Notes in Labor Law 1

I dwell in the Lord who strengthens me.
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LABOR STANDARDS AND SOCIAL LEGISLATION
Atty. Porfirio DG. Panganiban
2014-2015

Part 1: Labor Law in General
(Article 1-6)

1.01 Labor Law Defined

MATERNITY CHILDRENS HOSPITAL VS SECRETARY OF LABOR (Labor Law defined)
G.R. No. 78909

FACTS:
Maternity Childrens Hospital is a semi-governmental hospital in Cagayan De Oro and Employing forty-one
(41) employees. Ten (10) employees filed a complaint with the Regional Director of Labor and
Employment, Region 10, for underpayment. Consequently, the Regional Director directed two of his labor
standard and welfare officers to investigate and ascertain the truth of the allegations in the complaint.
Based on the report and recommendation, the Regional Director issued an order dated August 4, 1986,
directing payment of 723, 888.58, to all the hospitals employees. The Secretary of Labor affirmed the
Decision.

In a petition for certiorari, petitioner questioned the jurisdiction of the Regional Director and the all -
embracing applicability of the award involving salary differentials and ECOLAS (living allowance), in that it
covers not only the hospitals employees who signed the complaints, but also those who are not signatories
to the complaint, and those who were no longer in the service of the hospital at the time the complaint
was filed.

ISSUES:
1. Whether or not the Regional Director had jurisdiction over the case; and
2. Whether or not the Regional Director erred in extending the award to all hospital employees?

HELD:
1. Yes. Under E.O. No. 111, the Regional Director exercises both visitorial and enforcement power over labor
standards cases, and is therefore empowered to adjudicate money claims, provided there still exists an
employer-employee relationship, and the findings of the regional office is not contested by the employer
concerned. Even in the absence of E. O. No. 111, Regional Directors already had enforcement powers
over money claims, effective under P.D. No. 850, issued on December 16, 1975, which transferred labor
standards cases from the arbitration system to the enforcement system.
2. The Regional Director correctly applied the award with respect to those employees who signed the
complaint, as well as those who did not sign the complaint, but were still connected with the hospital at the
time the complaint was filed. However, there is no legal justification for the award in favor of those
employees who were no longer connected with the hospital t the time the complaint was filed. Article 129
of the Labor Code in aid of the enforcement power of the Regional Director is not applicable where the
employee seeking to be paid is separated from service. His claim is purely money claim that has to be
subject of arbitration proceedings and therefore within the original and exclusive jurisdiction of the Labor
Arbiter.

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1.02 Law Classification
Three (3) general classifications of labor statutes:

a) Labor Relations Laws;
b) Labor Standards Laws; and
c) Social Security Laws.

LABOR RELATIONS Laws are those labor statutes that deal with the relations of labor and management, like
the laws on unions, collective bargaining, unfair labor practices, strikes, lockouts and picketing.

LABOR STANDARDS are those labor statutes that prescribe standards relating to terms and conditions of
employment for compliance by employers, like the laws on hours of work, weekly rest periods, holiday pay,
wages, and laws dealing with women, minors, house-helpers, and industrial home-workers.

SOCIAL SECURITY Laws are those labor statutes that provide protection not only to a worker but also to
members of his family in case of loss of income or when there is need for medical care brought about by
contingencies like sickness, disability, death, and old age. Examples of social security laws are the Social
Security Law, Revised Government Service Insurance Act, the Articles of the Labor Code on Employees
Compensation, the State Insurance Fund, and the National Health Insurance Act.

1.03 Basis for Enactment- 1987 Constitution
ARTICLE II
DECLARATION OF PRINCIPLES AND STATE POLICIES PRINCIPLES
Section 5. The maintenance of peace and order, the protection of life, liberty, and property, and
promotion of the general welfare are essential for the enjoyment by all the people of the blessings of
democracy.

Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers
and promote their welfare.

ARTICLE XIII
SOCIAL JUSTICE AND HUMAN RIGHTS
Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance
the right of all the people to human dignity, reduce social, economic, and political inequalities, and
remove cultural inequities by equitably diffusing wealth and political power for the common good. To this
end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

1.04 Social Justice as the aim of Labor Laws

Calalang vs Williams, et al.
[A. D. Williams, Chairman of the National Traffic Commission;
Vicente Fragante, Director of Public Works;
Sergio Bayan, Acting Secretary of Public Works and Communications;
Eulogio Rodriguez, Mayor of the City of Manila; and Juan Dominguez, Acting Chief of Police of Manila]
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Facts:
Maximo Calalang, a private citizen and taxpayer of Manila, filed a petition for a writ of prohibition against
the respondents implementation of Commonwealth Act No. 548 which prohibits animal-drawn vehicles
from passing along Rosario Street to Rizal Avenue from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30
p.m.; and along Antipolo Street to Azcarraga Street, from 7 a.m. to 11 p.m., from a period of one year from
the date of the opening of the Colgante Bridge to traffic.

Issues:
WON the rules and regulations promulgated by the respondents pursuant to the provisions of
Commonwealth Act No. 548 constitute an unlawful interference with legitimate business or trade and
abridge the right to personal liberty and freedom of locomotion.

No. Commonwealth Act No. 548 was passed by the National Assembly in the exercise of the paramount
police power of the state. Said Act, by virtue of which the rules and regulations complained of were
promulgated, aims to promote safe transit upon and avoid obstructions on national roads, in the interest
and convenience of the public. Persons and property may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort, health, and prosperity of the state.

WON the rules and regulations complained of infringe upon the constitutional precept regarding the
promotion of social justice to insure the well-being and economic security of all the people.

No. Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but the humanization
of laws and the equalization of social and economic forces by the State so that justice in its rational and
objectively secular conception may at least be approximated. Social justice means the promotion of the
welfare of all the people, the adoption by the Government of measures calculated to insure economic
stability of all the competent elements of society, through the maintenance of a proper economic and
social equilibrium in the interrelations of the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored principle of salus populi est suprema lex.

1.05 Police Power as basis of Labor Laws

People vs. Vera Reyes
G.R. No. L-45748April 5, 1939

Facts:
Vera Reyes was charged with violation of Act No. 2549, as amended by Acts Nos. 3085 and 3958. The
information alleged that Vera Reyes, in his capacity as president and general manager of the
Consolidated Mines, having engaged the services of Severa Velasco de Vera as stenographer, at an
agreed salary of P35 a month, wilfully and illegally refused to pay the salary of said stenographer, in spite of
her repeated demands.

The accused interposed a demurrer on the ground that the facts alleged in the information do not
constitute any offense, and that even if they did, the laws penalizing it are unconstitutional. After the
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hearing, the court sustained the demurrer, declaring unconstitutional the last part of section 1 of Act No.
2549 as last amended by Act No. 3958 for the reason that it violates the constitutional prohibition against
imprisonment for debt, and dismissed the case. The last part of Section 1 of Act No. 2549, as last amended
by section 1 of Act No. 3958 considers as illegal the refusal of an employer to pay when he can do so, the
salaries of his employers or laborers on the 15th or last day of every month or on Saturday of every week,
with only two days extension, and the non-payment of the salary within the period specified is considered
as a violation of the law. The same act exempts from criminal responsibility the employer who, having failed
to pay the salary, should prove satisfactorily that it was impossible to make such payment. The fiscal
appealed from said order. In this appeal the Solicitor-General contends that the court erred in declaring
Act No. 3958 unconstitutional, and in dismissing the case.

Issue:
Whether or not the last part of Sec. 1 of Act No. 2594 as amended by Act No. 3958 is constitutional and
valid.

Held:
The last part of section 1 of Act No. 2549, as last amended by section 1 of Act No.3958, is valid. We do not
believe that this constitutional provision has been correctly applied in this case. A close perusal of the last
part of section 1 of Act No. 2549, as amended by section 1of Act No. 3958, will show that its language refers
only to the employer who, being able to make payment, shall abstain or refuse to do so, without
justification and to the prejudice of the laborer or employee. An employer so circumstanced is not unlike a
person who defrauds another, by refusing to pay his just debt. In both cases the deceit or fraud is the
essential element constituting the offense. The first case is a violation of Act No. 3958, and the second is
estafa punished by the Revised Penal Code. In either case the offender cannot certainly invoke the
constitutional prohibition against imprisonment for debt.

People vs. Pomar
G.R. No. L-22008, November 3, 1924

Facts:
Pomar was accused of violation of section 13 in connection with section 15 of Act No. 3071. The complaint
alleged that the Pomar being the manager and person in charge of La Flor de la Isabela (a tobacco
factory) failed and refused to pay Macaria Fajardo (employed as cigar maker) the sum of P80 to which she
was entitled as her regular wages on time of delivery and confinement by reason of pregnancy despite
and over the demands to do so. To said complaint, the defendant demurred, alleging that the facts
therein contained did not constitute an offense. The demurrer was overruled, whereupon the defendant
answered and admitted at the trial all of the allegations contained in the complaint, and contended that
the provisions of said Act No. 3071, upon which the complaint was based were illegal, unconstitutional and
void. After lawful hearing, Pomar was found guilty of the offense described in the complaint.

Issue:
Whether or not the provisions of sections 13 and 15 of Act No. 3071 are a reasonable and lawful exercise of
the police power of the state.

Held:
The provisions of section 13, of Act No. 3071 are unconstitutional and void, in that they violate and are
contrary to the provisions of the first paragraph of section 3 of the Act of Congress of the United States of


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August 29, 1916. Said section 13 was enacted by the Legislature of the Philippine Islands in the exercise of its
supposed police power, with the praiseworthy purpose of safeguarding the health of pregnant women
laborers in "factory, shop or place of labor of any description," and of insuring to them, to a certain extent,
reasonable support for one month before and one month after their delivery. The Act of 1893, now under
consideration, deprives the employer of the right to terminate his contract with his employee. Clearly,
therefore, the law has deprived, every person, firm, or corporation owning or managing a factory, shop or
place of labor of any description within the Philippine Islands, of his right to enter into contracts
of employment upon such terms as he and the employee may agree upon. It will hardly be contended
that the person, firm or corporation owning or managing a factory, shop or place of labor, who employs
women by the day or by the piece, could be compelled under the law to pay for sixty days during which
no services were rendered.

Philippine Association of Service Exporters, Inc. vs. Drilon
G.R. No. 81958, June 30, 1988

Facts:
The Philippine Association of Service Exporters, Inc. (PASEI), a firm" engaged principally in the recruitment of
Filipino workers for overseas placement," challenges the Constitutional validity of Department Order No. 1,
Series of 1988, of the Department of Labor and Employment, in the character of "GUIDELINES GOVERNING
THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS,"
and specifically assailed for "discrimination against males or females;" that it "does not apply to all Filipino
workers but only to domestic helpers and females with similar skills;" and that it is violative of the right to
travel. It is held likewise to be an invalid exercise of the lawmaking power, police power being legislative,
and not executive, in character. On May 25, 1988, the Solicitor General, on behalf of the respondents
Secretary of Labor and Administrator of the Philippine Overseas Employment Administration, filed a
Comment informing the Court that on March 8, 1988, the respondent Labor Secretary lifted the
deployment ban in the states of Iraq, Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway,
Austria, and Switzerland. In submitting the validity of the challenged "guidelines," the Solicitor General
invokes the police power of the Philippine State.

Issue:
Whether or not Department Order No.1 is a valid regulation in the nature of a police power measure under
the Constitution.

Held:
Police power has been defined as the "state authority to enact legislation that may interfere with personal
liberty or property in order to promote the general welfare." It consists of (1) an imposition of restraint upon
liberty or property, (2) in order to foster the common good. It is not capable of an exact definition but has
been, purposely, veiled in general terms to underscore its all-comprehensive embrace.

There is no question that Department Order No. 1 applies only to "female contract workers," but it does not
thereby make an undue discrimination between the sexes. It is well-settled that "equality before the law"
under the Constitution does not import a perfect Identity of rights among all men and women. "Protection
to labor" does not signify the promotion of employment alone. What concerns the Constitution more
paramountly is that such an employment be above all, decent, just, and humane. Under these
circumstances, the Government is duty-bound to insure that our toiling expatriates have adequate
protection, personally and economically, while away from home. This Court understands the grave


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implications the questioned Order has on the business of recruitment. The concern of the Government,
however, is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is
profits that suffer as a result of Government regulation. The interest of the State is to provide a decent living
to its citizens.

1.06 Principles Underlying the Code
7 Principles underlying code
i. Labor relations to be responsive and responsible for national development
ii. Labor laws to substitute rationality for confrontation
iii. Labor justice as expeditious without sacrificing due process
iv. Manpower development as a major dimension of labor policy
v. Global labor market
vi. Labor laws for adequate resources and capable machinery to sustain implementation
vii. Policy making through tripartism of government, laborer and employer

Tripartism is a state policy. It refers to the representation of workers and employers sectors in
decision and policy making bodies of the government. Through tripartism, workers and employers on the
one hand, representing their respective interests, and the government on the other hand, representing the
interest of the public, help shape labor, social and economic policies and programs of the government.

1.07 Significance of Foreign Decisions

Cerezo vs. Atlantic Gulf & Pacific Company
G.R. No. L-10107, February 4, 1916

Facts:
Jorge Ocumen (plaintiffs son/deceased) was an employee of the Atlantic Gulf & Pacific Company.
During the period to which Ocumen and the other employees of the said company were laying gas pipes
in the City of Manila, Ocumen entered the trench allegedly to pee. While Ocumen was in the trench, the
bank/reservoir caved in. Ocumen died before he could be released. It was not shown that the deceased
had received orders from the company to enter the trench. The plaintiff insists that the defendant was
negligent in failing to shore or brace the trench at the place where the accident occurred. Judgment was
entered in favor of the plaintiff. Defendant appealed.

Issue:
Whether or not the plaintiff has the right to recover based on Art.1902 of the Civil Code.

Held:
Article 1902 provides that a person who, by an act or omission causes damage to another when there is
fault or negligence shall be obliged to repair the damage so done. Article 1903 after providing for the
liability of principals for the acts of their employees, agents, or these for whom they are otherwise
responsible, provides that such liability shall cease when the persons mentioned therein prove that they
employed all the diligence of a good father of a family to avoid the damage. The cause of Ocumen's
death was not the weight of the earth which fell upon him, but was due to suffocation. The accident was
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of a most unusual character. Experience and common sense demonstrate that ordinarily no danger to
employees is to be anticipated from such a trench as that in question. The fact that the walls had
maintained themselves for a week, without indication of their giving way, strongly indicates that the
necessity for bracing or shoring the trench was remote. To require the company to guard against such an
accident as the one in question would virtually compel it to shore up every foot of the miles of trenches
dug by it in the city of Manila for the gas mains. Upon a full consideration of the evidence, ordinary care
did not require the shoring of the trench walls at the place where the deceased met his death. The event
properly comes within the class of those which could not be foreseen; and, therefore, the defendant is not
liable under the Civil Code.

1.08 Related Laws

Civil Code
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.

Art. 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or
convenience of the public.

Art.1703. No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall
be valid.

Revised Penal Code
Art 289. Formation, maintenance and prohibition of combination of capital or labor through violence or
threats. The penalty of arresto mayor and a fine not exceeding 300 pesos shall be imposed upon any
person who, for the purpose of organizing, maintaining or preventing coalitions or capital or labor, strike of
laborers or lock-out of employees, shall employ violence or threats in such a degree as to compel or force
the laborers or employers in the free and legal exercise of their industry or work, if the act shall not
constitute a more serious offense in accordance with the provisions of this Code.

Special Laws
SSS law, GSIS law, Agrarian Reform Law, 13
th
Month pay law, Magna Carta for Public Health Workers

1.09 Labor Laws and Social Economic Goals
ILO (International Labour Organization): UN specialized agency which seeks the promotion of social justice
and internationally recognized human and labour rights.

Art. 3, Labor Code
Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure
equal work opportunities regardless of sex, race or creed and regulate the relations between workers and
employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of
tenure, and just and humane conditions of work.

Purpose: to place the workingman on an equal plane with management with all its power and
influence in negotiating for the advancement of his interests and the defenses of his rights.


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1.10 Laborers Welfare; Liberal Approach

Abella vs. NLRC
G.R. No. 71813 July 20, 1987

Facts:
Ricardo Dionele, Sr. (private respondent) has been a regular farm worker since 1949 in Hacienda Danao-
Ramona located in Ponteverde, Negros Occidental. Said farm land was leased to Rosalina Abella
(petitioner) for a period of ten (10) years, renewable for another ten years. Upon the expiration of her
leasehold rights, petitioner dismissed Ricardo and another co-employee. Private respondents filed a
complaint against the petitioner at the Ministry of Labor and Employment for overtime pay, illegal dismissal
and reinstatement with backwages. After presenting their respective evidence, the Labor Arbiter ruled that
the dismissal is warranted by the cessation of business, but granted the private respondents separation
pay. Petitioner filed a motion for reconsideration but the same was denied. Hence, the present petition.

Issue:
Whether or not private respondents are entitled to separation pay.

Held:
The petition is devoid of merit. Article 284 of the Labor code provides that the employer may also
terminate the employment of any employee due to the 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 workers and the Ministry of Labor and Employment at least month before the intended date thereof.
In case of termination due to the installation of labor-saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one month pay or to at least one
month pay for every year of service, whichever is higher. The purpose of the said article is obvious: the
protection of the workers whose employment is terminated because of the closure of establishment and
reduction of personnel. Without said law, employees like private respondents in the case at bar will lose the
benefits to which they are entitled for the number of years served. In any event, it is well-settled that in the
implementation and interpretation of the provisions of the Labor Code and its implementing regulations,
the workingmans welfare should be the primordial and paramount consideration.

Euro-Linea Phil, Inc. vs. NLRC
G.R. No. 78782, December 1, 1987

Facts:
Petitioner Euro-Linea Phil, Inc hired private respondent Pastoral as shipping expediter on a probationary
basis for a period of six months. Prior to hiring, Pastoral had been employed by Fitscher Manufacturing
Corporation also as shipping expediter. On 4 February 1984, Pastoral received a memorandum terminating
his probationary employment in view of his failure to meet the performance standards set by the
company. Pastoral filed a complaint for illegal dismissal against Euro-Linea Phil, Inc. The Labor Arbiter
found Euro-Linea Phil, Inc guilty of illegal dismissal. Euro-Linea Phil, Inc appealed the decision to the NLRC
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but the appeal was dismissed. Hence the petition for review seeking to reverse and set aside the resolution
of public respondent NLRC, which ordered the reinstatement of complainant with six months backwages.

Issue:
Whether or not the NLRC acted with grave abuse of discretion amounting to excess of jurisdiction in ruling
against Euro-Linea Phil, Inc.

Held:
Although a probationary or temporary employee has a limited tenure, he still enjoys the constitutional
protection of security of tenure. Furthermore, what makes the dismissal highly suspicious is the fact that
while petitioner claims that respondent was inefficient, it retained his services until the last remaining
two weeks of the six months probationary employment. No less important is the fact that private
respondent had been a shipping expediter for more than one and a half years before he was absorbed by
petitioner. It therefore appears that the dismissal in question is without sufficient justification. It must be
emphasized that the prerogative of management to dismiss or lay-off an employee must be done without
abuse of discretion, for what is at stake is not only petitioner's position but also his means of livelihood. The
right of an employer to freely select or discharge his employees is subject to regulation by the State,
basically in the exercise of its paramount police power.

Meralco vs. NLRC
G.R. No. 7876, July 12,1989

Facts:
Signo was employed in MERALCO as supervisor-leadman from 1963 up to 1983. Signo was terminated from
work after MERALCO found out that he has committed irregularities in the installation of electricity. Signo
filed a complaint for illegal dismissal, unpaid wages, and separation pay. The Labor Arbiter ordered
MERALCO to reinstate Signo to his former position without backwages.

Issue:
Whether or not Signos dismissal from MERALCO is valid on grounds of serious misconduct.

Held:
Notwithstanding the existence of a valid cause for dismissal, such as breach of trust by an employee,
dismissal should not be imposed, as it is too severe a penalty if the latter has been employed for a
considerable length of time in the service of his employer. The power to dismiss is the normal prerogative of
the employer. An employer, generally, can dismiss or lay-off an employee for just and authorized causes
enumerated under Articles 282and 283 of the Labor Code. However, the right of an employer to freely
discharge his employees is subject to regulation by the State. Dismissal should not be meted to respondent
Signo considering his twenty (20) years of service, without any previous derogatory record, in addition to
the fact that MERALCO had awarded him in the past, two (2) commendations for honesty. If ever the
petitioner suffered losses resulting from the unlisted electric consumption of de Lara, this was found to be
the fault of petitioner's Power Sales Division.

1.11 Management Rights

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Sosito vs. Aguinaldo Development Corp.
G.R. No. L-48926 December 14, 1987

Facts:
Manuel Sosito was employed in 1964 by Aguinaldo Development Corp., a logging company, and was in
charge of logging importation, with a monthly salary of P675.00. On July 20, 1976, the Aguinaldo
Development Corp., through its president, announced a retrenchment program and offered separation
pay to employees in the active service as of June 30, 1976, who would tender their resignations not later
than July 31, 1976. Sosito decided to accept this offer and so submitted his resignation "to avail himself of
the gratuity benefits" promised. However, his resignation was not acted upon and he was never given the
separation pay he expected. The petitioner complained to the Department of Labor, where he was
sustained by the labor arbiter. The company was ordered to pay Sosito the sum of P 4,387.50, representing
his salary for six and a half months. On appeal to the National Labor Relations Commission, this decision
was reversed and it was held that the petitioner was not covered by the retrenchment program.

Issue:
Whether or not Sosito is covered by the retrenchment program and thus entitled to separation benefits.

Held:
It is clear from the memorandum that the offer of separation pay was extended only to those who were in
the active service of the company as of June 30, 1976. It is equally clear that Sosito was not eligible for the
promised gratuity as he was not actually working with the company as of the said date. Under the law then
in force, Aguinaldo Development Corp. could have validly reduced its work force because of its financial
reverses without the obligation to grant separation pay. This was permitted under the original Article 272(a),
of the Labor Code, which was in force at the time. To its credit, however, the company voluntarily
offered gratuities to those who would agree to be phased out pursuant to the terms and conditions of its
retrenchment program, in recognition of their loyalty and to tide them over their own financial difficulties.
The Court feels that such compassionate measure deserves commendation and support but at the same
time rules that it should be available only to those who are qualified therefore. We hold that the petitioner is
not one of them.

Colgate Palmolive Philippines, Inc., vs. Ople
G.R. No. 73681June 30, 1988

Facts:
Colgate Palmolive Sales Union filed a Notice of Strike with the Bureau of Labor Relations (BLR) on ground of
unfair labor practice consisting of alleged refusal to bargain, dismissal of union officers/members; and
coercing employees to retract their membership with the union and restraining non-union members from
joining the union. After efforts at amicable settlement proved unavailing, the Office of the Minister of Labor
and Employment (MOLE), upon petition of petitioner assumed jurisdiction over the dispute pursuant to
Article 264 (g) of the Labor Code. In its position paper, the Colgate Palmolive Philippines, Inc. pointed out
that the infractions committed by the three salesmen fully convinced the company, after investigation
of the existence of just cause for their dismissal, and that their dismissal was carried out pursuant to the
inherent right and prerogative of management to discipline erring employees. Minister Ople ordered the
reinstatement of the three salesmen: Peregrino Sayson, Salvador Reynante & Cornelio Mejia, on the ground
that the employees were first offenders.


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Issue:
Whether or not the respondent Minister committed a grave abuse of discretion when, notwithstanding his
very own finding that there was just cause for the dismissal of the three (3) salesmen, he nevertheless
ordered their reinstatement.

Held:
The respondent Minister has the power to decide a labor dispute in a case assumed by him under Art. 264
(g) of the Labor Code. The order of the respondent Minister to reinstate the employees despite a clear
finding of guilt on their part is not in conformity with law. Reinstatement is simply incompatible with a finding
of guilt. Where the totality of the evidence was sufficient to warrant the dismissal of the employees the law
warrants their dismissal without making any distinction between a first offender and a habitual delinquent.

Mendoza vs. Rural Bank of Lucban
G.R. No. 155421July 7, 2004

Facts:
The Board of Directors of the Rural Bank of Lucban, Inc., issued a Board Resolution which provides, in line
with the policy of the bank to familiarize bank employees with the various phases of bank operations and
further strengthen the existing internal control system, all officers and employees are subject to reshuffle of
assignments and that those affected branch employees are reshuffled to their new assignments without
changes in their compensation and other benefits. Elmer Mendoza expressed his opinion on the reshuffle
alleging that "his reshuffling is deemed to be a demotion without any legal basis and thus asking to be
allowed to remain in his position. The bank reiterated that the conduct of reshuffle is a management
prerogative. On June 24, 1999, while on his second leave of absence, Mendoza filed a Complaint before
the NLRC for illegal dismissal, underpayment, separation pay and damages. The labor arbiter upheld
Mendoza's claims. On appeal, the NLRC reversed the labor arbiter.s decision. The CA ruled in favor of the
rural bank.

Issue:
Whether or not Mendoza was constructively dismissed from employment and that there shuffling pursuant
to Board Res. Nos. 99-52 and 99-53 is a valid exercise of management prerogative.

Held:
Constructive dismissal is defined as an involuntary resignation resorted to when continued employment is
rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay; or
when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.
Jurisprudence recognizes the exercise of management prerogatives. In the pursuit of its legitimate business
interest, management has the prerogative to transfer or assign employees from one office or area of
operation to another -- provided there is no demotion in rank or diminution of salary, benefits, and other
privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of
punishment or demotion without sufficient cause. This privilege is inherent in the right of employers to
control and manage their enterprise effectively. The right of employees to security of tenure does not give
them vested rights to their positions to the extent of depriving management of its prerogative to change
their assignments or to transfer them..


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1.11.1 Right to Return of Investment

Gelmart Industries Phils., Inc. vs. NLRC
G.R. No. 85668 August 10, 1989

Facts:
Felix Francis started worked as an auto-mechanic for Gelmart Industries Phils., Inc. (GELMART). In 1987,
Francis was caught by the security guards taking out of GELMART's premises one (1) plastic container filled
with about 16 ounces of "used' motor oil, without the necessary gate pass to cover the same as required
under GELMART's rules and regulations which provides that theft and/or pilferage of company property
merits an outright termination from employment. By reason thereof, Francis was placed under preventive
suspension pending investigation for violation of company rules and regulations. After due investigation,
Francis was found guilty of theft of company property. As a consequence, his services were severed.
Francis filed a complaint for illegal dismissal before the NLRC. The Labor Arbiter ruled that Francis was
illegally dismissed and, accordingly, ordered the latter's reinstatement with full backwages. The NLRC
affirmed the ruling of the Labor Arbiter.

Issue:
Whether or not the NLRC committed a grave abuse of discretion in ordering the reinstatement of Francis to
his former position with payment of backwages.

Held:
Consistent with the policy of the State to bridge the gap between the underprivileged workingmen and
the more affluent employers, the NLRC rightfully tilted the balance in favor of the workingmen and this
was done without being blind to the concomitant right of the employer to the protection of his property.
On the other hand, without being too harsh to the employer, and naively liberal to labor, the NLRC
correctly pointed out that private respondent cannot totally escape liability for what is patently a violation
of company rules and regulations.

Considering that Francis has no previous derogatory record in his fifteen (15) years of service with petitioner
GELMART the value of the property pilfered (16 ounces of used motor oil) is very minimal, plus the fact that
GELMART failed to reasonably establish that non-dismissal of private respondent would work undue
prejudice to the viability of their operation or is patently inimical to the company's interest. Thus, the penalty
of preventive suspension was sufficient punishment for the violation under the circumstance.

1.11.2 Right to Prescribe Rules

Lagatic vs. NLRC
G.R. No. 121004 January 28, 1998

Facts:
Romeo Lagatic was employed in Cityland. As a marketing specialist, he was tasked with soliciting sales for
the company, with the corresponding duties of accepting call-ins, referrals, and making client calls
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and cold calls (the practice of prospecting for clients through the telephone directory). Cityland, requires
all its marketing specialists to make cold calls but nonetheless requires submission of daily progress reports.
Instead of complying with said directive, Lagatic wrote a note, TO HELL WITH COLD CALLS! WHO CARES?
and exhibited the same to his co-employees. To worsen matters, he left the same lying on his desk where
everyone could see it. Lagatic received a memorandum requiring him to explain why Cityland should not
make good its previous warning for his failure to submit cold call reports, as well as for issuing the written
statement aforementioned. Lagatic sent a letter-reply alleging that his failure to submit cold call reports
should not be deemed as gross insubordination. He denied any knowledge of the damaging statement.
Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal upon him. Lagatic
filed a complaint against Cityland for illegal dismissal, illegal deduction, underpayment, overtime and rest
day pay, damages and attorneys fees. The labor arbiter dismissed the petition for lack of merit. On
appeal, the same was affirmed by the NLRC.

Issue:
Whether or not the respondent NLRC gravely abused its discretion in not finding Lagatic illegally dismissed.

Held:
To constitute a valid dismissal from employment, two requisites must be met, namely: (1) the employee
must be afforded due process, and (2) the dismissal must be for a valid cause. An employee may be
validly dismissed for violation of a reasonable company rule or regulation adopted for the conduct of the
company business. An employer cannot rationally be expected to retain the employment of a person
whose x x x lack of regard for his employers rules x x x has so plainly and completely been bared. Petitioners
continued infraction of company policy requiring cold call reports, as evidenced by the 28 instances of
non-submission of aforesaid reports, justifies his dismissal. More than that, his written statement shows his
open defiance and disobedience to lawful rules and regulations of the company. There is, thus, just cause
for his dismissal.

China Banking Corp., vs. Borromeo
G.R. No. 156515 October 19, 2004

Facts:
Mariano Borromeo, Assistant Vice-President of the China Banking Corp. approved several DAUD/BP (Drawn
Against Uncollected Deposits/Bills Purchased) accommodations in favor of certain Joel Maniwan without
authority from the Executive Committee or Board of Directors. The bank authorities issued a memorandum
seeking clarification on issues relative thereto. Borromeo accepted full responsibility for committing an error.
He subsequently tendered his irrevocable resignation. His acts having constituted a violation of the Banks
Code of Ethics, Borromeo was directed to restitute the amount representing 90% of the total loss incurred
by the Bank. The said amount would be released upon recovery of the sums demanded from Maniwan in a
civil case. Borromeo made a demand on the Bank for the payment of his separation pay and other
benefits but the Bank maintained its position to withhold the sum earmarked. Thus, Borromeo filed with the
NLRC the complaint for payment of separation pay, mid-year bonus, profit share and damages against the
Bank. The Labor Arbiter ruled in favor of the bank. The NLRC affirmed the same. However, the CA ruled in
favour of Borromeo.

Issue:
Whether the bank has the prerogative/right to impose the withholding of Borromeos benefits.


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Held:
The Bank was left with no other recourse but to impose the ancillary penalty of restitution in view of his
voluntary separation from the petitioner Bank. It was certainly within the petitioner Banks prerogative to
impose on the respondent what it considered the appropriate penalty under the circumstances pursuant
to its company rules and regulations. Significantly, Borromeo was not wholly deprived of his separation
benefits but were merely withheld and will be released without delay as soon as the bank has satisfied a
judgment in the civil case.

Associated Watchmen and Security Union (PTWO) vs.Lanting
G.R. No. L-14120 February 29, 1960

Facts:

Republic Ships Security Agency is one of three agencies, together with K. Tagle Ship Watchmen Agency
and the City Watchmen and Security Agency, employed by certain shipping agencies in the City of Manila
and respondent Macondray and Company, Inc., in guarding ships or vessels arriving at the port of Manila
and discharging cargo on its piers. 38 affiliates of the Republic Ships Security Agency belong to the
Associated Watchmen and Security Union (PTWO). Said union declared a strike against 19 shipping firms in
the City of Manila. The strikers, through counsel, expressed their desire to return back to work and maintain
the status quo. The manager of respondent Macondray and Company, Inc. expressed willingness to
employ the strikers under the condition that the agency to which they belong file a bond in the sum of
P5,000 in favor of Macondray and Company, Inc. to respond for any negligence, misfeasance or
malfeasance of any of the watchmen of petitioner. However, the Republic Ships Security Agency, to which
most of the members of the petitioner union belonged, failed to comply with the demands of Macondray
and Company, Inc. Thus, Macondray and Company, Inc. refused to employ watchmen from the said
agency. Macondray and Company, Inc. was charged with unfair labor practice for having dismissed and
refused to employ 38 members of the Associated Watchmen and Security Union (PTWO).

Issue: Whether or not the bond imposed by respondent Macondray and Company, Inc. is valid.

Held: The refusal of the respondent to employ guards affiliated with a security or watchmen agency that
does not furnish a bond cannot constitute an unfair labor practice. Such refusal is merely the exercise of
respondent's legitimate right to protect its own interests. The members of the petitioner union or of the
shipping agencies are not ordinary permanent and continuous employees, but merely casual guards who
are employed only when there is a ship to be guarded and during the stay of the ship in the port of Manila.


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1.11.3 Right to Select Employees

Pampanga Bus Company, INC., vs. PAMBUSCO Employees' Union, Inc.
G.R. No. 46739 September 23, 1939

Facts:
On May 31, 1939, the Court of Industrial Relations issued an order, directing the petitioner herein,
Pampanga Bus Company, Inc., to recruit from the respondent, Pambusco Employees' Union, Inc., new
employees or laborers it may need to replace members of the union who may be dismissed from the
service of the company, with the proviso that, if the union fails to provide employees possessing the
necessary qualifications, the company may employ any other persons it may desire. This order, in

substance and in effect, compels the company, against its will, to employ preferentially, in its service, the
members of the union.

Issue:
Whether or not the said order issued by the CIR valid and not violative of the right of the employer to select
employees.

Held:
We hold that the court has no authority to issue such compulsory order. The general right to make a
contract in relation to one's business is an essential part of the liberty of the citizens protected by the due-
process clause of the Constitution. The right of the laborer to sell his labor to such person as he may choose
is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses.
The employer and the employee have thus an equality of right guaranteed by the Constitution. Section of
Commonwealth Act No. 213 confers upon labor organizations the right "to collective bargaining with
employers for the purpose of seeking better working and living conditions, fair wages, and shorter working
hours for laborers, and, in general, to promote the material, social and moral well-being of their members."
This provision in granting to labor unions merely the right of collective bargaining, impliedly recognizes the
employer's liberty to enter or not into collective agreements with them. Indeed, we know of no provision of
the law compelling such agreements. Such a fundamental curtailment of freedom, if ever intended by law
upon grounds of public policy, should be effected in a manner that is beyond all possibility of doubt. The
supreme mandates of the Constitution should not be loosely brushed aside. As held by the Supreme Court
of the United States in Hitchman Coal & Co. vs. Mitchell (245 U. S., 229; 62 Law. ed., 260, 276):

1.11.4 Right to Transfer or Discharge Employees

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GREGORIO ARANETA EMPLOYEES VS. ROLDAN
G.R. No. L-6846
July 20, 1955

Facts:
The Agricultural Division of the Gregorio Araneta, Inc., was established in 1947 with a capital of P200,000.
The total investment in that Division in 1953 was about P3,000,000. To reduce this overcapitalization, the
Board of Directors felt that it was necessary either to invite fresh capital from outside or to adopt a
retrenchment policy. When Heacock and Company refused the invitation to invest in the enterprise, the
Board took the alternative of retrenchment. The Board required a reduction in the volume of business
necessitating likewise a reduction of personnel and caused the laying off of 17 employees. The selection of
those to be laid off was made by a technical man and approved by the Board. These employees were
given one month separation pay, except Nicolas Gonzalez who refused to receive it.

Issue:
Whether or not the retrenchment policy adopted by the company is an unfair labor practice.

Held:
No. The reorganization of the Agricultural Division was adopted by unanimous resolution of the Board of
Directors as a consequence of the retrenchment policy. Thus, the laying off of the 17 employees was due
to the retrenchment policy which the Company had to adopt in order to reduce the overcapitalization
and minimize expenses. The volume of business was considerably reduced. This was adopted even before
the petitioner, "Gregorio Araneta Employees' Union", was organized and; consequently, it was never
directed against the union or any of its members for union or labor activities. The petition is denied, without
pronouncement as to costs.

PHILIPPINE SHEET METAL WORKERS' UNION VS. CIR
G..R. No. L-2028
April 28, 1949

Facts:
On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau of Labor Relations (BLR) on
ground of unfair labor practice consisting of alleged refusal to bargain, dismissal of union officers/members;
and coercing employees to retract their membership with the union and restraining non-union members
from joining the union. The said order was issued of said court involving an industrial dispute between the
respondent company (a corporation engaged in the manufacture of tin plates, aluminum sheets, etc.)
and its laborers some of whom belong to the Philippine Sheet Metal Workers' Union (CLO) and some to the
Liberal Labor Union. The dispute was over certain demands made upon the company by the laborers, one
of the demands, being for the recall of eleven workers who had been laid off. Temporarily taken back on
certain conditions pending final determination of the controversy, these eleven workers were in the end
ordered retained in the decision handed down by the court on February 19, 1947. The petitioner tried to


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prove that the 11 laborers were laid off by the respondent company due to their union activities. On
February 10, 1947, that is, nine days before the decision came down, filed a motion in the case, asking for
authority to lay off at least 15 workers in its can department on the ground that the installation and
operation of nine new labor-saving machines in said department had rendered the services of the said
workers unnecessary.

Issue:
Whether or not the firing of the laborers due to their union activities is valid?

Held:
Yes. The right to reduce personnel should, of course, not be abused. It should not be made a pretext for
easing out laborers on account of their union activities. But neither should it be denied when it is shows that
they are not discharging their duties in a manner consistent with good discipline and the efficient operation
of an industrial enterprise. The petitioner contends that the order complained of was made with grave
abuse of discretion and in excess of jurisdiction in that it is contrary to the pronouncement made by the
lower court in its decision in the main case where it disapproved of the dismissal of eleven workers "with
whom the management is displeased due to their union activities." It appears, however, that the
pronouncement was made upon a distinct set of facts, which are different from those found by the court in
connection with the present incident, and that very decision, in ordering the reinstatement of the eleven
laborers, qualifies the order by saying that those laborers are to be retained only "until the occurrence of
facts that may give rise to a just cause of their laying off or dismissal, or there is evidence of sufficient weight
to convince the Court that their conduct is not satisfactory."

After a careful review of the record, the court finds that the Court of Industrial Relations has neither
exceeded its jurisdiction nor committed grave abuse of discretion in rendering the order complained of.
The petition for certiorari is, therefore, denied, but without costs against the petitioner for the reasons stated
in its motion to litigate as pauper.

TIONG KING VS. CIR
G.R. No. L-3587

Facts:
Gaw Pun So owned and operated a tailor shop known as the Army Shirt Factory, located in his own house
at Nos. 231-245 Soler Street, Manila. In January, 1948, he had a labor dispute with his personnel and,
pending the case in the Court of Industrial Relations, Gaw Pun So, irked and worried by the incidents of
litigation, thought of dissolving the business and selling the sewing machines. Tiong King offered to take
over the business by leasing the place and the sewing machines. The transfer was put in writing. Tiong King
continued the Army Shirt Factory from the month of February with the same employees had by Gaw Pun
So. This transfer was known to the personnel, so much so that the latter, as petitioner in the pending dispute
in the Court of Industrial Relations, prayed that Tiong King be included as a respondent. In due time, the
National Tailors Association entered that all cases were terminated against the respondents. This
agreement was duly approved by the Court of Industrial Relations. On April 27, 1948, Tiong King filed a
petition in the Court of Industrial Relations Case No. 117-V-3, alleging that since he operated his shop in
February, 1948, he had continually suffered losses; that as there remained only very little of the capital
originally invested, and that he was definitely closing the shop on May 30, 1948. Tiong King accordingly


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prayed that he be allowed to close his tailor shop and business from six o'clock in the afternoon of May 29,
1948. On May 29, 1948, Presiding Judge Arsenio C. Roldan of the Court of Industrial Relations issued an
order enjoining Tiong King not to close his factory and not to dismiss, suspend or lay off any laborer or
employee without previous authority of said court. Upon petitioner for reconsideration filed by counsel for
Tiong King, the Court of Industrial Relations promulgated a resolution dated May 27, 1949, allowing Tiong
King to close his business and shop, subject to the condition that, upon reopening the same, his former
personnel would be taken back. Upon motion for reconsideration filed by counsel for the National Tailor's
Association, the Court of Industrial Relations, promulgated a resolution dated October 31, 1949, reaffirming
their stand on the resolution of the Court of Industrial Relations under date of July 1, 1949.The present
appeal by certiorari was taken by Tiong King against the last resolution of the Court of Industrial Relations.

Issue:
Whether or not he was the owner or operator thereof and had the right to file the petition in the Court of
Industrial Relations to close the tailors shop.

Held:
Upon this point, it is only sufficient to recall that the National Tailors Association entered into a stipulation
with Tiong King alone whereby they agreed that all cases against the former owners of the business were
terminated. That Tiong King was conceded to be the owner and operator of the army shirt factory at the
time his petition to close it was filed, is conclusively borne out by the fact that Presiding Judge Roldan in his
decision of January 13, 1949, ordered Tiong King, and not Gaw Pun So, to pay the salaries and wages of
the personnel. It is contended, however, that "If at all the court has approved of the agreement between
the National Tailors' Association and Mr. Tiong King it was because 'this arrangement is a very good
solution to the present conflict as it is advantageous not only to the union but also the management, and,
is in consonance with the contract entered into between the management and the new workers."

This contention is followed with the remark that the approval of said agreement did not include a finding
that Tiong King was either the owner or the lessee of the Army Shirt Factory. We are unable to agree. In
entering into the agreement with the National Tailors Association, Tiong King acted in his own behalf,
regardless of the former owners of the business. Indeed, it was covenanted that all the cases against the
latter were deemed terminated. Considerations of fair play and justice demand that Tiong King be given
the full legal effect of said agreement which before the sanction of the Court of Industrial Relations. There
being no question that Tiong King's capital invested in the Army Shirt Factory was almost exhausted at the
time of the filing of his petition to close it, said petition must necessity be granted. It is admitted by all the
Judges of the Court of Industrial Relations that an employer may close his business, provided the same is
done in good faith and is due beyond his control. To rule otherwise, would be oppressive and inhuman. The
court reversed the resolution of the Court of Industrial Relations dated October 31, 1949, and affirmed the
resolution of said court dated May 27, 1949.

Article 5: Rules and Regulations

ART. 5. Rules and regulations. - The Department of Labor and other government agencies charged with the
administration and enforcement of this Code or any of its parts shall promulgate the necessary
implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days
after announcement of their adoption in newspapers of general circulation.


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RIZAL EMPIRE INSURANCE GROUP VS. NLRC
G.R. No. 73140 May 29, 1987

Facts:
In August, 1977, herein private respondent Rogelio R. Coria was hired by herein petitioner Rizal Empire
Insurance Group as a casual employee with a salary of P10.00 a day. On January 1, 1978, he was made a
regular employee, having been appointed as clerk-typist, with a monthly salary of P300.00. Being a
permanent employee, he was furnished a copy of petitioner company's "General Information, Office
Behavior and Other Rules and Regulations." In the same year, without change in his positi on- designation,
he was transferred to the Claims Department and his salary was increased to P450.00 a month. In 1980, he
was transferred to the Underwriting Department and his salary was increased to P580.00 a month plus cost
of living allowance, until he was transferred to the Fire Department as filing clerk. In July, 1983, he was
made an inspector of the Fire Division with a monthly salary of P685.00 plus allowances and other benefits.
On October 15, 1983, private respondent Rogelio R. Coria was dismissed from work, allegedly, on the
grounds of tardiness and unexcused absences. Accordingly, he filed a complaint with the Ministry of Labor
and Employment (MOLE), and in a Decision dated March 14, 1985 (Record, pp. 80-87), Labor Arbiter
Teodorico L. Ruiz reinstated him to his position with back wages. Petitioner filed an appeal with the National
labor Relations Commission (NLRC) but, in a Resolution dated November 15, 1985 (Ibid, pp. 31-32), the
appeal was dismissed on the ground that the same had been filed out of time. Hence, the instant petition.

Issue:
Whether or not NLRC committed a grave abuse of discretion amounting to lack of jurisdiction in dismissing
petitioners appeal on a technicality.

Held:
Rule VIII of the Revised Rules of the National Labor Relations Commission on appeal, provides:
SECTION 1. (a) Appeal. Decision or orders of a labor Arbiter shall be final and executory unless appealed
to the Commission by any or both of the parties within ten (10) calendar days from receipt of notice
thereof.
SECTION 6. No extension of period. No motion or request for extension of the period within which to
perfect an appeal shall be entertained. The record shows that the employer (petitioner herein) received a
copy of the decision of the Labor Arbiter on April 1, 1985. It filed a Motion for Extension of Time to File
Memorandum of Appeal on April 11, 1985 and filed the Memorandum of Appeal on April 22, 1985. Pursuant
to the "no extension policy" of the National Labor Relations Commission, aforesaid motion for extension of
time was denied in its resolution dated November 15, 1985 and the appeal was dismissed for having been
filed out of time. The Revised Rules of the National Labor Relations Commission are clear and explicit and
leave no room for interpretation. Moreover, it is an elementary rule in administrative law that administrative
regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to
enforce, have the force of law, and are entitled to great respect (Espanol v. Philippine Veterans
Administration, 137 SCRA 314 [1985]). Under the above-quoted provisions of the Revised NLRC Rules, the
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decision appealed from in this case has become final and executory and can no longer be subject to
appeal. Even on the merits, the ruling of the Labor Arbiter appears to be correct; the consistent promotions
in rank and salary of the private respondent indicate he must have been a highly efficient worker, who
should be retained despite occasional lapses in punctuality and attendance. Perfection cannot after all
be demanded. The petition is DISMISSED.

Philippine Association of Service Expporters, Inc. vs. Drilon
G.R. No. 81958 June 30, 1988

Facts:
The petitioner, Philippine Association of Service Exporters, Inc. (PASEI), a firm "engaged principally in the
recruitment of Filipino workers for overseas placement," challenges the Constitutional validity of
Department Order No. 1, Series of 1988, of the Department of Labor and Employment, in the character of
"GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND
HOUSEHOLD WORKERS," and specifically assailed for "discrimination against males or females;"
2
that it
"does not apply to all Filipino workers but only to domestic helpers and females with similar skills;"
3
and that
it is violative of the right to travel. It is held likewise to be an invalid exercise of the lawmaking power, police
power being legislative, and not executive, in character. On May 25, 1988, the Solicitor General, on behalf
of the respondents Secretary of Labor and Administrator of the Philippine Overseas Employment
Administration, filed a Comment informing the Court that on March 8, 1988, the respondent Labor
Secretary lifted the deployment ban in the states of Iraq, Jordan, Qatar, Canada, Hongkong, United States,
Italy, Norway, Austria, and Switzerland. In submitting the validity of the challenged "guidelines," the Solicitor
General invokes the police power of the Philippine State.

Issue:
Whether the challenged Department Order is a valid regulation in the nature of a police power measure
under the Constitution.

Held:
The concept of police power is well-established in this jurisdiction. It has been defined as the "state authority
to enact legislation that may interfere with personal liberty or property in order to promote the general

welfare."
5
As defined, it consists of (1) an imposition of restraint upon liberty or property, (2) in order to foster
the common good. It is not capable of an exact definition but has been, purposely, veiled in general terms
to underscore its all-comprehensive embrace.

Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could
be done, provides enough room for an efficient and flexible response to conditions and circumstances thus
assuring the greatest benefits.

It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the Charter.
Along with the taxing power and eminent domain, it is inborn in the very fact of statehood and sovereignty.
It is a fundamental attribute of government that has enabled it to perform the most vital functions of
governance. The police power of the State ... is a power coextensive with self- protection. It may be said to


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be that inherent and plenary power in the State which enables it to prohibit all things hurtful to the comfort,
safety, and welfare of society.

As a general rule, official acts enjoy a presumed validity.
13
In the absence of clear and convincing
evidence to the contrary, the presumption logically stands. The petitioner has shown no satisfactory reason
why the contested measure should be nullified. There is no question that Department Order No. 1 applies
only to "female contract workers,"
14
but it does not thereby make an undue discrimination between the
sexes. It is well-settled that "equality before the law" under the Constitution
15
does not import a perfect
Identity of rights among all men and women. "Protection to labor" does not signify the promotion of
employment alone. What concerns the Constitution more paramountly is that such an employment be
above all, decent, just, and humane. Under these circumstances, the Government is duty-bound to insure
that our toiling expatriates have adequate protection, personally and economically, while away from
home. In this case, the Government has evidence, an evidence the petitioner cannot seriously dispute, of
the lack or inadequacy of such protection, and as part of its duty, it has precisely ordered an indefinite ban
on deployment.

This Court understands the grave implications the questioned Order has on the business of recruitment. The
concern of the Government, however, is not necessarily to maintain profits of business firms. In the ordinary
sequence of events, it is profits that suffer as a result of Government regulation. The interest of the State is to
provide a decent living to its citizens.

CBTC EMPLOYEES UNION VS. CLAVE
G.R. No. L 49582 January 7, 1986

Facts:
Petitioner Commercial Bank and Trust Company Employees' Union (CBTC) lodged a complaint with the
Department of Labor, against private respondent bank (Comtrust) for non-payment of the holiday pay
benefits provided for under Article 95 (now Article 94) of the Labor Code. Failing to arrive at an amicable
settlement at conciliation level, the parties opted to submit their dispute for voluntary arbitration. On 22
April 1976, the Arbitrator handed down an award on the dispute in favor of petitioner union. The next day,
23 April 1976, the Department of Labor released Policy Instructions No. 9, a policy regarding the
implementation of the ten (10) paid legal holidays. Said bank interposed an appeal to the National Labor
Relations Commission (NLRC), contending that the Arbitrator demonstrated gross incompetence and/or
grave abuse of discretion when he failed to apply Policy Instructions No. 9. This appeal was dismissed on 16

August 1976. Private respondent then appealed to the Secretary of Labor. On 30 June 1977, the Acting
Secretary of Labor reversed the NLRC decision. On the principal issue of holiday pay, the Acting Secretary,
guided by Policy Instructions No. 9, applied the same retrospectively, among other things.

Issue:
Whether or not the monthly pay of the covered employees already includes what Article 94 of the Labor
Code requires as regular holiday pay benefit in the amount of his regular daily wage.

Held:


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In excluding the union members the benefits of the holiday pay law, public respondent predicated his
ruling on Section 2, Rule IV, Book III of the Rules to implement Article 94 of the Labor Code promulgated by
the then Secretary of Labor and Policy Instructions No. 9. In Insular Bank of Asia andAmerica Employees'
Union (IBAAEU) vs. Inciong, this Court's Second Division, speaking through former Justice Makasiar,
expressed the view and declared that the section and interpretative bulletin are null and void, having
been promulgated by the then Secretary of Labor in excess of his rule-making authority. The questioned
Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy Instruction No. 9 add another
excluded group, namely, 'employees who are uniformly paid by the month'. While the additional exclusion
is only in the form of a presumption that all monthly paid employees have already been paid holiday pay,
it constitutes a taking away or a deprivation which must be in the law if it is to be valid. An administrative
interpretation which diminishes the benefits of labor more than what the statute delimits or withholds is
obviously ultra vires. Ruled in favor of the petitioners. Presidential Executive Assistant and the Acting
Secretary of labor are set aside, and the award of the Arbitrator reinstated.

Article 6: Applicability

ART. 6. Applicability. - All rights and benefits granted to workers under this Code shall, except as may
otherwise be provided herein, apply alike to all workers, whether agricultural or non-agricultural. (As
amended by Presidential Decree No. 570-A, November 1, 1974).

1.13.1 Government Corporation

NATIONAL HOUSING CORPORATION VS. JUCO
G.R. No. L-64313 January 17, 1985

Facts:
Petitioner Benjamin C. Juco was hired as a project engineer of respondent National Housing Corporation
(NHC) from November 16, 1970 to May 14, 1975. On May 14, 1975, he was separated from the service for
having been implicated in a crime of theft and/or malversation of public funds. On March 25, 1977,
petitioner filed a complaint for illegal dismissal against the NHC with the Department of Labor. On
September 17, 1977, the Labor Arbiter rendered a decision dismissing the complaint on the ground that the
NLRC had no jurisdiction over the case because NHC is a government-owned corporation and jurisdiction
over its employees is vested in the Civil Service Commision. Petitioner then elevated the case to the NLRC
which rendered a decision on December 28, 1982, reversing the decision of the Labor Arbiter remanded
the case to the labor arbiter for further proceedings. NHC in turn appealed to the Supreme Court.

Issue:
Whether or not the employees of the National Housing Corporation, a GOCC without original charter, is
covered by the Labor Code or by laws and regulations governing the civil service.

Held:
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Sec. 11, Art XII-B of the Constitution specifically provides: "The Civil Service embraces every branch, agency,
subdivision and instrumentality of the Government, including every government owned and controlled
corporation. The inclusion of GOCC within the embrace of the civil service shows a deliberate effort at the
framers to plug an earlier loophole which allowed GOCC to avoid the full consequences of the civil service
system. All offices and firms of the government are covered. This constitutional provision has been
implemented by statute PD 807 is unequivocal that personnel of GOCC belong to the civil service and
subject to civil service requirements."Every" means each one of a group, without exception. This case refers
to a GOCC. It does not cover cases involving private firms taken over by the government in foreclosure or
similar proceedings.The petition is GRANTED. The questioned decision of the respondent National Labor
Relations Commission is SET ASIDE. The decision of the Labor Arbiter dismissing the case before it for lack of
jurisdiction is REINSTATED.

NATIONAL SERVICE CORPORATION VS. NLRC
G.R. No. L-69870 November 29, 1988

Facts:
Eugenio Credo was an employee of the National Service Corporation. She claims she was illegally
dismissed. NLRC ruled ordering her reinstatement. NASECO argues that NLRC has no jurisdiction to order her
reinstatement. NASECO as a government corporation by virtue of its being a subsidiary of the NIDC, which
is wholly owned by the Phil. National Bank which is in turn a GOCC, the terms and conditions of
employment of its employees are governed by the Civil Service Law citing National Housing vs. Juco.

Issue:
Whether or not the employees of NASECO, a GOCC without original charter, are governed by the Civil
Service Law.

Held:
NO. The holding in NHC v Juco should not be given retroactive effect, that is to cases that arose before its
promulgation of Jan 17, 1985. To do otherwise would be oppressive to Credo and other employees similarly
situated because under the 1973 Constitution but prior to the ruling in NHC vs. Juco, this court recognized
the applicability of the Labor jurisdiction over disputes involving terms and conditions of employment in
GOCC's, among them NASECO. In the matter of coverage by the civil service of GOCC, the 1987
Constitution starkly differs from the 1973 constitution where NHC vs. Juco was based. It provides that the
"civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government,
including government owned or controlled corporation with original charter." Therefore by clear
implication, the civil service does not include GOCC which are organized as subsidiaries of GOCC under
the general corporation law.

1.13.2 Non-Applicability to Government Agencies


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REPUBLIC VS COURT OF APPEALS
G.R. No. 87676 December 20, 1989

FACTS:
The NPDC was originally created in 1963 under Executive Order No. 30, as the Executive Committee for the
development of the Quezon Memorial, Luneta and other national parks, and later renamed as the
National Parks Development Committee under Executive Order No. 68, on September 21, 1967, it was
registered in the Securities and Exchange Commission (SEC) as a non-stock and non- profit corporation,
known as "The National Parks Development Committee, Inc."However, in August, 1987, the NPDC was
ordered by the SEC to show cause why its Certificate of Registration should not be suspended for. The
NPDC Chairman, Amado Lansang, Jr., informed SEC that his Office had no objection to the suspension,
cancellation, or revocation of the Certificate of Registration of NPDC.By virtue of Executive Order No. 120,
the NPDC was attached to the Ministry (later Department) of Tourism and provided with a separate budget
subject to audit by the Commission on Audit and pursuant to Executive Order No. 120, all appointments
and other personnel actions shall be submitted through the Civil Service Commission Commission.
Meanwhile, the Rizal Park Supervisory Employees Association, consisting of employees holding supervisory
positions in the different areas of the parks, was organized and it affiliated with the Trade Union of the
Philippines and Allied Services (TUPAS) under Certificate No. 1206. Two collective bargaining agreements
were entered into between NPDC and NPDCEA (TUPAS local Chapter No. 967) and NPDC and NPDCSA
(TUPAS Chapter No. 1206), for a period of two years or until June 30, 1989.On March 20, 1988, these unions
staged a stake at the Rizal Park, Fort Santiago, Paco Park, and Pook ni Mariang Makiling at Los Banos,
Laguna, alleging unfair labor practices by NPDC. On March 21, 1988, NPDC filed in the Regional Trial Court
in Manila, Branch III, a complaint against the union to declare the strike illegal and to restrain it on the
ground that the strikers, being government employees, have no right to strike although they may form a
union. The Regional Trial Court of Manila, Branch III, dismissed for lack of jurisdiction, the petitioner's
complaint in Civil Case No. 88- 44048 praying for a declaration of illegality of the strike of the private
respondents and to restrain the same. The Court of Appeals denied the petitioner's petition for certiorari,
hence, this petition for review.

ISSUE:
Whether the petitioner, National Parks Development Committee (NPDC), is a government agency, or a
private corporation, for on this issue depends the right of its employees to strike.

HELD:
NPDC is a government agency, its employees are covered by civil service rules and regulations (Sec. 2,
Article IX, 1987 Constitution). Its employees are civil service employees (Sec. 14, Executive Order No.
180).While NPDC employees are allowed under the 1987 Constitution to organize and join unions of their
choice, there is as yet no law permitting them to strike. In case of a labor dispute between the employees
and the government, Section 15 of Executive Order No. 180 dated June 1, 1987 provides that the Public
Sector Labor- Management Council, not the Department of Labor and Employment, shall hear the dispute.
Clearly, the Court of Appeals and the lower court erred in holding that the labor dispute between the
NPDC and the members of the NPDSA is cognizable by the Department of Labor and Employment.

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The petition for review is granted. The private respondents' complaint should be filed in the Public Sector
Labor-Management Council as provided in Section 15 of Executive Order No. 180.

LUZON DEVELOPMENT BANK VS. ASSOCIATION OF LUZON DEVELOPMENT BANK, ET AL.
G.R. No. 120319 October 6, 1995

Facts:
From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon
Development Bank Employees (ALDBE) arose an arbitration case to resolve the following issue: whether or
not the company has violated the Collective Bargaining Agreement provision and the Memorandum of
Agreement dated April1994, on promotion. At a conference, the parties agreed on the submission of their
respective Position Papers on December 1-15, 1994. Atty. Ester S. Garcia,in her capacity as Voluntary
Arbitrator, received ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit its
Position Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995 no
Position Paper had been filed by LDB. On May 24, 1995, without LDB's Position Paper, the Voluntary
Arbitrator rendered a decision disposing as follows: WHEREFORE, finding is hereby made that the Bank has
not adhered to the Collective Bargaining Agreement provision nor the Memorandum of Agreement on
promotion. Hence, this petition for certiorari and prohibition seeking to set aside the decision of the
Voluntary Arbitrator and to prohibit her from enforcing the same.

Issue:
Which court has the jurisdiction for the appellate review of adjudications of all quasi-judicial entities.

Held:
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals shall
exercise:(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards
of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the
Securities and Exchange Commission, the Employees Compensation Commission and the Civil Service
Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with
the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948.

SSS Employees Association vs. Court of Appeals
[G.R. No. 85279, July 28,1989]

Facts:
The petitioners went on strike after the SSS failed to act upon the unions demands concerning the
implementation of their CBA. SSS filed before the court action for damages with prayer for writ of
preliminary injunction against petitioners for staging an illegal strike. The court issued a temporary restraining
order pending the resolution of the application for preliminary injunction while petitioners filed a motion to
dismiss alleging the courts lack of jurisdiction over the subject matter. Petitioners contend that the court
made reversible error in taking cognizance on the subject matter since the jurisdiction lies on the DOLE or
the National Labor Relations Commission as the case involves a labor dispute. The SSS contends on one
hand that the petitioners are covered by the Civil Service laws, rules and regulation thus have no right to


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strike. They are not covered by the NLRC or DOLE therefore the court may enjoin the petitioners from
striking.

Issue:
Whether or not SSS employers have the right to strike.

Held:
The Constitutional provisions enshrined on Human Rights and Social Justice provides guarantee among
workers with the right to organize and conduct peaceful concerted activities such as strikes. On one hand,
Section 14 of E.O No. 180 provides that the Civil Service law and rules governing concerted activities and
strikes in the government service shall be observed, subject to any legislation that may be enacted by
Congress referring to Memorandum Circular No. 6, s. 1987 of the Civil Service Commission which states that
prior to the enactment by Congress of applicable laws concerning strike by government employees
enjoins under pain of administrative sanctions, all government officers and employees from staging strikes,
demonstrations, mass leaves, walk-outs and other forms of mass action which will result in temporary
stoppage or disruption of public service. Therefore in the absence of any legislation allowing govt.
employees to strike they are prohibited from doing so.

Emancipation of Tenants
(Article 7-11)

Chapter II
EMANCIPATION OF TENANTS

ART. 7. Statement of Objectives. Inasmuch as the old concept of land ownership by a few has spawned
valid and legitimate grievances that gave rise to violent conflict and social tension and the redress of such
legitimate grievances being one of the fundamental objectives of the New Society, it has become
imperative to start reformation with the emancipation of the tiller of the soil from his bondage.

ART. 8. Transfer of lands to tenant-workers. - Being a vital part of the labor force, tenant-farmers on private
agricultural lands primarily devoted to rice and corn under a system of share crop or lease tenancy
whether classified as landed estate or not shall be deemed owner of a portion constituting a family-size
farm of five (5) hectares, if not irrigated and three (3) hectares, if irrigated.

In all cases, the land owner may retain a n area of not more than seven (7) hectares if such landowner is
cultivating such area or will now cultivate it.

ART. 9. Determination of land value. - For the purpose of determining the cost of the land to be transferred
to the tenant-farmer, the value of the land shall be equivalent to two and one-half (2-1/2) times the
average harvest of three (3) normal crop years immediately preceding the promulgation of Presidential
Decree No. 27 on October 21, 1972.
The total cost of the land, including interest at the rate of six percent (6%) per annum, shall be paid by the
tenant in fifteen (15) years of fifteen (15) equal annual amortizations.


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In case of default, the amortization due shall be paid by the farmers cooperative in which the defaulting
tenant-farmer is a member, with the cooperative having a right of recourse against him.
The government shall guarantee such amortizations with shares of stock in government-owned and
government-controlled corporations.

ART. 10. Conditions of ownership. - No title to the land acquired by the tenant-farmer under Presidential
Decree No. 27 shall be actually issued to him unless and until he has become a full-fledged member of a
duly recognized farmers cooperative.
Title to the land acquired pursuant to Presidential Decree No. 27 or the Land Reform Program of the
Government shall not be transferable except by hereditary succession or to the Government in
accordance with the provisions of Presidential Decree No. 27, the Code of Agrari an Reforms and other
existing laws and regulations.

ART. 11. Implementing agency. - The Department of Agrarian Reform shall promulgate the necessary rules
and regulations to implement the provisions of this Chapter.

1.1 Department of Agrarian Reform

Association of Small Landowners of the Phils. vs. Sec. of Agrarian Reform
GR No.788742, July 14,1989

The subject of this petition is a 9-hectare riceland cultivated by four tenants and owned by petitioner
Nicolas Manaay and his wife and a 5-hectare riceland cultivated by four tenants and owned by petitioner
Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified
farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation of
powers, due process, equal protection and the constitutional limitation that no private property shall be
taken for public use without just compensation.

They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The
said measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to provide for
retention limits for small landowners. Moreover, it does not conform to Article VI, Section 25(4) and the other
requisites of a valid appropriation.

Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended
for public use upon payment of just compensation to the owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary
deed of sale may be agreed upon by the parties. It is only where the owner is unwilling to sell, or cannot
accept the price or other conditions offered by the vendee, that the power of eminent domain will come
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into play to assert the paramount authority of the State over the interests of the property owner. Private
rights must then yield to the irresistible demands of the public interest on the time-honored justification, as in
the case of the police power, that the welfare of the people is the supreme law.

Acuna v Arroyo
G.R. No.79310July 14, 1989

Facts:
RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988was signed into law by
then President Corazon Aquino. There were a number of legal questions challenging the constitutionality of
the several measures enacted to implement the CARL. In the instant case, the petitioners are landowners
and sugar planters in the Victorias Mill District in Negros Occidental. Co-petitioner Planters Committee is an
organization composed of 1,400 planter-members. This petition seeks to prohibit the implementation of
Proclamation No. 131 and EO No. 229.The petitioners claim that the power to provide for a CARP as
decreed by the constitution belongs to Congress and not the President. Even assuming that the interim
legislative power of the President was properly exercised, Proc. No. 131 and EO No.229 would still have to
be annulled for violating the constitutional provisions on just compensation, due process and equal
protection. Section 2 of Proc. No. 131 provides: Agrarian Reform Fund.- There is hereby created a special
fund, to be known as the Agriarian Reform Fund, an initial amount of FIFTY BILLION PEOS to cover the
estimated cost of the CARP from 1987 -1992 which shall be sourced from the receipts of the sale of the
assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth received through the PCGG
and such other sources as government may deem appropriate. The amounts collected and accruing to
this special fund shall be appropriated automatically for the purpose authorized in this Proclamation. The
money needed to cover the cost of the contemplated expropriated has yet to be raised and cannot be
appropriated at this time. Petitioners contend that taking must be simultaneous with payment of just
compensation as it is traditionally understood, i.e., with money and in full, but no such payment is
contemplated in Sec. 5 of EO No. 229.The petitioners also argue that in the issuance of the two measures,
no effort was made to make a careful study of the sugar planters situation. To the extent that the sugar
planters have been lumped in the same legislation with other farmers, although they are a separate group
with problems exclusively their own, their right to equal protection has been violated.

Issue:
Whether or not Proc. No. 131 and EO No. 229 are valid.

Held:
The Court upheld the presumption of constitutionality in favour of Proc. No. 131 and EO No. 229. Contrary to
the petitioners contention, a pilot project to determine the feasibility of CARP and a general survey on the
peoples opinion thereon are not indispensable prerequisites to its promulgation. On the alleged violation
of the equal protection clause, the sugar planters have failed to show that they belong to a different class
and should be treated differently. Regarding the issue of just compensation, it cannot be denied that the
issue involved in the case is a revolutionary kind of expropriation. The expropriation in the instant case
affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of


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the maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit not
only of a particular community but of the entire Filipino nation. Such a program will involve not mere million
of pesos. The cost will be tremendous. Considering the vast areas of land subject to expropriation under the
laws before us, we estimate that hundreds of billions of pesos will be needed, far more indeed that the
amount of P50 billion initially appropriated, which is already staggering as it is by our present standards. We
assume that the framers of the Constitution were aware of this difficulty when they called for agrarian
reform as a top priority project of the government. It is a part of this assumption that when they envisioned
the expropriation that would be needed, they also intended that the just compensation would have to be
paid not in the orthodox way but a less conventional if more practical method. There can be doubt that
they were aware of the financial limitations of the government and had no illusions that there would be

enough money to pay in cash and in full for the lands they wanted to be distributed among the farmers.
we may therefore assume that their intention was to allow such manner of payment as is now provided for
by the CARP Law, particularly the payment of the balance, or indeed of the entire amount of the just
compensation, with other things of value. Accepting the theory that payment of the just compensation is
not always required to be made fully in money, we further that the proportion of cash payment to the
other things of value constituting the total payment, as determined on the basis of the areas of the lands
expropriated, is not unduly oppressive upon the landowner. Hence, the validity of Proc. No. 131 and EO No.
229 is SUSTAINED.

Pabico vs. Juico
G.R. No. 79744July 14, 1989
Emancipation of Tenants: Department of Agrarian Reform

Facts:
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due process
and the requirement for just compensation, placed his landholding under the coverage of Operation Land
Transfer. Certificates of Land Transfer were subsequently issued to the private respondents, who then
refused payment of lease rentals to him. On 3 September 1986, the petitioner protested the erroneous
inclusion of his small and holding under Operation Land transfer and asked for the recall and cancellation
of the Certificates of Land Transfer in the name of the private respondents. He claims that on 24 December
1986, his petition was denied without hearing. On 17 February 1987, he filed a motion for reconsideration,
which had not been acted upon when E.O. Nos. 228 and 229 were issued. These orders rendered his
motion moot and academic because they directly effected the transfer of his land to the private
respondents.

Issue:
Whether or not E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines

Ruling:
The power of President Aquino to promulgate E.O. Nos. 228 and 229, was authorized under Section 6 of the
Transitory Provisions of the 1987 Constitution. The incumbent president shall continue to exercise legislative
powers until the first Congress is convened.


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Manaay vs. Juico
G.R. No.: 79777 July 14, 1989

Facts:
Petitioners assail the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657. The subjects of
this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas Manaay and
his wife and a 5-hectare riceland worked by four tenants and owned by petitioner Augustin Hermano, Jr.
The tenants were declared full owners of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.
With the adoption of CARP law, the tenant are to be granted full ownership of the portion of the land they
till. They also question the power of the president to issue the assailed E.O. arguing that such is a usurpation
of legislative powers. They also raise the issue that said laws violate the equal protection law.

Issue:
Whether or not the said laws are in contravention with the constitution.

Held:
In resolving questions of constitutionality, the court takes a cautious step. We believes that the congress of
the president before adopting a law made an exhaustive study that such law will be in accordance with
the law. Most of the questions raised here in are now moot and academic. The argument of some of the
petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they do not provide for
retention limits as required by Article XIII, Section 4 of the Constitution is no longer tenable. R.A. No. 6657
does provide for such limits now in Section 6 of the law, which in fact is one of its most controversial
provisions. As to the power of the president to make a law, the presidential decrees are made in
accordance with the law as grand by the martial law rule. During the time of Pres. Aquino she is
empowered to do so by the transitory provisions of the 1987 Constitution. On the question of equal
protection the court find no violation of the elements of equal protection.The court therefore rules that the
assailed laws and issuances are all constitutional.

2.2 Lands Not Covered

ALITA VS COURT OF APPEALS
GR No 78517 February 27, 1989

Facts:
Two parcels of land were acquired by private respondents' predecessors-in-interest through homestead
patent under the provisions of Commonwealth Act No. 141. Private respondents herein are desirous of
personally cultivating these lands, but petitioners refuse to vacate, relying on the provisions of P.D. 27 and
P.D. 316 and appurtenant regulations issued by the then Ministry of Agrarian Reform (MAR), now
Department of Agrarian Reform (DAR). Private respondents instituted a complaint against Hon. Conrado
Estrella as then Minister of Agrarian Reform, P.D. Macarambon as Regional Director of MAR Region IX, and
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herein petitioners for the declaration of P.D. 27 and all other Decrees, Letters of Instructions and General
Orders issued in connection therewith as inapplicable to homestead lands.

Issue:
Whether the lands obtained through homestead patent are covered by the Agrarian Reform under P.D.
27.

Held:
P.D. 27 decrees that the emancipation of tenants from the bondage of the soil and transferring to them
ownership of the land they till is a sweeping social legislation, a remedial measure promulgated pursuant to
the social justice precepts of the Constitution. However, such contention cannot be invoked to defeat the
very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141. The Homestead Act
has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of
land where he may build a modest house for himself and family and plant what is necessary for subsistence
and for the satisfaction of life's other needs. The right of the citizens to their homes and to the things
necessary for their subsistence is as vital as the right to life itself. They have a right to live with a certain

degree of comfort as become human beings, and the State which looks after the welfare of the people's
happiness is under a duty to safeguard the satisfaction of this vital right. The newly promulgated
Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise contains a proviso
supporting the inapplicability of P.D. 27 to lands covered by homestead patents like those of the property
in question, reading: Section 6. Retention Limits.

... Provided further, That original homestead grantees or their direct compulsory heirs who still own the
original homestead at the time of the approval of this Act shall retain the same areas as long as they
continue to cultivate said homestead.

FELIX GONZALES AND CARMEN GONZALES VS. HON. COURT OF APPEALS, ET AL.
G.R. No.: G.R. No. 36213 June 29, 1989

Facts:
Petition for certiorari to review the decision of the Court of Appeals Petitioners leased a lot in the subdivision
on which they built their house, and, by tolerance of the subdivision owner, they cultivated some vacant
adjoining lots. When plaintiffs defaulted renting lot 1285 M, defendants sent a letter asking them to pay the
accrued rentals or vacate the premises. Plaintiffs filed the present action seeking to elect the leasehold
system and praying for a reliquidation of past harvests embracing the agricultural years 1961 1962 to 1967
1968. Defendants initiated an action for recovery of possession alleging that the property subject of the
action is residential land. Court of Agrarian Relations, and CA ruled that the plaintiffs are not de jure
agricultural tenants. Hence, this petition.

Issue:
Whether or not an agricultural tenancy relationship can be created over land embraced in an approved
residential subdivision?


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Held:
No. The Court ruled that an agricultural leasehold cannot be established on land which has ceased to be
devoted to cultivation or farming because of its conversion into a residential land; petitioners are not
entitled to reinstatement under Sec. 36 (1) of RA 3844 for the petitioners were not agricultural lessees or
tenants of the land before its conversion into a residential subdivision in 1955. They may not claim a right to
reinstatement. Petition denied for lack of merit.

LUZ FARMS VS. SEC. OF DEPT. OF AGRARIAN REFORM
GR NO. : 86889 DEC. 04,1990

FACTS:
This is a petition for prohibition with prayer for restraining order and/or preliminary and permanent injunction
against the Hon. Sec of Agrarian Reform for acting without jurisdiction in enforcing the assailed provisions of
RA no.6657 otherwise known as the Comprehensive Agrarian Reform Law of 1998 and in the promulgating
the Guidelines and Procedure Implementing Production and Profit Sharing under RA No.6657, insofar as the
same apply herein petitioner, and further from performing an act in violation of the constitutional rights of
the petitioner. Luz Farms is a corporation engaged in the livestock and poultry business and together with
others in the same business allegedly stands to be adversely affected by the enforcement of section 3(b),

Section 11, Section 13, Section 16(d) and 17 and Section 32 of RA No.6657 otherwise known as
Comprehensive Agrarian Reform L aw and of the Guidelines and Procedures Implementing Production and
Profit Sharing under RA No. 6657.Hence Luz Farms file a petition praying that aforesaid laws, guidelines and
rules be declared unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or
restraining order be issued enjoining public respondent from enforcing the same.

Issue:
The main issue in this petition is the constitutionality of Sec 3(b), 11, 13 and 32 of RA No. 6657, insofar as the
said law, includes the raising of livestock, poultry and swine in its coverage as well as the Implementing
Rules and Guidelines promulgated in accordance therewith.

Held :
Pettiton is granted , said sections and implementing rules are hereby declared null and void.

PRE-EMPLOYMENT
(Article 12)

BOOK ONE
PRE-EMPLOYMENT

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;


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b) To protect every citizen desiring to work locally or overseas by securing for him the best possible terms
and conditions of employment;
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;
e) To regulate the employment of aliens, including the establishment of a registration and/or work permit
system;
f) To strengthen the network of public employment offices and rationalize the participation of the private
sector in the recruitment and placement of workers, locally and overseas, to serve national development
objectives;
g) To insure careful selection of Filipino workers for overseas employment in order to protect the good
name of the Philippines abroad.

RECRUITMENT AND PLACEMENT
(Article 13)

Title I
RECRUITMENT
AND
PLACEMENT OF WORKERS

Chapter I
GENERAL PROVISIONS
ART. 13. Definitions. - (a) "Worker" means any member of the labor force, whether employed or
unemployed.
(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.
(c) "Private fee-charging employment agency" means any person or entity engaged in recruitment and
placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or
both.
(d) "License" means a document issued by the Department of Labor authorizing a person or entity to
operate a private employment agency.
(e) "Private recruitment entity" means any person or association engaged in the recruitment and
placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the workers
or employers.
(f) "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.
(g) "Seaman" means any person employed in a vessel engaged in maritime navigation.
(h) "Overseas employment" means employment of a worker outside the Philippines.


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(i) "Emigrant" means any person, worker or otherwise, who emigrates to a foreign country by virtue of an
immigrant visa or resident permit or its equivalent in the country of destination.

Recruitment and Placement

People v Panis
142 SCRA 664 1986

Facts:
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. 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." 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.

Issue: Whether or not the petitioner is guilty of violating Article 13(b) of P. D. 442, otherwise known as the
Labor Code.

Held: Article 13(b) of P. D. 442, otherwise known as the Labor Code, states that, "(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."

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."

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
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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 their own countrymen.

People vs Goce
GR No 113161 August 29, 1995

Facts:
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 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.

On January 21, 1987, a warrant of arrest was issued against the three accused but not one of them was
arrested. Hence, on February 2, 1989, the trial court ordered the case archived but it issued a standing
warrant of arrest against the accused. Thereafter, on learning of the whereabouts of the accused, at
around midday of February 26, 1993, Nelly Agustin was apprehended by the Paraaque police.

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.

In her 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.

Appellant 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.

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.

Issues:
Whether or not appellant Agustin actions in relation with the Goce couple constitute illegal recruitment.

Held:
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


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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.

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. 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.

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.

Darvin vs. CA and People of the Philippines
G.R. No. 125044, July 13, 1998

FACTS: Maria Toledo convinced by the petitioner that she has the authority to recruit workers for abroad
and that she can facilitate the necessary papers, gave Darvin Php150,000 for airfare and US visa. However,
she was not given a work permit to validly work in the US.

Issue: Whether or not the petitioner is guilty of illegal recruitment?

Held: There is lack of evidence that accused offered Toledo a job. Procuring of an airfare ticket and a US
visa does not qualify illegal recruitment.

Overseas Employment
Article 19-24

POEA

Cases under the Jurisdiction of POEA

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Eastern Shipping Lines vs. POEA
G.R. No. 76633, Oct. 18, 1988

Facts: Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in
Tokyo, Japan, March 15, 1985. His widow sued for damages under Executive Order No. 797 and
Memorandum Circular No. 2 of the POEA. The petitioner, as owner of the vessel, argued that the complaint
was cognizable not by the POEA but by the Social Security System and should have been filed against the
State Insurance Fund. The POEA nevertheless assumed jurisdiction and after considering the position papers
of the parties ruled in favor of the complainant. The award consisted of P180,000.00 as death benefits and
P12,000.00 for burial expenses.
The petitioner immediately came to this Court, prompting the Solicitor General to move for dismissal on the
ground of non-exhaustion of administrative remedies.

Issue: Is Saco an overseas worker or a domestic employee?

Decision: We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an overseas
employee of the petitioner at the time he met with the fatal accident in Japan in 1985.
Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined as
"employment of a worker outside the Philippines, including employment on board vessels plying
international waters, covered by a valid contract. A contract worker is described as "any person working
or who has worked overseas under a valid employment contract and shall include seamen" or "any person
working overseas or who has been employed by another which may be a local employer, foreign
employer, principal or partner under a valid employment contract and shall include seamen." These
definitions clearly apply to Vitaliano Saco for it is not disputed that he died while under a contract of
employment with the petitioner and alongside the petitioner's vessel, the M/V Eastern Polaris, while berthed
in a foreign country.
It is worth observing that the petitioner performed at least two acts which constitute implied or tacit
recognition of the nature of Saco's employment at the time of his death in 1985. The first is its submission of
its shipping articles to the POEA for processing, formalization and approval in the exercise of its regulatory
power over overseas employment under Executive Order NO. 797. The second is its payment of the
contributions mandated by law and regulations to the Welfare Fund for Overseas Workers, which was
created by P.D. No. 1694 "for the purpose of providing social and welfare services to Filipino overseas
workers."
WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary restraining order
dated December 10, 1986 is hereby LIFTED. It is so ordered.

PHILSA INTERNATIONAL PLACEMENT and SERVICES CORPORATION vs THE HON. SECRETARY OF LABOR AND
EMPLOYMENT, ET AL.

FACTS:
Petitioner Philsa is a domestic corporation engaged in the recruitment of workers for overseas employment.
Sometime in January 1985, private respondents, who were recruited by petitioner for employment in Saudi


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Arabia, were required to pay placement fees in the amount of P5,000.00 for private respondent Rodrigo L.
Mikin and P6,500.00 each for private respondents Vivencio A. de Mesa and Cedric P. Leyson.

After the execution of their respective work contracts, private respondents left for Saudi Arabia on January
29, 1985. They then began work for Al-Hejailan Consultants A/E, the foreign principal of petitioner.

While in Saudi Arabia, private respondents were allegedly made to sign a second contract on February 4,
1985 which changed some of the provisions of their original contract resulting in the reduction of some of
their benefits and privileges. On April 1, 1985, their foreign employer allegedly forced them to sign a third
contract which increased their work hours from 48 hours to 60 hours a week without any corresponding
increase in their basic monthly salary. When they refused to sign this third contract, the services of private
respondents were terminated by Al-Hejailan and they were repatriated to the Philippines.

Upon their arrival in the Philippines, private respondents demanded from petitioner Philsa the return of their
placement fees and for the payment of their salaries for the unexpired portion of their contract. When
petitioner refused, they filed a case before the POEA against petitioner Philsa and its foreign principal, Al-
Hejailan., with the following causes of action:
1. Illegal dismissal;
2. Payment of salary differentials;
3. Illegal deduction/withholding of salaries;
4. Illegal exactions/refund of placement fees; and
5. Contract substitution.

Several hearings were conducted before the POEA Hearing Officer on the two aspects of private
respondents' complaint. During these hearings, private respondents supported their complaint with the
presentation of both documentary and testimonial evidence. When it was its turn to present its evidence,
petitioner failed to do so and consequently, private respondents filed a motion to decide the case on the
basis of the evidence on record.

In line with this August 29, 1988 Order, petitioner deposited the check equivalent to the claims of private
respondents and paid the corresponding fine under protest. From the said Order, petitioner filed a Motion
for Reconsideration which was subsequently denied in an Order dated October 10, 1989.
Under the POEA Rules and Regulations, the decision of the POEA thru the LRO suspending or canceling a
license or authority to act as a recruitment agency may be appealed to the Ministry (now Department) of
Labor and Employment.
15
Accordingly, after the denial of its motion for reconsideration, petitioner
appealed the August 21, 1988 Order to the Secretary of Labor and Employment. However, in an Order
dated September 13, 1991,
16
public respondent Secretary of Labor and Employment affirmed in toto the
assailed Order. Petitioner filed a Motion for Reconsideration but this was likewise denied in an Order dated
November 25, 1991.

ISSUE:
1. Whether or not petitioner charge private respondents placement fees in excess of that allowed by
law. and;


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2. Whether or not the public respondent committed grave abuse of discretion in holding petitioner
liable for illegal deductions/withholding of salaries considering that the Supreme Court itself has
already absolved petitioner from this charge.
HELD:
To summarize, petitioner should be absolved from the three (3) counts of illegal exaction as POEA
Administrative Circular No. 2, Series of 1983 could not be the basis of administrative sanctions against
petitioner for lack of publication. However, we affirm the ruling of the POEA and the Secretary of Labor and
Employment that petitioner should be held administratively liable for two (2) counts of contract substitution
and one (1) count of withholding or unlawful deduction of salary.

Under the applicable schedule of penalties imposed by the POEA, the penalty for each count of contract
substitution is suspension of license for two (2) months or a fine of P10,000.00 while the penalty for
withholding or unlawful deduction of salaries is suspension of license for two (2) months or fine equal to the
salary withheld but not less than P10,000.00 plus restitution of the amount in both instances.
36
Applying the
said schedule on the instant case, the license of petitioner should be suspended for six (6) months or, in lieu
thereof, it should be ordered to pay fine in the amount of P30,000.00. Petitioner should likewise pay the
amount of SR1,000.00 to private respondent Vivencio A. de Mesa as restitution for the amount withheld
from his salary.

WHEREFORE, premises considered, the September 13, 1991 and November 25, 1991 Orders of public
respondent Secretary of Labor and Employment are hereby MODIFIED. As modified, the license of private
respondent Philsa International Placement and Services Corporation is hereby suspended for six (6) months
or, in lieu thereof, it is hereby ordered to pay the amount of P30,000.00 as fine. Petitioner is likewise ordered
to pay the amount of SR1,000.00 to private respondent Vivencio A. d e Mesa. All other monetary awards
are deleted.

Cases NOT under the Jurisdiction of POEA

PACIFIC ASIA OVERSEAS SHIPPING CORP. VS NLRC
G.R. No.: G.R. No. 76595 May 6, 1988

Facts:
Pacific Asia Overseas Shipping Corporation (Pascor), petitioner seeks the annulment and setting aside of
the Resolutions of the public respondent National Labor Relations Commission (NLRC) dated 14 August
1986 and 19 November 1986, denying Pascor's appeal for having been filed out of time and denying its
Motion for Reconsideration, respectively. Private respondent Teodoro Rances sometime in March 1984, was
engaged by petitioner Pascor as Radio Operator of a vessel belonging to Pascor's foreign principal, the
Gulf-East Ship Management Limited. Four (4) months later, and after having been transferred from one
vessel to another four times for misbehavior and inability to get along with officers and crew members of
each of the vessels, the foreign principal terminated the services of private respondent Rances citing the
latter's poor and incorrigible work attitude and incitement of others to insubordination. Petitioner Pascor

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filed a complaint against private respondent with the Philippine Overseas Employment Administration
(POEA) for acts unbecoming a marine officer and for, character assassination.

On 4 September 1985, the POEA found private respondent liable for inciting another officer or seaman to
insubordination and challenging a superior officer to a fist fight and imposed six (6) months suspension for
each offense or a total of twelve (12) months suspension, with a warning that commission of the same or
similar offense in the future would be met with a stiffer disciplinary sanction. The POEA decision passed over
sub silentio the counterclaim of private respondent. In its answer filed on 11 December 1985, petitioner
Pascor made four principal arguments: that the copy of the Dubai decision relied upon by private
respondent could not be considered as evidence, not having been properly authenticated; that Pascor
was not a party to the Dubai court proceedings; that the POEA had no jurisdiction over cases for the
enforcement of foreign judgments; and that the claim had already been resolved in POEA, having been
there dismissed as a counterclaim. In a decision dated 14 April 1986, the POEA held petitioner Pascor liable
to pay private respondent Rances the amount of US$ 1,500.00 "at the prevailing rate of exchange at the
time of payment." This decision was served on petitioner's counsel on 18 April 1986, which counsel filed a
'Memorandum on Appeal and/or Motion for Reconsideration" on 29 April 1986.

Issue:
Whether or not POEA denial of petitioner's appeal and Motion for Reconsideration is within its jurisdiction in
rendering decision of its Orders dated 14 August and 19 November 1986?

Held:

Cases under the Jurisdiction of NLRC

Douglas Millares and Rogelio Lagda vs National Labor Relations Commission, et al.

Facts:
Douglas Millares was employed by ESSO International through its local manning agency, Trans-Global, in
1968 as a machinist. In 1975, he was promoted as Chief Engineer which position he occupied until he
opted to retire in 1989. In 1989, petitioner Millares filed a leave of absence and applied for optional
retirement plan under the Consecutive Enlistment Incentive Plan (CEIP) considering that he had already
rendered more than twenty years of continuous service. Esso International denied Millares request for
optional retirement on the following grounds, to wit: (1) he was employed on a contractual basis; (2) his
contract of enlistment (COE) did not provide for retirement before the age of sixty years; and (3) he did not
comply with the requirement for claiming benefits under the CEIP, i.e., to submit a written advice to the
company of his intention to terminate his employment within thirty days from his last disembarkation date.
Subsequently, after failing to return to work after the expiration of his leave of absence, Millares was
dropped from the roster of crew members effective September 1, 1989. On the other hand, petitioner
Lagda was employed by Esso International as wiper/oiler in 1969. He was promoted as Chief Engineer in
1980, a position he continued to occupy until his last COE expired in 1989.

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In 1989, Lagda likewise filed a leave of absence and applied to avail of the optional early retirement plan
in view of his twenty years continuous service in the company. Trans-global similarly denied Lagdas request
for availment of the optional early retirement scheme on the same grounds upon which Millares request
was denied. Unable to return for contractual sea service after his leave of absence expire, Lagda was also
dropped from the roster of crew members effective September 1, 1989.Millares and Lagda filed a
complaint-affidavit for illegal dismissal and non-payment of employee benefits against private respondents
Esso International and Trans-Global before the POEA. The POEA rendered a decision dismissing the
complaint for lack of merit. On appeal, NLRC affirmed the decision of the POEA dismissing the complaint.
NLRC ratiocinated that Millares and Lagda, as seamen and overseas contract workers are not covered by
the term regular employment as defined under Article 280 of the Labor Code. The POEA, which is tasked
with protecting the rights of the Filipino workers for overseas employment to fair and equitable recruitment
and employment practices and to ensure their welfare, prescribes a standard employment contract for
seamen on board ocean-going vessels for a fixed period but in no case to exceed twelve months.

Issue:
Whether or not seafarers are considered regular employees under Article 280 of the Labor Code.

Ruling:
The court ruled that Seafarers are considered contractual employees. They cannot be considered as
regular employees under Article 280 of the Labor Code. Their employment is governed by the contracts
they sign everytime they are rehired and their employment is terminated when the contract expires. Their
employment is contractually fixed for a certain period of time. They fall under the exception of Article 280
whose 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 the employment is for the duration of the season.

Tierra International Construction Corporation vs NLRC, et al.
April 2, 1996 GR No. 101825, 256 SCRA 36

Facts:
Private respondents Manuel Cruz, Raymundo Nepa and Rolando Carino were recruited by the petitioner
Tierra International Construction to work as a transit mixer, truck driver and batch plant operator. Private
respondents had barely started work in the foreign assignment when they had a disagreement with the
plant supervisor, Engr. Terrance Filby. What exactly they had been ordered to do which they refused to
execute whether to dig and excavate canals and to haul bags of cement, cement pipes, heavy
plumbing equipments and large electric cables, as they claimed, or only to do household chores consisting
of keeling the workplace clean, as the company alleges. The fact is that the private respondents refused to
work as ordered and for this, they were dismissed and sent back to the Philippines. The company offered to
pay the final fees representing their salaries but private respondents demanded as well as the payment of
their salaries corresponding to the balance of their employment contracts. Private respondents made their
formal demand, claiming that, in violation of their contract of employment, they had been required to
perform work not related to the jobs for which they had been hired. As their demand was denied, private
respondents filed a complaint for illegal dismissal with the POEA. They sought recovery of unpaid salaries


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and salaries corresponding to the unexpired portion of their employment contracts. Petitioners denied the
allegations of private respondents and claimed that the latters dismissal was for a cause. Petitioners

claimed that, private respondents were merely requested by the plant supervisor to do housekeeping job
since they were idle for the rest of the day. The POEA dismissed private respondents claim that they had
been required to do work other than that for which they had been hired. POEA said no evidence had
been presented to support this allegation, but finding that private respondents had not been paid their
salaries, it order petitioners their salaries. Private respondents appealed to the NLRC and in its decision
found that the private respondents to have been illegally dismissed.

Issue:
Whether private respondents were dismissed because they refuse to do work not according to their job
description, and whether the NLRC had jurisdiction over the case.

Held:
The private respondents are fully justified in refusing to do assignments not connected with the nature of
their engagements. The NLRC had jurisdiction, therefore the basis for the finding of the NLRC that private
respondents had been required to dig canals, make excavations, and haul construction materials. It is not
disputed that to make them do this would require them to do work not connected to their employment as
transit mixer, truck driver and batch operator. They were therefore fully justified in refusing to do the
assignment.

ANDRES E. DITAN vs. PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION ADMINISTRATOR, ET AL.
G.R. No. 79560 December 3, 1990

Facts:
Andres E. Ditan was recruited by private respondent Intraco Sales Corporation, through its local agent, Asia
World, the other private respondent, to work in Angola as a welding supervisor. The contract was for nine
months, at a monthly salary of US$1,100.00 or US$275.00 weekly, and contained the required standard
stipulations for the protection of our overseas workers.

Arriving on November 30, 1984, in Luanda, capital of Angola, the petitioner was assigned as an ordinary
welder in the INTRACO central maintenance shop from December 2 to 25, 1984. On December 26, 1984,
he was informed, to his distress that would be transferred to Kafunfo, some 350 kilometers east of Luanda.
This was the place where, earlier that year, the rebels had attacked and kidnapped expatriate workers,
killing two Filipinos in the raid. Naturally, Ditan was reluctant to go. However, he was assured by the
INTRACO manager that Kafunfo was safe and adequately protected by government troops; moreover
and this was more persuasive he was told he would be sent home if he refused the new assignment. In
the end, with much misgiving, he relented and agreed.

On December 29, 1984, his fears were confirmed. The Unita rebels attacked the diamond mining site where
Ditan was working and took him and sixteen other Filipino hostages, along with other foreign workers. The
rebels and their captives walked through jungle terrain for 31 days to the Unita stronghold near the
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They trekked for almost a thousand kilometers. They subsisted on meager fare. Some of them had diarrhea.
Their feet were blistered. It was only on March 16, 1985, that the hostages were finally released after the
intercession of their governments and the International Red Cross. Six days later, Ditan and the other Filipino
hostages were back in the Philippines.

The repatriated workers had been assured by INTRACO that they would be given priority in re-employment
abroad, and eventually eleven of them were taken back. Ditan having been excluded, he filed in June
1985 a complaint against the private respondents for breach of contract and various other claims.
Specifically, he sought the amount of US$4,675.00, representing his salaries for the unexpired 17 weeks of his
contract; US$25,000.00 as war risk bonus; US$2,196.50 as the value of his lost belongings; US$1,100 for unpaid
vacation leave; and moral and exemplary damages in the sum of US$50,000.00, plus attorney's fees.

All these claims were dismissed by POEA Administrator Tomas D. Achacoso in a decision dated January 27,
1987. 2 This was affirmed in toto by respondent NLRC in a resolution dated July 14, 1987, 3 which is now
being challenged in this petition.

Issue:
Whether or not Ditan is entitled to any relief and his case is under the jurisdiction of NLRC?

Held:
Yes. The fact that stands out most prominently in the record is the risk to which the petitioner was subjected
when he was assigned, after his reluctant consent, to the rebel-infested region of Kafunfo. This was a
dangerous area.

The petitioner had gone to that foreign land in search of a better life that he could share with his loved
ones after his stint abroad. That choice would have required him to come home empty-handed to the
disappointment of an expectant family.

It is not explained why the petitioner was not paid for the unexpired portion of his contract which had 17
more weeks to go. The hostages were immediately repatriated after their release, presumably so they
could recover from their ordeal. The promise of INTRACO was that they would be given priority in re-
employment should their services be needed. In the particular case of the petitioner, the promise was not
fulfilled. It would seem that his work was terminated, and not again required, because it was really
intended all along to assign him only to Kafunfo.

The private respondents stress that the contract Ditan entered into called for his employment in Angola,
without indication of any particular place of assignment in the country. This meant he agreed to be
assigned to work anywhere in that country, including Kafunfo. When INTRACO assigned Ditan to that place
in the regular course of its business, it was merely exercising its rights under the employment contract that
Ditan had freely entered into. Hence, it is argued, he cannot now complain that there was a breach of
that contract for which he is entitled to monetary redress.

The private respondents also reject the claim for war risk bonus and point out that POEA Memorandum
Circular No. 4, issued pursuant to the mandatory war risk coverage provision in Section 2, Rule VI, of the


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POEA Rules and Regulations on Overseas Employment, categorizing Angola as a war risk took effect only
on February 6, 1985"after the petitioner's deployment to Angola on November 27, 1984." Consequently, the
stipulation could not be applied to the petitioner as it was not supposed to have a retroactive effect.

The paramount duty of this Court is to render justice through law. The law in this case allows two opposite
interpretations, one strictly in favor of the employers and the other liberally in favor of the worker. The
choice is obvious. We find, considering the totality of the circumstances attending this case, that the
petitioner is entitled to relief. The petitioner went to Angola prepared to work as he had promised in
accordance with the employment contract he had entered into in good faith with the private

respondents. Over his objection, he was sent to a dangerous assignment and as he feared was taken
hostage in a rebel attack that prevented him from fulfilling his contract while in captivity. Upon his release,
he was immediately sent home and was not paid the salary corresponding to the unexpired portion of his
contract. He was immediately repatriated with the promise that he would be given priority in re-
employment, which never came. To rub salt on the wound, many of his co-hostages were re-employed as
promised. The petitioner was left only with a bleak experience and nothing to show for it except dashed
hopes and a sense of rejection.

Under the policy of social justice, the law bends over backward to accommodate the interests of the
working class on the humane justification that those with less privileges in life should have more privileges in
law.

WHEREFORE, the challenged resolution of the NLRC is hereby MODIFIED. The private respondents are
hereby DIRECTED jointly and severally to pay the petitioner: a) the current equivalent in Philippine pesos of
US$4,675.00, representing his unpaid salaries for the balance of the contract term; b) nominal damages in
the amount of P20,000.00; and c) 10% attorney's fees. No costs.

Vinta Maritime Co., Inc. vs. NLRC
(G.R. No. 113911 January 23, 1998)

Facts:
On April 20, 1987, Leonides C. Basconcillo, herein private respondent, filed a complaint with the Philippine
Overseas Employment Administration (POEA) Workers' Assistance and Adjudication Office for illegal
dismissal against Vinta Maritime Co., Inc. and Elkano Ship Management, Inc., herein petitioners. In their
answer, petitioners alleged that private respondent was dismissed for his gross negligence and
incompetent performance as chief engineer of the M/V Boracay. March 9, 1990, POEA Administrator
Tomas D. Achacoso ruled that private respondent was illegally dismissed. The NLRC affirmed the decision of
the POEA.

Issue:
Whether the Commission erred in affirming the decision of the POEA.

Held:


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Using these legal criteria, we hold that private respondent was illegally dismissed. No notice was ever given
to him prior to his dismissal. This fact alone disproves petitioners' allegation that "private respondent was
given fair warning and enough opportunity to explain his side [regarding] the incidents that led to his
dismissal." These requisites cannot be replaced as they are not mere technicalities, but requirements of due
process to which every employee is entitled to ensure that the employer's prerogative to dismiss is not
exercised arbitrarily. Illegally dismissed workers are entitled to the payment of their salaries corresponding to
the unexpired portion of their employment where the employment is for a definite period. Conformably,
the administrator and the Respondent Commission properly awarded private respondent salaries for the
period beginning April 9, 1987, the date of his illegal dismissal, until February 18, 1988, the expiration of his
contract. WHEREFORE, the petition is hereby DISMISSED. The challenged Decision and Resolution are
AFFIRMED. Costs against petitioners.

R.A. 8042 Migrant Workers Act (Amended by REPUBLIC ACT No. 10022)

MARSAMAN MANNING AGENCY, INC. and DIAMANTIDES MARITIME, INC., vs. NATIONAL LABOR RELATIONS
COMMISSION ET AL.

MARSAMAN MANNING AGENCY, INC. (MARSAMAN) and its foreign principal DIAMANTIDES MARITIME, INC.
(DIAMANTIDES) assail the Decision of public respondent National Labor Relations Commission dated 16
September 1996 as well as its Resolution dated 12 November 1996 affirming the Labor Arbiter's decision
finding them guilty of illegal dismissal and ordering them to pay respondent Wilfredo T. Cajeras salaries
corresponding to the unexpired portion of his employment contract, plus attorney's fees.

Private respondent Wilfredo T. Cajeras was hired by petitioner MARSAMAN, the local manning agent of
petitioner DIAMANTIDES, as Chief Cook Steward on the MV Prigipos, owned and operated by
DIAMANTIDES, for a contract period of ten (10) months with a monthly salary of US$600.00, evidenced by a
contract between the parties dated 15 June 1995. Cajeras started work on 8 August 1995 but less than two
(2) months later, or on 28 September 1995, he was repatriated to the Philippines allegedly by mutual
consent.

On 17 November 1995 private respondent Cajeras filed a complaint for illegal dismissal against petitioners
with the NLRC National Capital Region Arbitration Branch alleging that he was dismissed illegally, denying
that his repatriation was by mutual consent, and asking for his unpaid wages, overtime pay, damages, and
attorneys fees.[1] Cajeras alleged that he was assigned not only as Chief Cook Steward but also as
assistant cook and messman in addition to performing various inventory and requisition jobs. Because of his
additional assignments he began to feel sick just a little over a month on the job constraining him to request
for medical attention. He was refused at first by Capt. Kouvakas Alekos, master of the MV Prigipos, who just
ordered him to continue working. However a day after the ships arrival at the port of Rotterdam, Holland,
on 26 September 1995 Capt. Alekos relented and had him examined at the Medical Center for Seamen.
However, the examining physician, Dr. Wden Hoed, neither apprised private respondent about the
diagnosis nor issued the requested medical certificate allegedly because he himself would forward the
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results to private respondents superiors. Upon returning to the vessel, private respondent was
unceremoniously ordered to prepare for immediate repatriation the following day as he was said to be
suffering from a disease of unknown origin.

MARSAMAN and DIAMANTIDES, on the other hand, denied the imputation of illegal dismissal. They alleged
that Cajeras approached Capt. Alekos on 26 September 1995 and informed the latter that he could not
sleep at night because he felt something crawling over his body. Furthermore, Cajeras reportedly declared
that he could no longer perform his duties and requested for repatriation. The following paragraph in the
vessel's Deck Log was allegedly entered by Capt. Alekos, to wit:

Private respondent was then sent to the Medical Center for Seamen at Rotterdam where he was examined
by Dr. Wden Hoed whose diagnosis appeared in a Medical Report as paranoia and other mental
problems.[5] Consequently, upon Dr. Hoeds recommendation, Cajeras was repatriated to the Philippines
on 28 September 1995.

WHEREFORE, judgment is hereby rendered declaring the repatriation and dismissal of complaint Wilfredo T.
Cajeras as illegal and ordering respondents Marsaman Manning Agency, Inc. and Diamantides Maritime,
Inc. to jointly and severally pay complainant the sum of USD 5,100.00 or its peso equivalent at the time of
payment plus USD 510.00 as 10% attorneys fees it appearing that complainant had to engage the service
of counsel to protect his interest in the prosecution of this case.

1. The employment of the seaman shall cease upon expiration of the contract period indicated in the
Crew Contract unless the Master and the Seaman, by mutual consent, in writing, agree to an early
termination x x x x (underscoring ours).

Clearly, under the foregoing, the employment of a Filipino seaman may be terminated prior to the
expiration of the stipulated period provided that the master and the seaman (a) mutually consent thereto
and (b) reduce their consent in writing.

The Labor Arbiter, rationalizing that the aforesaid law did not apply since it became effective only one (1)
month after respondent's overseas employment contract was entered into on 15 June 1995, simply
awarded private respondent his salaries corresponding to the unexpired portion of his employment
contract, i.e., for 8.6 months. The NLRC affirmed the award and the Office of the Solicitor General (OSG)
fully agreed. But petitioners now insist that Sec. 10, RA 8042 is applicable because although private
respondents contract of employment was entered into before the law became effective his alleged cause
of action, i.e., his repatriation on 28 September 1995 without just, valid or authorized cause, occurred when
the law was already in effect. Petitioners' purpose in so arguing is to invoke the law in justifying a lesser
monetary award to private respondent, i.e., salaries for three (3) months only pursuant to the last portion of
Sec. 10 as opposed to the salaries for 8.6 months awarded by the Labor Arbiter and affirmed by the NLRC.

HELD:
the questioned Decision and Resolution dated 16 September 1996 and 12 November 1996, respectively, of
public respondent National Labor Relations Commission are AFFIRMED. Petitioners MARSAMAN MANNING
AGENCY, INC., and DIAMANTIDES MARITIME, INC., are ordered, jointly and severally, to pay private


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respondent WILFREDO T. CAJERAS his salaries for the unexpired portion of his employment contract or
USD$5,100.00, reimburse the latter's placement fee with twelve percent (12%) interest per annum
conformably with Sec. 10 of RA 8042, as well as attorney's fees of ten percent (10%) of the total monetary
award. Costs against petitioners.

ASIAN CENTER FOR CAREER AND EMPLOYMENT SYSTEM AND SERVICES, INC. (ACCESS) vs NLRC ET AL.
[G.R. No. 131656. October 12, 1998]

FACTS:
Petitioner hired respondent IBNO MEDIALES to work as a mason in Jeddah, Saudi Arabia, with a monthly
salary of 1,200 Saudi Riyals (SR) with a term of contract for two (2) years, from February 28, 1995 until
February 28, 1997. On May 26, 1996, respondent applied with petitioner for vacation leave with pay which
he earned after working for more than a year. His application for leave was granted. While en route to the
Philippines, his co-workers informed him that he has been dismissed from service. The information turned
out to be true. On June 17, 1996, respondent filed a complaint with the labor arbiter for illegal dismissal,
non-payment of overtime pay, refund of transportation fare, illegal deductions, non-payment of 13
th
month
pay and salary for the unexpired portion of his employment contract.

On March 17, 1997, the labor arbiter found petitioner guilty of illegal dismissal. In the dispositive portion or
the fallo, the Labor Arbiter ordered the respondent ACCESS and/or ABDULLAH LELINA to pay the
complainant the amount of SR 13,200 representing complainants payment for the unexpired portion of his
contract, refund of the illegality deducted amount less P5,000.00, the legally allowed placement fee and
attorneys fees equivalent to ten percent (10%) of the judgment award or the amount of SR 1,320. It is
noteworthy, however, that in the body of his decision, the labor arbiter applied Section 10 R.A. 8042,
i[2]
the
law relative to the protection of Filipino overseas-workers, and computed private respondents salary for
the unexpired portion of his contract as follows: SR1,200 x 3 months = SR3,600.

On appeal by petitioner, the NLRC affirmed the factual findings of the labor arbiter but modified the
appealed decision by deleting the order of refund of excessive placement fee for lack of jurisdiction.
Petitioner moved for reconsideration with respect to the labor arbiters award of SR13, 200 in the dispositive
portion of the decision, representing respondents salary for the unexpired portion of his contract invoking
Section 10 R.A. 8042. Petitioner urged that its liability for respondents salary is for only three (3) months.
Petitioner claimed that it should pay only SR 3.600 (SR 1,200 x 3 months) for the unexpired portion of
respondents employment and SR360 (10% of SR3,600) for attorneys fees. The NLRC denied petitioners
motion. It ruled that R.A. 8042 does not apply as respondents employment which started in February 1995
occurred prior to its effectivity on July 15, 1995. Hence, this petition for certiorari.

ISSUE:
Whether or not R.A. 8042 applies to the case of the respondent and in case of conflict between the
dispositive portion or the fallo and the body of the decision, which one shall prevail.

HELD:
As a rule, jurisdiction is determined by the law at the time of the commencement of the action. In the case
at bar, private respondents cause of action did not accrue on the date of his date of his employment or


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on February 28, 1995. His cause of action arose only from the-time he was illegally dismissed by petitioner
from service in June 1996, after his vacation leave expired. It is thus clear that R.A. 8042 which took effect a
year earlier in July 1995 applies to the case at bar.

Under Section 10 of R.A. 8042, a worker dismissed from overseas employment without just, valid or
authorized cause is entitled to his salary for the unexpired portion of his employment contract or for three
(3) months for every year of the unexpired term, whichever is less.

In the case at bar, the unexpired portion of private respondents employment contract is eight (8) months.
Private respondent should therefore be paid his basic salary corresponding to three (3) months or a total of
SR3,600, which is the same computation was made by the labor arbiter in the body of his decision. Despite
said computation in the body of the decision, however, the labor arbiter awarded higher sum (SR13,200) in
the dispositive portion.

The general rule is that where there is a conflict between the dispositive portion or the fallo and the body of
the decision, the fallo controls. This rule rests on the theory that the fallo is the final order while the opinion
in the body is merely a statement ordering nothing.

However, where the inevitable conclusion from the body of the decision is so clear as to show that there
was a mistake in the dispositive portion, the body of the decision will prevail. As in this case, the labor
arbiters award of a higher amount in the dispositive portion was clearly an error for there is nothing in the

text of the decision which support the award of said higher amount. Hence, the correct award to private
respondent for the unexpired portion of his employment contract is SR3,600.

The decision of the public respondent National Labor Relations Commission, dated October 14, 1997, is
AFFIRMED with modifications: petitioner is ordered to pay private respondent IBNO MEDIALES the peso
equivalent of the amounts of SR3,600 for the unexpired portion of his employment contract, and SR360 for
attorneys fees. No costs.

ATHENNA INTERNATIONAL MANPOWER SERVICES, INC., vs. NONITO VILLANOS
G.R. No. 151303 April 15, 2005
R.A. 8042 Migrant Workers Act

Facts:
The petitioner is a domestic corporation engaged in recruitment and placement of workers for overseas
employment. Respondent applied to work overseas as caretaker thru petitioner. The petitioner asked for a
placement fee amounting to P100,000 but the respondent begged to reduced the fee and it was reduced
to P94,000 with the petitioner paying only P30,000 and the remaining will be paid through salary
deductions. Upon arrival on Taiwan, he was assigned to a mechanical shop, owned by Hsien, as a
hydraulic installer/repairer for car lifters, instead of the job for which he was hired. He did not, however,
complain because he needed money to pay for the debts he incurred back home. Barely a month after


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his placement, he was terminated by Hsien and received his salary and instructed for departure to the
Philippines. Upon arrival, the respondent went to petitioners office and demanded for the reimbursement
of P30,000 but instead the petitioner gave him a summary of expenses relating his deployment. The
respondent filed a complaint before Adjudication Office of the POEA. However, because of financial
constraints, he had to go home to Polanco, Zamboanga del Norte and filed a complaint against petitioner
for illegal dismissal, violation of contract, and recovery of unpaid salaries and other benefi ts before the
NLRC Sub-Regional Arbitration Branch No. 9, Dipolog City. In its defense, petitioner alleged that under the
employment contract, respondent was to undergo a probationary period of forty (40) days. However, at
the job site, respondent was found to be unfit for his work, thus he resigned from his employment and
requested for his repatriation signing a statement to that effect. The Labor Arbiter rendered a Decision
holding petitioner and Wei Yu Hsien solidarily liable for the wages representing the unserved portion of the
employment contract, the amount unlawfully deducted from respondents monthly wage, moral
damages, exemplary damages and attorneys fees. On appeal, the NLRC reversed the Labor Arbiter and
dismissed the complaint for lack of merit. It found that respondent was not at all dismissed, much less
illegally. Respondent seasonably filed a motion for reconsideration, which the NLRC denied in its second
resolution. respondent appealed to the Court of Appeals and granted the petition and reversing the
questioned resolutions of the NLRC.

Issue:
1. Did the respondent voluntarily resign or was he illegally dismissed?
2. Assuming that the respondent was illegally dismissed, was it proper for the Court of Appeals to affirm in
toto the monetary awards in the Decision of the Labor Arbiter?

Held:
The SC denied the petition and affirmed with modification the resolution by the Court of Appeals. On the
first issue, An employee voluntarily resigns when he finds himself in a situation where he believes that
personal reasons cannot be sacrificed in favor of the exigency of the service; thus, he has no other choice
but to disassociate himself from his employment. In this case respondent avers that petitioner did not
explain why he was unqualified nor inform of any qualifications needed for the job prior to his deployment
as mandated by Art 281[9] of the Labor Code and failed to prove the legality of the dismissal, despite the
fact that the burden of proof lies on the employment and recruitment agency. On the second issue, the SC
declared the petitioner solidarily liable with Wei Yu Hsien to pay the unexpired portion based on Sec 10 RA
8042. Lastly, because of the breach of contract and bad faith alleged against the employer and the
petitioner, we must sustain the award of P50,000 in moral damages and P50,000 as exemplary damages, in
addition to attorneys fees of ten percent (10%) of the aggregate monetary awards.

Death and Other Benefits, Basis of Compensation

EASTERN SHIPPING LINES, INC., vs. PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA)
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G.R. No. 76633 October 18, 1988

FACTS:
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo,
Japan. His widow sued for damages under Executive Order No. 797 and Memorandum Circular No. 2 of
the POEA. The petitioner, as owner of the vessel, argued that the complaint was cognizable not by the
POEA but by the Social Security System and should have been filed against the State Insurance Fund. The
POEA nevertheless assumed jurisdiction and after considering the position papers of the parties ruled in
favor of the complainant. The award consisted of P180,000.00 as death benefits and P12,000.00 for burial
expenses.

ISSUE:
Whether Saco was an overseas worker or a domestic worker.

RULING:
We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an overseas employee
of the petitioner at the time he met with the fatal accident in Japan in 1985.

Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined as
"employment of a worker outside the Philippines, including employment on board vessels plying
international waters, covered by a valid contract. A contract worker is described as "any person working
or who has worked overseas under a valid employment contract and shall include seamen" or "any person
working overseas or who has been employed by another which may be a local employer, foreign
employer, principal or partner under a valid employment contract and shall include seamen." These
definitions clearly apply to Vitaliano Saco for it is not disputed that he died while under a contract of
employment with the petitioner and alongside the petitioner's vessel, the M/V Eastern Polaris, while berthed
in a foreign country.

It is worth observing that the petitioner performed at least two acts which constitute implied or tacit
recognition of the nature of Saco's employment at the time of his death in 1985. The first is its submission of
its shipping articles to the POEA for processing, formalization and approval in the exercise of its regulatory
power over overseas employment under Executive Order NO. 797. The second is its payment of the
contributions mandated by law and regulations to the Welfare Fund for Overseas Workers, which was
created by P.D. No. 1694 "for the purpose of providing social and welfare services to Filipino overseas
workers."

It is not denied that the private respondent has been receiving a monthly death benefit pension of P514.42
since March 1985 and that she was also paid a P1,000.00 funeral benefit by the Social Security System. In
addition, as already observed, she also received a P5,000.00 burial gratuity from the Welfare Fund for
Overseas Workers. These payments will not preclude allowance of the private respondent's claim against
the petitioner because it is specifically reserved in the standard contract of employment for Filipino seamen
under Memorandum Circular No. 2, Series of 1984. Said provisions are manifestations of the concern of the
State for the working class, consistently with the social justice policy and the specific provisions in the
Constitution for the protection of the working class and the promotion of its interest.


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Inter Orient Maritime Enterprises Inc, et al vs NLRC
G.R. No.: G.R. No. 115497 September 16, 1996

Facts:
The instant petition seeks the reversal and/or modification of the Resolution dated March 30, 1994 of public
respondent National Labor Relations Commission dismissing the appeals of petitioners and affirming the
decision dated November 16, 1992 of Philippine Overseas Employment Administration (POEA) Administrator
Felicisimo C. Joson, This is a claim for death compensation benefits filed by Constancia Pineda as heir of
her deceased son, seaman Jeremias Pineda, against Inter orient Maritime Enterprises, Inc. and its foreign
principal, Fircroft Shipping Corporation and the Times Surety and Insurance Co., Inc. The following facts
were found by the POEA Administrator. On September 28, 1989, he finished his contract and was
discharged from the port of Dubai for repatriation to Manila; that his flight schedule from Dubai to the
Philippines necessitated a stopover at Bangkok, Thailand, and during said stopover he disembarked on his
own free will and failed to join the connecting flight to Hongkong with final destination to Manila; that on
October 5, 1990, it received a fax transmission from the Department of Forei gn Affairs to the effect that
Jeremias Pineda was shot by a Thai Officer on duty on October 2, 1989 at around 4:00 P.M.; that the police
report submitted to the Philippine Embassy in Bangkok confirmed that it was Pineda who "approached and
tried to stab the police sergeant with a knife and that therefore he was forced to pull out his gun and shot
Pineda"Petitioner contends that they are not liable to pay any death/burial benefits pursuant to the
provisions of Par. 6, Section C. Part II, POEA Standard Format of Employment which state(s) that "no
compensation shall be payable in respect of any injury, (in)capacity, disability or death resulting from a
willful (sic) act on his own life by the seaman"; that the deceased seaman died due to his own willful (sic)
act in attacking a policeman in Bangkok who shot him in self-defense. After the parties presented their
respective evidence, the POEA Administrator rendered his decision holding petitioners liable for death
compensation benefits and burial expenses. Petitioners appealed the POEA decision to the public
respondent. In a Decision dated March 30, 1994, public respondent upheld the POEA. Thus, this recourse to
this Court by way of a special civil action for certiorari per Rule 65 of the Rules of Court.

Issue:
Whether the petitioners can be held liable for the death of seaman Jeremias Pineda?

Held:
Yes, The petitioners contention that the assailed Resolution has no factual and legal bases is belied by the
adoption with approval by the public respondent of the findings of the POEA Administrator, which recites
at length the reasons for holding that the deceased Pineda was mentally sick prior to his death and
concomitantly, was no longer in full control of his mental faculties. In this instance, seaman Pineda, who
was discharged in Dubai, a foreign land, could not reasonably be expected to immediately resort to and
avail of psychiatric examination, assuming that he was still capable of submitting himself to such
examination at that time, not to mention the fact that when he disembarked in Dubai, he was already
discharged and without employment his contract having already run its full term and he had already
been put on a plane bound for the Philippines. Such mental disorder became evident when he failed to
join his connecting flight to Hongkong, having during said stopover wandered out of the Bangkok airport's
immigration area on his own. This Court agrees with the POEA Administrator that seaman Pineda was no
longer acting sanely when he attacked the Thai policeman. The report of the Philippine Embassy in
Thailand dated October 9, 1990 depicting the deceased's strange behavior shortly before he was shot


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dead, after having wandered around Bangkok for four days, clearly shows that the man was not in full
control of his own self.

The POEA Administrator ruled, and this Court agrees, that since Pineda attacked the Thai policeman when
he was no longer in complete control of his mental faculties, the aforequoted provision of the Standard
Format Contract of Employment exemption the employer from liability should not apply in the instant case.
Firstly, the fact that the deceased suffered from mental disorder at the time of his repatriation means that
he must have been deprived of the full use of his reason, and that thereby, his will must have been
impaired, at the very least. Thus, his attack on the policeman can in no wise be characterized as a
deliberate, willful or voluntary act on his part. Secondly, and apart from that, we also agree that in light of
the deceased's mental condition, petitioners "should have observed some precautionary measures and
should not have allowed said seaman to travel home alone", and their failure to do so rendered them
liable for the death of Pineda. Petitioners further argue that the cause of Pineda's death "is not one of the
occupational diseases listed by law", and that in the case of De Jesus vs. Employee's Compensation
Commission, this Court held that ". . . for the sickness and the resulting disability or death to be
compensable, the sickness must be the result of an occupational disease listed under Annex 'A' of the Rules
(the Amended Rules on Employee's Compensation) with the conditions set therein satisfied; otherwise,
proof must be shown that the risk of contracting the disease is increased by the working conditions. The
foreign employer may not have been obligated by its contract to provide a companion for a returning
employee, but it cannot deny that it was expressly tasked by its agreement to assure the safe return of said
worker. The uncaring attitude displayed by petitioners who, knowing fully well that its employee had been
suffering from some mental disorder, nevertheless still allowed him to travel home alone, is appalling to say
the least. Such attitude harks back to another time when the landed gentry practically owned the serfs,
and disposed of them when the latter had grown old, sick or otherwise lost their usefulness. WHEREFORE,
premises considered, the petition is hereby DISMISSED and the Decision assailed in this
petition is AFFIRMED. Costs against petitioners.

NORSE MANAGEMENT CO. (PTE) and PACIFIC SEAMEN SERVICES, INC. VS NATIONAL SEAMEN BOARD, ET AL.
G.R. No. L-54204 September 30, 1982

Facts: Napoleon B. Abordo, the deceased husband of private respondent Restituta C. Abordo, was the
Second Engineer of M.T. "Cherry Earl" when he died from an apoplectic stroke in the course of his

employment with petitioner NORSE MANAGEMENT COMPANY (PTE). The M.T. "Cherry Earl" is a vessel of
Singaporean Registry. The late Napoleon B. Abordo at the time of his death was receiving a monthly salary
of US$850.00. In her complaint for "death compensation benefits, accrued leave pay and time-off
allowances, funeral expenses, attorney's fees and other benefits and reliefs available in connection with
the death of Napoleon B. Abordo," filed before the National Seamen Board, Restituta C. Abordo alleged
that the amount of compensation due her from petitioners Norse Management Co. (PTE) and Pacific
Seamen Services, Inc., principal and agent, respectively, should be based on the law where the vessel is
registered. On the other hand, petitioners contend that the law of Singapore should not be applied in this
case because the National Seamen Board cannot take judicial notice of the Workmen's Insurance Law of
Singapore. As an alternative, they offered to pay private respondent Restituta C. Abordo the sum of


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P30,000.00 as death benefits based on the Board's Memorandum Circular No. 25 which they claim should
apply in this case.

Issue:
Whether or not the National Seamen Board had proper jurisdiction over the case at bar.

Held:
Yes, According to Article 20 of the Labor Code of the Philippines, provides that the National Seamen Board
has original and exclusive jurisdiction over all matters or cases including money claims, involving employer-
employee relations, arising out of or by virtue of any law or contracts involving Filipino seamen for overseas
employment. Finally, Article IV of the Labor Code provides that "all doubts in the implementation and
interpretation of the provisions of this code, including its implementing rules and resolved in favor of labor.

NFD INTERNATIONAL MANNING AGENTS and BARBER INTERNATIONAL VS THE NATIONAL LABOR RELATIONS
COMMISSION, ET AL.
G.R. No. 116629 January 16, 1998

Facts:
On July 5, 1991, private respondent Nelia Misada received notice that her husband, Eduardo Misada, died
on June 28, 1991 while on board the M/V Pan Victoria. On July 12 1991, private respondent Himaya
Envidiado likewise received notice that her husband, Enrico Envidiado, died on board the vessel. As heirs of
the deceased seamen, private respondents, in their behalf and in behalf of their minor children, filed for
death compensation benefits under the Philippine Overseas Employment Agency (POEA) Standard
Contract of Employment and the Norwegian National Insurance Scheme (NIS) for Filipino Officers. Their
claims were denied by petitioners. Private respondents filed separate complaints before the POEA
Adjudication Office. They prayed for U.S. $13,000.00 each as death compensation under the POEA
Standard Contract of Employment and U.S. $30,000.00 for each wife and U.S. $8,000.00 for each child
under eighteen years under the Norwegian NIS.

The petitioners claimed that private respondents are not entitled to death benefits on the ground that the
seamen's deaths were due to their own willful act. They alleged that the deceased were among three (3)
Filipino seamen who implanted fragments of reindeer horn in their respective sexual organs on or about
June 18, 1991; that due to the lack of sanitary conditions at the time and place of implantation, all three
seamen suffered "severe tetanus" and "massive viral infections;" that Misada and Envidiado died within days
of the other; that the third seaman, Arturo Fajardo, narrowly missed death only because the vessel was at
port in Penang, Malaysia at the time the tetanus became critical.

Issue:
Whether or not the heirs of the private petitioners are entitled to the death compensation benefits.

Held:
Yes. the petition is dismissed and the decision of respondent National Labor Relations Commission in NLRC
CA No. 006490-94 is affirmed As correctly found by respondent Commission, petitioners' evidence
insufficiently proves the fact that the deaths of the two seamen were caused by their own willful and


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deliberate act. And even if the seamen implanted fragments of reindeer horn in their sex organs, the
evidence does not substantially prove that they contracted tetanus as a result of the unsanitary surgical
procedures they performed on their bodies. Neither does the evidence show that the tetanus was the
direct cause of their deaths.

Overseas Compensation Benefits in Dollars

PHILIPPINE INTERNATIONAL SHIPPING CORPORATION vs. HONORABLE NATIONAL LABOR RELATIONS
COMMISSION, ET AL.
G.R. No. L-63535 May 27, 1985

FACTS:
The case at bar stems from a claim for disability compensation benefits and hospitalization expenses under
employment contract, filed by private respondent herein, Brigido Samson, against the petitioner before the
National Seaman's Board (NSB). On April 2, 1981, a decision was rendered on by the Executive Director of
the NSB, ordering petitioner herein to pay US $3,800 for disability compensation benefits. Petitioner argued
that there was already a previous payment to satisfy such claims for a total of 18,000 Php.

ISSUE:
WHETHER OR NOT THERE WAS ERROR IN ORDERING PAYMENT OF AWARD FOR DAMAGES IN DOLLARS.

HELD:
While it is true that Republic Act No. 529 makes it unlawful to require payment of domestic obligations in
foreign currency, this particular statute is not applicable to the case at bar. A careful reading of the
decision rendered by the Executive Director of the NSB dated April 2, 1981 and which led to the Writ of
Execution protested to by petitioner, will readily disclose that the award to the private respondent does not
compel payment in dollar currency but in fact expressly allows payment of "its equivalent in Philippine
currency." Moreover, as pointed out by public respondent, without any subsequent controversion
interposed by petitioner, the fixing of the award in dollars was based on the parties employment contract,
stipulating wages and benefits in dollars since private respondent was engaged in an overseas seaman on
board petitioner's foreign vessel. (Comment of respondent NLRC to the Petition, pg. 10, Rollo, 49)

Article 20: National Seamen Board

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ART. 20. National Seamen Board. - (a) A National Seamen Board is hereby created which shall develop and
maintain a comprehensive program for Filipino seamen employed overseas. It shall have the power and
duty:
1. To provide free placement services for seamen;
2. To regulate and supervise the activities of agents or representatives of shipping companies in the hiring
of seamen for overseas employment and secure the best possible terms of employment for contract
seamen workers and secure compliance therewith;
3. To maintain a complete registry of all Filipino seamen.
(b) The Board shall have original and exclusive jurisdiction over all matters or cases including money claims,
involving employer-employee relations, arising out of or by virtue of any law or contracts involving Filipino
seamen for overseas employment. The decisions of the Board shall be appealable to the
National Labor Relations Commission upon the same grounds provided in Article 223 hereof. The decisions
of the National Labor Relations Commission shall be final and inappealable.

VIR-JEN Shipping and Marine Services, Inc., vs. NLRC
G.R. No. L-58011 & L-58012 November 18, 1983

Facts:
Certain seamen entered into a contract of employment for a 12-month period. Some three months after
the commencement of their employment, the seamen demanded a 50 % increase of their salaries and
benefits. The seamen demanded this increase while their vessel was en route to a port in Australia
controlled by thye International Transport Workers Federation (ITF), a militant international labor
organization with affiliates in different ports of the world, which reputedly can tie a vessel in a port by
preventing its loading and unloading unless it paid its seamen their prescribed ITF rates.

In reply, the agent of the owner of the vessel agreed to pay a 25% increase, but when the vessel arrived in
Japan shortly afterwards, the seamen were repatriated to Manila and their contract terminated. There is no
showing that the Seamen were given the opportunity to at least comment for the cancellation of their
contracts, although they had served only three (3) out of the twelve (12) months' duration of their
contracts.

The private respondents filed a complaint for illegal dismissal and non-payment of earned wages with the
National Seamen Board (NSB). The Vir-jen Shipping and Marine Services Inc. in turn filed a complaint for
breach of contract and recovery of excess salaries and overtime pay against the private respondents. On
July 2, 1980, the NSB rendered a decision declaring that the seamen breached their employment contracts
when they demanded and received from Vir-jen Shipping wages over and above their contracted rates.

The dismissal of the seamen was declared legal and the seamen were ordered suspended.
The seamen appealed the decision to the NLRC which reversed the decision of the on the ground that the
termination of the contract by the petitioner was without valid cause. Hence, the petition.

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Issue:
Whether or not the findings of the NSB is more credible than the NLRC that the seamen did not violate their
contract.

Held:
The decision sought to be reconsidered appears to be a deviation from the Court's decision, speaking
through the First Division, in Wallem Shipping, Inc. v. Hon. Minister of Labor (102 SCRA 835). Faced with two
seemingly conflicting resolutions of basically the same issue by its two Divisions, the Court. therefore,
resolved to transfer the case to the Court en banc. We sustain the decision of the respondent National
labor Relations Commission. The contention that manning industries in the Philippines would not survive if
the instant case is not decided in favor of the petitioner is not supported by evidence. The Wallem case
was decided on February 20, 1981. There have been no severe repercussions, no drying up of employment
opportunities for seamen, and none of the dire consequences repeatedly emphasized by the petitioner.

Why should Vir-jen be all exception?
Filipino seamen are admittedly as competent and reliable as seamen from any other country in the world.
Otherwise, there would not be so many of them in the vessels sailing in every ocean and sea on this globe.
It is competence and reliability, not cheap labor that makes our seamen so greatly in demand. Filipino
seamen have never demanded the same high salaries as seamen from the United States, the United
Kingdom, Japan and other developed nations. But certainly they are entitled to government protection
when they ask for fair and decent treatment by their employer.-, and when they exercise the right to
petition for improved terms of employment, especially when they feel that these are sub-standard or are
capable of improvement according to internationally accepted rules.

In the domestic scene, there are marginal employers who prepare two sets of payrolls for their employees
one in keeping with minimum wages and the other recording the sub-standard wages that the
employees really receive, The reliable employers, however, not only meet the minimums required by fair
labor standards legislation but even go way above the minimums while earning reasonable profits and
prospering. The same is true of international employment. There is no reason why this Court and the Ministry
of Labor and. Employment or its agencies and commissions should come out with pronouncements based
on the standards and practices of unscrupulous or inefficient shipowners, who claim they cannot survive
without resorting to tricky and deceptive schemes, instead of Government maintaining labor law and
jurisprudence according to the practices of honorable, competent, and law-abiding employers, domestic
or foreign.

Prescinding from the above, we now hold that neither the National Seamen Board nor the National Labor
Relations Commission should, as a matter of official policy, legitimize and enforce cubious arrangements
where shipowners and seamen enter into fictitious contracts similar to the addendum agreements or side
contracts in this case whose purpose is to deceive. The Republic of the Philippines and its ministries and
agencies should present a more honorable and proper posture in official acts to the whole world,
notwithstanding our desire to have as many job openings both here and abroad for our workers. At the
very least, such as sensitive matter involving no less than our dignity as a people and the welfare of our
workingmen must proceed from the Batasang Pambansa in the form of policy legislation, not from
administrative rule making or adjudication


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Suzara vs. Benipayo
G.R. No. 57999 VS. NLRC

Facts:
A group of Filipino seamen entered into separate contracts of employment with Magsaysay lines at
specified salary rates. When vessel reached Manila Magsaysay Lines demanded from Seamen over
payment made to them in Canada the seamen demanded and received additional wages prescribed by
the International Transport workers Federation (ITF) in amounts over and above the rates appearing in their
contract approved earlier by the National Seamen Board.

Issue:
Whether the Seaman demanded and received additional wages prescribes International Transport
Workers Federation. When the vessel docked at Nagoya , an NSB representative boarded the vessel He
called a meeting among seamen, an urged them to sign an agreement, which they did. It turned out that
in the agreement the following statement was inserted the amounts were received and held by crew
members in trust for ship owners when reached Manila Magsaysay Lines demanded from seamen the
overpayments made to them in Canada. When they refused, it filed charges against them before the NSB.
NSB declared the seamen guilty of breach of their employment contracts suspended the seamen for three
years, prompting the workers to bring the case up to the Supreme Court

Ruling:
The Supreme Court reversed and set aside the decision of NSB-National seamen Board and the NLRC, it
held that Seamen were not guilty of the offense for which they were charged and order Magsaysay Lines
to pay the seamen their earned but unpaid wages overtime pay Special Agreement that the parties
entered into Vancouver. The criminal cases were ordered dismissed. The Court reiterate the Vir-jen
pronouncements.

Invalid Side Agreement

CHAVEZ VS. BONTO-PEREZ, RAYALA et al.
G.R. No. 109808

Facts:
Petitioner entered into a standard employment contract for overseas employment as an entertainer in
Japan. The contract, as approved by POEA, had a duration of two to six months and the stipulated
monthly compensation was $1500. However, a side agreement was entered into by Petitioner with the
foreign employer through her local manager. Such agreement stipulated a lesser compensation and other
deductions. Petitioner pushed through with her foreign employment and worked for six months. Two years
upon her return, Petitioner filed a complaint of underpayment of wages.

Issue:
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Whether or not the side agreement entered into by the petitioner superseded the employment contract
previously entered into?

Held:
It was expressly stated in the employment contract that any changes or alterations made to any part of
said contract without prior approval from the POEA shall be null and void notwithstanding the fact the
employee had agreed to said contract.

Regulations of Recruitment and Placement Activities
(Article 25-39)

Chapter II
REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES

ART. 25. Private sector participation in the recruitment and placement of workers. - Pursuant to national
development objectives and in order to harness and maximize the use of private sector resources and
initiative in the development and implementation of a comprehensive employment program, the private
employment sector shall participate in the recruitment and placement of workers, locally and overseas,
under such guidelines, rules and regulations as may be issued by the Secretary of Labor.

ART. 26. Travel agencies prohibited to recruit. - Travel agencies and sales agencies of airline companies are
prohibited from engaging in the business of recruitment and placement of workers for overseas
employment whether for profit or not.

ART. 27. Citizenship requirement. - Only Filipino citizens or corporations, partnerships or entities at least
seventy-five percent (75%) of the authorized and voting capital stock of which is owned and controlled by
Filipino citizens shall be permitted to participate in the recruitment and placement of workers, locally or
overseas.

ART. 28. Capitalization. - All applicants for authority to hire or renewal of license to recruit are required to
have such substantial capitalization as determined by the Secretary ofLabor.

ART. 29. Non-transferability of license or authority. - No license or authority shall be used directly or indirectly
by any person other than the one in whose favor it was issued or at any place other than that stated in the
license or authority be transferred, conveyed or assigned to any other person or entity. Any transfer of
business address, appointment or designation of any agent or representative including the establishment of
additional offices anywhere shall be subject to the prior approval of the Department of Labor.

ART. 30. Registration fees. - The Secretary of Labor shall promulgate a schedule of fees for the registration of
all applicants for license or authority.

ART. 31. Bonds. - All applicants for license or authority shall post such cash and surety bonds as determined
by the Secretary of Labor to guarantee compliance with prescribed recruitment procedures, rules and
regulations, and terms and conditions of employment as may be appropriate.


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ART. 32. Fees to be paid by workers. - Any person applying with a private fee-charging employment
agency for employment assistance shall not be charged any fee until he has obtained employment
through its efforts or has actually commenced employment. Such fee shall be always covered with the
appropriate receipt clearly showing the amount paid. The Secretary of Labor shall promulgate a schedule
of allowable fees.

ART. 33. Reports on employment status. - Whenever the public interest requires, the Secretary of Labor may
direct all persons or entities within the coverage of this Title to submit a report on the status of employment,
including job vacancies, details of job requisitions, separation from jobs, wages, other terms and conditions
and other employment data.

Cases under the Jurisdiction of the POEA

Finman General Assurance vs. Innocencio
G.R. No. 90273-75, Nov. 15, 1989

FACTS:
Pan Pacific Overseas Recruiting Services, Inc. ("Pan Pacific") is a private, fee-charging, recruitment and
employment agency. In accordance with the requirements of Section 4, Rule II, Book II of the Rules and
Regulations of the Philippine Overseas Employment Administration (POEA), Pan Pacific posted a surety
bond issued by petitioner Finman General Assurance Corporation ("Finman") and was granted a license to
operate by the POEA.

Private respondents William Inocencio, Perfecto Palero, Jr., Edwin Cardones and one Edwin Hernandez
filed with the POEA separate complaints against Pan Pacific for violation of Articles 32 and 34 (a) of the
Labor Code, as amended and for refund of placement fees paid to Pan Pacific. The complainants alleged
that Pan Pacific charged and collected such fees from them but did not secure employment for them.
Acting on the complaints, the POEA Administrator motuproprioimpleaded petitioner Finman as party
respondent in its capacity as surety for Pan Pacific. Separate summonses were served upon Finman and
Pan Pacific.

Finman filed an answer denying liability and pleading, by way of special and affirmative defenses, that: (1)
the POEA had no "jurisdiction over surety bonds," that jurisdiction being vested in the Insurance Commission
or the regular courts; (2) it (Finman) had not violated Articles 32 and 34 (a) of the Labor Code and
complainants' claims had accrued during the suspension of the principal obligor, Pan Pacific; (3)
complainants had no cause of action against Finman, since it was not privy to the transactions between
them and Pan Pacific and had not received any moneys from them; and (4) the amounts claimed by
complainants had been paid by them as deposits and not as placement fees.

ISSUE:
Whether or not POEA has jurisdiction over surety bonds.
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HELD:
Yes the POEA has jurisdiction over surety bonds. The Supreme Court held We believe and so hold that to
compel the POEA and private respondents the beneficiaries of Finman's bond-to go to the Insurance
Commissioner or to a regular court of law to enforce that bond, would be to collide with the public policy
which requires prompt resolution of claims against private recruitment and placement agencies.

Eastern Assurance and Surety Corp. vs Sec. of Labor
GR No L-79436-50 January 17, 1990

Facts:
In connection with the application with the Philippine Overseas Employment Administration (POEA) of J & B
Manpower Specialist, Inc. for a license to engage in business as a recruitment agency, a surety bond was
filed on January 2, 1985 by the applicant and the Eastern Assurance and Surety Corporation, herein
petitioner, in virtue of which they both held themselves
. . . firmly bound unto (said) Philippine Overseas Employment Administration, Ministry of Labor in the penal
sum of PESOS ONE HUNDRED FIFTY THOUSAND ONLY . . . (Pl50,000.00) for the payment of which will and truly
to be made, . . . (they bound themselves, their) heirs, executors, administrators, successors and assigns,
jointly and severally . .

The bond stipulated that:

a) it was "conditioned upon the true and faithful performance and observance of the . . . principal (J & B
Manpower Specialist, Inc.) of its duties and obligations in accordance with all the rules and regulations
promulgated by the Ministry of Labor Philippine Overseas Employment Administration and with the terms
and conditions stipulated in the License;

b) the liability of the . . . Surety (petitioner) shall in no case exceed the sum of PESOS ONE HUNDRED FIFTY
THOUSAND (P150,000.00) ONLY, PHILIPPINE CURRENCY;

c) notice to the Principal is also a notice to the Surety; and

d) LIABILITY of the surety . . . shall expire on JANUARY 02, 1986 and this bond shall be automatically
cancelled ten (10) days after its expiration and the surety shall not be liable for any claim not discovered
and presented to it in writing within said period of . . . from expiration and the obligee hereby expressly
waives the rights to file any court action against the Surety after termination of said period of . . . . above
cited.

Issues:
EASCO essentially disclaimed liability on the ground that the claims were not expressly covered by the
bond, that POEA had no jurisdiction to order forfeiture of the bond, that some of the claims were paid
beyond or prior to the period of effectivity of the bond.


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Held:
EASCO's liability for the refund, jointly and severally with its principal, was limited to 19 named complainants
(in contrast to verdicts of the POEA and the Deputy Minister which both ordered payment to no less than 33
complainants) and was correspondingly reduced from P308,751.75 and US $ 400.00 to the aggregate
amount of P 140,817.75.

The penalties of suspension and cancellation of license or authority are prescribed for violations of the
above quoted provisions, among others. And the Secretary of Labor has the power under Section 35 of the
law to apply these sanctions, as well as the authority, conferred by Section 36, not only, to "restrict and
regulate the recruitment and placement activities of all agencies," but also to "promulgate rules and
regulations to carry out the objectives and implement the provisions" governing said activities. Pursuant to

this rule-making power thus granted, the Secretary of Labor gave the POEA "on its own initiative or upon
filing of a complaint or report or upon request for investigation by any aggrieved person, . . . (authority to)
conduct the necessary proceedings for the suspension or cancellation of the license or authority of any
agency or entity" for certain enumerated offenses including
1) the imposition or acceptance, directly or indirectly, of any amount of money, goods or services, or any
fee or bond in excess of what is prescribed by the Administration, and
2) any other violation of pertinent provisions of the Labor Code and other relevant laws, rules and
regulations.

The Administrator was also given the power to "order the dismissal of the case or the suspension of the
license or authority of the respondent agency or contractor or recommend to the Minister the cancellation
thereof."

EASCO's claim that it had not been properly served with summons as regards a few of the complaints must
be rejected, the issue being factual, and the Court having been cited to no grave error invalidating the
respondent Secretary's conclusion that summons had indeed been duly served.

EASCO's half-hearted argument that its liability should be limited to the maximum amount set in its surety
bond, i.e., P150,000.00, is palpably without merit, since the aggregate liability imposed on it,
P140,817.75, supra, does not in fact exceed that limit.

Salazar vs. Achacoso and Marquez
G.R. No. 81510, March 14, 1990

FACTS:
A complaint against the petitioner Salazar was filed for withholding the complainants PECC Card, it was
further alleged that Salazar did not posses a license to operate as a recruitment agency. POEA through its
Director on Licensing and Regulation, issued a warrant of arrest and seizure against the petitioner.

ISSUE:
Whether or not the power of the Secretary of Labor to issue warrants of arrest and seizure is valid?


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HELD:
Under the new Constitution, "no search warrant or warrant of arrest shall issue except upon probable cause
to be determined personally by the judge after examination under oath or affirmation of the complainant
and the witnesses he may produce, and particularly describing the place to be searched and the persons
or things to be seized. It is only a judge who may issue warrants of search and arrest." Mayors may not
exercise this power. Neither may it be done by a mere prosecuting body. The Secretary of Labor, not being
a judge, may no longer issue search or arrest warrants. Hence, the authorities must go through the judicial
process.

Article 34: Prohibited Practices

ART. 34. Prohibited practices. - It shall be unlawful for any individual, entity, licensee, or holder of authority:

(a) To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of
allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than
that actually received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to recruitment or
employment;
(c) To give any false notice, testimony, information or document or commit any act of misrepresentation for
the purpose of securing a license or authority under this Code.
(d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him
to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of
employment;
(e) To influence or to attempt to influence any person or entity not to employ any worker who has not
applied for employment through his agency;
(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to
the dignity of the Republic of the Philippines; chanroblesvirtuallawlibrary
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized
representatives;
(h) To fail to file reports on the status of employment, placement vacancies, remittance of foreign
exchange earnings, separation from jobs, departures and such other matters or information as may be
required by the Secretary of Labor.
(i) To substitute or alter employment contracts approved and verified by the Department of Labor from the
time of actual signing thereof by the parties up to and including the periods of expiration of the same
without the approval of the Secretary ofLabor;
(j) To become an officer or member of the Board of any corporation engaged in travel agency or to be
engaged directly or indirectly in the management of a travel agency; and
(k) To withhold or deny travel documents from applicant workers before departure for monetary or
financial considerations other than those authorized under this Code and its implementing rules and
regulations.

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Soriano vs. Offshore Shipping and Marketing Corp.
G.R. No. 78409, Sept. 14, 1989

Facts: In search for better opportunities and higher income, petitioner Norberto Soriano, a licensed Second
Marine Engineer, sought employment and was hired by private respondent Knut Knutsen O.A.S. through its
authorized shipping agent in the Philippines, Offshore Shipping and Manning Corporation. As evidenced by
the Crew Agreement, petitioner was hired to work as Third Marine Engineer on board Knut Provider" with a
salary of US$800.00 a month on a conduction basis for a period of fifteen (15) days. He admitted that the
term of the contract was extended to six (6) months by mutual agreement on the promise of the employer
to the petitioner that he will be promoted to Second Engineer. Thus, while it appears that petitioner joined
the aforesaid vessel on July 23, 1985 he signed off on November 27, 1985 due to the alleged failure of
private respondent-employer to fulfill its promise to promote petitioner to the position of Second Engineer
and for the unilateral decision to reduce petitioner's basic salary from US$800.00 to US$560.00. Petitioner
was made to shoulder his return airfare to Manila.

In the Philippines, petitioner filed with the Philippine Overseas Employment Administration (POEA for short), a
complaint against private respondent for payment of salary differential, overtime pay, unpaid salary for

November, 1985 and refund of his return airfare and cash bond allegedly in the amount of P20,000.00
contending therein that private respondent unilaterally altered the employment contract by reducing his
salary of US$800.00 per month to US$560.00, causing him to request for his repatriation to the Philippines.
In resolving aforesaid case, the Officer-in-Charge of the Philippine Overseas Employment Administration or
POEA found that petitioner-complainant's total monthly emolument is US$800.00 inclusive of fixed overtime
as shown and proved in the Wage Scale submitted to the Accreditation Department of its Office which
would therefore not entitle petitioner to any salary differential; that the version of complainant that there
was in effect contract substitution has no grain of truth because although the Employment Contract seems
to have corrections on it, said corrections or alterations are in conformity with the Wage Scale duly
approved by the POEA; that the withholding of a certain amount due petitioner was justified to answer for
his repatriation expenses which repatriation was found to have been requested by petitioner himself as
shown in the entry in his Seaman's Book; and that petitioner deposited a total amount of P15,000.00 only
instead of P20,000.00 cash bond.

Dissatisfied, both parties appealed the aforementioned decision of the POEA to the National Labor
Relations Commission. Complainant-petitioner's appeal was dismissed for lack of merit while respondents'
appeal was dismissed for having been filed out of time. Petitioner's motion for reconsideration was likewise
denied. Hence this recourse.

Issue: Whether or not POEA acted in excess of its jurisdiction?

Decision: As clearly explained by respondent NLRC, the correction was made only to specify the salary and
the overtime pay to which petitioner is entitled under the contract. It was a mere breakdown of the total
amount into US$560.00 as basic wage and US$240.00 as overtime pay. Otherwise stated, with or without the
amendments the total emolument that petitioner would receive under the agreement as approved by the
POEA is US$800.00 monthly with wage differentials or overtime pay included.


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Moreover, the presence of petitioner's signature after said items renders improbable the possibility that
petitioner could have misunderstood the amount of compensation he will be receiving under the contract.
Nor has petitioner advanced any explanation for statements contrary or inconsistent with what appears in
the records. The purpose of Article 34, paragraph 1 of the Labor Code is clearly the protection of both
parties. In the instant case, the alleged amendment served to clarify what was agreed upon by the parties
and approved by the Department of Labor. To rule otherwise would go beyond the bounds of reason and
justice.

Finally, it is well-settled that factual findings of quasi-judicial agencies like the National Labor Relations
Commission which have acquired expertise because their jurisdiction is confined to specific matters are
generally accorded not only respect but at times even finality if such findings are supported by substantial
evidence.

SEAGULL MARITIME CORP., ET AL. VSNERRY D. BALATONGAN, ET AL.
G.R. No. 82252 February 28, 1989

Facts:
On October 6, 1983 Balatongan met an accident in the Suez Canal, Egypt as a result of which he was
hospitalized at the Suez Canal Authority Hospital. Later, he was repatriated to the Philippines and was

hospitalized at the Makati Medical Center from October 23, 1983 to March 27, 1984. On August 19, 1985
the medical certificate was issued describing his disability as "permanent in nature."Balatongan demanded
payment for his claim for total disability insurance in the amount of US $ 50,000.00 as provided for in the
contract of employment but his claim was denied for having been submitted to the insurers beyond the
designated period for doing so.Seagull and Philimare appealed said decision to the National Labor
Relations Commission (NLRC) on June 4, 1986. Pending resolution of their appeal because of the alleged
transfer of the agency of Seagull to Southeast Asia Shipping Corporation, Seagull filed on April 28, 1987 a
Motion For Substitution/Inclusion of Party Respondent which was opposed by Balatongan. This was followed
by an ex-parte motion for leave to file third party complaint on June 4, 1987 by Seagull.

Issue:
Whether or not the respondent committed prohibited acts by altering or substituting employment contracts
approved and verified by the Department of Labor.

Held:
Yes, it shall be unlawful for any individual, entity, licensee, or holder of authority to substitute or alter
employment contracts approved and verified by the Department of Labor from the time of actual signing
thereof by the parties up to and including the period of expiration of the same without the approval of the
Department of Labor. The supplementary contract of employment was entered into between petitioner
and private respondent to modify the original contract of employment The reason why the law requires
that the POEA should approve and verify a contract under Article 34 of the Labor Code is to insure that the
employee shall not thereby be placed in a disadvantageous position and that the same are within the
minimum standards of the terms and conditions of such employment contract set by the POEA.


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Article 35: Suspension and/or Cancellation of License or Authority

ART. 35. Suspension and/or cancellation of license or authority.- The Minister of Labor shall have the power
to suspend or cancel any license or authority to recruit employees for overseas employment for violation of
rules and regulations issued by the Ministry of Labor, the Overseas Employment Development Board, or for
violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions.

Manuela S. Catan/M.S. Catan Placement Agency v. The NLRC and Francisco Reyes
G.R. No. 77279 April 15, 1988

FACTS:
Petitioner Catan, a duly licensed recruitment agency, as agent of Ali and Fahd Shabokshi Group, a Saudi
Arabian firm recruited private respondent Francisco D. Reyes to work in Saudi Arabia. The term of contract
is for one (1) year, however, the contract provided for automatic renewal. Said contract was automatically
renewed when private respondent was not repatriated by hi Saudi employer but instead was assigned to
work as a crusher plant operator. On March 30, 1983 while he was working as a crusher plant operator, his
ankle was crushed under the machine he was operating. On May 15, 1983 after expiration of renewed
term, private respondent returned to the Philippines. His ankle was operated on at the Sta. Mesa Heights
Medical Center for which he incurred expenses. On September 9, 1983, he returned to Saudi and resume
to his work and on May 15, 1984, he was repatriated. And upon his return, he had ankle treated for which
he incurred further expenses.

Private respondent filed a claim against Catan placement agency on the basis of the provision in the
employment contract that the employer shall compensate the employee if he is injured or permanently
disabled in the course of employment. POEA rendered judgment in favor of the complainant. Ordering the
respondent placement agency to pay SEVEN THOUSAND NINE HUNDRED EIGHTY FIVE and 60/100 (P7,
985.60), TWENTY FIVE THOUSAND NINTY SIX 20/100 (P29, 096.20) and 10% for attorneys fees. On appeal,
respondent NLRC affirmed the decision of the POEA.

ISSUE:
Whether or not the Placement Agency is liable for disability benefits to private respondent, since the time
he was injured his original contract had already expired?

HELD:
Yes, Catan Placement Agency is liable for disability benefits to private respondent. Private respondents
contract of employment cannot be said to have expired on May 14, 1982 as it was automatically renewed
since no notice of its termination was given by either or both parties at a month before its termination. As
stipulated in their contract. M. S. Catan Agency was at the time of complainant's accident resulting in his
permanent partial disability was (sic) no longer the accredited agent of its foreign principal, foreign
respondent herein, yet its responsibility over the proper implementation of complainant's
employment/service contract and the welfare of complainant himself in the foreign job site, still existed, the
contract of employment in question not having expired yet. This must be so, because the obligations
covenanted in the recruitment agreement entered into by and between the local agent and its foreign
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principal are not coterminus with the term of such agreement so that if either or both of the parties decide
to end the agreement, the responsibilities of such parties towards the contracted employees under the
agreement do not at all end, but the same extends up to and until the expiration of the employment
contracts of the employees recruited and employed pursuant to the said recruitment agreement.
Otherwise, this will render nugatory the very purpose for which the law governing the employment of
workers for foreign jobs abroad was enacted.

Solidary Liability assumed by the Recruitment Agent

ROYAL CROWN INTERNATIONALE vs. NLRC, ET AL.

Facts:
In 1983, petitioner, a duly licensed private employment agency, recruited and deployed private
respondent for employment with ZAMEL as an architectural draftsman in Saudi Arabia. On February 13,
1984, ZAMEL terminated the employment of private respondent on the ground that his performance was
below par. For three (3) successive days thereafter, he was detained at his quarters and was not allowed to
report to work until his exit papers were ready. On February 16, 1984, he was made to board a plane bound
for the Philippines. Private respondent then filed on April 23, 1984 a complaint for illegal termination against
petitioner and ZAMEL. Based on a finding that petitioner and ZAMEL failed to establish that private
respondent was terminated for just and valid cause, the Workers' Assistance and Adjudication Office of the
POEA issued a decision ordering the former to pay, jointly and severally, the complainant.

Petitioner Royal Crown Internationale seeks the nullification of a resolution of the National Labor Relations
Commission (NLRC) which affirmed a decision of the Philippine Overseas Employment Administration
(POEA) holding it liable to pay, jointly and severally with Zamel-Turbag Engineering and Architectural
Consultant (ZAMEL), private respondent Virgilio P. Nacionales' salary and vacation pay corresponding to
the unexpired portion of his employment contract with ZAMEL.

Issue:
I. Whether or not petitioner as a private employment agency may be held jointly and severally liable with
the foreign-based employer for any claim which may arise in connection with the implementation of the
employment contracts of the employees recruited and deployed abroad;
II. Whether or not sufficient evidence was presented by petitioner to establish the termination of private
respondent's employment for just and valid cause.

Ruling:
I. In applying for its license to operate a private employment agency for overseas recruitment and
placement, petitioner was required to submit, among others, a document or verified undertaking whereby
it assumed all responsibilities for the proper use of its license and the implementation of the contracts of
employment with the workers it recruited and deployed for overseas employment [Section 2(e), Rule V,

Book 1, Rules to Implement the Labor Code (1976)]. It was also required to file with the Bureau a formal
appointment or agency contract executed by the foreign-based employer in its favor to recruit and hire
personnel for the former, which contained a provision empowering it to sue and be sued jointly and
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solidarily with the foreign principal for any of the violations of the recruitment agreement and the contracts
of employment [Section 10 (a) (2), Rule V, Book I of the Rules to Implement the Labor Code (1976)].

II. The NLRC upheld the POEA finding that petitioner's evidence was insufficient to prove termination from
employment for just and valid cause. And a careful study of the evidence thus far presented by petitioner
reveals to this Court that there is legal basis for public respondent's conclusion.

The Court holds, therefore, that the NLRC committed no grave abuse of discretion amounting to lack or
excess of jurisdiction in upholding the POEA's finding of insufficiency of evidence to prove termination for
just and valid cause.

Suability of a Foreign Corporation which hires Filipino Workers

Facilities Management Corporation, J.S Dreyer and J.V. Catuira vs. Leonardo Dela Osa
March 26, 1979 GR L-38649

Facts:
Leonardo De La Osa sought his reinstatement, with full backwages, as well as the recovery of his overtime
compensation, swing shift and graveyard shift differentials. He alleged that he was employed by Facilities
Management as a painter, a houseboy, and a cashier. The respondents filed their letter-answer without
substantially denying the material allegations, but interposed that Facilities Management and J.S. Dreyer
are domiciled in Wake Island which is beyond territorial jurisdiction of the Philippine Government, and that
J.V. Catuira, though an employee of Facilities presently stationed in Manila, is without power and authority

of legal representation, and that the employment contract between De La Osa and the Facilities carries
the approval of the Department of Labor of the Philippines.

Issue:
Is the mere act by a non-resident foreign corporation of recruiting Filipino workers for its own use abroad, in
law doing business in the Philippines? And whether or not the respondent can sue the foreign corporation.

Held:
A foreign corporation not doing business in the Philippines can be sued here for acts done against persons
in the Philippines. If a foreign corporation, not engaged in business in the Philippines, is not banned from
seeking redress from courts in the Philippines, a fortiori, that same corporation cannot claim exemption from
being sued in Philippine courts for acts done against a person or persons in the Philippines.

Article 38: Illegal Recruitment

(Definition &Prohibited Acts)

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ART. 38. Illegal recruitment. - (a) Any recruitment activities, including the prohibited practices enumerated
under Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority, shall be
deemed illegal and punishable under Article 39 of this Code. The Department of Labor and Employment or
any law enforcement officer may initiate complaints under this Article.
(b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense
involving economic sabotage and shall be penalized in accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed
committed in large scale if committed against three (3) or more persons individually or as a group.
(c) The Secretary of Labor and Employment or his duly authorized representatives shall have the power to
cause the arrest and detention of such non-licensee or non-holder of authority if after investigation it is
determined that his activities constitute a danger to national security and public order or will lead to further
exploitation of job-seekers. The Secretary shall order the search of the office or premises and seizure of
documents, paraphernalia, properties and other implements used in illegal recruitment activities and the
closure of companies, establishments and entities found to be engaged in the recruitment of workers for
overseas employment, without having been licensed or authorized to do so.

R.A. No. 10022
Section 5. Section 6 of Republic Act No. 8042, as amended, is hereby amended to read as follows:
"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 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. It shall likewise include the following acts, whether committed by any
person, whether a non-licensee, non-holder, licensee or holder of authority:
"(a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of
allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or
acknowledge any amount greater than that actually received by him as a loan or advance;
"(b) To furnish or publish any false notice or information or document in relation to recruitment or
employment;
"(c) To give any false notice, testimony, information or document or commit any act of misrepresentation
for the purpose of securing a license or authority under the Labor Code, or for the purpose of documenting
hired workers with the POEA, which include the act of reprocessing workers through a job order that
pertains to nonexistent work, work different from the actual overseas work, or work with a different
employer whether registered or not with the POEA;
"(d) To include or attempt to induce a worker already employed to quit his employment in order to offer
him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of
employment;
"(e) To influence or attempt to influence any person or entity not to employ any worker who has not
applied for employment through his agency or who has formed, joined or supported, or has contacted or is
supported by any union or workers' organization;
"(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to
the dignity of the Republic of the Philippines;
"(h) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign
exchange earnings, separation from jobs, departures and such other matters or information as may be
required by the Secretary of Labor and Employment;
"(i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by
the Department of Labor and Employment from the time of actual signing thereof by the parties up to and


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including the period of the expiration of the same without the approval of the Department of Labor and
Employment;
"(j) For an officer or agent of a recruitment or placement agency to become an officer or member of the
Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the
management of travel agency;
"(k) To withhold or deny travel documents from applicant workers before departure for monetary or
financial considerations, or for any other reasons, other than those authorized under the Labor Code and its
implementing rules and regulations;
"(l) Failure to actually deploy a contracted worker without valid reason as determined by the Department
of Labor and Employment;
"(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and
processing for purposes of deployment, in cases where the deployment does not actually take place
without the worker's fault. Illegal recruitment when committed by a syndicate or in large scale shall be
considered an offense involving economic sabotage; and
"(n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency.
"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.
"In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit the
following prohibited acts:
"(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum,
which will be used for payment of legal and allowable placement fees and make the migrant worker issue,
either personally or through a guarantor or accommodation party, postdated checks in relation to the said
loan;
"(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to
avail of a loan only from specifically designated institutions, entities or persons;
"(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's
employment contract has been prematurely terminated through no fault of his or her own;
undergo health examinations only from specifically designated medical clinics, institutions, entities or
persons, except in the case of a seafarer whose medical examination cost is shouldered by the
principal/shipowner;
undergo training, seminar, instruction or schooling of any kind only from specifically designated institutions,
entities or persons, except fpr recommendatory trainings mandated by principals/shipowners where the
latter shoulder the cost of such trainings;
"(6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity including
the processing of pending workers' applications; and
"(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino
worker or deduct from his or her salary the payment of the cost of insurance fees, premium or other
insurance related charges, as provided under the compulsory worker's insurance coverage.
"The persons criminally liable for the above offenses are the principals, accomplices and accessories. In
case of juridical persons, the officers having ownership, control, management or direction of their business
who are responsible for the commission of the offense and the responsible employees/agents thereof shall
be liable.
"In the filing of cases for illegal recruitment or any of the prohibited acts under this section, the Secretary of
Labor and Employment, the POEA Administrator or their duly authorized representatives, or any aggrieved
person may initiate the corresponding criminal action with the appropriate office. For this purpose, the
affidavits and testimonies of operatives or personnel from the Department of Labor and Employment, POEA
and other law enforcement agencies who witnessed the acts constituting the offense shall be sufficient to
prosecute the accused.
"In the prosecution of offenses punishable under this section, the public prosecutors of the Department of
Justice shall collaborate with the anti-illegal recruitment branch of the POEA and, in certain cases, allow
the POEA lawyers to take the lead in the prosecution. The POEA lawyers who act as prosecutors in such
cases shall be entitled to receive additional allowances as may be determined by the POEA Administrator.


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"The filing of an offense punishable under this Act shall be without prejudice to the filing of cases punishable
under other existing laws, rules or regulations."

PEOPLE OF THE PHILIPPINES VS. BULU CHOWDURY
G.R. No.: G.R. No. 129577-80
Date: Feb. 15, 2000
Petitioner: Bulu Chowdury
Respondent: People of the Philippines
Ponente: J. Puno
Facts:
BuluChowdury was charged with the crime of illegal recruitment in large scale by recruiti ng Estrella B.
Calleja, Melvin C. Miranda and Aser S. Sasis for employment in Korea. Evidence shows that accused
appellant interviewed private complainant in 1994 at Craftrades office. At that time, he was an
interviewer of Craftrade which was operating under temporary authority given by POEA pending the
renewal of license. He was charged based on the fact that he was not registered with the POEA as
employee of Craftrade and he is not in his personal capacity, licensed to recruit overseas workers. The
compalinants also averred that during their applications for employment for abroad, the license of
Craftrade was already expired. For his defense Chowdury testified that he worked as interviewer at
Craftrade from 1990 until 1994. His primary duty was to interview job applicants for abroad. As a mere
employee, he only followed the instructions given by his superiors, Mr. Emmanuel Geslani, the agency's
President and General Manager, and Mr. UtkalChowdury, the agency's Managing Director.

Issue:
Whether or not accused-appellant knowingly and intentionally participated in the commission of the crime
charged.

Held:
No, an employee of a company or corporation engaged in illegal recruitment may be held liable as
principal, together with his employer, if it is shown that he actively and consciously participated in illegal
recruitment. In this case, Chowdury merely performed his tasks under the supervision of its president and
managing director. The prosecution failed to show that the accused-appellant is conscious and has an
active participation in the commission of the crime of illegal recruitment. Moreover, accused- appellant
was not aware of Craftrade's failure to register his name with the POEA and the prosecution failed to prove
that he actively engaged in recruitment despite this knowledge. The obligation to register its personnel with
the POEA belongs to the officers of the agency. A mere employee of the agency cannot be expected to
know the legal requirements for its operation. The accused-appellant carried out his duties as interviewer of
Craftrade believing that the agency was duly licensed by the POEA and he, in turn, was duly authorized by
his agency to deal with the applicants in its behalf. Accused-appellant in fact confined his actions to his
job description. He merely interviewed the applicants and informed them of the requirements for
deployment but he never received money from them. Chowdury did not knowingly and intentionally
participated in the commission of illegal recruitment being merely performing his task and unaware of
illegality of recruitment.

CASE


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PEOPLE OF THE PHILIPPINES VS. NELLIE CABAIS y GAMUELA
G.R. No.: G.R. No. 129070 March 16, 2001

Facts:
Accused-appellant Nellie Cabais met the complainants Joan Merante, Nancy Oidi, Florentino Balanon,
Jr.and Imelda Mortera on different occasions. They were told that the accused-appellant was a legal
recruiter working with a licensed recruitment agency based in Manila. She talked to complainants several
times during the period of February 1994 up to May 1994, persuading them to be contract workers in South
Korea. She even presented some persons to influence them. Convinced, the complainants complied with
requirement and paid all the needed amounts. After complying with all the requirements, complainants
were told to wait for their deployment. They waited and repeatedly inquired about the status of their
applications. However, several months passed and they were not deployed as promised. Complainants
checked with the office of the Philippine Overseas Employment Administration (POEA) in Baguio and
learned that Nellie Cabais was not licensed to recruit in Baguio or in any part of the Cordillera
Administrative Region. The accused was indicted for illegal recruitment and estafa. For her part, accused
Cabais denied all the charges against her. She alleged that she was hired as an employee and as such
employee, her duties only included processing other applications for job placement and entertaining
applicants. Accused Cabais denied involvement in the recruitment of complainants, claiming that it was
her boss who was doing recruitment activities. She admitted, though, that she received payments from
complainants, but alleged that she was merely acting upon the instruction of Forneas and that she turned
over all the payments to her employer.

Issue:
Whether or not accused-appellant Accused-appellant Cabais is guilty of illegal recruitment committed in
large scale.

Held:
Yes, In this case, all the requisite of illegal recruitment are present. Accused-appellant was the one who
informed complainants of job prospects in Korea and the requirements for deployment. She also received
money from them as placement fees. Complainants parted with their money, evidenced by receiptssigned
by accused Cabais. Thus, accused-appellant actively participated in the recruitment of the complainants.
Furthermore, accused-appellant did not possess any license to engage in recruitment activities, as
evidenced by a certification from the POEA and the testimony of a representative of said government
agency. Her acts constituted recruitment, and considering that she admittedly had no license or authority
to recruit workers for overseas employment, accused-appellant is guilty of illegal recruitment. Despite the
fact that she was just an ordinary employee of the company, her criminal liability would still stand for being
a conspirator with the corporate officers in undertaking illegal recruitment activities. Since the recruitment
involves three or more persons, accused-appellant is guilty of illegal recruitment in a large scale.

PEOPLE OF THE PHILIPPINES VS. LUZ GONZALES-FLORES
G.R. No.: G.R. No. 138535-38 April 19, 2001

Facts:
Accussed-appellant was charged and convicted before regional trial court of illegal recruitment and
estafa. Complainants Felixberto Leongson, Jr., Ronald Frederizo and Larry Tibor testified that the accused-
appellants are recruiting for seaman to work abroad. They paid the needed payments for the processing
of their applications but no receipts were issued upon them. They were assured of the employment and


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that they will be informed of the developments. The complainant followed up their application but each
they were told to be patient. Realizing that they had been deceived, complainants went to the Baler
Police Station 2 in Quezon City on November 11, 1994 to file their complaints for illegal recruitment and
estafa against accused-appellant and other people who helped in recruitment with the accused. On
November 14, 1994, complainants went to the Philippine Overseas Employment Administration (POEA) and
discovered that accused-appellant and her companions did not have any license or authority to engage
in any recruitment activity.Accused-appellant denied having promised complainants overseas
employment and having collected money from them. All she did was to refer the complainants to other
persons who were the real recruiters.

Issue:
Whether or not referral made by accused-appellant would constitute of illegal recruitment in large scale.

Held:
Yes, under Article 13 (b) of the Labor Code, recruitment includes "referral," which is defined as the act of
passing along or forwarding an applicant for employment after initial interview of a selected applicant
foremployment to a selected employer, placement officer, or bureau. In these cases, accused- appellant
didmore than just make referrals. She actively and directly enlisted complainants for supposed employment
abroad, even promising them jobs as seamen, and collected moneys from them. There was also
conspiracy among accused-appellant and other recruiters who used fraudulent means and under
pretense of legal recruiters in recruiting complainants for employment overseas.

PEOPLE OF THE PHILIPPINES VS. LINDA SAGAYDO
G.R. No.: G.R. No. 124671-75 Sep. 29, 2000

Facts:
Accused Linda Sagayado was convicted before the regional trial court of illegal recruitment in large scale
and fur charges of estafa. Complainants Gina Cleto, Rogelio Tebeb, Nata Pita and Jessie Bolinao
recounted that the accused Sagayado propsed and encourage them for employment abroad in Korea.
Complainants gave their respective payments to the accused for the processing of their travel papers and
passport. They were assured of their flight and of employment abroad. However, months have passed but
their flight never pushed through. They then inquired at the Baguio POEA office whether the accused was a
license recruiter to which they receive certification that the accused was not a license recruiter. In her
defense, the accused denied having recruited any of the private complainants. She claimed that they
came to her voluntarily after being informed that she was able to send her three (3) sons to Korea. While
accused admitted having received money from complainants Gina Cleto and Naty Pita, she said she used
their money to buy their plane tickets. Gina and Naty were not able to leave because the Korean
government imposed a visa requirement beginning January, 1992. When asked why she was not able to
return the money of Gina and Naty, accused said that she returned the plane tickets to the Tour Master
travel Agency for refund but said agency did not make reimbursements. With respect to complainants
Jessie Bolinao and Rogelio Tibeb, the accused denied having received money from them.

Issue:
Whether or not the accused is guilty of illegal recruitment in large scale.


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Held:
Yes, Illegal recruitment is deemed committed in large scale if committed against three or more person,
individually or as a group. This crime requires proof that the accused: (1) engaged in the recruitment and
placement of workers defined under Article 13 or in any of the prohibited activities under Article 34 of the
Labor Code; (2) does not have a license or authority to lawfully engage in the recruitment and placement
of workers; and (3) committed the infraction against three or more persons, individually or as a group. All
the requisites are present in this case. The accused representations to the private complainants that she
could send them to Korea to work as factory workers, constituting a promise of employment which
amounted to recruitment as defined under Article 13(b) of the Labor Code. From the testimonies of the
private complainants, there is no denying that accused gave the complainants the distinct impression that
she had the power or ability to send them abroad for work such that the latter were convinced to part with
their money in order to be employed. As against the positive and categorical testimonies of the
complainants, mere denial of accused cannot prevail. As to the license requirement, the record showed
that accused-appellant did not have the authority to recruit for employment abroad as the certification
issued by the POEA in Baguio City.

PEOPLE OF THE PHILIPPINES VS. BENZONG ONG y SATE
G.R. No.: G.R. No. 119594 Jan. 18, 2000

Facts:
The regional trial court convicted accused Benson Ong of illegal recruitment and seven charges of estafa
for promising employment abroad to the following:
1.Noel Bacasnot Baldivino;
2.Ruth A Eliw;
3.Samuel Bagni;
4.Francisca Cayaya;
5.Teofilo S. Gallao,Jr.;
6.Sally Kamura;
7.Paul G. Esteban;
8.David Joaquin; and
9. Solidad M. Malinias
The above complainants recounted that the accused encourage them for employment abroad. Some of
them voluntarily sought the help of the accused believing that he is a legal and licensed recruiter. They
paid the placement fees and were assured for employment abroad upon completion of their papers.
Accused never fulfilled his promise. Complainants sought help to the NBI about the recruitment activi ties of
the accused. The NBI confirmed from the Philippine Overseas Employment Administration-Regional
Extension Unit (POEA-REU) in the Cordillera Autonomous Region that accused had not been licensed to
recruit for overseas employment. On June 27, 1994, a team composed of NBI and special investigators
conducted an entrapment operation which led to the arrest of the accused. For his part, the accused
denied the charges and for collecting fees from them. He further claimed that his signatures on the receipt
were forged and he merely suggested to the complainants employment abroad.

Issue:
Whether or not accused is guilty of illegal recruitment in large scale.


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Held:
The essential elements of the crime of illegal recruitment in large scale are: (1) the accused engages in
acts of recruitment and placement of workers defined under Art. 13 (b) or in any prohibited acti vities under
Art. 34 of the Labor Code; (2) the accused has not complied with the guidelines issued by the Secretary of
Labor and Employment, particularly with respect to the securing of a license or an authority to recruit and
deploy workers, either locally or overseas; and (3) the accused commits the unlawful acts against three or
more persons, individually or as a group.

All the requisites of Illegal recruitment in large scale are present in this case. Accused represented himself to
complainants as one capable of deploying workers abroad and even quoted the alleged salary rates of
factory and construction workers in Taiwan. He was not also authorized to recruit workers abroad as he has
not been licensed by the POEA and he illegally recruited more than three persons. Even if accused-
appellant did no more than "suggest" to complainants where they could apply for overseas employment,
his act constituted "referral" within the meaning of Art.13 (b) of the Labor Code. Indeed, the testimonial and
documentary evidence in the record shows that accused-appellant did more than just make referrals. The
evidence shows that he made misrepresentations to them concerning his authority to recruit for overseas
employment and collected various amounts from them for placement fees. Clearly, accused-appellant
committed acts constitutive of large scale illegal recruitment.

PEOPLE OF THE PHILIPPINES VS. REYDANTE CALONZO Y AMBROSIO
G.R. No.: G.R. No. 115150 Sep. 27, 1996

Facts:
Reydante Calonzo Y ambrosio was charged with illegal recruitment in large scale and 5 counts of estafa
by Brenando Miranda, Danilo de los Reyes, Elmer Clamor, Belarmino Torregrosa and Hazel de Paula. The
complainants recounted that they met the accused-appellant who was then employed in R.A.C Business
Agency and offered to them employment in Italy. The accused was glib and persuasive that they were
lured to give payment for the processing of their application for work in Italy. The accused- appellant
wasable to send the complainants to Bangkok and were brought to P.S Guest Hotel. While in Bangkok, the
complainants again gave additional amounts to the accused. However, they only remain in Bangkok and
the promise of employment in Italy was not fulfilled. Upon return to the Philippines, the complainants
verified from POEA to which the latter issued a certification that the accused and R.A.C Business Agency
were not licensed to recruit workers for overseas employment. As for his part, accused-appellant denies
involvement in any recruitment activities.

Issue:
Whether or not accused-appellant is guilty of illegal recruitment committed in large scale.

Held:
Yes, Illegal recruitment in large scale is committed when a person "(a) undertakes any recruitment activity
defined under Article 13(b) or any prohibited practice enumerated under Article 34 of the Labor Code; (b)
does not have a license or authority to lawfully engage in the recruitment and placement of workers; and
(c) commits the same against three or more persons, individually or as a group."

The above requisites to constitute illegal recruitment in large scale are present in this case, the testimony of
complainants evidently showed that Calonzo was engaged in recruitment activities in large scale. Firstly,
he deluded complainants into believing that jobs awaited them in Italy by distinctly impressing upon them


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that he had the facility to send them for work abroad. He even showed them his passport to lend
credence to his claim. To top it all, he brought them to Bangkok and not to Italy. Neither did he have any
arrangements in Bangkok for the transfer of his recruits to Italy. Secondly, POEA likewise certified that
neither Calonzo nor R.A.C. Business Agency was licensed to recruit workers for employment abroad.
Appellant admitted this fact himself. Thirdly, appellant recruited five (5) workers thus making the crime
illegal recruitment in large scale constituting economic sabotage.

PEOPLE OF THE PHILIPPINES VS. FRANCISCO HERNANDEZ (at large), KARL
REICHL, and YOLANDA GUTIERREZ DE REICHL,
G.R. No.: G.R. No. 141221-36 March 7, 2002

Facts:
In April 1993, eight informations for syndicated and large scale illegal recruitment and eight informations for
estafa were filed against accused-appellants, spouses Karl and Yolanda Reichl, together with Francisco
Hernandez. Only the Reichl spouses were tried and convicted by the trial court as Francisco Hernandez
remained at large.

The complainants namely, Narcisa Autor de Hernandez, Leonora Perez, Melanie Bautista Annaliza Perez,
Edwin Coling, Estela Abel de Manalo, Anicel Umahon and Charito Balmes have their own similar stories
about the illegal recruitment conducted by the accused-appellants. They recounted that accused
Hernandez was the one convincing each of them to apply for employment abroad. Accused
Hernandezasked for the payment for the processing of their papers, travel documents and visas.
Complainants then were introduced by Hernandez to spouse Reichl who in turn promised them for
employment abroad. The spouse issued reciept for the payments made by the complainants. The promises
of employment however did not pushed through and the complainants remained in the Phillippines. Upon
demands, the accused spouse promise them to refund the payment if their employments never
materialized. These agreements were reduced into a document but the accused spouse never complies
with their obligations. There was also a certification from the Philippine Overseas Employment
Administration (POEA) that Francisco Hernandez, Karl Reichl and Yolanda Gutierrez Reichl in their personal
capacities were neither licensed nor authorized by the POEA to recruit workers for overseas employment.As
for their part, the spouse denied any of involvement of Hernandez's recruitment and their knowledge of
promises for overseas employment. They further contended that they cannot be convicted of illegal
recruitment committed in large scale as the several information were only filed by single complainant.

Issue:
Whether or not the accused-appellants were guilty of syndicated and large scale illegal recruitment.

Held:
They cannot be convicted of illegal recruitment committed in large scale. Where only one complainant
filed individual complaints as in this case, there is no illegal recruitment in large scale. However, they are
guilty of syndicated illegal recruitment. 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 of Article 38
of the Labor Code. It has been shown that Karl Reichl, Yolanda Reichl and Francisco Hernandez conspired
with each other in convincing private complainants to apply for an overseas job and giving them the
guaranty that they would be hired as domestic helpers in Italy although they were not licensed to do so.
Thus, the accused-appellants are liable for illegal recruitment committed by a syndicate.


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PEOPLE OF THE PHILIPPINES VS. TAN TIONG MENG alias "TOMMY TAN"
G.R. No. 120835-40 April 10, 1997

Facts:
Accused-appellant Tan Tiong Meng alias Tommy Tan was charged and convicted with illegal recruitment
in large scale and 6 counts of estafa before the regional trial court of cavity city. The complainants namely:
Ernesto Orcullo, Manuel Latina, Neil Mascardo, Librado C. Pozas, Edgardo Tolentino and Cavino Asiman
have similar stories about the illegal recruitment activities of the accused. Each of them recounted that
they were informed of job employment in Taiwan. The transactions happened in certain house of Borja
where the accused-appellant assured the complainants of employment at Rainbow Ship Co.. They were
asked to pay a certain amount for placement and processing fees. The accused issued receipts. The
promise of employment however did not push through and the complainants decided to file a complaint
for illegal recruitment. They later found out that the accused-appellant was not a licensed overseas
recruiter.

Issue:
Whether or not the accused-appellant was guilty of illegal recruitment in large scale.

Held:
Yes, the Labor Code defines recruitment and placement as any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not; Provided, that any person or entity
which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed
engaged in recruitment and placement. It is clear that accused-appellant's acts of accepting placement
fees from job applicants and representing to said applicants that he could get them jobs in Taiwan
constitute recruitment and placement under the above provision of the Labor Code. The accused was not
also licensed by the POEA and thus making him an illegal recruiter. Moreover, illegal recruitment is deemed
committed in large scale if committed against three or more persons individually or as a group. In this case,
the accused-appellant committed illegal recruitment in large scale for having recruited six complainants.

PEOPLE OF THE PHILIPPINES VS. DIOSCORA M. ARABIA and FRANCISCA L.
TOMAS
G.R. No. 138431-36 September 12, 2001

Facts:
In October 1992, private complainants Violeta de la Cruz, Remelyn Jacinto, Teresita Lorenzo, Rolando
Rustia and Noel de la Cruz were introduced by the latter's mother, private complainant Pelagia de la Cruz,
to appellant Dioscora Arabia, a recruiter of job applicants for a factory in Taiwan. They all saw appellants
at Quezon City where the appellants convinced them and other applicants to apply for jobs in Taiwan that
would give them a monthly pay. Service fees for processing and placement, private complainants were
told by appellants Arabia and Tomas, would be P16, 000.00 for each of them. Each of the private
complainants give certain amount to Arabia at the latter's residence and in the presence of Tomas.
Arabia, however, did not issue any receipt upon her assurance that she would not fool them. Various
requirements, such as pictures, passports and bio-data, were submitted also by private complainants.
However, private complainants were not able to leave for Taiwan because appellants told them that the
person who was supposed to accompany them to Taiwan did not arrive. The departure date was thus


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reset but private complainants were still unable to leave. Private complainants asked for the return of their
money as they were no longer interested in working abroad. They were informed by Arabia's sister,
however, that appellants were arrested by the NBI and detained at the Quezon City Jail. Records also
showed that appellants were neither licensed nor authorized to recruit workers for overseas employment.

Issue:
Whether the accused-appellants committed illegal recruitment in large scale.

Held:
Large-scale illegal recruitment has the following essential elements:The accused undertook recruitment
activity defined under Article 13 or any prohibited practice under Art. 34 of the Labor Code, he did not
have the license or the authority to lawfully engage in the recruitment and placement of workers and he
committed the same against three or more persons, individually or as a group. These essential elements are
present in this case. Accused-appellants recruited at least four persons, giving them the impression that
they had the capability to send them to Taiwan for employment. They collected various amounts allegedly
for recruitment and placement fees without license or authority to do so. It is settled that the fact that an
accused in an illegal recruitment case did not issue the receipts for amounts received from the
complainants has no bearing on his culpability so long as complainants show through their respective
testimonies and affidavits that the accused was involved in the prohibited recruitment. Thus, the accused-
appellants were guilty of illegal recruitment in large scale.

PEOPLE OF THE PHILIPPINES VS. ELENA VERANO Y ABANES
G.R. No. 90017-18 March 1, 1994

Facts:
Sometime in October 1987, accused-appellant Elena Verano persuaded the three private complainants,
Jose Daep, Arturo Espiel and Alfonso Abanes to accept overseas employment as salesmen in Bahrain. In
consideration thereof, Alfonso, Arturo and Jose were required to pay P10, 000.00 each to cover the
expenses for the processing of their passports, visas and the cost of their plane tickets, medical examination
and recruitment fees. The complainants paid the amount which is covered by receipts issued and signed
by the accused. However, for three times, the accused never showed up and failed to deliver the plain
tickets, passports and visas before the supposed flight to Bahrain. The complainants then went to the
Western Police District Headquarters to lodge their complaint. Accused- appellant was arrested on the
same day and charged with illegal recruitment committed in large scale, and estafa. After trial, she was
sentenced for life imprisonment. On appeal, the accused disputed the finding of facts. She argues that,
she never represented herself as having the capacity to contract workers for overseas employment; and
that she merely introduced private complainants to a certain Juliet Majestrado who was the one who
claimed to have such capacity.

Issue:
Whether or not the finding of fact made by the trial court can be reviewed on appeal.

Held:
No, well-settled doctrine that findings of fact made by the trial court are final and conclusive and cannot
be reviewed on appeal. Except for a few recognized instances, which do not apply in the case at bench,
such findings are bindings and will not be reviewed by the Supreme Court for the latter is not a trier of facts.


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The issues raised by appellant are purely and indisputably factual, as she herself admits. Considering that
none of the exceptions apply the court would not be justified in reversing the judgment of conviction.

People of the Philippines vs. Espanol
Criminal Case No. Q-88 4444

Facts:
In or about February and August 1988, at Quezon City, accused J. Espanol canvassed, enlisted, contracted
and promised employment to 14 persons, exacting a total of P21,500.00 as recruitment fees, without
authority or license from the POEA. Accused introduced himself to the 14 private complainants as one who
had rich and influential relatives in California, U.S.A. The positions promised were for a dressmaker, cook,
dishwasher, driver and housemaid, and accused exacted payments for processing of travel documents in
amounts ranging from P1,000 P3,000.
On September 3, 1988, the birthday of accused, he informed the 14 applicants that a certain Atty. Dizon,
who was working for their documents, would definitely be coming and would advise them to their
departure. The lawyer never appeared. The birthday turned out to be a grand affair, applicants donating
pigs, dogs, goats, and some other items. After the party, complainants became apprehensive.
On several occasions, complainants talked to the accused, who kept promising that he could send them
abroad. When the complainants sensed that they were deceived, they demanded return of their money,
but accused failed and started hiding. They chanced on him and forcibly took him to the police station
where they gave their sworn statements. Accuseds defense was that he did not know the applicants
except one, that he had no brother or sister in California, U.S.A. and that the house where he celebrated
his birthday was owned by one de la Pasion, who shouldered all the expenses.

Issue:
Whether or not the accused committed illegal recruitment.

Held:
The accused is a dangerous member of society who feels happy and comfortable victimizing the poor,
innocent and the gullible, of their hard-earned money. Evidence woven together proves the pattern for
illegal recruitment, hence, mere denial must necessarily fall.

People of the Philippine vs. Roxas
Criminal Case N0. 87-52583 (Violation of Article 32 of P.D. No.442 ,as amended)

Facts:
Accused F.C. Roxas, doing business under the and style of F.c. Roxas Construction, with office address at
Rm. 212 Manufacturer Building. Sta. Cruz, Manila was a licensed private recruitment entity (service
contractor) whose authority was issued on February 20, 1984 and expired on march 25, 1988, (a Service
contractor acts as employer of its recruits with respect to project it contracted to service abroad).

Issue:
Whether or not the accused is guilty beyond reasonable doubt of violation Article 32 of P.D. 442 as
amended. As a service contractor, is not allowed to charge, directly or indirectly, any fee from the workers
except the authorized documentation fee of P1,500.00. During the period from January 1984 to July 1986,


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the accused F.C. construction co. demanded and received from its applicants, herein private
complainants numbering about 22, various sums of money ranging from P1,500.00. in excess of the limits set
forth by law. The complainants, furthermore. Were not able to work abroad, were not issued any travel
documents, and despite efforts, were not refunded the money paid to and received by the accused. The
accused Roxas did not deny the receipts covering the different sums of money paid by private
complainants. He resorted out that the amounts paid to and received by him were for pass-porting and
ticketing of the private complainants.

Ruling:
The court found the excuse of accused to be highly unjustified and definitely unconvincing. Besides, the
accused has jumped bail. And despite the issuance of a warrant of arrest, he has not been apprehended.
As a matter of fact, he was tried in absentia. The fundamental rule that the plight of the accused is
consistent with his guilt was made applicable in his case. Accused Roxas is guilty beyond reasonable doubt
of violation of Article 32 of P.D. No. 442,as amended and its implanting rules and regulations, as charged in
the information and was sentenced of suffer a penalty of imprisonment for a period of five years and to
pay a fine of fifty thousand pesos (P50,000.00) The accused was further ordered to refunded to the herein
private complainants the amounts paid by each of them plus legal enters of 12% per annum for the filing of
this case until the above amounts are paid in full, and also to pay the cost of this suit.

People vs. Remullo
G.R. No. 124443 36

Facts:
Petitioner falsely represented herself as an employee of a recruitment agency to have the capacity and
power to contract, enlist and recruit workers for job placement abroad, and willfully, unlawfully, and
feloniously collected fees, and promised employment abroad to multiple (4) complainants. Complainants
paid sums of money to accused for the promise of employment and scheduled flights abroad. When
complainants had their flights cancelled repeatedly, they decided to inquire their status to the recruitment
agency allegedly being represented by accused. There, complainants have been informed that accused
was not anymore an employee and such role she handled did not authorize her to recruit workers and
moreso accept payment and other fees.

Issue:
Whether or not accused is guilty of large-scale illegal recruitment?

Held:
Accused is guilty of large-scale illegal recruitment.

Ratio Decidendi:
The elements of large scale illegal recruitment are as follows: (1) the accused was engaged in recruitment
activity under Article 13 b, or any prohibited practice under Article 34 of the Labor Code; (2) he or she
lacks the requisite license or authority to lawfully engage in the recruitment and placement of workers; and
(3) he or she committed such acts against three or more persons, individually or as a group. In this case,
such elements have been fulfilled in the case of the accused.


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PEOPLE OF THE PHILIPPINES vs. SAMINA ANGELES YCALMA
G.R. No. 132376, April 11, 2002

FACTS:
Maria TolosaSardea was working in Saudi Arabia when she received a call from her sister, Priscilla
Agoncillo, who was in Paris, France. Priscilla advised Maria to return to the Philippines and await the arrival
of her friend, accused-appellant Samina Angeles, who will assist in processing her travel and employment
documents to Paris, France. Analyn Olpindo met accused-appellant in Belgium. At that time, Analyn was
working in Canada but she went to Belgium to visit her in-laws. After meeting accused-appellant, Analyn
Olpindo called up her sister, Precila Olpindo, in the Philippines and told her to meet accused-appellant
upon the latters arrival in the Philippines because accused-appellant can help process her documents for
employment in Canada. In both instance accused appellant promised to help process their papers for
travel abroad but never made a promise of employment. Accused-appellant told Precila Olpindo and
Vilma Brina that it was easier to complete the processing of their papers if they start from Jakarta, Indonesia
rather than from Manila. Precila Olpindo, Vilma Brina and accused-appellant flew to Jakarta, Indonesia.
However, accused-appellant returned to the Philippines after two days, leaving behind Precila and Vilma.
They waited for accused-appellant in Jakarta but the latter never returned. Precila and Vilma eventually
came home to the Philippines. They started looking for her but they could not reach her.

ISSUE:
Whether or not Angeles is guilty of illegal recruitment.

HELD:
Angeles was acquitted for failure of the prosecution to prove illegal recruitment (he was however found
guilty of 4 counts of fraud.) since he did not offer any kind of promise of work only the processing of their
travel documents. To prove illegal recruitment, it must be shown that the accused-appellant gave
complainants the distinct impression that he had the power or ability to send complainants abroad for
work such that the latter were convinced to part with their money in order to be employed. To be
engaged in the practice of recruitment and placement, it is plain that there must at least be a promise or
offer of an employment from the person posing as a recruiter whether locally or abroad.

Employment of Non-Resident Aliens
(Article 40)

Title II
EMPLOYMENT OF NON-RESIDENT
ALIENS

ART. 40. Employment permit 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. 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.


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Employment of Non-Resident Aliens

FARLE P. ALMODIEL vs. NLRC, ET AL.

FACTS:
Farle P. Almodiel is a certified public accountant who was hired as Cost Accounting Manager of Raytheon
Philippines, Inc. He started as a probationary or temporary employee. After a few months, he was
regularized. Raytheon adopted and installed a new cost accounting system in their operation which
Raytheon plants and subsidiaries worldwide used. As a consequence, the submission of periodic reports
was no longer needed. Almodiel was told of the abolition of his position on the ground of redundancy.
Thus, constrained him to file the complaint for illegal dismissal.The Labor Arbiter ruled in his favor declaring
that complainant's termination on the ground of redundancy is highly irregular and without legal and
factual basis. On appeal. NLRC reversed the decision and directed Raytheon to pay petitioner separation
pay/financial assistance. Unsatisfied, Almodiel filed the instant petition averring that the public respondent
committed grave abuse of discretion amounting to or in excess of jurisdiction in declaring as valid and
justified the termination of Almodiel on the ground of redundancy.Almodiel 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. Raytheon insists that Almodiel's functions and duties had not been absorbed by Ang Tan
Chai, a permanent resident born in this country, because they are 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.

ISSUE:
Whether or not the Raytheon Phils., Inc. violates Art. 40 of the Labor Code in employing a resident alien
without a working permit?

HELD:
No. Article 40 of the Labor Code which requires employment permit of no-resident alien. 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.

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. Further, 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 i n the Labor Arbiters
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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.

GENERAL MILLING CORPORATION, ET AL., vs. HON. RUBEN D. TORRES, in his capacity as Secretary of Labor
and Employment, ET AL.
G.R. No. 93666 April 22, 1991

FACTS:
The National Capital Region of the Department of Labor and Employment issued Alien Employment Permit
No. M-0689-3-535 to petitioner Earl Timothy Cone, a United States citizen, as sports consultant and assistant
coach for General Milling Corporation ("GMC"). GMC and Cone entered into a contract of employment
whereby the latter undertook to coach GMC's basketball team. On 9 February 1990, GMC requested
renewal of Cone's alien employment permit. GMC also requested that it be allowed to employ Cone as
full-fledged coach. DOLE granted the request on 15 February 1990 under Alien Employment Permit No. M-
02903-881, valid until 25 December 1990. 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 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 Cone would redound to the national interest.GMC filed a Motion for
Reconsideration and two (2) Supplemental Motions for Reconsideration but said Motions were denied.
Petition for Certiorari was filed on the court. GMC's claim that hiring of a foreign coach is an employer's
prerogative.

ISSUE:
Whether or not Secretary of Labor gravely abuse his discretion in rendering decision revoking petitioner
Cone's Alien Employment Permit?

HELD:
No. The Court ruled that petitioners have failed to show that Secretary of Labor acted with grave of
discretion in revoking petitioner Cone's Alien Employment Permit.

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. There is no showing 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 required nor that the hiring of petitioner Cone would redound to the national interest.
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.


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DEE C. CHUAN & SONS, INC., vs. THE COURT OF INDUSTRIAL RELATIONS, ET AL.
G.R. No. L-2216 January 31, 1950

FACTS:
During the trial of an industrial dispute between Dee C. Chuan & Sons, Inc., and the respondent labor
union, the former applied to the Court of Industrial Relations for authority "to hire about twelve more
laborers from time to time and on a temporary basis, to be chosen by the petitioner from either Filipinos or
Chinese." the court granted the authority applied for but imposed as a condition that the majority of the
twelve new laborers to be hired "should be native and only a nominal percentage thereof alien." In
imposing such condition Dee C. Chuan & Sons, Inc. assails the validity of the order of the Court of Industrial
Relations. That, the Court of Industrial Relations cannot intervene in questions of selection of employees and
workers so as to impose unconstitutional restrictions," and that "The restrictions of the number of aliens that
nay be employed in any business, occupation, trade or profession of any kind, is a denial of the equal
protection of the laws."

ISSUE:
Whether or not an order issued by CIR limiting alien employment violates the equal protection of the laws?

HELD:
No. The information does not name the persons who are supposed to be denied the equal protection of
the laws, it is clearly to be inferred that aliens in general are in petitioner's mind. An alien may question the
constitutionality of a statute (or court order) only when and so far as it is being, or is about to be, applied to
his disadvantage. The decision is rooted under "Commonwealth Act No. 103 has precisely vested the Court
of Industrial Relations with authority to intervene in all disputes between employees or strikes arising from the
difference as regards wages, compensation, and other labor conditions which it may take cognizance of."
The employer's right to hire labor is not absolute. "This privilege of hiring and firing ad libitum is, of course,
being subjected to restraints today." The legislature has the power to make regulations subject only to the

condition that they should be affected with public interest and reasonableness under the circumstances.
The power may be exercised directly by the law-making body or delegated by appropriate rules to the
courts or administrative agencies. The court is in opinion that the order under consideration meets the test
of reasonableness and public interest.

Training and Employment of Special Workers
(Article 57-81)

Article 57-72: Apprentices

Title II
TRAINING AND EMPLOYMENT
OF SPECIAL WORKERS

Chapter I


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APPRENTICES
ART. 57. Statement of objectives. - This Title aims:
(1) To help meet the demand of the economy for trained manpower;
(2) To establish a national apprenticeship program through the participation of employers, workers and
government and non-government agencies; and
(3) To establish apprenticeship standards for the protection of apprentices.

ART. 58. Definition of Terms. - As used in this Title:
(a) "Apprenticeship" means practical training on the job supplemented by related theoretical instruction.
(b) An "apprentice" is a worker who is covered by a written apprenticeship agreement with an individual
employer or any of the entities recognized under this Chapter.
(c) An "apprenticeable occupation" means any trade, form of employment or occupation which requires
more than three (3) months of practical training on the job supplemented by related theoretical instruction.
(d) "Apprenticeship agreement" is an employment contract wherein the employer binds himself to train the
apprentice and the apprentice in turn accepts the terms of training.

ART. 59. Qualifications of apprentice. - To qualify as an apprentice, a person shall:
(a) Be at least fourteen (14) years of age;
(b) Possess vocational aptitude and capacity for appropriate tests; and
(c) Possess the ability to comprehend and follow oral and written instructions.
Trade and industry associations may recommend to the Secretary of Labor appropriate educational
requirements for different occupations.

ART. 60. Employment of apprentices. - Only employers in the highly technical industries may employ
apprentices and only in apprenticeable occupations approved by the Secretary of Labor and
Employment. (As amended by Section 1, Executive Order No. 111, December 24, 1986).

ART. 61. Contents of apprenticeship agreements. - Apprenticeship agreements, including the wage rates of
apprentices, shall conform to the rules issued by the Secretary 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 Secretary
of Labor and Employment. The Department shall develop standard model programs of apprenticeship. (As
amended by Section 1, Executive Order No. 111, December 24, 1986).

ART. 62. Signing of apprenticeship agreement. -Every apprenticeship agreement shall be signed by the
employer or his agent, or by an authorized representative of any of the recognized organizations,
associations or groups and by the apprentice.
An apprenticeship agreement with a minor shall be signed in his behalf by his parent or guardian, if the
latter is not available, by an authorized representative of the Department of Labor, and the same shall be
binding during its lifetime.


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Every apprenticeship agreement entered into under this Title shall be ratified by the appropriate
apprenticeship committees, if any, and a copy thereof shall be furnished both the employer and the
apprentice.

ART. 63. Venue of apprenticeship programs. - Any firm, employer, group or association, industry
organization or civic group wishing to organize an apprenticeship program may choose from any of the
following apprenticeship schemes as the training venue for apprentice:
(a) Apprenticeship conducted entirely by and within the sponsoring firm, establishment or entity;
(b) Apprenticeship entirely within a Department of Labor and Employment training center or other public
training institution; or
(c) Initial training in trade fundamentals in a training center or other institution with subsequent actual work
participation within the sponsoring firm or entity during the final stage of training.

ART. 64. Sponsoring of apprenticeship program. - Any of the apprenticeship schemes recognized herein
may be undertaken or sponsored by a single employer or firm or by a group or association thereof or by a
civic organization. Actual training of apprentices may be undertaken:
(a) In the premises of the sponsoring employer in the case of individual apprenticeship programs;
(b) In the premises of one or several designated firms in the case of programs sponsored by a group or
association of employers or by a civic organization; or
(c) In a Department of Labor and Employment training center or other public training institution.

ART. 65. Investigation of violation of apprenticeship agreement. - Upon complaint of any interested person
or upon its own initiative, the appropriate agency of the Department of Labor and Employment or its
authorized representative shall investigate any violation of an apprenticeship agreement pursuant to such
rules and regulations as may be prescribed by the Secretary of Labor and Employment.

ART. 66. Appeal to the Secretary of Labor and Employment. - The decision of the authorized agency of the
Department of Labor and Employment may be appealed by any aggrieved person to the Secretary
of Labor and Employment within five (5) days from receipt of the decision. The decision of the Secretary
of Labor and Employment shall be final and executory.

ART. 67. Exhaustion of administrative remedies. - No person shall institute any action for the enforcement of
any apprenticeship agreement or damages for breach of any such agreement, unless he has exhausted
all available administrative remedies.

ART. 68. Aptitude testing of applicants. - Consonant with the minimum qualifications of apprentice-
applicants required under this Chapter, employers or entities with duly recognized apprenticeship
programs shall have primary responsibility for providing appropriate aptitude tests in the selection of
apprentices. If they do not have adequate facilities for the purpose, the Department of Labor and
Employment shall perform the service free of charge.


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ART. 69. Responsibility for theoretical instruction. - Supplementary theoretical instruction to apprentices in
cases where the program is undertaken in the plant may be done by the employer. If the latter is not
prepared to assume the responsibility, the same may be delegated to an appropriate government
agency.

ART. 70. Voluntary organization of apprenticeship programs; exemptions. - (a) The organization of
apprenticeship program shall be primarily a voluntary undertaking by employers;
(b) When national security or particular requirements of economic development so demand, the President
of the Philippines may require compulsory training of apprentices in certain trades, occupations, jobs or
employment levels where shortage of trained manpower is deemed critical as determined by the
Secretary of Labor and Employment. Appropriate rules in this connection shall be promulgated by the
Secretary of Labor and Employment as the need arises; and
(c) Where services of foreign technicians are utilized by private companies in apprenticeable trades, said
companies are required to set up appropriate apprenticeship programs.

ART. 71. Deductibility of training costs. - An additional deduction from taxable income of one-half (1/2) of
the value of labor training expenses incurred for developing the productivity and efficiency of apprentices
shall be granted to the person or enterprise organizing an apprenticeship program: Provided, That such
program is duly recognized by the Department ofLabor and Employment: Provided, further, That such
deduction shall not exceed ten (10%) percent of direct labor wage: and Provided, finally, That the person
or enterprise who wishes to avail himself or itself of this incentive should pay his apprentices the minimum
wage.

ART. 72. Apprentices without compensation. - The Secretary ofLabor and Employment may authorize the
hiring of apprentices without compensation whose training on the job is required by the school or training
program curriculum or as requisite for graduation or board examination.

NITTO ENTERPRISES vs. NLRC, ET AL.
G.R. No. 114337 September 29, 1995

FACTS:
Respondent Roberto Capili was hired by petitioner Nitto Enterprise, a company engage in the sale of glass
and aluminum products, sometime in May 1990 as an apprentice machinist, molder and core maker, thru
an apprenticeship agreement for a period of six (6) months from May 28, 1990 to November 28, 1990. An
accidents happened because of respondents improper attitude towards work, and asked to resign. On
August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for and in
consideration of the sum of P1,912.79. After three days, private respondent formally filed before the NLRC

Arbitration Branch, National Capital Region a complaint for illegal dismissal and payment of other
monetary benefits. The Labor Arbiter rendered his decision finding the termination of private respondent as
valid and dismissing the money claim for lack of merit. On July 26, 1993, the National Labor Relations
Commission issued an order reversing the decision of the Labor Arbiter, directed to reinstate complainant
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to his work with backwages, and declared that private respondent was a regular employee of petitioner.
Hence, the instant petition for certiorari.

ISSUE:
Whether or not there exist an employer-apprentice relationship between petitioner and private respondent
in the case at bar?

HELD:
No. Based on the evidence, 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 quo 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.

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
assertion that he was hired not as an apprentice but as a delivery boy ("kargador" or "pahinante") deserves
credence. He should rightly be considered as a regular employee of petitioner as defined by Article 280 of
the Labor Code. 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 establish apprenticeship standards for the protection of apprentices." To
translate such objectives into 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.
Pursuant to the constitutional mandate to "protect the rights of workers and promote their welfare."

FILAMER CHRISTIAN INSTITUTE vs. HON. INTERMEDIATE APPELLATE COURT, ET AL.
G.R. No. 75112 August 17, 1992

FACTS:
Potenciano Kapunan, Sr., seeking reconsideration on the decision rendered by this Court on October 16,
1990 which ruled that the Filamer is not liable for the injuries caused by Funtecha on the grounds that the
latter was not an authorized driver, that Funtecha was merely a working scholar who, under Section 14,
Rule X, Book III of the Rules and Regulations Implementing the Labor Code is not considered an employee
of the Filamer. Potenciano Kapunan, Sr., assert that the circumstances in the present case cal l for the
application of Article 2180 of the Civil Code since Funtecha is no doubt an employee of Filamer. That under
Article 2180 an injured party shall have recourse against the servant as well as the Filamer for whom, at the
time of the incident, the servant was performing an act in furtherance of the interest and for the benefit of
the Institute. Funtecha allegedly did not steal the school jeep nor use it for a joy ride without the knowledge
of the school authorities. Funtecha was a working student, being a part-time janitor and a scholar of
petitioner Filamer. He was, in relation to the school, an employee assigned to clean the school premises for


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only two (2) hours in the morning of each school day. While on their way home one late afternoon
Funtecha requested the driver, Allan Masa to drive, and was allowed. It is significant to note that the place
where Allan lives is also the house of his father, the school president, Agustin Masa. Moreover, it is also the
house where Funtecha was allowed free board while he was a student of Filamer Christian Institute. Hence,
under their supervision.

ISSUE:
Whether or not Section 14, Rule X, Book III of the Rules and Regulations Implementing the Labor Code can
be invoked in the case at bar?

HELD:
No. The court after a re-examination of the laws relevant to the facts, reinstate the Court of Appeals'
decision, applying Civil Code provisions. The Court reconsiders its decision. Its defense, was promulgated by
the Secretary of Labor and Employment only for the purpose of administering and enforcing the provisions
of the Labor Code on conditions of employment. Particularly, Rule X of Book III provides guidelines on the
manner by which the powers of the Labor Secretary shall be exercised; on what records should be kept;
maintained and preserved; on payroll; and on the exclusion of working scholars from, and inclusion of
resident physicians in the employment coverage as far as compliance with the substantive labor provisions
on working conditions, rest periods, and wages, is concerned.

In other words, Rule X is merely a guide to the enforcement of the substantive law on labor. The Court, thus,
makes the distinction and so holds that Section 14, Rule X, Book III of the Rules is not the decisive law in a
civil suit for damages instituted by an injured person during a vehicular accident against a working student
of a school and against the school itself. It is undisputed that Funtecha was a working student, being a
part-time janitor and a scholar of petitioner Filamer. He was, in relation to the school, an employee even if
he was assigned to clean the school premises for only two (2) hours in the morning of each school day. In
learning how to drive while taking the vehicle home in the direction of Allan's house, Funtecha defi nitely
was not having a joy ride. Funtecha was not driving for the purpose of his enjoyment or for a "frolic of his
own" but ultimately, for the service for which the jeep was intended by the petitioner school. Therefore, the
Court is constrained to conclude that the act of Funtecha in taking over the steering wheel was one done
for and in behalf of his employer for which act the petitioner-school cannot deny any responsibility by
arguing that it was done beyond the scope of his janitorial duties. The clause "within the scope of their
assigned tasks" for purposes of raising the presumption of liability of an employer, includes any act done by
an employee, in furtherance of the interests of the employer or for the account of the employer at the time
of the infliction of the injury or damage.

The fact that Funtecha was not the school driver or was not acting within the scope of his janitorial duties
does not relieve the petitioner of the burden of rebutting the presumption juris tantum that there was
negligence on its part either in the selection of a servant or employee, or in the supervision over him. The
petitioner has failed to show proof of its having exercised the required diligence of a good father of a
family over its employees Funtecha and Allan. The present case does not deal with a labor dispute on
conditions of employment between an alleged employee and an alleged employer. It invokes a claim
brought by one for damages for injury caused by the patently negligent acts of a person, against both
doer-employee and his employer. Hence, the reliance on the implementing rule on labor to disregard the
primary liability of an employer under Article 2180 of the Civil Code is misplaced. An implementing rule on
labor cannot be used by an employer as a shield to avoid liability under the substantive provisions of the
Civil Code. The petitioner, thus, has an obligation to pay damages for injury arising from the unskilled


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manner by which Funtecha drove the vehicle. The liability of the employer is, under Article 2180, primary
and solidary. However, the employer shall have recourse against the negligent employee for whatever
damages are paid to the heirs of the plaintiff.

Article 73-77: Learners

Chapter II
LEARNERS

ART. 73. Learners defined. - Learners are persons hired as trainees in semi-skilled and other industrial
occupations which are non-apprenticeable and which may be learned through practical training on the
job in a relatively short period of time which shall not exceed three (3) months.

ART. 74. When learners may be hired. - Learners may be employed when no experienced workers are
available, the employment of learners is necessary to prevent curtailment of employment opportunities,
and the employment does not create unfair competition in terms of labor costs or impair or lower working
standards.

ART. 75. Learnership agreement. - Any employer desiring to employ learners shall enter into
a learnership agreement with them, which agreement shall include:
(a) The names and addresses of the learners;
(b) The duration of the learnership period, which shall not exceed three (3) months;
(c) The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of
the applicable minimum wage; and chanroblesvirtuallawlibrary
(d) A commitment to employ the learners if they so desire, as regular employees upon completion of
the learnership. All learners who have been allowed or suffered to work during the first two (2) months shall
be deemed regular employees if training is terminated by the employer before the end of the stipulated
period through no fault of the learners.
The learnership agreement shall be subject to inspection by the Secretary of Labor and Employment or his
duly authorized representative.

ART. 76. Learners in piecework. - Learners employed in piece or incentive-rate jobs during the training
period shall be paid in full for the work done.

ART. 77. Penalty clause. - Any violation of this Chapter or its implementing rules and regulations shall be
subject to the general penalty clause provided for in this Code.

Article 78-81: Handicapped Workers

Chapter III
HANDICAPPED WORKERS


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ART. 78. Definition. - Handicapped workers are those whose earning capacity is impaired by age or
physical or mental deficiency or injury.

ART. 79. When employable. - Handicapped workers may be employed when their employment is
necessary to prevent curtailment of employment opportunities and when it does not create unfair
competition in labor costs or impair or lower working standards.

ART. 80. Employment agreement. - Any employer who employs handicapped workers shall enter into an
employment agreement with them, which agreement shall include:
a. The names and addresses of the handicapped workers to be employed;
b. The rate to be paid the handicapped workers which shall not be less than seventy five (75%) percent of
the applicable legal minimum wage;
c. The duration of employment period; and
d. The work to be performed by handicapped workers.

The employment agreement shall be subject to inspection by the Secretary of Labor or his duly authorized
representative.

ART. 81. Eligibility for apprenticeship. - Subject to the appropriate provisions of this Code, handicapped
workers may be hired as apprentices or learners if their handicap is not such as to effectively impede the
performance of job operations in the particular occupations for which they are hired.


2014-2015

Notes in Labor Law 1

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I dwell in the Lord who strengthens me.

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