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Century Textile Mills v. Escaño (P) v. NLRC & Calangi | GR No.
!"# | ".$".!! | Ter%ination o E%'loy%ent Proceure |
*eliciano+ , '-
• Since 12.74, R was employed by P as a Machine Operator. On 6.8,
he was placed !nder pre"enti"e s!spension, and on 7.27.8,
terminated, ha"in# been acc!sed o$ plottin# criminal acts a#ainst 2o$ his s!per"isors, by poisonin# thr! water, a criminal complaint was
also instit!ted a#ainst R.• S!in#% alle#in# he was not $!rnished him copy o$ char#es% nor
a&orded him opport!nity to answer.• '( )ismissed, holdin# that the e"idence was o"erwhelmin# and
s!*cient to +!sti$y Ps actions% R $ailin# to contro"ert. 'R- Re"ersed,
hence this.
• (/RM0). R was e&ecti"ely denied his ri#ht to d!e process in that,prior to his pre"enti"e s!spension and the termination o$ his
ser"ices, he had not been #i"en the opport!nity either to a*rm or
re$!te the char#es pro$erred a#ainst him.• he win3 re!irement o$ notice is intended to in$orm the employee
concerned o$ the employer5s intent to dismiss and the reason $or the
proposed dismissal% !pon the other hand, the re!irement o$ hearin#
a&ords the employee an opport!nity to answer his employer5s
char#es a#ainst him and accordin#ly to de$end himsel$ there$rombe$ore dismissal is e&ected.
• hose ri#hts were not satised by petitioner -orporation5s obtainin#
the consent o$ or cons!ltin# with the labor !nion% s!ch cons!ltation
or consent was not a s!bstit!te $or act!al obser"ance o$ those ri#hts
o$ pri"ate respondent -alan#i.• he employee can wai"e those ri#hts, i$ he so chooses, b!t the !nion
cannot wai"e them $or him. hat the pri"ate respondent simply ept
silent all the while, is not ade!ate to show an e&ecti"e wai"er o$ his ri#hts.
• R is, as a matter o$ ri#ht, entitled to recei"e both types o$ relie$
made a"ailable in (rticle 289 o$ the 'abor -ode, as amended. /t
matters not that R had omitted in his complaint led in -ase o.
'R-:-R:19:4;18:8 a claim $or reinstatement witho!t loss o$
seniority ri#hts $or he is entitled to s!ch relie$ as the $acts alle#ed
and pro"ed warrant.
• <!t P-o sho!ld not be compelled to tae bac in its $old anemployee who, at least in the minds o$ his employers, poses a
si#nicant threat to the li"es and sa$ety o$ company worers.
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-onse!ently, we hold that pri"ate respondent sho!ld be #i"en his
separation pay in lie! o$ s!ch reinstatement.
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/iera (P) v. NLRC & Planters 0an1 | GR No. 23$3$4 | 22.5.#$ |
Ter%ination o E%'loy%ent Proceure | Cru6+ , '-
• (s a Mana#er o$ R-o <an3, was dismissed on 4.28.87 on the
#ro!nd o$ loss o$ condence. he ban was bein# a!dited by the
=ead O*ce, at the same time P led $or a "acation lea"e to tae a
m!ch needed rest. >pon his ret!rn, he recei"ed a memo re!irin#him to answer the a!dit report, s!##estin# his participation in some
"iolations prohibited in the <ans -ode o$ )iscipline% ? was not
allowed to ret!rn to wor. =e was ad"ised to appear be$ore the
in"esti#atin# committee also, he wai"ed the assistance o$ co!nsel
on said committee in"esti#ation.• P on the other hand denies the a$ore!oted. =e was then
pre"enti"ely s!spended on 1.12.87. ormally protestin#, a"errin#
that the in"esti#ation was de$ecti"e. ( $ollow:!p list o$ ndin#s o$ irre#!larities was $o!nd by the committee, he re$!ted, the
committee then s!bmitted a recommendation $or dismissal, w@c was
eAec!ted by R-o.• '( r!led $or P% 'R- re"ersed% hence this.
• )/SM/SS0). Be do not a#ree. Be hold that the rst element was not
"iolated beca!se the petitioner was d!ly notied o$ the Specication
o$ -har#es and in"ited to appear at the hearin# sched!led $or their
in"esti#ation. =e was e"en ad"ised to brin# a lawyer with him i$ heso desired.
• he re!irement $or hearin# was also obser"ed. he petitioner
cannot say he was depri"ed o$ this ri#ht beca!se the record shows
he was d!ly a&orded ample opport!nity to de$end himsel$ and
introd!ce e"idence on his behal$. (mple opport!nity connotes
e"ery ind o$ assistance that mana#ement m!st accord the
employee to enable him to prepare ade!ately $or his de$ense,
incl!din# le#al representation. (biera says he belie"ed that thehearin# to which he was in"ited was only preliminary and so wo!ld
not re!ire the presence o$ his lawyer. 0"en so, he was not
precl!ded $rom asin# $or the s!spension o$ that hearin# a$ter he
realiCed that he was already bein# #rilled, as he p!t it, in a $ormal
in"esti#ation.• /t is also not tr!e that the petitioner had not been #i"en a chance to
de$end himsel$. he established $act is that he did this "erbally and
thro!#h written replies to the internal a!dit report and the additionalchar#e a#ainst him. he -o!rt especially notes his point:by:point
re$!tation dated September 18, 1D86, =is eAplanation was !ite
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detailed and belies his claim that he was not #i"en access to the
pri"ate respondent5s records.• ( $ormal trial:type hearin# is not at all times and in all instances
essential to d!e process. /t is eno!#h that the parties are #i"en a $air
and reasonable opport!nity to eAplain their respecti"e sides o$ the
contro"ersy and to present s!pportin# e"idence on which a $air
decision can be based. -aselaw3 this type o$ hearin# is not e"en
mandatory in cases o$ complaints lod#ed be$ore the 'abor (rbiter.
(ltho!#h the a$oresaid in"esti#ations were not cond!cted in the
manner o$ a re#!lar trial in co!rt, the elements o$ d!e process,
namely, the ri#ht to be in$ormed o$ the char#es, to be present and to
be heard, were accorded petitioners. /n said in"esti#ations,
petitioners $reely and "ol!ntarily answered the !estions and e"en
made $!rther statements in their de$ense d!rin# the concl!din#
sta#es thereo$. )!e process as a constit!tional precept does not,
always and in all sit!ations, re!ire trial:type proceedin#s. he
essence o$ d!e process is to be $o!nd in the reasonable opport!nity
to be heard and to s!bmit any e"idence one may ha"e in s!pport o$
one5s de$ense. o be heard does not only mean "erbal ar#!ments
in co!rt. One may be heard also thro!#h pleadin#s.• he parties co!ld ha"e held a trial:type hearin#, b!t they decided
instead to s!bmit the case $or decision on the basis o$ the position
papers, doc!mentary e"idence and other pleadin#s already
s!bmitted be$ore the 'abor (rbiter. his arran#ement was m!t!ally
a#reed !pon by them d!rin# the hearin# held on E!ly 27, 1D8D, and
is a!thoriCed !nder (rticle 221 o$ the 'abor -ode. /t is tr!e that the
ri#ht o$ con$rontation is embraced in d!e process and that the
petitioner did demand the appearance o$ the internal a!ditors so he
co!ld cross:eAamine them. /t is also tr!e that this demand was
re+ected by the /n"esti#atin# -ommittee. e"ertheless, the
petitioner saw t not to insist on this ri#ht and in $act s!bse!ently
wai"ed it when he a#reed at the said hearin# on the abo"e:
disc!ssed proced!re.• Re#ardin# the #ro!nd $or his dismissal, his cond!ct ca!sed the
pri"ate respondent to lose condence in his +!d#ment and e"en his
inte#rity and pro"ided the +!st ca!se $or his dismissal as branch
mana#er. (rticle 282c3 o$ the 'abor -ode plainly statesF (rt. 282.
ermination by employer. G (n employer may terminate anemployment $or any o$ the $ollowin# ca!sesF . . . c3 ra!d or will$!l
breach by the employee o$ the tr!st reposed in him by his employer
or d!ly a!thoriCed representati"e.
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7el Monte P8ils. & 0alanra (P) v. 9alivar et al.+ (R) | GR No.
2"!5$3 | 23.22.35 | Ter%ination o E%'loy%ent Proceure |
Tinga+ ,+ '-
• Bhether there was s!*cient ca!se $or the dismissal o$ a ran:and:
le employee e&ect!ated thro!#h the en$orcement o$ a closed:shop
pro"ision in a -<(.• he (ssociated 'abor >nion ('>3 is the eAcl!si"e bar#ainin# a#ent
o$ plantation worers o$ P-o. R imbal3 as a ran:and:le employee
o$ P-o. ( -<( was entered into by ('> and P-o.• Rs were char#ed $or disloyalty to the !nion, $or s!pposedly
con"incin# others to +oin a contra >nion, this alle#ation was
s!pported by the statement o$ a certain (rta+o. R answered the
board ('>3 cond!ctin# the in"esti#ation, denyin# the alle#ations,
p!rportedly moti"ated by hate and re"en#e a#ainst her.• he board $o!nd R #!ilty o$ partisan acti"ities, w@c is prohibited since
the H$reedom periodI has yet to commence then% liewise in
accordance with the Sec!rity cla!se in the -<(, P-o dismissed her.• '( $a"o!red Rs, 'R- re"ersed. On re"iew -( $o!nd that only R
imbal was ille#ally dismissed, ndin# $ail!re to obser"e proced!ral
d!e process. =ence this petition led by the other Rs.• )enied. (*rmed. L:;s sole <itness against 8er+ s8oul not /e
given <eig8t /ecause rta=o 8a an ax>e? to grin at t8eti%e <8en s8e %ae t8e averse state%ents against 8er.
imbal5s dismissal is not predicated on any o$ the +!st or a!thoriCed
ca!ses $or dismissal !nder <oo SiA, itle / o$ the 'abor -ode, b!t on
the !nion sec!rity cla!se in the -<( between )el Monte and ('>.
Stip!lations in the -<( a!thoriCin# the dismissal o$ employees are o$
e!al import as the stat!tory pro"isions on dismissal !nder the
'abor -ode, since JaK -<( is the law between the company and the
!nion and compliance therewith is mandated by the eApress policyto #i"e protection to labor.
• ( closed:shop may be dened as an enterprise in which, by
a#reement between the employer and his employees or their
representati"es, no person may be employed in any or certain
a#reed departments o$ the enterprise !nless he or she is, becomes,
and, $or the d!ration o$ the a#reement, remains a member in #ood
standin# o$ a !nion entirely comprised o$ or o$ which the employees
in interest are a part. ( -<( pro"ision $or a closed:shop is a "alid$orm o$ !nion sec!rity and it is not a restriction on the ri#ht or
$reedom o$ association #!aranteed by the -onstit!tion.
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$rom the necessity to d!ly establish the eAistence o$ s!ch #ro!nds
be$ore the dismissal may be "alidated. (nd e"en i$ the employer or,
in this case, the collecti"e bar#ainin# a#ent, is satised that ca!se
has been established to warrant the dismissal, suc8 satisaction
<ill /e o no conseAuence i+ u'on legal c8allenge+ t8ey are
una/le to esta/lis8 /eore t8e NLRC or t8e courts t8e
'resence o suc8 causes.• -onsiderin# that the ci"il complaint was led +!st siA 63 days prior
to the eAec!tion o$ (rta+o5s a*da"it a#ainst imbal, it wo!ld be
plainly in+!dicio!s to pres!me that (rta+o possessed an !nbiased
state o$ mind as she eAec!ted that a*da"it. S!ch circ!mstance was
considered by the 'abor (rbiter, and especially the -o!rt o$ (ppeals,
as they rendered a $a"orable r!lin# to imbal. he 'R- may ha"e
decided a#ainst (rta+o, b!t in doin# so, it $ailed to pro"ide any basis
as to why (rta+o5s testimony sho!ld be belie"ed, instead o$
disbelie"ed. • (ltho!#h )el Monte claims be$ore this -o!rt that Pi!ero had
corroborated (rta+o5s claims d!rin# s!ch testimony, positi"ely
identied Jimbal5sK presence in the ' seminar on 14 E!ly 1DD2,
and conrmed that imbal #a"e (rta+o P;99.99 $or recr!itin#
participants in the ' seminar. hese transcripts were not taen
d!rin# a hearin# cond!cted by any p!blic o*ce in the Philippines,
b!t they were committed in the co!rse o$ an internal disciplinary
mechanism de"ised by a pri"ately or#aniCed labor !nion. >nless the
a!thenticity o$ these notes is d!ly pro"en be$ore, and appreciated by
the triers o$ $act, we cannot accord them any pres!mpti"e or
concl!si"e "al!e.
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Bing o Bings Trans'ort+ 7ela *uente+ & Li% (P) v. Ma%ac (R) |
GR No. 255$3! | 5.$#.3 | Ter%ination o E%'loy%ent Proceure
| Delasco+ ,r.+ , '-
• (s a cond!ctor and >nion 'eader3. One o$ his d!ties is to s!bmit a
rip Report indicates ticet openin# and closin# $or each trip L
(cco!ntin# o$ earnin#s3. On 19.8.91 a discrepancy PhP.89D.993 was$o!nd, ased to eAplain, he held that they enco!ntered an accident
and erroneo!sly #a"e a wron# report, $or they had to c!t short their
trip $or them to report to the police.• On 11.26.91, he recei"ed a termination letter e&ecti"e 11.2D.91,
alle#in# $ra!d on said report, citin# other o&enses alle#edly
committed since 1DDD. -laimin# that his dismissal was e&ected
witho!t d!e process, he s!ed. '( dismissed his complaint. 'R-
Modied to indemni$y only3 $or $ailin# to comply w@ d!e processprior to termination. -( a*rms, holdin# that there is +!st ca!se $or
dismissal )eclarin# sold ticets as ret!rned ticets constit!ted
$ra!d3. =ence this. /s a "erbal appraisal o$ the char#es a breach o$
the proced!ral d!e process• P(R'N R(0). Only /ndemnity. )!e process !nder the 'abor
-ode in"ol"es two aspectsF rst, s!bstanti"e G the "alid and
a!thoriCed ca!ses o$ termination o$ employment !nder the 'abor
-ode% and second, proced!ral G the manner o$ dismissal. irst,respondent was not iss!ed a written notice char#in# him o$
committin# an in$raction. he law is clear on the matter. ( "erbal
appraisal o$ the char#es a#ainst an employee does not comply with
the rst notice re!irement. • -ons!ltations or con$erences are not a s!bstit!te $or the act!al
obser"ance o$ notice and hearin#. he employee5s written
eAplanation did not eAc!se the $act that there was a complete
absence o$ the rst notice.• Second, e"en ass!min# that petitioner / was able to $!rnish
respondent an /rre#!larity Report noti$yin# him o$ his o&ense, s!ch
wo!ld not comply with the re!irements o$ the law. Be obser"e $rom
the irre#!larity reports a#ainst respondent $or his other o&enses that
s!ch contained merely a #eneral description o$ the char#es a#ainst
him. he reports did not e"en state a company r!le or policy that the
employee had alle#edly "iolated. 'iewise, there is no mention o$
any o$ the #ro!nds $or termination o$ employment !nder (rt. 282 o$ the 'abor -ode. h!s, /5s standard char#e sheet is not s!*cient
notice to the employee.
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• hird, no hearin# was cond!cted. Re#ardless o$ respondent5s written
eAplanation, a hearin# was still necessary in order $or him to clari$y
and present e"idence in s!pport o$ his de$ense. Moreo"er,
respondent made the letter merely to eAplain the circ!mstances
relatin# to the irre#!larity in his October 28, 2991 -ond!ctor5s rip
Report. =e was !naware that a dismissal proceedin# was already
bein# e&ected. h!s, he was s!rprised to recei"e the o"ember 26,
2991 termination letter indicatin# as #ro!nds, not only his October
28, 2991 in$raction, b!t also his pre"io!s in$ractions.
en'8il (P) v. NLRC & Mallare (R) | GR No. !3"! | $.!.!# |
Ter%ination ga/on 7octrine | Gancayco+ , '-
• R was c!rrently then a <acroom )epartment (ssistant head o$ P in
-!bao Resta!rant3. On ;.29.8;, he and <arrameda had analtercation, d!e to which they were s!spended and R was
immediately ;.2;.8;3 dismissed, in accordance w@ their Personnel
Man!al. J-irc!mstanceF ( mis!nderstandin# on tendin# the Salad
<ar, #ht ens!ed% ased to report, re$!sed, S bro!#ht R to the
Mana#er, instead o$ eAplainin#, sho!ted pro$ane words% R wanted
the iss!e settled in between them only% Mana#er iss!ed s!spension
!ntil $!rther notice% Only R was dismissed.K•
'( dismissed. 'R- re"ersed. =ence this a restrainin# order was#ranted by S-3.
• ranted. Re"ersed and Set (side. he deant attit!de o$ pri"ate
respondent immediately a$ter the incident amo!nted to
ins!bordination. e"ertheless his re$!sal to eAplain his side !nder
the circ!mstances cannot be considered as a wai"er o$ his ri#ht to
an in"esti#ation.• (ltho!#h in the Personnel Manual o$ the petitioner, it states that
an errin# employee m!st re!est $or an in"esti#ation it does notthereby mean that petitioner is thereby relie"ed o$ the d!ty to
cond!ct an in"esti#ation be$ore dismissin# pri"ate respondent.
/ndeed said pro"ision o$ the Personnel Man!al o$ petitioner which
may e&ecti"ely depri"e its employees o$ the ri#ht to d!e process is
clearly against t8e la< an 8ence null an voi. • >nder Section 1, R!le Q/ o$ the /mplementin# Re#!lations o$ the
'abor -ode, it is pro"ided that o worer shall be dismissed eAcept
$or +!st or a!thoriCed ca!se pro"ided by law and a$ter d!e processSections 2, ;, 6, and 7 o$ the same r!les re!ire that be$ore an
employer may dismiss an employee the latter m!st be #i"en a
written notice statin# the partic!lar act or omission constit!tin# the
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#ro!nds thereo$% that the employee may answer the alle#ations
within a reasonable period% that the employer shall a&ord him ample
opport!nity to be heard and to de$end himsel$ with the assistance o$
his representati"e, i$ he so desires% and that it is only then that the
employer may dismiss the employee by noti$yin# him o$ the decision
in writin# statin# clearly the reasons there$or. S!ch dismissal is
witho!t pre+!dice to the ri#ht o$ the employee to contest its "alidity
in the Re#ional <ranch o$ the 'R-.• he claim o$ petitioner that a $ormal in"esti#ation was not necessary
beca!se the incident which #a"e rise to the termination o$ pri"ate
respondent was witnessed by his co:employees and s!per"isors is
witho!t merit. he basic re!irement o$ d!e process is that which
hears be$ore it condemns, which proceeds !pon in!iry and renders
+!d#ment only a$ter trial. • =owe"er, it is a matter o$ $act that when the pri"ate respondent led
a complaint a#ainst petitioner he was a&orded the ri#ht to an
in"esti#ation by the labor arbiter. =e presented his position paper as
did the petitioner. /$ no hearin# was had, it was the $a!lt o$ pri"ate
respondent as his co!nsel $ailed to appear at the sched!led
hearin#s. he labor arbiter concl!ded that the dismissal o$ pri"ate
respondent was $or +!st ca!se. =e was $o!nd #!ilty o$ #ra"e
miscond!ct and ins!bordination. his is borne by the sworn
statements o$ witnesses. he -o!rt is bo!nd by this ndin# o$ the
labor arbiter.• (ltho!#h belatedly, pri"ate respondent was a&orded d!e process
be$ore the labor arbiter wherein the +!st ca!se o$ his dismissal had
been established. Bith s!ch ndin#, it wo!ld be arbitrary and !n$air
to order his reinstatement with bac wa#es.• h!s in the present case, where the pri"ate respondent, who
appears to be o$ "iolent temper, ca!sed tro!ble d!rin# o*ce ho!rs
and e"en deed his s!periors as they tried to paci$y him, sho!ld not
be rewarded with re:employment and bac wa#es. /t may enco!ra#e
him to do e"en worse and will render a mocery o$ the r!les o$
discipline that employees are re!ired to obser"e. >nder the
circ!mstances the dismissal o$ the pri"ate respondent $or +!st ca!se
sho!ld be maintained. =e has no ri#ht to ret!rn to his $ormer
employer.• =owe"er, the petitioner m!st ne"ertheless be held to acco!nt $or
$ail!re to eAtend to pri"ate respondent his ri#ht to an in"esti#ation
be$ore ca!sin# his dismissal. he r!le is eAplicit as abo"e disc!ssed.
he dismissal o$ an employee m!st be $or +!st or a!thoriCed ca!se
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and a$ter d!e process. Petitioner committed an in$raction o$ the
second re!irement )>0 PRO-0SS3. h!s, it m!st be imposed a
sanction $or its $ail!re to #i"e a $ormal notice and cond!ct an
in"esti#ation as re!ired by law be$ore dismissin# petitioner $rom
employment. -onsiderin# the circ!mstances o$ this case petitioner
m!st indemni$y the pri"ate respondent the amo!nt o$ P1,999.99.
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9errano (P) v. NLRC & F9ETNN 7e'art%ent 9tore (RCo) | GR No.
2233 | "..33 | Ter%ination ga/on 7octrine | Meno6a+ , '-
• P was notied o$ his termination e&ecti"e on the same date o$
receipt on the #ro!nd o$ retrenchment. =e contested the same and
led a complaint $or ille#al dismissal.
• he '( r!led in his $a"or $or $ail!re o$ respondent to pro"e thattermination was to pre"ent or minimiCe losses. =oldin# that
petitioner was not a&orded d!e process. 'R- Re"ersed, ndin# that
the termination was le#al b!t $ailed to address the iss!e o$
compliance with the notice re!irement.• S- a*rmed the decision o$ the 'R- and ordered the payment o$ $!ll
bacwa#es $or $ail!re to comply with the 9:day prior notice
re!irement.
• R-o mo"in# $or reconsideration, contening+ a%ong ot8ers+ t8at'ay%ent o t8e 43 ays 'ay is suHcient co%'liance <it8 t8e
43 ays 'rior notice an t8at t8e nonIo/servance o t8e
notice reAuire%ent s8oul not /e visite <it8 a severe
conseAuence. /nso$ar as it is ordered to pay petitioner $!ll
bacwa#es $rom the time the latter5s employment was terminated
$or $ail!re to #i"e petitioner a written notice o$ termination at least
thirty 93 days be$ore the termination o$ his employment as
re!ired by (rt. 28 the 'abor -ode.• )enied. he re!irement to #i"e a written notice o$ termination at
least thirty 93 days in ad"ance is a re!irement o$ the 'abor -ode.
othin# in the law #i"es pri"ate respondent the option to s!bstit!te
the re!ired prior written notice with payment o$ thirty 93 days
salary. /t is not $or pri"ate respondent to mae s!bstit!tions $or a
ri#ht that a worer is le#ally entitled to.• he p!rpose o$ s!ch pre"io!s notice is to #i"e the employee some
time to prepare $or the e"ent!al loss o$ his +ob as well as the )O'0the opport!nity to ascertain the "erity o$ the alle#ed a!thoriCed
ca!se o$ termination. S!ch p!rpose wo!ld not be ser"ed by the
simple eApedient o$ payin# thirty 93 days salary in lie! o$ notice o$
an employee5s impendin# dismissal, as by then the loss o$
employment wo!ld ha"e been a $ait accompli.• /n (ssociated 'abor >nions:/M-O> ". 'R-, the employees and
the then Ministry o$ 'abor and 0mployment MO'03 were notied in
writin# on (!#!st ;, 1D8 that the employees5 ser"ices wo!ld ceaseon (!#!st 1, 1D8 b!t that they wo!ld be paid their salaries and
other benets !ntil September ;, 1D8. /t was held that s!ch written
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notice was more than s!bstantial compliance with the notice
re!irement o$ the 'abor -ode. =ad pri"ate respondent #i"en a
written notice to petitioner on October 1, 1DD1, at the latest, that
e&ecti"e October 1, 1DD1 his employment wo!ld cease altho!#h
$rom October 1 he wo!ld no lon#er be re!ired to wor, there wo!ld
be basis $or pri"ate respondent5s boast that JpaymentK o$ this salary
e"en Ji$ he isK no lon#er worin# is e&ecti"e notice and is m!ch
better than 9 days $ormal notice b!t worin# !ntil the end o$ the 9
days period. Bhat happened here was that on October 11, 1DD1,
petitioner was #i"en a memorand!m terminatin# his employment
e&ecti"e on the same day on the #ro!nd o$ retrenchment act!ally
red!ndancy3.• /t is contended that pri"ate respondent5s non:obser"ance o$ the
notice re!irement sho!ld not be "isited with a se"ere conse!ence
in accordance with (rt. ///, 1D13 o$ the -onstit!tion. he contention
is witho!t merit. (rt. ///, 1D13 o$ the -onstit!tion, prohibitin# the
imposition o$ eAcessi"e nes, applies only to criminal prosec!tions.• he order to pay $!ll bacwa#es is a conse!ence o$ the employer5s
action in dismissin# an employee witho!t notice which maes said
dismissal ine&ect!al. he employee is considered not to ha"e been
terminated $rom his employment !ntil it is nally determined that his
dismissal@termination o$ employment was $or ca!se and, there$ore,
he sho!ld be paid his salaries in the interim. his eliminates
#!esswor in determinin# the de#ree o$ pre+!dice s!&ered by an
employee dismissed with ca!se b!t witho!t notice since the penalty
is meas!red by the salary he $ailed to earn on acco!nt o$ his
dismissal@termination o$ employment.• he decision in -ol!mbia Pict!res does not mean that i$ a new r!le is
laid down in a case, it sho!ld not be applied in that case b!t that
said r!le sho!ld apply prospecti"ely to cases arisin# a$terwards.
Pri"ate respondent5s "iew o$ the principle o$ prospecti"e application
o$ new +!dicial doctrines wo!ld t!rn the +!dicial $!nction into a mere
academic eAercise with the res!lt that the doctrine laid down wo!ld
be no more than a dict!m and wo!ld depri"e the holdin# in the case
o$ any $orce.
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ga/on (P) v. NLRC & Riviera Jo%e F%'rove%ents (R) | GR No.
2"!5#4 | 22.2.3 | Ter%ination ga/on 7octrine | KnaresI
9antiago+ , '-
• Ri"iera =ome /mpro"ements, /nc. Ri"iera3 is en#a#ed in the
b!siness o$ sellin# and installin# ornamental and constr!ction
materials. /t employed Ps as #yps!m board and cornice installers in1DD2 !ntil 1DDD when they were dismissed $or abandonment o$
wor.• wice in the d!ration o$ their employment, petitioners accepted wor
$or another company. =ence, there was abandonment o$ wor. /t
appears, howe"er, that Ri"iera $ailed to send the re!ired notices to
the petitioners to their last nown address $or the reason that it
wo!ld be !seless since petitioners do not reside there anymore. his
is a proced!ral inrmity which, nonetheless, sho!ld not in"alidatethe dismissal, contrary to the pre"ailin# b!t herein abandoned case
o$ Serrano ". 'R-. he employer was liable b!t only $or non:
compliance with the proced!ral re!irements o$ d!e process.• o dismiss an employee, the law re!ires not only the eAistence o$ a
+!st and "alid ca!se b!t also en+oins the employer to #i"e the
employee the opport!nity to be heard and to de$end himsel$.• (bandonment is the deliberate and !n+!stied re$!sal o$ an
employee to res!me his employment. /t is a $orm o$ ne#lect o$ d!ty,hence, a +!st ca!se $or termination o$ employment by the employer.
or a "alid ndin# o$ abandonment, these two $actors sho!ld be
presentF 13 the $ail!re to report $or wor or absence witho!t "alid or
+!stiable reason% and 23 a clear intention to se"er employer:
employee relationship, with the second as the more determinati"e
$actor which is mani$ested by o"ert acts $rom which it may be
ded!ced that the employees has no more intention to wor.
• he proced!re $or terminatin# an employee is $o!nd in <oo /, R!le/, Section 2 d3 o$ the Omnib!s R!les /mplementin# the 'abor -odeF
Standards o$ d!e processF re!irements o$ notice. or termination o$
employment based on +!st ca!ses as dened in (rticle 282 o$ the
-odeF a3 ( written notice ser"ed on the employee speci$yin# the
#ro!nd or #ro!nds $or termination, and #i"in# to said employee
reasonable opport!nity within which to eAplain his side% b3 (
hearin# or con$erence d!rin# which the employee concerned, with
the assistance o$ co!nsel i$ the employee so desires, is #i"enopport!nity to respond to the char#e, present his e"idence or reb!t
the e"idence presented a#ainst him% and c3 ( written notice o$
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termination ser"ed on the employee indicatin# that !pon d!e
consideration o$ all the circ!mstances, #ro!nds ha"e been
established to +!sti$y his termination. /n case o$ termination, the
$ore#oin# notices shall be ser"ed on the employee5s last nown
address. • Proced!rally, 13 i$ the dismissal is based on a +!st ca!se !nder
(rticle 282, the employer m!st #i"e the employee two written
notices and a hearin# or opport!nity to be heard i$ re!ested by the
employee be$ore terminatin# the employmentF a notice speci$yin#
the #ro!nds $or which dismissal is so!#ht a hearin# or an
opport!nity to be heard and a$ter hearin# or opport!nity to be
heard, a notice o$ the decision to dismiss% and 23 i$ the dismissal is
based on a!thoriCed ca!ses !nder (rticles 28 and 284, the
employer m!st #i"e the employee and the )epartment o$ 'abor and
0mployment written notices 9 days prior to the e&ecti"ity o$ his
separation. T• rom the $ore#oin# r!les $o!r possible sit!ations may be deri"edF 13
the dismissal is $or a +!st ca!se !nder (rticle 282 o$ the 'abor -ode,
$or an a!thoriCed ca!se !nder (rticle 28, or $or health reasons
!nder (rticle 284, and d!e process was obser"ed% 23 the dismissal
is witho!t +!st or a!thoriCed ca!se b!t d!e process was obser"ed%
3 the dismissal is witho!t +!st or a!thoriCed ca!se and there was
no d!e process% and 43 the dismissal is $or +!st or a!thoriCed ca!se
b!t d!e process was not obser"ed. /n the rst sit!ation, the
dismissal is !ndo!btedly "alid and the employer will not s!&er any
liability. /n the second and third sit!ations where the dismissals are
ille#al, (rticle 27D mandates that the employee is entitled to
reinstatement witho!t loss o$ seniority ri#hts and other pri"ile#es
and $!ll bacwa#es, incl!si"e o$ allowances, and other benets or
their monetary e!i"alent comp!ted $rom the time the
compensation was not paid !p to the time o$ act!al reinstatement.
/n the $o!rth sit!ation, the dismissal sho!ld be !pheld. Bhile the
proced!ral inrmity cannot be c!red, it sho!ld not in"alidate the
dismissal. =owe"er, the employer sho!ld be held liable $or non:
compliance with the proced!ral re!irements o$ d!e process.• ( re"iew and re:eAamination o$ the rele"ant le#al principles is
appropriate and timely to clari$y the "ario!s r!lin#s on employment
termination in the li#ht o$ Serrano ". ational 'abor Relations-ommission. Be held that the "iolation by the employer o$ the
notice re!irement in termination $or +!st or a!thoriCed ca!ses was
not a denial o$ d!e process that will n!lli$y the termination. =owe"er,
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the dismissal is ine&ect!al and the employer m!st pay $!ll
bacwa#es $rom the time o$ termination !ntil it is +!dicially declared
that the dismissal was $or a +!st or a!thoriCed ca!se.• Be belie"e, howe"er, that the r!lin# in Serrano did not consider the
$!ll meanin# o$ (rticle 27D o$ the 'abor -ode Sec!rity o$ en!re. G /n
cases o$ re#!lar employment, the employer shall not terminate the
ser"ices o$ an employee eAcept $or a +!st ca!se or when a!thoriCed
by this itle. (n employee who is !n+!stly dismissed $rom wor shall
be entitled to reinstatement witho!t loss o$ seniority ri#hts and other
pri"ile#es and to his $!ll bacwa#es, incl!si"e o$ allowances, and to
his other benets or their monetary e!i"alent comp!ted $rom the
time his compensation was withheld $rom him !p to the time o$ his
act!al reinstatement. his means that the termination is ille#al only
i$ it is not $or any o$ the +!stied or a!thoriCed ca!ses pro"ided by
law. Pay%ent o /ac1<ages an ot8er /enets+ incluing
reinstate%ent+ is =ustie only i t8e e%'loyee <as un=ustly
is%isse. ($ter care$!lly analyCin# the conse!ences o$ the
di"er#ent doctrines in the law on employment termination, we
belie"e that in cases in"ol"in# dismissals $or ca!se b!t witho!t
obser"ance o$ the twin re!irements o$ notice and hearin#, the
better r!le is to abandon the Serrano doctrine and to $ollow Benphil
case by holdin# that the dismissal was $or +!st ca!se b!t imposin#
sanctions on the employer. S!ch sanctions, howe"er, m!st be stier
than that imposed in Benphil to disco!ra#e the abhorrent practice o$
dismiss now, pay later, which we so!#ht to deter. he sanction
sho!ld be in the nat!re o$ indemnication or penalty and sho!ld
depend on the $acts o$ each case, tain# into special consideration
the #ra"ity o$ the d!e process "iolation o$ the employer. <y doin# so,
this -o!rt wo!ld be able to achie"e a $air res!lt by dispensin# +!stice
not +!st to employees, b!t to employers as well.• )!e process !nder the 'abor -ode, lie -onstit!tional d!e process,
has two aspectsF s!bstanti"e, i.e., the "alid and a!thoriCed ca!ses o$
employment termination !nder the 'abor -ode% and proced!ral, i.e.,
the manner o$ dismissal. Proceural ue 'rocess reAuire%ents
or is%issal are oun in t8e F%'le%enting Rules o P.7.
$+ as a%ene+ ot8er<ise 1no<n as t8e La/or Coe o t8e
P8ili''ines in 0oo1 DF+ Rule F+ 9ec. $+ as a%ene /y
7e'art%ent rer Nos. # an 23. 0reac8es o t8ese ue'rocess reAuire%ents violate t8e La/or Coe. Therefore
statutory due process should be dierentiated from failure
to comply with constitutional due process. Constitutional
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due process protects the individual from the government
and assures him of his rights in criminal, civil or
administrative proceedings ; while statutory due process
found in the Labor Code and Implementing Rules protects
employees from being unustly terminated without ust
cause after notice and hearing.
• >nder the -i"il -ode, no%inal a%ages is ad+!dicated in order that
a ri#ht o$ the plainti&, which has been "iolated or in"aded by the
de$endant, may be "indicated or reco#niCed, and not $or the p!rpose
o$ indemni$yin# the plainti& $or any loss s!&ered by him. he
"iolation o$ the petitioners5 ri#ht to stat!tory d!e process by the
pri"ate respondent warrants the payment o$ indemnity in the $orm o$
nominal dama#es. he amo!nt o$ s!ch dama#es is addressed to the
so!nd discretion o$ the co!rt, tain# into acco!nt the rele"ant
circ!mstances. (t the "ery least, it pro"ides a "indication or
reco#nition o$ this $!ndamental ri#ht #ranted to the latter !nder the
'abor -ode and its /mplementin# R!les.• TFNG+ ,.+ se'arate o'inion- / conc!r in the res!lt, the nal
disposition o$ the petition bein# correct. he -o!rt emphatically
rea*rms the r!le that dismissals $or +!st ca!se are not in"alidated
d!e to the $ail!re o$ the employer to obser"e the proper notice and
hearin# re!irements !nder the 'abor -ode. (t the same time, t8e
7ecision li1e<ise esta/lis8es t8at t8e Civil Coe 'rovisions
on a%ages serve as t8e 'ro'er ra%e<or1 or t8e
a''ro'riate relie to t8e e%'loyee is%isse or =ust cause i
t8e noticeI8earing reAuire%ent is not %et. Serrano ". 'R-,
inso$ar as it is controllin# in dismissals $or !na!thoriCed ca!ses, is no
lon#er the controllin# precedent. (ny and all pre"io!s r!lin#s and
statements o$ the -o!rt inconsistent with these determinations are
now deemed inoperati"e. • i"en the lon# contro"ersy that has do##ed this present iss!e
re#ardin# dismissals $or +!st ca!se, it is wise to lay down standards
that wo!ld #!ide the proper award o$ dama#es !nder the -i"il -ode
in cases wherein the employer $ailed to comply with stat!tory d!e
process in dismissals $or +!st ca!se. / belie"e that it can be
maintained as a #eneral r!le, that $ail!re to comply with the
stat!tory re!irement o$ notice a!tomatically #i"es rise to nominal
dama#es, at the "ery least, e"en i$ the dismissal was s!stained $or +!st ca!se. ominal dama#es are ad+!dicated in order that a ri#ht o$
a plainti& which has been "iolated or in"aded by another may be
"indicated or reco#niCed witho!t ha"in# to indemni$y the plainti& $or
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any loss s!&ered by him. ominal dama#es may liewise be
awarded in e"ery obli#ation arisin# $rom law, contracts, !asi:
contracts, acts or omissions p!nished by law, and !asi:delicts, or
where any property ri#ht has been in"aded.• /t has also been held that one5s employment, pro$ession, trade, or
callin# is a property ri#ht and the wron#$!l inter$erence therewith
#i"es rise to an actionable wron#.• -onsiderin# that the a&ected ri#ht is a property ri#ht, there is
+!stication in basin# the amo!nt o$ nominal dama#es on the
partic!lar characteristics attachin# to the claimant5s employment. (t
the same time, it sho!ld be reco#niCed that no%inal a%ages are
not %eant to /e co%'ensatory.• ctual or co%'ensatory a%ages are not availa/le as a
%atter o rig8t to an e%'loyee is%isse or =ust cause /ut
enie statutory ue 'rocess. (n award o$ bacwa#es dis#!ised
as act!al dama#es wo!ld almost ne"er be +!stied i$ the employee
was dismissed $or +!st ca!se.• emperate or nominal dama#es may yet pro"e to be a pla!sible
remedy, especially when common sense dictates that pec!niary loss
was s!&ered, b!t incapable o$ precise denition.
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,a1a *oos (P) v. Pacot et al.+ (R) | GR No. 2"24! | Ter%ination
ga/on 7octrine | Garcia+ , '-
• Rs were hired by P, was later terminated, as alle#ed by P, were in a
H)ire nancial straitsI, !ncontested is the $act that P did not ser"e
notices atleast 1 month be$ore termination.
• '( $a"o!red Rs, orderin# reinstatement and@or payment bacwa#esand separation i$ reinstatement is no lon#er possible. 'R-
!ltimately modied by remo"in# the award $or bacwa#es. -(
re"ersed applyin# Serrano doctrine. =ence this.• ranted. Rs are dismissed b!t #ranted with nominal dama#es ;93
$or "iolation o$ the d!e process.• ( dismissal $or +!st ca!se !nder (rticle 282 o$ the 'abor -ode
implies that the employee concerned has committed, or is #!ilty o$,
some "iolation a#ainst the employer, i.e. the employee hascommitted some serio!s miscond!ct, is #!ilty o$ some $ra!d a#ainst
the employer, or, as in (#abon, has ne#lected his d!ties. h!s, it can
be said that the employee himsel$ initiated the dismissal process. On
another breath, a dismissal $or an a!thoriCed ca!se !nder (rticle
28 o$ the same -ode does not necessarily imply delin!ency or
c!lpability on the part o$ the employee. /nstead, the dismissal
process is initiated by the employer5s eAercise o$ his mana#ement
prero#ati"e, i.e. when the employer opts to install labor sa"in#de"ices, when he decides to cease b!siness operations or when, as
in this case, he !ndertaes to implement a retrenchment pro#ram.
he clear:c!t distinction between a dismissal $or +!st ca!se !nder
(rticle 282 and a dismissal $or a!thoriCed ca!se !nder (rticle 28 is
$!rther rein$orced by the $act that in the rst instance, payment o$
separation pay, as a r!le, is not re!ired, while in the second, the
law re!ires payment o$ separation pay. or these reasons, there
o!#ht to be a di&erence in treatment when the #ro!nd $or dismissalis one o$ the +!st ca!ses !nder (rticle 282, and when based on one
o$ the a!thoriCed ca!ses !nder (rticle 28. (ccordin#ly, it is wise to
hold thatF 13 i$ the dismissal is based on a +!st ca!se !nder (rticle
282 b!t the employer $ailed to comply with the notice re!irement,
the sanction to be imposed !pon him sho!ld be tempered, the
dismissal process bein# in e&ect, initiated by an act imp!table to the
employee% and 23 i$ the dismissal is based on an a!thoriCed ca!se
!nder (rticle 28 b!t the employer $ailed to comply with the noticere!irement, the sanction sho!ld be sti&er beca!se the dismissal
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process was initiated by the employer5s eAercise o$ his mana#ement
prero#ati"e.• he records be$ore !s re"eal that E(( was indeed s!&erin# $rom
serio!s b!siness losses at the time it terminated respondents5
employment. h!s, there was #ro!nd $or respondents5 dismissal, i.e.,
retrenchment, which is one o$ the a!thoriCed ca!ses en!merated
!nder (rticle 28 o$ the 'abor -ode. 'iewise, it is established that
E(( $ailed to comply with the notice re!irement !nder the same
(rticle. -onsiderin# the $act!al circ!mstances in the instant case,
we, there$ore, deem it proper to A the indemnity at P;9,999.99.• Be liewise nd the -o!rt o$ (ppeals to ha"e been in error when it
ordered E(( to pay respondents separation pay e!i"alent to one
13 month salary $or e"ery year o$ ser"ice. his is beca!se in Reahs
-orporation "s. 'R-, we made the $ollowin# declarationF he r!le,
there$ore, is that in all cases o$ b!siness clos!re or cessation o$
operation or !ndertain# o$ the employer, the a&ected employee is
entitled to separation pay. his is consistent with the state policy o$
treatin# labor as a primary social economic $orce, a&ordin# $!ll
protection to its ri#hts as well as its wel$are. he exce'tion is when
the clos!re o$ b!siness or cessation o$ operations is due to serious
business losses or !nancial reverses; duly proved , in which
case, the ri#ht o$ a&ected employees to separation pay is lost $or
ob"io!s reasons. . . .
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Eastern ssurance & 9urety (P) v. 9ec. o La/or+ etc. (R) | GR No.
#45I"3 | 2.2.#3 | Migrant or1ers Generally I Recruit%ent &
Place%ent I | Narvasa+ , '-
• E?< Manpower applied $or a license to en#a#e in the b!siness o$
recr!itment% P #a"e its bond. >nable to deli"er on their promise to
persons $or deployment, said persons s!ed $or "iolations o$ (rts.2 and 4 o$ '-. E?<3 $ailed to answer nor appear in the hearin#s
cond!cted.• P disclaimed liability, holdin# that s!ch liability was not eApressly
co"ered by the bond% PO0( has no +!risdiction $or$eit!re o$ the bond
1;93.• PO0( r!led in $a"o!r o$ complainants mostly3% P were held +ointly
liable% later modied by the secretary, holdin# +ointly liable to 1D
only. =ence this, 0(S-O contends that the PO0( had noad+!dicatory +!risdiction o"er the monetary claims in !estion
beca!se the same did not arise $rom employer:employee relations.• )ismissed. Secretary o$ 'abor has the power !nder Section ; o$ the
law to apply these sanctions, as well as the a!thority, con$erred by
Section 6, not only to restrict and re#!late the recr!itment and
placement acti"ities o$ all a#encies, b!t also to prom!l#ate r!les
and re#!lations to carry o!t the ob+ecti"es and implement the
pro"isions #o"ernin# said acti"ities. P!rs!ant to this r!le:main#power th!s #ranted, the Secretary o$ 'abor #a"e the PO0(, on its
own initiati"e or !pon lin# o$ a complaint or report or !pon re!est
$or in"esti#ation by any a##rie"ed person, . . . a!thority to3 cond!ct
the necessary proceedin#s $or the s!spension or cancellation o$ the
license or a!thority o$ any a#ency or entity $or certain en!merated
o&enses incl!din# G 13 the imposition or acceptance, directly or
indirectly, o$ any amo!nt o$ money, #oods or ser"ices, or any $ee or
bond in eAcess o$ what is prescribed by the (dministration, and 23any other "iolation o$ pertinent pro"isions o$ the 'abor -ode and
other rele"ant laws, r!les and re#!lations.• /mplicit in these powers is the award o$ appropriate relie$ to the
"ictims o$ the o&enses committed by the respondent a#ency or
contractor, specially the re$!nd or reimb!rsement o$ s!ch $ees as
may ha"e been $ra!d!lently or otherwise ille#ally collected, or s!ch
money, #oods or ser"ices imposed and accepted in eAcess o$ what is
licitly prescribed. /t wo!ld be illo#ical and abs!rd to limit thesanction on an o&endin# recr!itment a#ency or contractor to
s!spension or cancellation o$ its license, witho!t the concomitant
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obli#ation to repair the in+!ry ca!sed to its "ictims. /t wo!ld res!lt
either in rewardin# !nlaw$!l acts, as it wo!ld lea"e the "ictims
witho!t reco!rse, or in compellin# the latter to liti#ate in another
$or!m, #i"in# rise to that m!ltiplicity o$ actions or proceedin#s which
the law abhors.
Ca'ricorn Fnternational Travel & Tours (P) v. C & 9a%eer
verseas Place%ent gency (R) GR No. #23#5 | .4.#3 | Migrant
or1ers Recruit%ent & Place%ent I Generally | Cortes+ , '-
• /s the cash bond posted by a recr!itment a#ency in the Philippine
O"erseas 0mployment (dministration PO0(3 may be #arnished by a
+!d#ment creditor o$ the a#ency.• /n a ci"il case between P-o and R-o, R- manila held $or P-o and $or
the latter to be indemnied D1.23 by R-o. PO0( e"ent!ally
complied w@ the R-s order. he -( re"ersed, pre"entin# P-o $rom
attachin#, le"yin# and #arnishin# R-oUs cash bond, and to ret!rn the
same to the PO0(. =ence this.• )enied $or 'ac o$ Merit. Pri"ate respondent5s liability to petitioner
relates to a p!rely contract!al obli#ation arisin# $rom the p!rchase
and sale o$ airline ticets. Bhile the liability may ha"e been inc!rred
in connection with the b!siness o$ recr!itin# or placin# o"erseasworers, it is denitely not one arisin# $rom "iolations o$ the
conditions $or the #rant and !se o$ the license or a!thority and
contracts o$ employment. or is it one arisin# $rom the "iolation o$
labor laws.• 0Aplicit $rom the pro"isions o$ the 'abor -ode and Philippines
O"erseas 0mployment (dministration R!les and Re#!lationF a3 that
the cash bond is a re!isite $or the iss!ance and renewal o$ a license
or a!thority to en#a#e in the b!siness o$ recr!itment and o"erseasplacement% b3 that the cash bond is to answer $or the liabilities o$
the a#ency arisin# $rom "iolations o$ the conditions $or the #rant or
!se o$ the license or a!thority or the contracts o$ employment, the
'abor -ode, the PO0( r!les and 'abor )epartment iss!ances and all
liabilities that the PO0( may impose% c3 that the amo!nt o$ the cash
bond m!st be maintained d!rin# the li$etime o$ the license or
a!thority% and d3 that the amo!nt o$ the cash bond shall be
ret!rned to the a#ency only when it s!rrenders its license ora!thority, and only !pon postin# o$ a s!rety bond o$ the same
amo!nt "alid $or three 3 years.
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• On a broader scale, the !ndertain# to ass!me +oint and solidary
liability and to #!arantee compliance with labor laws, and the
conse!ent postin# o$ cash and s!rety bonds, may be traced all the
way bac to the constit!tional mandate $or the State to a&ord $!ll
protection to labor, local and o"erseas J(rt. Q///, sec. K.• he pec!liar nat!re o$ o"erseas employment maes it "ery di*c!lt
$or the ilipino o"erseas worer to e&ecti"ely #o a$ter his $orei#n
employer $or employment:related claims and, hence, p!blic policy
dictates that, to a&ord o"erseas worers protection $rom
!nscr!p!lo!s employers, the recr!itment or placement a#ency in
the Philippines be made to share in the employer5s responsibility.• -onsiderin# the rationale $or re!irin# the postin# o$ a cash bond
and its nat!re, it cannot there$ore be ar#!ed that the cash bond is
not eAempt $rom eAec!tion by a +!d#ment creditor simply beca!se it
is not one o$ those en!merated in R!le D, sec. 12 o$ the R!les o$
-o!rt. o accede to s!ch an ar#!ment wo!ld be tantamo!nt to
t!rnin# a blind eye to the clear intent o$ the law to reser"e the cash
bond $or the employment:related claims o$ o"erseas worers and $or
"iolations o$ labor laws.
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9trong8ol Fnsurance v. C | GR No. !!3"3 | 2.43.#$ | Migrant
or1ers Generally : Recruit%ent & Place%ent I | Cru6+ , '-
• he petitioner in"oes d!e process to escape liability on a s!rety
bond eAec!ted $or the protection o$ a ilipino seaman.• (ctin# in behal$ o$ itUs $orei#n principal Vatar ational ishin#, Pan
(sian 'o#istics and radin# Jrecr!itment ? placement a#encyK. =ired(driano >rtes!ela as a captain ;9 bond by P3. months in the +ob,
>rtes!elaUs ser"ices was terminated, therea$ter s!ed the (#ency $or
breach o$ contract and dama#es.• PO0( r!led $or >rtes!ela, later s!ed in the /ns!rance -ommission P
beca!se the a#ency ceased operation. (sin# $or re"ersal at the
claimin# "iolation o$ d!e process as it was not specically directed to
pay. -( dismissed. =ence this.
• )enied. (*rmed. /n the s!rety bond, the petitioner !ne!i"ocallybo!nd itsel$F o answer $or all liabilities which the Philippine
O"erseas 0mployment (dministration may ad+!d#e@impose a#ainst
the Principal in connection with the recr!itment o$ ilipino seamen.
Strictly interpreted, this wo!ld mean that the petitioner a#reed to
answer $or whate"er decision mi#ht be rendered a#ainst the
principal, whether or not the s!rety was impleaded in the complaint
and had the opport!nity to de$end itsel$. here is nothin# in the
stip!lation callin# $or a direct +!d#ment a#ainst the s!rety as a co:de$endant in an action a#ainst the principal. On the contrary, the
petitioner a#reed to answer $or all liabilities that mi#ht be
ad+!d#ed or imposed by the PO0( a#ainst the Principal. <!t e"en i$
this interpretation were re+ected, considerin# the well:nown maAim
that the s!rety is a $a"orite o$ the law, the petitioner wo!ld still
ha"e to eAplain its other a#reement that notice to the Principal is
notice to the s!rety. his was in $act another special stip!lation
typewritten on the printed $orm o$ the s!rety bond prepared by thepetitioner. >nder this commitment, the petitioner is deemed, by the
implied notice, to ha"e been #i"en an opport!nity to participate in
the liti#ation and to present its side, i$ it so chose, to a"oid liability. /$
it did not decide to inter"ene as a co:de$endant and perhaps also as
cross:claimant a#ainst Pan (sian3, it cannot be heard now to
complain that it was denied d!e process.• he petitioner contends, howe"er, that the said stip!lation is
!nconstit!tional and contrary to p!blic policy, beca!se it is a "irt!alwai"er. he -o!rt cannot a#ree. he ar#!ment ass!mes that the
ri#ht to a hearin# is absol!te and may not be wai"ed in any case
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!nder the d!e process cla!se. his is not correct. (s a matter o$ $act,
the ri#ht to be heard is as o$ten wai"ed as it is in"oed, and "alidly
as lon# as the party is #i"en an opport!nity to be heard on his
behal$. he circ!mstance that the chance to be heard is not a"ailed
o$ does not dispara#e that opport!nity and depri"e the person o$ the
ri#ht to d!e process.• /n the proceedin#s be$ore the -ommission, the petitioner was #i"en
$!ll opport!nity which it too3 to present its side, in its answer with
co!nterclaim to the complaint, in its testimony at the hearin#s, in its
motion to dismiss the complaint, and in its 19:pa#e memorand!m.
here is absol!tely no !estion that in that proceedin#, the
petitioner was act!ally and e"en eAtensi"ely heard.
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P8il E%'loy (gency) (P) v. Para%io et al.+ (R) | GR No. 2!5 |
.2".3 | Migrant or1ers Recruit%ent & Place%ent I Generally
| Calle=o+ 9r.+ , '-
• Respondents herein were repatriated $rom their employment in
aiwan on di&erent dates, $or di&erent ca!ses, b!t all prior to the
eApiration o$ their respecti"e contracts.• hey led separate complaints a#ainst their recr!iter petitioner
herein3 be$ore the 'R- $or ille#al dismissal, non:payment o$
benets and eApenses. '( $o!nd $or Rs. 'R- re"ersed the decision
o$ the labor arbiter and $o!nd the respondents were le#ally
dismissed. -( reinstated '(Us decision with modication as to
dama#es. =ence this.• )enied. Preliminarily, it bears stressin# that the respondents who
led complaints $or ille#al dismissal a#ainst the petitioner wereo"erseas ilipino worers whose employment contracts were
appro"ed by the Philippine O"erseas 0mployment (dministration
PO0(3 and were entered into and per$ected here in the Philippines.
(s s!ch, the r!le leA loci contract!s the law o$ the place where the
contract is made3 #o"erns. here$ore, the 'abor -ode, its
implementin# r!les and re#!lations, and other laws a&ectin# labor,
apply in this case.
• (pplyin# the law and the r!le, the employer is b!rdened to pro"ethat the employee was s!&erin# $rom a disease which pre"ented his
contin!ed employment, or that the employee5s wo!nd pre"ented his
contin!ed employment. Section 8, R!le 1, <oo / o$ the Omnib!s
R!les /mplementin# the 'abor -ode re!ires a certication $rom
competent p!blic a!thority that the employee was hea"ily wo!nded
and had lost the ability to wor.• /n Sippers Pacic, /nc. ". Mira, we r!led that an o"erseas ilipino
worer who is ille#ally terminated shall be entitled to his salarye!i"alent to the !neApired portion o$ his employment contract i$
s!ch contract is less than one year. =owe"er, i$ his contract is $or a
period o$ at least one year, he is entitled to recei"e his salaries
e!i"alent to the !neApired portion o$ his contract, or three months5
salary $or e"ery year o$ the !neApired term, whiche"er is lower.• (ccordin# to Section 19, para#raph 2 o$ Rep. (ct o. 8942, the
a#ency which deployed the employees whose employment contract
were ad+!d#ed ille#ally terminated, shall be +ointly and solidarilyliable with the principal $or the money claims awarded to the
a$oresaid employees. >nder Section 1; o$ the same (ct, the
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repatriation o$ the worer and the transport o$ his personal
belon#in#s shall be the primary responsibility o$ the a#ency which
recr!ited or deployed the o"erseas contract worer. (ll the costs
attendant thereto shall be borne by the a#ency concerned and@or its
principal.
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Peo'le v. ,uge Panis | GR No. LI"!5I | .22.!5 | Migrant
or1ers Fllegal Recruet%ent | Cru6 ,+ '-
• he basic iss!e in this case is the correct interpretation o$ (rticle
1b3 o$ P. ). 442, otherwise nown as the 'abor -ode, HRecr!itment
and PlacementI.
• ( certain (b!# was ori#inally s!ed $or Hoperatin# w@o a license $romMO'0 in the en#a#ement o$ Recr!itment and Placement L char#in#
theretoI and promisin# employment in Sa!di% in "iolation o$ (rt. 16
in relation to (rt. D o$ the '-.• (b!# motioned to !ash w@c was e"ent!ally #ranted L holdin# that
the in$ormation did not char#e an o&ense beca!se he was acc!se o$
/lle#al Recr!itment, citin# (rt. 1b3, that there is /R i$, whene"er
two or more persons are in any manner promised or o&ered any
employment $or a $ee. he motion to !ash was e"ent!ally #ranted,hence this.
• /ORM(/OS R0/S(0). he pro"iso was intended neither to
impose a condition on the basic r!le nor to pro"ide an eAception
thereto b!t merely to create a pres!mption. he pres!mption is that
the indi"id!al or entity is en#a#ed in recr!itment and placement
whene"er he or it is dealin# with two or more persons to whom, in
consideration o$ a $ee, an o&er or promise o$ employment is made in
the co!rse o$ the can"assin#, enlistin#, contractin#, transportin#,!tiliCin#, hirin# or proc!rin# o$3 worers.
• he n!mber o$ persons dealt with is not an essential in#redient o$
the act o$ recr!itment and placement o$ worers. (ny o$ the acts
mentioned in the basic r!le in (rticle 1b3 will constit!te
recr!itment and placement e"en i$ only one prospecti"e worer is
in"ol"ed. he pro"iso merely lays down a r!le o$ e"idence that
where a $ee is collected in consideration o$ a promise or o&er o$
employment to two or more prospecti"e worers, the indi"id!al orentity dealin# with them shall be deemed to be en#a#ed in the act
o$ recr!itment and placement. he words shall be deemed create
that pres!mption be #i"en the $orce o$ a disp!table pres!mption or
o$ prima $acie e"idence o$ en#a#in# in recr!itment and placement.
lepp ". Odin p., Mc=enry -o!nty 49 ) .B. 1, 14.3• (t any rate, the interpretation here adopted sho!ld #i"e more $orce
to the campai#n a#ainst ille#al recr!itment and placement, which
has "ictimiCed many ilipino worers seein# a better li$e in a $orei#nland, and in"estin# hard:earned sa"in#s or e"en borrowed $!nds in
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p!rs!it o$ their dream, only to be awaened to the reality o$ a
cynical deception at the hands o$ their own co!ntrymen.
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Auino (P) v. C & Peo'le (R) | GR No. #2!#5 | 22.$2.#2 | Migrant
or1ers Fllegal Recruet%ent | Guttierre6+ , '-
• P was s!ed $or "iolation o$ (rt. 2; o$ the '-% a$ter operatin# to recr!it
worers $or employment abroad w@o license $rom MO'0. 4 "ictims,
all in"ol"ed #i"in# cash3 to P.
• 'ower -o!rt $o!nd P #!ilty beyond reasonable do!bt. -( a*rmed,hence this.
• Re"ersed. (c!itted. )oes the receipt o$ payments, a$ter the
eApiration o$ the license, $or ser"ices rendered be$ore said eApiration
constit!te ille#al recr!itment Be belie"e that it does not, at least
not $or p!rposes o$ criminal prosec!tions. Recr!itment re$ers to the
orderin# o$ ind!cements to !alied personnel to enter a partic!lar
+ob or employment. he ad"ertisin#, the promise o$ $!t!re
employment and other come:ons too place while Ms. (!ino wasstill licensed.
• r!e, the payments $or ser"ices rendered are necessary
conse!ences o$ the applications $or o"erseas employment.
=owe"er, it is asin# too m!ch to eApect a licensed a#ency to
absol!tely at the stroe o$ midni#ht stop all transactions on the day
its license eApires and re$!se to accept carry:o"er payments a$ter
the a#ency is closed. /n any b!siness, there has to be a windin#:!p
a$ter it ceases operations. he collection o$ !npaid acco!nts sho!ldnot be the basis o$ a criminal prosec!tion. he o"ernment did not
!estion the le#ality o$ the payments as s!ch. he prosec!tion is
based on the date o$ the prohibited acti"ity, not on the payments
bein# ille#al eAactions e"er i$ e&ected d!rin# the correct period. he
payments are necessary in order to de$ray the eApenses entailed in
any o"erseas contract o$ employment. hey are intended $or
administrati"e and $or b!siness o$ eApenses and $or the tra"ellin#
eApenses o$ the applicants once cleared $or o"erseas tra"el.• /t has been the consistent r!lin# o$ this -o!rt that the iss!ance o$ a
chec is not payment !ntil the chec has been encashed. (ltho!#h a
chec, as a ne#otiable instr!ment, is re#arded as a s!bstit!te $or
money, it is not money. =ence, its mere deli"ery does not, by itsel$,
operate as payment. P(' ". -o!rt o$ (ppeals, 181 S-R( ;;7
J1DD9K3.
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Peo'le (P) v. Ca/acang () | GR No. 224#2 | .2.#" | Migrant
or1ers Fllegal Recruet%ent | Puno+ , '-
• (( is char#ed $or ille#al recr!itment% a$ter cond!ctin# recr!itment
and promisin# a +ob to 4 people all related3. 0"idence shows that ((
is not licensed, instr!cted the "ictims to pay processin# $ees.
• -/ $o!nd her #!ilty sentencin# to li$e imprisonment. =ence this.• (*rmed w@ Modications more se"ere3. /t is incorrect to maintain
that to be liable $or ille#al recr!itment, one m!st represent
himsel$@hersel$ to the "ictims as a d!ly:licensed recr!iter.. /lle#al
recr!itment is dened in (rticle 8 a3 o$ the 'abor -ode, as
amended, as a3ny recr!itment acti"ities, incl!din# the prohibited
practices en!merated !nder (rticle 4 o$ this -ode, to be
!ndertaen by non:licenses or non:holders o$ a!thority. (rticle 1
b3 o$ the same -ode denes recr!itment and placement asre$errin# toF (3ny act o$ can"assin#, enlistin#, contractin#,
transportin#, !tiliCin#, hirin# or proc!rin# worers, and incl!des
re$errals, contract ser"ices, promisin# or ad"ertisin# $or
employment, locally or abroad, whether $or prot or notF Pro"ided,
hat any person or entity which in any manner, o&ers or promises
$or a $ee employment to two or more persons shall be deemed
en#a#ed in recr!itment and placement. -learly, to pro"e ille#al
recr!itment, only two elements need to be shown, "iCF 13 the personchar#ed with the crime m!st ha"e !ndertaen recr!itment acti"ities
or any o$ the acti"ities en!merated in (rticle 4 o$ the 'abor -ode,
as amended3% and 23 said person does not ha"e a license or
a!thority to do so. Ft is not reAuire t8at it /e s8o<n t8at suc8
'erson <rongully re'resente 8i%sel as a license
recruiter.• he only time they taled to the mana#er o$ the 'aas (#ency was
a$ter their aborted Wi#ht to (b! )habi, when they were tryin# tolocate the whereabo!ts o$ appellant. -learly, it was appellant who
directly recr!ited pri"ate complainants within the meanin# o$ (rticle
8 a3 and b3 the 'abor -ode. Since it is !ndisp!ted that appellant is
not a holder o$ a license or a!thority to recr!it $rom the )epartment
o$ 'abor, thro!#h the PO0(, her acts constit!te ille#al recr!itment.• (ppellant cannot s!ccess$!lly contend she merely per$ormed her
d!ties as an employee o$ a licensed recr!itment a#ency. (part $rom
her !ncorroborated testimony on the matter, she $ailed to presentcredible e"idence.
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DirI,en 98i''ing (P) v. NLRC+ et al. (R) | GR Nos. LI"!322I2$ |
22.2!.!4 | Migrant or1ers Recruit%ent & Place%ent
Contractual 9ti'ulations | Guttierre6+ ,r.+ , '-
• ( complainant here, the captain <is!la3 recei"ed a cable on 1.19.7D
$rom the -ompany in$ormin# them that they may be directed to call
at /:-ontrolled Ports /:Militant 'abor Or#, capable o$ holdin#ships3% therea$ter was ad"ised o$ the proced!re to be $ollowed in
comp!tin# $or special or additional compensation o$ crew members
while in said ports.• On .24.7D <is!la sent a cable to the company ad"isin# them that a
consens!s was achie"ed by the crew% that they are not contented w@
their present salaries% based on their ro!tes, haCardo!s car#o% that
they wanted to be paid w@ / rate ;9X increase3% both sides
e"ent!ally a#reed to accept a 2;X increase s!b+ect to conditions%w@c was e&ected.
• S!bse!ently the -ompany so!#ht to cancel their contracts, citin#
act!ations o$ the seamen% S< ranted% therea$ter the -ompany
cabled the seamen in$ormin# that their contracts are terminated and
they are to be repatriated immediately.• S!in# $or ille#al dismissal and non:payment o$ earned wa#es at the
S<% -o!nterin# P s!ed $or breach o$ contract. S< r!led $or P. 'R-
re"ersed, to pay $or the !neApired contract term. =ence this Petitionand Reconsideration3
• Reconsideration ranted@Petition )ismissed.
• /$ any minor ad"anta#es #i"en to ilipino seamen may somehow c!t
into the prots o$ local mannin# a#encies and $orei#n shipowners,
that is not s!*cient reason why the S< or the 'R- sho!ld not
stand by the $ormer instead o$ listenin# to !ns!bstantiated $ears that
they wo!ld be illin# the hen which lays the #olden e##s.
Prescindin# $rom the abo"e, the -o!rt now holds that neither theational Seamen <oard nor the ational 'abor Relations
-ommissions sho!ld, as a matter o$ o*cial policy, le#itimiCe and
en$orce d!bio!s arran#ements where shipowners and seamen enter
into ctitio!s contracts similar to the addend!m a#reements or side
contracts in this case whose p!rpose is to decei"e.• he $orm contracts appro"ed by the ational Seamen <oard are
desi#ned to protect ilipino seamen not $orei#n shipowners who can
tae care o$ themsel"es. he standard $orms embody the basicminim!ms which m!st be incorporated as parts o$ the employment
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contract. Section 1;, R!le , R!les and Re#!lations /mplementin#
the 'abor -ode.3• hey are not collecti"e bar#ainin# a#reements or imm!table
contracts which the parties cannot impro"e !pon or modi$y in the
co!rse o$ the a#reed period o$ time. o state, there$ore, that the
a&ected seamen cannot petition their employer $or hi#her salaries
d!rin# the 12 months d!ration o$ the contract r!ns co!nter to
established principles o$ labor le#islation. he ational 'abor
Relations -ommission, as the appellate trib!nal $rom decisions o$ the
ational Seamen <oard, correctly r!led that the seamen did not
"iolate their contracts to warrant their dismissal.• he -o!rt a#rees with the mo"ants that there is no showin# o$ any
ca!se, which !nder the 'abor -ode or any c!rrent applicable law,
wo!ld warrant the termination o$ the respondentsY ser"ices be$ore
the eApiration o$ their contracts. he -onstit!tion #!arantees State
ass!rance o$ the ri#hts o$ worers to sec!rity o$ ten!re. Sec. D,
(rticle //, -onstit!tion3 Pres!mptions and pro"isions o$ law, the
e"idence on record, and $!ndamental State policy all dictate that the
motions $or reconsideration sho!ld be #ranted.• Petitioner claims that the dismissal o$ pri"ate respondents was
+!stied beca!se the latter threatened the ship a!thorities in
accedin# to their demands, and this constit!tes serio!s miscond!ct
as contemplated by the 'abor -ode. his contention is not well:
taen. <!t e"en i$ there had been s!ch a threat, respondents5
beha"ior sho!ld not be cens!red beca!se it is b!t nat!ral $or them
to employ some means o$ pressin# their demands on petitioner, who
re$!sed to abide with the terms o$ the Special (#reement, to honor
and respect the same. hey were only actin# in the eAercise o$ their
ri#hts, and to depri"e them o$ their $reedom o$ eApression is
contrary to law and p!blic policy.
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0 <(-
J.R. os. ;7DDD, ;814:;. (!#!st 1;, 1D8D.K
R0S>RR0--/O S>Z(R(, -0S(R )/M(()(', (0'/O M0)OZ(,
(O/O (0)O (MORSO'O -(<R0R(, )OM/()OR S(OS , /S/)RO
<R(-/(, R(MO )0 <0'0, 0R0SO S(<()O, M(R/ M('(<((,
ROM0O =>0RO and /('/(O P(>0, petitioners, "s. =0 =O. E>)0
('R0)O '. <0/P(NO and M(S(NS(N '/0S, /-., respondents.
J.R. os. 64781:8D. (!#!st 1;, 1D8D.K
R0S>RR0--/O S>Z(R(, -0S(R )/M(()(', (0'/O M0)OZ(,
(O/O (0)O, R(NM>)O P0R0Z, (MORSO'O -(<R0R(,
)OM/()OR S(OS, /S/)RO <R(-/(, -(('/O -(S/-(, /('/(O
P(>0, R(MO )0 <0'0, 0)>(R)O P(('>(, (O/O M/R()(,R(MO >/((, 0R0SO S(R()O, M(R/ M('(<((, ROM0O
=>0RO and B/'R0)O -R/SO<(', petitioners, "s. =0 =OOR(<'0
(/O(' '(<OR R0'(/OS -OMM/SS/O, =0 (/O(' S0(M0
<O(R) now the Philippine O"erseas 0mployment (dministration3, and
M(S(NS(N '/0S, /-., respondents.
V!asha, (sperilla, (ncheta, Pe[a and olasco $or petitioners.
Samson S. (lcantara $or pri"ate respondent.) 0 - / S / O
>/0RR0Z, ER., E pF
hese petitions as $or a re:eAamination o$ this -o!rt5s precedent G
settin# decision in ir:Een Shippin# and Marine Ser"ices /nc. ". ational
'abor Relations -ommission, et al. 12; S-R( ;77 J1D8K3. On
constit!tional, stat!tory, and $act!al #ro!nds, we nd no reason to dist!rb
the doctrine in ir:Een Shippin# and to t!rn bac the cloc o$ pro#ress $or
seabased o"erseas worers. he eAperience #ained in the past $ew years
shows that, $ollowin# said doctrine, we sho!ld neither deny nor diminish
the en+oyment by ilipino seamen o$ the same ri#hts and $reedoms taen
$or #ranted by other worin#men here and abroad.
he cases at bar in"ol"e a #ro!p o$ ilipino seamen who were declared by
the de$!nct ational Seamen <oard S<3 #!ilty o$ breachin# their
employment contracts with the pri"ate respondent beca!se theydemanded, !pon the inter"ention and assistance o$ a third party, the
/nternational ransport Borer5s ederation /3, the payment o$ wa#es
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o"er and abo"e their contracted rates witho!t the appro"al o$ the S<.
he petitioners were ordered to reimb!rse the total amo!nt o$
>S\D1,48.44 or its e!i"alent in Philippine -!rrency representin# the
said o"er:payments and to be s!spended $rom the S< re#istry $or a
period o$ three years. he ational 'abor Relations -ommission 'R-3
a*rmed the decision o$ the S<.
/n a corollary de"elopment, the pri"ate respondent, $or $ail!re o$ the
petitioners to ret!rn the o"erpayments made to them !pon demand by
the $ormer, led esta$a char#es a#ainst some o$ the petitioners. he
criminal cases were e"ent!ally consolidated in the sala o$ then
respondent E!d#e (l$redo <enipayo. =ence, these consolidated petitions,
.R. o. 64781:DD and .R. os. ;7DDD and ;814:;, which respecti"ely
pray $or the n!llication o$ the decisions o$ the 'R- and the S<, and
the dismissal o$ the criminal cases a#ainst the petitioners.
he $acts are $o!nd in the !estioned decision o$ the S< in .R. o.
64781:DD.
rom the records o$ this case it appears that the $acts established and@or
admitted by the parties are the $ollowin#% that on di&erent dates in 1D77
and 1D78 respondents entered into separate contracts o$ employment
0Ahs. < to <:17, incl!si"e3 with complainant pri"ate respondent3 to
wor aboard "essels owned@operated@manned by the latter $or a period o$ 12 calendar months and with di&erent ratin# @position, salary, o"ertime
pay and allowance, hereinbelow speciedF . . . % that a$oresaid
employment contracts were "eried and appro"ed by this <oard% that on
di&erent dates in (pril 1D78 respondents petitioners3 +oined the M@
5R(-0 R/0R5% that on or abo!t October 9, 1D78 a$oresaid "essel, with
the respondents on board, arri"ed at the port o$ anco!"er, -anada% that
at this port respondent recei"ed additional wa#es !nder rates prescribed
by the /nternational ransport Borer5s ederation /3 in the totalamo!nt o$ >S\D8,261 .79% that the respondents recei"ed the amo!nts
appearin# opposite their names, to witF . . . % that a$oresaid amo!nts were
o"er and abo"e the rates o$ pay o$ respondents !s appearin# in their
employment contracts appro"ed by this <oard% that on o"ember 19,
1D78, a$oresaid "essel, with respondent on board, le$t anco!"er, -anada
$or Noohama, Eapan% that on )ecember 14, 1D78, while a$oresaid "essel,
was at Nara, Eapan, they were made to disembar. pp. 6466, Rollo3
!rthermore, accordin# to the petitioners, while the "essel was doced at
a#oya, Eapan, a certain (tty. Oscar orres o$ the S< 'e#al )epartment
bo!nded the "essel and called a meetin# o$ the seamen incl!din# the
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petitioners, tellin# them that $or their own #ood and sa$ety they sho!ld
si#n an a#reement prepared by him on board the "essel and that i$ they
do, the cases led a#ainst them with S< on o"ember 17, 1D78 wo!ld
be dismissed. h!s, the petitioners si#ned the (#reement dated
)ecember ;, 1D78. (nneA - o$ Petition3 =owe"er, when they were later
nished AeroA copies o$ what they had si#ned, they noticed that the line
which amo!nts3 was@were recei"ed and held by -R0BM0M<0RS in tr!st
$or S=/POB0RS was inserted therein, thereby main# it appear that the
amo!nts #i"en to the petitioners representin# the increase in their wa#es
based on / rates were only recei"ed by them in tr!st $or the pri"ate
respondent.
Bhen the "essel reached Manila, the pri"ate respondent demanded $rom
the petitioners the o"erpayments made to them in -anada. (s the
petitioners re$!sed to #i"e bac the said amo!nts, char#es were leda#ainst some o$ them with the S< and the Pro$essional Re#!lations
-ommission. 0sta$a char#es were also led be$ore di&erent branches o$
the then -o!rt o$ irst /nstance o$ Manila which, as earlier stated, were
s!bse!ently consolidated in the sala o$ the respondent E!d#e (l$redo
<enipayo and which e"ent!ally led to .R. os. ;7DDD and ;814:;.
/n .R. os. 64781:DD, the petitioners claimed be$ore the S< that
contrary to the pri"ate respondent5s alle#ations, they did not commit anyille#al act nor sta#e a strie while they were on board the "essel% that the
Special (#reement entered into in anco!"er to pay their salary
di&erentials is "alid, ha"in# been eAec!ted a$ter peace$!l ne#otiations.
Petitioners $!rther ar#!ed that the amo!nts they recei"ed were in
accordance with the pro"ision o$ law, citin# amon# others, Section 18,
R!le /, <oo / o$ the R!les and Re#!lations /mplementin# the 'abor -ode
which pro"ides that the basic minim!m salary o$ seamen shall not be
less than the pre"ailin# minim!m rates established by the /nternational'abor Or#aniCation /'O3 or those pre"ailin# in the co!ntry whose Wa# the
employin# "essel carries, which e"er in hi#her . . . % and that the
(#reement eAec!ted in a#oya, Eapan had been $orced !pon them and
that intercalation5s were made to mae it appear that they were merely
tr!stees o$ the amo!nts they recei"ed in anco!"er.
On the other hand, the pri"ate respondent alle#ed that the petitioners
breached their employment contracts when they, actin# in concert and
with the acti"e participation5s o$ the / while the "essel was inanco!"er, sta#ed an ille#al strie and by means o$ threats, coercion and
intimidation compelled the owners o$ the "essel to pay to them "ario!s
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s!ms totallin# >S\194,244.;% that the respondent entered into the
Special (#reement to pay the petitioners5 wa#e di&erentials beca!se it
was !nder d!ress as the "essel wo!ld not be allowed to lea"e anco!"er
!nless the said a#reement was si#ned, and to pre"ent the shipowner $rom
inc!rrin# $!rther delay in the shipment o$ #oods% and that in "iew o$
petitioners5 breach o$ contract, the latter5s names m!st be remo"ed $rom
the S<5s Re#istry and that they sho!ld be ordered to ret!rn the amo!nts
they recei"ed o"er and abo"e their contracted rates.
he respondent S< r!led that the petitioners were #!ilty o$ breach o$
contract beca!se despite s!bsistin# and "alid S< appro"ed employment
contracts, the petitioners so!#ht the assistance o$ a third party /3 to
demand $rom the pri"ate respondent wa#es in accordance with the /
rates, which rates are o"er and abo"e their rates o$ pay as appearin# in
their S< appro"ed contracts. (s bases $or this concl!sion, the S<statedF
13 he $act that respondents so!#ht the aid o$ a third party /3 and
demanded $or wa#es and o"ertime pay based on / rates is shown in the
entries o$ their respecti"e Pay:O& -learance Slips which were mared as
their 0Ahs. 1 to 18, and we !ote 5)0M()0) / B(0S, O0R/M0,
)/0R0/('S (PR/' O O-O<0R 1D785. Respondent S!Cara admitted
that the entries in his Pay:O& -learance Slip 0Ah. 13 are correct S.,p. 16, )ec. 6, 1D7D3. Moreo"er, it is the policy reiterated "ery o$ten3 by
the / that it does not inter$ere in the a&airs o$ the crewmembers and
masters and@or owners o$ a "essel !nless its assistance is so!#ht by the
crewmembers themsel"es. >nder this prono!nced policy o$ the /, it is
reasonable to ass!me that the representati"es o$ the / in anco!"er,
-anada assisted and inter"ened by reason o$ the assistance so!#ht by
the latter.
23 he $act that the / assisted and inter"ened $or and in behal$ o$ therespondents in the latter5s demand $or hi#her wa#es co!ld be #leaned
$rom the answer o$ the respondents when they admitted that the /
acted in their behal$ in the ne#otiations $or increase o$ wa#es. Moreo"er,
respondent -esar )imaandal admitted that the / di&erential pay was
comp!ted by the / representati"e S, p.7, )ec, 12, 1D7D3
3 he $act that complainant and the owner@operator o$ the "essel were
compelled to si#n the Special (#reement 0Ah. 293 and to pay /di&erentials to respondents in order not to delay the depart!re o$ the
"essel and to pre"ent $!rther losses is shown in the (#reement5 0Aist. R:
213 . . . pp. 6D:79, Rollo3
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he S< $!rther saidF
Bhile the <oard reco#niCes the ri#hts o$ the respondents to demand $or
hi#her wa#es, pro"ided the means are peace$!l and le#al, it co!ld not,
howe"er, sanction the same i$ the means employed are "iolent and
ille#al. /n the case at bar, the means employed are "iolent and ille#al $or
in demandin# hi#her wa#es the respondents so!#ht the aid o$ a thirdparty and in t!rn the latter inter"ened in their behal$ and prohibited the
"essel $rom sailin# !nless the owner and@or operator o$ the "essel
acceded to respondents5 demand $or hi#her wa#es. o a"oid s!&erin#
$!rther incalc!lable losses, the owner and@or operator o$ the "essel had
no alternati"e b!t to pay respondents5 wa#es in accordance with the /
scale. he <oard condemns the act o$ a party who enters into a contract
and with the !se o$ $orce@or intimidation ca!ses the other party to modi$y
said contract. /$ the respondents belie"e that they ha"e a a"oid #ro!nd todemand $rom the complainant a re"ision o$ the terms o$ their contracts,
the same sho!ld ha"e been done in accordance with law and not thr!
ille#al means. at p. 72, Rollo3.
(ltho!#h the respondent S< $o!nd that the petitioners were entitled to
the payment o$ earned wa#es and o"ertime pay@allowance $rom
o"ember 1, 1D78 to )ecember 14, 1D78, it ne"ertheless r!led that the
comp!tation sho!ld be based on the rates o$ pay as appearin# in thepetitioners5 S< appro"ed contracts. /t ordered that the amo!nts to which
the petitioners are entitled !nder the said comp!tation sho!ld be
ded!cted $rom the amo!nts that the petitioners m!st ret!rn to the pri"ate
respondent.
On appeal, the 'R- a*rmed the S<5s ndin#s. =ence, the petition in
.R. os. 64781:DD.
Meanwhile, the petitioners in .R. os. ;7DDD and ;814:; mo"ed to!ash the criminal cases o$ esta$a led a#ainst the on the #ro!nd that the
alle#ed crimes were committed, i$ at all, in anco!"er, -anada and,
there$ore, Philippine co!rts ha"e no +!risdiction. he respondent +!d#e
denied the motion. =ence, the second petition.
he principal iss!e in these consolidated petitions is whether or not the
petitioners are entitled to the amo!nts they recei"ed $rom the pri"ate
respondent representin# additional wa#es as determined in the special
a#reement. /$ they are, then the decision o$ the 'R- and S< m!st be
re"ersed. Similarly, the criminal cases o$ esta$a m!st be dismissed
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beca!se it $ollows as a conse!ence that the amo!nts recei"ed by the
petitioners belon# to them and not to the pri"ate respondent.
/n arri"in# at the !estioned decision, the S< r!led that the petitioners
are not entitled to the wa#e di&erentials as determined by the /
beca!se the means employed by them in obtainin# the same were "iolent
and ille#al and beca!se in demandin# hi#her wa#es the petitionersso!#ht the aid o$ a third party, which, in t!rn, inter"ened in their behal$
and prohibited the "essel $rom sailin# !nless the owner and@or operator o$
the "essel acceded to respondents5 demand $or hi#her wa#es. (nd as
proo$ o$ this concl!sion, the S< cited the $ollowin#F a3 the entries in the
petitioners Pay:O& clearances lip which contained the phrase
)0M()0) / B(0S. . . .% b3 the alle#ed policy o$ the /5 in not
inter$erin# with crewmembers o$ a "essel !nless its inter"ention is so!#ht
by the crewmembers themsel"es% c3, the petitioners5 admission that /acted in their behal$% and d3 the $act that the pri"ate respondent was
compelled to si#n the special a#reement at anco!"er, -anada.
here is nothin# in the p!blic and pri"ate respondents5 pleadin#s, to
s!pport the alle#ations that the petitioners !sed $orce and "iolence to
sec!re the special a#reement si#ned in anco!"er, <ritish -ol!mbia.
here was no need $or any $orm o$ intimidation comin# $rom the ilipino
seamen beca!se the -anadian <rotherhood o$ Railways and ransportBorers -<R3, a stron# -anadian labor !nion, baced by an
international labor $ederation was act!ally doin# all the inW!encin# not
only on the ship:owners and employers b!t also a#ainst third world
seamen themsel"es who, by recei"in# lower wa#es and cheaper
accommodations, were threatenin# the employment and li"elihood o$
seamen $rom de"eloped nations.
he bases !sed by the respondent S< to s!pport its decision do not
pro"e that the petitioners initiated a conspiracy with the / ordeliberately so!#ht its assistance in order to recei"e hi#her wa#es. hey
only pro"e that when / acted in petitioners5 behal$ $or an increase in
wa#es, the latter mani$ested their s!pport. his wo!ld be a lo#ical and
nat!ral reaction $or any worer in whose benet the / or any other labor
#ro!p had inter"ened. he petitioners admit that while they eApressed
their con$ormity to and their sentiments $or hi#her wa#es by means o$
placards, they, ne"ertheless, contin!ed worin# and #oin# abo!t their
!s!al chores. /n other words, all they did was to eAercise their $reedom o$ speech in a most peace$!l way. he / people, in t!rn, did not employ
any "iolent means to $orce the pri"ate respondent to accede to their
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demands. /nstead, they simply applied e&ecti"e press!re when they
intimated the possibility o$ interdiction sho!ld the shipowner $ail to heed
the call $or an !pward ad+!stment o$ the rates o$ the ilipino seamen.
/nterdiction is nothin# more than a re$!sal o$ / members to render
ser"ice $or the ship, s!ch as to load or !nload its car#o, to pre"ision it or
to per$orm s!ch other chores ordinarily incident to the docin# o$ the ship
at a certain port. /t was the $ear o$ / interdiction, not any action taen
by the seamen on board the "essel which led the shipowners to yield.
he S<5s concl!sion that it is /5s policy not to inter"ene with the pli#ht
o$ crewmembers o$ a "essel !nless its inter"ention was so!#ht is witho!t
basis. his -o!rt is co#niCant o$ the $act that d!rin# the period co"ered by
the labor contro"ersies in Ballem Philippines Shippin#, /nc. ". Minister o$
'abor 192 S-R( 8;J1D81K% ir:len Shippin# and Marine Ser"ices, /nc. ".
'R- s!pra3 and these consolidated petitions, the / was militantworldwide especially in -anada, (!stralia, Scandina"ia, and "ario!s
0!ropean co!ntries, interdictin# $orei#n "essels and demandin# wa#e
increases $or third world seamen. here was no need $or ilipino or other
seamen to see / inter"ention. he / was waitin# on its own "olition in
all -anadian ports, not partic!larly $or the petitioners5 "essel b!t $or all
ships similarly sit!ated. (s earlier stated, the / was not really actin# $or
the petitioners o!t o$ p!re altr!ism. he / was merely protectin# the
interests o$ its own members. he petitioners happened to be pawns in ahi#her and broader str!##le between the / on one hand and shipowners
and third world seamen, on the other. o s!b+ect o!r seamen to criminal
prosec!tion and p!nishment $or ha"in# been ca!#ht in s!ch a str!##le is
o!t o$ the !estion.
(s stated in ir:Een Shippin# s!pra3F
he seamen had done no act which !nder Philippine law or any other
ci"iliCed law wo!ld be termed ille#al, oppressi"e, or malicio!s. Bhate"erpress!re eAisted, it was mild compared to accepted and "alid modes o$
labor acti"ity. at pa#e ;D13
i"en these $act!al sit!ations, there$ore, we cannot a*rm the S< and
'R-5s ndin# that there was "iolence, physical or otherwise employed
by the petitioners in demandin# $or additional wa#es. he $act that the
petitioners placed placards on the #an#way o$ their ship to show s!pport
$or /5s demands $or wa#e di&erentials $or their own benet and theres!ltin# /5s threatened interdiction do not constit!te "iolence. he
petitioners were eAercisin# their $reedom o$ speech and eApressin#
sentiments in their hearts when they placed the placard Be Bant /
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Rates. >nder the $acts and circ!mstances o$ these petitions, we see no
reason to depri"e the seamen o$ their ri#ht to $reedom o$ eApression
#!aranteed by the Philippine -onstit!tion and the $!ndamental law o$
-anada where they happened to eAercise it.
(s we ha"e r!led in Ballem Phil. Shippin# /nc. ". Minister o$ 'abor, et al
s!praF
5Petitioner claims that the dismissal o$ pri"ate respondents was +!stied
beca!se the latter threatened the ship a!thorities in accedin# to their
demands, and this constit!tes serio!s miscond!ct as contemplated by the
'abor -ode. his contention is now well:taen. he records $ail to
establish clearly the commission o$ any threat. <!t e"en i$ there had been
s!ch a threat, respondents5 beha"ior sho!ld not be cens!red beca!se it is
b!t nat!ral $or them to employ some means o$ pressin# their demands $or
petitioner, who re$!sed to abide with the terms o$ the Special (#reement,
to honor and respect the same. hey were only actin# in the eAercise o$
their ri#hts, and to depri"e them o$ their $reedom o$ eApression is
contrary to law and p!blic policy. . . . at pa#e 843
Be liewise, nd the p!blic respondents5 concl!sions that the acts o$ the
petitioners in demandin# and recei"in# wa#es o"er and abo"e the rates
appearin# in their S<:appro"ed contracts is in e&ect an alteration o$
their "alid and s!bsistin# contracts beca!se the same were not obtainedthro!#h m!t!al consent and witho!t the prior appro"al o$ the S< to be
witho!t basis, not only beca!se the pri"ate respondent5s consent to pay
additional wa#es was not "itiated by any "iolence or intimidation on the
part o$ the petitioners b!t beca!se the said S<:appro"ed $orm contracts
are not !nalterable contracts that can ha"e no room $or impro"ement
d!rin# their e&ecti"ity or which ban any amendments d!rin# their term.
or one thin#, the employer can always impro"e the worin# conditionswitho!t "iolatin# any law or stip!lation.
Be stated in the ir:Een case s!pra3 thatF
he $orm contracts appro"ed by the ational Seamen <oard are
desi#ned to protect ilipino seamen not $orei#n shipowners who can tae
care o$ themsel"es. he standard $orms embody the basic minim!ms
which m!st be incorporated !s parts o$ the employment contract.
Section 1;, R!le , R!les and Re#!lations /mplementin# the 'abor -ode3. hey are not collecti"e bar#ainin# a#reements or illimitable contracts
which the parties cannot impro"e !pon or modi$y in the co!rse o$ the
a#reed period o$ time. o state, there$ore, that the a&ected seamen
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cannot petition their employer $or hi#her salaries d!rin# the 12 months
d!ration o$ the contract r!ns co!nter to established principles o$ labor
le#islation. he ational 'abor Relations -ommission, as the appellate
trib!nal $rom the decisions o$ the ational Seamen <oard, correctly r!led
that the seamen did not "iolate their contracts to warrant their dismissal.
at pa#e ;8D3
/t is impractical $or the S< to re!ire the petitioners, ca!#ht in the
middle o$ a labor str!##le between the / and owners o$ ocean #oin#
"essels hal$way aro!nd the world in anco!"er, <ritish -ol!mbia to rst
sec!re the appro"al o$ the S< in Manila be$ore si#nin# an a#reement
which the employer was willin# to si#n. /t is also totally !nrealistic to
eApect the petitioners while in -anada to eAhibit the will and stren#th to
oppose the /5s demand $or an increase in their wa#es, ass!min# they
were so minded.
(n eAamination o$ (nneA - o$ the petition, the a#reement si#ned in Eapan
by the crewmembers o$ the M@ race Ri"er and a certain M. abei,
representati"e o$ the Eapanese shipowner lends credence to the
petitioners5 claim that the cla!se which amo!nts3 was recei"ed and held
by -R0BM0M<0RS in tr!st $or S=/POB0R was an intercalation added
a$ter the eAec!tion o$ the a#reement. he cla!se appears too closely
typed below the names o$ the 1D crewmen and their wa#es with nosimilar inter"enin# space as that which appears between all the
para#raphs and the triple space which appears between the list o$
crewmembers and their wa#es on one hand and the para#raph abo"e
which introd!ces the list, on the other. he "erb were was also inserted
abo"e the "erb was to mae the cla!se #rammatically correct b!t the
insertion o$ were is already on the same line as (ntonio Miranda and
;,221.96 where it clearly does not belon#. here is no other space where
the word were co!ld be intercalated. See Rollo, pa#e 893.(t any rate, the proposition that the petitioners sho!ld ha"e pretended to
accept the increased wa#es while in anco!"er b!t ret!rned them to the
shipowner when they reached its co!ntry, Eapan, has already been
answered earlier by the -o!rtF
ilipino seamen are admittedly as competent and reliable as seamen
$rom any other co!ntry in the world. Otherwise, there wo!ld not be so
many o$ them in the "essels sailin# in e"ery ocean and sea on this #lobe./t is competence and reliability, not cheap labor that maes o!r seamen
so #reatly in demand. ilipino seamen ha"e ne"er demanded the same
hi#h salaries as seamen $rom the >nited States, the >nited in#dom,
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Eapan and other de"eloped nations. <!t certainly they are entitled to
#o"ernment protection when they as $or $air and decent treatment by
their employer and when they eAercise the ri#ht to petition $or impro"ed
terms o$ employment, especially when they $eel that these are s!b:
standard or are capable o$ impro"ement accordin# to internationally
accepted r!les. /n the domestic scene, there are mar#inal employers who
prepare two sets o$ payrolls $or their employees G one in eepin# with
minim!m wa#es and the other recordin# the s!b:standard wa#es that the
employees really recei"e. he reliable employers, howe"er, not only meet
the minim!ms re!ired by $air labor standards le#islation b!t e"en so
away abo"e the minim!ms while earnin# reasonable prots and
prosperin#. he same is tr!e o$ international employment. here is no
reason why this co!rt and the Ministry o$ 'abor and 0mployment or its
a#encies and commissions sho!ld come o!t with prono!ncements based
on the standards and practices o$ !nscr!p!lo!s or ine*cient shipowners,
who claim they cannot s!r"i"e witho!t resortin# to tricy and decepti"e
schemes, instead o$ o"ernment maintainin# labor law and +!rispr!dence
accordin# to the practices o$ honorable, competent, and law:abidin#
employers, domestic or $orei#n. ir:Een Shippin#, s!pra, pp. ;87:;883
/t is noteworthy to emphasiCe that while the /nternational 'abor
Or#aniCation /'O3 set the minim!m basic wa#e o$ able seamen at
>S\187.99 as early as October 1D76, it was only in 1D7D that therespondent S< iss!ed Memo -irc!lar o. 4;, en+oinin# all shippin#
companies to adopt the said minim!m basic wa#e. /t was correct $or the
respondent S< to state in its decision that when the petitioners entered
into separate contracts between 1D77:1D78, the monthly minim!m basic
wa#e $or able seamen ordered by S< was still Aed at >S\19.99.
=owe"er, it is not the $a!lt o$ the petitioners that the S< not only
"iolated the 'abor -ode which created it and the R!les and Re#!lations
/mplementin# the 'abor -ode b!t also sees to p!nish the seamen $or ashortcomin# o$ S< itsel$.
(rticle 21c3 o$ the 'abor -ode, when it created the S<, mandated the
<oard to O3btain the best possible terms and conditions o$ employment
$or seamen.
Section 1;, R!le o$ <oo / o$ the R!les and Re#!lations /mplementin#
the 'abor -ode pro"idesF
Sec. 1;. Model contract o$ employment. G he S< shall de"ise a model
contract o$ employment which shall embody all the re!irements o$
pertinent labor and social le#islation5s and the pre"ailin# standards set by
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applicable /nternational 'abor Or#aniCation -on"entions. he model
contract shall set the minim!m standards o$ the terms and conditions to
#o"ern the employment o$ ilipinos on board "essels en#a#ed in o"erseas
trade. (ll employers o$ ilipinos shall adopt the model contract in
connection with the hirin# and en#a#ement o$ the ser"ices o$ ilipino
sea$arers, and in no case shall a shipboard employment contract be
allowed where the same pro"ides $or benets less than those en!merated
in the model employment contract, or in any way conWicts with any other
pro"isions embodied in the model contract.
Section 18 o$ R!le / o$ the same R!les and Re#!lations pro"idesF
Sec. 18. <asic minim!m salary o$ able:seamen. G he basic minim!m
salary o$ seamen shall be not less than the pre"ailin# minim!m rates
established by the /nternational 'abor Or#aniCation or those pre"ailin# in
the co!ntry whose Wa# the employin# "essel carries, whiche"er is hi#her.
=owe"er, this pro"ision shall not apply i$ any shippin# company pays its
crew members salaries abo"e the minim!m herein pro"ided.
Section 8, R!le Q, <oo / o$ the Omnib!s R!les pro"idesF
Section 8. >se o$ standard $ormat o$ ser"ice a#reement. G he <oard
shall adopt a standard $ormat o$ ser"ice a#reement in accordance5s with
pertinent labor and social le#islation and pre"ailin# standards set byapplicable /nternational 'abor Or#aniCation -on"entions. he standard
$ormat shall set the minim!m standard o$ the terms and conditions to
#o"ern the employment o$ ilipino sea$arers b!t in no case shall a
shipboard employment contract sic3, or in any way conWict with any
other pro"ision embodied in the standard $ormat.
/t too three years $or the S< to implement re!irements which, !nder
the law, they were obli#ed to $ollow and eAec!te immediately. )!rin#
those three years, the incident in anco!"er happened. he terms andconditions a#reed !pon in anco!"er were well within /'O rates e"en i$
they were abo"e S< standards at the time.
he sanctions applied by S< and a*rmed by 'R- are moreo"er not in
eepin# with the basic premise that this -o!rts stressed in the ir:Een
Shippin# case s!pra3 that the Ministry new the )epartment o$ 'abor and
0mployment and all its a#encies eAist primarily $or the worin#man5s
interest and the nation5s as a whole.
/mplicit in these petitions and the only reason $or the S< to tae the side
o$ $orei#n shipowners a#ainst ilipino seamen is the illin# the #oose
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which lays the #olden e##s ar#!ment. Be reiterate the r!lin# o$ the
-o!rt in ir:Een Shippin# s!pra3
here are "ario!s ar#!ments raised by the petitioners b!t the common
thread r!nnin# thro!#h all o$ them is the contention, i$ not the dismal
prophecy, that i$ the respondent seaman are s!stained by this -o!rt, we
wo!ld in e&ect 5ill the hen that lays the #olden e##.5 /n other words,ilipino seamen, admittedly amon# the best in the world, sho!ld remain
satised with relati"ely lower i$ not the lowest, international rates o$
compensation, sho!ld not a#itate $or hi#her wa#es while their contracts
o$ employment are s!bsistin#, sho!ld accept as sacred, iron clad, and
imm!table the side contracts which re!ire them to $alsely pretend to be
members o$ international labor $ederations, pretend to recei"e hi#her
salaries at certain $orei#n ports only to ret!rn the increased pay once the
ship lea"es that port, sho!ld stiWe not only their ri#ht to as $or impro"edterms o$ employment b!t their $reedom o$ speech and eApression, and
sho!ld s!&er instant termination o$ employment at the sli#htest si#n o$
dissatis$action with no protection $rom their o"ernment and their co!rts.
Otherwise, the petitioners contend that ilipinos wo!ld no lon#er be
accepted as seamen, those employed wo!ld lose their +obs, and the still
!nemployed wo!ld be le$t hopeless.
his is not the rst time and it will not be the last where the threat o$ !nemployment and loss o$ +obs wo!ld be !sed to ar#!e a#ainst the
interests o$ labor% where e&orts by worin#men to better their terms o$
employment wo!ld be characteriCed as pre+!dicin# the interests o$ labor
as a whole.
AAA AAA AAA
>nionism, employers5 liability acts, minim!m wa#es, wormen5s
compensation, social sec!rity and collecti"e bar#ainin# to name a $ewwere all initially opposed by employer5 and e"en well meanin# leaders o$
#o"ernment and society as 5illin# the hen or #oose which lays the #olden
e##s.5 he claims o$ worin#men were described as o!tra#eo!sly
in+!rio!s not only to the employer b!t more so to the employees
themsel"es be$ore these claims or demands were established by law and
+!rispr!dence as 5ri#hts5 and be$ore these were pro"ed benecial to
mana#ement, labor, and the national as a whole beyond reasonable
do!bt.
he case be$ore !s does not represent any ma+or ad"ance in the ri#hts o$
labor and the worin#men. he pri"ate respondents merely so!#ht ri#hts
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already established. o matter how m!ch the petitioner:employer tries to
present itsel$ as speain# $or the entire ind!stry, there is no e"idence that
it is typical o$ employers hirin# ilipino seamen or that it can spea $or
them.
he contention that mannin# ind!stries in the Philippines wo!ld not
s!r"i"e i$ the instant case is not decided in $a"or o$ the petitioner is nots!pported by e"idence. he Ballem case was decided on ebr!ary 29,
1D81. here ha"e been no se"ere reperc!ssions, no di"in# !p o$
employment opport!nities $or seamen, and none o$ the dire
conse!ences repeatedly emphasiCed by the petitioner. Bhy sho!ld ir:
Een be an eAception
he wa#es o$ seamen en#a#ed in international shippin# are sho!ldered
by the $orei#n principal. he local mannin# o*ce is an a#ent whose
primary $!nction is recr!itment end who !s!ally #ets a l!mp s!m $rom
the shipowner to de$ray the salaries o$ the crew. he hirin# o$ seamen
and the determination o$ their compensation is s!b+ect to the interplay o$
"ario!s maret $actors and one ey $actor is how m!ch in terms o$ prots
the local meanin# o*ce and the $orei#n shipowner may realiCe a$ter the
costs o$ the "oya#e are met. (nd costs incl!de salaries o$ o*cers and
crew members. at pp. ;8;:;863
he Ballem Shippin# case, was decided in 1D81. ir:Een Shippin# wasdecided in 1D8. /t is now 1D8D. here has been no dryin# !p o$
employment opport!nities $or ilipino seamen. ot only ha"e their wa#es
impro"ed th!s lendin# / to be placid and !iet all these years inso$ar as
ilipinos are concerned b!t the hirin# o$ Philippine seamen is at its hi#hest
le"el e"er.
Reportin# its acti"ities $or the year 1D88, the Philippine O"erseas
0mployment (dministration PO0(3 stated that there will be en increasein demand $or seamen based o"erseas in 1D8D boostin# the n!mber to as
hi#h as 19;,999. his will represent a D.; percent increase $rom the 1D88
a##re#ate. <!siness Borld, ews <rie$s, Ean!ary 11, 1D8D at pa#e 23
(ccordin# to the PO0(, seabased worers n!mberin# D;,D1 in 1D88
eAceeded by a wide mar#in o$ 28.1; percent the year end total in 1D87.
he report shows that seabased worers posted bi##er monthly
increments compared to those o$ landbesed worers. he <!siness Star,
/ndicators, Ean!ary 11, 1D88 at pa#e 23
(!#mentin# this optimistic report o$ PO0( (dministrator omas (chacoso
is the statement o$ Secretary o$ 'abor ranlin M. )rilon that the
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Philippines has a bi# +!mp o"er other crewin# nations beca!se o$ the
ilipinos5 abilities compared with any 0!ropean or western crewin#
co!ntry. )rilon added that cr!ise shippin# is also a #rowin# maret $or
ilipino sea$arers beca!se o$ their WeAibility in handlin# odd +obs and their
eApertise in handlin# almost all types o$ ships, incl!din# l!A!ry liners.
Manila <!lletin, More ilipino Seamen 0Apected )eployment )ecember
27, 1D88 at pa#e 2D3. Parenthetically, the minim!m monthly salary o$
able bodied seamen set by the /'O and adhered to by the Philippines is
now \276.99 id.3 more than do!ble the \19.99 so!#ht to be en$orced
by the p!blic respondents in these petitions.
he eAperience $rom 1D81 to the present "indicates the ndin# in ir:Een
Shippin# that a decision in $a"or o$ the seamen wo!ld not necessarily
mean se"ere reperc!ssions, dryin# !p o$ employment opport!nities $or
seamen, and other dire conse!ences predicted by mannin# a#enciesand recr!iters in the Philippines.
rom the $ore#oin#, we nd that the S< and 'R- committed #ra"e
ab!se o$ discretion in ndin# the petitioners #!ilty o$ !sin# intimidation
and ille#al means in breachin# their contracts o$ employment and
p!nishin# them $or these alle#ed o&enses. -onse!ently, the criminal
prosec!tions $or esta$a in .R. os. ;7DDD and ;814:; sho!ld be
dismissed.B=0R0OR0, the petitions are hereby R(0). he decisions o$ the
ational Seamen <oard and ational 'abor Relations -ommission in . R.
os. 64781:DD are R00RS0) and S0 (S/)0 and a new one is entered
holdin# the petitioners not #!ilty o$ the o&enses $or which they were
char#ed. he petitioners5 s!spension $rom the ational Seamen <oard5s
Re#istry $or three 3 years is '/0). he pri"ate respondent is ordered
to pay the petitioners their earned b!t !npaid wa#es and o"ertime
pay@allowance $rom o"ember 1, 1D78 to )ecember 14, 1D78 accordin#to the rates in the Special (#reement that the parties entered into in
anco!"er, -anada.
he criminal cases $or esta$a, s!b+ect matter o$ . R. os. ;7DDD and
;814:;, are ordered )/SM/SS0).
SO OR)0R0).
ar"asa, Melencio:=errera, -r!C, Paras, ancayco, Padilla, <idin,Sarmiento, -ortes, ri[o:(!ino, Medialdea and Re#alado, EE., conc!r.
ernan, -.E.3 on o*cial lea"e.
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eliciano, E., too no part. / was a director o$ pri"ate respondent corp.
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/RS )//S/O
J.R. o. 822;2. ebr!ary 28, 1D8D.K
S0(>'' M(R//M0 -ORP. () P=/'/M(R0 S=/PP/ ? 0V>/PM0
S>PP'N, petitioners, "s. 0RRN ). <('(O(, (/O(' '(<OR
R0'(/OS -OMM/SS/O () P=/'/PP/0 O0RS0(S 0MP'ONM0
()M//SR(/O, respondents.
an+!atco, Oreta, an+!atco, <eren#!er ? San icente $or petitioners.
he Solicitor eneral $or p!blic respondent.
<en+amin <. er#ara $or pri"ate respondent.
SN''(<>S
1. '(<OR '(B% 0MP'ONM0 -OR(-% M>S <0 S><M/0) O =0PO0( OR (PPRO('% R0(SO% S>PP'0M0(RN -OR(- PRO/)/
OR MOR0 <00/S O =0 BOR0RS, )0-'(R0) ('/) ()
0OR-0(<'0 00 B/=O> (PPRO(' O =0 PO0(. G he
s!pplementary contract o$ employment was entered into between
petitioner and pri"ate respondent to modi$y the ori#inal contract o$
employment. he reason why the law re!ires that the PO0( sho!ld
appro"e and "eri$y a contract !nder (rticle 4i3 o$ the 'abor -ode is to
ins!re that the employee shall not thereby be placed in adisad"anta#eo!s position and that the same are within the minim!m
standards o$ the terms and conditions o$ s!ch employment contract set
by the PO0(. his is why a standard $ormat $or employment contracts has
been adopted by the )epartment o$ 'abor. =owe"er, there is no
prohibition a#ainst stip!latin# in a contract more benets to the
employee than those re!ired by law. h!s, in this case wherein a
s!pplementary contract was entered into a&ordin# #reater benets to
the employee than the pre"io!s one, and altho!#h the same was not
s!bmitted $or the appro"al o$ the PO0(, the p!blic respondents properly
considered said contract to be "alid and en$orceable. /ndeed, said
prono!ncements o$ p!blic respondents ha"e the e&ect o$ an appro"al o$
said contract. Moreo"er, as said contract was "ol!ntarily entered into by
the parties the same is bindin# between them. ot bein# contrary to law,
morals, #ood c!stoms, p!blic policy or p!blic order, its "alidity m!st be
s!stained.
2. /).% /).% PRO/S/O O B(/0R ((/S ('' -'(/MS ((/S =0
0MP'ON0R, =0') -OR(RN O P><'/- PO'/-N. G he co!rt s!stains the
r!lin# o$ p!blic respondents that the pro"ision in the s!pplementary
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contract whereby pri"ate respondent wai"es any claim a#ainst petitioners
$or dama#es arisin# $rom death or permanent disability is a#ainst p!blic
policy, oppressi"e and inimical to the ri#hts o$ pri"ate respondent. he
said pro"ision de$eats and is inconsistent with the d!ty o$ petitioners to
ins!re pri"ate respondent a#ainst said contin#encies as clearly stip!lated
in the said contract.
. /).% /).% /)/S O (- O '(<OR R/<>('S, -O-'>S/0%
0MP'ON0R '/(<'0 O P(N -'(/M O 0MP'ON00 / -(S0 O )0(= OR
(--/)0 B=/-= O-->RR0) )>R/ =/S 0MP'ONM0. G his -o!rt is
not a trier o$ $acts and the ndin#s o$ the p!blic respondents are
concl!si"e in this proceedin#. P!blic respondents $o!nd that petitioner
Philimare and pri"ate respondent, entered into said s!pplementary
contract o$ employment on )ecember 6, 1D82. (ss!min# $or the sae o$
ar#!ment that it was petitioners5 principal which entered into saidcontract with pri"ate respondent, ne"ertheless petitioner, as its mannin#
a#ent in the Philippines, is +ointly responsible with its principal there!nder.
here is no !estion that !nder the said s!pplementary contract o$
employment, it is the d!ty o$ the employer, petitioners herein, to ins!re
the employee, d!rin# his en#a#ement, a#ainst death and permanent
in"alidity ca!sed by accident on board !p to \;9,999.99. -onse!ently, it
is also its concomitant obli#ation to see to it that the claim a#ainst the
ins!rance company is d!ly led by pri"ate respondent or in his behal$,and within the time pro"ided $or by the terms o$ the ins!rance contract. /n
this case, the pri"ate respondent met the accident on October 6, 1D8.
Since then, he was hospitaliCed at the S!eC -anal (!thority =ospital and
therea$ter he was repatriated to the Philippines wherein he was also
hospitaliCed $rom October 22, 1D8 to March 27, 1D84. /t was only on
(!#!st 1D, 1D8; that he was iss!ed a medical certicate describin# his
disability to be permanent in nat!re. /t was not possible $or pri"ate
respondent to le a claim $or permanent disability with the ins!rancecompany within the one:year period $rom the time o$ the in+!ry, as his
disability was ascertained to be permanent only therea$ter. Petitioners did
not eAert any e&ort to assist pri"ate respondent to reco"er payment o$ his
claim $rom the ins!rance company. hey did not e"en care to disp!te the
ndin# o$ the ins!rer that the claim was not led on time. Petitioners
m!st, there$ore, be held responsible $or its omission, i$ not ne#li#ence, by
re!irin# them to pay the claim o$ pri"ate respondent.
) 0 - / S / O
(-(N-O, E pF
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On o"ember 2, 1D82, a -rew (#reement was entered into by pri"ate
respondent erry ). <alaton#an and Philimare Shippin# and 0!ipment
S!pply hereina$ter called Philimare whereby the latter employed the
$ormer as able seaman on board its "essel Santa -r!C renamed !rtle
<ay3 with a monthly salary o$ >S\99.99. Said a#reement was processed
and appro"ed by the ational Seaman5s <oard S<3 on o"ember ,
1D82. 1
Bhile on board said "essel the said parties entered into a s!pplementary
contract o$ employment on )ecember 6, 1D82 2 which pro"ides amon#
othersF
1. he employer shall be obli#ed to ins!re the employee d!rin# his
en#a#ement a#ainst death or permanent in"alidity ca!sed by accident on
board !p toF
>S \49,999 G $or death ca!sed by accident
>S \;9,999 G $or permanent total disability ca!sed by accident.
On October 6, 1D8 <alaton#an met an accident in the S!eC -anal, 0#ypt
as a res!lt o$ which he was hospitaliCed at S!eC -anal (!thority =ospital.
'ater, he was repatriated to the Philippines and was hospitaliCed at the
Maati Medical -enter $rom October 2, 1D8 to March 27, 1D84. On
(!#!st 1D, 1D8; the medical certicate was iss!ed describin# hisdisability as permanent in nat!re.
<alaton#an demanded payment $or his claim $or total disability ins!rance
in the amo!nt o$ >S \;9,999.99 as pro"ided $or in the contract o$
employment b!t his claim was denied ha"in# been s!bmitted to the
ins!rers beyond the desi#nated period $or doin# so.
h!s, <alaton#an led on E!ne 21, 1D8; a complaint a#ainst Philimare
and Sea#!ll Maritime -orporation hereina$ter called Sea#!ll3 in the
Philippine O"erseas 0mployment (dministration PO0(3 $or non:payment
o$ his claim $or permanent total disability with dama#es and attorney5s
$ees.
($ter the parties s!bmitted their respecti"e position papers with the
correspondin# doc!mentary e"idence, the o*ce char#e o$ the Borers
(ssistance and (d+!dication O*ce o$ the PO0( rendered a decision on
May 2, 1D86, the dispositi"e part o$ which reads as $ollowsF
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B=0R0OR0, premises considered, respondents are hereby ordered to
pay complainant the amo!nt o$ >S\;9,999.99 representin# permanent
total disability ins!rance and attorney5s $ees at 19X o$ the award.
Payment sho!ld be made in this O*ce within ten 193 days $rom receipt
hereo$ at the pre"ailin# rate o$ eAchan#e. his O*ce cannot howe"er r!le
on dama#es, ha"in# no +!risdiction on the matter.
SO OR)0R0). 4
Sea#!ll and Philimare appealed said decision to the ational 'abor
Relations -ommission 'R-3 on E!ne 4, 1D86. Pendin# resol!tion o$ their
appeal beca!se o$ the alle#ed trans$er o$ the a#ency o$ Sea#!ll to
So!theast (sia Shippin# -orporation, Sea#!ll led on (pril 28, 1D87 a
Motion or S!bstit!tion@/ncl!sion o$ Party Respondent which was opposed
by <alaton#an. ; his was $ollowed by an eA:parte motion $or lea"e to le
third party complaint on E!ne 4, 1D87 by Sea#!ll. ( decision was
prom!l#ated on )ecember 7, 1D87 denyin# both motions and dismissin#
the appeal $or lac o$ merit. 6 ( motion $or reconsideration o$ said
decision was denied $or lac o$ merit in a resol!tion dated ebr!ary 26,
1D88. 7
=ence, Sea#!ll and Philimare led this petition $or certiorari with a prayer
$or the iss!ance o$ a temporary restrainin# order based on the $ollowin#
#ro!ndsF
1. Respondent PO0( erred in applyin# the S!pplemental -ontract%
2. Respondents PO0( and 'R- acted with #ra"e ab!se o$ discretion in
holdin# that the S!pplemental -ontract was si#ned on board M Santa
-r!C by and between pri"ate respondent and $rom petitioner% and
. Respondent 'R- acted with #ra"e ab!se o$ discretion in not #i"in#
d!e co!rse to yo!r petitioners5 Motion $or 'ea"e to ile hird Party-omplaint as well as their Motion $or /ncl!sion@S!bstit!tion o$
respondents. 8
On March 21, 1D88, the -o!rt iss!ed a temporary restrainin# order
en+oinin# respondents $rom en$orcin# the !estioned decision and
resol!tion o$ p!blic respondents.
Petitioners ar#!e that prior to pri"ate respondent5s depart!re he eAec!ted
a crew a#reement on o"ember 2, 1D82 which was d!ly appro"ed by thePO0(% that the s!pplementary contract o$ employment that was entered
into on board the "essel !rtle <ay which pro"ides $or a >S \;9,999.99
ins!rance benet in case o$ permanent disability was neither appro"ed
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nor "eried by respondent PO0(% and that the same "iolates (rticle 4i3
o$ the 'abor -ode, as amended, which pro"ides as $ollowsF
(rt. 4. Prohibited Practices. G /t shall be !nlaw$!l $or any indi"id!al,
entity, licensee, or holder o$ a!thorityF
AAA AAA AAA
i3 to s!bstit!te or alter employment contracts appro"ed and "eried
by the )epartment o$ 'abor $rom the time o$ act!al si#nin# thereo$ by the
parties !p to and incl!din# the period o$ eApiration o$ the same witho!t
the appro"al o$ the )epartment o$ 'abor.
Petitioners also call attention to (rticle ///, para#raph 2 o$ the
S!pplementary -ontract which pro"ides as $ollowsF
2. otwithstandin# his claim a#ainst the ins!rers the employee herebyeApressly wai"es all claims o$ his own or his heirs $or compensation o$
dama#es d!e to death or permanent in"alidity which he s!&ered d!rin#
his en#a#ement a#ainst the employers . . . !nless his death or permanent
in"alidity has been ca!sed by will$!l act o$ any o$ the abo"e:named
persons. D
Petitioners stress that while p!blic respondents !pheld the applicability o$
said s!pplementary contract inso$ar as it increased the benets to pri"aterespondent, p!blic respondents considered the pro"ision on the wai"er
a#ainst all claims by pri"ate respondent to be contrary to p!blic policy.
/n its !estioned decision dated )ecember 7, 1D87, the respondent 'R-
made the $ollowin# dis!isitionF
he $ocal iss!e $or determination is the "alidity and en$orceability o$ the
second contract o$ employment entered into by and between complainant
and respondents on board the "essel where the $ormer had ser"ed as amember o$ its complement despite the absence o$ S< "erication or
appro"al. Bith respect to the ndin#s o$ $acts in the appealed decision,
Be consider the same as d!ly s!pported by s!bstantial e"idence and the
admissions o$ the parties in pleadin#s. ''phil
M!ch stress and emphasis are made by the respondents in their appeal
that this claim has no le#al basis or $ootin# inasm!ch as the second
contract o$ employment containin# a total disability ins!rance benet o$
>S\;9,999.99, m!ch more than that embodied in the rst contract o$
employment which was appro"ed by the de$!nct S<, was not "eried or
appro"ed by the latter. (ccordin#ly, the respondents posit the ar#!ment
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that s!b+ect claim may not prosper p!rs!ant to the pro"isions o$ (rt. 4i3
o$ the 'abor -ode, as amended, which pro"ides that it shall be !nlaw$!l
$or any indi"id!al, entity, licensee, or holder o$ a!thority 53o s!bstit!te
or alter employment contracts appro"ed and "eried by the )epartment
o$ 'abor $rom the time o$ act!al si#nin# thereo$ by the parties !p to and
incl!din# the period o$ eApiration o$ the same witho!t the appro"al o$ the
)epartment o$ 'abor.
)id the PO0( commit a re"ersible error when it considered the second
contract o$ employment as "alid sans any "erication or appro"al thereo$
by the S< O!r answer to this !ery is in the ne#ati"e. (pparently, the
intention o$ the law when (rt. 4 o$ the 'abor -ode was enacted is to
pro"ide $or the prohibited and !nlaw$!l practices relati"e to recr!itment
and placement. (s shown in the 50Aplanatory ote5 o$ Parliamentary <ill
o. 4;1, pertainin# to (rt. 4 s!pra3, th!sF
Many o$ the pro"isions are already eAistin# and were simply restated.
Some howe"er were restated with modications and new ones were
introd!ced to reWect what in the past ha"e been noted to be pernicio!s
practices which tend to place worers at a disad"anta#e.
it is ind!bitably clear that the p!rpose o$ ha"in# o"erseas contracts o$
employment appro"ed by the S<PO0(3 is whether or not s!ch contracts
con$orm to the minim!m terms and conditions prescribed by the S<PO0(3. /n other words, the law did not at all prohibit any alteration which
pro"ided $or increases in wa#es or other benets "ol!ntarily #ranted by
the employer. Precisely, !nder Section 2, R!le 1, <oo o$ the R!les and
Re#!lations o$ the PO0( 5t3he standard $ormat o$ employment contracts
shall set the minim!m standards o$ the terms and conditions o$
employment. (ll employers and principals shall adopt the model contract
in connection with the hirin# o$ worers witho!t pre+!dice to their
adoptin# other terms and conditions o$ employment o"er and abo"e theminim!m standards o$ the (dministration.5 Bhere, as here, it is admitted
that the second contract altho!#h not "eried or appro"ed by the S<
PO0(3 #ranted more benets by way o$ total disability ins!rance to the
complainant, the respondents may not be allowed to disa"ow their own
"ol!ntary acts by insistin# that s!ch benecial contract in $a"or o$ the
seaman is n!ll and "oid. 0mphasis s!pplied.3 19
Be a#ree.
he s!pplementary contract o$ employment was entered into between
petitioner and pri"ate respondent to modi$y the ori#inal contract o$
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employment. he reason why the law re!ires that the PO0( sho!ld
appro"e and "eri$y a contract !nder (rticle 4i3 o$ the 'abor -ode is to
ins!re that the employee shall not thereby be placed in a
disad"anta#eo!s position and that the same are within the minim!m
standards o$ the terms and conditions o$ s!ch employment contract set
by the PO0(. his is why a standard $ormat $or employment contracts has
been adopted by the )epartment o$ 'abor. =owe"er, there is no
prohibition a#ainst stip!latin# in a contract more benets to the
employee than those re!ired by law. h!s, in this case wherein a
s!pplementary contract was entered into a&ordin# #reater benets to
the employee than the pre"io!s one, and altho!#h the same was not
s!bmitted $or the appro"al o$ the PO0(, the p!blic respondents properly
considered said contract to be "alid and en$orceable. /ndeed, said
prono!ncements o$ p!blic respondents ha"e the e&ect o$ an appro"al o$
said contract. Moreo"er, as said contract was "ol!ntarily entered into by
the parties the same is bindin# between them. 11 ot bein# contrary to
law, morals, #ood c!stoms, p!blic policy or p!blic order, its "alidity m!st
be s!stained. 12 <y the same toen, the co!rt s!stains the r!lin# o$
p!blic respondents that the pro"ision in the s!pplementary contract
whereby pri"ate respondent wai"es any claim a#ainst petitioners $or
dama#es arisin# $rom death or permanent disability is a#ainst p!blic
policy, oppressi"e and inimical to the ri#hts o$ pri"ate respondent. he
said pro"ision de$eats and is inconsistent with the d!ty o$ petitioners to
ins!re pri"ate respondent a#ainst said contin#encies as clearly stip!lated
in the said contract. ''pr
Petitioners howe"er ar#!e that they co!ld not ha"e entered into said
s!pplementary contract o$ employment as Philimare was a mere mannin#
a#ent in the Philippines o$ the shippin# company mana#ed by a"ales
Shippin# Mana#ement and Marine -ons!ltant Pte3 'td., its principal.
Petitioners assert that the said s!pplementary contract was entered intoby pri"ate respondent with their principal, a"ales Shippin# Mana#ement
and Marine -ons!ltant Pte3 'td. on board the "essel !rtle <ay so
petitioners cannot be held responsible there!nder.
his -o!rt is not a trier o$ $acts and the ndin#s o$ the p!blic respondents
are concl!si"e in this proceedin#. P!blic respondents $o!nd that petitioner
Philimare and pri"ate respondent, entered into said s!pplementary
contract o$ employment on )ecember 6, 1D82. (ss!min# $or the sae o$ ar#!ment that it was petitioners5 principal which entered into said
contract with pri"ate respondent, ne"ertheless petitioner, as its mannin#
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a#ent in the Philippines, is +ointly responsible with its principal there!nder.
1
here is no !estion that !nder the said s!pplementary contract o$
employment, it is the d!ty o$ the employer, petitioners herein, to ins!re
the employee, d!rin# his en#a#ement, a#ainst death and permanent
in"alidity ca!sed by accident on board !p to \;9,999.99. -onse!ently, itis also its concomitant obli#ation to see to it that the claim a#ainst the
ins!rance company is d!ly led by pri"ate respondent or in his behal$,
and within the time pro"ided $or by the terms o$ the ins!rance contract.
/n this case, the pri"ate respondent met the accident on October 6, 1D8.
Since then, he was hospitaliCed at the S!eC -anal (!thority =ospital and
therea$ter he was repatriated to the Philippines wherein he was also
hospitaliCed $rom October 22, 1D8 to March 27, 1D84. /t was only on
(!#!st 1D, 1D8; that he was iss!ed a medical certicate describin# his
disability to be permanent in nat!re. /t was not possible $or pri"ate
respondent to le a claim $or permanent disability with the ins!rance
company within the one:year period $rom the time o$ the in+!ry, as his
disability was ascertained to be permanent only therea$ter. Petitioners did
not eAert any e&ort to assist pri"ate respondent to reco"er payment o$ his
claim $rom the ins!rance company. hey did not e"en care to disp!te the
ndin# o$ the ins!rer that the claim was not led on time. 14 Petitionersm!st, there$ore, be held responsible $or its omission, i$ not ne#li#ence, by
re!irin# them to pay the claim o$ pri"ate respondent. 'eA'ib
he -o!rt nds that the respondent 'R- did not commit a #ra"e ab!se
o$ discretion in denyin# petitioners5 motion $or lea"e to le third:party
complaint and s!bstit!tion or incl!sion o$ party respondent. S!ch motion
is lar#ely addressed to the discretion o$ the said -ommission. /nasm!ch
as the alle#ed trans$er o$ interest too place only a$ter the PO0( had
rendered its decision, the denial o$ the motion so as to a"oid $!rther delayin the settlement o$ the claim o$ pri"ate respondent was well:taen. (t
any rate, petitioners may p!rs!e their claim a#ainst their alle#ed
s!ccessor:in:interest in a separate s!it.
B=0R0OR0, the petition is hereby )/SM/SS0) $or lac o$ merit and the
temporary restrainin# order iss!ed by this -o!rt on March 21, 1D88 is
hereby '/0). o costs. his decision is immediately eAec!tory.
SO OR)0R0).
ar"asa, -r!C, ri[o:(!ino and Medialdea, EE., conc!r.
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=/R) )//S/O
J.R. o. 11D29. March 1, 1DD8.K
O-0( 0(S (0-N -ORP., 0>ROP0( (/(/O, /-. ? S()(R)
/S>R(-0 -O., /-., petitioners, "s. =0 (/O(' '(<OR R0'(/OS
-OMM/SS/O 'R-:/RS )//S/O3, and -(P. P0P/O M. >-OR,
respondents.
Potenciano R. apenas $or petitioners.
Ro#er S. <oni$acio $or pri"ate respondent.
SNOPS/S
Respondent -apt. !cor was hired by petitioner Ocean 0ast as master o$
M@ (lpine $or one year. Bhile the M@ (lpine was anchored at thePort o$ =a"ana, -!ba, respondent was in$ormed o$ his repatriation $or his
s!bse!ent trans$er to another "essel.
-apt. !cor re$!sed to lea"e the "essel, belie"in# the ca!se $or his
repatriation to be !nreasonable. Ocean 0ast and petitioner 0!ropean
a"i#ation ad"ised him that his ser"ices were not terminated, the
repatriation bein# solely $or doc!mentation p!rposes.
On the #ro!nd o$ serio!s miscond!ct or will$!l disobedience, petitionersterminated the ser"ices o$ -apt. !cor. Respondent led a complaint $or
ille#al dismissal, b!t the PO0( dismissed the complaint $or lac o$ merit
ndin# respondent5s apprehension as premat!re and that petitioners
were merely actin# in the eAercise o$ their mana#ement prero#ati"e.
)-c=a
On appeal, the decision o$ the PO0( was re"ersed by the 'R-. he
principal iss!e is whether or not the trans$er cla!se o$ the Standard
0mployment -ontract S0-3 is "iolati"e o$ (rticle 4i3 o$ the 'abor -ode.
he 'R- r!led that the intended trans$er o$ -apt. !cor to another
"essel was an alteration o$ his ori#inal contract which co!ld not be done
witho!t the appro"al o$ the Secretary o$ 'abor.
he 'R-5s r!lin# does not pers!ade. he Standard 0mployment -ontract
was adopted and appro"ed con$ormably with Section , R!le //, <oo o$
the PO0( R!les and Re#!lations. he trans$er cla!se !nder the S0- is not
inconsistent with (rticle 4i3 o$ the 'abor -ode. On the contrary, thetrans$er cla!se !nder the S0- e"en complements the 'abor -ode by way
o$ resol"in# the compleA demands o$ sea$arers whose ser"ices may entail
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occasional trans$er $rom one "essel to another. ( trans$er is sanctioned
only i$ it is to any "essel owned or mana#ed by the same employer
pro"ided it is accredited to the same mannin# a#ent and that the ratin#
o$ the crewmember, his wa#es and terms o$ ser"ice are in no way in$erior
and the total period o$ employment shall not eAceed that ori#inally
a#reed !pon. he trans$er cla!se is deemed incorporated into the ori#inal
contract% hence, the appro"al o$ the Secretary o$ 'abor is no lon#er
necessary.
Petitioners merely a"ailed o$ what the employment contract allows.
SN''(<>S
1. '(<OR () SO-/(' '0/S'(/O% '(<OR -O)0% 0MP'ONM0%
0MP'ON0R:0MP'ON00 R0'(/OS=/P% 0Q/S0-0 =0R0O O 0(0)
<N 0QPR0SS'N R0P>)/(/ / / -OR(-. G /t is aAiomatic that theeAistence o$ an employer:employee relationship cannot be ne#ated by
eApressly rep!diatin# it in the mana#ement contract and pro"idin#
therein that the employee is an independent contractor when the terms
o$ the a#reement clearly show otherwise. or, the employment stat!s o$ a
person is dened and prescribed by law and not by what the parties say it
sho!ld be. /n determined the stat!s o$ the mana#ement contract, the
$o!r:$old test on employment has to be applied. -(aS0)
2. /).% /).% /).% O>R:O') 0S% S0'0-/O () 0(0M0 O
0MP'ON00. G Petitioner contends that )e los Reyes was ne"er re!ired to
#o thro!#h the pre:employment proced!res and that the probationary
employment stat!s was reser"ed only to employees o$ petitioner. On this
score, it insists that the rst re!irement o$ selection and en#a#ement o$
the employee was not met. ( loo at the pro"isions o$ the contract shows
that pri"ate respondent was appointed as (ctin# >nit Mana#er only !pon
recommendation o$ the )istrict Mana#er. his indicates that pri"aterespondent was hired by petitioner beca!se o$ the $a"orable endorsement
o$ its d!ly a!thoriCed o*cer. <!t, this approbation co!ld only ha"e been
based on the per$ormance o$ )e los Reyes as a#ent !nder the a#ency
contract so that there can be no other concl!sion arri"ed !nder this
premise than the $act that the a#ency or !nderwriter phase o$ the
relationship o$ )e los Reyes with petitioner was nothin# more than a trial
or probationary period $or his e"ent!al appointment as (ctin# >nit
Mana#er o$ petitioner. hen, a#ain, the "ery desi#nation o$ theappointment o$ pri"ate respondent as actin# !nit mana#er ob"io!sly
implies a temporary employment stat!s which may be made permanent
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only !pon compliance with company standard s!ch as those en!merated
!nder Sec. 6 o$ the mana#ement contract.
. /).% /).% /).% /).% P(NM0 O B(0S% -(S0 ( <(R. G On the matter
o$ payment o$ wa#es, petitioner points o!t that respondent was
compensated strictly on commission basis, the amo!nt o$ which was
totally dependent on his total o!tp!t. <!t, the mana#er5s contract speasdi&erently. he abo"e pro"isions !n!estionably demonstrate that the
per$ormance re!irement imposed on )e los Reyes was applicable
!arterly while his entitlement to the $ree portion P993 and the
"alidated portion P1,2993 was monthly startin# on the rst month o$
twel"e 123 months o$ the appointment. h!s, it has to be admitted that
e"en be$ore the end o$ the rst !arter and prior to the so:called
!arterly per$ormance e"al!ation, pri"ate respondent was already
entitled to be paid both the $ree and "alidated portions o$ the >) e"erymonth beca!se his prod!ction per$ormance co!ld not be determined !ntil
a$ter the lapse o$ the !arter in"ol"ed. his indicates !ite clearly that
the !nit mana#er5s !arterly per$ormance had no bearin# at all on his
entitlement at least to the $ree portion o$ the >) which $or all intents and
p!rposes comprised the salary re#!larly paid to him by petitioner. h!s it
cannot be "alidly claimed that the nancial assistance consistin# o$ the
$ree portion o$ the >) was p!rely dependent on the premi!m prod!ction
o$ the a#ent. <e that as it may, it is worth considerin# that the paymento$ compensation by way o$ commission does not militate a#ainst the
concl!sion that pri"ate respondent was an employee o$ petitioner. >nder
(rt. D7 o$ the 'abor -ode, wa#e shall mean howe"er desi#nated,
capable o$ bein# eApressed in terms o$ money, whether Aed or
ascertained on a time, tas, price or commission basis . . . .
4. /).% /).% /).% /).% POB0R O )/SM/SS(' () -ORO'% -(S0 ( <(R.
G ( per!sal o$ the appointment o$ complainant as (ctin# >nit Mana#erre"eals thatF 1. -omplainant was to eAcl!si"ely ser"e respondent
company. h!s it is pro"idedF . . .7..7 Other ca!ses o$ erminationF his
appointment may liewise be terminated $or any o$ the $ollowin#
ca!ses F . . 7..7..2. No!r enterin# the ser"ice o$ the #o"ernment or another
li$e ins!rance company% 7..7... No!r acceptin# a mana#erial or
s!per"isory position in any rm doin# b!siness in the Philippines witho!t
the written consent o$ the -ompany% . . . /t wo!ld not be amiss to state
that respondent5s d!ty to collect the company5s premi!m !sin# companyreceipts !nder Sec. 7.4 o$ the mana#ement contract is $!rther e"idence o$
petitioner5s control o"er respondent. 0Acl!si"ity o$ ser"ice, control o$
assi#nments and remo"al o$ a#ents !nder pri"ate respondent5s !nit,
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collection o$ premi!ms, $!rnishin# o$ company $acilities and materials as
well as capital described as >nit )e"elopment !nd are b!t hallmars o$
the mana#ement system in which herein pri"ate respondent wored. his
obtainin#, there is no escapin# the concl!sion that pri"ate respondent
Pantaleon de los Reyes was an employee o$ herein petitioner. a(0)S
) 0 - / S / O
ROM0RO, E pF
On September 28, 1DD1, respondent -apt. Pepito M. !cor was hired by
petitioner Ocean 0ast (#ency -orp. Ocean 0ast3, the mannin# a#ent o$
herein co:petitioner 0!ropean a"i#ation, /nc. 0/3, as master o$ M@
(lpine $or a period o$ one 13 year with a monthly salary o$ >S\849.99.
Sometime in ebr!ary 1DD2, while the M@ (lpine was anchored at the
Port o$ =a"ana, -!ba, respondent was in$ormed o$ his repatriation $or hiss!bse!ent trans$er to another "essel. cdtai
Percei"in# the trans$er as an ins!lt to his pro$essional competence, -apt.
!cor si#nied that, !nless his $!ll benets are accorded him, he shall
re$!se to lea"e the "essel nowin# the ca!se $or his repatriation to be
!nreasonable. /n an e&ort to ass!a#e his $ears, petitioners Ocean 0ast
and 0/ ad"ised him that his ser"ices were not terminated at all, the
repatriation bein# solely $or doc!mentation p!rposes. On ebr!ary 2D,1DD2, a$ter his demands were $!lly settled, respondent a#reed to be
repatriated. Petitioner alle#ed that in "iew o$ respondent5s earlier re$!sal
to be repatriated and to man the newly:ac!ired M =a"re de race, it
was compelled to assi#n another master to the said "essel. herea$ter,
the company decided to assi#n him to M 0leptheria:, whose master
was #oin# on lea"e on ebr!ary 27, which, howe"er, respondent liewise
missed $or $ail!re to disembar when ordered to do so.
On the #ro!nd o$ serio!s miscond!ct or will$!l disobedience, petitionerterminated the ser"ices o$ respondent. /n a complaint $or ille#al dismissal,
on )ecember 1, 1DD, Philippine O"erseas 0mployment (dministration
PO0(3, thro!#h (dministrator elicisimo O. Eoson, dismissed the said
complaint $or lac o$ merit ndin# respondent5s apprehension as
premat!re and that petitioners were merely actin# in the eAercise o$ their
mana#ement prero#ati"e.
On appeal, this decision was re"ersed by the ational 'abor Relations-ommission 'R-3 in its decision dated o"ember 2D, 1DD4, the
dispositi"e portion o$ which readsF
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B=0R0OR0, the appealed decision is hereby set aside. he respondents
are hereby directed to +ointly and se"erally pay complainant his salary,
o"ertime pay, "acation lea"e and other benets correspondin# to the
!neApired portion o$ his contract.
SO OR)0R0). 1
/ts motion $or reconsideration ha"in# been denied, petitioners led the
instant petition.
he principal iss!e in this case is whether or not the trans$er cla!se o$ the
Standard 0mployment -ontract S0-3 2 is "iolati"e o$ (rticle 4i3 o$ the
'abor -ode.
Said cla!se pro"ides thatF
he -R0BM0M<0R a#rees to be trans$erred at any port to any "esselowned or operated, manned or mana#ed by the same employer pro"ided
it is accredited to the same mannin# a#ent and pro"ided $!rther that the
ratin# o$ the crewmember and the rate o$ his wa#es and terms o$ ser"ice
are in no way in$erior and the total period o$ employment shall not eAceed
that ori#inally a#reed !pon.
(rticle 4i3 o$ the 'abor -ode, on the other hand, readsF
i3 /t shall be !nlaw$!l $or 5any indi"id!al, entity, licensee or holder o$ a!thority to s!bstit!te or alter employment contract appro"ed and
"eried by the )epartment o$ 'abor $rom the time o$ act!al si#nin#
thereo$ by the parties !p to and incl!din# the periods o$ eApiration o$ the
same witho!t the appro"al o$ the Secretary o$ 'abor.
he 'R-, in settin# aside the decision o$ the PO0(, r!led that the
intended trans$er o$ -apt. !cor to another "essel was in e&ect an
alteration o$ his ori#inal contract which co!ld not be done witho!t theappro"al o$ the Secretary o$ 'abor.
he 'R-5s r!lin# does not pers!ade.
/t m!st be noted that the standard employment contract was adopted
and appro"ed con$ormably with Section , R!le //, <oo o$ the PO0(
R!les and Re#!lations which reads as $ollowsF
Section . Standard 0mployment -ontract. G he (dministration
shall !ndertae de"elopment and@or periodic re"iew o$ re#ion, co!ntry
and sills specic employment contracts $or landbased worers and
cond!ct re#!lar re"iew o$ standard employment contracts S0-3 $or
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sea$arers. hese contracts shall pro"ide $or minim!m employment
standards herein en!merated !nder Section 2 o$ this R!le and shall
reco#niCe the pre"ailin# labor and social le#islations at the site o$
employment and international con"entions. he S0- shall set the
minim!m terms and conditions o$ employment. (ll employers and
principals shall adopt the S0- in connection with the hirin# o$ worers
witho!t pre+!dice to their adoption o$ other terms and conditions o$
employment o"er and abo"e the minim!m standards o$ the
(dministration.
On the other hand, el!cidatin# the rationale behind (rticle 4 i3, this
-o!rt held in Sea#!ll Maritime -orp., et al. ". <alaton#an, et al., 4 th!sF
he reason why the law re!ires that the PO0( sho!ld appro"e and
"eri$y a contract !nder (rticle 4i3 o$ the 'abor -ode is to ins!re that the
employee shall not thereby be placed in a disad"anta#eo!s position and
that the same are within the minim!m standards o$ the terms and
conditions o$ s!ch employment contract set by the PO0(. his is why a
standard $ormat $or employment contracts has been adopted by the
)epartment o$ 'abor. 0mphasis s!pplied3
(pparently, there is no inconsistency between (rticle 4i3 o$ the 'abor
-ode and the trans$er cla!se !nder the S0-. On the contrary, the latter
e"en complements the other by way o$ resol"in# the compleA demands o$ sea$arers whose ser"ices may entail occasional trans$er $rom one "essel
to another. Ob"io!sly, the trans$er cla!se is not witho!t limitations. h!s,
a trans$er is sanctioned only i$ it is to any "essel owned or operated,
manned or mana#ed by the same employer pro"ided it is accredited to
the same mannin# a#ent and that the ratin# o$ the crewmember, his
wa#es and terms o$ ser"ice are in no way in$erior and the total period o$
employment shall not eAceed that ori#inally a#reed !pon. /n the instant
case, respondent5s assi#nment to another "essel owned by 0!ropeana"i#ation and accredited to the same mannin# a#ent, there$ore, !nder
no circ!mstance, "iolated (rticle 4i3 o$ the 'abor -ode. he trans$er
cla!se is deemed incorporated into the ori#inal contract% hence, the
appro"al o$ the Secretary o$ 'abor is no lon#er necessary.
(ccordin#ly, we concl!de that petitioners merely a"ailed o$ what the
employment contract allows. /ndeed, it was nothin# more than an
application o$ the s!b+ect pro"ision.
Bith re#ard to the ndin# o$ ille#al dismissal, the pertinent pro"ision o$
the 'abor -ode statesF
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(rt. 282. ermination by employer. G dctai
(n employer may terminate an employment $or any o$ the $ollowin#
ca!sesF
a. Serio!s miscond!ct or wil$!l disobedience by the employer o$ the
law$!l orders o$ his employer or representati"e in connection with his
wor%
AAA AAA AAA.
/n (=S Philippines, /nc. ". -o!rt o$ (ppeals, ; we held that in order that an
employer may terminate an employee on the #ro!nd o$ will$!l
disobedience to the $ormer5s order, re#!lations or instr!ctions, it m!st be
established that the said orders, re#!lation or instr!ctions are a3
reasonable and law$!l, b3 s!*ciently nown to the employee, and c3 inconnection with the d!ties which the employee has been en#a#ed to
dischar#e.
/n the instant case, petitioners ha"e conscientio!sly apprised respondent
that his repatriation was solely $or doc!mentation p!rposes preliminary to
his trans$er to another "essel which the mana#ement belie"es him to be
more $amiliar with. Respondent5s deance o$ a law$!l order posed serio!s
and considerable pre+!dice to the b!siness o$ the employer. his -o!rt
nds that petitioner5s order was made within the sphere o$ itsmana#ement prero#ati"e. he eAercise o$ an employer to re#!late all
aspects o$ employment m!st be in eepin# with #ood $aith and not be
!sed as a preteAt $or de$eatin# the ri#hts o$ employees !nder the laws
and applicable contracts. 6 ( per!sal o$ the records shows a clear, "alid
and le#al ca!se $or the termination o$ respondent5s employment. (s
correctly "iewed by the Solicitor eneralF
-apt. !cor5s re$!sal to disembar and t!rn o"er command o$ his "esselto its new master when instr!cted to do so ca!sed #reat pec!niary
dama#e to his employer. he "essel was at anchora#e $or a lon# time
disr!ptin# its sched!le. ot only that. =e was not able to tae command
o$ the M@ =a"re de race, $orcin# 0!ropean a"i#ation to mae the
arran#ements and assi#n a new master to it. 0!ropean a"i#ation,
eAercisin# maAim!m tolerance in spite o$ -apt. !cor5s ins!bordination,
e"en went as $ar as assi#nin# him to the M@ 0leptheria: a$ter he missed
the M@ =a"re de race. =e liewise missed this assi#nment. (ll thisbeca!se he belie"ed that his trans$er was an ins!lt to his personal and
pro$essional capacity.
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-apt. !cor will$!lly disobeyed a law$!l order o$ his employer. his act o$
ins!bordination is a "alid #ro!nd $or dismissal. 7
B=0R0OR0, the instant petition is hereby R(0). he decision o$ the
ational 'abor Relations -ommission dated o"ember 2D, 1DD4 is
"acated and the resol!tion o$ the PO0( (dministrator is R0/S(0). o
costs.
SO OR)0R0). dctai
ar"asa, - .E ., ap!nan and P!risima, EE ., conc!r.
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S0-O) )//S/O
J.R. o. 19D898. March 1, 1DD;.K
0S('N -=(0Z, petitioner, "s. =O. 0)( <OO:P0R0Z, =O.
RO0'/O . R(N('(, =O. )OM/O =. Z(P((, =O. EOS0 .
S(RM/0O, -0R>M PROMO/OS ? P'(-0M0 -ORPOR(/O, EOS0
(. (Z>-0(, ER., and /M0S S>R0N ? /S>R(-0 -OMP(N, /-.,
respondents.
eliA - . -ha"eC $or petitioner.
he Solicitor eneral $or respondents.
SN''(<>S
1. '(<OR () SO-/(' '0/S'(/O% B(0S% S/)0 (R00M0 OR0)>-0 B(0S% >''//0) / -(S0 ( <(R. G he mana#erial
commission a#reement eAec!ted by petitioner to a!thoriCe her Eapanese
employer to ded!ct wo =!ndred i$ty >.S. )ollars >S\2;9.993 $rom her
monthly basic salary is "oid beca!se it is a#ainst o!r eAistin# laws, morals
and p!blic policy. /t cannot s!persede the standard employment contract
o$ )ecember 1, 1D88 appro"ed by the PO0(. he basic salary o$ One
ho!sand i"e =!ndred >.S. )ollars >S\1,;99.993 #!aranteed to
petitioner !nder the parties5 standard employment contract is inaccordance with the minim!m employment standards, with respect to
wa#es set by the PO0(. h!s, the side a#reement which red!ced
petitioner5s basic wa#e to Se"en =!ndred i$ty >.S. )ollars >.S.\7;9.993
is n!ll and "oid $or "iolatin# the PO0(5s minim!m employment standards,
and $or not ha"in# been appro"ed by the PO0(. /ndeed, this side
a#reement is a scheme all too $re!ently resorted to by !nscr!p!lo!s
employers a#ainst o!r helpless o"erseas worers who are compelled to
a#ree to satis$y their basic economic needs.
2. /).% /).% (0-N () OR0/ PR/-/P('% SO'/)(R/'N '/(<'0 OR
>P(/) B(0S. G Pri"ate respondents -entr!m and imes as well as
Plannin# Eapan -o., 'td. G the a#ency5s $orei#n principal G are solidarily
liable to petitioner $or her !npaid wa#es. his is in accordance with
stip!lation 1.7 o$ the parties5 standard employment contract. his
solidary liability also arises $rom the pro"isions o$ Section 19a323, R!le ,
<oo / o$ the Omnib!s R!les /mplementin# the 'abor -ode.
. /).% )O-R/0 O '(-=0S% )0/0)% B=0 O (PP'/-(<'0% -(S0
( <(R. G he doctrine o$ laches or stale demands cannot be applied to
petitioner. 'aches has been dened as the $ail!re or ne#lect $or an
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!nreasonable and !neAplained len#th o$ time to do that which, by
eAercisin# d!e dili#ence, co!ld or sho!ld ha"e been done earlier, 'a
-ampana ood Prod!cts, /nc. ". -o!rt o$ (ppeals, 22 S-R( 1;1 J1DDK,
Radio -omm!nications o$ the Philippines, /nc. ". ational 'abor Relations
-ommission, 22 S-R( 6;6 J1DDK% Marcelino ". -o!rt o$ (ppeals, 219
S-R( 444 J1DD2K3 th!s #i"in# rise to a pres!mption that the party entitled
to assert it either has abandoned or declined to assert it. <er#ado ".
-o!rt o$ (ppeals, 17 S-R( 4D7 J1D8DK3. /t is not concerned with mere
lapse o$ time% the $act o$ delay, standin# alone, is ins!*cient to constit!te
laches. )onato ". -o!rt o$ (ppeals, 217 S-R( 1D6 J1DDK3. he doctrine
o$ laches is based !pon #ro!nds o$ p!blic policy which re!ires, $or the
peace o$ society, the disco!ra#ement o$ stale claims, and is principally a
!estion o$ the ine!ity or !n$airness permittin# a ri#ht or claim to be
en$orced or asserted. <er#ado ". -o!rt o$ (ppeals, op. cit.3 here is no
absol!te r!le as to what constit!tes laches% each case is to be determined
accordin# to its partic!lar circ!mstances. he !estion o$ laches is
addressed to the so!nd discretion o$ the co!rt, and since it is an e!itable
doctrine, its application is controlled by e!itable considerations. /t
cannot be wored to de$eat +!stice or to perpetrate $ra!d and in+!stice.
EimeneC ". ernandeC, 184 S-R( 1D9 J1DD9K3.
) 0 - / S / O
P>O, E pF
One o$ the an#!ished cries in o!r society today is that while o!r laws
appear to protect the poor, their interpretation is sometimes anti:poor. /n
the case at bench, petitioner, a poor, !nco!nselled entertainment dancer
si#ned a contract with her Eapanese employer callin# $or a monthly salary
o$ One ho!sand i"e =!ndred >.S. )ollars >S\1,;993, b!t later had to
si#n an immoral side a#reement red!cin# her salary below the minim!m
standard set by the PO0(. Petitioner in"oed the law to collect her salarydi&erentials, b!t incredibly $o!nd p!blic respondents strainin# the seams
o$ o!r law to dis$a"or her. here is no #reater disappointment to the poor
lie petitioner than to disco"er the !#ly reality behind the bea!ti$!l
rhetoric o$ laws. Be will not allow this tra"esty.
his is a petition $or certiorari to re"iew the )ecision o$ the ational 'abor
Relations -ommission 'R-3, 1 dated )ecember 2D, 1DD2, which
a*rmed the )ecision o$ p!blic respondent Philippine O"erseas0mployment (#ency PO0(3 (dministrator Eose . Sarmiento, dated
ebr!ary 17, 1DD2, dismissin# petitioner5s complaint $or !npaid salaries
amo!ntin# to SiA ho!sand >.S. )ollars >S\6,999.993. 'ib'eA
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he $acts are !ndisp!ted.
On )ecember 1, 1D88, petitioner, an entertainment dancer, entered into
a standard employment contract $or o"erseas ilipino artists and
entertainers with Plannin# Eapan -o., 'td., 2 thro!#h its Philippine
representati"e, pri"ate respondent -entr!m Placement ? Promotions
-orporation. he contract had a d!ration o$ two 23 to siA 63 months, andpetitioner was to be paid a monthly compensation o$ One ho!sand i"e
=!ndred >.S. )ollars >S\1,;99.993. On )ecember ;, 1D88, the PO0(
appro"ed the contract. S!bse!ently, petitioner eAec!ted the $ollowin#
side a#reement with her Eapanese employer thro!#h her local mana#er,
EaC alents PromotionF
)ateF )ec. 19, 1D88
S><E0-F Salary )ed!ction
M((0R/(' -OMM/SS/O
)(0 O )0P(R>R0F ]]]]]]]]]]]]]
(0/OF MR. /B((
/, 0S('N -=(0Z, )(-0R, do hereby with my own $ree will and
"ol!ntarily ha"e the honor to a!thoriCe yo!r #ood o*ce to please ded!ct
the amo!nt o$ BO =>)R0) /N )O''(RS \2;93 $rom my contractedmonthly salary o$ S00 =>)R0) /N )O''(RS \7;93 as monthly
commission $or my Mana#er, Mr. Eose (. (C!cena, Er.
hat my monthly salary net3 is /0 =>)R0) )O''(RS \;993.
s#d. by petitioner3
On )ecember 16, 1D88, petitioner le$t $or Osaa, Eapan, where she
wored $or siA 63 months, !ntil E!ne 19, 1D8D. She came bac to thePhilippines on E!ne 14, 1D8D. prcd
Petitioner instit!ted the case at bench $or !nderpayment o$ wa#es with
the PO0( on ebr!ary 21, 1DD1. She prayed $or the payment o$ SiA
ho!sand >.S. )ollars >S\6,999.993, representin# the !npaid portion o$
her basic salary $or siA months. -har#ed in the case were pri"ate
respondent -entr!m Promotions and Placement -orporation, the
Philippine representati"e o$ Plannin# Eapan, -o., /nc., its ins!rer, imes
S!rety and /ns!rance -o., /nc., and EaC alents Promotion. -dpr
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he complaint was dismissed by p!blic respondent PO0( (dministrator on
ebr!ary 17, 1DD2. =e ratiocinated, inter aliaF
. . . (pparently and $orm all indications, complainant re$errin# to
petitioner herein3 was satised and did not ha"e any complaint abo!t3
anythin# re#ardin# her employment in Eapan !ntil a$ter almost two 23
years when3 she led the instant complaint on ebr!ary 21, 1DD1. herecords show that a$ter si#nin# the Standard 0mployment -ontract on
)ecember 1, 1D88, she entered into a side a#reement with the Eapanese
employer thr! her local mana#er, EaC alents Promotion consentin# to a
monthly salary o$ >S\7;9.99 which she a*rmed d!rin# the con$erence o$
May 21, 1DD1. Respondent a#ency had no nowled#e nor participation in
the said a#reement s!ch that it co!ld not be $a!lted $or "iolation o$ the
Standard 0mployment -ontract re#ardin# the stip!lated salary. Be cannot
tae co#niCance o$ s!ch "iolation when one o$ the principal party sic3thereto opted to recei"e a salary di&erent $rom what has been stip!lated
in their contract, especially so i$ the other contractin# party did not
consent@participate in s!ch arran#ement. -omplainant petitioner3 cannot
now demand $rom respondent a#ency to pay her the salary based on3
the processed 0mployment -ontract $or she is now considered in bad
$aith and hence, estopped $rom claimin# thereto thr! her own act o$
consentin# and a#reein# to recei"e a salary not in accordance with her
contract o$ employment. Moreo"er, her sel$:imposed silence $or a lon#period o$ time wored to her own disad"anta#e as she allowed laches to
pre"ail which barred respondent $rom doin# somethin# at the o!tset.
ormally, i$ a person5s ri#ht is3 "iolated, she@he wo!ld immediately react
to protect her@his ri#hts which is not tr!e in the case at bar.
he term laches has been dened as one5s ne#li#ence or $ail!re to assert
his ri#ht in d!e time or within reasonable time $rom the accr!al o$ his
ca!se o$ action, th!s, leadin# another party to belie"e that there isnothin# wron# with his own claim. his res!lted in placin# the ne#li#ent
party in estoppel to assert or en$orce his ri#ht. . . . 'iewise, the S!preme
-o!rt in one case held that not only is inaction within reasonable time to
en$orce a ri#ht the basic premise that !nderlies a "alid de$ense o$ laches
b!t s!ch inaction e"inces implied consent or ac!iescence to the
"iolation o$ the ri#ht. . . .
>nder the pre"ailin# circ!mstances o$ this case, it is o!tside the
re#!latory powers o$ the (dministration to r!le on the liability o$ respondent EaC alents Promotions, i$ any, it3 not bein# a licensed pri"ate
a#ency b!t a promotion which trains entertainers $or abroad. cdphil
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AAA AAA AAA -itations omitted.3
On appeal, the 'R- !pheld the )ecision, th!sF
Be $ail to see any conspiracy that the complainant petitioner herein3
imp!tes to the respondents. She has, to p!t it bl!ntly, not established
and@or laid the basis $or >s to arri"e at a concl!sion that the respondents
ha"e been and sho!ld be held liable $or her claims.
he way Be see it, the records do not at all indicate any connection
between respondents -entr!m Promotion ? Placement -orporation and
EaC alents Promotion. -dpr
here is, there$ore, no merit in the appeal. =ence, Be a*rmed. 4
)issatised with the 'R-5s )ecision, petitioner instit!ted the present
petition, alle#in# that p!blic respondents committed #ra"e ab!se o$ discretion in ndin#F that she is #!ilty o$ laches% that she entered into a
side contract on )ecember 19, 1D88 $or the red!ction o$ her basic salary
to Se"en =!ndred i$ty >.S. )ollars >S\7;9.993 which s!perseded,
n!llied and in"alidated the standard employment contract she entered
into on )ecember 1, 1D88% and that Plannin# Eapan -o., 'td. and pri"ate
respondents are not solidarily liable to her $or SiA ho!sand >S )ollars
>S\6,999.993 in !npaid wa#es. ;
he petition is meritorio!s.
irstly, we hold that the mana#erial commission a#reement eAec!ted by
petitioner to a!thoriCe her Eapanese employer to ded!ct wo =!ndred
i$ty >.S. )ollars >S\2;9.993 $rom her monthly basic salary is "oid
beca!se it is a#ainst o!r eAistin# laws, morals and p!blic policy. /t cannot
s!persede the standard employment contract o$ )ecember 1, 1D88
appro"ed by the PO0( with the $ollowin# stip!lation appended theretoF
/t is !nderstood that the terms and conditions stated in this 0mployment
-ontract are in con$ormance with the Standard 0mployment -ontract $or
0ntertainers prescribed by the PO0( !nder Memorand!m -irc!lar o. 2,
Series o$ 1D86. (ny alterations or chan#es made in any part o$ this
contract witho!t prior appro"al by the PO0( shall be n!ll and "oid% 6
0mphasis s!pplied.3
he stip!lation is in line with the pro"isions o$ R!le //, <oo and Section
2$3, R!le /, <oo / o$ the 1DD1 R!les and Re#!lations o"ernin#
O"erseas 0mployment, th!sF
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<oo , R!le //
Section 1. 0mployment Standards. G he (dministration shall
determine, $orm!late and re"iew employment standards in accordance
with the maret de"elopment and wel$are ob+ecti"es o$ the o"erseas
employment pro#ram and the pre"ailin# maret conditions.
Section 2. Minim!m Pro"isions $or -ontract. G he $ollowin# shall be
considered the minim!m re!irements $or contracts o$ employmentF
a. !aranteed wa#es $or re#!lar worin# ho!rs and o"ertime pay $or
ser"ices rendered beyond re#!lar worin# ho!rs in accordance with the
standards established by the (dministration%
AAA AAA AAA
Section . Standard 0mployment -ontract. G he (dministrationshall !ndertae de"elopment and@or periodic re"iew o$ re#ion, co!ntry
and sills specic employment contracts $or landbased worers and
cond!ct re#!lar re"iew o$ standard employment contracts S0-3 $or
sea$arers. hese contracts shall pro"ide $or minim!m employment
standards herein en!merated !nder Section 2, o$ this R!le and shall
reco#niCe the pre"ailin# labor and social le#islations at the site o$
employment and international con"entions. he S0- shall set the
minim!m terms and conditions o$ employment. (ll employers andprincipals shall adopt the S0- in connection with the hirin# o$ worers
witho!t pre+!dice to their adoption o$ other terms and conditions o$
employment o"er and abo"e the minim!m standards o$ the
(dministration. 0mphasis s!pplied.3 'eA'ib
and
<OO /, R>'0 /
Section 2. ro!nds $or s!spension@cancellation o$ license.
AAA AAA AAA
$. S!bstit!tin# or alterin# employment contracts and other doc!ments
appro"ed and "eried by the (dministration $rom the time o$ act!al
si#nin# thereo$ by the parties !p to and incl!din# the period o$ eApiration
o$ the same witho!t the (dministration5s appro"al.
AAA AAA AAA
0mphasis s!pplied3
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-learly, the basic salary o$ One ho!sand i"e =!ndred >.S. )ollars
>S\1,;99.993 #!aranteed to petitioner !nder the parties5 standard
employment contract is in accordance with the minim!m employment
standards with respect to wa#es set by the PO0(. h!s, the side
a#reement which red!ced petitioner5s basic wa#e to Se"en =!ndred i$ty
>.S. )ollars >S\7;9.993 is n!ll and "oid $or "iolatin# the PO0(5s
minim!m employment standards, and $or not ha"in# been appro"ed by
the PO0(. /ndeed, this side a#reement is a scheme all too $re!ently
resorted to by !nscr!p!lo!s employers a#ainst o!r helpless o"erseas
worers who are compelled to a#ree to satis$y their basic economic
needs. cdll
Secondly. he doctrine o$ laches or stale demands cannot be applied to
petitioner. 'aches has been dened as the $ail!re or ne#lect $or an
!nreasonable and !neAplained len#th o$ time to do that which, byeAercisin# d!e dili#ence, co!ld or sho!ld ha"e been done earlier, 7 th!s
#i"in# rise to a pres!mption that the party entitled to assert it either has
abandoned or declined to assert it. 8 /t is not concerned with mere lapse
o$ time% the $act o$ delay, standin# alone, is ins!*cient to constit!te
laches. D
he doctrine o$ laches is based !pon #ro!nds o$ p!blic policy which
re!ires, $or the peace o$ society, the disco!ra#ement o$ stale claims, andis principally a !estion o$ the ine!ity or !n$airness o$ permittin# a ri#ht
or claim to be en$orced or asserted. 19 here is no absol!te r!le as to
what constit!tes laches% each case is to be determined accordin# to its
partic!lar circ!mstances. he !estion o$ laches is addressed to the
so!nd discretion o$ the co!rt, and since it is an e!itable doctrine, its
application is controlled by e!itable considerations. /t cannot be wored
to de$eat +!stice or to perpetrate $ra!d and in+!stice. 11
/n the case at bench, petitioner led her claim well within the three:yearprescripti"e period $or the lin# o$ money claims set $orth in (rticle 2D1 o$
the 'abor -ode. 12 or this reason, we hold the doctrine o$ laches
inapplicable to petitioner. (s we r!led in /mperial ictory Shippin# (#ency
". 'R- , 299 S-R( 178 1DD13F
. . . 'aches is a doctrine in e!ity while prescription is based on law. O!r
co!rts are basically co!rts o$ law not co!rts o$ e!ity. h!s, laches cannot
be in"oed to resist the en$orcement o$ an eAistin# le#al ri#ht. Be ha"er!led in (rsenal ". /ntermediate (ppellate -o!rt . . . that it is a lon#
standin# principle that e!ity $ollows the law. -o!rts eAercisin# e!ity
+!risdiction are bo!nd by r!les o$ law and ha"e no arbitrary discretion to
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disre#ard them. /n Zabat, Er. ". -o!rt o$ (ppeals . . ., this -o!rt was more
emphatic in !pholdin# the r!les o$ proced!re. Be said thereinF
(s $or e!ity, which has been aptly described as a 5+!stice o!tside
le#ality,5 this is applied only in the absence o$, and ne"er a#ainst,
stat!tory law or, as in this case, +!dicial r!les o$ proced!re. (e!etas
n!n!am contra"enit le#is. he pertinent positi"e r!les bein# presenthere, they sho!ld preempt and pre"ail o"er all abstract ar#!ments based
only on e!ity.
h!s, where the claim was led within the three:year stat!tory period,
reco"ery there$ore cannot be barred by laches. -o!rts sho!ld ne"er apply
the doctrine o$ laches earlier than the eApiration o$ time limited $or the
commencement o$ actions at law. 'eA'ib
AAA AAA AAA
0mphasis s!pplied. -itations omitted.3
hirdly, pri"ate respondents -entr!m and imes as well as Plannin# Eapan
-o., 'td. G the a#ency5s $orei#n principal G are solidarily liable to
petitioner $or her !npaid wa#es. his is in accordance with stip!lation
1.7 o$ the parties5 standard employment contract which pro"idesF
1.7. he 0mployer in this case, Plannin# Eapan -o., 'td.3 and itslocally sic3 a#ent@promoter@representati"e pri"ate respondent -entr!m
Promotions ? Placement -orporation3 shall be +ointly and se"erally
responsible $or the proper implementation o$ the terms and conditions in
this -ontract. 1 0mphasis s!pplied.3
his solidary liability also arises $rom the pro"isions o$ Section 19a323,
R!le , <oo / o$ the Omnib!s R!les /mplementin# the 'abor -ode, as
amended, th!sF
Section 19. Re!irement be$ore recr!itment. G <e$ore recr!itin# any
worer, the pri"ate employment a#ency shall s!bmit to the <!rea! the
$ollowin# doc!mentsF
a3 ( $ormal appointment or a#ency contract eAec!ted by a $orei#n:
based employer in $a"or o$ the license holder to recr!it and hire personnel
$or the $ormer. . . . S!ch $ormal appointment or recr!itment a#reement
shall contain the $ollowin# pro"isions, amon# otherF
AAA AAA AAA
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2. Power o$ the a#ency to s!e and be s!ed +ointly and solidarily with
the principal or $orei#n based employer $or any o$ the "iolations o$ the
recr!itment a#reement and the contracts o$ employment. 'eA'ib
AAA AAA AAA
0mphasis s!pplied.3
O!r o"erseas worers constit!te an eAploited class. Most o$ them come
$rom the poorest sector o$ o!r society. hey are thoro!#hly
disad"anta#ed. heir prole shows they li"e in s!&ocatin# sl!ms, trapped
in an en"ironment o$ crime. =ardly literate and in ill health, their only
hope lies in +obs they can hardly nd in o!r co!ntry. heir !n$ort!nate
circ!mstance maes them easy prey to a "aricio!s employers. hey will
climb mo!ntains, cross the seas, end!re sla"e treatment in $orei#n lands
+!st to s!r"i"e. O!t o$ despondence, they will wor !nder s!b:h!manconditions and accept salaries below the minim!m. he least we can do is
to protect them with o!r laws in o!r land. Re#ret$!lly, respondent p!blic
o*cials who sho!ld sympathiCe with the worin# class appear to ha"e a
di&erent orientation.
/ /0B B=0R0O, the petition is R(0). he )ecisions o$ respondent
PO0( (dministrator and 'R- -ommissioners in PO0( -ase o. (d+. D1:
92:1DD 0R3, respecti"ely dated ebr!ary 17 and )ecember 2D, 1DD2, andthe Resol!tion o$ the 'R-, dated March 2, 1DD, are R00RS0) and
S0 (S/)0. Pri"ate respondents are held +ointly and se"erally liable to
petitioner $or the payment o$ S/Q =O>S() >S )O''(RS >S\6,999.993
in !npaid wa#es. -osts a#ainst pri"ate respondents. 'ib'eA
SO OR)0R0).
ar"asa, -.E., <idin, Re#alado and MendoCa, EE., conc!r.