BOOK ONE- PRE-EMPLOYMENT

People of the Philippines vs. Domingo Panis

GR No. L–58674–77, July 11, 1990

FACTS:

On January 9, 1981, four information were filed in the in the Court of First Instance (CFI)
of Zambales and Olongapo City alleging that herein private respondent Serapio Abug,
"without first securing a license from the Ministry of Labor as a holder of authority to
operate a fee-charging employment agency, did then and there wilfully, unlawfully and
criminally operate a private fee charging employment agency by charging fees and
expenses (from) and promising employment in Saudi Arabia" to four separate
individuals. Abug filed a motion to quash contending that he cannot be charged for illegal
recruitment because according to him, Article 13(b) of the Labor Code says there would
be illegal recruitment only "whenever two or more persons are in any manner promised
or offered any employment for a fee.”

Denied at first, the motion to quash was reconsidered and granted by the Trial Court in
its Orders dated June 24, 1981, and September 17, 1981. In the instant case, the view
of the private respondents is that to constitute recruitment and placement, all the acts
mentioned in this article should involve dealings with two or more persons as an
indispensable requirement. On the other hand, the petitioner argues that the requirement
of two or more persons is imposed only where the recruitment and placement consists of
an offer or promise of employment to such persons and always in consideration of a
fee.

ISSUE:

Whether or not Article 13(b) of the Labor Code provides for the innocence or guilt of the
private respondent of the crime of illegal recruitment

COURT RULING:

The Supreme Court reversed the CFI’s Orders and reinstated all four information filed
against private respondent.

The Article 13(b) of the Labor Code was merely intended to create a presumption, and
not to impose a condition on the basic rule nor to provide an exception thereto.

Where a fee is collected in consideration of a promise or offer of employment to two or

more prospective workers, the individual or entity dealing with them shall be deemed to
be engaged in the act of recruitment and placement. The words "shall be deemed"
create the said presumption.
Darvin v Court of Appeals
G.R. No. 125044
July 13, 1998

Facts:
Imelda Darvin was convicted of simple illegal recruitment under the Labor Code by the RTC. It
stemmed from a complaint of one Macaria Toledo who was convinced by the petitioner that she
has the authority to recruit workers for abroad and can facilitate the necessary papers in
connection thereof. In view of this promise, Macaria gave her P150,000 supposedly intended for
US Visa and air fare.

On appeal, the CA affirmed the decision of the trial court in toto, hence this petition.

Issue:
Whether or not appellant is guilty beyond reasonable doubt of illegal recruitment.

Held:
Art. 13 of the Labor Code provides the definition of recruitment and placement as:

...b.) any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers and includes referrals, contract services, promising or advertising for employment
locally or abroad, whether for profit or not: Provided, that any reason person or entity which, in
any manner, offers or promises for a fee employment to two or more persons shall be deemed
engaged in recruitment and placement.

Art. 38 of the Labor Code provides:

a.)Any recruitment activities, including the prohibited practices enumerated under Article 43 of
the Labor Code, to be undertaken by non-licensees or non-holders of authority shall be deemed
illegal and punishable under Article 39 of the Labor Code.

Applied to the present case, to uphold the conviction of accused-appellant, two elements need
to be shown: (1) the person charged with the crime must have undertaken recruitment activities:
and (2) the said person does not have a license or authority to do so.

In the case, the Court found no sufficient evidence to prove that accused-appellant offered a job
to private respondent. It is not clear that accused gave the impression that she was capable of
providing the private respondent work abroad. What is established, however, is that the private
respondent gave accused-appellant P150,000.By themselves, procuring a passport, airline
tickets and foreign visa for another individual, without more, can hardly qualify as recruitment
activities. Aside from the testimony of private respondent, there is nothing to show that appellant
engaged in recruitment activities.At best, the evidence proffered by the prosecution only goes
so far as to create a suspicion that appellant probably perpetrated the crime charged. But
suspicion alone is insufficient, the required quantum of evidence being proof beyond reasonable
doubt. When the People’s evidence fail to indubitably prove the accused’s authorship of the
crime of which he stand accused, then it is the Court’s duty, and the accused’s right, to proclaim
his innocence.

WHEREFORE, the appeal is hereby granted and the decision of the CA is REVERSED and
SET ASIDE. Appellant is hereby ACQUITTED on ground of reasonably doubt. The accused is
ordered immediately released from her confinement.
PEOPLE VS CHUA
GR NO. 128280
APRIL 4, 2001

FACTS: Chua was found guilty beyond reasonable doubt of illegal recruitment committed in
large scale for recruiting and promising work in Taiwan to 9 people, without a license. According
to Chua, she received a call from Taiwan informing her that some people were needed so she
called several people and collected money but the placement in Taiwan never materialized. The
POEA issued a certification that Chua was not licensed to recruit persons/ workers for overseas
employment. Chua argues that she had an approved application for a service contractor’s
authority. But the records show that she failed to comply with post –licensing requirements.
ISSUE: WON Chua was licensed to recruit workers for overseas work.
HELD: The SC held that Chua wasn’t licensed to perform recruiting activities. The records show
that the license was not issued due to her failure to comply with post-licensing requirements. It
is the issuance of the license which makes the holder thereof authorized to perform recruitment
activates. The law specifically provides that “every license shall be valid for at least 2 years from
the date of issuance unless sooner canceled or revoked by the Secretary. Chua admitted
herself that she wasn’t licensed when she replied to the Taiwan Company.
PEOPLE VS MERIS
GR NO. 11745-7447
MARCH 28, 2000

FACTS: Accused-appellant was charged and convicted of illegal recruitment in large scale and
estafa. She contends that her conviction was erroneous because the court never acquired
jurisdiction over her person, as her arrest was illegal, and that the prosecution failed to establish
estafa.

ISSUE: WON Accused-appellant is guilty of illegal recruitment

HELD: YES. Accused-appellant’s contention that she was a mere applicant and eventually a
victim like complainants holds no water. Note should be made of the fact that throughout the
trial of the case, no mention was made that accused-appellant exerted any effort to seek a
refund for her money nor did she file a case against Julie Micua, her alleged victimizer. Her only
excuse was that at the time of the filing of the complaint in Manila, she was confused and the
investigating officer would not listen to her side of the controversy. Moreover, accused-appellant
and her husband’s acts of receiving almost all the payments of the complainants and issuing
receipts signed by Julie Micua contradict her claim of being a mere applicant. There were even
times that accused-appellant herself signed the receipts for the placement fees.[23] Taken as a
whole, the evidence shows that accused-appellant conspired and actively participated in the
deceitful plan adopted by her co-accused Julie Micua, Rico Cordova and her own husband,
Renato Meris, to hire without license or authority, gullible and naïve applicants for non-existent
overseas jobs.
PEOPLE VS CALONZO
GR NOS. 115150-55
SEPTEMBER 27, 1996

FACTS:

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

ISSUE:

WON accused-appellant is guilty of illegal recruitment committed in large scale.

HELD:

Yes, Illegal recruitment in large scale is committed when a person "(a) undertakes any
recruitment activity defined under Article 13(b) or any prohibited practice enumerated under
Article 34 of the Labor Code; (b) does not have a license or authority to lawfully engage in the
recruitment and placement of workers; and (c) commits the same against three or more
persons, individually or as a group."The above requisites to constitute illegal recruitment in large
scale are present in this case, the testimony of complainants evidently showed that Calonzo
was engaged in recruitment activities in large scale. Firstly, he deluded complainants into
believing that jobs awaited them in Italy by distinctly impressing upon them that he had the
facility to send them for work abroad. He even showed them his passport to lend credence to
his claim. To top it all, he brought them to Bangkok and not to Italy. Neither did he have any
arrangements in Bangkok for the transfer of his recruits to Italy. Secondly, POEA likewise
certified that neither Calonzo nor R.A.C. Business Agency was licensed to recruit workers for
employment abroad. Appellant admitted this fact himself. Thirdly, appellant recruited five (5)
workers thus making the crime illegal recruitment in large scale constituting economic sabotage.
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. v. NLRC
480 SCRA 146
JANUARY 25, 2006

FACTS: Respondent Divina Montehermozo is a domestic helper deployed to Taiwan by Sunace

International Management Services (Sunace) under a 12-month contract. Such employment
was made with the assistance of Taiwanese broker Edmund Wang. After the expiration of the
contract, Montehermozo continued her employment with her Taiwanese employer for another 2
years.

When Montehermozo returned to the Philippines, she filed a complaint against Sunace, Wang,
and her Taiwanese employer before the National Labor Relations Commission (NLRC). She
alleges that she was underpaid and was jailed for three months in Taiwan. She further alleges
that the 2-year extension of her employment contract was with the consent and knowledge of
Sunace. Sunace, on the other hand, denied all the allegations.

The Labor Arbiter ruled in favor of Montehermozo and found Sunace liable thereof. The National
Labor Relations Commission and Court of Appeals affirmed the labor arbiter’s decision. Hence,
the filing of this appeal.

ISSUE: WON the 2-year extension of Montehermozo’s employment was made with the
knowledge and consent of Sunace

HELD: The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the
principal, employer, not the other way around. The knowledge of the principal-foreign employer
cannot, therefore, be imputed to its agent Sunace.

There being no substantial proof that Sunace knew of and consented to be bound under the 2-
year employment contract extension, it cannot be said to be privy thereto. As such, it and its
"owner" cannot be held solidarily liable for any of Montehermozo’s claims arising from the 2-
year employment extension. As the New Civil Code provides, Contracts take effect only
between the parties, their assigns, and heirs, except in case where the rights and obligations
arising from the contract are not transmissible by their nature, or by stipulation or by provision of
law. Furthermore, as Sunace correctly points out, there was an implied revocation of its agency
relationship with its foreign principal when, after the termination of the original employment
contract, the foreign principal directly negotiated with Montehermozo and entered into a new
and separate employment contract in Taiwan. Article 1924 of the New Civil Code states that the
agency is revoked if the principal directly manages the business entrusted to the agent, dealing
directly with third persons.
Douglas Millares and Rogelio Lagda vs National Labor Relations Commission, Trans-Global
Maritime Agency, Inc. and Esso International Shipping Co., L.td.

Facts:
Douglas Millares was employed by ESSO International through its local manning agency,
Trans-Global, in 1968 as a machinist. In 1975, he was promoted as Chief Engineer which
position he occupied until he opted to retire in 1989.
In 1989, petitioner Millares filed a leave of absence and applied for optional retirement plan
under the Consecutive Enlistment Incentive Plan (CEIP) considering that he had already
rendered more than twenty years of continuous service.
Esso International denied Millares’ request for optional retirement on the following grounds, to
wit: (1) he was employed on a contractual basis; (2) his contract of enlistment (COE) did not
provide for retirement before the age of sixty years; and (3) he did not comply with the
requirement for claiming benefits under the CEIP, i.e., to submit a written advice to the company
of his intention to terminate his employment within thirty days from his last disembarkation date.
Subsequently, after failing to return to work after the expiration of his leave of absence, Millares
was dropped from the roster of crew members effective September 1, 1989.
On the other hand, petitioner Lagda was employed by Esso International as wiper/oiler in 1969.
He was promoted as Chief Engineer in 1980, a position he continued to occupy until his last
COE expired in 1989.
In 1989, Lagda likewise filed a leave of absence and applied to avail of the optional early
retirement plan in view of his twenty years continuous service in the company.
Trans-global similarly denied Lagda’s request for availment of the optional early retirement
scheme on the same grounds upon which Millares request was denied.
Unable to return for contractual sea service after his leave of absence expire, Lagda was also
dropped from the roster of crew members effective September 1, 1989.
Millares and Lagda filed a complaint-affidavit for illegal dismissal and non-payment of employee
benefits against private respondents Esso International and Trans-Global before the POEA.
The POEA rendered a decision dismissing the complaint for lack of merit. On appeal, NLRC
affirmed the decision of the POEA dismissing the complaint.
NLRC ratiocinated that Millares and Lagda, as seamen and overseas contract workers are not
covered by the term “regular employment” as defined under Article 280 of the Labor Code. The
POEA, which is tasked with protecting the rights of the Filipino workers for overseas
employment to fair and equitable recruitment and employment practices and to ensure their
welfare, prescribes a standard employment contract for seamen on board ocean-going vessels
for a fixed period but in no case to exceed twelve months.

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

Ruling:
The court ruled that Seafarers are considered contractual employees. They can not be
considered as regular employees under Article 280 of the Labor Code. Their employment is
governed by the contracts they sign everytime they are rehired and their employment is
terminated when the contract expires. Their employment is contractually fixed for a certain
period of time. They fall under the exception of Article 280 whose employment has been fixed
for a specific project or undertaking the completion or termination of which has been determined
at the time of engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.
ROYAL CROWN INTERNATIONALE, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSI0N and VIRGILIO P. NACIONALES, respondents

Facts:
In 1983, petitioner, a duly licensed private employment agency, recruited and deployed private
respondent for employment with ZAMEL as an architectural draftsman in Saudi Arabia.
On February 13, 1984, ZAMEL terminated the employment of private respondent on the ground
that his performance was below par. For three (3) successive days thereafter, he was detained
at his quarters and was not allowed to report to work until his exit papers were ready. On
February 16, 1984, he was made to board a plane bound for the Philippines.

Private respondent then filed on April 23, 1984 a complaint for illegal termination against
petitioner and ZAMEL.

Based on a finding that petitioner and ZAMEL failed to establish that private respondent was
terminated for just and valid cause, the Workers' Assistance and Adjudication Office of the
POEA issued a decision ordering the former to pay, jointly and severally, the complainant.
Petitioner Royal Crown Internationale seeks the nullification of a resolution of the National Labor
Relations Commission (NLRC) which affirmed a decision of the Philippine Overseas
Employment Administration (POEA) holding it liable to pay, jointly and severally with Zamel-
Turbag Engineering and Architectural Consultant (ZAMEL), private respondent Virgilio P.
Nacionales' salary and vacation pay corresponding to the unexpired portion of his employment
contract with ZAMEL.

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

Ruling:
1. In applying for its license to operate a private employment agency for overseas
recruitment and placement, petitioner was required to submit, among others, a
document or verified undertaking whereby it assumed all responsibilities for the proper
use of its license and the implementation of the contracts of employment with the
workers it recruited and deployed for overseas employment [Section 2(e), Rule V, Book
1, Rules to Implement the Labor Code (1976)]. It was also required to file with the
Bureau a formal appointment or agency contract executed by the foreign-based
employer in its favor to recruit and hire personnel for the former, which contained a
provision empowering it to sue and be sued jointly and solidarily with the foreign
principal for any of the violations of the recruitment agreement and the contracts of
employment [Section 10 (a) (2), Rule V, Book I of the Rules to Implement the Labor
Code (1976)].
2. The NLRC upheld the POEA finding that petitioner's evidence was insufficient to prove
termination from employment for just and valid cause. And a careful study of the
evidence thus far presented by petitioner reveals to this Court that there is legal basis for
public respondent's conclusion.
The Court holds, therefore, that the NLRC committed no grave abuse of discretion amounting to
lack or excess of jurisdiction in upholding the POEA's finding of insufficiency of evidence to
prove termination for just and valid cause.
WHEREFORE, the Court Resolved to DISMISS the instant petition.
SANTIAGO,petitioners, 
 vs.
 NATIONAL LABOR RELATIONS COMMISSION, FFW-GLOBE
MACKAY EMPLOYEES UNION and EDA CONCEPCION, respondents.

Facts:
On October 30, 1984 Wage Order No. 6 mandated an increased in the cost-of-living allowance
of non-agricultural workers in the private sector for P3.00. The order was complied by the
petitioner Corporation by multiplying the same by 22 days, equivalent to the number of working
days in the company.

Respondent union alleges that instead of multiplying the COLA by 22 it should be multiplied by
30 representing the number of days in a month, as what the corporation's normal practice prior
to the said Wage Order. Thus the union filed a complaint against the Corporation for for illegal
deduction, underpayment, unpaid allowances, and violation of Wage Order No. 6.

Issue:
Whether or not COLA under Wage Order No. 6 should be multiplied by 22 or 30 representing
the number of working days in a month.

Held:
Labor Arbiter Adelaido F. Martinez sustained the position of Petitioner Corporation by holding
that since the individual petitioners acted in their corporate capacity they should not have been
impleaded; and that the monthly COLA should be computed on the basis of twenty two (22)
days, since the evidence showed that there are only 22 paid days in a month for monthly-paid
employees in the company. His reasoning, inter alia, was as follows:
To compel the respondent company to use 30 days in a month to compute the allowance and
retain 22 days for vacation and sick leave, overtime pay and other benefits is inconsistent and
palpably unjust. If 30 days is used as divisor, then it must be used for the computation of all
benefits, not just the allowance. But this is not fair to complainants, not to mention that it will
contravene the provision of the parties' CBA.

Section 5 of the Rules Implementing Wage Orders Nos. 2, 3, 5 and 6 uniformly read as follows:

Section 5. Allowance for Unworked Days.

All covered employees shall be entitled to their daily living allowance during the days that they
are paid their basic wage, even if unworked. (Emphasis supplied)

... it is evident that the intention of the law is to grant ECOLA upon the payment of basic wages.
Hence, we have the principle of 'No Pay, No ECOLA.
Salazar vs. Achacoso and Marquez
G.R. No. 81510, March 14, 1990

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

ISSUE:

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

HELD:
Under the new Constitution, "no search warrant or warrant of arrest shall issue except upon
probable cause to be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly describing
the place to be searched and the persons or things to be seized. It is only a judge who may
issue warrants of search and arrest." Mayors may not exercise this power. Neither may it be
done by a mere prosecuting body. The Secretary of Labor, not being a judge, may no longer
issue search or arrest warrants. Hence, the authorities must go through the judicial process.
ASIAN CENTER FOR CAREER AND EMPLOYMENT SYSTEM AND SERVICES, INC.
(ACCESS), petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and IBNO
MEDIALES, respondents.

PUNO, J.:

FACTS:
Petitioner hired respondent IBNO MEDIALES to work as a mason in Jeddah, Saudi Arabia, with
a monthly salary of 1,200 Saudi Riyals (SR) with a term of contract for two (2) years, from
February 28, 1995 until February 28, 1997.

On May 26, 1996, respondent applied with petitioner for vacation leave with pay which he
earned after working for more than a year. His application for leave was granted. While en
route to the Philippines, his co-workers informed him that he has been dismissed from service.
The information turned out to be true.

On June 17, 1996, respondent filed a complaint with the labor arbiter for illegal dismissal, non-
payment of overtime pay, refund of transportation fare, illegal deductions, non-payment of 13th
month pay and salary for the unexpired portion of his employment contract.

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

Petitioner moved for reconsideration with respect to the labor arbiter’s award of SR13,200 in the
dispositive portion of the decision, representing respondent’s salary for the unexpired portion of
his contract invoking Section 10 R.A. 8042. Petitioner urged that its liability for respondent’s
salary is for only three (3) months. Petitioner claimed that it should pay only SR 3.600 (SR
1,200 x 3 months) for the unexpired portion of respondent’s employment and SR360 (10% of
SR3,600) for attorney’s fees.

The NLRC DENIED petitioner’s motion. It ruled that R.A. 8042 does NOT apply as
respondent’s employment which started in February 1995 occurred prior to its effectivity on July
15, 1995.
Hence, this petition for certiorari.

ISSUE:
Whether or not R.A. 8042 applies to the case of the respondent and in case of conflict between
the dispositive portion or the fallo and the body of the decision, which one shall prevail.
HELD:
As a rule, jurisdiction is determined by the law at the time of the commencement of the action. In
the case at bar, private respondent’s cause of action did not accrue on the date of his date of
his employment or on February 28, 1995. His cause of action arose only from the-time he was
illegally dismissed by petitioner from service in June 1996, after his vacation leave expired. It is
thus clear that R.A. 8042 which took effect a year earlier in July 1995 APPLIES to the case at
bar.

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

In the case at bar, the unexpired portion of private respondent’s employment contract is eight
(8) months. Private respondent should therefore be paid his basic salary corresponding to three
(3) months or a total of SR3,600, which is the same computation was made by the labor arbiter
in the body of his decision. Despite said computation in the body of the decision, however, the
labor arbiter awarded higher sum (SR13,200) in the dispositive portion.
The general rule is that where there is a CONFLICT between the dispositive portion or the fallo
and the body of the decision, the FALLO CONTROLS. This rule rests on the theory that the
fallo is the final order while the opinion in the body is merely a statement ordering nothing.

However, where the inevitable conclusion from the body of the decision is so clear as to show
that there was a mistake in the dispositive portion, the body of the decision will prevail. As in
this case, the labor arbiter’s award of a higher amount in the dispositive portion was clearly an
error for there is nothing in the text of the decision which support the award of said higher
amount. Hence, the correct award to private respondent for the unexpired portion of his
employment contract is SR3,600.

The decision of the public respondent National Labor Relations Commission, dated October 14,
1997, is AFFIRMED with modifications: petitioner is ordered to pay private respondent IBNO
MEDIALES the peso equivalent of the amounts of SR3,600 for the unexpired portion of his
employment contract, and SR360 for attorney’s fees. No costs.
EASTERN SHIPPING LINES, INC., vs. PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION (POEA)
G.R. No. 76633 October 18, 1988

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

Whether Saco was an overseas worker or a domestic worker.

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

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

It is worth observing that the petitioner performed at least two acts which constitute implied or
tacit recognition of the nature of Saco's employment at the time of his death in 1985. The first is
its submission of its shipping articles to the POEA for processing, formalization and approval in
the exercise of its regulatory power over overseas employment under Executive Order NO.
797. The second is its payment of the contributions mandated by law and regulations to the
Welfare Fund for Overseas Workers, which was created by P.D. No. 1694 "for the purpose of
providing social and welfare services to Filipino overseas workers."
It is not denied that the private respondent has been receiving a monthly death benefit pension
of P514.42 since March 1985 and that she was also paid a P1,000.00 funeral benefit by the
Social Security System. In addition, as already observed, she also received a P5,000.00 burial
gratuity from the Welfare Fund for Overseas Workers. These payments will not preclude
allowance of the private respondent's claim against the petitioner because it is specifically
reserved in the standard contract of employment for Filipino seamen under Memorandum
Circular No. 2, Series of 1984.
Said provisions are manifestations of the concern of the State for the working class, consistently
with the social justice policy and the specific provisions in the Constitution for the protection of
the working class and the promotion of its interest.
CHAVEZ VS. BONTO-PEREZ, RAYALA et Al.
G.R. No. 109808
PUNO, J.:

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

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

Held:

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