1
FACTS: Gonzales-Flores was found guilty of illegal recruitment as seamen three
different people at the same time and collecting money from them without the
necessary license. The complainants filed a complaint after they tried to follow-up
their applications and nothing happened for three months and they found out from
the POEA that the accused wasn’t licensed. The evidence consisted of the
complainant’s testimonies and testimonies of other witnesses. Accused now argues
that the Court didn’t have enough evidence to convict her.
ISSUE: W/N the Court had enough evidence to convict the accused.
HELD: The SC upholds the conviction. The elements of illegal recruitment in large
scale are: (1) the accused engages in acts of recruitment and placement of workers;
(2) the accused has no 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 conditions are present. The
evidence shows that she could do something to get their applications approved.
Accused contends that all she did was to refer the complaints but 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
application for employment or a selected employer, placement after initial interview
of a selected applicant for employment to a selected employer, placement officer, or
bureau. Also she did more than just make referrals, she actively and directly enlisted
complainants for employment aboard, when promising jobs as seamen, and collected
money.
People v Goce
Chester Cabalza recommends his visitors to please read the original & full text
of the case cited. Xie xie!
RECRUITMENT AND PLACEMENT
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. LOMA GOCE y
OLALIA, DAN GOCE and NELLY D. AGUSTIN, accused, NELLY D.
AGUSTIN, accused-appellant.
G.R. 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
(Presidential Decree No. 442) as amended by Section 1(b) of Presidential Decree No.
2018, was filed against spouses Dan and Loma Goce and herein accused-appellant
Nelly Agustin in the Regional Trial Court of Manila, Branch 5, alleging —
That in or about and during the period comprised between May 1986 and June 25,
1987, both dates inclusive, in the City of Manila, Philippines, the said accused,
conspiring and confederating together and helping one another, representing
themselves to have the capacity to contract, enlist and transport Filipino workers for
employment abroad, did then and there willfully and unlawfully, for a fee, recruit
and promise employment/job placement abroad, to (1) Rolando Dalida y Piernas, (2)
Ernesto Alvarez y Lubangco, (3) Rogelio Salado y Savillo, (4) Ramona Salado y
Alvarez, (5) Dionisio Masaya y de Guzman, (6) Dave Rivera y de Leon, (7) Lorenzo
Alvarez y Velayo, and (8) Nelson Trinidad y Santos, without first having secured the
required license or authority from the Department of Labor.
Four of the complainants testified for the prosecution. Rogelio Salado was the first to
take the witness stand and he declared that sometime in March or April, 1987 he was
introduced by Lorenzo Alvarez, his brother-in-law and a co-applicant, to Nelly
Agustin in the latter's residence at Factor, Dongalo, Parañaque, Metro Manila.
Representing herself as the manager of the Clover Placement Agency, Agustin
showed him a job order as proof that he could readily be deployed for overseas
employment. Salado learned that he had to pay P5,000.00 as processing fee, which
amount he gave sometime in April or May of the same year. He was issued the
corresponding receipt.
Also in April or May, 1987, Salado, accompanied by five other applicants who were
his relatives, went to the office of the placement agency at Nakpil Street, Ermita,
Manila where he saw Agustin and met the spouses Dan and Loma Goce, owners of

the agency. He submitted his bio-data and learned from Loma Goce that he had to
give P12,000.00, instead of the original amount of P5,000.00 for the placement fee.
Although surprised at the new and higher sum, they subsequently agreed as long as
there was an assurance that they could leave for abroad.
Thereafter, a receipt was issued in the name of the Clover Placement Agency
showing that Salado and his aforesaid co-applicants each paid P2,000.00, instead of
the P5,000.00 which each of them actually paid. Several months passed but Salado
failed to leave for the promised overseas employment. Hence, in October, 1987,
along with the other recruits, he decided to go to the Philippine Overseas
Employment Administration (POEA) to verify the real status of Clover Placement
Agency. They discovered that said agency was not duly licensed to recruit job
applicants. Later, upon learning that Agustin had been arrested, Salado decided to
see her and to demand the return of the money he had paid, but Agustin could only
give him P500.00.
Ramona Salado, the wife of Rogelio Salado, came to know through her brother,
Lorenzo Alvarez, about Nelly Agustin. Accompanied by her husband, Rogelio,
Ramona went to see Agustin at the latter's residence. Agustin persuaded her to apply
as a cutter/sewer in Oman so that she could join her husband. Encouraged by
Agustin's promise that she and her husband could live together while working in
Oman, she instructed her husband to give Agustin P2,000.00 for each of them as
placement fee, or the total sum of P4,000.00.
Much later, the Salado couple received a telegram from the placement agency
requiring them to report to its office because the "NOC" (visa) had allegedly arrived.
Again, around February, or March, 1987, Rogelio gave P2,000.00 as payment for his
and his wife's passports. Despite follow-up of their papers twice a week from
February to June, 1987, he and his wife failed to leave for abroad.
Complainant Dionisio Masaya, accompanied by his brother-in-law, Aquiles Ortega,
applied for a job in Oman with the Clover Placement Agency at Parañaque, the
agency's former office address. There, Masaya met Nelly Agustin, who introduced
herself as the manager of the agency, and the Goce spouses, Dan and Loma, as well
as the latter's daughter. He submitted several pertinent documents, such as his bio-
data and school credentials.
In May, 1986, Masaya gave Dan Goce P1,900.00 as an initial downpayment for the
placement fee, and in September of that same year, he gave an additional
P10,000.00. He was issued receipts for said amounts and was advised to go to the
placement office once in a while to follow up his application, which he faithfully did.
Much to his dismay and chagrin, he failed to leave for abroad as promised.
Accordingly, he was forced to demand that his money be refunded but Loma Goce
could give him back only P4,000.00 in installments.
As the prosecution's fourth and last witness, Ernesto Alvarez took the witness stand
2
on June 7, 1993. He testified that in February, 1987, he met appellant Agustin
through his cousin, Larry Alvarez, at her residence in Parañaque. She informed him
that "madalas siyang nagpapalakad sa Oman" and offered him a job as an ambulance
driver at the Royal Hospital in Oman with a monthly salary of about $600.00 to
$700.00.
On March 10, 1987, Alvarez gave an initial amount of P3,000.00 as processing fee to
Agustin at the latter's residence. In the same month, he gave another P3,000.00, this
time in the office of the placement agency. Agustin assured him that he could leave
for abroad before the end of 1987. He returned several times to the placement
agency's office to follow up his application but to no avail. Frustrated, he demanded
the return of the money he had paid, but Agustin could only give back P500.00.
Thereafter, he looked for Agustin about eight times, but he could no longer find her.
Only herein appellant Agustin testified for the defense. She asserted that Dan and
Loma Goce were her neighbors at Tambo, Parañaque and that they were licensed
recruiters and owners of the Clover Placement Agency. Previously, the Goce couple
was able to send her son, Reynaldo Agustin, to Saudi Arabia. Agustin met the
aforementioned complainants through Lorenzo Alvarez who requested her to
introduce them to the Goce couple, to which request she acceded.
Denying any participation in the illegal recruitment and maintaining that the
recruitment was perpetrated only by the Goce couple, Agustin denied any knowledge
of the receipts presented by the prosecution. She insisted that the complainants
included her in the complaint thinking that this would compel her to reveal the
whereabouts of the Goce spouses.
On November 19, 1993, the trial court rendered judgment finding herein appellant
guilty as a principal in the crime of illegal recruitment.
Issue:
Whether or not Agustin’s act of introducing couple Goce falls within the meaning of
illegal recruitment and placement under Art 13(b) in relation to Art 34 of the Labor
Code.
Held:
The testimonial evidence hereon show that she indeed further committed acts
constitutive of illegal recruitment.
All four prosecution witnesses testified that it was Agustin whom they initially
approached regarding their plans of working overseas. It was from her that they
learned about the fees they had to pay, as well as the papers that they had to submit.
It was after they had talked to her that they met the accused spouses who owned the
placement agency.
 3

People of the Philippines vs. Melissa Chua

As correctly held by the trial court, being an employee of the Goces, it was therefore
logical for appellant to introduce the applicants to said spouses, they being the G.R. No. 187052 ; 13 September 2012
owners of the agency. As such, appellant was actually making referrals to the agency
of which she was a part. She was therefore engaging in recruitment activity.

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 PONENTE: Villarama, Jr.
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 SUBJECT: (4) Estafa, Illegal Recruitment in large scale
employed.

WHEREFORE, the appealed judgment of the court a quo is hereby AFFIRMED in

toto, with costs against accused-appellant Nelly D. Agustin.
SO ORDERED.
FACTS:

Within the period of 29 July 2002 up to 20 August 2002, accused personally met the
complainants individually and on separate dates where she represented herself to
have the capacity to contract, enlist and transport the complainants as Filipino
Overseas Workers, particularly Taiwan. She personally received various amounts as
placement fees in consideration for their overseas employment and personally issued
receipts to the complainants. Accused represented herself that she is an employee of
Gate International (Golden Gate) Office located in Paragon Tower, Ermita, Manila.
She also assured them that the earlier complainants would be able to pay their
placement fees then the earlier that they could leave. After the complainants
completed payment of their placement fees, they were made to sign a contract
containing stipulations as to salary and conditions of work. On several occasions
thereafter, they returned to appellant’s office to follow-up on their application. After
several visits, however, they noticed that all the properties of Golden Gate in its
Paragon Tower Office were already gone. Thus, the complainants filed a complaint
for Illegal Recruitment and Estafa against the accused. During trial, accused denied
that she was the one who recruited the complainants and that she is merely a cashier
of Golden Gate.

ISSUE:

Whether or not the prosecution was able to sufficiently prove the crime of
Illegal Recruitment and Four (4) Estafa

HELD:
Yes, the accused cannot escape liability by conveniently limiting her
participation as a cashier of Golden Gate. Article 13(b) of the Labor Code and
Section 6 of R.A. No. 8042 are unequivocal that illegal recruitment may or may not
be for profit. It is immaterial, therefore, whether appellant remitted the placement
fees to the agency’s treasurer or appropriated them. The same provision likewise
provides that the persons criminally liable for illegal recruitment are the principals,
accomplices and accessories. Just the same, therefore, appellant can be held liable as
a principal by direct participation since she personally undertook the recruitment of
private complainants without a license or authority to do so.
It is well-established in jurisprudence that a person may be charged and convicted for
both illegal recruitment and estafa. The reason therefor is not hard to discern: illegal
recruitment is malum prohibitum, while estafa is mala in se. In the first, the criminal
intent of the accused is not necessary for conviction. In the second, such intent is
imperative. Estafa under Article 315, paragraph 2(a) of the Revised Penal Code is
committed by any person who defrauds another by using fictitious name, or falsely
pretends to possess power, influence, qualifications, property, credit, agency,
business or imaginary transactions, or by means of similar deceits executed prior to
or simultaneously with the commission of fraud.
However, the Supreme Court held that the prosecution failed to establish the
presence of the third and fourth elements of estafa as to the case of private
complainant Ursulum. While Ursulum claims that he delivered to the accused some
amounts, he failed to produce receipts to substantiate the same. Instead, Ursulum
relies only on ten text messages allegedly sent by the accused as evidence of their
transaction. Said text messages alone does not constitute proof beyond reasonable
doubt that appellant was able to obtain an amount from Ursulum as a result of her
false pretenses.
Unlike in illegal recruitment where profit is immaterial, a conviction for estafa
requires a clear showing that the offended party parted with his money or property
upon the offender’s false pretenses, and suffered damage thereby. In every criminal
prosecution, the State must prove beyond reasonable doubt all the elements of the
crime charged and the complicity or participation of the accused.32 It is imperative,
therefore, that damage as an element of estafa under Article 315, paragraph 2(a) be
proved as conclusively as the offense itself. The failure of the prosecution to
discharge this burden concerning the estafa allegedly committed against Ursulum
warrants the acquittal of appellant on the said charge.
4
People v Panis
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
 5

presumption is that the individual or entity is engaged in recruitment and placement STO. TOMAS V. SALAC DIGEST
whenever he or it is dealing with two or more persons to whom, in consideration of a December 21, 2016 ~ vbdiaz
fee, an offer or promise of employment is made in the course of the "canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers."
STO. TOMAS V. SALAC
At any rate, the interpretation here adopted should give more force to the campaign
against illegal recruitment and placement, which has victimized many Filipino GR No. 152642
workers seeking a better life in a foreign land, and investing hard-earned savings or
even borrowed funds in pursuit of their dream, only to be awakened to the reality of Facts:
a cynical deception at the hands of their own countrymen.
These consolidated cases pertain to the constitutionality of certain provisions of R.A.
Acknowledgement: Peter De Guzman No. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995.

1. G.R. 152642 and G.R. 152710

Respondents question the constitutionality of Sections 29 and 30, R.A. 8042

Sections 29 and 30 of the Act commanded the Department of Labor and

Employment (DOLE) to begin deregulating within one year of its passage the
business of handling the recruitment and migration of overseas Filipino workers and
phase out within five years the regulatory functions of the Philippine Overseas
Employment Administration (POEA).

*Sections 29 and 30 were repealed by RA 8042. Consequently, these 2 cases were

dismissed for being moot and academic.

1. G.R. 167590

Issue is on the constitutionality of Sections 6 (for being vague as it fails to

distinguish licensed & non-licensed recruiters), 7 (for being sweeping in its
application of penalties), and 9 (for allowing the offended parties to file the
criminal case in their place of residence instead of filing it at the place where the
crime or any of its essential elements were committed) of R.A. 8042.

Section 6 defines the crime of “illegal recruitment” and enumerates the acts
constituting the same. Section 7 provides the penalties for prohibited acts.

For Section 6 – Illegal recruitment, as defined, is clear and unambiguous and,

contrary to the RTC’s finding, actually makes a distinction between licensed and
non-licensed recruiters.

By its terms, persons who engage in “canvassing, enlisting, contracting,

transporting, utilizing, hiring, or procuring workers” without the appropriate
government license or authority are guilty of illegal recruitment whether or not

they commit the wrongful acts enumerated in that section. On the other hand,
recruiters who engage in the canvassing, enlisting, etc. of OFWs, although with
the appropriate government license or authority, are guilty of illegal recruitment
only if they commit any of the wrongful acts enumerated in Section 6.
For Section 7 – Congress was within its prerogative to determine what individual
acts are equally reprehensible, consistent with the State policy of according full
protection to labor, and deserving of the same penalties. It is not within the power
of the Court to question the wisdom of this kind of choice.
Section 9 of R.A. 8042 allowed the filing of criminal actions arising from “illegal
recruitment” before the RTC of the province or city where the offense was
committed or where the offended party actually resides at the time of the commission
of the offense.
* There is nothing arbitrary or unconstitutional in Congress fixing an alternative
venue for violations of Section 6 of R.A. 8042 that differs from the venue
established by the Rules on Criminal Procedure. Rule 110 Sec. 15 (a) of the Rules
of Court allows exceptions. Thus:
SEC. 15. Place where action is to be instituted.— (a) Subject to existing laws, the
criminal action shall be instituted and tried in the court of the municipality or
territory where the offense was committed or where any of its essential ingredients
occurred.
Section 9 of R.A. 8042, as an exception to the rule on venue of criminal actions is,
consistent with that law’s declared policy of providing a criminal justice system that
protects and serves the best interests of the victims of illegal recruitment.
1. G.R. 167590, G.R. 182978-79, and G.R. 184298-99
(Constitutionality of Section 10, last sentence of 2nd paragraph on the liability of the
principal/employer and the recruitment/placement agency)
The liability of corporate directors and officers is not automatic. To make them
jointly and solidarily liable with their company, there must be a finding that they
were remiss in directing the affairs of that company, such as sponsoring or
tolerating the conduct of illegal activities (MAM Realty Development Corp. v.
National Labor Relations Commission, 314 Phil. 838, 845 (1995).
FROM ATTY. SANTIAGO ^^
6
FACTS: Respondent Divina Montehermozo is a domestic helper deployed to
Taiwan by Sunace International Management Services (Sunace) under a 12-month
contract. Such employment was made with the assistance of Taiwanese broker
Edmund Wang. After the expiration of the contract, Montehermozo continued her
employment with her Taiwanese employer for another 2 years.
When Montehermozo returned to the Philippines, she filed a complaint against
Sunace, Wang, and her Taiwanese employer before the National Labor Relations
Commission (NLRC). She alleges that she was underpaid and was jailed for three
months in Taiwan. She further alleges that the 2-year extension of her employment
contract was with the consent and knowledge of Sunace. Sunace, on the other hand,
denied all the allegations.
The Labor Arbiter ruled in favor of Montehermozo and found Sunace liable thereof.
The National Labor Relations Commission and Court of Appeals affirmed the labor
arbiter’s decision. Hence, the filing of this appeal.
ISSUE: Whether or not the 2-year extension of Montehermozo’s employment was
made with the knowledge and consent of Sunace
HELD: There is an implied revocation of an agency relationship when after the
termination of the original employment contract, the foreign principal directly
negotiated with the employee and entered into a new and separate employment
contract.
Contrary to the Court of Appeals finding, the alleged continuous communication was
with the Taiwanese broker Wang, not with the foreign employer.
The finding of the Court of Appeals solely on the basis of the telefax message
written by Wang to Sunace, that Sunace continually communicated with the foreign
"principal" (sic) and therefore was aware of and had consented to the execution of
the extension of the contract is misplaced. The message does not provide evidence
that Sunace was privy to the new contract executed after the expiration on February
1, 1998 of the original contract. That Sunace and the Taiwanese broker
communicated regarding Montehermozo’s allegedly withheld savings does not
necessarily mean that Sunace ratified the extension of the contract.
As can be seen from that letter communication, it was just an information given to
Sunace that Montehermozo had taken already her savings from her foreign employer
and that no deduction was made on her salary. It contains nothing about the
extension or Sunace’s consent thereto.
Parenthetically, since the telefax message is dated February 21, 2000, it is safe to
assume that it was sent to enlighten Sunace who had been directed, by Summons

issued on February 15, 2000, to appear on February 28, 2000 for a mandatory
conference following Montehermozo’s filing of the complaint on February 14, 2000.
Respecting the decision of Court of Appeals following as agent of its foreign
principal, [Sunace] cannot profess ignorance of such an extension as obviously, the
act of its principal extending [Montehermozo’s] employment contract necessarily
bound it, it too is a misapplication, a misapplication of the theory of imputed
knowledge.
The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to
the principal, employer, not the other way around. The knowledge of the principal-
foreign employer cannot, therefore, be imputed to its agent Sunace.
There being no substantial proof that Sunace knew of and consented to be bound
under the 2-year employment contract extension, it cannot be said to be privy
thereto. As such, it and its "owner" cannot be held solidarily liable for any of
Montehermozo’s claims arising from the 2-year employment extension. As the New
Civil Code provides, Contracts take effect only between the parties, their assigns,
and heirs, except in case where the rights and obligations arising from the contract
are not transmissible by their nature, or by stipulation or by provision of law.
Furthermore, as Sunace correctly points out, there was an implied revocation of its
agency relationship with its foreign principal when, after the termination of the
original employment contract, the foreign principal directly negotiated with
Montehermozo and entered into a new and separate employment contract in Taiwan.
Article 1924 of the New Civil Code states that the agency is revoked if the principal
directly manages the business entrusted to the agent, dealing directly with third
persons.
7
SERRANO V. GALLANT MARITIME SERVICES,INC.
By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails
the Decision and Resolution of the Court of Appeals (CA).
FACTS:
Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co.,
Ltd. (respondents) under a Philippine Overseas Employment Administration
(POEA)-approved Contract of Employment with the following terms and
conditions:
Duration of contract 12 months
Position Chief Officer
Basic monthly salary US$1,400.00
Hours of work 48.0 hours per week
Overtime US$700.00 per month
Vacation leave with pay 7.00 days per month
On March 19, 1998, the date of his departure, petitioner was constrained to accept a
downgraded employment contract for the position of Second Officer with a monthly
salary of US$1,000.00, upon the assurance and representation of respondents that he
would be made Chief Officer by the end of April 1998.
Respondents did not deliver on their promise to make petitioner Chief Officer.
Hence, petitioner refused to stay on as Second Officer and was repatriated to the
Philippines on May 26, 1998.
Petitioner’s employment contract was for a period of 12 months or from March 19,
1998 up to March 19, 1999, but at the time of his repatriation on May 26, 1998,
he had served only two (2) months and seven (7) days of his contract, leaving an
unexpired portion of nine (9) months and twenty-three (23) days.
Petitioner filed with the Labor Arbiter (LA) a Complaint against respondents
for constructive dismissal and for payment of his money claims in the total
amount of US$26,442.73.

The LA rendered a Decision dated July 15, 1999, declaring the dismissal of
petitioner illegal and awarding him monetary benefits, to wit:
WHEREFORE, premises considered, judgment is hereby rendered declaring that the
dismissal of the complainant (petitioner) by the respondents in the above-entitled
case was illegal and the respondents are hereby ordered to pay the complainant
[petitioner], jointly and severally, in Philippine Currency, based on the rate of
exchange prevailing at the time of payment, the amount of EIGHT
THOUSAND SEVEN HUNDRED SEVENTY U.S. DOLLARS (US $8,770.00),
representing the complainant’s salary for three (3) months of the unexpired
portion of the aforesaid contract of employment.
The claims of the complainant for moral and exemplary damages are hereby
DISMISSED for lack of merit.
In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his
computation on the salary period of three months only — rather than the entire
unexpired portion of nine months and 23 days of petitioner’s employment
contract – applying the subject clause. However, the LA applied the salary rate
of US$2,590.00, consisting of petitioner’s “[b]asic salary, US$1,400.00/month +
US$700.00/month, fixed overtime pay, + US$490.00/month, vacation leave pay =
US$2,590.00/compensation per month.”
Respondents appealed to the National Labor Relations Commission (NLRC) to
question the finding of the LA that petitioner was illegally dismissed.
The NLRC modified the LA Decision and corrected the LA’s computation of the
lump-sum salary awarded to petitioner by reducing the applicable salary rate from
US$2,590.00 to US$1,400.00 because R.A. No. 8042 “does not provide for the
award of overtime pay, which should be proven to have been actually
performed, and for vacation leave pay.
Petitioner filed a Motion for Partial Reconsideration, but this time he questioned
the constitutionality of the subject clause. The NLRC denied the motion.
Petitioner filed a Petition for Certiorari with the CA, reiterating the constitutional
challenge against the subject clause. After initially dismissing the petition on a
technicality, the CA eventually gave due course to it, as directed by this Court in its
Resolution which granted the petition for certiorari,filed by petitioner.
The CA affirmed the NLRC ruling on the reduction of the applicable salary
rate; however, the CA skirted the constitutional issue raised by petitioner.
His Motion for Reconsideration having been denied by the CA, petitioner brings his
cause to this Court on the following grounds:
8
The Court of Appeals and the labor tribunals have decided the case in a way not in
accord with applicable decision of the Supreme Court involving similar issue of
granting unto the migrant worker back wages equal to the unexpired portion of his
contract of employment instead of limiting it to three (3) months.
Even without considering the constitutional limitations [of] Sec. 10 of Republic Act
No. 8042, the Court of Appeals gravely erred in law in excluding from
petitioner’s award the overtime pay and vacation pay provided in his contract
since under the contract they form part of his salary.
The Court now takes up the full merit of the petition mindful of the extreme
importance of the constitutional question raised therein.
ISSUES:
 Whether Section 10 (par 5) of RA 8042 is unconstitutional
 Proper computation of the Lump-sum salary to be awarded to
petitioner by reason of his illegal dismissal
 Whether the overtime and leave pay should form part of the salary
basis in the computation of his monetary award
The unanimous finding of the LA, NLRC and CA that the dismissal of
petitioner was illegal is not disputed. Likewise not disputed is the salary
differential of US$45.00 awarded to petitioner in all three fora.
Applying the subject clause, the NLRC and the CA computed the lump-sum salary
of petitioner at the monthly rate of US$1,400.00 covering the period of three months
out of the unexpired portion of nine months and 23 days of his employment contract
or a total of US$4,200.00.
Impugning the constitutionality of the subject clause, petitioner contends that, in
addition to the US$4,200.00 awarded by the NLRC and the CA, he is entitled to
US$21,182.23 more or a total of US$25,382.23, equivalent to his salaries for the
entire nine months and 23 days left of his employment contract, computed at
the monthly rate of US$2,590.00.31

Arguments of the Petitioner
For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th
paragraph of Section 10, Republic Act (R.A.) No. 8042, violates the OFWs’
constitutional rights in that it impairs the terms of their contract, deprives them of
equal protection and denies them due process.
The Arguments of Respondents
Respondents contend that the constitutional issue should not be entertained, for this
was belatedly interposed by petitioner in his appeal before the CA, and not at the
earliest opportunity, which was when he filed an appeal before the NLRC.40
The Arguments of the Solicitor General
The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July
15, 1995, its provisions could not have impaired petitioner’s 1998 employment
contract. Rather, R.A. No. 8042 having preceded petitioner’s contract, the provisions
thereof are deemed part of the minimum terms of petitioner’s employment,
especially on the matter of money claims, as this was not stipulated upon by the
parties.
The Court’s Ruling:
First Issue
Does the subject clause violate Section 1, Article III of the Constitution, and
Section 18, Article II and Section 3, Article XIII on Labor as protected sector?
The answer is in the affirmative.
Section 1, Article III of the Constitution guarantees:
No person shall be deprived of life, liberty, or property without due process of law
nor shall any person be denied the equal protection of the law.
Section 18, Article II and Section 3, Article XIII accord all members of the labor
sector, without distinction as to place of deployment, full protection of their rights
and welfare.
To Filipino workers, the rights guaranteed under the foregoing constitutional
provisions translate to economic security and parity: all monetary benefits should be
equally enjoyed by workers of similar category, while all monetary obligations
should be borne by them in equal degree; none should be denied the protection of the
9
laws which is enjoyed by, or spared the burden imposed on, others in like
circumstances.
Imbued with the same sense of “obligation to afford protection to labor,” the
Court in the present case also employs the standard of strict judicial scrutiny,
for it perceives in the subject clause a suspect classification prejudicial to
OFWs.
Upon cursory reading, the subject clause appears facially neutral, for it applies to all
OFWs. However, a closer examination reveals that the subject clause has a
discriminatory intent against, and an invidious impact on OFWs
The subject clause does not state or imply any definitive governmental purpose; and
it is for that precise reason that the clause violates not just petitioner’s right to
equal protection, but also her right to substantive due process under Section 1,
Article III of the Constitution.
Second Issue
It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or
the unexpired portions thereof, were treated alike in terms of the computation of their
monetary benefits in case of illegal dismissal. Their claims were subjected to a
uniform rule of computation: their basic salaries multiplied by the entire
unexpired portion of their employment contracts.
The enactment of the subject clause in R.A. No. 8042 introduced a differentiated
rule of computation of the money claims of illegally dismissed OFWs based on
their employment periods, in the process singling out one category whose contracts
have an unexpired portion of one year or more and subjecting them to the peculiar
disadvantage of having their monetary awards limited to their salaries for 3 months
or for the unexpired portion thereof, whichever is less, but all the while sparing the
other category from such prejudice, simply because the latter’s unexpired contracts
fall short of one year.
Prior to R.A. No. 8042, a uniform system of computation of the monetary awards of
illegally dismissed OFWs was in place. This uniform system was applicable even
to local workers with fixed-term employment.
The subject clause does not state or imply any definitive governmental purpose; and
it is for that precise reason that the clause violates not just petitioner’s right to
equal protection, but also her right to substantive due process under Section 1,
Article III of the Constitution.
The subject clause being unconstitutional, petitioner is entitled to his salaries
for the entire unexpired period of nine months and 23 days of his employment

contract, pursuant to law and jurisprudence prior to the enactment of R.A. No.
8042.
Third Issue
Petitioner contends that his overtime and leave pay should form part of the salary
basis in the computation of his monetary award, because these are fixed benefits that
have been stipulated into his contract.
Petitioner is mistaken.
The word salaries in Section 10(5) does not include overtime and leave pay. For
seafarers like petitioner, DOLE Department Order No. 33, series 1996, provides a
Standard Employment Contract of Seafarers, in which salary is understood as the
basic wage, exclusive of overtime, leave pay and other bonuses; whereas
overtime pay is compensation for all work “performed” in excess of the regular
eight hours, and holiday pay is compensation for any work “performed” on
designated rest days and holidays.
In the same vein, the claim for the day’s leave pay for the unexpired portion of the
contract is unwarranted since the same is given during the actual service of the
seamen.
WHEREFORE, the Court GRANTS the Petition. The subject clause “or for
three months for every year of the unexpired term, whichever is less” in the 5th
paragraph of Section 10 of Republic Act No. 8042 is DECLARED
UNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005
Resolution of the Court of Appeals are MODIFIED to the effect that petitioner
is AWARDED his salaries for the entire unexpired portion of his employment
contract consisting of nine months and 23 days computed at the rate of
US$1,400.00 per month.
10
CLAUDIO S. YAP v. THENAMARIS SHIP'S MANAGEMENT, GR No. 179532,
2011-05-30
Facts:
Yap was employed as electrician of the vessel, M/T SEASCOUT... by Intermare
Maritime Agencies, Inc. in behalf of its principal, Vulture Shipping Limited. The
contract of employment... was for a duration of 12 months
Yap boarded M/T SEASCOUT and commenced his job as electrician. However...
the vessel was sold.
Yap, along with the other crewmembers, was informed... that the same was sold and
will be scrapped.
Yap received his seniority bonus, vacation bonus, extra bonus along with the
scrapping bonus. However, with respect to the payment of his wage, he refused to
accept the payment of one-month basic wage.
He insisted that he was entitled to the payment of the unexpired... portion of his
contract since he was illegally dismissed from employment.
He alleged that he opted for immediate transfer but none was made.
[Respondents], for their part, contended that
Yap's employment contract was validly terminated due to the sale of the vessel and
no arrangement was made for Yap's transfer to Thenamaris' other vessels.
Thus,... Yap... filed a complaint for Illegal Dismissal with Damages... before the
Labor Arbiter (LA).
laimed that he was entitled to the salaries corresponding to the unexpired portion of
his contract.
LA rendered a decision... in favor of petitioner... respondents sought recourse from
the NLRC.
In its decision
, the NLRC affirmed the LA's findings

Respondents filed a Motion for Partial Reconsideration... the NLRC reversed its
earlier
Decision, holding that "there can be no choice to grant only three (3) months salary
for every year of the unexpired term because there is no full year of unexpired term
which this can be applied."
Hence -
CA affirmed the findings and ruling of the LA and the NLRC... petitioner posits that,
assuming said... provision of law is constitutional, the CA gravely abused its
discretion when it reduced petitioner's backwages from nine months to three months
as his nine-month unexpired term cannot accommodate the lesser relief of three
months for every year of the unexpired term.[24]
Issues:
Whether or not Section 10 of R.A. [No.] 8042, to the extent that it affords an
illegally dismissed migrant worker the lesser benefit of - "salaries for [the] unexpired
portion of his employment contract or for three (3) months for every... year of the
unexpired term, whichever is less" - is constitutional
Assuming that it is, whether or not the Court of Appeals gravely erred in granting
petitioner only three (3) months backwages when his unexpired term of 9 months is
far short of the "every year of the unexpired term" threshold.
Ruling:
the 5th paragraph of Section 10, R.A. No. 8042, is violative of Section 1,... Article
III and Section 3,... Article XIII of the
Constitution to the extent that it gives an erring employer the option to pay an
illegally dismissed migrant worker only three months for every year of the unexpired
term of his contract; that said provision of law has long been a source of abuse by
callous employers against... migrant workers
; and that said provision violates the equal protection clause under the Constitution
because, while illegally dismissed local workers are guaranteed under the Labor
Code of reinstatement with full backwages computed from the time compensation
was withheld from... them up to their actual reinstatement, migrant workers, by
virtue of Section 10 of R.A. No. 8042, have to waive nine months of their collectible
backwages every time they have a year of unexpired term of contract to reckon with.
The petition is impressed with merit
11
Veril... y, we have already declared in Serrano that the clause "or for three months
for every year of the unexpired term, whichever is less" provided in the 5th
paragraph of Section 10 of R.A. No. 8042 is unconstitutional for being violative of...
the rights of Overseas Filipino Workers (OFWs) to equal protection of the laws. In
an exhaustive discussion of the intricacies and ramifications of the said clause, this
Court, in Serrano, pertinently held:
The Court concludes that the subject clause contains a suspect classification in that,
in the computation of the monetary benefits of fixed-term employees who are
illegally discharged, it imposes a 3-month cap on the claim of OFWs with an
unexpired portion of... one year or more in their contracts, but none on the claims of
other OFWs or local workers with fixed-term employment. The subject clause
singles out one classification of OFWs and burdens it with a peculiar disadvantage.
As a general rule, an unconstitutional act is not a law; it confers no rights; it imposes
no duties; it affords no protection; it creates no office; it is inoperative as if it has not
been passed at all.
The doctrine of operative fact, as an exception to the general rule, only applies as a
matter of equity and fair play. It nullifies the effects of an unconstitutional law by
recognizing that the existence of a statute prior to a determination of
unconstitutionality... is an operative fact and may have consequences which cannot
always be ignored.
The doctrine is applicable when a declaration of unconstitutionality will impose an
undue burden on those who have relied on the invalid law.
Following Serrano, we hold that this case should not be included in the
aforementioned exception. After all, it was not the fault of petitioner that he lost his
job due to an act of illegal dismissal committed by respondents.
To rule otherwise would be iniquitous to... petitioner and other OFWs, and would, in
effect, send a wrong signal that principals/employers and recruitment/manning
agencies may violate an OFW's security of tenure which an employment contract
embodies and actually profit from such violation based on an unconstitutional...
provision of law.
WHEREFORE, the Petition is GRANTED.
etitioner is AWARDED his salaries for the entire unexpired portion of his
employment... contract consisting of nine months
Principles:

SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner,
vs.
JOY C. CABILES, Respondent.
G.R. No. 170139 August 5, 2014
PONENTE: Leonen
TOPIC: Section 10 of RA 8042 vis-a-vis Section 7 of RA 10022
FACTS:
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and
placement agency.
Respondent Joy Cabiles was hired thus signed a one-year employment
contract for a monthly salary of NT$15,360.00. Joy was deployed to work for
Taiwan Wacoal, Co. Ltd. (Wacoal) on June 26, 1997. She alleged that in her
employment contract, she agreed to work as quality control for one year. In Taiwan,
she was asked to work as a cutter.
Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal
informed Joy, without prior notice, that she was terminated and that “she should
immediately report to their office to get her salary and passport.” She was asked to
“prepare for immediate repatriation.” Joy claims that she was told that from June 26
to July 14, 1997, she only earned a total of NT$9,000.15 According to her, Wacoal
deducted NT$3,000 to cover her plane ticket to Manila.
On October 15, 1997, Joy filed a complaint for illegal dismissal with the
NLRC against petitioner and Wacoal. LA dismissed the complaint. NLRC reversed
LA’s decision. CA affirmed the ruling of the National Labor Relations Commission
finding respondent illegally dismissed and awarding her three months’ worth of
salary, the reimbursement of the cost of her repatriation, and attorney’s fees
ISSUE:
12
Whether or not Cabiles was entitled to the unexpired portion of her salary
due to illegal dismissal.
HELD:
YES. The Court held that the award of the three-month equivalent of
respondent’s salary should be increased to the amount equivalent to the unexpired
term of the employment contract.
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co.,
Inc., this court ruled that the clause “or for three (3) months for every year of the
unexpired term, whichever is less” is unconstitutional for violating the equal
protection clause and substantive due process.
A statute or provision which was declared unconstitutional is not a law. It
“confers no rights; it imposes no duties; it affords no protection; it creates no office;
it is inoperative as if it has not been passed at all.”
The Court said that they are aware that the clause “or for three (3) months
for every year of the unexpired term, whichever is less” was reinstated in Republic
Act No. 8042 upon promulgation of Republic Act No. 10022 in 2010.
Ruling on the constitutional issue
In the hierarchy of laws, the Constitution is supreme. No branch or office
of the government may exercise its powers in any manner inconsistent with the
Constitution, regardless of the existence of any law that supports such exercise. The
Constitution cannot be trumped by any other law. All laws must be read in light of
the Constitution. Any law that is inconsistent with it is a nullity.
Thus, when a law or a provision of law is null because it is inconsistent
with the Constitution, the nullity cannot be cured by reincorporation or
reenactment of the same or a similar law or provision. A law or provision of law
that was already declared unconstitutional remains as such unless circumstances
have so changed as to warrant a reverse conclusion.
The Court observed that the reinstated clause, this time as provided in
Republic Act. No. 10022, violates the constitutional rights to equal protection and
due process.96 Petitioner as well as the Solicitor General have failed to show any
compelling change in the circumstances that would warrant us to revisit the
precedent.
 13

The Court declared, once again, the clause, “or for three (3) months for
every year of the unexpired term, whichever is less” in Section 7 of Republic Act
No. 10022 amending Section 10 of Republic Act No. 8042 is declared
unconstitutional and, therefore, null and void.