 4, 5 and 6 June 2005 were not corroborated by any witness.13
On the other hand, in her Appeal Brief, 14 Lalli claims that she simply met Lolita on 6 June 2005 on board the
ship M/V Mary Joy bound for Sandakan, Malaysia. 15 Lalli denies having met Lolita prior to their meeting on
board M/V Mary Joy.16 Lalli claims she was going to Malaysia to visit her daughter and son-in-law who was a
Malaysian national.17 Lalli further claims that she only spoke to Lolita aboard the ship for idle conversation to
pass away the time.18 In this conversation, she learned that Lolita was with a party of girls accompanied by
Relampagos, and the latter was bringing them to Malaysia to work as sales ladies. 19 Lalli admits that Lolita,
Relampagos and the other girls rode in Lalli’s van in Sandakan, driven by a friend of Lalli’s son-in-law. 20 They all
rode together because Relampagos talked to the van driver, requesting if he and his party of girls could board
the van and pay their fare when they reach the city proper of Kota Kinabalu. 21 Lalli boarded the van with Lolita,
Relampagos and their companions.22 Upon reaching her destination, Lalli got off the van, leaving Lolita,
Relampagos and their other companions to continue their journey towards the city proper of Kota
Kinabalu.23 After spending several days in Malaysia with her daughter and son-in-law, Lalli went to Brunei to
visit a cousin on 12 June 2005, and headed back to Malaysia on 14 June 2005.24
Lalli assails the credibility of Lolita due to inconsistencies in her testimony with regard to: (1) Lolita not being in
Southcom Village on 5 June 2005 at 6:00 p.m., as she claimed, but in Buenavista Village; and (2) Lolita’s claim
that Lalli and Relampagos on 12 June 2005 brought the girls to Labuan, when in fact, Lalli was already in Brunei
on 12 June 2005, as evidenced by the stamp in her passport.25
Credibility of Testimonies
Both Aringoy and Lalli, in their respective Appeal Briefs, assail the testimony of Lolita due to its alleged
inconsistency on immaterial facts, such as the status of Lolita’s grandfather, the name of the village she was in,
the date she was brought to Labuan, Malaysia, and the like. In a long line of cases, the Court has ruled that
inconsistencies pointed out by the accused in the testimony of prosecution witnesses relating to minor details
do not destroy the credibility of witnesses. 26 On the contrary, they indicate that the witnesses were telling the
truth and not previously rehearsed.27
The clear material inconsistency in this case, however, lies in the testimonies of accused Aringoy and Lalli.
Aringoy admitted that he referred Lolita to a certain Hadja Jarma Lalli, his neighbor who frequents Malaysia
and with whom Lolita could ask pertinent information on job opportunities.28 Lalli, on the other hand, denies
having met Lolita prior to their meeting on board M/V Mary Joy on 6 June 2005,29 and claims that her meeting
with Lolita was purely coincidental.30 Lalli admits that, even if she met Relampagos, Lolita and their
companions only on that day on board M/V Mary Joy, she allowed these people to ride with her in Malaysia
using the van driven by the friend of Lalli’s son-in-law.31 Lastly, Lalli claims that she often goes to Malaysia to
visit her daughter and son-in-law.32 However, this does not explain why Lalli purchased boat tickets, not only
for herself, but for the other women passengers going to Malaysia. 33 From March 2004 to June 2005, Lalli
traveled to Malaysia no less than nine (9) times. 34 Nora Mae Adling, ticketing clerk of Aleson Shipping Lines,
owner of the vessel M/V Mary Joy 2 plying Zamboanga City to Sandakan, Malaysia route and of M/V Kristel
Jane 3, testified in open court that "Hadja Jarma Lalli bought passenger tickets for her travel to Sandakan, not
only for herself but also for other women passengers." 35 Clearly, it is not Lolita’s testimony that is materially
inconsistent, but the testimonies of Lalli and Aringoy.
Aringoy presented his witnesses Rachel, Mercedita and Estrella to impeach the credibility of Lolita by alleging
that Lolita was a Massage Attendant and GRO in a massage parlor and videoke bar. His witness Rachel further
declared that Lolita, at the young age of 23 years, already had four children sired by four different men, and
had been previously travelling to Malaysia to work in bars. These bare allegations were not supported by any
other evidence. Assuming, for the sake of argument, that Lolita previously worked in a Karaoke Bar and
Massage Parlor and that she had four children from different men, such facts cannot constitute exempting or
mitigating circumstances to relieve the accused from their criminal liabilities. It does not change the fact that
the accused recruited Lolita to work in Malaysia without the requisite POEA license, thus constituting the
crime of illegal recruitment. Worse, the accused deceived her by saying that her work in Malaysia would be as
restaurant entertainer, when in fact, Lolita would be working as a prostitute, thus, constituting the crime of
trafficking.
The facts found by the trial court, as affirmed in toto by the Court of Appeals, are, as a general rule, conclusive
upon this Court, in the absence of any showing of grave abuse of discretion. 36 The Court, however, may
determine the factual milieu of cases or controversies under specific circumstances, such as:
(1) when the inference made is manifestly mistaken, absurd or impossible;
(2) when there is a grave abuse of discretion;
(3) when the finding is grounded entirely on speculations, surmises or conjectures;
(4) when the judgment of the Court of Appeals is based on misapprehension of facts;
(5) when the findings of fact are conflicting;
(6) when the Court of Appeals, in making its findings, went beyond the issues of the
case and the same is contrary to the admissions of both appellant and appellee;
(7) when the findings of the Court of Appeals are contrary to those of the trial court;
(8) when the findings of fact are conclusions without citation of specific evidence on
which they are based;
(9) when the Court of Appeals manifestly overlooked certain relevant facts not
disputed by the parties and which, if properly considered, would justify a different
conclusion; and
(10) when the findings of fact of the Court of Appeals are premised on the absence of
evidence and are contradicted by the evidence on record.37
In this case, none of these exceptions to the general rule on conclusiveness of facts are applicable. The Court
gives weight and respect to the trial court’s findings in criminal prosecution because the latter is in a better
position to decide the question, having heard the witnesses in person and observed their deportment and
manner of testifying during the trial.38 For this reason, the Court adopts the findings of fact of the trial court, as
affirmed in toto by the Court of Appeals, there being no grave abuse of discretion on the part of the lower
courts.
Criminal Case No. 21930 (Illegal Recruitment)
Section 6 of Republic Act No. 8042 (RA 8042) defines illegal recruitment, as follows:
[I]llegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or
procuring workers and includes referring, contact services, promising or advertising for employment
abroad, whether for profit or not, when undertaken by a non-licensee or non-holder of
authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as
the Labor Code of the Philippines.
xxx
Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving
economic sabotage.
xxx
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons
conspiring or confederating with one another. (Emphasis supplied)
Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the
Philippines, defines "authority" as follows:
"Authority" means a document issued by the Department of Labor authorizing a person or association to
engage in recruitment and placement activities as a private recruitment entity.
Section 7 of RA 8042 provides for the penalty of illegal recruitment committed by a syndicate (which
constitutes economic sabotage), as follows:
(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand pesos (₱500,000.00)
nor more than One million pesos (₱1,000,000.00) shall be imposed if illegal recruitment constitutes economic
sabotage as defined therein.
It is clear that a person or entity engaged in recruitment and placement activities without the requisite
authority from the Department of Labor and Employment (DOLE), whether for profit or not, is engaged in
illegal recruitment.39 The Philippine Overseas Employment Administration (POEA), an agency under DOLE
created by Executive Order No. 797 to take over the duties of the Overseas Employment Development Board,
issues the authority to recruit under the Labor Code. The commission of illegal recruitment by three or more
persons conspiring or confederating with one another is deemed committed by a syndicate and constitutes
economic sabotage,40 for which the penalty of life imprisonment and a fine of not less than ₱ 500,000 but not
more than ₱ 1,000,000 shall be imposed.41
The penalties in Section 7 of RA 8042 have already been amended by Section 6 of Republic Act No. 10022, and
have been increased to a fine of not less than ₱ 2,000,000 but not more than ₱ 5,000,000. However, since the
crime was committed in 2005, we shall apply the penalties in the old law, RA 8042.
In People v. Gallo,42 the Court enumerated the elements of syndicated illegal recruitment, to wit:
1. the offender undertakes either any activity within the meaning of "recruitment and placement"
defined under Article 13(b), or any of the prohibited practices enumerated under Art. 34 of the
Labor Code;
2. he has no valid license or authority required by law to enable one to lawfully engage in
recruitment and placement of workers; and
3. the illegal recruitment is committed by a group of three (3) or more persons conspiring or
confederating with one another.43
Article 13(b) of the Labor Code of the Philippines defines recruitment and placement as "any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for profit or not, provided, that
any person or entity which, in any manner, offers or promises for a fee, employment to two or more persons
shall be deemed engaged in recruitment and placement."
Clearly, given the broad definition of recruitment and placement, even the mere act of referring someone for
placement abroad can be considered recruitment. Such act of referral, in connivance with someone without
the requisite authority or POEA license, constitutes illegal recruitment. In its simplest terms, illegal recruitment
is committed by persons who, without authority from the government, give the impression that they have the
power to send workers abroad for employment purposes.44
In this case, the trial court, as affirmed by the appellate court, found Lalli, Aringoy and Relampagos to have
conspired and confederated with one another to recruit and place Lolita for work in Malaysia, without a POEA
license. The three elements of syndicated illegal recruitment are present in this case, in particular: (1) the
accused have no valid license or authority required by law to enable them to lawfully engage in the
recruitment and placement of workers; (2) the accused engaged in this activity of recruitment and placement
by actually recruiting, deploying and transporting Lolita to Malaysia; and (3) illegal recruitment was committed
by three persons (Aringoy, Lalli and Relampagos), conspiring and confederating with one another.
Aringoy claims and admits that he only referred Lolita to Lalli for job opportunities to Malaysia. Such act of
referring, whether for profit or not, in connivance with someone without a POEA license, is already considered
illegal recruitment, given the broad definition of recruitment and placement in the Labor Code.
Lalli, on the other hand, completely denies any involvement in the recruitment and placement of Lolita to
Malaysia, and claims she only met Lolita for the first time by coincidence on board the ship M/V Mary Joy.
Lalli’s denial does not deserve credence because it completely conflicts with the testimony of Aringoy who
claims he referred Lolita to Lalli who had knowledge of the job opportunities in Malaysia.
The conflicting testimonies of Lalli and Aringoy on material facts give doubt to the truth and veracity of their
stories, and strengthens the credibility of the testimony of Lolita, despite allegations of irrelevant
inconsistencies.
No improper motive could be imputed to Lolita to show that she would falsely testify against the accused. The
absence of evidence as to an improper motive entitles Lolita’s testimony to full faith and credit.45
Aringoy claims that no conspiracy existed in illegal recruitment, as he denies even knowing Relampagos, who
is currently at-large. Lalli denies any involvement in the illegal recruitment, and claims that she only met
Relampagos through Lolita on board the ship M/V Mary Joy on 6 June 2005, and learned that Relampagos was
bringing Lolita and their other girl companions to Malaysia to work as sales ladies.
Under Article 8 of the Revised Penal Code, there is conspiracy "when two or more persons come to an
agreement concerning the commission of a felony and decide to commit it."
In People v. Lago,46 the Court discussed conspiracy in this wise:
The elements of conspiracy are the following: (1) two or more persons came to an agreement, (2) the
agreement concerned the commission of a felony, and (3) the execution of the felony was decided upon. Proof
of the conspiracy need not be based on direct evidence, because it may be inferred from the parties’ conduct
indicating a common understanding among themselves with respect to the commission of the crime. Neither
is it necessary to show that two or more persons met together and entered into an explicit agreement setting
out the details of an unlawful scheme or objective to be carried out. The conspiracy may be deduced from the
mode or manner in which the crime was perpetrated; it may also be inferred from the acts of the accused
evincing a joint or common purpose and design, concerted action and community of interest. 47
In this case, Lolita would not have been able to go to Malaysia if not for the concerted efforts of Aringoy, Lalli
and Relampagos. First, it was Aringoy who knew Lolita, since Aringoy was a neighbor of Lolita’s grandfather. It
was Aringoy who referred Lolita to Lalli, a fact clearly admitted by Aringoy. Second, Lolita would not have been
able to go to Malaysia if Lalli had not purchased Lolita’s boat ticket to Malaysia. This fact can be deduced from
the testimony of Nora Mae Adling (Nora), ticketing clerk of Aleson Shipping Lines, owner of the vessel M/V
Mary Joy 2 plying Zamboanga City to Sandakan, Malaysia route and of M/V Kristel Jane 3. Nora testified in
open court that "Hadja Jarma Lalli bought passenger tickets for her travel to Sandakan, not only for herself but
also for other women passengers." Lalli’s claim that she only goes to Malaysia to visit her daughter and son-in-
law does not explain the fact why she bought the boat tickets of the other women passengers going to
Malaysia. In fact, it appears strange that Lalli visited Malaysia nine (9) times in a span of one year and three
months (March 2004 to June 2005) just to visit her daughter and son-in-law. In Malaysia, it was Relampagos
who introduced Lolita and her companions to a Chinese Malay called "Boss" as their first employer. When
Lolita and her companions went back to the hotel to tell Relampagos and Lalli that they did not want to work
as prostitutes, Relampagos brought Lolita and the girls on board a van to Sangawan China Labuan, where they
stayed in a room for one night. The next day, they were picked up by a van and brought to Pipen Club, where
Lolita and her companions worked as prostitutes. To date, accused Relampagos is at large and has not been
brought under the jurisdiction of the courts for his crimes.
Flight in criminal law is the evading of the course of justice by voluntarily withdrawing oneself in order to avoid
arrest or detention or the institution or continuance of criminal proceedings. 48 The unexplained flight of an
accused person may as a general rule be taken into consideration as evidence having a tendency to establish
his guilt.49 Clearly, in this case, the flight of accused Relampagos, who is still at-large, shows an indication of
guilt in the crimes he has been charged.
It is clear that through the concerted efforts of Aringoy, Lalli and Relampagos, Lolita was recruited and
deployed to Malaysia to work as a prostitute. Such conspiracy among Aringoy, Lalli and Relampagos could be
deduced from the manner in which the crime was perpetrated – each of the accused played a pivotal role in
perpetrating the crime of illegal recruitment, and evinced a joint common purpose and design, concerted
action and community of interest.
For these reasons, this Court affirms the CA Decision, affirming the RTC Decision, declaring accused Ronnie
Aringoy y Masion and Hadja Jarma Lalli y Purih guilty beyond reasonable doubt of the crime of illegal
recruitment committed by a syndicate in Criminal Case No. 21930, with a penalty of life imprisonment and a
fine of ₱ 500,000 imposed on each of the accused.
Criminal Case No. 21908 (Trafficking in Persons)
Section 3(a) of Republic Act No. 9208 (RA 9208), otherwise known as the Anti-Trafficking in Persons Act of
2003, defines Trafficking in Persons, as follows:
Trafficking in Persons – refers to the recruitment, transportation, transfer or harboring, or receipt of
persons with or without the victim’s consent or knowledge, within or across national borders by means of
threat or use of force, or other forms of coercion, abduction, fraud, deception, abuse of power or of position,
taking advantage of the vulnerability of the person, or, the giving or receiving of payments or benefits to
achieve the consent of a person having control over another person for the purpose of exploitation which
includes at a minimum, the exploitation or the prostitution of others or other forms of sexual exploitation,
forced labor or services, slavery, servitude or the removal or sale of organs. x x x (Emphasis supplied)
Section 4 of RA 9208 enumerates the prohibited acts of Trafficking in Persons, one of which is:
(a) To recruit, transport, transfer, harbor, provide, or receive a person by any means, including those done
under the pretext of domestic or overseas employment or training or apprenticeship, for the purpose of
prostitution, pornography, sexual exploitation, forced labor, slavery, involuntary servitude or debt bondage.
The crime of Trafficking in Persons is qualified when committed by a syndicate, as provided in Section 6(c) of
RA 9208:
(c) When the crime is committed by a syndicate, or in large scale. Trafficking is deemed committed by a
syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one another.
It is deemed committed in large scale if committed against three (3) or more persons, individually or as a
group.
Section 10(c) of RA 9208 provides for the penalty of qualified trafficking:
(c) Any person found guilty of qualified trafficking under Section 6 shall suffer the penalty of life imprisonment
and a fine of not less than Two million pesos (₱2,000,000.00) but not more than Five million pesos
(₱5,000,000.00).
The Anti-Trafficking in Persons Act is a new law passed last 26 May 2003, designed to criminalize the act of
trafficking in persons for prostitution, sexual exploitation, foced labor and slavery, among others.
Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good,
in addition to the moral, temperate, liquidated or compensatory damages.
Art. 2230. In criminal offenses, exemplary damages as a part of the civil liability may be imposed when the
crime was committed with one or more aggravating circumstances. Such damages are separate and distinct
from fines and shall be paid to the offended party.

In this case, Aringoy claims that he cannot be convicted of the crime of Trafficking in Persons because he was The payment of ₱ 500,000 as moral damages and ₱ 100,000 as exemplary damages for the crime of Trafficking
not part of the group that transported Lolita from the Philippines to Malaysia on board the ship M/V Mary Joy. in Persons as a Prostitute finds basis in Article 2219 of the Civil Code, which states:
In addition, he presented his niece, Rachel, as witness to testify that Lolita had been travelling to Malaysia to
work in bars. On the other hand, Lalli denies any involvement in the recruitment and trafficking of Lolita,
Art. 2219. Moral damages may be recovered in the following and analogous cases:
claiming she only met Lolita for the first time on board M/V Mary Joy going to Malaysia.

(1) A criminal offense resulting in physical injuries;

The testimony of Aringoy’s niece, Rachel, that Lolita had been travelling to Malaysia to work in bars cannot be
given credence. Lolita did not even have a passport to go to Malaysia and had to use her sister’s passport
when Aringoy, Lalli and Relampagos first recruited her. It is questionable how she could have been travelling (2) Quasi-delicts causing physical injuries;
to Malaysia previously without a passport, as Rachel claims. Moreover, even if it is true that Lolita had been
travelling to Malaysia to work in bars, the crime of Trafficking in Persons can exist even with the victim’s (3) Seduction, abduction, rape, or other lascivious acts;
consent or knowledge under Section 3(a) of RA 9208.

(4) Adultery or concubinage;

Trafficking in Persons under Sections 3(a) and 4 of RA 9208 is not only limited to transportation of victims, but
also includes the act of recruitment of victims for trafficking. In this case, since it has been sufficiently proven
beyond reasonable doubt, as discussed in Criminal Case No. 21930, that all the three accused (Aringoy, Lalli (5) Illegal or arbitrary detention or arrest;
and Relampagos) conspired and confederated with one another to illegally recruit Lolita to become a
prostitute in Malaysia, it follows that they are also guilty beyond reasonable doubt of the crime of Qualified (6) Illegal search;
Trafficking in Persons committed by a syndicate under RA 9208 because the crime of recruitment for
prostitution also constitutes trafficking.
(7) Libel, slander or any other form of defamation;

When an act or acts violate two or more different laws and constitute two different offenses, a prosecution
under one will not bar a prosecution under the other. 50 The constitutional right against double jeopardy only (8) Malicious prosecution;
applies to risk of punishment twice for the same offense, or for an act punished by a law and an
ordinance.51 The prohibition on double jeopardy does not apply to an act or series of acts constituting different (9) Acts mentioned in Article 309;
offenses.
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
DAMAGES
The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may also
Lolita claimed actual damages of ₱ 28,000, which she allegedly paid to the accused as placement fee for the recover moral damages.
work of restaurant entertainer in Malaysia. The trial court did not award this amount to Lolita. We agree and
affirm the trial court’s non-award due to Lolita’s inconsistent statements on the payment of placement fee. In
The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in No. 9 of this
her sworn statement, Lolita alleged that she paid ₱ 28,000 as placement fee to Lalli. 52 On cross-examination,
article, in the order named.
however, she admitted that she never paid ₱ 28,000 to the accused.53

We, however, modify and increase the payment of damages in the crime of Trafficking in Persons from ₱
50,000 to ₱ 500,000 as moral damages and ₱ 50,000 to ₱ 100,000 as exemplary damages.
The Civil Code describes moral damages in Article 2217:
Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant’s
wrongful act for omission.1avvphi1
Exemplary damages, on the other hand, are awarded in addition to the payment of moral damages, by way of
example or correction for the public good, as stated in the Civil Code:
The criminal case of Trafficking in Persons as a Prostitute is an analogous case to the crimes of seduction,
abduction, rape, or other lascivious acts. In fact, it is worse. To be trafficked as a prostitute without one’s
consent and to be sexually violated four to five times a day by different strangers is horrendous and atrocious.
There is no doubt that Lolita experienced physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, and social humiliation when she was trafficked as a
prostitute in Malaysia. Since the crime of Trafficking in Persons was aggravated, being committed by a
syndicate, the award of exemplary damages is likewise justified.
WHEREFORE, we AFFIRM the Decision of the Court of Appeals dated 26 February 2010, affirming the Decision
of the Regional Trial Court of Zamboanga City dated 29 November 2005, finding accused Lalli and Aringoy
guilty beyond reasonable doubt of the crimes of Illegal Recruitment and Trafficking in Persons committed by a
syndicate, with the following MODIFICATIONS:
 1. In Criminal Case No. 21908, each of the accused is sentenced to suffer the penalty of LIFE
IMPRISONMENT and to pay a fine of ₱ 2,000,000;

2. In Criminal Case No. 21930, each of the accused is sentenced to suffer the penalty of
LIFEIMPRISONMENT and to pay a fine of ₱ 500,000;

3. Each of the accused is ordered to pay the offended party Lolita Plando y Sagadsad, jointly and
severally, the sum of ₱ 500,000 as moral damages, and ₱ 100,000 as exemplary damages for the
crime of Trafficking in Persons; and to pay the costs.

The Court cannot pronounce the liability of accused-at-large Nestor Relampagos as jurisdiction over his person
has not been acquired.

SO ORDERED.
G.R. No. 120141 April 21, 1999
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,  The case before the Court is an appeal from a decision 1 of the Regional Trial Court, Branch 6, Legaspi City,
vs.
LORNA B. GUEVARRA, JOSIE BEA and PEDRO BEA, JR., accused-appellants.
 Criminal Law; Labor Code; Illegal Recruitment; It is the lack of the necessary license or permit, or the
engagement of prohibited activities enumerated in the Labor Code that render such recruitment activities
unlawful or criminal; Illegal recruitment is qualified into large scale recruitment when three or more persons
are victimized.—Recruitment for overseas employment is not in itself necessarily immoral or unlawful. It is the
lack of the necessary license or permit, or the engagement of prohibited activities enumerated in the Labor
Code that render such recruitment activities unlawful or criminal. Illegal recruitment is qualified into large
scale recruitment when three or more persons are victimized. If such recruitment is carried out by a group of
three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or
illegal transaction, enterprise or scheme, it becomes one committed by a syndicate. Illegal recruitment
committed by a syndicate or in large scale amounts to an offense involving economic sabotage, punishable by
life imprisonment and a fine of one hundred thousand pesos (P100,000.00).
Same; Same; Same; The offense committed against the five complainants is illegal recruitment in large
scale.—As can be seen from the testimonies of the witnesses, the accused-appellants com-
__________________
*
 FIRST DIVISION.
112
11 SUPREME COURT REPORTS ANNOTATED
2
People vs. Guevarra
mitted acts of recruitment such as promises of profitable employment to complainants and acceptance
of placement fees. Such acts fall squarely within the definition of recruitment and placement under the Labor
Code. With the certification from the Department of Labor and Employment stating that appellants were not
authorized to recruit workers for overseas employment, it is clear that the offense committed against the five
complainants is illegal recruitment in large scale.
Same; Same; Same; Evidence; Denials, if unsubstantiated by clear and convincing evidence, are
deemed negative and self-serving evidence unworthy of credence.—As against the evidence built by the
prosecution, the accused-appellants merely raised the defense of denial. However, denials, if unsubstantiated
by clear and convincing evidence, are deemed negative and self-serving evidence unworthy of credence. They
have no evidentiary value when ranged against the testimonies of credible witnesses on affirmative matters.
Same; Same; Same; Same; Appellate courts accord high respect to the findings and conclusions of
lower courts.—The credibility of witnesses is best left to the judgment of the trial judge whose findings are
generally not disturbed on appeal, absent any showing that substantial errors were committed or that
determinative facts were overlooked which, if appreciated, would call for a different conclusion. The trial court
has the advantage, not available to appellate courts, of observing the deportment of witnesses and their
manner of testifying during the trial. Thus, appellate courts accord high respect to the findings and conclusions
of lower courts.
Same; Same; Same; Same; Motive; The rule is established that it is against human nature and
experience for strangers to conspire and accuse another stranger of a most serious crime just to mollify their
hurt feelings.—There is no showing that any of the complainants had ill-motives to testify falsely against
accused-appellants and to impute such serious charges. Accused-appellants have not disputed the fact that
they have had no previous quarrel with any of the complainants. The rule is established that it is against
human nature and experience for strangers to conspire and accuse another stranger of a most serious crime
just to mollify their hurt feelings.
PARDO, J.:
convicting accused Lorna B. Guevarra, Josie Bea and Pedro Bea, Jr., of illegal recruitment by a syndicate in
large scale, and sentencing all three accused to life imprisonment and to pay a fine of one hundred thousand
(P100,000.00) each, and to indemnify each of the complainants, namely, Wilfredo Belbes, Ermelita Bocato,
Rizalina Belbes, Alan Banico and Arnel Basaysay, 2 jointly and severally, the amount of thirty thousand pesos
(P30,000.00) for the placement fees collected, and twenty thousand pesos (P20,000,00) as moral damages,
and costs.1âwphi1.nêt
On January 17, 1994, Assistant Provincial Prosecutor Ignacio N. Almodovar, Jr. of Albay charged Lorna B.
Guevarra, Josie Bea and Pedro Bea, Jr. with illegal recruitment committed by a syndicate in large scale, as
follows:
That sometime in August and September, 1993, at Barangay San Andres, Sto. Domingo,
Albay and within the jurisdiction of this Honorable Court, the 3 (three) above-named
accused conspiring, confederating and mutually helping one another for a common
purpose did then and there, without any license or authority to do so, recruit WILFREDO
BELBES Y BALLARES, ERMELITA BALBIN BOCATO, RIZALINA BELBES Y BALLARES, ALAN
BANICO Y BELBES and ARNEL A. BAGAYSAY, all of Brgy. San Andres, Sto. Domingo, Albay
for a job placement in Malaysia and received from the five victims P30,000.00 each as
processing fee; that on September 25, 1993, the five recruits flew to Kuala Lumpur,
Malaysia, expecting as per instruction of the accused, that somebody will fetch them at
the airport and will bring them to their employer; that nobody fetched them as they did
not have any employer in Malaysia which forced them to go back to the Philippines, to
their damage and prejudice.
CONTRARY TO LAW. 3
Upon arraignment on February 14, 1994, 4 all three accused entered a plea of not guilty. After due trial, on
February 15, 1995, the court a quo rendered a decision, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, decision is hereby rendered finding the accused
Lorna Guevarra, Pedro Bea, Jr. and Josie Bea GUILTY beyond reasonable doubt of the
crime of ILLEGAL RECRUITMENT qualified into large scale recruitment and by a syndicate
and hereby sentences each of the said accused to suffer the penalty of LIFE
IMPRISONMENT and to pay a FINE of One Hundred Thousand (P100,000.00) Pesos each,
and to indemnify each of the complainants, jointly and severally P30,000.00 for the
placement fees they have collected, and the further sum of P20,000.00 for each of the
complainants as moral damages and to pay the costs.
SO ORDERED. 5
Hence, this appeal.
The facts, as established by evidence of the prosecution, are as follows:
On August 23, 1993, accused Lorna Guevarra visited Rizalina Belbes in her house in Sto. Domingo, Albay, and
offered her an opportunity to work in Malaysia for a salary of nine thousand pesos (P9,000.00) for the first
three months and an increase of at least three thousand pesos (P3,000.00) thereafter, Guevarra also
approached Wilfredo Belbes, the brother Rizalina, to convince him to work abroad. Guevarra assured them
that she had the capability of sending workers abroad and that her connection was on a direct hiring
basis. 6 Guevarra made several visits until Rizalina and Wilfredo agreed to meet accused spouses Josie and
Pedro Bea, Jr. in Bonga, Bacaycay, Albay. The spouses Bea continued to persuade Rizalina and Wilfredo to
accept the job offers. 7
Likewise, on August 23, 1993, accused Guevarra went to the house of Ermelita Balbin Bocato, promising
overseas employment, high salary, and free board and lodging. Guevarra also introduced Ermelita to accused
spouses Bea. All three accused kept persuading Ermelita to pay thirty thousand pesos (P30,000.00) as
placement fee for the opportunity to work abroad. After much coaxing, Ermelita finally agreed and gave five
thousand pesos (P5,000.00) as initial payment, in the presence of Rizalina Belbes, who also gave her initial
payment of four thousand pesos (P4,000.00). 8
The complainants claimed that their lives were endangered because they were stranded in a foreign country
without a place to stay or any means of subsistence. They also suffered embarrassment and humiliation. 21 The
complainants confronted the three accused, who promised to refund the money. Later, however, the accused
challenged complainants to file a case. 22
Accused Lorna Guevarra, on the other hand, insisted that she was merely a housewife with three children, not
a recruiter. She testified that sometime before August 23, 1993, Ermelita Bocato and Rizalina Belbes went to
her house in order to ask how her brothers, Resurreccion and Dionisio Bea, and niece Maricel Bermillo, who
were working in Malaysia, were able to go abroad. Guevarra told Ermelita and Rizalina that her brothers were
assisted by an agency and that they should go to Manila to look for that agency. Since that time, Guevarra did
not see Ermelita Bocato. Rizalina Belbes, however, insisted that she be accompanied to the house of Josie Bea,
who financed the overseas trip.

On September 16, 1993, Ermelita paid her balance of twenty-five thousand pesos (P25.000.00) at a canteen On August 23, 1993, Guevarra escorted Rizalina to the house of Josie Bea. Guevarra later learned that Rizalina
near the Physician's Tower at United Nations Avenue, Manila. She also saw Rizalina Belbes pay her balance of and Ermelita returned to the house of Josie Bea several times. 23
twenty-six thousand pesos (P26,000.00) and the further sum of thirty thousand pesos (P30,000.00) for
Wilfredo Belbes. The accused spouses Bea received these payments. 9
Guevarra denied recruiting the complainants or collecting any amount from them. 24 She claimed that she did
not know Ermelita Bocato, Arnel Basaysay or Alan Banico before August 1993, although she admitted knowing
Accused Guevarra also enticed Gloria Banico to let her son Alan Banico work in Malaysia, where an employer Rizalina Belbes, a businesswoman in her barangay, and Gloria Banico, a worker at the barangay health
offered free board and lodging with a starting salary of nine thousand pesos (P9,000.00) to be increased to center. 25
twelve thousand pesos (P12,000.00) after three months. 10 She also introduced Gloria to the accused spouses
Bea, who continued convincing her to send her son to Malaysia to work. After some time, Gloria finally agreed
Accused Josie Bea likewise denied having recruited any of the complainants to work abroad, saying that she
and paid the placement fee of thirty thousand pesos (P30,000.00) to Josie and
was engaged in the manufacture of abaca slippers while her husband, Pedro Bea, Jr., was a jeepney driver. 26
Pedro Bea, Jr. 11

Josie testified that on August 23, 1993, accused Lorna Guevarra, accompanied by Ermelita Bocato and Rizalina
Accused Guevarra also offered overseas employment to Arnel Basaysay, as a worker in a grove factory in
Belbes, visited her. Josie did not know why Ermelita and Rizalina were with Guevarra. 27 Four days later,
Malaysia with a starting salary of nine thousand pesos (P9,000.00), to be increased after three months.
Rizalina and Ermelita returned and asked her how her brother-in-law Resurreccion Bea was able to go to
Accused Guevarra kept going to the house of Arnel, accompanied by Josie Bea. Guevarra managed to convince
Malaysia. She told them that it was through a travel agency When they asked to be accompanied there, Josie
the father of Arnel to agree to the offer and to pay the placement fee for his son. 12
refused because she had just delivered a child a few days earlier, and needed to rest. 28

All the complainants trusted Lorna Guevarra, as they all resided in the same barrio. 13 Complainants believed
On September 15, 1993, Rizalina Belbes and Ermelita Bocato returned and instead that Josie finally agreed.
that the proposed overseas employment was legitimate, so they did not ask too many questions on the
They left for Manila that afternoon and arrived in the morning of the next day. Josie brought them to a certain
authority of the three accused. The complainants also trusted Pedro Bea, Jr. and Josie Bea, who gave
George Serrano of Travel Orient Agency in San Juan, Manila. There, Ermelita and Rizalina bought plane tickets
assurances that complainants were not being fooled. 14
for Malaysia. Josie went home that same day. 29

On September 24, 1993, Rizalina and Wilfredo Belbes, Ermelita Bocato and Arnel Basaysay received their
Josie testified further that on October 9, 1993, Rizalina Belbes came back to the Philippines from Malaysia and
passports and PAL plane tickets.
visited her. Rizalina mentioned that she found a buyer of abaca products in Malaysia and showed Josie some
pictures and calling cards. 30
On September 25, 1993, the three accused were at the airport to brief the complainants about the trip.
Accused Josie Bea assured the complainants that their prospective employer will meet them at the Kuala
Pedro Bea, Jr. denied involvement in any recruitment activity and alleged that he was driving on the Legaspi-
Lumpur airport. 15At this time, Josie Bea handed over the passport and plane ticket of Alan Banico. 16
Tabaco route from July 1993 to October 1993. 31

The complainants left the Manila airport at 3:30 in the afternoon. Upon arrival in Kuala Lumpur three hours
Pedro testified that on September 15, 1993, he did not find his wife Josie at home and learned that she went
later, the complainants waited in the airport for someone to meet them.
to Manila. When Josie came back on September 17, 1993, she told Pedro that she took care of some papers
because she wanted to go back to her former job as seamstress in a tailor shop. 32
After waiting until nighttime without anybody fetching them at the complainants remembered the address of
Resurrecion Bea and Dionisio Bea, brothers-in-law of Josie Bea. Complainants took a taxi and proceeded to
In this appeal, the three accused-appellants alleged that they neither recruited nor received any payment
such address. 17 They found Resurrecion Bea, who did not known anything about employment for the
from any of the complainants. They denied even knowing the complainants before the filing of the case. They
complainants. The complainants agreed to contribute one hundred dollars ($100) each for their lodging
also maintained that the lower court erred in finding the existence of conspiracy, and qualifying the illegal
expenses while waiting for the promised employment. 18
recruitment to one committed by a syndicate or in large scale.

After several days and realizing that there was no work for them in Malaysia, Rizalina Belbes, Wilfredo Belbes
The appeal lacks merit.
and Ermelita Bocato returned to the Philippines on September 30, 1993. 19 Alan Banico and Arnel Basaysay
followed suit on October 2, 1993. 20
Under the Labor Code, recruitment and placement refer to "any act of canvassing, enlisting, contracting, Wilfredo Belbes corroborated his sister's testimony in the following manner, to wit:
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, [t]hat any person or entity
Q What convinced you to work abroad?
which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed
engaged in recruitment and
placement. 33 A I was convinced to work abroad because Lorna Guevarra told
me that she has the capability of sending workers abroad; and
that her connection was on direct hiring basis; that for the first
Recruitment for overseas employment is not in itself necessarily immoral or unlawful. It is the lack of the
three months period I will be receiving P9,000.00 pesos and that
necessary license or permit, or the engagement of prohibited activities enumerated in the Labor Code that
after three months period I will receiving P12,000.00 pesos. So
render such recruitment activities unlawful or criminal. 34 Illegal recruitment is qualified into large scale
being a poor man I accepted the offer because I wanted to give
recruitment when three or more persons are victimized. If such recruitment is carried out by a group of three
my family more benefits. 38
(3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme, it becomes one committed by a syndicate. Illegal recruitment committed by
a syndicate or in large scale amounts to an offense involving economic sabotage, punishable by life x x x           x x x          x x x
imprisonment and a fine of one hundred thousand pesos (P100,000.00). 35
Q It was your sister Sally Belbes who allegedly paid the P30,000.00
In this case, Lorna Guevarra and Josie Bea were neither license nor authorized by the Department of Labor is that correct?
and Employment and the Philippine Overseas Employment Administration to recruit workers for overseas
employment. 36 Pedro Bea Jr. had no such authority or license. A Yes sir.

Complainants in this case comprise five persons, or more than the minimum number or persons required by Q Were you aware to whom did your sister pay that amount?
law to constitute illegal recruitment in large scale.

A To Josie Bea and Pedro Bea, Jr., sir.

The question now is whether or not appellants engaged in recruitment activities.

Q Were you around when the amount was paid?

Complainant Rizalina Belbes testified as follows:

A Yes sir. 39
Q Do you remember having met this Lorna B. Guevarra prior to
your departure from Kuala Lumpur?
Ermelita Bocato, for her part, testified as follows:

A From what I remember she first came to our house on August

23, 1993. Q In connection with your complaint, do you remember when for
the first time have met Lorna Guevarra?

x x x           x x x          x x x
She started convincing me to work in Malaysia because she said
she has job placements abroad.
Q Relying on the alleged promise of a very lucrative job at Kuala
Lumpur by Lorna Guevarra who initially saw you on August 23,
what else happened?
A I already knew her because she is my barrio mate and she came
to me for the first regarding this job opportunity at Kuala Lumpur
on August 23, 1993 and told me they have connections in
Malaysia and her hiring is direct employment and it is very good
opportunity in Malaysia.
x x x           x x x          x x x

A For several times that she came to our house, she accompanied
me to the house of her brother Pedro Bea and his wife Josie Bea.
x x x           x x x          x x x
When we arrived there Lorna Guevarra informed the two of them
saying that "these are the persons whom I convinced to work
abroad," and in fact, the three of them started convincing us more
and asked us on what country we would like to work. 37
A During the first time that she came to me and told me the job
opportunity I was not convinced yet because I was then having
seven children and the youngest who was only seven months old
because of this I did not want to leave them but because of her
explanation (Lorna Guevarra) that they were hiring employees
direct employees board and lodging free I was convinced to go to
Malaysia.
x x x           x x x          x x x
A . . . I was taken by Lorna Guevarra to the house of Josie Bea and
Pedro Bea, Jr. in Bonga, Bacaycay, Albay.
 x x x           x x x          x x x x x x           x x x          x x x

Q After you were convinced by these three accused and finally Q Did you acceed to their proposal to join the other persons
decided to go to Malaysia for a very attractive job or employment, whom they have recruited to go to Malaysia?
did you ask them what will be your obligation to them for this
favor they were affording to you?
A Yes, I acceeded to their promised job. 41

A The accused told me that I should give them thirty thousand

Arnel Basaysay testified as follows:
pesos (P30,000.00) for this job opportunity. 40

Q How were you able to go to Kuala Lumpur, Malaysia on

Alan Banico also testified in the following manner, to wit:
September 25, 1993?

Q Do you know Lorna Guevarra?

A I was recruited.

A Yes sir.
Q By whom?

x x x           x x x          x x x
Q Lorna Guevarra, Josie Bea and Pedro Bea, Jr.

She went to our house and told me about her business of sending
x x x           x x x          x x x
workers in Malaysia, sir.

Q . . . will you kindly tell us how these three (3) people were able
Q When she talked that matter with you, what else did she tell
to recruit you?
you?

A Lorna Guevarra came to our house sir.

A She told me to go with those whom they were going to send to
work in Malaysia. She also told me that we were going to have a
very good job in Malaysia; that I would be receiving a high salary. x x x           x x x          x x x

x x x           x x x          x x x She was convincing me to go abroad sir.

Q After you have talked with your mother about this matter, did x x x           x x x          x x x
you again see this Lorna Guevarra subsequent to that meeting of
yours? Q . . . what else did Lorna Guevarra tell you?

A Yes sir because she had been coming back to our house and A She told me for the first three (3) months our salary would be
trying to convince me to go abroad. P9,000.00 and after three (3) months it will be increased.

Q This Lorna Guevarra in her going to your house, was there any x x x           x x x          x x x
other person who helped her convince you?

Q Is Lorna Guevarra alone in her succeeding return trips to your

A She went to our house with Josie Bea, sir. house at San Andres, Sto. Domingo, Albay?

x x x           x x x          x x x A She was with Josie Bea sir.

Lorna Guevarra said that Josie Bea is the one sending workers x x x           x x x          x x x
abroad.

Q Did you know as to how much did they demand for the favor
Q It was not Lorna Guevarra? they are extending to you?

A Including her, sir. A P30,000.00 sir. 42

As can be seen from the testimonies of the witnesses, the accused-appellants committed acts of recruitment
such as promises of profitable employment to complainants and acceptance of placement fees. Such acts fall
squarely within the definition of recruitment and placement under the Labor Code. With the certification from
the Department of Labor and Employment stating that appellants were not authorized to recruit workers for
overseas employment, it is clear that the offense committed against the five complainants is illegal
recruitment in large scale. 43

The accused-appellants asserted that the offense should not have been qualified into illegal recruitment by a
syndicate since there was no proof that they acted in conspiracy with one another. However, the acts of
accused-appellants showed unity of purpose. Guevarra would visit each of the complainants in their houses
for several times, convincing them to work abroad, and giving them the impression that she had the capability
of sending them abroad. She would accompany them to the house of the spouses Bea, who, in turn, would
collect the placement fees and process the passports and plane tickets. All these acts of the appellants
established a common criminal design mutually deliberated upon and accomplished through coordinated
moves.

As against the evidence built by the prosecution, the accused-appellants merely raised the defense of denial.
However, denials, if unsubstantiated by clear and convincing evidence, are deemed negative and self-serving
evidence unworthy of credence. They have no evidentiary value when ranged against the testimonies of
credible witnesses on affirmative matters. 44

The credibility of witnesses is best left to the judgment of the trial judge whose findings are generally not
disturbed on appeal, absent any showing that substantial errors were committed or that determinative facts
were overlooked which, if appreciated, would call for a different conclusion. 45 The trial court has the
advantage, not available to appellate courts, of observing the deportment of witnesses and their manner of
testifying during the trial. Thus, appellate courts accord high respect to the findings and conclusions of lower
courts. 46

Moreover, there is no showing that any of the complainants had ill-motives to testify falsely against accused-
appellants and to impute such serious charges. Accused-appellants have not disputed the fact that they have
had no previous quarrel with any of the complainants. The rule is established that it is against human nature
and experience for strangers to conspire and accuse another stranger of a most serious crime just to mollify
their hurt feelings. 47

Aside from exacting hard-earned money from the complainants, the accused-appellants even permitted the
complainants to go to another country without a place to stay or any means of subsistence. No explanation
was given to the complainants as to why the alleged employer failed to appear at the airport. In fact, instead
of sympathizing with the complainants because of their misfortune, the accused-appellants even challenged
complainants to file a case in court.

The accused-appellants have conspired to recruit complainants without the necessary permit or license and
victimized more than three persons in the case at bar. Thus, they are guilty of illegal recruitment by a
syndicate in large scale and must suffer the consequences thereof.

IN VIEW WHEREOF, the Court hereby AFFIRMS the appealed decision in toto. With costs.1âwphi1.nêt

SO ORDERED.
G.R. No. 120353 February 12, 1998
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, 
vs.
FLOR N. LAUREL, accused-appellant.
Labor Law; Criminal Law; Illegal Recruitment; Illegal recruitment is committed in large scale if done
against three or more persons individually or as a group.—The language of the law is very clear that illegal
recruitment is committed in large scale if done against three or more persons individually or as a group. The
number of offenders, whether an individual or a syndicate, is clearly not considered a factor in the
determination of its commission. The rule is well-settled that when the language of the statute is clear, plain
and free from ambiguity, there is no room for attempted interpretation or extended court rationalization of
the law. The duty of the court is to apply it, not to interpret it. Counsel for accused-appellant was misled by
the fact that illegal recruitment in large scale is defined immediately after illegal recruitment by a syndicate.
However, the only reason therefor is that they are both considered offenses involving economic sabotage as
the law itself so provides. Besides, we have affirmed time and again the conviction of an individual for large
scale illegal recruitment.
Criminal Procedure; Desistance; Although an affidavit of desistance may be given due course even if
executed only on appeal, it may be given such credit only when special circumstances exist engendering doubt
on the criminal liability of the accused.—As regards the alleged desistance by private complainants, we rule
that although an affidavit of desistance may be given due course even if executed only on appeal, it may be
given such credit only when special circumstances exist engendering doubt on the criminal liability of the
accused. Otherwise, without such special circumstances, courts look with disfavor on affidavits of retraction
considering them as exceedingly unreliable.
Same; Same; There is absolutely nothing in the affidavits of retraction executed by private
complainants which creates doubt on the guilt of accused-appellant.—There is absolutely nothing in the
affidavits of retraction executed by private complainants which creates doubt on the guilt of accused-
appellant. The complainants merely allege that they made a mistake and “misunderstood the circumstances.”
However, aside from such sweeping statement as “misunderstood the circumstances,” no detail is given as to
how their mistake or misapprehension of circumstances can indicate absence of or at least cast doubt on the
guilt of accused-appellant. On the contrary, we have every reason to conclude that the affidavits of retraction
were executed by private complainants only because accused-appellant returned the money taken from them
as evidenced by the receipts marked as Exhs. “2,” “3,” “4,” “5” and “6.” As complainant Ricardo San Felipe
testified in court: “I will withdraw, if the payments is (sic) complete, sir.” Thus, given the reason for their
desistance, the solemn testimonies given by private complainants shall not be disregarded for it is a matter of
public interest that every crime must be prosecuted and the author thereof penalized.
BELLOSILLO, J.:
This is an appeal from the decision of the Regional Trial Court of Manila finding accused-appellant Flor N.
Laurel guilty of illegal recruitment in large scale penalized under Art. 38, par. (b), in relation to Art. 39, par. (a),
of the Labor Code.
From 19 October 1991 to 25 May 1992 accused-appellant Flor N. Laurel promised employment abroad for a
fee to complaining witnesses Ricardo San Felipe, Rosauro San Felipe, Juanito Cudal and Cenen Tambongco, Jr.
However, after receiving P12,000.00 from Tambongco, Jr., P11,000.00 from each of the San Felipe brothers
and P6,000.00 from Cudal, Laurel reneged on her promises and went into hiding. Verification with the
Philippine Overseas Employment Administration (POEA) revealed that Laurel was neither licensed nor
authorized to recruit workers for overseas employment. 1 Consequently, she was haled to court and charged
with large scale illegal recruitment.
Accused Laurel did not deny the charge against her. Instead, when called to the witness stand, she presented
an affidavit of desistance by Juanito Cudal as well as several receipts, Exhs. "2," "3," "4," "5" and "6," signed by
the other private complainants acknowledging payment by her of the amounts taken from them in "full
settlement" of her obligation. 2 Thus, on the basis of these documents, she moved to dismiss the case. But the
court a quo denied her motion on the ground that the elements of large scale illegal recruitment were
established beyond reasonable doubt through the combined testimonies of the four (4) offended parties. The
court a quo noted that the affidavit of desistance as well as the receipts for payments made were prepared
and signed after the prosecution had already rested its case. Consequently, the trial judge rendered a decision
convicting the accused Flor N. Laurel and sentenced her to life imprisonment and to pay a fine of P100,000.00
conformably with Art. 39, par. (a), of the Labor Code. In addition, the accused was ordered to return the
balance of what she had received from each complainant. 3 Hence, this appeal.
As in the court below, accused-appellant does not deny the charge against her. She contends however that
she should have been convicted only of simple illegal recruitment and not of large scale illegal recruitment.
She argues through counsel that since illegal recruitment in large scale is defined in Art. 38, par. (b), of the
Labor Code immediately following the definition of illegal recruitment committed by a syndicate, it follows
that for illegal recruitment to be considered committed in large scale it should have been committed by a
syndicate. Hence, an individual who commits an act of illegal recruitment even if it be against three (3) or
more persons cannot be charged with illegal recruitment in large scale.
The interpretation is completely erroneous. Article 38, par. (b), of the Labor Code reads:
Illegal recruitment when committed by a syndicate or in large scale shall be considered
an offense involving economic sabotage . . . .
Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring and/or confederating with one another in carrying
out any unlawful or illegal transaction, enterprise or scheme defined under the first
paragraph hereof.
Illegal recruitment is deemed committed in large scale if committed against three (3) or
more persons individually or as a group (emphasis supplied).
The language of the law is very clear that illegal recruitment is committed in large scale if done against three
or more persons individually or as a group. The number of offenders, whether an individual or a syndicate, is
clearly not considered a factor in the determination of its commission. The rule is well-settled that when the
language of the statute is clear, plain and free from ambiguity there is no room for attempted interpretation
or extended court rationalization of the law.4 The duty of the court is to apply it, not to interpret it.5 Counsel
for accused-appellant was misled by the fact that illegal recruitment in large scale is defined immediately after
illegal recruitment by a syndicate. However, the only reason therefor is that they are both considered offenses
involving economic sabotage as the law itself so provides. Besides, we have affirmed time and again the
conviction of an individual for large scale illegal recruitment.6
As regards the alleged desistance by private complaints, we rule that although an affidavit of desistance may
be given due course even if executed only on appeal, it may be given such credit only when special
circumstances exist engendering doubt on the criminal liability of the accused.7 Otherwise, without such
special circumstances, courts look with disfavor on affidavits of retraction8 considering them as exceedingly
unreliable.9
There is absolutely nothing in the affidavits of retraction executed by private complainants which creates
doubt on the guilt of accused-appellant. The complainants merely allege that they made a mistake and
"misunderstood the circumstances." 10 However, aside from such sweeping statement as "misunderstood
the circumstances," no detail is given as to how their mistake or misapprehension of circumstances can
indicate absence of or at least cast doubt on the guilt of accused-appellant. On the contrary, we have every
reason to conclude that the affidavits of retraction were executed by private complainants only because
accused-appellant returned the money taken from them as evidenced by the receipts marked as Exhs. "2,"
"3," "4," "5" and "6." 11 As complainant Ricardo San Felipe testified in court: "I will withdraw, if the
payments is (sic) complete, sir." 12 Thus, given the reason for their desistance, the solemn testimonies given
by private complainants shall not be disregarded for it is a matter of public interest that every crime must
be prosecuted and the author thereof penalized. 13

WHEREFORE, the Decision of the Regional Trial Court of Manila convicting accused-appellant Flor N. Laurel
of illegal recruitment in large scale penalized under Art. 38, par. (b), in relation to Art. 39, par. (a), of the
Labor Code and sentencing her to life imprisonment is AFFIRMED. However, the portion of the appealed
decision directing accused-appellant to pay the balance of what she had received from each of private
complainants is DELETED in view of the full settlement of her civil liability as acknowledged by private
complainants themselves.

SO ORDERED.
G.R. No. 181244               August 9, 2010
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, 
vs.
ANITA "KENNETH" TRINIDAD, Defendant and Appellant.
DECISION
Criminal Law; Labor Law; Migrant Workers and Overseas Filipinos Act of 1995 (R.A. No. 8042); Illegal
Recruitment in Large Scale.—Section 6 of Republic Act No. 8042 or the “Migrant Workers and Overseas
Filipinos Act of 1995” defines illegal recruitment as “any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers and includes referring contract services, promising or advertising for
employment abroad, whether for profit or not, when undertaken by a non-licensee or non-holder of authority
contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor
Code of the Philippines.
Same; Same; Same; Witnesses; Criminal Procedure; Evidence; The well-settled rule is that the credibility
of witnesses is best left to the judgment of the trial judge whose findings are generally not disturbed on
appeal, absent any showing that substantial errors were committed or that determinative facts were
overlooked which, if appreciated, would call for a different conclusion.—All three private complainants
testified in a categorical and straightforward manner; hence, the trial court properly accorded full faith and
credence to their declarations on the witness stand. The well-settled rule is that the credibility of witnesses is
best left to the judgment of the trial judge whose findings are generally not disturbed on appeal, absent any
showing that substantial errors were committed or that determinative facts were overlooked which, if
appreciated, would call for a different conclusion. The trial court has the advantage, not available to the
appellate courts, of observing the deportment of witnesses and their manner of testifying during trial. Thus,
the appellate courts confer highest respect to such findings and conclusions of the lower courts.
Same; Same; Same; Same; It is contrary to human nature and experience for persons to conspire and
accuse a stranger of a crime, or even a casual acquaintance for that matter, that would take the latter’s liberty
and send him to prison just to appease their feeling of rejection and assuage the frustration of their dreams to
go abroad.—Besides, the only defense offered by appellant against the allegations against her was mere
denial, an inherently weak defense which cannot prevail over the positive and unequivocal testimonies of
complainants. Bare denials, without clear and convincing evidence to support them, cannot sway judgment.
They are self-serving statements which can easily be put forward. It is inconceivable that private complainants
would be mistaken in their claim that it was appellant who recruited them considering that it was she who
personally talked with them on several occasions and received the sums of money for which she issued
receipts. It is contrary to human nature and experience for persons to conspire and accuse a stranger of a
crime, or even a casual acquaintance for that matter, that would take the latter’s liberty and send him to
prison just to appease their feeling of rejection and assuage the frustration of their dreams to go abroad.
Same; Same; Same; Statutes; The Migrant Workers and Overseas Filipinos Act of 1995, otherwise
known as the Magna Carta of Overseas Filipino Workers, is a significant improvement on existing laws in the
recruitment and placement of workers for overseas employment—it broadened the concept of illegal
recruitment under the Labor Code and provided stiffer penalties therefor, especially those that constitute
economic sabotage, i.e., Illegal Recruitment in Large Scale and Illegal Recruitment Committed by a Syndicate.
—The proliferation of illegal job recruiters and syndicates preying on innocent people anxious to obtain
employment abroad is one of the primary considerations that led to the enactment of The Migrant Workers
and Overseas Filipinos Act of 1995. Aimed at affording greater protection to Overseas Filipino Workers (OFWs),
it is a significant improvement on existing laws in the recruitment and placement of workers for overseas
employment. Otherwise known as the Magna Carta of Overseas Filipino Workers, it broadened the concept of
illegal recruitment under the Labor Code and provided stiffer penalties therefor, especially those that
constitute economic sabotage, i.e., Illegal Recruitment in Large Scale and Illegal Recruitment Committed by a
Syndicate.
Same; Same; Same; Illegal Recruitment in Large Scale; The accused is guilty of illegal recruitment in
large scale because it was committed against three private complainants.—In the instant case,
397
VOL. 627, AUGUST 9, 2010 397
People vs. Trinidad
appellant is guilty of illegal recruitment in large scale because it was committed against three private
complainants. This is in accordance with the penultimate paragraph of Section 6 Republic Act No. 8042 which
provides, thus: Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or
more persons conspiring or confederating with one another. It is deemed committed in large scale if
committed against three (3) or more persons individually or as a group.
PEREZ, J.:
Appellant, together with Taciana "Tess" Aquino, Mauro Marasigan, Louella Garen and Daniel Trinidad, were
charged with violation of Section 6 in relation to Section 7 of Republic Act No. 80421 for large scale illegal
recruitment committed by a syndicate in an information which reads:
That in or about the months of May, June, August and December, 1998, or sometime prior and subsequent
thereto, in the City of Pasay, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring, confederating and mutually helping each other, did then and there willfully, unlawfully
and feloniously contract, enlist and promise employment to the following Aires V. Pascual, Elma J. Hernandez,
Gemma Noche dela Cruz and Elizabeth de Villad (sic), as domestic helpers in Italy, without first securing the
required licensed (sic) or authority from the Philippine Overseas Employment Administration.2
Upon arraignment, appellant pleaded not guilty to the charge against her. The rest of the accused have all
remained at large.3
The factual antecedents of the case, based on the records, are as follows:
Sometime in May 1998, private complainant Elizabeth de Villa (De Villa), together with her cousin Elma
Hernandez, was brought by their aunt Patricia to the house of appellant in Pasay City for possible job
placement as domestic helpers in Italy. 4 A cousin of hers was earlier able to leave for abroad through the help
of appellant.5 Convinced by appellant’s representation that she can send her to Italy, De Villa agreed to give
appellant ₱240,000.00, representing the price of her ticket and the processing of her papers, 6 which amount
she paid in three installments. The first installment of ₱100,000.00, was given by de Villa to appellant in the
same month of May after their first meeting.7 This initial payment was covered by a handwritten receipt
signed and issued by appellant herself. 8 The second and third installments, in the amounts of ₱50,000.00 and
₱90,000.00, respectively, were paid by de Villa in June and August 1998. 9 These latter amounts were no longer
covered by receipts because, according to De Villa, appellant had won her trust as a result of the former’s
assurances that she would be able to send her to Italy.10
On 8 August 1998, de Villa and three other recruits left the Philippines.11 However, instead of sending them to
Italy, appellant and accused Mauro Marasigan (Marasigan) sent them to Bangkok, Thailand and told them that
they (appellant and Marasigan) will secure the visas for Italy in Bangkok because it would be easier to get an
Italian visa in Bangkok.12
Elma Hernandez (Hernandez), a cousin of De Villa, was likewise introduced to appellant by their aunt Patricia
sometime after the elections of May 1998. Upon meeting appellant, Hernandez asked if appellant could really
send her to Italy to work as a domestic helper, and appellant replied positively. Whereupon, she agreed to
give ₱240,000.00 to appellant representing the expenses for the processing of her Italian visa. 13 Hernandez
paid this amount in three installments: ₱100,000.00 was paid in May 1998, which payment was evidenced by
the same receipt issued by appellant to De Villa; 14 ₱100,000.00 in June of the same year; and the balance of
₱40,000.00 was paid by her Aunt Patricia to appellant in August 1998 because at that time, Hernandez had
already left the Philippines. 15 No receipts were issued for the latter amounts because she trusted appellant’s
promise that she would send her to Italy.16
Appellant told her that she was tentatively scheduled to leave in May 1998, but because the processing of her
papers were allegedly not completed on time, appellant moved her flight to August. Hernandez was able to
leave the Philippines on this later date but not for Italy as agreed upon, but for Bangkok where appellant will
allegedly secure her Italian visa.17
Gemma dela Cruz (Dela Cruz) first met appellant and accused Taciana "Tess" Aquino (Aquino) on 25 August
1998 in the house of one of appellant’s victims in Blumentritt, Manila. During this meeting, appellant and
Aquino convinced her of their ability to send her to Italy as long as she can produce the amount of
₱250,000.00. Their agreement was that Dela Cruz would give an initial amount of ₱150,000.00 and when she
gets to Italy, she will give the remaining balance of ₱100,000.00. Thus, on the same date, Dela Cruz went to
appellant’s house in Pasay City and paid ₱150,000.00 to appellant.18 This transaction was witnessed by dela
Cruz’s sister, Geraldine Noche, and the latter’s fiancé, Neopito Laraya 19 (Laraya) and is evidenced by a
document, denominated as "Contract to Service"20 which was signed by appellant and Laraya. Dela Cruz did
not sign the contract because it was meant to be a proof that the ₱50,000.00 Laraya loaned to dela Cruz to
complete the ₱150,000.00 payment to appellant was indeed given to the latter.21 This claim was affirmed by
Laraya when he took the witness stand on 27 June 2002 to testify for the prosecution.
Dela Cruz was able to leave the Philippines the following day, 26 August 2002. However, as in the cases of De
Villa and Hernandez, Dela Cruz was sent to Bangkok instead of Italy.22
In Bangkok, De Villa, Hernandez and Dela Cruz met at the Benz Residence Hotel where appellant and
Marasigan instructed all their recruits to stay. There, they met appellant’s brother Daniel Trinidad (Trinidad),
who likewise assured them that appellant would be able to secure an Italian visa for them.23 Appellant and
Marasigan followed them to Bangkok in the month of September but nothing happened insofar as their visas
were concerned.24 They stayed in Bangkok for four months but because they could stay in Thailand for only
one month at a time, they had to exit to Malaysia two times to have their passports stamped to reflect their
act of exiting Thailand so they could return to Bangkok. 25 For this, Dela Cruz incurred expenses in the total
amount of US$200.26 She incurred additional expenses for the duration of her stay in Bangkok for calling
collect to the Philippines, totaling ₱9,387.30.27 For her part, Hernandez spent a total of US$500 for board and
lodging during her stay in Bangkok.28
After staying idle for four months in Bangkok, De Villa, Hernandez, and dela Cruz, together with other recruits,
were taken by appellant and Marasigan to Morocco, again, allegedly for the purpose of securing their Italian
visa there. For this, Hernandez and Dela Cruz each spent another US$2,700, which they gave to Marasigan and
his wife Louella Garen.29
The group stayed in Morocco for two months but appellant continued to fail to deliver her promise of securing
Italian visas for them. Hence, they returned to Bangkok and stayed there for another month during which
appellant persisted in dissuading them from returning to the Philippines, assuring them that she would send
them to Italy.30They failed to be further dissuaded, however, and they returned to the Philippines on 27 March
1999 and on 29 March 1999, filed a complaint against appellant and her companions.31
On 24 October 2002, the trial court rendered judgment as follows:
WHEREFORE, accused ANITA "KENNETH" TRINIDAD, also known as ANITA TRINIDAD MORAUDA, is hereby
found GUILTY beyond reasonable doubt of the crime of LARGE SCALE ILLEGAL RECRUITMENT as defined under
Section 6 of R.A. No. 8042, and penalized under Article 39(a) of the Labor Code of the Philippines.
Accordingly, said accused is hereby sentenced to suffer the penalty of LIFE IMPRISONMENT, and to pay a fine
of ₱100,000.00.
Further, she is ordered to pay the sum of ₱270,000.00 to Elizabeth de Villa; ₱270,000.00 plus the peso
equivalent of US$500 to Elma Hernandez, and ₱159,387.30 plus the peso equivalent of US$2,900 to Gemma
dela Cruz.32
The trial court rejected appellant’s defense that the real illegal recruiter is Mauro Marasigan to whom she
referred private complainants when they sought her help regarding jobs abroad and that they complained
against her only because they could no longer locate Marasigan. The trial court likewise disregarded
appellant’s bare denials that she did not promise employment to complainants, that she did not receive any
money from them, and that the signature appearing on the receipt presented by them is not hers.33 Instead, it
gave credence to the respective testimonies of private complainants that they were recruited by appellant,
who was not duly licensed to conduct recruitment activities, as certified 34 by the Philippine Overseas
Employment Administration (POEA) and the testimony of prosecution witness Rosa Mangila, Senior Labor and
Employment Officer of the POEA.35
On 31 August 2007, the Court of Appeals rendered the herein assailed Decision 36 affirming the judgment of the
trial court.
Thus, appellant is now before us on the following assignment of errors:
I
THE TRIAL COURT GRAVELY ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY BEYOND REASONABLE
DOUBT OF THE CRIME CHARGED DESPITE THE PATENT WEAKNESS OF THE PROSECUTION’S EVIDENCE.
II
THE TRIAL COURT GRAVELY ERRED IN NOT CONSIDERING THE DEFENSE INTERPOSED BY THE ACCUSED-
APPELLANT.37
Appellant maintains that she is a mere victim of circumstances in this case as the person responsible for the
crime imputed to her, Marasigan, is a fugitive from justice. Thus, in order for private complainants to recover
their money, they blamed her. She claims that she simply indorsed complainants to Marasigan, after which,
she no longer had any participation in their transactions.38
Appellant’s submissions fail to convince us.
Section 6 of Republic Act No. 8042 or the "Migrant Workers and Overseas Filipinos Act of 1995" defines illegal
recruitment as "any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers
and includes referring contract services, promising or advertising for employment abroad, whether for profit
or not, when undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines.
During their respective testimonies, complainants described their dealings with appellant as follows:
1. Elizabeth de Villa:
xxxx
How [will] you be able to work in Italy by the mere fact that you were introduced to the accused?
A: She convinced us that she could send us to Italy to work.
Fiscal Kuong to the witness: xxxx

Q: Whom you are referring to that convinced you that you will be sent to Italy? Q: x x x. Now, you said the accused wrote this writings in a piece of paper in your residence in Pasay
City, did she leave you for a while in order to make this writing in the piece of paper?
A: Kenneth, ma’am.
A: No sir, she wrote that in front of me and I saw it.
Q: Can you give the full name of Kenneth Trinidad?
xxxx
A: Anita Kenneth Trinidad.
Q: And after writing the same the accused signed her signature Kenneth Trinidad?
Q: Ms. Witness, what happened after you and your aunt Patricia went to the house of Kenneth
Trinidad? A: Yes sir.

A: We have an agreement that we will give her the amount of ₱240,000. Q: Are you sure this is her signature?

xxxx A: Yes sir.

A: We do not give the whole amount of ₱240,000 but partially I gave the amount of ₱100,000 on xxxx
the month of May I cannot recall the exact date.
Q: Was this writing continuous from beginning to end?
xxxx
A: No sir, she wrote the word commission ₱30,000, the amount of ₱570,000 and deposit 100,000.
Q: Do you recall where it was that you gave her ₱100,000 in May of 1998? When she wrote commission of ₱30,000 it means that, because we were 3 she gave the discount of
₱30,000, sir.
A: In her house located in Lucban St., Pasay City.
xxxx
xxxx
Q: Now, who accompanied you to the airport?
Q: And also for what is the payment given to Anita Kenneth Trinidad?
A: Anita Kenneth Trinidad.
xxxx
xxxx
A: In payment for our ticket and also for processing of the requirements.
Q: Who was your companion aside from the accused?
Court to the witness:
A: We were conveyed by Anita Kenneth Trinidad because we were at her residence, Kenneth
Trinidad accompanied me to the airport.
Q: Who will process the requirement?

xxxx
A: Kenneth Trinidad.

Q: Ms. Witness, you stated accused Kenneth Trinidad, told you that she will get employment for
Q: And what are these requirements for?
you in Italy. What exactly, Ms. Witness, she told you?

A: For us to go to Italy.
A: She assured us she will help us to secure employment because she has a lot of relatives in
Italy.39(Emphases supplied)
xxxx
2. Elma Hernandez:
Q: And upon giving her ₱100,000 did she issue to you any receipt?
xxxx
A: Yes sir, the one I handed to you earlier.
Q: And what did you do after you went to her house at Lucban? WITNESS:

A: I asked her if she could really sent (sic) [me] to Italy and she replied positively, ma’am. No, your honor.

COURT: xxxx

To sent you to Italy as what? Q: And you would agree with me that you were able to meet the accused Kenneth Trinidad through
the intercession of your Tita Patricia, am I correct?
WITNESS:
A: Yes, sir.
To work there as a domestic helper, your Honor.
Q: And likewise your Tita Patricia informed you that she knows this Kenneth Trinidad and she told
you that Kenneth Trinidad can help you in going to Italy am I correct?
Q: In what arrangements did you make with her regarding the payment of your visa?

A: It was Tita Patricia who introduced Kenneth Trinidad to me but if Kenneth Trinidad would not
A: She asked me to give her ₱100,000.00 in order for her to process my documents in going to Italy,
promised (sic) that employment I would not agree to pay that amount to her.
ma’am.

xxxx
Q: So, the ₱100,000.00 is only for the processing of your documents, was there any other fees that
the accused Kenneth Trinidad asked from you?
Q: May I clarify, if your Tita Patricia [was] not involved in this case, you would not met (sic) Kenneth
Trinidad?
A: Yes, ma’am.

A: Yes, sir, if not because of Tita Patricia I would not know this Kenneth Trinidad but if not for the
Q: And how much more, Miss witness?
promised (sic) of Kenneth Trinidad that she could secure employment for us, I will not apply.

A: All in all ₱240,000.00, ma’am.

xxxx

xxxx
Q: So when you arrived at the house of the accused in Lucban Street, Pasay City, your Tita Patricia
was the one holding that money?
Q: After you gave the payment to the accused Kenneth Trinidad, what arrangement did you and
the accused make regarding your flight to Italy?
A: Yes, sir.

A: She told me that she could have secured a visa for me in going to Italy.
Q: And when you arrived there your Tita Patricia brought out the money and she started counting
the same, is that correct?
xxxx
A: Yes, sir.
COURT:
Q: After counting the money she handed it over to Kenneth Trinidad, the accused?
So, what was the undertaking of accused Anita Trinidad aside from sending you to Italy?
A: After counting that money the money was not yet handed to Anita Kenneth Trinidad because I’m
WITNESS: still clearing if she really could secure employment for me in Italy, sir.

She told me that she has a lot of relatives there and she promised an employment to me, your Q: And after having cleared the fact that she could secure employment for you, your Tita Patricia
Honor. already gave the amount of ₱100,000.00 to the accused, correct?

COURT: A: Not yet, sir, my Tita Patricia still asked for my decision if I am decided to give that amount to
Kenneth Trinidad.
If the undertaking of the accused was only to send you to Italy or secure a visa for you for Italy,
would you have given her the amount of ₱240,000.00? Q: After you have decided to give that amount, your Tita Patricia gave the amount to the accused?
 A: Yes sir. A: I gave her ₱150,000.00, in fact I have two witnesses, Geraldine Noce (sic) and Taraya (sic). And I
also have receipt with me to prove that she received the amount of ₱150,000.00.
xxxx
xxxx
Q: Now, this piece of paper which is the receipt, this was according to you prepared by Kenneth
Trinidad, the accused in this case? Q: To whom did you hand the amount of ₱150,000.00?

A: Yes, sir. A: To Neopito Laraya, I first handed the ₱150,000.00 to Neopito Laraya and Neopito Laraya in turn
handed the ₱150,000.00 to Anita "Kenneth" Trinidad. In that ₱150,000.00, I borrowed the
₱50,000.00 from my sister’s boyfriend and the ₱100,000.00 I borrowed it from a Lending Company.
Q: And did she execute this receipt in front of you?

Q: Miss Witness, do you have any documents to show that accused Anita "Kenneth" Trinidad,
A: Yes, sir.
received the amount of ₱150,000.00?

Q: Were you able to see her actually writing the notations here in this piece of paper?
A: Yes, Ma’am.

A: Yes, sir.
Q: Showing to you this document entitled "CONTRACT OF SERVICE", is this the document you are
referring to?
Q: Whose signature is this, Miss witness?
A: Yes, Ma’am.
A: That is the signature of Anita Kenneth Trinidad, sir.40 (Emphases supplied).
xxxx
3. Gemma dela Cruz:
Q: Miss Witness, showing to you this signature above the handwritten word Anita Trinidad, do you
Q: Can you tell us what transpire[d] during the meeting with accused Taciana "Tess" Aquino and know whose signature is this?
Anita "Kenneth" Trinidad?
A: Yes, Ma’am, that is the signature of Anita "Kenneth" Trinidad.
A: When I went to the house of Pisyang Agno located at Blumentritt, I met Trinidad and Aquino
who convinced me that they could send me to Italy as long as I can produce the amount of
Q: How do you know that this is the signature of Anita "Kenneth" Trinidad?
₱250,000.00.

A: Because she affixed her signature in front of me.41

COURT:

Who told you that they can send you abroad if you will give the amount of ₱250,000.00?
WITNESS:
Kenneth Trinidad and Taciana Aquino, your Honor.
xxxx
Q: And Madam Witness, what was the terms of your agreement with the two accused as regards
this payment of ₱250,000.00?
A: The agreement with them was that, initially, I will give the amount of ₱150,000.00, if I’m already
in Italy that’s the time I give the remaining ₱100,000.00.
Q: What happened after the meeting on August 25, 1998?
It is clear from the aforequoted statements that appellant engaged in recruitment activities.1awph!1 The
respective testimonies of private complainants clearly established that appellant promised them employment
in Italy and that she asked money from them for the processing of their papers. Relying upon appellant’s
representations, complainants parted with their money. That appellant recruited them without the requisite
license from the POEA makes her liable for illegal recruitment.
All three private complainants testified in a categorical and straightforward manner; hence, the trial court
properly accorded full faith and credence to their declarations on the witness stand. The well-settled rule is
that the credibility of witnesses is best left to the judgment of the trial judge whose findings are generally not
disturbed on appeal, absent any showing that substantial errors were committed or that determinative facts
were overlooked which, if appreciated, would call for a different conclusion. 42 The trial court has the
advantage, not available to the appellate courts, of observing the deportment of witnesses and their manner
of testifying during trial. Thus, the appellate courts confer highest respect to such findings and conclusions of
the lower courts.43
Besides, the only defense offered by appellant against the allegations against her was mere denial, an
inherently weak defense which cannot prevail over the positive and unequivocal testimonies of complainants.
Bare denials, without clear and convincing evidence to support them, cannot sway judgment. They are self-
serving statements which can easily be put forward.44 It is inconceivable that private complainants would be
mistaken in their claim that it was appellant who recruited them considering that it was she who personally
talked with them on several occasions and received the sums of money for which she issued receipts. 45 It is
contrary to human nature and experience for persons to conspire and accuse a stranger of a crime, or even a
casual acquaintance for that matter, that would take the latter’s liberty and send him to prison just to appease
their feeling of rejection and assuage the frustration of their dreams to go abroad.46

The proliferation of illegal job recruiters and syndicates preying on innocent people anxious to obtain
employment abroad is one of the primary considerations that led to the enactment of The Migrant Workers
and Overseas Filipinos Act of 1995. Aimed at affording greater protection to Overseas Filipino Workers
(OFWs), it is a significant improvement on existing laws in the recruitment and placement of workers for
overseas employment. Otherwise known as the Magna Carta of Overseas Filipino Workers, it broadened the
concept of illegal recruitment under the Labor Code and provided stiffer penalties therefor, especially those
that constitute economic sabotage, i.e., Illegal Recruitment in Large Scale and Illegal Recruitment Committed
by a Syndicate.47

In the instant case, appellant is guilty of illegal recruitment in large scale because it was committed against
three private complainants. This is in accordance with the penultimate paragraph of Section 6 Republic Act No.
8042 which provides, thus:

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons
conspiring or confederating with one another. It is deemed committed in large scale if committed against
three (3) or more persons individually or as a group.48

The trial court, as affirmed by the Court of Appeals, imposed upon the appellant the penalty of life
imprisonment and a fine of ₱100,000.00 plus actual damages, with interest thereon. However, the fine of
₱100,000.00 should be increased to ₱500,000.00 pursuant to Section 7(b) of Republic Act No. 8042 which
reads, thus:

(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand pesos (₱500,000.00)
nor more than One million pesos (₱1,000,000.00) shall be imposed if illegal recruitment constitutes economic
sabotage as defined therein.49

WHEREFORE, the Decision of the Court of Appeals dated 31 August 2007 in CA-G.R. CR-H.C. No. 00490,
affirming the Judgment of the Regional Trial Court of Pasay City, Branch 117, finding appellant Anita "Kenneth"
Trinidad guilty of illegal recruitment in large scale, sentencing her to suffer the penalty of life imprisonment
and ordering her to pay a fine and actual damages, is hereby AFFIRMED with the following MODIFICATIONS:
(1) the amount of fine is increased to ₱500,000.00; and (2) appellant is further ordered to pay Elma Hernandez
the peso equivalent of US$2,700.00.

SO ORDERED.
G.R. No. 199211               June 4, 2014
PEOPLE OF THE PHILIPPINES, Appellee, 
vs.
JERIC FERNANDEZ y JAURIGUE, Appellant.
RESOLUTION
Criminal Law; Labor Law; Illegal Recruitment in Large Scale; The law imposes a higher penalty when the
illegal recruitment is committed by a syndicate or in large scale as they are considered an offense involving
economic sabotage. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three
(3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme. It is deemed committed in large scale if committed against three (3) or more
persons individually or as a group.—Article 38 of the Labor Code defines illegal recruitment as “any
recruitment activities, including the prohibited practices enumerated under Article 34 of (the Labor Code), to
be undertaken by nonlicensees or nonholders of authority.” The term “recruitment and placement” refers to
any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, including
referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or
not, provided that any person or entity which, in any manner, offers or promises for a fee employment to two
or more persons shall be deemed engaged in recruitment and placement. The law imposes a higher penalty
when the illegal recruitment is committed by a syndicate or in large scale as they are considered an offense
involving economic sabotage. Illegal recruitment is deemed committed by a syndicate if carried out by a group
of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or
illegal transaction, enterprise or scheme. It is deemed committed in large scale if committed against three (3)
or more persons individually or as a group.
Same; Same; Same; Elements of.—For illegal recruitment in large scale to prosper, the prosecution has
to prove three essential elements, namely: (1) the accused undertook a recruitment activity under Article
13(b) or any prohibited practice under Article 34 of the
_______________
* SECOND DIVISION.
 
 
153
Labor Code; (2) the accused did not have the license or the authority to lawfully engage in the
recruitment and placement of workers; and (3) the accused committed such illegal activity against three or
more persons individually or as a group.
Same; Same; Same; There is illegal recruitment when one who does not possess the necessary authority
or license gives the impression of having the ability to send a worker abroad. Corollarily, where the offense is
committed against three or more persons, it is qualified to illegal recruitment in large scale which provides a
higher penalty under Article 39(a) of the Labor Code.—There is illegal recruitment when one who does not
possess the necessary authority or license gives the impression of having the ability to send a worker abroad.
Corollarily, where the offense is committed against three or more persons, as in this case, it is qualified to
illegal recruitment in large scale which provides a higher penalty under Article 39(a) of the Labor Code.
Same; Same; Same; Estafa; Conviction under the Labor Code for illegal recruitment does not preclude
punishment under the Revised Penal Code for the crime of estafa.—We point out that conviction under the
Labor Code for illegal recruitment does not preclude punishment under the Revised Penal Code for the crime
of estafa. We are convinced that the prosecution proved beyond reasonable doubt that appellant violated
Article 315(2)(a) of the Revised Penal Code, as amended, which provides that estafa is committed by any
person who defrauds another by using a fictitious name; or by falsely pretending to possess power, influence,
qualifications, property, credit, agency, business; by imaginary transactions or similar forms of deceit executed
prior to or simultaneous with the fraud. The appellant’s act of falsely pretending to possess power and
qualifications to deploy the complainants to Hongkong, even if he did not have the authority or license for the
purpose, undoubtedly constitutes estafa under Article 315(2)(a) of the Revised Penal Code. The elements of
deceit and damage are clearly present; the appellant’s false pretenses were the very cause that induced the
complainants to part with their money.
BRION, J.:
We decide the appeal, filed by appellant Jeric Fernandez, assailing the April 6, 2011 decision of the Court of
Appeals (CA) in CA-G.R. CR-HC No. 03313.1
The RTC Ruling
In its February 11, 2008 decision,2 the Regional Trial Court (RTC), Branch 211, Mandaluyong City, convicted the
appellant of the crimes of illegal recruitment in large scale and five ( 5) counts of estafa committed against
complainants Airene Etac, Jowel A. Baja, Joemar Aquino, Luis M. Bernardo and Anthony M. Canlas. The RTC
gave full faith and credence to the testimonies of the complainants that the appellant promised them
employment abroad. The trial court ruled that the appellant represented to the complainants that he had the
power and ability to send them in Hongkong, and that by virtue of this representation and fraud, the
complainants were convinced to part with their money in order to be employed. It also disregarded the
appellant’s defenses of denial and alibi.
For the crime of illegal recruitment in large scale in Criminal Case No. MC03-6278, the RTC sentenced the
appellant to suffer the penalty of life imprisonment, and to pay a ₱100,000.00 fine. For the crime of estafa, the
RTC sentenced the appellant to suffer the following indeterminate penalties: (a) four (4) years of prision
correccional, as minimum, to nine (9) years of prision mayor, as maximum in Criminal Case No. MC03-6279;
(b) four (4) years of prision correccional, as minimum, to seven (7) years of prision mayor, as maximum in
Criminal Case No. MC03-6280; (c) four (4) years of prision correccional, as minimum, to seven (7) years of
prision mayor, as maximum in Criminal Case No. MC03-6281; (d) four (4) years of prision correccional, as
minimum, to eight (8) years of prision mayor, as maximum in Criminal Case No. MC03-6282 ; and (e) four (4)
years of prision correccional, as minimum, to eight (8) years of prision mayor, as maximum in Criminal Case
No. MC03-6283.
The RTC also ordered the appellant to indemnify Etac the sum of ₱35,000.00; Baja the sum of ₱29,550.00;
Aquino the sum of ₱45,800.00; Bernardo the sum of ₱30,500.00; and Canlas the sum of ₱29,550.00.
The CA Ruling
On appeal, the CA upheld the factual findings of the RTC. It agreed with the trial court that all the elements of
illegal recruitment, as defined under Article 13(b), in relation to Article 34 of the of the Labor Code, were
sufficiently established by the prosecution’s evidence. The CA held that the appellant’s acts of promising the
complainants that they would be deployed for work abroad after they paid him their placement fees, and his
misrepresentations concerning his purported power and authority despite the lack of license, are constitutive
of illegal recruitment in large scale.
The CA also declared that appellant’s assurances that he could deploy the complainants for employment in
Hongkong constitutes estafa.
Our Ruling As regards the penalties imposed in the crime of estafa, Article 315 of the RPC provides that an accused found
guilty of estafa shall be sentenced to the penalty of prision correccional in its maximum period to prision
mayor in its minimum period, if the amount of the fraud is over 12,000 but does not exceed 22,000 pesos, and
We deny the appeal and affirm the appellant’s convictions. We however, modify the penalties imposed in the
if such amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its
five counts of estafa.
maximum period, adding one year for each additional 10,000 pesos.

Illegal Recruitment In Large Scale

Applying the Indeterminate Sentence Law, the minimum term is taken from the penalty next lower or
anywhere within prision correccional minimum and medium (i.e., from 6 months and 1 day to 4 years and 2
Article 38 of the Labor Code defines illegal recruitment as "any recruitment activities, including the prohibited months). On the other hand, the maximum term is taken from the prescribed penalty of prision correccional
practices enumerated under Article 34 of (the Labor Code), to be undertaken by non-licensees or non holders maximum to prision mayor minimum in its maximum period, adding 1 year of imprisonment for every
of authority." The term "recruitment and placement" refers to any act of canvassing, enlisting, contracting, ₱10,000.00 in excess of ₱22,000.00, provided that the total penalty shall not exceed 20 years.
transporting, utilizing, hiring or procuring workers, including referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not, provided that any person or entity
Applying these principles to the present case, the maximum period of the prescribed penalty of prision
which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed
correccional maximum to prision mayor minimum is not prision mayor minimum as apparently assumed by
engaged in recruitment and placement. The law imposes a higher penalty when the illegal recruitment is
the RTC.1âwphi1 To compute the maximum period of the prescribed penalty, prision correccional maximum
committed by a syndicate or in large scale as they are considered an offense involving economic sabotage.
to prision mayor minimum should be divided into three equal portions of time each of which portion shall be
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons
deemed to form one period in accordance with Article65 of the RPC. Following this procedure, the maximum
conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction,
period of prision correccional maximum to prision mayor minimum is from 6 years, 8 months and 21 days to 8
enterprise or scheme. It is deemed committed in large scale if committed against three (3) or more persons
years. The incremental penalty, when proper, shall thus be added to anywhere from 6 years, 8 months and 21
individually or as a group.3
days to 8 years, at the discretion of the court.

For illegal recruitment in large scale to prosper, the prosecution has to prove three essential elements,
In computing the incremental penalty, jurisprudence tells us that the amount defrauded should be subtracted
namely: (1) the accused undertook a recruitment activity under Article 13(b) or any prohibited practice under
by ₱22,000.00, and the difference shall be divided by ₱10,000.00. Any fraction of a year shall be discarded.
Article 34 of the Labor Code; (2) the accused did not have the license or the authority to lawfully engage in the
Accordingly, the imposable penalty should be as follows:
recruitment and placement of workers; and (3) the accused committed such illegal activity against three or
more persons individually or as a group. In the present case, the appellant promised the five complainants
that there were jobs available for them in Hongkong; and that through his help, they could be deployed for In Criminal Case No. MC03-6279, where the amount defrauded was ₱45,800.00, the appellant should be
work within a month or two. He exacted money from them for the plane ticket, hotel accommodation, sentenced to an indeterminate penalty of four (4) years and two (2) months of prision correccional, as
processing of visa and placement fees. Notably, the prosecution presented a Certification dated January 10, minimum, to 8 years, 8 months and 21 days of prision mayor, as maximum. Since the amount defrauded
2003 issued by Felicitas Q. Bay, Director II of the Philippine Overseas Employment Agency (POEA) Licensing exceeds ₱22,000.00 by ₱23,800.00, 2 years shall be added to the maximum period of the prescribed penalty.
Branch, showing that the appellant had no authority or license to lawfully engage in the recruitment and
placement of workers. These acts, to our mind, constitute illegal recruitment. There is illegal recruitment
In Criminal Case No. MC03-6280, where the amount defrauded was ₱29,550.00, the appellant should be
when one who does not possess the necessary authority or license gives the impression of having the ability to
sentenced to an indeterminate penalty of four (4) years and two (2) months of prision correccional, as
send a worker abroad. Corollarily, where the offense is committed against three or more persons, as in this
minimum, to 6 years, 8 months and 21 days of prision mayor, as maximum.
case, it is qualified to illegal recruitment in large scale which provides a higher penalty under Article 39(a) of
the Labor Code.
In Criminal Case No. MC03-6281, where the amount defrauded was ₱29,550.00, the appellant should be
sentenced to an indeterminate penalty of four (4) years and two (2) months of prision correccional, as
Estafa
minimum, to 6 years, 8 months and 21 days of prision mayor, as maximum.

We point out that conviction under the Labor Code for illegal recruitment does not preclude punishment
In Criminal Case No. MC03-6282, where the amount defrauded was ₱30,500.00, the appellant should be
under the Revised Penal Code for the crime of estafa. 4 We are convinced that the prosecution proved beyond
sentenced to an indeterminate penalty of four (4) years and two (2) months of prision correccional, as
reasonable doubt that appellant violated Article 315(2)(a) of the Revised Penal Code, as amended, which
minimum, to 6 years, 8 months and 21 days of prision mayor, as maximum.
provides that estafa is committed by any person who defrauds another by using a fictitious name; or by falsely
pretending to possess power, influence, qualifications, property, credit, agency, business; by imaginary
transactions or similar forms of deceit executed prior to or simultaneous with the fraud.5 In Criminal Case No. MC03-6283, where the amount defrauded was ₱35,000.00, the appellant should be
sentenced to an indeterminate penalty of four (4) years and two (2) months of prision correccional, as
minimum, to 7 years, 8 months and 21 days or prision mayor, as maximum. Since the amount defrauded
The appellant’s act of falsely pretending to possess power and qualifications to deploy the complainants to
exceeds ₱22,000.00 by ₱13,000.00, 1 year shall be added to the maximum period of the prescribed penalty.
Hongkong, even if he did not have the authority or license for the purpose, undoubtedly constitutes estafa
under Article 315(2)(a) of the Revised Penal Code. The elements of deceit and damage are clearly present; the
appellant’s false pretenses were the very cause that induced the complainants to part with their money. WHEREFORE, premises considered, the assailed decision of the Court of Appeals dated April 6, 2011 in CA-G.R.
CR-HC No. 03313 is hereby AFFIRMED with the following MODIFICATIONS:
Penalties
(1) In Criminal Case No. MC03-6279, the appellant is sentenced to suffer the indeterminate penalty
of four ( 4) years and two (2) months of prision correccional, as minimum, to 8 years, 8 months and
The CA correctly imposed the penalty for illegal recruitment in large scale.
21 days of prision mayor, as maximum.
 (2) In Criminal Case No. MC03-6280, the appellant is sentenced to suffer the indeterminate penalty
of four (4) years and two (2) months of prision correccional, as minimum, to 6 years, 8 months and
21 days of prision mayor, as maximum.

(3) In Criminal Case No. MC03-6281, the appellant is sentenced to suffer the indeterminate penalty
of four (4) years and two (2) months of prision correccional, as minimum, to 6 years, 8 months and
21 days of prision mayor, as maximum.

(4) In Criminal Case No. MC03-6282, the appellant is sentenced to suffer the in detenninate penalty
of four (4) years and two (2) months of prision correccional, as minimum, to 6 years, 8 months and
21 days of prision mayor, as maximum.

(5) In Criminal Case No. MC03-6283, the appellant is sentenced to suffer the indeterminate penalty
of four (4) years and two (2) months of prision correccional, as minimum, to 7 years, 8 months and
21 days or prision mayor, as maximum.

SO ORDERED.
G.R. No. 146964 August 10, 2006
ROSA C. RODOLFO, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
Labor Law; Illegal Recruitment; The elements of illegal recruitment 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.—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.
Same; Same; Words and Phrases; “Recruitment and placement” is defined as “[a]ny 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.” —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, promising or
advertising for employment, locally or abroad, whether for profit or not.”
Same; Same; Greater weight must be given to the positive testimonies of the prosecution witness than
to denial of defendant so that petitioner’s disclaimer of having engaged in recruitment activities does not
persuade in light of the evidence for the prosecution.—Petitioner’s disclaimer of having engaged in recruitment
activities from the very start does not persuade in light of the evidence for the prosecution. In People v.
Alvarez, 387 SCRA 448 (2002), this Court held: Appellant denies that she engaged in acts of recruitment and
placement without first complying with the guidelines issued by the Department of Labor and Employment.
She contends that she did not possess any license for recruitment, because she never engaged in such activity.
We are not persuaded. In weighing contradictory declarations and statements, greater weight must be given
to the positive testimonies of the prosecution witnesses than to the denial of the defendant . Article 38 (a)
clearly shows that illegal recruitment is an offense that is essentially committed by a non-licensee or non-
holder of authority. A non-licenseemeans any person, corporation or entity to which the labor secretary has
not issued a valid license or authority to engage in recruitment and placement; or whose license or authority
has been suspended, revoked or cancelled by the POEA or the labor secretary. A license authorizes a person or
an entity to operate a private employment agency, while authority is given to those engaged in recruitment
and placement activities. x x x x That appellant in this case had been neither licensed nor authorized to recruit
workers for overseas employment was certified by Veneranda C. Guerrero, officer-in-charge of the Licensing
and Regulation Office; and Ma. Salome S. Mendoza, manager of the Licensing Branch—both of the Philippine
Overseas Employment Administration. Yet, as complainants convincingly proved, she recruited them for jobs
in Taiwan. (Italics in the original; underscoring supplied)
Same; Same; 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.—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.” Petitioner’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.
Same; Same; It is sufficient that the accused “promises or offers for a fee employment” to warrant
conviction for illegal recruitment.—That petitioner 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 employ-ment” to warrant conviction for illegal recruitment.
Same; Same; The undertaking of recruitment activities without the necessary license or authority that
makes a case for illegal re-cruitment.—On petitioner’s reliance on Señoron, true, this 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.
Penalties; Application of Indeterminate Sentence Law; Indeterminate Sentence Law also applies to
offenses punished by special laws.—A word on the penalty. Indeed, the trial court failed to apply the
Indeterminate Sentence Law which also applies to offenses punished by special laws.
CARPIO MORALES, J.:
Petitioner was charged before the Regional Trial Court (RTC) of Makati for illegal recruitment alleged to have
been committed as follows:
That in or about and during the period from August to September 1984, in Makati, Metro Manila, Philippines,
and within the jurisdiction of this Honorable Court, the said accused representing herself to have the capacity
to contract, enlist and transport Filipino workers for employment abroad, did then and there willfully and
unlawfully, for a fee, recruit and promise employment/job placement abroad to VILLAMOR ALCANTARA,
NARCISO CORPUZ, 1NECITAS R. FERRE, GERARDO H. TAPAWAN and JOVITO L. CAMA, without first securing the
required license or authority from the Ministry of Labor and Employment. 2
After trial on the merits, Branch 61 of the Makati RTC rendered its Judgment on the case, 3 the decretal
portion of which reads:
WHEREFORE, PREMISES ABOVE CONSIDERED, the Court finds the accused ROSA C. RODOLFO as GUILTY of the
offense of ILLEGAL RECRUITMENT and hereby sentences her [to] a penalty of imprisonment of EIGHT
YEARS and to pay the costs. 4 (Underscoring supplied)
In so imposing the penalty, the trial court took note of the fact that while the information reflected the
commission of illegal recruitment in large scale, only the complaint of the two of the five complainants was
proven.
On appeal, the Court of Appeals correctly synthesized the evidence presented by the parties as follows:
[The evidence for the prosecution] shows that sometime in August and September 1984, accused-
appellant approached private complainants Necitas Ferre and Narciso Corpus individually and invited them to
apply for overseas employment  in Dubai. The accused-appellant being their neighbor, private complainants
agreed and went to the former’s office. This office which bore the business name "Bayside Manpower Export
Specialist" was in a building situated at Bautista St. Buendia, Makati, Metro Manila. In that office, private
complainants gave certain amounts to appellant for processing and other fees. Ferre gave P1,000.00 as
processing fee (Exhibit A) and another P4,000.00 (Exhibit B). Likewise, Corpus gave appellant P7,000.00
(Exhibit D). Appellant then told private complainants that they were scheduled to leave for Dubai on
September 8, 1984. However, private complainants and all the other applicants were not able to depart on the
said date as their employer allegedly did not arrive. Thus, their departure was rescheduled to September 23,
but the result was the same. Suspecting that they were being hoodwinked, private complainants demanded of
appellant to return their money. Except for the refund of P1,000.00 to Ferre, appellant was not able to return
private complainants’ money. Tired of excuses, private complainants filed the present case for illegal
recruitment against the accused-appellant.
To prove that accused-appellant had no authority to recruit workers for overseas employment, the
prosecution presented Jose Valeriano, a Senior Overseas Employment Officer of the Philippine Overseas
Employment Agency (POEA), who testified that accused-appellant was neither licensed nor authorized by the
then Ministry of Labor and Employment to recruit workers for overseas employment.
For her defense, appellant denied ever approaching private complainants to recruit them for employment in
Dubai. On the contrary, it was the private complainants who asked her help in securing jobs abroad. As a good
neighbor and friend, she brought the private complainants to the Bayside Manpower Export Specialist agency
because she knew Florante Hinahon, 5 the owner of the said agency. While accused-appellant admitted that
she received money from the private complainants, she was quick to point out that she received the same
only in trust for delivery to the agency. She denied being part of the agency either as an owner or employee
thereof. To corroborate appellant’s testimony, Milagros Cuadra, who was also an applicant and a companion
of private complainants, testified that appellant did not recruit them. On the contrary, they were the ones
who asked help from appellant. To further bolster the defense, Eriberto C. Tabing, the accountant and cashier
of the agency, testified that appellant is not connected with the agency and that he saw appellant received
money from the applicants but she turned them over to the agency through either Florantino Hinahon or
Luzviminda Marcos. 6 (Emphasis and underscoring supplied)
In light thereof, the appellate court affirmed the judgment of the trial court but modified the penalty imposed
due to the trial court’s failure to apply the Indeterminate Sentence Law.
The appellate court thus disposed:
WHEREFORE, finding no merit in the appeal, this Court DISMISSES it and AFFIRMS the appealed Decision
EXCEPT the penalty x x x which is hereby changed to five (5) years as minimum to seven (7) years as maximum
with perpetual disqualification from engaging in the business of recruitment and placement of
workers. 7(Underscoring supplied)
Petitioner’s Motion for Reconsideration having been denied, 8 the present petition was filed, faulting the
appellate court
I POEA do not show that petitioner is authorized to recruit workers for overseas employment. 15 A Certification
x x x IN GIVING CREDENCE TO THE TESTIMONIES OF THE COMPLAINING WITNESSES, [AND]
II
x x x IN FINDING THE PETITIONER-ACCUSED GUILTY WHEN THE PROSECUTION FAILED TO PROVE HER GUILT
BEYOND REASONABLE DOUBT. 9 (Underscoring supplied)
Petitioner bewails the failure of the trial court and the Court of Appeals to credit the testimonies of her
witnesses, her companion Milagros Cuadra, and Eriberto C. Tabing who is an accountant-cashier of the
agency.
Further, petitioner assails the trial court’s and the appellate court’s failure to consider that the provisional
receipts she issued indicated that the amounts she collected from the private complainants were turned over
to the agency through Minda Marcos and Florante Hinahon. At any rate, she draws attention to People v.
Señoron 10 wherein this Court held that the issuance or signing of receipts for placement fees does not make a
case for illegal recruitment.11
The petition fails.
Articles 38 and 39 of the Labor Code, the legal provisions applicable when the offense charged was
committed, 12provided:
ART. 38. Illegal Recruitment. – (a) Any recruitment activities, including the prohibited practices enumerated
under Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority shall be deemed
illegal and punishable under Article 39 of this Code. x x x
Article 39. Penalties. – x x x x
(c) Any person who is neither a licensee nor a holder of authority under this Title found violating any provision
thereof or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty
of imprisonment of not less than four years nor more than eight years or a fine of not less than  P20,000 nor
more than P100,000 or both such imprisonment and fine, at the discretion of the court;
x x x x (Underscoring supplied)
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. 13 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. 14
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,
promising or advertising for employment, locally or abroad, whether for profit or not." (Underscoring
supplied)
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
to that effect was in fact issued by Hermogenes C. Mateo, Chief of the Licensing Division of POEA. 16
Petitioner’s disclaimer of having engaged in recruitment activities from the very start does not persuade in
light of the evidence for the prosecution. In People v. Alvarez, this Court held:
Appellant denies that she engaged in acts of recruitment and placement without first complying with the
guidelines issued by the Department of Labor and Employment. She contends that she did not possess any
license for recruitment, because she never engaged in such activity.
We are not persuaded. In weighing contradictory declarations and statements, greater weight must be given
to the positive testimonies of the prosecution witnesses than to the denial of the defendant. Article 38 (a)
clearly shows that illegal recruitment is an offense that is essentially committed by a non-licensee or non-
holder of authority. A non-licensee means any person, corporation or entity to which the labor secretary has
not issued a valid license or authority to engage in recruitment and placement; or whose license or authority
has been suspended, revoked or cancelled by the POEA or the labor secretary. A license authorizes a person or
an entity to operate a private employment agency, while authority is given to those engaged in recruitment
and placement activities.
xxxx WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals
are AFFIRMED with MODIFICATION in that the accessory penalty imposed by it consisting of "perpetual
disqualification from engaging in the business of recruitment and placement of workers" is DELETED.
That appellant in this case had been neither licensed nor authorized to recruit workers for overseas
employment was certified by Veneranda C. Guerrero, officer-in-charge of the Licensing and Regulation Office;
and Ma. Salome S. Mendoza, manager of the Licensing Branch – both of the Philippine Overseas Employment Costs against petitioner.
Administration. Yet, as complainants convincingly proved, she recruited them for jobs in Taiwan. 17 (Italics in
the original; underscoring supplied)
SO ORDERED.

The second element is doubtless also present. The act of referral, which is included in recruitment, 18 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." 19 Petitioner’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.

That petitioner 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. 20 As the appellate court stated:

x x x Sec. 13(b) of P.D. 442 [The Labor Code] does not require that the recruiter receives and keeps the
placement money for himself or herself. For as long as a person who has no license to engage in recruitment
of workers for overseas employment offers for a fee an employment to two or more persons, then he or she is
guilty of illegal recruitment. 21

Parenthetically, why petitioner 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 petitioner’s reliance on Señoron, 22 true, this 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. 23

A word on the penalty. Indeed, the trial court failed to apply the Indeterminate Sentence Law which also
applies to offenses punished by special laws.

Thus, Section 1 of Act No. 4103 (An Act to Provide for an Indeterminate Sentence and Parole for All Persons
Convicted of Certain Crimes by the Courts of the Philippine Islands; To Create A Board of Indeterminate
Sentence and to Provide Funds Therefor; and for Other Purposes) provides:

SECTION 1. Hereafter, in imposing a prison sentence for an offense punished by the Revised Penal Code, or its
amendments, the court shall sentence the accused to an indeterminate sentence the maximum term of which
shall be that which, in view of the attending circumstances, could be properly imposed under the rules of the
said Code, and the minimum which shall be within the range of the penalty next lower to that prescribed by
the Code for the offense; and if the offense is punished by any other law, the court shall sentence the accused
to an indeterminate sentence, the maximum term of which shall not exceed the maximum fixed by said law
and the minimum shall not be less than the minimum term prescribed by the same. (As amended by Act No.
4225) (Underscoring supplied)

While the penalty of imprisonment imposed by the appellate court is within the prescribed penalty for the
offense, its addition of "perpetual disqualification from engaging in the business of recruitment and placement
of workers" is not part thereof. Such additional penalty must thus be stricken off.
G.R. Nos. 116905-908               August 6, 2002
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, 
vs.
EDUARDO BALLESTEROS, accused-appellant.
DECISION
Labor Law; Large-Scale Illegal Recruitment; Elements; To constitute illegal recruitment in large-scale,
three elements must concur.—We have held that to constitute illegal recruitment in large-scale, three
elements must concur: 1. The accused undertook any recruitment activity defined under Art. 13 (b) or any
prohibited practice enumerated under Art. 34 of the Labor Code. 2. He did not have the license or the
authority to lawfully engage in the recruitment and placement of workers. 3. He committed the same against
three or more persons, individually or as a group.
Criminal Law; Estafa; Illegal Recruitment as Estafa under the Revised Penal Code; A person convicted
under the Labor Code may also be convicted of offenses punishable by other laws for the same acts.—The trial
court also did not err in finding appellant guilty of estafa. It is well-settled that a person, for the same acts,
may be charged and convicted separately of the crime of illegal recruitment under the Labor Code
and estafa under paragraph 2(a) of Article 315 of the Revised Penal Code. Illegal recruitment is malum
prohibitum where the criminal intent of the accused is not necessary for conviction, while estafa is malum in
se where the criminal intent of the accused is necessary for conviction. In other words, a person convicted
under the Labor Code may also be convicted of offenses punishable by other laws for the same acts.
Same; Same; Elements.—The elements of estafa are as follows: (1) the accused defrauded another by
abuse of confidence or by means of deceit; and (2) the offended party or a third party suffered damage or
prejudice capable of pecuniary estimation.
CARPIO, J.:
The Case
This is an appeal from the Decision 1 dated July 6, 1994 of the Regional Trial Court of Manila, Branch 49, in
Criminal Cases Nos. 93-121321, 93-121322, 93-121323 and 93-121324, convicting appellant Eduardo
Ballesteros ("Appellant" for brevity) of the crimes of illegal recruitment in large-scale and estafa. The trial
court sentenced appellant to life imprisonment plus three indeterminate penalties ranging from two years,
eleven months and ten days of prision correccional as minimum to nine years, eight months and one day
of prision mayor as maximum.
The Charge
2  worker in Japan. Ricky de la Torre (hereinafter "dela Torre"), who was a cousin of Ricamonte’s friend,
On May 26, 1993, the Assistant City Prosecutor of Manila filed an Information charging appellant with the
crime of illegal recruitment in large-scale,3 docketed as Criminal Case No. 93-121321, as follows:
"That on or about May 23, 1992, November 27, 1992 and January 3, 1993, in the City of Manila, Philippines,
the said accused representing himself to have the capacity to contract, enlist and transport Filipino workers
for employment abroad, did then and there wilfully and unlawfully for a fee, recruit and promise employment
job placement in Japan to the following persons: Arnel Viloria y Viloria, Santiago Ricamonte y Leocario and
Nenita Sorita y Ramos, without first having secured the required license or authority from the Department of
Labor.
Contrary to law."
The Assistant City Prosecutor also charged appellant, based on the same incident, of three counts
of estafacommitted on each of the private complainants under Criminal Cases Nos. 93-121322, 4 93-
1213235 and 93-121324.6 The Informations were identical, except for the name of the private complainants, as
follows:
"That on or about May 23, 1992, the accused, did then and there willfully, unlawfully and feloniously defraud
ARNEL VILORIA Y VILORIA in the following manner, to wit: the said accused, by means of false manifestations
and fraudulent representation which he/they/she made to said ARNEL VILORIA Y VILORIA to the effect that he
had the power and capacity to recruit and employ ARNEL VILORIA Y VILORIA and could facilitate the
processing of the pertinent papers if given the necessary amount to meet the requirements thereof, and by
means of other similar deceits, induced and succeeded in inducing said ARNEL VILORIA Y VILORIA to give and
deliver, as in fact he gave and delivered to said accused the amount of P50,000.00 on the strength of said
manifestations and representations, said accused well knowing that the same were false and fraudulent and
were made solely, to obtain, as in fact he did obtain the amount of P50,000.00 which amount once in his
possession, with intent to defraud, willfully, unlawfully and feloniously misappropriated, misapplied and
converted to his own personal use and benefit, to the damage and prejudice of said ARNEL VILORIA Y VILORIA
in the aforesaid amount of P50,000.00, Philippine Currency.
Contrary to law."
Arraignment and Plea
Upon arraignment on June 18, 1983 for each of the charges, appellant, assisted by counsel de parte, entered a
plea of "Not Guilty" to all the charges. Trial then followed.
The Trial
The prosecution presented as its witnesses the three private complainants, Arnel Viloria ("Viloria" for brevity),
Santiago Ricamonte ("Ricamonte" for brevity), and Nenita Sorita ("Sorita" for brevity), as well as SPO4
Benjamin Lotivio. The defense presented appellant as its lone witness.
Version of the Prosecution
The facts7 of the case are as follows:
Santiago Ricamonte, Arnel Viloria and Nenita Sorita all dreamt of seeking "greener pastures" in foreign shores.
It was most unfortunate for them to have fallen into the deceptive acts and machinations of the appellant who
lured them into a false sense of security with promises of foreign employment in Japan.
Santiago Ricamonte was a driver at the Monte Merchandizing when he thought of applying as a construction
introduced him to Engineer Jose Mendoza, a recruiter of workers to Japan. On November, 1992, dela Torre
and Mendoza brought Ricamonte to an office in the Army and Navy Club, located at T. M. Kalaw St., Manila,
and introduced him to appellant, Cecilia Legarbes Zabala (hereinafter "Zabala") and Alfredo Hunsayan, Jr.
(hereinafter "Hunsayan"). When inside the office, Ricamonte saw, on one of the tables, a name plate bearing
the name of ‘Judge Cornejo’. He found out that the office belonged to a former fiscal named Crisanto Cornejo,
who was on vacation at that time, and who allowed the appellant to hold office there while he was away.
Once introduced, Ricamonte was informed of each of the person’s duties in that office. He found out that
Zabala was in charge of arranging papers of recruits to Japan while Hunsayan was the one who had contacts in
Japan and that both of them were associated in the business of recruiting workers for employment in Japan.
The appellant told Ricamonte that there was a job offer in Japan and that Zabala knew everything about the
recruitment. The appellant also impressed upon Ricamonte that the recruitment of persons for employment in
Japan was a transaction of people with money so that if he did not have any money, he might as well forget
setting foot in Japan. The appellant added that Ricamonte needed to prepare P80,000.00 for the processing of
his employment papers and his plane ticket.
On November 23, 1992, in the office of the appellant, Ricamonte gave P20,000.00, as the first installment of
his payment, to de la Torre who counted the money and thereafter gave it to Zabala who then issued a receipt
for the amount (Exhibits ‘A’ and ‘3’). The appellant and Mendoza were present and witnessed the transaction.
Ricamonte thereafter signed an application for employment which would be allegedly sent by Zabala to his
prospective employer in Japan.
On another occasion, Ricamonte again went to the office of the appellant to give an additional P50,000.00.
The same process was followed. The money was given to Zabala who issued a receipt for the amount while
the appellant, Mendoza, dela Torre, and Hunsayan were present as witnesses. Zabala then told him that his
visa would be released soon and asked him to return on a specified date.
When Ricamonte returned to the office of the appellant on the specified date, Zabala was nowhere to be
found. He asked the appellant, who was in the office at that time, where Zabala was, but the appellant told
him that he had nothing to do with Zabala and that it was up to him to look for her. When Ricamonte returned
to the office of the appellant sometime in December 1992, he found the office already padlocked.
Nenita Sorita was 56 years old and had already worked in Bahrain for some time, when she, too, was promised
an employment in Japan.
On April, 1992, Sorita’s nephew and niece borrowed money from her and asked her to pay the money to a
certain recruitment agency where she met Engineer Mendoza. Mendoza offered Sorita a job in Japan but she
initially refused since she was not yet interested at that time. However, it was not long after that first
conversation when she gave in to the offer of employment in a garment factory in Japan. Mendoza showed
her a letter of invitation from his contact in Japan for persons to work there and assured her that this contact
person would be responsible for everything.
Convinced, Sorita paid P10,000.00 to Mendoza for the processing of her papers and her visa for which
Mendoza signed a receipt (Exhibits ‘G’ and ‘6’). He was able to get a passport for Sorita as a tourist but still,
after a long wait, failed to send her to Japan. Mendoza told Sorita that he had a misunderstanding with his
Japanese contact so he could not procure employment for her in Japan but, nevertheless, assured her that he
had friends who could secure employment for her in Japan.
So, on November 20, 1992, Mendoza brought Sorita to the house of the appellant in Singalong, Manila where
she met Cecilia Legarbes Zabala. The appellant and Zabala told Sorita that she would have to pay P60,000.00
for the processing of her employment papers, visa and her plane tickets to and from Japan. However, the
P10,000.00 which she had earlier paid Mendoza would be deducted from the amount. After laying down the
terms and conditions of their agreement, Sorita was asked to deliver the money to the office of the appellant
at the Army and Navy Club.
On January 3, 1993, Sorita went to the office of the appellant with only P21,500.00. This notwithstanding, the
appellant and Mendoza instructed her to give the money to Zabala. Once inside the office, Sorita saw the
name plate of "Judge Cornejo" on one table and that of the appellant, "Captain" on another table. After giving
them the P21,000.00, Sorita told the three that she could not produce the rest of the money because the
person who was supposed to buy her personal properties, the proceeds of which she would use to pay the
balance of her recruitment fee, failed to do so. Nevertheless, the three told Sorita to bring her personal
properties to the office so that they could buy them from her for P30,000.00.
On the same day, Sorita brought her personal properties to the office of the appellant consisting of: 1 Ladies’
ring with Tampok; 1 wedding band; a 24 karat necklace; 1 14" colored TV (Goldmaster brand); and 1 Sony
Walkman (Exhibits ‘5’ and ‘H’). The appellant, Zabala and Mendoza were still there when Sorita arrived. Zabala
then gave Sorita a signed receipt for the cash amount of P21,000.00 and her personal properties (Exhibits ‘H’
and ‘5’). However, Zabala instructed Sorita to bring her Sony Walkman and television to the house of the
appellant where he himself received the items. Sorita, however, never got any receipt for the items since
Zabala assured her that there was no more problem. Zabala then told her that she would procure a tourist visa
for her and enable her to work as a ‘TNT’ (tago ng tago) in Japan and guaranteed her that she, together with
the others, would endeavor to bring her to Japan.
However, the day of Sorita’s departure never came. Like Ricamonte, when she returned to the office of the
appellant, the office was already padlocked.
Arnel Viloria was a 5th year Engineering student at the Technological Institute of the Philippines when he fell
into the same "employment trap."
Viloria’s mother and Nenita Sorita were close friends. On one occasion when Viloria went to the house of
Sorita, he met Engineer Jose Mendoza. About a month thereafter, because of Mendoza’s incessant efforts,
Viloria was convinced to apply for a construction job in Japan. It was also upon the prodding of Mendoza that
Viloria no longer enrolled for the incoming semester in school.
On November 23, 1992, Viloria, together with his parents and Sorita, went to the office of the appellant at the
Army and Navy Club to apply as a construction worker in Japan. Once there, Mendoza introduced Viloria to
the appellant and Zabala and informed him that these people were his associates and that Zabala was the one
responsible for the processing and approval of his employment application. The appellant informed Viloria
that he had to pay P80,000.00 for his employment papers and plane ticket. Viloria paid the total amount of
P50,000.00 in three installments for which he was given receipts by Zabala (Exhibits M-3, L, M, J) and was also
given the same assurance that he would soon be leaving for Japan.
However, as the same story goes, when Viloria returned to the office of the appellant to claim his visa and
employment papers, the office was already closed. Viloria then inquired from the Philippine Overseas
Employment Administration if the appellant, Zabala and Mendoza were licensed to procure workers for
employment in Japan and was informed that they were not. Upon learning this, Viloria tried to contact the
appellant but, naturally, the latter refused to see him. When Viloria finally managed to talk to the appellant
over the telephone, the appellant got mad at him and told him that he had nothing to do with his problem.
Finally, Santiago Ricamonte, Arnel Viloria and Nenita Sorita, after conferring with each other and realizing that
they were defrauded, executed a "Joint Affidavit of Complaint" against the appellant with the Western Police
District (Exhibit ‘D’) on May 11, 1993.
On the same date, members of the Western Police District arrested the appellant. After the Inquest
Investigation, the Investigator recommended that the appellant be charged of estafa and illegal recruitment
(large-scale) (Exhibit ‘0-2’). Two days after the appellant was arrested, Cecilia Zabala was also arrested upon
information received by the police that she was staying at the Arevalo Building in Manila. The police found the
passports of Arnel Viloria and Santiago Ricamonte and the receipts signed by the appellant (Exhibits ‘E’ and ‘E-
2’) in her possession and turned them over to Viloria and Ricamonte. An Inquest Investigation was conducted
on May 14, 1993. However, a month thereafter, Zabala managed to escape from the Western Police and is, up
to now, still at large.
Version of the Defense
The facts,8 according to the defense, are as follows:
Appellant categorically denies having recruited or having been involved in the recruitment of the offended
parties to Japan. He, however, admits that he and Mendoza were once close friends, having worked together
in a vessel, appellant as the Captain, and Mendoza, as his Engineer. However, appellant claims that the
relations between them became strained when Mendoza refused to repay appellant for his expenses in the
baptism of Mendoza’s son.
Appellant narrates that he was the Chairman of the Board of Directors of PSBN Marine Salvage, Inc., a
company he established, with offices at No. 2336 Espiritu St., Singalong, Manila, which was also his residence
at that time. Appellant claims that his relations with Mendoza became further strained when he found out
that the latter tampered with his company’s Articles of Incorporation by erasing the name of one of the
Directors and replacing it with his own (Exhibits 19 and 19-B).
Appellant also states that he transferred his office to the Army and Navy Club upon the permission of a former
Assistant City Fiscal Crisanto Cornejo, who originally rented the office, and who was on vacation at that time.
Appellant claims that he arranged to pay for the rentals of the office, in exchange for its use since Cornejo was
three months in arrears in its payment.
Appellant narrates that sometime in November 1992, Mendoza, Zabala, and Almonte arrived in his office and
sought to rent one table for a monthly rental of P2,000.00. He claims that Mendoza and Zabala were brokers
besides being engaged in the recruitment of workers for employment abroad. However, appellant claims that
he never meddled in their business and tended to his own. Appellant also asserts that Cornejo knew of this
arrangement and insisted that money transactions should not be done inside the office. Accordingly,
whenever Mendoza, Zabala and Almonte had business conferences with their clients, they went to the
canteen inside the club, about 25 meters away from the office.
It was also in November 1992, on different occasions, that Sorita, Viloria and Ricamonte, who were applicants
for employment abroad, were brought to the office by Mendoza and the other recruiters. In the process,
appellant admitted that "he advised the three that if they had no money or somebody to finance their
employment abroad they might as well forget any plans of working abroad."
Appellant says that Mendoza and the others paid the rent for the use of the table promptly for the first three
months or until January 1993 (Exhibit Q-4). Appellant signed two receipts acknowledging the payment of the
rent. At one point, one of the applicants, Sorita, delivered to his house a television set and a Sony walkman.
Appellant was surprised by this act, but claims, that on the same day, Zabala took the said items. Sorita told
him that Zabala had already signed the receipt for the said goods.
Sometime in January or February of 1993, the office of the appellant was padlocked for non-payment of rent
for 6 months. Subsequently, appellant entered into a contract for shipping services with a new company.
On May 3, 1993, appellant claims that police operatives of the Western Police District sought his help in
locating Mendoza, Zabala, and Alfredo Hunsayan, Jr., for defrauding Sorita, Viloria and Ricamonte. Appellant
agreed to help and informed them where Zabala could be found. After two days, Zabala was arrested by the
police but managed to escape after a month. Appellant, however, claims that, in spite of the help he gave to
the police, he was still placed under arrest and charged for the crime of illegal recruitment (large-scale)
and estafa.
Ruling of the Trial Court
The trial court accorded full faith and credence to the testimony of the private complainants. The trial court
was "convinced, beyond a shadow of doubt, that they testified in a spontaneous, straight-forward and sincere
manner, bereft of the affectations and tell-tale signs of perjured and/or rehearsed witnesses." 9 The trial court
held that appellant was in cahoots with Cecilia Legarbes Zabala, Jose Mendoza, Perla Almonte, Ricky de la
Torre and Alfredo Hunsayan, Jr. in recruiting private complainants for employment in Japan. The trial court
found that appellant received various sums of money and personal properties from the private complainants
as placement fees, expenses for processing of employment papers, issuance of visas to Japan and for purchase
of plane tickets.
After trial on the merits, the trial court convicted appellant of illegal recruitment in large-scale and three
counts of estafa, stating that:10
"In view of the foregoing disquisitions of the Court, judgment is hereby rendered against the Accused as
follows:
1. In ‘People versus Eduardo Ballesteros, Criminal Case No. 93-121321’, the Accused is hereby
found guilty beyond reasonable doubt of the crime of illegal recruitment defined in Article 13 (b) in
relation to Article 38 of the Labor Code as amended and hereby meted the penalty of life
imprisonment and to pay a fine of P100,000.00 without subsidiary imprisonment in case of
insolvency;
2. In ‘People versus Eduardo Ballesteros, Criminal Case No. 93-121322’, the Accused is found guilty
beyond reasonable doubt of the crime of Estafa defined in Article 315, paragraph 2 (a) of the
Revised Penal Code and hereby meted an indeterminate penalty of from Two (2) Years, Eleven (11)
Months and Ten (10) Days of Prision Correccional as Minimum, to Eight (8) Years, Eight (8) Months
and One (1) Day of Prision Mayor as Maximum, and ordered to refund to Arnel Viloria the amount
of P50,000.00, with interests thereon, at the legal rate from November 23, 1992 until the said
amount is paid in full;
3. In ‘People versus Eduardo Ballesteros, Criminal Case Number 93-121323’, the Accused is hereby
found guilty beyond reasonable doubt of the crime of Estafa defined in Article 315 (2) (a) of the
Revised Penal Code and hereby meted an indeterminate penalty of from Two (2) Years, Eleven (11)
Months and Ten (10) Days of Prision Correccional as Minimum, to Eight (8) Years, Eight (8) Months
and One (1) Day of Prision Mayor as Maximum and ordered to refund to Santiago Ricamonte the
amount of P50,000.00 plus interests thereon at the legal rate from November 27, 1992, until the
said amount is paid in full;
4. In ‘People versus Eduardo Ballesteros, Criminal Case Number 93-121324’, the Court found the
Accused guilty beyond reasonable doubt of the crime of Estafa defined in Article 315 (2) (a) of the
Revised Penal Code and hereby sentences the Accused to an indeterminate penalty of from Two (2)
Years, Eleven Months and Ten (10) Days of Prision Correccional, as Minimum, to Nine (9) Years,
Eight (8) Months and One (1) Day of Prision Mayor, as Maximum, and to refund to Nenita Sorita the
amount of P31,000.00 and to return to her the following described properties:
1 Ladies ring with tampok
1 Wedding band
1 Necklace – 24 karat
1 TV colored 14" Goldmaster brand
1 Sony Walkman
and if he is unable to do so, or refuses to do so, to pay to her the value thereof in the amount of P30,000.00,
said amounts with interests thereon at the legal rate from January 3, 1993, up to the time the said amounts
are paid in full.
The Accused shall be entitled to the full credit of his detention at the City Jail of Manila provided that he
agreed to abide by and comply strictly with the rules and regulations of the said Jail. With costs against the
Accused.
SO ORDERED."
In view of the penalty of life imprisonment, the appellant filed his appeal directly with this Court.
Issues
The appeal is anchored on the following assigned errors:
"I
THE TRIAL COURT ERRED IN CONCLUDING THAT THE ACCUSED CONSPIRED WITH CECILIA LEGARBES ZABALA,
ENGINEER JOSE MENDOZA, PERLA ALMONTE, RICKY DE LA TORRE AND ALFREDO HUNSAYAN, JR., THE
ALLEGED RECRUITERS, IN COMMITTING THE CRIME OF ILLEGAL RECRUITMENT ALLEGED IN THE
INFORMATIONS.
II
THE TRIAL COURT ERRED IN FINDING THAT THERE IS NO EVIDENCE ON RECORD ADDUCED BY THE ACCUSED
THAT PRIVATE COMPLAINANTS ARNEL VILORIA, SANTIAGO RICAMONTE AND NENITA SORITA, HAD ANY
DEVIOUS OR ILL-MOTIVE TO FABRICATE THE CHARGES AGAINST THE ACCUSED.
III
THE TRIAL COURT ERRED IN GIVING FULL FAITH AND CREDIT TO THE TESTIMONIAL EVIDENCE OF THE
PROSECUTION NOTWITHSTANDING THE INCREDIBLE AND UNBELIEVABLE TESTIMONIES OF THE PROSECUTION
WITNESSES.
IV
THE TRIAL COURT ERRED IN NOT FINDING THAT THE COMPLAINTS BY THE PRIVATE COMPLAINANTS BROUGHT
AGAINST THE ACCUSED WERE MERELY AN AFTERTHOUGHT, AND THAT THE COMPLAINANTS’ TESTIMONY IN
SUPPORT OF THE SAME WERE UNCONVINCING AND IMPLAUSIBLE AND FALL SHORT OF THE REQUIRED PROOF
BEYOND REASONABLE DOUBT.
V Illegal Recruitment In Large-Scale
THE TRIAL COURT ERRED IN NOT GIVING WEIGHT TO ACCUSED’S CLAIM THAT THE FACT THAT THE GROUP OF
CECILIA LEGARBES ZABALA HAD SUBLEASED A PORTION OF THE OFFICE AT THE ARMY AND NAVY CLUB FROM
THE ACCUSED AS CARETAKER OF THE OFFICE DOES NOT MEAN THAT ACCUSED HAD KNOWLEDGE OR
PARTICIPATION IN THEIR BUSINESS ACTIVITIES AS THEIR TRANSACTIONS WERE NOT DONE IN THE OFFICE BUT
IN THE CANTEEN OF THE CLUB.
VI
THE TRIAL COURT ERRED IN PLACING HEAVY RELIANCE ON THE RECEIPTS, EXHIBITS ‘E’ AND ‘E-2’, SHOWING
THAT ACCUSED RECEIVED COMMISSIONS FROM CECILIA LEGARBES ZABALA AND OTHERS, AND IN NOT
HOLDING THAT THE SAID RECEIPTS WERE NOT FOR COMMISSIONS AS INDICATED IN THE RECEIPTS BUT WERE
ACTUALLY RECEIPTS OF PAYMENT OF RENTALS OF THE SAID PERSONS OF A PORTION OF THE OFFICE FOR
ABOUT THREE (3) MONTHS.
VII
THE TRIAL COURT ERRED IN HOLDING, WITHOUT VALID, SUFFICIENT, CONVINCING AND SUBSTANTIAL
EVIDENCE, THAT THE AFOREMENTIONED RECEIPTS, EXHIBITS ‘E’ AND ‘E-2’, CONFIRMED THE PROSECUTION’S
CLAIM THAT THE ACCUSED WAS DIRECTLY INVOLVED IN THE ILLEGAL RECRUITMENT ACTIVITIES OF THE SAID
CECILIA LEGARBES ZABALA AND OTHERS CONSIDERING THAT ACCUSED HAD NEVER ENGAGED AND HAD NOT
ACTUALLY ENGAGED IN ILLEGAL RECRUITMENT ACTIVITIES.
VIII
THE TRIAL COURT ERRED IN NOT FINDING THAT ACCUSED WAS NOT GUILTY OF ILLEGAL RECRUITMENT
(LARGE-SCALE) CONSIDERING ITS ADMISSION THAT THE PROSECUTION HAS NOT ADDUCED ANY EVIDENCE TO
PROVE THAT THE ACCUSED RECEIVED FROM CECILIA LEGARBES ZABALA ANY CASH AMOUNT FROM THE
PAYMENTS OF PLACEMENT FEES BY PRIVATE COMPLAINANT NENITA SORITA. MOREOVER, FURTHER PROOF
THAT ACCUSED HAD NEVER ENGAGED AND HAS NOT ACTUALLY ENGAGED IN ILLEGAL RECRUITMENT IS PLAIN
AND EVIDENT FROM THE UNIFORM TESTIMONIES OF THE COMPLAINANTS THAT ACCUSED HAD NEVER
RECEIVED MONEY AS ALLEGED PLACEMENT FEES PERSONALLY FROM THE SAID COMPLAINING WITNESSES.
IX
THE TRIAL COURT ERRED IN NOT FINDING THAT THE ACCUSED IS NOT GUILTY OF ESTAFA.
X
THE TRIAL COURT ERRED IN CONVICTING THE ACCUSED OF THE CRIMES OF ILLEGAL RECRUITMENT (LARGE-
SCALE) AND THREE (3) COUNTS OF ESTAFA AND IN NOT ACQUITTING HIM OF THE CRIMES CHARGED, THE
SAME NOT HAVING BEEN PROVED BEYOND REASONABLE DOUBT."11
The thrust of the appeal is twofold. First, the trial court erred in finding appellant responsible for the illegal
recruitment of the complaining witnesses and in finding that there was conspiracy between appellant and his
alleged cohorts. Second, the trial court erred in convicting appellant of estafa despite the failure of the
prosecution to prove his guilt beyond reasonable doubt.
The Court’s Ruling
We find no reason to reverse appellant’s conviction. Hence, we affirm but with modification.
Article 13, par. (b), of the Labor Code defines recruitment and placement as:
"(b) ‘Recruitment and placement’ refer to any act of canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not; Provided, that any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in
recruitment and placement."
Illegal recruitment is specifically defined in Article 38 of the same Code thus:
"Article 38. Illegal Recruitment:
(a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of
this Code, to be undertaken by non-licensees or non-holders of authority shall be deemed illegal
and punishable under Article 39 of this Code. x x x.
 (b) Illegal recruitment when committed by a syndicate or in large-scale shall be considered an
offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons
conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction,
enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in
large-scale if committed against three (3) or more persons individually or as a group."
We have held that to constitute illegal recruitment in large-scale, three elements must concur:
1. The accused undertook any recruitment activity defined under Art. 13 (b) or any prohibited
practice enumerated under Art. 34 of the Labor Code.
2. He did not have the license or the authority to lawfully engage in the recruitment and placement
of workers.
3. He committed the same against three or more persons, individually or as a group.12
The prosecution sufficiently established the foregoing elements in the instant case. First, as found by the trial
court:
"The Accused represented to and assured Santiago Ricamonte that, indeed, there was a job offer for a
construction worker in Japan and even told the latter to prepare and pay the amount of P80,000.00, payable
in installments for the processing of his papers for his employment in Japan and his plane ticket to Japan. The
Accused even impressed on Santiago Ricamonte that the matter of employment of workers in Japan was a
transaction only of people with money and unless the applicant has the amount demanded of him, he could
not possibly procure employment in Japan. Santiago Ricamonte gave and paid to Cecilia Legarbes Zabala the
amount of P20,000.00 on November 23, 1992, and the amount of P30,000.00 on December 3, 1992, in the
presence of the Accused in the latter’s office at the Army and Navy Club where Cecilia Legarbes Zabala signed
the Receipts (Exhibits "A" and "B"). Santiago Ricamonte relied on the assurances and representations of the
Accused and his cohorts and was impressed by the office of the Accused. After all, on one of the tables was the
name plate of ‘Judge Cornejo’. The Court cannot then begrudge Santiago Ricamonte into trusting the Accused
and his cohorts and in believing that they would not deceive and defraud him."13
Second, there is no need to show that appellant represented himself as a licensed recruiter since it is enough
to show that he did not possess the requisite authority or license to undertake recruitment activities. 14 The
prosecution established that the Philippine Overseas Employment Administration (POEA) did not authorize or
license appellant and his cohorts to engage in recruitment Activities. 15 Despite the absence of such authority or
license, appellant recruited the complainants.
The appellant need not have expressly represented that he had authority or license from POEA. It is sufficient
that appellant gave the impression that he could find jobs for complainants in Japan, inducing complainants to
agree to pay him recruitment fees.16 On several occasions, this Court has held that there is illegal recruitment
when one, without authority or license to do so, represents to others that he could send workers abroad for
employment.17
Assuming arguendo that appellant did not actually receive any fee, his representations that he had the
capacity to secure employment for private complainants made him liable for illegal recruitment since he had
no authority or license from the POEA.18 In the recent case of People v. Arabia,19 we held that:
"While it may be true that complainants herein were not able to present receipts to prove that they in fact
paid the placement fee of P16,000.00 each to accused Arabia with accused Tomas witnessing the payment, it
has been ruled that the absence of receipts in a criminal case for illegal recruitment does not warrant
acquittal of the accused and is not fatal to the case of the prosecution. As long as the witnesses had
positively shown through their respective testimonies that the accused is the one involved in the prohibited
recruitment, he may be convicted of the offense despite absence of receipts. (People v. Goce 247 SCRA 780;
People v. Senden 228 SCRA 489; People v. Naparan 225 SCRA 714; People v. Pabala 262 SCRA 553)." (Emphasis
supplied)
Clearly, the actual receipt of a fee is not an element of the crime.
Third, since there are at least three victims in this case, appellant thus committed large-scale illegal
recruitment.
Appellant also argues that the prosecution failed to prove that he conspired with the others in the commission
of the crime of illegal recruitment and estafa. We find no cogent reason to disturb the findings of the lower
court that there was conspiracy among appellant, Cecilia Legarbes Zabala, Jose Mendoza, Perla Almonte, Ricky
de la Torre and Alfredo Hunsayan, Jr. The evidence on record indubitably shows that there was a delineation
of roles among the appellant and his cohorts, but with a common design and a unity of purpose. As aptly
pointed out by the trial court:
"The Accused was at the forefront, not merely as a passive onlooker as the Accused wanted the Court to
believe in the recruitment of the Private Complainants. xxx In November, 1992, the Accused, Cecilia Legarbes
Zabala and Jose Mendoza, agreed to the use the office (sic) of former Assistant City Fiscal of Pasay City as their
base of operations or office in their recruitment activities. Jose Mendoza and Ricky de la Torre looked for
applicants who sought employment in Japan, Cecilia Legarbes Zabala was the one tasked to receive the sums
of money paid by the recruits signed and issued Receipts for said amounts. The Accused, on the other hand,
fixed the amounts to be paid by the recruits and directly negotiated and transacted with them and received
his commissions from Cecilia Legarbes Zabala from the payments of the recruits. All the actuations of the
Accused, Cecilia Legarbes Zabala, Jose Mendoza, Perla Almonte and Ricky de la Torre, were geared and
designed to achieve a common purpose or objective – the recruitment of persons for employment in Japan
and eke out sums of money from them although the Accused was not authorized to recruit workers for
employment abroad. Under the circumstances, it is abundantly clear that the Accused conspired with Jose
Mendoza, Cecilia Legarbes Zabala, Perla Almonte, Ricky de la Torre and Alfredo Hunsayan, Jr. and that,
therefore, the Accused is liable for the wrongful acts and its consequences."20
Direct proof of previous agreement to commit a crime is not necessary.  21 Such previous agreement may be
deduced from the mode and manner in which the offense was perpetrated, or inferred from the acts of the
accused which point to a joint purpose and design, concerted action and community of interest.22
In his attempt to exculpate himself, appellant denies having received money from private complainants.
However, as against the positive assertion of complainants, the appellant’s denial is worthless and at most
self-serving. Private complainants testified that Cecilia Legarbes Zabala signed and issued receipts for the cash
amount and other personal properties complainants turned over as payment for processing their employment
applications abroad. The documentary evidence of the prosecution shows that appellant received his
commission from recruitment fees paid by the private complainants. Exhibits "E" and "E-2", which bear
appellant’s signature, establish this fact, to wit:
"December 3, 1992
Received the amount of four thousand five hundred pesos (P4,500.00) from Cely Zabala
as commission."23(Emphasis supplied)
and
"December 7, 1992
Received the amount of Two Thousand Pesos from Cely Zabala as commission (P2,000.00)."24 (Emphasis and estafa under paragraph 2(a) of Article 315 of the Revised Penal Code. 29 Illegal recruitment
supplied) is malum prohibitum where the criminal intent of the accused is not necessary for conviction,
while estafa is malum in se where the criminal intent of the accused is necessary for conviction. 30 In other
words, a person convicted under the Labor Code may also be convicted of offenses punishable by other laws
These receipts show no indication that the amounts were accepted as payment for the rental of the Army and
for the same acts.
Navy Club office space as alleged by appellant. On the contrary, the testimonial and documentary evidence
establish beyond any doubt that appellant received the amounts stated as "commission" for his participation
in the illegal recruitment activities. As correctly observed by the trial court: The elements of estafa are as follows: (1) the accused defrauded another by abuse of confidence or by means
of deceit; and (2) the offended party or a third party suffered damage or prejudice capable of pecuniary
estimation.31 In the instant case, the prosecution proved beyond reasonable doubt that appellant and his
"When he testified before the Court, the Accused resolutely claimed that he was issued Receipts for the
cohorts Cecilia Legarbes Zabala, Jose Mendoza, Perla Almonte, Ricky de la Torre and Alfredo Hunsayan, Jr.
rentals of Jose Mendoza and Cecilia Legarbes Zabala and the Accused readily referred to the Receipts, Exhibits
deceived private complainants into believing that they had the authority and capability to send complainants
"E" And "E-2" bearing his signatures. Ironically, instead of buttressing his stance, the Receipts, Exhibits "E" and
to Japan for employment. Because of the assurances given by appellant and his cohorts, private complainants
"E-2", in fact, belied said claim and placed his defense in a quagmire of inconsistency. For, as can be easily
parted with their hard-earned money in exchange for what they thought was a promising future abroad. The
gleaned from said Receipts, the amounts of P4,500.00 and P2,000.00 mentioned therein were
acts of appellant and his cohorts constitute estafa punishable under Article 315, paragraph 2(a) of the Revised
the "commissions" of the Accused from Cecilia Legarbes Zabala which he received from her and not rentals
Penal Code.
xxx.

The penalty for estafa depends on the amount of the defraudation.32 Article 315 of the Revised Penal Code
xxx
provides:

The Court found the claim of the Accused puerile and preposterous. The Accused is a businessman, a Captain
Art. 315. Swindling (estafa).- Any person who shall defraud another by any of the means mentioned
of a vessel no less. If the amounts were, in fact, rental payments, the Accused, for sure, should have refused to
hereinbelow shall be punished by:
sign the Receipt and should have insisted, before he signed the Receipts, that the same be stated therein in
unequivocal terms. And then again, the Accused has not enlightened the Court why Cecilia Legarbes Zabala
would have the temerity and audacity to place the word "commission" in the Receipts instead of placing the 1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period, if the
word "rental" or the motive of Cecilia Legarbes Zabala in placing "commission" in the Receipts. After all, the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos, and if such amount exceeds the
Accused even allowed her and her companions to rent his office. latter sum, the penalty provided in this paragraph shall be imposed in its maximum period, adding one year for
each additional 10,000 pesos; but the total penalty which may be imposed shall not exceed twenty years. In
such cases, and in connection with the accessory penalties which may be imposed and for the purpose of the
On the other hand, the Receipts, Exhibits "E" and "E-2" galvanized the case of the Prosecution and confirmed
other provisions of this Code, the penalty shall be termed prision mayor or reclusion temporal, as the case may
its claim that, indeed, the Accused was directly involved in the illegal recruitment activities of Cecilia Legarbes
be.
Zabala, more particularly the recruitment of the Private Complainants to Japan. This is so because, as the
Receipts indubitably show, the Accused received, from Cecilia Legarbes Zabala, the said amounts of P4,500.00
and P2,000.00 as his commission for the recruitment of Santiago Ricamonte and Arnel Viloria. Indeed, the 2nd. The penalty of prision correccional in its minimum and medium periods, if the amount of the fraud is over
evidence of the Prosecution shows that Cecilia Legarbes Zabala received, from Santiago Ricamonte, the 6,000 pesos but does not exceed 12,000 pesos.
amount of P30,000.00 on December 3, 1992 (Exhibit "B"). Arnel Viloria paid to Cecilia Legarbes Zabala, on
December 7, 1992, the amount of P10,000.00 (Exhibit "M"). The payments were made in the presence of the
3rd. The penalty of arresto mayor in its maximum period to prision correccional in its minimum period, if such
Accused. It was precisely on December 3, 1992 when the Accused received P4,500.00 from Cecilia Legarbes
amount is over 200 pesos but does not exceed 6,000 pesos; and
Zabala as his commission and on December 7, 1992, when the Accused received, from Cecilia Legarbes Zabala,
the amount of P2,000.00 as his commission. The only logical conclusion is that the amounts given to the
Accused by Cecilia Legarbes Zabala on those dates must have come from the amounts paid by Santiago 4th. By arresto mayor in its medium and maximum periods, if such amount does not exceed 200 pesos,
Ricamonte and Arnel Viloria on those dates respectively. The Accused has not adduced a morsel of evidence provided that in the four cases mentioned, the fraud be committed by any of the following means:
that the Accused transacted business with third persons as agent of Cecilia Legarbes Zabala for which he was
entitled to said amounts as commissions from her."25 xxx

We find no reason to disturb the findings of the trial court, which is in the best position to appreciate 2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with
complainants’ truthfulness, honesty and candor.26 As against the positive and categorical testimonies of the the commission of the fraud:
complainants, appellant’s mere denial cannot prevail.27

In light of these established facts, appellant is guilty beyond reasonable doubt of one count of illegal
recruitment in large-scale. The appellant should suffer the penalty of life imprisonment and a fine of One
Hundred Thousand Pesos (P100,000.00) for the crime of illegal recruitment in large-scale under Article 39(a) of
the Labor Code.28
(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit,
agency, business or imaginary transactions; or by means of other similar deceits.
xxx

Conviction for Estafa We ruled in People v. Gabres33 that:

The trial court also did not err in finding appellant guilty of estafa. It is well-settled that a person, for the same "The fact that the amounts involved in the instant case exceed P22,000.00 should not be considered in the
acts, may be charged and convicted separately of the crime of illegal recruitment under the Labor Code initial determination of the indeterminate penalty; instead, the matter should be so taken as analogous to
modifying circumstances in the imposition of the maximum term of the full indeterminate sentence. This SO ORDERED.
interpretation of the law accords with the rule that penal laws should be construed in favor of the accused.
Since the penalty prescribed by law for the estafa charge against accused-appellant is prision
correccional maximum to prision mayor minimum, the penalty next lower would then
be prision correccional minimum to medium. Thus, the minimum term of the indeterminate sentence should
be anywhere within six (6) months and one (1) day to four (4) years and two (2) months while the maximum
term of the indeterminate sentence should at least be six (6) years and one (1) day because the amounts
involved exceeded P22,000.00, plus an additional one (1) year for each additional P10,000.00."

In addition, appellant is liable to indemnify the private complainants in the amounts which they respectively
paid him and his cohorts: P50,000.00 to Arnel Viloria; P50,000.00 to Santiago Ricamonte; and P31,000.00 to
Nenita Sorita plus P30,000.00 as reparation34 for her unrecovered personal properties. Hence, pursuant to
Article 315 of the Revised Penal Code and our ruling in Gabres, the penalties imposed on appellant
for estafa should be modified as follows:

In Criminal Case Nos. 93-121322 and 93-121323 (which pertain to private complainant Arnel Viloria and
Santiago Ricamonte), the amount involved is P50,000.00.35 The minimum term of the indeterminate penalty,
as fixed by the trial court, is two (2) years, eleven (11) months and ten (10) days of prision correccional, which
is within the lawful range of the allowable minimum period of the indeterminate sentence, while the
maximum term is six (6) years and one (1) day of prision mayor plus a period of two (2) years (an additional of
one year for every P10,000.00 in excess of P22,000.00), or a maximum of eight (8) years and one day of prision
mayor.

In Criminal Case No. 93-121324 (pertaining to private complainant Nenita Sorita), the total amount involved is
P61,000.00. The minimum term of the indeterminate penalty is two (2) years, eleven (11) months and ten (10)
days of prision correccional (which is within the lawful range of the allowable minimum period of the
indeterminate sentence) while the maximum term is nine (9) years and one day of prision mayor.

WHEREFORE, the assailed Decision dated July 6, 1994 of the Regional Trial Court of Manila, Branch 49, finding
appellant EDUARDO BALLESTEROS guilty beyond reasonable doubt of the crimes of Illegal Recruitment in
Large-Scale in Criminal Case No. 93-121321 and of Estafa in Criminal Cases Nos. 93-121322 to 93-121324, is
AFFIRMED with the following modifications:

1. In Criminal Case No. 93-121322 (for estafa involving P50,000.00), appellant is sentenced to suffer

the indeterminate penalty of two (2) years, eleven (11) months and ten (10) days of prision
correccional, as minimum, to eight (8) years and one day of prision mayor, as maximum, and
ordered to refund Arnel Viloria the sum of P50,000.00 with legal interest from November 23, 1992
until the amount is fully paid.

2. In Criminal Case No. 93-121323 (for estafa involving P50,000.00), appellant is sentenced to suffer

the indeterminate penalty of two (2) years, eleven (11) months and ten (10) days of prision
correccional, as minimum, to eight (8) years and one day of prision mayor, as maximum, and
ordered to refund Santiago Ricamonte the sum of P50,000.00 with legal interest from November
27, 1992 until the amount is fully paid.

3. In Criminal Case No. 93-121324 (for estafa involving a total of P61,000.00), appellant is

sentenced to suffer the indeterminate penalty of two (2) years, eleven (11) months and ten (10)
days of prision correccional, as minimum, to nine (9) years and one day of prision mayor, as
maximum, and ordered to pay Nenita Sorita the sum of P31,000.00 plus P30,000.00 as reparation
for the unrecovered personal properties, all with legal interest from January 3, 1993 until the
amount is fully paid.

4. In Criminal Case No. 93-121321 (for illegal recruitment in large-scale), appellant is sentenced to
suffer the penalty of life imprisonment, and to pay a fine of P100,000.00.
G.R. No. 169076             January 23, 2007
PEOPLE OF THE PHILIPPINES, Appellee, 
vs.
JOSEPH JAMILOSA, Appellant.
DECISION
Labor Law; Criminal Law; Illegal Recruitment in Large Scale; Elements; Any recruitment activities to be
undertaken by non-licensee or non-holder of contracts shall be deemed illegal and punishable under Article 39
of the Labor Code of the Philippines.—Any recruitment activities to be undertaken by non-licensee or non-
holder of contracts shall be deemed illegal and punishable under Article 39 of the Labor Code of the
Philippines. Illegal recruitment is deemed committed in large scale if committed against three (3) or more
persons individually or as a group. To prove illegal recruitment in large scale, the prosecution is burdened to
prove three (3) essential elements, to wit: (1) the person charged undertook a recruitment activity under
Article 13(b) or any prohibited practice under Article 34 of the Labor Code; (2) accused did not have the license
or the authority to lawfully engage in the recruitment and placement of workers; and (3) accused committed
the same against three or more persons individually or as a group. As gleaned from the collective testimonies
of the complaining witnesses which the trial court and the appellate court found to be credible and deserving
of full probative weight, the prosecution mustered the requisite quantum of evidence to prove the guilt of
accused beyond reasonable doubt for the crime charged. Indeed, the findings of the trial court, affirmed on
appeal by the CA, are conclusive on this Court absent evidence that the tribunals ignored, misunderstood, or
misapplied substantial fact or other circumstance.
Same; Same; Same; Even in the absence of money or other valuables given as consideration for the
“services” of the recruiter, he is still considered as being engaged in recruitment activities—it can be gleaned
from the language of Article 13(b) of the Labor Code that the act of recruitment may be for profit or not .—The
failure of the prosecution to adduce in evidence any receipt or document signed by appellant where he
acknowledged to have received money and liquor does not free him from criminal liability. Even in the
absence of money or other valuables given as consideration for the “services” of appellant, the latter is
considered as being engaged in recruitment activities. It can be gleaned from the language of Article 13(b) of
the Labor Code that the act of recruitment may be for profit or not. It is sufficient that the accused promises or
offers for a fee employment to warrant conviction for illegal recruitment. As the Court held in People v.
Sagaydo, 341 SCRA 329 (2000): Such is the case before us. The complainants parted with their money upon
the prodding and enticement of accused-appellant on the false pretense that she had the capacity to deploy
them for employment abroad. In the end, complainants were neither able to leave for work abroad nor get
their money back. The fact that private complainants Rogelio Tibeb and Jessie Bolinao failed to produce
receipts as proof of their payment to accused-appellant does not free the latter from liability. The absence of
receipts cannot defeat a criminal prosecution for illegal recruitment. As long as the witnesses can positively
show through their respective testimonies that the accused is the one involved in prohibited recruitment, he
may be convicted of the offense despite the absence of receipts.
CALLEJO, SR., J.:
This is an appeal from the Decision1 of the Regional Trial Court (RTC) of Quezon City in Criminal Case No. Q-97-
72769 convicting appellant Joseph Jamilosa of large scale illegal recruitment under Sections 6 and 7 of
Republic Act (R.A.) No. 8042, and sentencing him to life imprisonment and to pay a P500,000.00 fine.
The Information charging appellant with large scale illegal recruitment was filed by the Senior State Prosecutor
on August 29, 1997. The inculpatory portion of the Information reads:
That sometime in the months of January to February, 1996, or thereabout in the City of Quezon, Metro
Manila, Philippines, and within the jurisdiction of this Honorable Court, representing to have the capacity,
authority or license to contract, enlist and deploy or transport workers for overseas employment, did then and
there, willfully, unlawfully and criminally recruit, contract and promise to deploy, for a fee the herein
complainants, namely, Haide R. Ruallo, Imelda D. Bamba, Geraldine M. Lagman and Alma E. Singh, for work or
employment in Los Angeles, California, U.S.A. in Nursing Home and Care Center without first obtaining the
required license and/or authority from the Philippine Overseas Employment Administration (POEA).
Contrary to law.2
On arraignment, the appellant, assisted by counsel, pleaded not guilty to the charge.
The case for the prosecution, as synthesized by the Court of Appeals (CA), is as follows:
The prosecution presented three (3) witnesses, namely: private complainants Imelda D. Bamba, Geraldine M.
Lagman and Alma E. Singh.
Witness Imelda D. Bamba testified that on January 17, 1996, she met the appellant in Cubao, Quezon City on
board an aircon bus. She was on her way to Shoemart (SM), North EDSA, Quezon City where she was working
as a company nurse. The appellant was seated beside her and introduced himself as a recruiter of workers for
employment abroad. The appellant told her that his sister is a head nurse in a nursing home in Los Angeles,
California, USA and he could help her get employed as a nurse at a monthly salary of Two Thousand US Dollars
($2,000.00) and that she could leave in two (2) weeks time. He further averred that he has connections with
the US Embassy, being a US Federal Bureau of Investigation (FBI) agent on official mission in the Philippines for
one month. According to the appellant, she has to pay the amount of US$300.00 intended for the US consul.
The appellant gave his pager number and instructed her to contact him if she is interested to apply for a
nursing job abroad.
On January 21, 1996, the appellant fetched her at her office. They then went to her house where she gave him
the photocopies of her transcript of records, diploma, Professional Regulatory Commission (PRC) license and
other credentials. On January 28 or 29, 1996, she handed to the appellant the amount of US$300.00 at the
McDonalds outlet in North EDSA, Quezon City, and the latter showed to her a photocopy of her supposed US
visa. The appellant likewise got several pieces of jewelry which she was then selling and assured her that he
would sell the same at the US embassy. However, the appellant did not issue a receipt for the said money and
jewelry. Thereafter, the appellant told her to resign from her work at SM because she was booked with
Northwest Airlines and to leave for Los Angeles, California, USA on February 25, 1996.
The appellant promised to see her and some of his other recruits before their scheduled departure to hand to
them their visas and passports; however, the appellant who was supposed to be with them in the flight failed
to show up. Instead, the appellant called and informed her that he failed to give the passport and US visa
because he had to go to the province because his wife died. She and her companions were not able to leave
for the United States. They went to the supposed residence of the appellant to verify, but nobody knew him or
his whereabouts. They tried to contact him at the hotel where he temporarily resided, but to no avail. They
also inquired from the US embassy and found out that there was no such person connected with the said
office. Thus, she decided to file a complaint with the National Bureau of Investigation (NBI).
Prosecution witness Geraldine Lagman, for her part, testified that she is a registered nurse by profession. In
the morning of January 22, 1996, she went to SM North EDSA, Quezon City to visit her cousin Imelda Bamba.
At that time, Bamba informed her that she was going to meet the appellant who is an FBI agent and was
willing to help nurses find a job abroad. Bamba invited Lagman to go with her. On the same date at about 2:00
o’clock in the afternoon, she and Bamba met the appellant at the SM Fast-Food Center, Basement, North
EDSA, Quezon City. The appellant convinced them of his ability to send them abroad and told them that he has
a sister in the United States. Lagman told the appellant that she had no working experience in any hospital but
the appellant assured her that it is not necessary to have one. The appellant asked for US$300.00 as payment
to secure an American visa and an additional amount of Three Thousand Four Hundred Pesos (P3,400.00) as
processing fee for other documents.
On January 24, 1996, she and the appellant met again at SM North EDSA, Quezon City wherein she handed to
the latter her passport and transcript of records. The appellant promised to file the said documents with the
US embassy. After one (1) week, they met again at the same place and the appellant showed to her a
photocopy of her US visa. This prompted her to give the amount of US$300.00 and two (2) bottles of Black
Label to the appellant. She gave the said money and liquor to the appellant without any receipt out of trust
and after the appellant promised her that he would issue the necessary receipt later. The appellant even went
to her house, met her mother and uncle and showed to them a computer printout from Northwest Airlines
showing that she was booked to leave for Los Angeles, California, USA on February 25, 1996.
Mart (SM), North Edsa, Quezon City. He never told Bamba that he could get her a job in Los Angeles,
California, USA, the truth being that she wanted to leave SM as company nurse because she was having a
problem thereat. Bamba called him up several times, seeking advice from him if Los Angeles, California is a
good place to work as a nurse. He started courting Bamba and they went out dating until the latter became his
girlfriend. He met Geraldine Lagman and Alma Singh at the Shoe Mart (SM), North Edsa, Quezon City thru
Imelda Bamba. As complainants were all seeking advice on how they could apply for jobs abroad, lest he be
charged as a recruiter, he made Imelda Bamba, Geraldine Lagman and Alma Singh sign separate certifications
on January 17, 1996 (Exh. "2"), January 22, 1996 (Exh. "4"), and February 19, 1996 (Exh. "3"), respectively, all
to the effect that he never recruited them and no money was involved. Bamba filed an Illegal Recruitment
case against him because they quarreled and separated. He came to know for the first time that charges were
filed against him in September 1996 when a preliminary investigation was conducted by Fiscal Dañosos of the
Department of Justice. (TSN, October 13, 1999, pp. 3-9 and TSN, December 8, 1999, pp. 2-9)4

Four days after their last meeting, Extelcom, a telephone company, called her because her number was
On November 10, 2000, the RTC rendered judgment finding the accused guilty beyond reasonable doubt of
appearing in the appellant’s cellphone documents. The caller asked if she knew him because they were trying
the crime charged.5 The fallo of the decision reads:
to locate him, as he was a swindler who failed to pay his telephone bills in the amount of P100,000.00. She
became suspicious and told Bamba about the matter. One (1) week before her scheduled flight on February
25, 1996, they called up the appellant but he said he could not meet them because his mother passed away. WHEREFORE, judgment is hereby rendered finding accused guilty beyond reasonable doubt of Illegal
The appellant never showed up, prompting her to file a complaint with the NBI for illegal recruitment. Recruitment in large scale; accordingly, he is sentenced to suffer the penalty of life imprisonment and to pay a
fine of Five Hundred Thousand Pesos (P500,000.00), plus costs.
Lastly, witness Alma Singh who is also a registered nurse, declared that she first met the appellant on February
13, 1996 at SM North EDSA, Quezon City when Imelda Bamba introduced the latter to her. The appellant told Accused is ordered to indemnify each of the complainants, Imelda Bamba, Geraldine Lagman and Alma Singh
her that he is an undercover agent of the FBI and he could fix her US visa as he has a contact in the US the amount of Three Hundred US Dollars ($300.00).
embassy. The appellant told her that he could help her and her companions Haidee Raullo, Geraldine Lagman
and Imelda Bamba find jobs in the US as staff nurses in home care centers.
SO ORDERED.6

On February 14, 1996 at about 6:30 in the evening, the appellant got her passport and picture. The following
day or on February 15, 1996, she gave the appellant the amount of US$300.00 and a bottle of cognac as
"grease money" to facilitate the processing of her visa. When she asked for a receipt, the appellant assured
her that there is no need for one because she was being directly hired as a nurse in the United States.
She again met the appellant on February 19, 1996 at the Farmers Plaza and this time, the appellant required
her to submit photocopies of her college diploma, nursing board certificate and PRC license. To show his
sincerity, the appellant insisted on meeting her father. They then proceeded to the office of her father in
Barrio Ugong, Pasig City and she introduced the appellant. Thereafter, the appellant asked permission from
her father to allow her to go with him to the Northwest Airlines office in Ermita, Manila to reserve airline
tickets. The appellant was able to get a ticket confirmation and told her that they will meet again the following
day for her to give P10,000.00 covering the half price of her plane ticket. Singh did not meet the appellant as
agreed upon. Instead, she went to Bamba to inquire if the latter gave the appellant the same amount and
found out that Bamba has not yet given the said amount. They then paged the appellant through his beeper
and told him that they wanted to see him. However, the appellant avoided them and reasoned out that he
could not meet them as he had many things to do. When the appellant did not show up, they decided to file a
complaint for illegal recruitment with the NBI.
The prosecution likewise presented the following documentary evidence:
Exh. "A" – Certification dated February 23, 1998 issued by Hermogenes C. Mateo, Director II, Licensing Branch,
POEA.
Exh. "B" – Affidavit of Alma E. Singh dated February 23, 1996.3
On the other hand, the case for the appellant, as culled from his Brief, is as follows:
In rejecting the defenses of the appellant, the trial court declared:
To counter the version of the prosecution, accused claims that he did not recruit the complainants for work
abroad but that it was they who sought his advice relative to their desire to apply for jobs in Los Angeles,
California, USA and thinking that he might be charged as a recruiter, he made them sign three certifications,
Exh. "2," "3" and "4," which in essence state that accused never recruited them and that there was no money
involved.
Accused’s contention simply does not hold water. Admittedly, he executed and submitted a counter-affidavit
during the preliminary investigation at the Department of Justice, and that he never mentioned the aforesaid
certifications, Exhibits 2, 3 and 4 in said counter-affidavit. These certifications were allegedly executed before
charges were filed against him. Knowing that he was already being charged for prohibited recruitment, why
did he not bring out these certifications which were definitely favorable to him, if the same were authentic. It
is so contrary to human nature that one would suppress evidence which would belie the charge against him.
Denials of the accused can not stand against the positive and categorical narration of each complainant as to
how they were recruited by accused who had received some amounts from them for the processing of their
papers. Want of receipts is not fatal to the prosecution’s case, for as long as it has been shown, as in this case,
that accused had engaged in prohibited recruitment. (People v. Pabalan, 262 SCRA 574).
That accused is neither licensed nor authorized to recruit workers for overseas employment, is shown in the
Certification issued by POEA, Exh. "A."
In fine, the offense committed by the accused is Illegal Recruitment in large scale, it having been committed
against three (3) persons, individually.7

Appellant appealed the decision to this Court on the following assignment of error:
Accused JOSEPH JAMILOSA testified on direct examination that he got acquainted with Imelda Bamba inside
an aircon bus bound for Caloocan City when the latter borrowed his cellular phone to call her office at Shoe
THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF THE CRIME OF ILLEGAL RECRUITMENT IN
LARGE SCALE DESPITE THE FACT THAT THE LATTER’S GUILT WAS NOT PROVED BEYOND REASONABLE DOUBT
BY THE PROSECUTION.8
According to appellant, the criminal Information charging him with illegal recruitment specifically mentioned
the phrase "for a fee," and as such, receipts to show proof of payment are indispensable. He pointed out that
the three (3) complaining witnesses did not present even one receipt to prove the alleged payment of any fee.
In its eagerness to cure this "patent flaw," the prosecution resorted to presenting the oral testimonies of
complainants which were "contrary to the ordinary course of nature and ordinary habits of life [under Section
3(y), Rule 131 of the Rules on Evidence] and defied credulity." Appellant also pointed out that complainants’
testimony that they paid him but no receipts were issued runs counter to the presumption under Section [3]
(d), Rule 131 of the Rules on Evidence that persons take ordinary care of their concern. The fact that
complainants were not able to present receipts lends credence to his allegation that it was they who sought
advice regarding their desire to apply for jobs in Los Angeles, California, USA. Thus, thinking that he might be
charged as a recruiter, he made them sign three (3) certifications stating that he never recruited them and
there was no money involved. On the fact that the trial court disregarded the certifications due to his failure
to mention them during the preliminary investigation at the Department of Justice (DOJ), appellant pointed
out that there is no provision in the Rules of Court which bars the presentation of evidence during the hearing
of the case in court. He also pointed out that the counter-affidavit was prepared while he was in jail "and
probably not assisted by a lawyer."9
Appellee, through the Office of the Solicitor General (OSG), countered that the absence of receipts signed by
appellant acknowledging receipt of the money and liquor from the complaining witnesses cannot defeat the
prosecution and conviction for illegal recruitment. The OSG insisted that the prosecution was able to prove the
guilt of appellant beyond reasonable doubt via the collective testimonies of the complaining witnesses, which
the trial court found credible and deserving of full probative weight. It pointed out that appellant failed to
prove any ill-motive on the part of the complaining witnesses to falsely charge him of illegal recruitment.
On appellant’s claim that the complaining witness Imelda Bamba was his girlfriend, the OSG averred:
Appellant’s self-serving declaration that Imelda is his girlfriend and that she filed a complaint for illegal
recruitment after they quarreled and separated is simply preposterous. No love letters or other documentary
evidence was presented by appellant to substantiate such claim which could be made with facility. Imelda has
no reason to incriminate appellant except to seek justice. The evidence shows that Alma and Geraldine have
no previous quarrel with appellant. Prior to their being recruited by appellant, Alma and Geraldine have never
met appellant. It is against human nature and experience for private complainants to conspire and accuse a
stranger of a most serious crime just to mollify their hurt feelings. (People v. Coral, 230 SCRA 499, 510
[1994])10
The OSG posited that the appellant’s reliance on the certifications11 purportedly signed by the complaining
witnesses is misplaced, considering that the certifications are barren of probative weight.
On February 23, 2005, the Court resolved to transfer the case to the CA. 12 On June 22, 2005, the CA rendered
judgment affirming the decision of the RTC.13
The OSG filed a Supplemental Brief, while the appellant found no need to file one.
The appeal has no merit.
Article 13(b) of the Labor Code of the Philippines defines recruitment and placement as follows:
(b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing,
hiring, or procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not. Provided, That any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in
recruitment and placement.
Section 6 of R.A. No. 8042 defined when recruitment is illegal:
SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services,
promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-
licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-licensee or non-
holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be
deemed so engaged. x x x
Any recruitment activities to be undertaken by non-licensee or non-holder of contracts shall be deemed illegal
and punishable under Article 39 of the Labor Code of the Philippines. 14 Illegal recruitment is deemed
committed in large scale if committed against three (3) or more persons individually or as a group.15
To prove illegal recruitment in large scale, the prosecution is burdened to prove three (3) essential elements,
to wit: (1) the person charged undertook a recruitment activity under Article 13(b) or any prohibited practice
under Article 34 of the Labor Code; (2) accused did not have the license or the authority to lawfully engage in
the recruitment and placement of workers; and (3) accused committed the same against three or more
persons individually or as a group.16 As gleaned from the collective testimonies of the complaining witnesses
which the trial court and the appellate court found to be credible and deserving of full probative weight, the
prosecution mustered the requisite quantum of evidence to prove the guilt of accused beyond reasonable
doubt for the crime charged. Indeed, the findings of the trial court, affirmed on appeal by the CA, are
conclusive on this Court absent evidence that the tribunals ignored, misunderstood, or misapplied substantial
fact or other circumstance.
The failure of the prosecution to adduce in evidence any receipt or document signed by appellant where he
acknowledged to have received money and liquor does not free him from criminal liability. Even in the
absence of money or other valuables given as consideration for the "services" of appellant, the latter is
considered as being engaged in recruitment activities.
It can be gleaned from the language of Article 13(b) of the Labor Code that the act of recruitment may be for
profit or not. It is sufficient that the accused promises or offers for a fee employment to warrant conviction for
illegal recruitment.17 As the Court held in People v. Sagaydo:18
Such is the case before us. The complainants parted with their money upon the prodding and enticement of
accused-appellant on the false pretense that she had the capacity to deploy them for employment abroad. In
the end, complainants were neither able to leave for work abroad nor get their money back.
The fact that private complainants Rogelio Tibeb and Jessie Bolinao failed to produce receipts as proof of their
payment to accused-appellant does not free the latter from liability. The absence of receipts cannot defeat a
criminal prosecution for illegal recruitment. As long as the witnesses can positively show through their
respective testimonies that the accused is the one involved in prohibited recruitment, he may be convicted of
the offense despite the absence of receipts.19
Appellant’s reliance on the certifications purportedly signed by the complaining witnesses Imelda Bamba,
Alma Singh and Geraldine Lagman20 is misplaced. Indeed, the trial court and the appellate court found the
certifications barren of credence and probative weight. We agree with the following pronouncement of the
appellate court:
Anent the claim of the appellant that the trial court erred in not giving weight to the certifications (Exhs. "2," A I don’t know of that, Sir.
"3" & "4") allegedly executed by the complainants to the effect that he did not recruit them and that no
money was involved, the same deserves scant consideration.
Q If I show you that Counter-Affidavit you said you prepared, will you be able to identify the same, Mr.
Witness?
The appellant testified that he was in possession of the said certifications at the time the same were executed
by the complainants and the same were always in his possession; however, when he filed his counter-affidavit
A Yes, Sir.
during the preliminary investigation before the Department of Justice, he did not mention the said
certifications nor attach them to his counter-affidavit.lavvphil.net
Q I will show you the Counter-Affidavit dated June 16, 1997 filed by one Joseph J. Jamilosa, will you please go
over this and tell if this is the same Counter-Affidavit you said you prepared and you are going to file with the
We find it unbelievable that the appellant, a college graduate, would not divulge the said certifications which
investigating state prosecutor?
would prove that, indeed, he is not an illegal recruiter. By failing to present the said certifications prior to the
trial, the appellant risks the adverse inference and legal presumption that, indeed, such certifications were not
genuine. When a party has it in his possession or power to produce the best evidence of which the case in its A Yes, Sir. This the same Counter-Affidavit.
nature is susceptible and withholds it, the fair presumption is that the evidence is withheld for some sinister
motive and that its production would thwart his evil or fraudulent purpose. As aptly pointed out by the trial Q There is a signature over the typewritten name Joseph J. Jamilosa, will you please go over this and tell this
court: Honorable Court if this is your signature, Mr. Witness?

"x x x These certifications were allegedly executed before charges were filed against him. Knowing that he was A Yes, Sir. This is my signature.
already being charged for prohibited recruitment, why did he not bring out these certifications which were
definitely favorable to him, if the same were authentic. It is so contrary to human nature that one would
suppress evidence which would belie the charge against him." (Emphasis Ours)21 Q During the direct examination you were asked to identify [the] Certification as Exh. "2" dated January 17,
1996, allegedly issued by Bamba, one of the complainants in this case, when did you receive this Certification
issued by Imelda Bamba, Mr. Witness?
At the preliminary investigation, appellant was furnished with copies of the affidavits of the complaining
witnesses and was required to submit his counter-affidavit. The complaining witnesses identified him as the
culprit who "recruited" them. At no time did appellant present the certifications purportedly signed by the A That is the date, Sir.
complaining witnesses to belie the complaint against him. He likewise did not indicate in his counter-affidavit
that the complaining witnesses had executed certifications stating that they were not recruited by him and Q You mean the date appearing in the Certification.
that he did not receive any money from any of them. He has not come forward with any valid excuse for his
inaction. It was only when he testified in his defense that he revealed the certifications for the first time. Even
then, appellant lied when he claimed that he did not submit the certifications because the State Prosecutor A Yes, Sir.
did not require him to submit any counter-affidavit, and that he was told that the criminal complaint would be
dismissed on account of the failure of the complaining witnesses to appear during the preliminary Q Where was this handed to you by Imelda Bamba, Mr. Witness?
investigation. The prevarications of appellant were exposed by Public Prosecutor Pedro Catral on cross-
examination, thus:
A At SM North Edsa, Sir.

Q Mr. Witness, you said that a preliminary investigation [was] conducted by the Department of Justice
Q During the direct examination you were also asked to identify a Certification Exh. "3" for the defense dated
through State Prosecutor Dañosos. Right?
February 19, 1996, allegedly issued by Alma Singh, one of the complainants in this case, will you please go
over this and tell us when did Alma Singh allegedly issue to you this Certification?
A Yes, Sir.
A On February 19, 1996, Sir.
Q Were you requested to file your Counter-Affidavit?
Q And also during the direct examination, you were asked to identify a Certification which was already marked
A Yes, Sir. I was required. as Exh. "4" for the defense dated January 22, 1996 allegedly issued by Geraldine M. Lagman, one of the
complainants in this case, will you please tell the court when did Geraldine Lagman give you this Certification?
Q Did you file your Counter-Affidavit?
A January 22, 1996, Sir.
A Yes, Sir, but he did not accept it.
Q During that time, January 22, 1996, January 17, 1996 and February 19, 1996, you were in possession of all
Q Why? these Certification. Correct, Mr. Witness?

A Because he said "never mind" because the witness is not appearing so he dismissed the case. A Yes, Sir.

Q Are you sure that he did not accept your Counter-Affidavit, Mr. Witness? Q These were always in your possession. Right?
A Yes, Sir, with my papers. Q Did you go over the said resolution you said you received here?

Q Do you know when did the complainants file cases against you? A I just learned about it now, Sir.

A I don’t know, Sir. Q Did you read the content of the resolution?

Q Alright. I will read to you this Counter-Affidavit of yours, and I quote "I, Joseph Jamilosa, of legal age, A Not yet, Sir. It’s only now that I am going to read.
married and resident of Manila City Jail, after having duly sworn to in accordance with law hereby depose and
states that: 1) the complainants sworn under oath to the National Bureau of Investigation that I recruited
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them and paid me certain sums of money assuming that there is truth in those allegation of this (sic)
complainants. The charge filed by them should be immediately dismissed for certain lack of merit in their
Sworn Statement to the NBI Investigator; 2) likewise, the complainants’ allegation is not true and I never Q You said it was dismissed. Correct?
recruited them to work abroad and that they did not give me money, they asked me for some help so I
[helped] them in assisting and processing the necessary documents, copies for getting US Visa; 3) the A Yes, Your Honor.
complainant said under oath that they can show a receipt to prove that they can give me sums or amount of
money. That is a lie. They sworn (sic), under oath, that they can show a receipt that I gave to them to prove
that I got the money from them. I asked the kindness of the state prosecutor to ask the complainants to show Q Did you receive a resolution of this dismissal?
and produce the receipts that I gave to them that was stated in the sworn statement of the NBI; 4) the
allegation of the complainants that the charges filed by them should be dismissed because I never [received] A No, Your Honor.
any amount from them and they can not show any receipt that I gave them," Manila City Jail, Philippines, June
16, 1997. So, Mr. Witness, June 16, 1997 is the date when you prepared this. Correct?
FISCAL CATRAL

A Yes, Sir.
Q What did you receive?

Q Now, my question to you, Mr. Witness, you said that you have with you all the time the Certification issued
by [the] three (3) complainants in this case, did you allege in your Counter-Affidavit that this Certification you A I did not receive any resolution, Sir. It’s just now that I learned about the finding.
said you claimed they issued to you?
Q You said you learned here in court, did you read the resolution filed against you, Mr. Witness?
A I did not say that, Sir.
A I did not read it, Sir.
Q So, it is not here in your Counter-Affidavit?
Q Did you read by yourself the resolution made by State Prosecutor Dañosos, Mr. Witness?
A None, Sir.
A Not yet, Sir.
Q What is your educational attainment, Mr. Witness?
Q What did you take, if any, when you received the subpoena from this court?
A I am a graduate of AB Course Associate Arts in 1963 at the University of the East.
A I was in court already when I asked Atty. Usita to investigate this case.
Q You said that the State Prosecutor of the Department of Justice did not accept your Counter-Affidavit, are
you sure of that, Mr. Witness? Q You said a while ago that your Affidavit was not accepted by State Prosecutor Dañosos. Is that correct?

A Yes, Sir. A Yes, Sir.

Q Did you receive a copy of the dismissal which you said it was dismissed? Q Will you please read to us paragraph four (4), page two (2) of this resolution of State Prosecutor Dañosos.

A No, Sir. I did not receive anything. (witness reading par. 4 of the resolution)

Q Did you receive a resolution from the Department of Justice? Alright. What did you understand of this paragraph 4, Mr. Witness?

A No, Sir. A Probably, guilty to the offense charge.22

It turned out that appellant requested the complaining witnesses to sign the certifications merely to prove
that he was settling the cases:

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Q These complainants, why did you make them sign in the certifications?

A Because one of the complainants told me to sign and they are planning to sue me.

Q You mean they told you that they are filing charges against you and yet you [made] them sign certifications
in your favor, what is the reason why you made them sign?

A To prove that I’m settling this case.

Q Despite the fact that they are filing cases against you and yet you were able to make them sign
certifications?

A Only one person, Your Honor, who told me and he is not around.

Q But they all signed these three (3) certifications and yet they filed charges against you and yet you made
them sign certifications in your favor, so what is the reason why you made them sign?

(witness can not answer)23

The Court notes that the trial court ordered appellant to refund US$300.00 to each of the complaining
witnesses. The ruling of the appellate court must be modified. Appellant must pay only the peso equivalent of
US$300.00 to each of the complaining witnesses.

IN LIGHT OF ALL THE FOREGOING, the appeal is DISMISSED. The Decision of the Court of Appeals affirming the
conviction of Joseph Jamilosa for large scale illegal recruitment under Sections 6 and 7 of Republic Act No.
8042 is AFFIRMED WITH MODIFICATION. The appellant is hereby ordered to refund to each of the complaining
witnesses the peso equivalent of US$300.00. Costs against appellant.

SO ORDERED.