Republic of the Philippines SUPREME COURT Manila EN BANC G.R. Nos.

L-58674-77 July 11, 1990 PEOPLE OF THE PHILIPPINES, petitioner, vs. HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of Zambales & Olongapo City, Branch III and SERAPIO ABUG, respondents. CRUZ, J: The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise known as the Labor Code, reading as follows: (b) Recruitment and placement' refers to any act of canvassing, enlisting, contracting, transporting, hiring, or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and Olongapo City alleging that Serapio Abug, private respondent herein, "without first securing a license from the Ministry of Labor as a holder of authority to operate a fee-charging employment agency, did then and there wilfully, unlawfully and criminally operate a private fee charging employment agency by charging fees and expenses (from) and promising employment in Saudi Arabia" to four separate individuals named therein, in violation of Article 16 in relation to Article 39 of the Labor Code. 1 Abug filed a motion to quash on the ground that the informations did not charge an offense because he was accused of illegally recruiting only one person in each of the four informations. Under the proviso in Article 13(b), he claimed, there would be illegal recruitment only "whenever two or more persons are in any manner promised or offered any employment for a fee. " 2 Denied at first, the motion was reconsidered and finally granted in the Orders of the trial court dated June 24 and September 17, 1981. The prosecution is now before us on certiorari. 3 The posture of the petitioner is that the private respondent is being prosecuted under Article 39 in relation to Article 16 of the Labor Code; hence, Article 13(b) is not applicable. However, as the first two cited articles penalize acts of recruitment and placement without proper authority, which is the charge embodied in the informations, application of the definition of recruitment and placement in Article 13(b) is unavoidable. The view of the private respondents is that to constitute recruitment and placement, all the acts mentioned in this article should involve dealings with two or m re persons as an indispensable requirement. On the other hand, the petitioner argues that the requirement of two or more persons is imposed only where the recruitment and placement consists of an offer or promise of employment to such persons and always in consideration of a fee. The other acts mentioned in the body of the article may involve even only one person and are not necessarily for profit. Neither interpretation is acceptable. We fail to see why the proviso should speak only of an offer or promise of employment if the purpose was to apply the requirement of two or more persons to all the acts mentioned in the basic rule. For its part, the petitioner does

not explain why dealings with two or more persons are needed where the recruitment and placement consists of an offer or promise of employment but not when it is done through "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers. As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide an exception thereto but merely to create a presumption. The presumption is that the individual or entity is engaged in recruitment and placement whenever he or it is dealing with two or more persons to whom, in consideration of a fee, an offer or promise of employment is made in the course of the "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers. " The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) win constitute recruitment and placement even if only one prospective worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of employment to two or more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement. The words "shall be deemed" create that presumption. This is not unlike the presumption in article 217 of the Revised Penal Code, for example, regarding the failure of a public officer to produce upon lawful demand funds or property entrusted to his custody. Such failure shall be prima facie evidence that he has put them to personal use; in other words, he shall be deemed to have malversed such funds or property. In the instant case, the word "shall be deemed" should by the same token be given the force of a disputable presumption or of prima facie evidence of engaging in recruitment and placement. (Klepp vs. Odin Tp., McHenry County 40 ND N.W. 313, 314.) It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of records of debates and deliberations that would otherwise have been available if the Labor Code had been enacted as a statute rather than a presidential decree. The trouble with presidential decrees is that they could be, and sometimes were, issued without previous public discussion or consultation, the promulgator heeding only his own counsel or those of his close advisers in their lofty pinnacle of power. The not infrequent results are rejection, intentional or not, of the interest of the greater number and, as in the instant case, certain esoteric provisions that one cannot read against the background facts usually reported in the legislative journals. At any rate, the interpretation here adopted should give more force to the campaign against illegal recruitment and placement, which has victimized many Filipino workers seeking a better life in a foreign land, and investing hard- earned savings or even borrowed funds in pursuit of their dream, only to be awakened to the reality of a cynical deception at the hands of theirown countrymen. WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are set aside and the four informations against the private respondent reinstated. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 167614 March 24, 2009

ANTONIO M. SERRANO, Petitioner, vs. Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC., Respondents. DECISION AUSTRIA-MARTINEZ, J.: For decades, the toil of solitary migrants has helped lift entire families and communities out of poverty. Their earnings have built houses, provided health care, equipped schools and planted the seeds of businesses. They have woven together the world by transmitting ideas and knowledge from country to country. They have provided the dynamic human link between cultures, societies and economies. Yet, only recently have we begun to understand not only how much international migration impacts development, but how smart public policies can magnify this effect. United Nations Secretary-General Ban Ki-Moon Global Forum on Migration and Development Brussels, July 10, 20071 For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section 10, Republic Act (R.A.) No. 8042,2 to wit: Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. x x x x (Emphasis and underscoring supplied) does not magnify the contributions of overseas Filipino workers (OFWs) to national development, but exacerbates the hardships borne by them by unduly limiting their entitlement in case of illegal dismissal to their lump-sum salary either for the unexpired portion of their employment contract "or for three months for every year of the unexpired term, whichever is less" (subject clause). Petitioner claims that the last clause violates the OFWs' constitutional rights in that it impairs the terms of their contract, deprives them of equal protection and denies them due process. By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the December 8, 2004 Decision3 and April 1, 2005 Resolution4 of the Court of Appeals (CA), which applied the subject clause, entreating this Court to declare the subject clause unconstitutional. Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. (respondents) under a Philippine Overseas Employment Administration (POEA)approved Contract of Employment with the following terms and conditions: Duration of contract Position 12 months Chief Officer

Basic monthly salary US$1,400.00 Hours of work 48.0 hours per week Overtime US$700.00 per month Vacation leave with pay 7.00 days per month5 On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded employment contract for the position of Second Officer with a monthly salary of US$1,000.00, upon the assurance and representation of respondents that he would be made Chief Officer by the end of April 1998.6 Respondents did not deliver on their promise to make petitioner Chief Officer.7 Hence, petitioner refused to stay on as Second Officer and was repatriated to the Philippines on May 26, 1998.8 Petitioner's employment contract was for a period of 12 months or from March 19, 1998 up to March 19, 1999, but at the time of his repatriation on May 26, 1998, he had served only two (2) months and seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-three (23) days. Petitioner filed with the Labor Arbiter (LA) a Complaint9 against respondents for constructive dismissal and for payment of his money claims in the total amount of US$26,442.73, broken down as follows: May 27/31, 1998 (5 days) incl. Leave pay June 01/30, 1998 July 01/31, 1998 August 01/31, 1998 Sept. 01/30, 1998 Oct. 01/31, 1998 Nov. 01/30, 1998 Dec. 01/31, 1998 Jan. 01/31, 1999 Feb. 01/28, 1999 Mar. 1/19, 1999 (19 days) incl. leave pay US$ 413.90 2,590.00 2,590.00 2,590.00 2,590.00 2,590.00 2,590.00 2,590.00 2,590.00 2,590.00 1,640.00 -----------------------------------------------------------------------------25,382.23 1,060.5010 -------------------------------------------------------------------------------------------US$ 26,442.7311

Amount adjusted to chief mate's salary (March 19/31, 1998 to April 1/30, 1998) +

TOTAL CLAIM as well as moral and exemplary damages and attorney's fees.

The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner illegal and awarding him monetary benefits, to wit: WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of the complainant (petitioner) by the respondents in the above-entitled case was illegal and the respondents are hereby ordered to pay the complainant [petitioner], jointly and severally, in Philippine Currency, based on the rate of exchange prevailing at the time of payment, the amount of EIGHT THOUSAND SEVEN HUNDRED SEVENTY U.S. DOLLARS (US $8,770.00), representing the complainants salary for three (3) months of the unexpired portion of the aforesaid contract of employment.1avvphi1 The respondents are likewise ordered to pay the complainant [petitioner], jointly and severally, in Philippine Currency, based on the rate of exchange prevailing at the time of payment, the amount of FORTY FIVE U.S. DOLLARS (US$ 45.00),12 representing the complainants claim for a salary differential. In addition, the respondents are hereby ordered to pay the complainant, jointly and severally, in Philippine Currency, at the

exchange rate prevailing at the time of payment, the complainants (petitioner's) claim for attorneys fees equivalent to ten percent (10%) of the total amount awarded to the aforesaid employee under this Decision. The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack of merit. All other claims are hereby DISMISSED. SO ORDERED.13 (Emphasis supplied) In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on the salary period of three months only -- rather than the entire unexpired portion of nine months and 23 days of petitioner's employment contract - applying the subject clause. However, the LA applied the salary rate of US$2,590.00, consisting of petitioner's "[b]asic salary, US$1,400.00/month + US$700.00/month, fixed overtime pay, + US$490.00/month, vacation leave pay = US$2,590.00/compensation per month."14 Respondents appealed15 to the National Labor Relations Commission (NLRC) to question the finding of the LA that petitioner was illegally dismissed. Petitioner also appealed16 to the NLRC on the sole issue that the LA erred in not applying the ruling of the Court in Triple Integrated Services, Inc. v. National Labor Relations Commission17 that in case of illegal dismissal, OFWs are entitled to their salaries for the unexpired portion of their contracts.18 In a Decision dated June 15, 2000, the NLRC modified the LA Decision, to wit: WHEREFORE, the Decision dated 15 July 1999 is MODIFIED. Respondents are hereby ordered to pay complainant, jointly and severally, in Philippine currency, at the prevailing rate of exchange at the time of payment the following: 1. Three (3) months salary $1,400 x 3 US$4,200.00 2. Salary differential 45.00 US$4,245.00 3. 10% Attorneys fees 424.50 TOTAL US$4,669.50 The other findings are affirmed. SO ORDERED.19 The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by reducing the applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042 "does not provide for the award of overtime pay, which should be proven to have been actually performed, and for vacation leave pay."20 Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of the subject clause.21 The NLRC denied the motion.22 Petitioner filed a Petition for Certiorari23 with the CA, reiterating the constitutional challenge against the subject clause.24 After initially dismissing the petition on a technicality, the CA eventually gave due course to it, as directed by this Court in its Resolution dated August 7, 2003 which granted the petition for certiorari, docketed as G.R. No. 151833, filed by petitioner. In a Decision dated December 8, 2004, the CA affirmed the NLRC ruling on the reduction of the applicable salary rate; however, the CA skirted the constitutional issue raised by petitioner.25 His Motion for Reconsideration26 having been denied by the CA,27 petitioner brings his

cause to this Court on the following grounds: I The Court of Appeals and the labor tribunals have decided the case in a way not in accord with applicable decision of the Supreme Court involving similar issue of granting unto the migrant worker back wages equal to the unexpired portion of his contract of employment instead of limiting it to three (3) months II In the alternative that the Court of Appeals and the Labor Tribunals were merely applying their interpretation of Section 10 of Republic Act No. 8042, it is submitted that the Court of Appeals gravely erred in law when it failed to discharge its judicial duty to decide questions of substance not theretofore determined by the Honorable Supreme Court, particularly, the constitutional issues raised by the petitioner on the constitutionality of said law, which unreasonably, unfairly and arbitrarily limits payment of the award for back wages of overseas workers to three (3) months. III Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042, the Court of Appeals gravely erred in law in excluding from petitioners award the overtime pay and vacation pay provided in his contract since under the contract they form part of his salary.28 On February 26, 2008, petitioner wrote the Court to withdraw his petition as he is already old and sickly, and he intends to make use of the monetary award for his medical treatment and medication.29 Required to comment, counsel for petitioner filed a motion, urging the court to allow partial execution of the undisputed monetary award and, at the same time, praying that the constitutional question be resolved.30 Considering that the parties have filed their respective memoranda, the Court now takes up the full merit of the petition mindful of the extreme importance of the constitutional question raised therein. On the first and second issues The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not disputed. Likewise not disputed is the salary differential of US$45.00 awarded to petitioner in all three fora. What remains disputed is only the computation of the lump-sum salary to be awarded to petitioner by reason of his illegal dismissal. Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at the monthly rate of US$1,400.00 covering the period of three months out of the unexpired portion of nine months and 23 days of his employment contract or a total of US$4,200.00. Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the US$4,200.00 awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a total of US$25,382.23, equivalent to his salaries for the entire nine months and 23 days left of his employment contract, computed at the monthly rate of US$2,590.00.31 The Arguments of Petitioner Petitioner contends that the subject clause is unconstitutional because it unduly impairs the freedom of OFWs to negotiate for and stipulate in their overseas employment contracts a determinate employment period and a fixed salary package.32 It also impinges on the equal protection clause, for it treats OFWs differently from local Filipino workers (local workers) by putting a cap on the amount of lump-sum salary to which

OFWs are entitled in case of illegal dismissal, while setting no limit to the same monetary award for local workers when their dismissal is declared illegal; that the disparate treatment is not reasonable as there is no substantial distinction between the two groups;33 and that it defeats Section 18,34 Article II of the Constitution which guarantees the protection of the rights and welfare of all Filipino workers, whether deployed locally or overseas.35 Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line with existing jurisprudence on the issue of money claims of illegally dismissed OFWs. Though there are conflicting rulings on this, petitioner urges the Court to sort them out for the guidance of affected OFWs.36 Petitioner further underscores that the insertion of the subject clause into R.A. No. 8042 serves no other purpose but to benefit local placement agencies. He marks the statement made by the Solicitor General in his Memorandum, viz.: Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event that jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on its obligation. Hence, placement agencies that are in good faith and which fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect them and to promote their continued helpful contribution in deploying Filipino migrant workers, liability for money claims was reduced under Section 10 of R.A. No. 8042. 37 (Emphasis supplied) Petitioner argues that in mitigating the solidary liability of placement agencies, the subject clause sacrifices the well-being of OFWs. Not only that, the provision makes foreign employers better off than local employers because in cases involving the illegal dismissal of employees, foreign employers are liable for salaries covering a maximum of only three months of the unexpired employment contract while local employers are liable for the full lump-sum salaries of their employees. As petitioner puts it: In terms of practical application, the local employers are not limited to the amount of backwages they have to give their employees they have illegally dismissed, following well-entrenched and unequivocal jurisprudence on the matter. On the other hand, foreign employers will only be limited to giving the illegally dismissed migrant workers the maximum of three (3) months unpaid salaries notwithstanding the unexpired term of the contract that can be more than three (3) months.38 Lastly, petitioner claims that the subject clause violates the due process clause, for it deprives him of the salaries and other emoluments he is entitled to under his fixedperiod employment contract.39 The Arguments of Respondents In their Comment and Memorandum, respondents contend that the constitutional issue should not be entertained, for this was belatedly interposed by petitioner in his appeal before the CA, and not at the earliest opportunity, which was when he filed an appeal before the NLRC.40 The Arguments of the Solicitor General The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its provisions could not have impaired petitioner's 1998 employment contract. Rather, R.A. No. 8042 having preceded petitioner's contract, the provisions thereof are deemed part of the minimum terms of petitioner's employment, especially on the matter of money claims, as this was not stipulated upon by the parties.42 Moreover, the OSG emphasizes that OFWs and local workers differ in terms of the nature of their employment, such that their rights to monetary benefits must necessarily be treated differently. The OSG enumerates the essential elements that distinguish OFWs from local workers: first, while local workers perform their jobs within Philippine

territory, OFWs perform their jobs for foreign employers, over whom it is difficult for our courts to acquire jurisdiction, or against whom it is almost impossible to enforce judgment; and second, as held in Coyoca v. National Labor Relations Commission43 and Millares v. National Labor Relations Commission,44 OFWs are contractual employees who can never acquire regular employment status, unlike local workers who are or can become regular employees. Hence, the OSG posits that there are rights and privileges exclusive to local workers, but not available to OFWs; that these peculiarities make for a reasonable and valid basis for the differentiated treatment under the subject clause of the money claims of OFWs who are illegally dismissed. Thus, the provision does not violate the equal protection clause nor Section 18, Article II of the Constitution.45 Lastly, the OSG defends the rationale behind the subject clause as a police power measure adopted to mitigate the solidary liability of placement agencies for this "redounds to the benefit of the migrant workers whose welfare the government seeks to promote. The survival of legitimate placement agencies helps [assure] the government that migrant workers are properly deployed and are employed under decent and humane conditions."46 The Court's Ruling The Court sustains petitioner on the first and second issues. When the Court is called upon to exercise its power of judicial review of the acts of its co-equals, such as the Congress, it does so only when these conditions obtain: (1) that there is an actual case or controversy involving a conflict of rights susceptible of judicial determination;47 (2) that the constitutional question is raised by a proper party48 and at the earliest opportunity;49 and (3) that the constitutional question is the very lis mota of the case,50 otherwise the Court will dismiss the case or decide the same on some other ground.51 Without a doubt, there exists in this case an actual controversy directly involving petitioner who is personally aggrieved that the labor tribunals and the CA computed his monetary award based on the salary period of three months only as provided under the subject clause. The constitutional challenge is also timely. It should be borne in mind that the requirement that a constitutional issue be raised at the earliest opportunity entails the interposition of the issue in the pleadings before a competent court, such that, if the issue is not raised in the pleadings before that competent court, it cannot be considered at the trial and, if not considered in the trial, it cannot be considered on appeal.52 Records disclose that the issue on the constitutionality of the subject clause was first raised, not in petitioner's appeal with the NLRC, but in his Motion for Partial Reconsideration with said labor tribunal,53 and reiterated in his Petition for Certiorari before the CA.54 Nonetheless, the issue is deemed seasonably raised because it is not the NLRC but the CA which has the competence to resolve the constitutional issue. The NLRC is a labor tribunal that merely performs a quasi-judicial function its function in the present case is limited to determining questions of fact to which the legislative policy of R.A. No. 8042 is to be applied and to resolving such questions in accordance with the standards laid down by the law itself;55 thus, its foremost function is to administer and enforce R.A. No. 8042, and not to inquire into the validity of its provisions. The CA, on the other hand, is vested with the power of judicial review or the power to declare unconstitutional a law or a provision thereof, such as the subject clause.56 Petitioner's interposition of the constitutional issue before the CA was undoubtedly seasonable. The CA was therefore remiss in failing to take up the issue in its decision. The third condition that the constitutional issue be critical to the resolution of the case likewise obtains because the monetary claim of petitioner to his lump-sum salary for the entire unexpired portion of his 12-month employment contract, and not just for a period of three months, strikes at the very core of the subject clause. Thus, the stage is all set for the determination of the constitutionality of the subject

clause. Does the subject clause violate Section 10, Article III of the Constitution on nonimpairment of contracts? The answer is in the negative. Petitioner's claim that the subject clause unduly interferes with the stipulations in his contract on the term of his employment and the fixed salary package he will receive57 is not tenable. Section 10, Article III of the Constitution provides: No law impairing the obligation of contracts shall be passed. The prohibition is aligned with the general principle that laws newly enacted have only a prospective operation,58 and cannot affect acts or contracts already perfected;59 however, as to laws already in existence, their provisions are read into contracts and deemed a part thereof.60 Thus, the non-impairment clause under Section 10, Article II is limited in application to laws about to be enacted that would in any way derogate from existing acts or contracts by enlarging, abridging or in any manner changing the intention of the parties thereto. As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of the employment contract between petitioner and respondents in 1998. Hence, it cannot be argued that R.A. No. 8042, particularly the subject clause, impaired the employment contract of the parties. Rather, when the parties executed their 1998 employment contract, they were deemed to have incorporated into it all the provisions of R.A. No. 8042. But even if the Court were to disregard the timeline, the subject clause may not be declared unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted in the exercise of the police power of the State to regulate a business, profession or calling, particularly the recruitment and deployment of OFWs, with the noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may be employed.61 Police power legislations adopted by the State to promote the health, morals, peace, education, good order, safety, and general welfare of the people are generally applicable not only to future contracts but even to those already in existence, for all private contracts must yield to the superior and legitimate measures taken by the State to promote public welfare.62 Does the subject clause violate Section 1, Article III of the Constitution, and Section 18, Article II and Section 3, Article XIII on labor as a protected sector? The answer is in the affirmative. Section 1, Article III of the Constitution guarantees: No person shall be deprived of life, liberty, or property without due process of law nor shall any person be denied the equal protection of the law. Section 18,63 Article II and Section 3,64 Article XIII accord all members of the labor sector, without distinction as to place of deployment, full protection of their rights and welfare. To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to economic security and parity: all monetary benefits should be equally enjoyed by workers of similar category, while all monetary obligations should be borne by them in equal degree; none should be denied the protection of the laws which is enjoyed by, or spared the burden imposed on, others in like circumstances.65

Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it sees fit, a system of classification into its legislation; however, to be valid, the classification must comply with these requirements: 1) it is based on substantial distinctions; 2) it is germane to the purposes of the law; 3) it is not limited to existing conditions only; and 4) it applies equally to all members of the class.66 There are three levels of scrutiny at which the Court reviews the constitutionality of a classification embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification needs only be shown to be rationally related to serving a legitimate state interest;67 b) the middle-tier or intermediate scrutiny in which the government must show that the challenged classification serves an important state interest and that the classification is at least substantially related to serving that interest;68 and c) strict judicial scrutiny69 in which a legislative classification which impermissibly interferes with the exercise of a fundamental right70 or operates to the peculiar disadvantage of a suspect class71 is presumed unconstitutional, and the burden is upon the government to prove that the classification is necessary to achieve a compelling state interest and that it is the least restrictive means to protect such interest.72 Under American jurisprudence, strict judicial scrutiny is triggered by suspect classifications73 based on race74 or gender75 but not when the classification is drawn along income categories.76 It is different in the Philippine setting. In Central Bank (now Bangko Sentral ng Pilipinas) Employee Association, Inc. v. Bangko Sentral ng Pilipinas,77 the constitutionality of a provision in the charter of the Bangko Sentral ng Pilipinas (BSP), a government financial institution (GFI), was challenged for maintaining its rank-and-file employees under the Salary Standardization Law (SSL), even when the rank-and-file employees of other GFIs had been exempted from the SSL by their respective charters. Finding that the disputed provision contained a suspect classification based on salary grade, the Court deliberately employed the standard of strict judicial scrutiny in its review of the constitutionality of said provision. More significantly, it was in this case that the Court revealed the broad outlines of its judicial philosophy, to wit: Congress retains its wide discretion in providing for a valid classification, and its policies should be accorded recognition and respect by the courts of justice except when they run afoul of the Constitution. The deference stops where the classification violates a fundamental right, or prejudices persons accorded special protection by the Constitution. When these violations arise, this Court must discharge its primary role as the vanguard of constitutional guaranties, and require a stricter and more exacting adherence to constitutional limitations. Rational basis should not suffice. Admittedly, the view that prejudice to persons accorded special protection by the Constitution requires a stricter judicial scrutiny finds no support in American or English jurisprudence. Nevertheless, these foreign decisions and authorities are not per se controlling in this jurisdiction. At best, they are persuasive and have been used to support many of our decisions. We should not place undue and fawning reliance upon them and regard them as indispensable mental crutches without which we cannot come to our own decisions through the employment of our own endowments. We live in a different ambience and must decide our own problems in the light of our own interests and needs, and of our qualities and even idiosyncrasies as a people, and always with our own concept of law and justice. Our laws must be construed in accordance with the intention of our own lawmakers and such intent may be deduced from the language of each law and the context of other local legislation related thereto. More importantly, they must be construed to serve our own public interest which is the be-all and the end-all of all our laws. And it need not be stressed that our public interest is distinct and different from others. xxxx Further, the quest for a better and more "equal" world calls for the use of equal

protection as a tool of effective judicial intervention. Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble proclaims "equality" as an ideal precisely in protest against crushing inequities in Philippine society. The command to promote social justice in Article II, Section 10, in "all phases of national development," further explicitated in Article XIII, are clear commands to the State to take affirmative action in the direction of greater equality. x x x [T]here is thus in the Philippine Constitution no lack of doctrinal support for a more vigorous state effort towards achieving a reasonable measure of equality. Our present Constitution has gone further in guaranteeing vital social and economic rights to marginalized groups of society, including labor. Under the policy of social justice, the law bends over backward to accommodate the interests of the working class on the humane justification that those with less privilege in life should have more in law. And the obligation to afford protection to labor is incumbent not only on the legislative and executive branches but also on the judiciary to translate this pledge into a living reality. Social justice calls for the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. xxxx Under most circumstances, the Court will exercise judicial restraint in deciding questions of constitutionality, recognizing the broad discretion given to Congress in exercising its legislative power. Judicial scrutiny would be based on the "rational basis" test, and the legislative discretion would be given deferential treatment. But if the challenge to the statute is premised on the denial of a fundamental right, or the perpetuation of prejudice against persons favored by the Constitution with special protection, judicial scrutiny ought to be more strict. A weak and watered down view would call for the abdication of this Courts solemn duty to strike down any law repugnant to the Constitution and the rights it enshrines. This is true whether the actor committing the unconstitutional act is a private person or the government itself or one of its instrumentalities. Oppressive acts will be struck down regardless of the character or nature of the actor. xxxx In the case at bar, the challenged proviso operates on the basis of the salary grade or officer-employee status. It is akin to a distinction based on economic class and status, with the higher grades as recipients of a benefit specifically withheld from the lower grades. Officers of the BSP now receive higher compensation packages that are competitive with the industry, while the poorer, low-salaried employees are limited to the rates prescribed by the SSL. The implications are quite disturbing: BSP rank-and-file employees are paid the strictly regimented rates of the SSL while employees higher in rank - possessing higher and better education and opportunities for career advancement - are given higher compensation packages to entice them to stay. Considering that majority, if not all, the rank-and-file employees consist of people whose status and rank in life are less and limited, especially in terms of job marketability, it is they - and not the officers - who have the real economic and financial need for the adjustment . This is in accord with the policy of the Constitution "to free the people from poverty, provide adequate social services, extend to them a decent standard of living, and improve the quality of life for all." Any act of Congress that runs counter to this constitutional desideratum deserves strict scrutiny by this Court before it can pass muster. (Emphasis supplied) Imbued with the same sense of "obligation to afford protection to labor," the Court in the present case also employs the standard of strict judicial scrutiny, for it perceives in the subject clause a suspect classification prejudicial to OFWs. Upon cursory reading, the subject clause appears facially neutral, for it applies to all

OFWs. However, a closer examination reveals that the subject clause has a discriminatory intent against, and an invidious impact on, OFWs at two levels: First, OFWs with employment contracts of less than one year vis--vis OFWs with employment contracts of one year or more; Second, among OFWs with employment contracts of more than one year; and Third, OFWs vis--vis local workers with fixed-period employment; OFWs with employment contracts of less than one year vis--vis OFWs with employment contracts of one year or more As pointed out by petitioner,78 it was in Marsaman Manning Agency, Inc. v. National Labor Relations Commission79 (Second Division, 1999) that the Court laid down the following rules on the application of the periods prescribed under Section 10(5) of R.A. No. 804, to wit: A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or three (3) months salary for every year of the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term of at least one (1) year or more. This is evident from the words "for every year of the unexpired term" which follows the words "salaries x x x for three months." To follow petitioners thinking that private respondent is entitled to three (3) months salary only simply because it is the lesser amount is to completely disregard and overlook some words used in the statute while giving effect to some. This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute, care should be taken that every part or word thereof be given effect since the law-making body is presumed to know the meaning of the words employed in the statue and to have used them advisedly. Ut res magis valeat quam pereat.80 (Emphasis supplied) In Marsaman, the OFW involved was illegally dismissed two months into his 10-month contract, but was awarded his salaries for the remaining 8 months and 6 days of his contract. Case Title Skippers v. Maguad84 Bahia Shipping v. Reynaldo Chua 85 Centennial Transmarine v. dela Cruz l86 Talidano v. Falcon87 Univan v. CA 88 Oriental v. CA 89 PCL v. NLRC90 Olarte v. Nayona91 JSS v.Ferrer92 Contract Period 6 months 9 months 9 months 12 months 12 months 12 months 12 months 12 months 12 months Period of Service 2 months 8 months 4 months 3 months 3 months more than 2 months more than 2 months 21 days 16 days 9 months and 7 days 10 months Unexpired Period 4 months 4 months 5 months 9 months 9 months 10 months more or less 9 months 11 months and 9 days 11 months and 24 days 2 months and 23 days 2 months Period Applied in the Computation of the Monetary Award 4 months 4 months 5 months 3 months 3 months 3 months 3 months 3 months 3 months 2 months and 23 days Unexpired portion

Pentagon v. 12 months Adelantar93 Phil. Employ v. 12 months Paramio, et al.94

Flourish Maritime v. Almanzor 95 Athenna Manpower v. Villanos 96

2 years

26 days

23 months and 4 days

1 year, 10 1 month 1 year, 9 months and months and 28 28 days days Prior to Marsaman, however, there were two cases in which the Court made conflicting rulings on Section 10(5). One was Asian Center for Career and Employment System and Services v. National Labor Relations Commission (Second Division, October 1998),81 which involved an OFW who was awarded a two-year employment contract, but was dismissed after working for one year and two months. The LA declared his dismissal illegal and awarded him SR13,600.00 as lump-sum salary covering eight months, the unexpired portion of his contract. On appeal, the Court reduced the award to SR3,600.00 equivalent to his three months salary, this being the lesser value, to wit: Under Section 10 of R.A. No. 8042, a worker dismissed from overseas employment without just, valid or authorized cause is entitled to his salary for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. In the case at bar, the unexpired portion of private respondents employment contract is eight (8) months. Private respondent should therefore be paid his basic salary corresponding to three (3) months or a total of SR3,600.82

6 months or 3 months for each year of contract 6 months or 3 months for each year of contract

Another was Triple-Eight Integrated Services, Inc. v. National Labor Relations Commission (Third Division, December 1998),83 which involved an OFW (therein respondent Erlinda Osdana) who was originally granted a 12-month contract, which was deemed renewed for another 12 months. After serving for one year and seven-and-ahalf months, respondent Osdana was illegally dismissed, and the Court awarded her salaries for the entire unexpired portion of four and one-half months of her contract. The Marsaman interpretation of Section 10(5) has since been adopted in the following cases: As the foregoing matrix readily shows, the subject clause classifies OFWs into two categories. The first category includes OFWs with fixed-period employment contracts of less than one year; in case of illegal dismissal, they are entitled to their salaries for the entire unexpired portion of their contract. The second category consists of OFWs with fixed-period employment contracts of one year or more; in case of illegal dismissal, they are entitled to monetary award equivalent to only 3 months of the unexpired portion of their contracts. The disparity in the treatment of these two groups cannot be discounted. In Skippers, the respondent OFW worked for only 2 months out of his 6-month contract, but was awarded his salaries for the remaining 4 months. In contrast, the respondent OFWs in Oriental and PCL who had also worked for about 2 months out of their 12-month contracts were awarded their salaries for only 3 months of the unexpired portion of their contracts. Even the OFWs involved in Talidano and Univan who had worked for a longer period of 3 months out of their 12-month contracts before being illegally dismissed were awarded their salaries for only 3 months. To illustrate the disparity even more vividly, the Court assumes a hypothetical OFW-A with an employment contract of 10 months at a monthly salary rate of US$1,000.00 and a hypothetical OFW-B with an employment contract of 15 months with the same monthly salary rate of US$1,000.00. Both commenced work on the same day and under the same employer, and were illegally dismissed after one month of work. Under the subject clause, OFW-A will be entitled to US$9,000.00, equivalent to his salaries for the remaining 9 months of his contract, whereas OFW-B will be entitled to only US$3,000.00, equivalent to his salaries for 3 months of the unexpired portion of his contract, instead of US$14,000.00 for the unexpired portion of 14 months of his contract, as the US$3,000.00 is the lesser amount.

The disparity becomes more aggravating when the Court takes into account jurisprudence that, prior to the effectivity of R.A. No. 8042 on July 14, 1995,97 illegally dismissed OFWs, no matter how long the period of their employment contracts, were entitled to their salaries for the entire unexpired portions of their contracts. The matrix below speaks for itself: Case Title ATCI v. CA, et al.98 Phil. Integrated v. NLRC99 JGB v. NLC100 Agoy v. NLRC101 EDI v. NLRC, et al.102 Barros v. NLRC, et al.103 Philippine Transmarine v. Carilla104 Contract Period 2 years 2 years 2 years 2 years 2 years 12 months 12 months Period of Service 2 months 7 days 9 months 2 months 5 months 4 months 6 months and 22 days Unexpired Period 22 months 23 months and 23 days 15 months 22 months 19 months 8 months 5 months and 18 days Period Applied in the Computation of the Monetary Award 22 months 23 months and 23 days 15 months 22 months 19 months 8 months 5 months and 18 days

It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired portions thereof, were treated alike in terms of the computation of their monetary benefits in case of illegal dismissal. Their claims were subjected to a uniform rule of computation: their basic salaries multiplied by the entire unexpired portion of their employment contracts. The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation of the money claims of illegally dismissed OFWs based on their employment periods, in the process singling out one category whose contracts have an unexpired portion of one year or more and subjecting them to the peculiar disadvantage of having their monetary awards limited to their salaries for 3 months or for the unexpired portion thereof, whichever is less, but all the while sparing the other category from such prejudice, simply because the latter's unexpired contracts fall short of one year. Among OFWs With Employment Contracts of More Than One Year Upon closer examination of the terminology employed in the subject clause, the Court now has misgivings on the accuracy of the Marsaman interpretation. The Court notes that the subject clause "or for three (3) months for every year of the unexpired term, whichever is less" contains the qualifying phrases "every year" and "unexpired term." By its ordinary meaning, the word "term" means a limited or definite extent of time.105 Corollarily, that "every year" is but part of an "unexpired term" is significant in many ways: first, the unexpired term must be at least one year, for if it were any shorter, there would be no occasion for such unexpired term to be measured by every year; and second, the original term must be more than one year, for otherwise, whatever would be the unexpired term thereof will not reach even a year. Consequently, the more decisive factor in the determination of when the subject clause "for three (3) months for every year of the unexpired term, whichever is less" shall apply is not the length of the original contract period as held in Marsaman,106 but the length of the unexpired portion of the contract period -- the subject clause applies in cases when the unexpired portion of the contract period is at least one year, which arithmetically requires that the original contract period be more than one year. Viewed in that light, the subject clause creates a sub-layer of discrimination among OFWs whose contract periods are for more than one year: those who are illegally dismissed with less than one year left in their contracts shall be entitled to their salaries for the entire unexpired portion thereof, while those who are illegally dismissed with one

year or more remaining in their contracts shall be covered by the subject clause, and their monetary benefits limited to their salaries for three months only. To concretely illustrate the application of the foregoing interpretation of the subject clause, the Court assumes hypothetical OFW-C and OFW-D, who each have a 24month contract at a salary rate of US$1,000.00 per month. OFW-C is illegally dismissed on the 12th month, and OFW-D, on the 13th month. Considering that there is at least 12 months remaining in the contract period of OFW-C, the subject clause applies to the computation of the latter's monetary benefits. Thus, OFW-C will be entitled, not to US$12,000,00 or the latter's total salaries for the 12 months unexpired portion of the contract, but to the lesser amount of US$3,000.00 or the latter's salaries for 3 months out of the 12-month unexpired term of the contract. On the other hand, OFW-D is spared from the effects of the subject clause, for there are only 11 months left in the latter's contract period. Thus, OFW-D will be entitled to US$11,000.00, which is equivalent to his/her total salaries for the entire 11-month unexpired portion. OFWs vis--vis Local Workers With Fixed-Period Employment As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary awards of illegally dismissed OFWs was in place. This uniform system was applicable even to local workers with fixed-term employment.107 The earliest rule prescribing a uniform system of computation was actually Article 299 of the Code of Commerce (1888),108 to wit: Article 299. If the contracts between the merchants and their shop clerks and employees should have been made of a fixed period, none of the contracting parties, without the consent of the other, may withdraw from the fulfillment of said contract until the termination of the period agreed upon. Persons violating this clause shall be subject to indemnify the loss and damage suffered, with the exception of the provisions contained in the following articles. In Reyes v. The Compaia Maritima,109 the Court applied the foregoing provision to determine the liability of a shipping company for the illegal discharge of its managers prior to the expiration of their fixed-term employment. The Court therein held the shipping company liable for the salaries of its managers for the remainder of their fixedterm employment. There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of Commerce which provides: Article 605. If the contracts of the captain and members of the crew with the agent should be for a definite period or voyage, they cannot be discharged until the fulfillment of their contracts, except for reasons of insubordination in serious matters, robbery, theft, habitual drunkenness, and damage caused to the vessel or to its cargo by malice or manifest or proven negligence. Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie,110 in which the Court held the shipping company liable for the salaries and subsistence allowance of its illegally dismissed employees for the entire unexpired portion of their employment contracts. While Article 605 has remained good law up to the present,111 Article 299 of the Code of Commerce was replaced by Art. 1586 of the Civil Code of 1889, to wit: Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for a certain work cannot leave or be dismissed without sufficient cause, before the fulfillment of the contract. (Emphasis supplied.)

Citing Manresa, the Court in Lemoine v. Alkan112 read the disjunctive "or" in Article 1586 as a conjunctive "and" so as to apply the provision to local workers who are employed for a time certain although for no particular skill. This interpretation of Article 1586 was reiterated in Garcia Palomar v. Hotel de France Company.113 And in both Lemoine and Palomar, the Court adopted the general principle that in actions for wrongful discharge founded on Article 1586, local workers are entitled to recover damages to the extent of the amount stipulated to be paid to them by the terms of their contract. On the computation of the amount of such damages, the Court in Aldaz v. Gay114 held: The doctrine is well-established in American jurisprudence, and nothing has been brought to our attention to the contrary under Spanish jurisprudence, that when an employee is wrongfully discharged it is his duty to seek other employment of the same kind in the same community, for the purpose of reducing the damages resulting from such wrongful discharge. However, while this is the general rule, the burden of showing that he failed to make an effort to secure other employment of a like nature, and that other employment of a like nature was obtainable, is upon the defendant. When an employee is wrongfully discharged under a contract of employment his prima facie damage is the amount which he would be entitled to had he continued in such employment until the termination of the period. (Howard vs. Daly, 61 N. Y., 362; Allen vs. Whitlark, 99 Mich., 492; Farrell vs. School District No. 2, 98 Mich., 43.)115 (Emphasis supplied) On August 30, 1950, the New Civil Code took effect with new provisions on fixed-term employment: Section 2 (Obligations with a Period), Chapter 3, Title I, and Sections 2 (Contract of Labor) and 3 (Contract for a Piece of Work), Chapter 3, Title VIII, Book IV.116 Much like Article 1586 of the Civil Code of 1889, the new provisions of the Civil Code do not expressly provide for the remedies available to a fixed-term worker who is illegally discharged. However, it is noted that in Mackay Radio & Telegraph Co., Inc. v. Rich,117 the Court carried over the principles on the payment of damages underlying Article 1586 of the Civil Code of 1889 and applied the same to a case involving the illegal discharge of a local worker whose fixed-period employment contract was entered into in 1952, when the new Civil Code was already in effect.118 More significantly, the same principles were applied to cases involving overseas Filipino workers whose fixed-term employment contracts were illegally terminated, such as in First Asian Trans & Shipping Agency, Inc. v. Ople,119 involving seafarers who were illegally discharged. In Teknika Skills and Trade Services, Inc. v. National Labor Relations Commission,120 an OFW who was illegally dismissed prior to the expiration of her fixed-period employment contract as a baby sitter, was awarded salaries corresponding to the unexpired portion of her contract. The Court arrived at the same ruling in Anderson v. National Labor Relations Commission,121 which involved a foreman hired in 1988 in Saudi Arabia for a fixed term of two years, but who was illegally dismissed after only nine months on the job -- the Court awarded him salaries corresponding to 15 months, the unexpired portion of his contract. In Asia World Recruitment, Inc. v. National Labor Relations Commission,122 a Filipino working as a security officer in 1989 in Angola was awarded his salaries for the remaining period of his 12-month contract after he was wrongfully discharged. Finally, in Vinta Maritime Co., Inc. v. National Labor Relations Commission,123 an OFW whose 12-month contract was illegally cut short in the second month was declared entitled to his salaries for the remaining 10 months of his contract. In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were illegally discharged were treated alike in terms of the computation of their money claims: they were uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally dismissed OFWs with an unexpired portion of one year or more in their employment contract have since been differently treated in that their money claims are subject to a 3-month cap, whereas no such limitation is imposed on local workers with fixed-term employment. The Court concludes that the subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed-term employees who are

illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. There being a suspect classification involving a vulnerable sector protected by the Constitution, the Court now subjects the classification to a strict judicial scrutiny, and determines whether it serves a compelling state interest through the least restrictive means. What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the Constitution and calibrated by history.124 It is akin to the paramount interest of the state125 for which some individual liberties must give way, such as the public interest in safeguarding health or maintaining medical standards,126 or in maintaining access to information on matters of public concern.127 In the present case, the Court dug deep into the records but found no compelling state interest that the subject clause may possibly serve. The OSG defends the subject clause as a police power measure "designed to protect the employment of Filipino seafarers overseas x x x. By limiting the liability to three months [sic], Filipino seafarers have better chance of getting hired by foreign employers." The limitation also protects the interest of local placement agencies, which otherwise may be made to shoulder millions of pesos in "termination pay."128 The OSG explained further: Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event that jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on its obligation. Hence, placement agencies that are in good faith and which fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect them and to promote their continued helpful contribution in deploying Filipino migrant workers, liability for money are reduced under Section 10 of RA 8042. This measure redounds to the benefit of the migrant workers whose welfare the government seeks to promote. The survival of legitimate placement agencies helps [assure] the government that migrant workers are properly deployed and are employed under decent and humane conditions.129 (Emphasis supplied) However, nowhere in the Comment or Memorandum does the OSG cite the source of its perception of the state interest sought to be served by the subject clause. The OSG locates the purpose of R.A. No. 8042 in the speech of Rep. Bonifacio Gallego in sponsorship of House Bill No. 14314 (HB 14314), from which the law originated;130 but the speech makes no reference to the underlying reason for the adoption of the subject clause. That is only natural for none of the 29 provisions in HB 14314 resembles the subject clause. On the other hand, Senate Bill No. 2077 (SB 2077) contains a provision on money claims, to wit: Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of the complaint, the claim arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas employment including claims for actual, moral, exemplary and other forms of damages.

The liability of the principal and the recruitment/placement agency or any and all claims under this Section shall be joint and several. Any compromise/amicable settlement or voluntary agreement on any money claims exclusive of damages under this Section shall not be less than fifty percent (50%) of such money claims: Provided, That any installment payments, if applicable, to satisfy any such compromise or voluntary settlement shall not be more than two (2) months. Any compromise/voluntary agreement in violation of this paragraph shall be null and void. Non-compliance with the mandatory period for resolutions of cases provided under this Section shall subject the responsible officials to any or all of the following penalties: (1) The salary of any such official who fails to render his decision or resolution within the prescribed period shall be, or caused to be, withheld until the said official complies therewith; (2) Suspension for not more than ninety (90) days; or (3) Dismissal from the service with disqualification to hold any appointive public office for five (5) years. Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such official may have incurred under other existing laws or rules and regulations as a consequence of violating the provisions of this paragraph. But significantly, Section 10 of SB 2077 does not provide for any rule on the computation of money claims. A rule on the computation of money claims containing the subject clause was inserted and eventually adopted as the 5th paragraph of Section 10 of R.A. No. 8042. The Court examined the rationale of the subject clause in the transcripts of the "Bicameral Conference Committee (Conference Committee) Meetings on the Magna Carta on OCWs (Disagreeing Provisions of Senate Bill No. 2077 and House Bill No. 14314)." However, the Court finds no discernible state interest, let alone a compelling one, that is sought to be protected or advanced by the adoption of the subject clause. In fine, the Government has failed to discharge its burden of proving the existence of a compelling state interest that would justify the perpetuation of the discrimination against OFWs under the subject clause. Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the employment of OFWs by mitigating the solidary liability of placement agencies, such callous and cavalier rationale will have to be rejected. There can never be a justification for any form of government action that alleviates the burden of one sector, but imposes the same burden on another sector, especially when the favored sector is composed of private businesses such as placement agencies, while the disadvantaged sector is composed of OFWs whose protection no less than the Constitution commands. The idea that private business interest can be elevated to the level of a compelling state interest is odious. Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement agencies vis-a-vis their foreign principals, there are mechanisms already in place that can be employed to achieve that purpose without infringing on the constitutional rights of OFWs. The POEA Rules and Regulations Governing the Recruitment and Employment of LandBased Overseas Workers, dated February 4, 2002, imposes administrative disciplinary measures on erring foreign employers who default on their contractual obligations to migrant workers and/or their Philippine agents. These disciplinary measures range from temporary disqualification to preventive suspension. The POEA Rules and Regulations

Governing the Recruitment and Employment of Seafarers, dated May 23, 2003, contains similar administrative disciplinary measures against erring foreign employers. Resort to these administrative measures is undoubtedly the less restrictive means of aiding local placement agencies in enforcing the solidary liability of their foreign principals. Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of petitioner and other OFWs to equal protection.1avvphi1 Further, there would be certain misgivings if one is to approach the declaration of the unconstitutionality of the subject clause from the lone perspective that the clause directly violates state policy on labor under Section 3,131 Article XIII of the Constitution. While all the provisions of the 1987 Constitution are presumed self-executing,132 there are some which this Court has declared not judicially enforceable, Article XIII being one,133 particularly Section 3 thereof, the nature of which, this Court, in Agabon v. National Labor Relations Commission,134 has described to be not self-actuating: Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as self-executing in the sense that these are automatically acknowledged and observed without need for any enabling legislation. However, to declare that the constitutional provisions are enough to guarantee the full exercise of the rights embodied therein, and the realization of ideals therein expressed, would be impractical, if not unrealistic. The espousal of such view presents the dangerous tendency of being overbroad and exaggerated. The guarantees of "full protection to labor" and "security of tenure", when examined in isolation, are facially unqualified, and the broadest interpretation possible suggests a blanket shield in favor of labor against any form of removal regardless of circumstance. This interpretation implies an unimpeachable right to continued employment-a utopian notion, doubtless-but still hardly within the contemplation of the framers. Subsequent legislation is still needed to define the parameters of these guaranteed rights to ensure the protection and promotion, not only the rights of the labor sector, but of the employers' as well. Without specific and pertinent legislation, judicial bodies will be at a loss, formulating their own conclusion to approximate at least the aims of the Constitution. Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive enforceable right to stave off the dismissal of an employee for just cause owing to the failure to serve proper notice or hearing. As manifested by several framers of the 1987 Constitution, the provisions on social justice require legislative enactments for their enforceability.135 (Emphasis added) Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable rights, for the violation of which the questioned clause may be declared unconstitutional. It may unwittingly risk opening the floodgates of litigation to every worker or union over every conceivable violation of so broad a concept as social justice for labor. It must be stressed that Section 3, Article XIII does not directly bestow on the working class any actual enforceable right, but merely clothes it with the status of a sector for whom the Constitution urges protection through executive or legislative action and judicial recognition. Its utility is best limited to being an impetus not just for the executive and legislative departments, but for the judiciary as well, to protect the welfare of the working class. And it was in fact consistent with that constitutional agenda that the Court in Central Bank (now Bangko Sentral ng Pilipinas) Employee Association, Inc. v. Bangko Sentral ng Pilipinas, penned by then Associate Justice now Chief Justice Reynato S. Puno, formulated the judicial precept that when the challenge to a statute is premised on the perpetuation of prejudice against persons favored by the Constitution with special protection -- such as the working class or a section thereof -- the Court may recognize the existence of a suspect classification and subject the same to strict judicial scrutiny.

The view that the concepts of suspect classification and strict judicial scrutiny formulated in Central Bank Employee Association exaggerate the significance of Section 3, Article XIII is a groundless apprehension. Central Bank applied Article XIII in conjunction with the equal protection clause. Article XIII, by itself, without the application of the equal protection clause, has no life or force of its own as elucidated in Agabon. Along the same line of reasoning, the Court further holds that the subject clause violates petitioner's right to substantive due process, for it deprives him of property, consisting of monetary benefits, without any existing valid governmental purpose.136 The argument of the Solicitor General, that the actual purpose of the subject clause of limiting the entitlement of OFWs to their three-month salary in case of illegal dismissal, is to give them a better chance of getting hired by foreign employers. This is plain speculation. As earlier discussed, there is nothing in the text of the law or the records of the deliberations leading to its enactment or the pleadings of respondent that would indicate that there is an existing governmental purpose for the subject clause, or even just a pretext of one. The subject clause does not state or imply any definitive governmental purpose; and it is for that precise reason that the clause violates not just petitioner's right to equal protection, but also her right to substantive due process under Section 1,137 Article III of the Constitution. The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired period of nine months and 23 days of his employment contract, pursuant to law and jurisprudence prior to the enactment of R.A. No. 8042. On the Third Issue Petitioner contends that his overtime and leave pay should form part of the salary basis in the computation of his monetary award, because these are fixed benefits that have been stipulated into his contract. Petitioner is mistaken. The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like petitioner, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses; whereas overtime pay is compensation for all work "performed" in excess of the regular eight hours, and holiday pay is compensation for any work "performed" on designated rest days and holidays. By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and holiday pay in the computation of petitioner's monetary award, unless there is evidence that he performed work during those periods. As the Court held in Centennial Transmarine, Inc. v. Dela Cruz,138 However, the payment of overtime pay and leave pay should be disallowed in light of our ruling in Cagampan v. National Labor Relations Commission, to wit: The rendition of overtime work and the submission of sufficient proof that said was actually performed are conditions to be satisfied before a seaman could be entitled to overtime pay which should be computed on the basis of 30% of the basic monthly salary. In short, the contract provision guarantees the right to overtime pay but the entitlement to such benefit must first be established. In the same vein, the claim for the day's leave pay for the unexpired portion of the contract is unwarranted since the same is given during the actual service of the seamen. WHEREFORE, the Court GRANTS the Petition. The subject clause "or for three months for every year of the unexpired term, whichever is less" in the 5th paragraph of Section

10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005 Resolution of the Court of Appeals are MODIFIED to the effect that petitioner is AWARDED his salaries for the entire unexpired portion of his employment contract consisting of nine months and 23 days computed at the rate of US$1,400.00 per month. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-50734-37 February 20, 1981 WALLEM PHILIPPINES SHIPPING, INC., petitioner, vs. THE HON. MINISTER OF LABOR, in his capacity as Chairman of the National Seamen Board Proper, JAIME CAUNCA, ANTONIO CABRERA, EFREN GARCIA, JOSE OJEDA and RODOLFO PAGWAGAN, respondents.

DE CASTRO, J.: Petition for certiorari with preliminary injunction with prayer that the Orders dated December 19, 1977 and April 3, 1979 of the National Seamen Board (NSB) be declared null and void. Private respondents were hired by petitioner sometime in May 1975 to work as seamen for a period of ten months on board the M/V Woermann Sanaga, a Dutch vessel owned and operated by petitioner's European principals. While their employment contracts were still in force, private respondents were dismissed by their employer, petitioner herein, and were discharged from the ship on charges that they instigated the International Transport Federation (ITF) to demand the application of worldwide ITF seamen's rates to their crew. Private respondents were repatriated to the Philippines on October 27, 1975 and upon their arrival in Manila, they instituted a complaint against petitioner for illegal dismissal and recovery of wages and other benefits corresponding to the five months' unexpired period of their shipboard employment contract. In support of their complaint, private respondents submitted a Joint Affidavit 1 stating the circumstances surrounding their employment and subsequent repatriation to the Philippines, material averments of which are herein below reproduced: JOINTAFFIDAVIT xxx xxx xxx 5. That aside from our basic monthly salary we are entitled to two (2) months vacation leave, daily subsistence allowance of US$8.14 each, daily food allowance of US$2.50. as well as overtime pay which we failed to receive because our Shipboard Employment Contract was illegally terminated; 6. That while we were in Rotterdam, on or about July 9, 1975, representative of the ITF boarded our vessel and talked with the Ship's Captain; 7. That the following day, the representatives of the ITF returned and was followed by Mr. M.S.K. Ogle who is the Company's Administrative Manager, again went to see the Captain; 8. That at around 7:00 in the evening all the crew members were called in the Mess Hall where the ITF representatives informed us that they have just entered into a "Special Agreement" with the Wallem Shipping Management, Ltd., represented by Mr. M.S.K. Ogle, Administrative Manager, wherein new salary rates was agreed upon and that we were going to be paid our salary differentials in view of the new rates;

9. That in the same meeting, Mr. M.S.K. Ogle also spoke where he told that a Special Agreement has been signed and that we will be receiving new pay rate and enjoined us to work hard and be good boys; 10. That the same evening we received our salary differentials based on the new rates negotiated for us by the ITF. 11. That while we were in the Port Dubai, Saudi Arabia, we were not receiving our pay, since the Ship's Captain refused to implement the world-wide rates and insisted on paying us the Far East Rate; 12. That the Port Dubai is one that is within the Worldwide rates sphere. 13. That on October 22, 1975, Mr. Greg Nacional Operation Manager of respondent corporation, arrived in Dubai Saudi Arabia and boarded our ship; 14. That on October 23, 1975, Mr. Nacional called all the crew members, including us to a meeting at the Mess Hall and there he explained that the Company cannot accept the worldwide rate. The Special Agreement signed by Mr. Ogle in behalf of the Company is nothing but a scrap of paper. Mr. Jaime Caunca then asked Mr. Nacional, in view of what he was saying, whether the Company will honor the Special Agreement and Mr. Nacional answered "Yes". That we must accept the Far East Rates which was put to a vote. Only two voted for accepting the Far East Rates; 15. That immediately thereafter Mr. Nacional left us; 16. That same evening, Mr. Nacional returned and threatened that he has received a cable from the Home Office that if we do not accept the Far East Rate, our services will be terminated and there will be a change in crew; 17. That when Mr. Nacional left, we talked amongst ourselves and decided to accept the Far East Rates; 18. That in the meeting that evening because of the threat we informed Mr. Nacional we were accepting the Far East Rate and he made us sign a document to that effect; 19. That we the complainants with the exception of Leopoldo Mamaril and Efren Garcia, were not able to sign as we were at the time on work schedules, and Mr. Nacional did not bother anymore if we signed or not; 20. That after the meeting Mr. Nacional cabled the Home Office, informing them that we the complainants with the exception of Messrs. Mamaril and Garcia were not accepting the Far East Rates; 21. That in the meeting of October 25, 1975, Mr. Nacional signed a document whereby he promised to give no priority of first preference in "boarding a vessel and that we are not blacklisted"; 22. That in spite of our having accepted the Far East Rate, our services were terminated and advised us that there was a change in crew; 23. That on October 27, 1975, which was our scheduled flight home, nobody attended us, not even our clearance for our group travel and consequently we were not able to board the plane, forcing us to sleep on the floor at the airport in the evening of October 27, 1975; 24. That the following day we went back to the hotel in Dubai which was a two hours ride from the airport, where we were to await another flight for home via Air France; 25. That we were finally able to leave for home on November 2, 1975 arriving here on

the 3rd of November; 26. That we paid for all excess baggages; 27. That Mr. Nacional left us stranded, since he went ahead on October 27, 1975; 28. That immediately upon arriving in Manila, we went to respondent Company and saw Mr. Nacional, who informed us that we were not blacklisted, however, Mr. Mckenzie, Administrative Manager did inform us that we were all blacklisted; 29. That we were asking from the respondent Company our leave pay, which they refused to give, if we did not agree to a US$100.00 deduction; 30. That with the exception of Messrs. Jaime Caunca Amado Manansala and Antonio Cabrera, we received our leave pay with the US$100.00 deduction; 31. That in view of the written promise of Mr. Nacional in Dubai last October 23, 1975 to give us priority and preference in boarding a vessel and that we were not blacklisted we have on several occasions approached him regarding his promise, which up to the present he has refused to honor. xxx xxx xxx Answering the complaint, petitioner countered that when the vessel was in London, private respondents together with the other crew insisted on worldwide ITF rate as per special agreement; that said employees threatened the ship authorities that unless they agreed to the increased wages the vessel would not be able to leave port or would have been picketed and/or boycotted and declared a hot ship by the ITF; that the Master of the ship was left with no alternative but to agree; that upon the vessel's arrival at the Asian port of Dubai on October 22, 1975, a representative of petitioner went on board the ship and requested the crew together with private respondents to desist from insisting worldwide ITF rate and instead accept the Far East rate; that said respondents refused to accept Far East ITF rates while the rest of the Filipino crew members accepted the Far East rates; that private respondents were replaced at the expense of petitioner and it was prayed that respondents be required to comply with their obligations under the contract by requiring them to pay their repatriation expenses and all other incidental expenses incurred by the master and crew of the vessel. After the hearing on the merits, the hearing Officer of the Secretariat rendered a decision 2 on March 14, 1977 finding private respondents to have violated their contract of employment when they accepted salary rates different from their contract verified and approved by the National Seamen Board. As to the issue raised by private respondents that the original contract has been novated, it was held that: xxx xxx xxx For novation to be a valid defense, it is a legal requirement that all parties to the contract should give their consent. In the instant case only the complainants and respondents gave their consent. The National Seamen Board had no participation in the alleged novation of the previously approved employment contract. It would have been different if the consent of the National Seamen Board was first secured before the alleged novation of the approved contract was undertaken, hence, the defense of novation is not in order. xxx xxx xxx The Hearing Officer likewise rules that petitioner violated the contract when its representative signed the Special Agreement and he signed the same at his own risk and must bear the consequence of such act, and since both parties are in paridelicto, complaint and counterclaim were dismissed for lack of merit but petitioner was ordered to pay respondents Caunca and Cabrera their respective leave pay for the period that they have served M/V Woermann Sanaga plus attorney's fees.

Private respondents filed a motion for reconsideration with the Board which modified the decision of the Secretariat in an Order 3 of December 19, 1977 and ruled that petitioner is liable for breach of contract when it ordered the dismissal of private respondents and their subsequent repatriation before the expiration of their respective employment contracts. The Chairman of the Board stressed that "where the contract is for a definite period, the captain and the crew members may not be discharged until after the contract shall have been performed" citing the case of Madrigal Shipping Co., Inc. vs. Ogilvie, et al. (104 Phil. 748). He directed petitioner to pay private respondents the unexpired portion of their contracts and their leave pay, less the amount they received as differentials by virtue of the special agreements entered in Rotterdam, and ten percent of the total amounts recovered as attorney's fees. Petitioner sought clarification and reconsideration of the said order and asked for a confrontation with private respondents to determine the specific adjudications to be made. A series of conferences were conducted by the Board. It was claimed by petitioner that it did not have in its possession the records necessary to determine the exact amount of the judgment since the records were in the sole custody of the captain of the ship and demanded that private respondents produce the needed records. On this score, counsel for respondents manifested that to require the master of the ship to produce the records would result to undue delay in the disposition of the case to the detriment of his clients, some of whom are still unemployed. Under the circumstances, the Board was left with no alternative but to issue an Order dated April 3, 1979 4 fixing the amount due private respondents at their three (3) months' salary equivalent without qualifications or deduction. Hence,the instant petition before Us alleging grave abuse of discretion on the part of the respondent official as Chairman of the Board, in issuing said order which allegedly nullified the findings of the Secretariat and premised adjudication on imaginary conditions which were never taken up with full evidence in the course of hearing on the merits. The whole controversy is centered around the liability of petitioner when it ordered the dismissal of herein private respondents before the expiration of their respective employment contracts. In its Order of December 19, 1977 5 the Board, thru its Chairman, Minister Blas F. Ople, held that there is no showing that the seamen conspired with the ITF in coercing the ship authorities to grant salary increases, and the Special Agreement was signed only by petitioner and the ITF without any participation from the respondents who, accordingly, may not be charged as they were, by the Secretariat, with violation of their employment contract. The Board likewise stressed that the crew members may not be discharged until after the expiration of the contract which is for a definite period, and where the crew members are discharged without just cause before the contract shall have been performed, they shall be entitled to collect from the owner or agent of the vessel their unpaid salaries for the period they were engaged to render the services, applying the case of Madrigal Shipping Co., Inc. vs. Jesus Ogilivie et al. 6 The findings and conclusion of the Board should be sustained. As already intimated above, there is no logic in the statement made by the Secretariat's Hearing Officer that the private respondents are liable for breach of their employment contracts for accepting salaries higher than their contracted rates. Said respondents are not signatories to the Special Agreement, nor was there any showing that they instigated the execution thereof. Respondents should not be blamed for accepting higher salaries since it is but human for them to grab every opportunity which would improve their working conditions and earning capacity. It is a basic right of all workingmen to seek greater benefits not only for themselves but for their families as well, and this can be achieved through collective bargaining or with the assistance of trade unions. The Constitution itself guarantees the promotion of social welfare and protection to labor. It is therefore the Hearing Officer that gravely erred in disallowing the payment of the unexpired portion of the seamen's respective contracts of employment. Petitioner claims that the dismissal of private respondents was justified because the

latter threatened the ship authorities in acceeding to their demands, and this constitutes serious misconduct as contemplated by the Labor Code. This contention is not welltaken. The records fail to establish clearly the commission of any threat. But even if there had been such a threat, respondents' behavior should not be censured because it is but natural for them to employ some means of pressing their demands for petitioner, who refused to abide with the terms of the Special Agreement, to honor and respect the same. They were only acting in the exercise of their rights, and to deprive them of their freedom of expression is contrary to law and public policy. There is no serious misconduct to speak of in the case at bar which would justify respondents' dismissal just because of their firmness in their demand for the fulfillment by petitioner of its obligation it entered into without any coercion, specially on the part of private respondents. On the other hand, it is petitioner who is guilty of breach of contract when they dismissed the respondents without just cause and prior to the expiration of the employment contracts. As the records clearly show, petitioner voluntarily entered into the Special Agreement with ITF and by virtue thereof the crew men were actually given their salary differentials in view of the new rates. It cannot be said that it was because of respondents' fault that petitioner made a sudden turn-about and refused to honor the special agreement. In brief, We declare petitioner guilty of breach of contract and should therefore be made to comply with the directives contained in the disputed Orders of December 19, 1977 and April 3, 1979. WHEREFORE, premises considered, the decision dated March 14, 1977 of the Hearing Officer is SET ASIDE and the Orders dated December 19, 1977 and April 3, 1979 of the National Seamen Board are AFFIRMED in toto. This decision is immediately executory. Without costs. SO ORDERED. Makasiar, Fernandez, Guerrero and Melencio-Herrera, JJ., concur. Teehankee (Chairman), J., concur in the result.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-58011 & L-58012 November 18, 1983 VIR-JEN SHIPPING AND MARINE SERVICES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, ROGELIO BISULA RUBEN ARROZA JUAN GACUTNO LEONILO ATOK, NILO CRUZ, ALVARO ANDRADA, NEMESIO ADUG SIMPLICIO BAUTISTA, ROMEO ACOSTA, and JOSE ENCABO respondents. Antonio R. Atienza for petitioner. The Solicitor General for respondent NLRC, Quasha, Asperilia, Ancheta &- Valmonte Pena Marcos Law Offices for private respondents. RESOLUTION

GUTIERREZ, JR., J.:+.wph!1 Before the Court en banc is a motion to reconsider the decision promulgated on July 20, 1982 which set aside the decision of respondent National Labor Relations Commission and reinstated the decision of the National Seamen Board. To better understand the issues raised in the motion for reconsideration, we reiterate the background facts of the case, Taken from the decision of the National Labor Relations Commission: t.hqw It appears that on different dates in December, 1978 and January, 1979, the Seamen entered into separate contracts of employment with the Company, engaging them to work on board M/T' Jannu for a period of twelve (12) months. After verification and approval of their contracts by the NSB, the Seamen boarded their vessel in Japan. On 10 January 1919, the master of the vessel complainant Rogelio H. Bisula, received a cable from the Company advising him of the possibility that the vessel might be directed to call at ITF-controlled ports said at the same time informing him of the procedure to be followed in the computation of the special or additional compensation of crew members while in said ports. ITF is the acronym for the International Transport Workers Federation, a militant international labor organization with affiliates in different ports of the world, which reputedly can tie down a vessel in a port by preventing its loading or unloading, This is a sanction resorted to by ITF to enforce the payment of its wages rates for seafarers the so-called ITF rates, if the wages of the crew members of a vessel who have affiliated with it are below its prescribed rates.) In the same cable of the Company, the expressed its regrets for hot clarifying earlier the procedure in computing the special compensation as it thought that the vessel would 'trade in Caribbean ports only. On 22 March 1979, the Company sent another cable to complainant Bisula, this time informing him of the respective amounts each of the officers and crew members would receive as special compensation when the vessel called at the port of Kwinana Australia, an ITF-controlled port. This was followed by another cable on 23 March 1979, informing him that the officers and crew members had been enrolled as members of the ITF in

Sidney, Australia, and that the membership fee for the 28 personnel complement of the vessel had already been paid. In answer to the Company's cable last mentioned, complainant Bisula, in representation of the other officers and crew members, sent on 24 March 1979 a cable informing the Company that the officers and crew members were not agreeable to its 'suggestion'; that they were not contented with their present salaries 'based on the volume of works, type of ship with hazardous cargo and registered in a world wide trade': that the 'officers and crew (were) not interested in ITF membership if not actually paid with ITF rate that their 'demand is only 50% increase based on present basic salary and that the proposed wage increase is the 'best and only solution to solve ITF problem' since the Company's salary rates 'especially in tankers (are) very far in comparison with other shipping agencies in Manila ... In reply, the Company proposed a 25% increase in the basic pay of the complainant crew members, although it claimed, that it would "suffer and absorb considerable amount of losses." The proposal was accepted by the Seamen with certain conditions which were accepted by the Company. Conformably with the agreement of the parties which was effected through the cables abovementioned, the Seamen were paid their new salary rates. Subsequently, the Company sought authority from the NSB to cancel the contracts of employment of the Seamen, claiming that its principals had terminated their manning agreement because of the actuations of the Seamen. The request was granted by the NSB Executive Director in a letter dated 10 April 1979. Soon thereafter, the Company cabled the Seamen informing them that their contracts would be terminated upon the vessel's arrival in Japan. On 19 April 1979 they Arere asked to disembark from the vessel, their contracts were terminated, and they were repatriated to Manila. There is no showing that the Seamen were given the opportunity to at least comment on the Company's request for the cancellation of their contracts, although they had served only three (3) out of the twelve (12) months' duration of their contracts. The private respondents filed a complaint for illegal dismissal and non-payment of earned wages with the National Seamen Board. The Vir-jen Shipping and Marine Services Inc. in turn filed a complaint for breach of contract and recovery of excess salaries and overtime pay against the private respondents. On July 2, 1980, the NSB rendered a decision declaring that the seamen breached their employment contracts when they demanded and received from Vir-jen Shipping wages over and above their contracted rates. The dismissal of the seamen was declared legal and the seamen were ordered suspended. The seamen appealed the decision to the NLRC which reversed the decision of the NSB and required the petitioner to pay the wages and other monetary benefits corresponding to the unexpired portion of the manning contract on the ground that the termination of the contract by the petitioner was without valid cause. Vir-jen Shipping filed the present petition. The private respondents submit the following issues in their motion for reconsideration: t.hqw A. THIS HONORABLE COURT DID VIOLENCE TO LAW AND JURISPRUDENCE WHEN IT HELD THAT THE FINDING OF FACT OF THE NATIONAL SEAMEN BOARD THAT THE SEAMEN VIOLATED THEIR CONTRACTS IS MORE CREDIBLE THAN THE FINDING OF FACT OF THE NATIONAL LABOR RELATIONS COMMISSION THAT THE SEAMEN DID NOT VIOLATE THEIR CONTRACT. B. THIS HONORABLE COURT ERRED IN FINDING THAT VIR-JEN'S HAVING AGREED TO A 25% INCREASE OF THE SEAMEN'S BASIC WAGE WAS NOT VOLUNTARY BUT WAS DUE TO THREATS. C. THIS HONORABLE COURT ERRED WHEN IT TOOK COGNIZANCE OF THE

ADDENDUM AGREEMENT; ASSUMING THAT THE ADDENDUM AGREEMENT COULD BE TAKEN COGNIZANCE OF, THIS HONORABLE COURT ERRED WHEN' IT FOUND THAT PRIVATE RESPONDENTS HAD VIOLATED THE SAME. D, THIS HONORABLE COURT ERRED WHEN IT DID NOT FIND PETITIONER VIRJEN LIABLE FOR HAVING TERMINATED BEFORE EXPIRY DATE THE EMPLOYMENT CONTRACTS OF PRIVATE RESPONDENTS, THERE BEING NO LEGAL AND JUSTIFIABLE GROUND FOR SUCH TERMINATION. E. THIS HONORABLE COURT ERRED IN FINDING THAT THE PREPARATION BY PETITIONER OF THE TWO PAYROLLS AND THE EXECUTION OF THE SIDE CONTRACT WERE NOT MADE IN BAD FAITH. F. THIS HONORABLE COURT INADVERTENTLY DISCRIMINATED AGAINST PRIVATE RESPONDENTS. At the outset, we are faced with the question whether or not the Court en banc should give due course to the motion for reconsideration inspite of its having been denied twice by the Court's Second Division. The case was referred to and accepted by the Court en banc because of the movants' contention that the decision in this case by the Second Division deviated from Wallem Phil. Shipping Inc. v. Minister of Labor (L-50734-37, February 20, 1981), a First Division case with the same facts and issues. We are constrained to answer the initial question in the affirmative. A fundamental postulate of Philippine Constitutional Law is the fact, that there is only one Supreme Court from whose decisions all other courts are required to take their bearings. (Albert v. Court of First Instance, 23 SCRA 948; Barrera v. Barrera, 34 SCRA 98; Tugade v. Court of Appeals, 85 SCRA 226). The majority of the Court's work is now performed by its two Divisions, but the Court remains one court, single, unitary, complete, and supreme. Flowing from this nature of the Supreme Court is the fact that, while ' individual Justices may dissent or partially concur with one another, when the Court states what the law is, it speaks with only one voice. And that voice being authoritative should be a clear as possible. Any doctrine or principle of law laid down by the Court, whether en banc or in Division, may be modified or reversed only by the Court en banc. (Section 2(3), Article X, Constitution.) In the rare instances when one Division disagrees in its views with the other Division, or the necessary votes on an issue cannot be had in a Division, the case is brought to the Court en banc to reconcile any seeming conflict, to reverse or modify an earlier decision, and to declare the Court's doctrine. This is what has happened in this case. The decision sought to be reconsidered appears to be a deviation from the Court's decision, speaking through the First Division, in Wallem Shipping, Inc. v. Hon. Minister of Labor (102 SCRA 835). Faced with two seemingly conflicting resolutions of basically the same issue by its two Divisions, the Court. therefore, resolved to transfer the case to the Court en banc. Parenthetically, the petitioner's comment on the third motion for reconsideration states that the resolution of the motion might be the needed vehicle to make the ruling in the Wallem case clearer and more in time with the underlying principles of the Labor Code. We agree with the petitioner. After an exhaustive, painstaking, and perspicacious consideration of the motions for reconsideration and the comments, replies, and other pleadings related thereto, the Court en banc is constrained to grant the motions. To grant the motion is to keep faith with the constitutional mandate to afford protection to labor and to assure the rights of workers to self-organization and to just and humane conditions of work. We sustain the decision of the respondent National labor Relations Commission. There are various arguments raised by the petitioners but the common thread running through all of them is the contention, if not the dismal prophecy, that if the respondent seamen are sustained by this Court, we would in effect "kill the en that lays the golden

egg." In other words, Filipino seamen, admittedly among the best in the world, should remain satisfied with relatively lower if not the lowest, international rates of compensation, should not agitate for higher wages while their contracts of employment are subsisting, should accept as sacred, iron clad, and immutable the side contracts which require them to falsely pretend to be members of international labor federations, pretend to receive higher salaries at certain foreign ports only to return the increased pay once the ship leaves that port, should stifle not only their right to ask for improved terms of employment but their freedom of speech and expression, and should suffer instant termination of employment at the slightest sign of dissatisfaction with no protection from their Government and their courts. Otherwise, the petitioners contend that Filipinos would no longer be accepted as seamen, those employed would lose their jobs, and the still unemployed would be left hopeless. This is not the first time and it will not be the last where the threat of unemployment and loss of jobs would be used to argue against the interests of labor; where efforts by workingmen to better their terms of employment would be characterized as prejudicing the interests of labor as a whole. In 1867 or one hundred sixteen years ago. Chief Justice Beasley of the Supreme Court of New Jersey was ponente of the court's opinion declaring as a conspiracy the threat of workingmen to strike in connection with their efforts to promote unionism, t.hqw It is difficult to believe that a right exists in law which we can scarcely conceive can produce, in any posture of affairs, other than injuriois results. It is simply the right of workmen, by concert of action, and by taking advantage of their position, to control the business of another, I am unwilling to hold that a right which cannot, in any, event, be advantageous to the employee, and which must always be hurtful to the employer, exists in law. In my opinion this indictment sufficiently shows that the force of the confederates was brought to bear upon their employer for the purpose of oppression and mischief and that this amounts to a conspiracy, (State v. Donaldson, 32 NJL 151, 1867. Cited in Chamberlain, Sourcebook on Labor, p. 13. Emphasis supplied) The same arguments have greeted every major advance in the rights of the workingman. And they have invariably been proved unfounded and false. Unionism, employers' liability acts, minimum wages, workmen's compensation, social security and collective bargaining to name a few were all initially opposed by employers and even well meaning leaders of government and society as "killing the hen or goose which lays the golden eggs." The claims of workingmen were described as outrageously injurious not only to the employer but more so to the employees themselves before these claims or demands were established by law and jurisprudence as "rights" and before these were proved beneficial to management, labor, and the nation as a whole beyond reasonable doubt. The case before us does not represent any major advance in the rights of labor and the workingmen. The private respondents merely sought rights already established. No matter how much the petitioner-employer tries to present itself as speaking for the entire industry, there is no evidence that it is typical of employers hiring Filipino seamen or that it can speak for them. The contention that manning industries in the Philippines would not survive if the instant case is not decided in favor of the petitioner is not supported by evidence. The Wallem case was decided on February 20, 1981. There have been no severe repercussions, no drying up of employment opportunities for seamen, and none of the dire consequences repeatedly emphasized by the petitioner. Why should Vir-jen be all exception? The wages of seamen engaged in international shipping are shouldered by the foreign principal. The local manning office is an agent whose primary function is recruitment and who .usually gets a lump sum from the shipowner to defray the salaries of the crew. The hiring of seamen and the determination of their compensation is subject to the interplay of various market factors and one key factor is how much in terms of profits the local

manning office and the foreign shipowner may realize after the costs of the voyage are met. And costs include salaries of officers and crew members. Filipino seamen are admittedly as competent and reliable as seamen from any other country in the world. Otherwise, there would not be so many of them in the vessels sailing in every ocean and sea on this globe. It is competence and reliability, not cheap labor that makes our seamen so greatly in demand. Filipino seamen have never demanded the same high salaries as seamen from the United States, the United Kingdom, Japan and other developed nations. But certainly they are entitled to government protection when they ask for fair and decent treatment by their employer.-, and when they exercise the right to petition for improved terms of employment, especially when they feel that these are sub-standard or are capable of improvement according to internationally accepted rules. In the domestic scene, there are marginal employers who prepare two sets of payrolls for their employees one in keeping with minimum wages and the other recording the sub-standard wages that the employees really receive, The reliable employers, however, not only meet the minimums required by fair labor standards legislation but even go way above the minimums while earning reasonable profits and prospering. The same is true of international employment. There is no reason why this Court and the Ministry of Labor and. Employment or its agencies and commissions should come out with pronouncements based on the standards and practices of unscrupulous or inefficient shipowners, who claim they cannot survive without resorting to tricky and deceptive schemes, instead of Government maintaining labor law and jurisprudence according to the practices of honorable, competent, and law-abiding employers, domestic or foreign. If any minor advantages given to Filipino seamen may somehow cut into the profits of local manning agencies and foreign shipowners, that is not sufficient reason why the NSB or the ILRC should not stand by the former instead of listening to unsubstantiated fears that they would be killing the hen which lays the golden eggs. Prescinding from the above, we now hold that neither the National Seamen Board nor the National Labor Relations Commission should, as a matter of official policy, legitimize and enforce cubious arrangements where shipowners and seamen enter into fictitious contracts similar to the addendum agreements or side contracts in this case whose purpose is to deceive. The Republic of the Philippines and its ministries and agencies should present a more honorable and proper posture in official acts to the whole world, notwithstanding our desire to have as many job openings both here and abroad for our workers. At the very least, such as sensitive matter involving no less than our dignity as a people and the welfare of our workingmen must proceed from the Batasang Pambansa in the form of policy legislation, not from administrative rule making or adjudication Another issue raised by the movants is whether or not the seamen violated their contracts of employment. The form contracts approved by the National Seamen Board are designed to protect Filipino seamen not foreign shipowners who can take care of themselves. The standard forms embody' the basic minimums which must be incorporated as parts of the employment contract. (Section 15, Rule V, Rules and Regulations Implementing the Labor Code.) They are not collective bargaining agreements or immutable contracts which the parties cannot improve upon or modify in the course of the agreed period of time. To state, therefore, that the affected seamen cannot petition their employer for higher salaries during the 12 months duration of the contract runs counter to established principles of labor legislation. The National Labor Relations Commission, as the appellate tribunal from decisions of the National Seamen Board, correctly ruled that the seamen did not violate their contracts to warrant their dismissal. The respondent Commission ruled: t.hqw In the light of all the foregoing facts, we find that the cable of the seamen proposing an increase in their wage rates was not and could not have been intended as a threat to

comp el the Company to accede to their proposals. But even assuming, if only for the sake of argument, that the demand or proposal for a wage increase was accompanied by a threat that they would report to ITF if the Company did not accede to the contract revision - although there really was no such threat as pointed out earlier the Seamen should not be held at fault for asking such a demand. In the same case cited above, the Supreme Court held: t.hqw Petitioner claims that the dismissal of private respondents was justified because the latter threatened the ship authorities in acceding to their demands, and this constitutes serious misconduct as contemplated by the Labor Code. This contention is not welltaken. But even if there had been such a threat, respondents' behavior should not be censured because it is but natural for them to employ some means of pressing their demands for petitioner, the refusal to abide with the terms of the Special Agreement, to honor and respect the same, They were only acting in the exercise of their rights, and to deprive them of their freedom of expression is contrary to law and public policy. There is no serious misconduct to speak of in the case at bar which would justify respondents' dismissal just because of their firmness in their demand for the fulfillment by petitioner of its obligation it entered into without any coercion, specially on the part of private respondents. (Emphasis supplied). The above citation is from Wallem. The facts show that when the respondents boarded the M/T Jannu there was no intention to send their ship to Australia. On January 10, 1979, the petitioner sent a cable to respondent shipmaster Bisula informing him of the procedure to be followed in the computation of special compensation of crewmembers while in ITF controlled ports and expressed regrets for not having earlier clarified the procedure as it thought that the vessel would trade in Carribean ports only. On March 22, 1979, the petitioner sent another cable informing Bisula of the special compensation when the ship would call at Kwinana Australia. The following day, shipmaster Bisula cabled Vir-jen stating that the officers and crews were not interested in ITF membership if not paid ITF rates and that their only demand was a 50 percent increase based on their then salaries. Bisula also pointed out that Virjen rates were "very far in comparison with other shipping agencies in Manila." In reply, Vir-jen counter proposed a 25 percent increase. Only after Kyoei Tanker Co., Ltd., declined to increase the lumps sum amount given monthly to Vir-jen was the decision to terminate the respondents' employment formulated. The facts show that Virjen Initiated the discussions which led to the demand for increased . The seamen made a proposal and the petitioner organized with a counterproposal. The ship had not vet gone to Australia or any ITF controlled port. There was absolutely no mention of any strike. much less a threat to strike. The seamen had done in act which under Philippine law or any other civilized law would be termed illegal, oppressive, or malicious. Whatever pressure existed, it was mild compared to accepted valid modes of labor activity. We reiterate our ruling in Wallem. t.hqw Petitioner claims that the dismissal of private respondents was justified because the latter threatened the ship authorities in acceding to their demands, and this constitutes serious misconduct as contemplated by the Labor Code. This contention is not welltaken. The records fail to establish clearly the commission of any threat, But even if there had been such a threat, respondents' behavior should not be censured because it is but natural for them to employ some means of pressing their demands for petitioner, who refused to abide with the terms of the Special Agreement, to honor and respect the same, They were only acting in the exercise of their rights, and to deprive them of their form of expression is contrary to law and public policy. ...

Our dismissing the petition is premised on the assumption that the Ministry of Labor and Employment and all its agencies exist primarily for the workinginan's interests and, of course, the nation as a whole. The points raised by the Solicitor-General in his comments refer to the issue of allowing what the petitioner importunes under the argument of "killing the hen which lays the golden eggs." This is one of policy which should perhaps be directed to the Batasang Pambansa and to our country's other policy makers for more specific legislation on the matter, subject to the constitutional provisions protecting labor, promoting social justice, and guaranteeing non-abridgement of the freedom of speech, press, peaceable assembly and petition. We agree with the movants that there is no showing of any cause, which under the Labor Code or any current applicable law, would warrant the termination of the respondents' services before the expiration of their contracts. The Constitution guarantees State assurance of the rights of workers to security of tenure. (Sec. 9, Article II, Constitution). Presumptions and provisions of law, the evidence on record, and fundamental State policy all dictate that the motions for reconsideration should be granted. WHEREFORE, the motions for reconsideration are hereby GRANTED. The petition is DISMISSED for lack of merit. The decision of the National Labor Relations Commission is AFFIRMED. No costs. SO ORDERED.1wph1.t Fernando, C.J., Guerrero, Abad Santos, Plana, Escolin and Relova, JJ., concur. Separate Opinions De CASTRO, J., concurring: Being the ponente of the Wallem case, upon whose ruling the decision of the Court en banc in this case is mainly made to rest, at least insofar as said Court now finds that the respondent seamen have not committed any misconduct which would constitute a just cause for the termination of their services just after three months of the 12-month term of their contract, a brief explanation why I voted in the Second Division in favor of the petitioner company in the instant case, and not the respondent seamen, as I did in the Wallem case, is obviously called for. During our deliberations in the Division, it was made clear that in the instant case,' threat was employed by the seamen against the company or shipowners to obtain consent to the 50% raise of wages as proposed by the seamen upon being informed that they would touch on ITF-controlled ports. I joined my colleagues in the Second Division in concurring in the decision penned by Justice Barredo, now retired, in the belief that threat was indeed committed, constituting a just cause for termination of the services of the seamen with still nine months to go of their 12-month contract with the petitioner. As the facts are more thoroughly and accurately presented and discussed in the decision so brilliantly written by Justice Gutierrez, I am persuaded that on the basis of the ruling of the Wallem case, a mistake was committed in finding the existence of a just cause for the instant and unexpected termination of the services of the seamen. The facts of this case show that to the proposal of the seamen for a 50% increase, made because they were informed that they would touch on ITF-controlled ports, the company countered with an offer of only 25% raised The proposal of 5% was much lower than the rates which the ITF would surely force upon the company When the company made a counter proposal of 25% raise the seamen accepted. The trip went on smoothly until upon arriving at a port which afforded haven and safety to the shipowner, the latter suddenly, and with imperious finality, terminated the services of the seamen and repatriated them to Manila. These are the simple facts that call for the application of the law, mainly the provisions of the Labor Code. That law is none other than what is indicated in how the Walem case was decided in vindication of how the Seamen were given a raw deal in being lulled into a false sense of security in their employment contract only to be rudely terminated and ordered repatriated.

In the Wallem case, the seamen pressed their demand for the enforcement of a special agreement entered into by the shipowner or company with the ITF. For this act, their services were terminated and they were repatriated by their employer shipping company. What the First Division said in favor of the seamen, is in my opinion, the correct ruling which We should reaffirm in the instant case. Thus t.hqw Petitioner claims that the dismissal of private respondent was justified because the latter threatened the ship authorities in acceding to their demands, and this constitutes serious misconduct as contemplated by the Labor Code. This contention is not welltaken. But even en if there had been such a threat, respondents' behavior should not be censured because it is but natural for them to employ some means of pressing their demands on petitioner, who refused to abide with the terms of the Special Agreement, to honor and respect the same. They were only acting in the exercise of their rights, and to deprive them of their freedom of expression is contrary to law and public policy. There is no serious misconduct to speak of in the case at bar which would justify respondents' dismissal just because of their firmness in their demand for the fulfillment by petitioner of its obligation it entered into without any coercion, specially on the part of private respondents. (Emphasis supplied). This above ruling is the law on the matter and, in my opinion. controlling on the case at bar. Whatever policy may prove more beneficial to the cause of labor in general, as is sought to be offered as argument in support of the Second Division decision, is not a proper ground for making said policy prevail over the applicable law or jurisprudence, Questions of policy are better left to the Batasan Pambansa. We should confine ourselves to applying the law as it is. In so doing, We are not allowed to apply it to suit, or to respond to, the demands of what We may deem the better policy than what the law clearly intends. The policy is the law, and the law is the policy. We might be treading on forbidden ground to bend the law to what We perceive to be a desirable policy. Courts are called upon only to apply the law. Does the law permit the termination of the services of the seamen in violation of their contract except only upon a just cause? This is the only question to be answered in this case. The answer is given with eloquent persuasiveness in the decision in which I concur wholeheartedly. Teehankee, Makasiar, Aquino, ,Concepcion, Jr. and Melencio-Herrera, JJ., took no part. Separate Opinions DE CASTRO, J., concurring: Being the ponente of the Wallem case, upon whose ruling the decision of the Court en banc in this case is mainly made to rest, at least insofar as said Court now finds that the respondent seamen have not committed any misconduct which would constitute a just cause for the termination of their services just after three months of the 12-month term of their contract, a brief explanation why I voted in the Second Division in favor of the petitioner company in the instant case, and not the respondent seamen, as I did in the Wallem case, is obviously called for. During our deliberations in the Division, it was made clear that in the instant case,' threat was employed by the seamen against the company or shipowners to obtain consent to the 50% raise of wages as proposed by the seamen upon being informed that they would touch on ITF-controlled ports. I joined my colleagues in the Second Division in concurring in the decision penned by Justice Barredo, now retired, in the belief that threat was indeed committed, constituting a just cause for termination of the services of the seamen with still nine months to go of their 12-month contract with the petitioner. As the facts are more thoroughly and accurately presented and discussed in the decision so brilliantly written by Justice Gutierrez, I am persuaded that on the basis of the ruling of the Wallem case, a mistake was committed in finding the existence of a just cause for the instant and unexpected termination of the services of the seamen. The facts of this case show that to the proposal of the seamen for a 50% increase, made

because they were informed that they would touch on ITF-controlled ports, the company countered with an offer of only 25% raised The proposal of 5% was much lower than the rates which the ITF would surely force upon the company When the company made a counter proposal of 25% raise the seamen accepted. The trip went on smoothly until upon arriving at a port which afforded haven and safety to the shipowner, the latter suddenly, and with imperious finality, terminated the services of the seamen and repatriated them to Manila. These are the simple facts that call for the application of the law, mainly the provisions of the Labor Code. That law is none other than what is indicated in how the Walem case was decided in vindication of how the Seamen were given a raw deal in being lulled into a false sense of security in their employment contract only to be rudely terminated and ordered repatriated. In the Wallem case, the seamen pressed their demand for the enforcement of a special agreement entered into by the shipowner or company with the ITF. For this act, their services were terminated and they were repatriated by their employer shipping company. What the First Division said in favor of the seamen, is in my opinion, the correct ruling which We should reaffirm in the instant case. Thus t.hqw Petitioner claims that the dismissal of private respondent was justified because the latter threatened the ship authorities in acceding to their demands, and this constitutes serious misconduct as contemplated by the Labor Code. This contention is not welltaken. But even en if there had been such a threat, respondents' behavior should not be censured because it is but natural for them to employ some means of pressing their demands on petitioner, who refused to abide with the terms of the Special Agreement, to honor and respect the same. They were only acting in the exercise of their rights, and to deprive them of their freedom of expression is contrary to law and public policy. There is no serious misconduct to speak of in the case at bar which would justify respondents' dismissal just because of their firmness in their demand for the fulfillment by petitioner of its obligation it entered into without any coercion, specially on the part of private respondents. (Emphasis supplied). This above ruling is the law on the matter and, in my opinion. controlling on the case at bar. Whatever policy may prove more beneficial to the cause of labor in general, as is sought to be offered as argument in support of the Second Division decision, is not a proper ground for making said policy prevail over the applicable law or jurisprudence, Questions of policy are better left to the Batasan Pambansa. We should confine ourselves to applying the law as it is. In so doing, We are not allowed to apply it to suit, or to respond to, the demands of what We may deem the better policy than what the law clearly intends. The policy is the law, and the law is the policy. We might be treading on forbidden ground to bend the law to what We perceive to be a desirable policy. Courts are called upon only to apply the law. Does the law permit the termination of the services of the seamen in violation of their contract except only upon a just cause? This is the only question to be answered in this case. The answer is given with eloquent persuasiveness in the decision in which I concur wholeheartedly. Separate Opinions DE CASTRO, J., concurring: Being the ponente of the Wallem case, upon whose ruling the decision of the Court en banc in this case is mainly made to rest, at least insofar as said Court now finds that the respondent seamen have not committed any misconduct which would constitute a just cause for the termination of their services just after three months of the 12-month term of their contract, a brief explanation why I voted in the Second Division in favor of the petitioner company in the instant case, and not the respondent seamen, as I did in the Wallem case, is obviously called for. During our deliberations in the Division, it was made clear that in the instant case,' threat was employed by the seamen against the company or shipowners to obtain consent to the 50% raise of wages as proposed by the seamen upon being informed that they

would touch on ITF-controlled ports. I joined my colleagues in the Second Division in concurring in the decision penned by Justice Barredo, now retired, in the belief that threat was indeed committed, constituting a just cause for termination of the services of the seamen with still nine months to go of their 12-month contract with the petitioner. As the facts are more thoroughly and accurately presented and discussed in the decision so brilliantly written by Justice Gutierrez, I am persuaded that on the basis of the ruling of the Wallem case, a mistake was committed in finding the existence of a just cause for the instant and unexpected termination of the services of the seamen. The facts of this case show that to the proposal of the seamen for a 50% increase, made because they were informed that they would touch on ITF-controlled ports, the company countered with an offer of only 25% raised The proposal of 5% was much lower than the rates which the ITF would surely force upon the company When the company made a counter proposal of 25% raise the seamen accepted. The trip went on smoothly until upon arriving at a port which afforded haven and safety to the shipowner, the latter suddenly, and with imperious finality, terminated the services of the seamen and repatriated them to Manila. These are the simple facts that call for the application of the law, mainly the provisions of the Labor Code. That law is none other than what is indicated in how the Walem case was decided in vindication of how the Seamen were given a raw deal in being lulled into a false sense of security in their employment contract only to be rudely terminated and ordered repatriated. In the Wallem case, the seamen pressed their demand for the enforcement of a special agreement entered into by the shipowner or company with the ITF. For this act, their services were terminated and they were repatriated by their employer shipping company. What the First Division said in favor of the seamen, is in my opinion, the correct ruling which We should reaffirm in the instant case. Thus t.hqw Petitioner claims that the dismissal of private respondent was justified because the latter threatened the ship authorities in acceding to their demands, and this constitutes serious misconduct as contemplated by the Labor Code. This contention is not welltaken. But even en if there had been such a threat, respondents' behavior should not be censured because it is but natural for them to employ some means of pressing their demands on petitioner, who refused to abide with the terms of the Special Agreement, to honor and respect the same. They were only acting in the exercise of their rights, and to deprive them of their freedom of expression is contrary to law and public policy. There is no serious misconduct to speak of in the case at bar which would justify respondents' dismissal just because of their firmness in their demand for the fulfillment by petitioner of its obligation it entered into without any coercion, specially on the part of private respondents. (Emphasis supplied). This above ruling is the law on the matter and, in my opinion. controlling on the case at bar. Whatever policy may prove more beneficial to the cause of labor in general, as is sought to be offered as argument in support of the Second Division decision, is not a proper ground for making said policy prevail over the applicable law or jurisprudence, Questions of policy are better left to the Batasan Pambansa. We should confine ourselves to applying the law as it is. In so doing, We are not allowed to apply it to suit, or to respond to, the demands of what We may deem the better policy than what the law clearly intends. The policy is the law, and the law is the policy. We might be treading on forbidden ground to bend the law to what We perceive to be a desirable policy. Courts are called upon only to apply the law. Does the law permit the termination of the services of the seamen in violation of their contract except only upon a just cause? This is the only question to be answered in this case. The answer is given with eloquent persuasiveness in the decision in which I concur wholeheartedly.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 81510 March 14, 1990 HORTENCIA SALAZAR, petitioner, vs. HON. TOMAS D. ACHACOSO, in his capacity as Administrator of the Philippine Overseas Employment Administration, and FERDIE MARQUEZ, respondents. Gutierrez & Alo Law Offices for petitioner.

SARMIENTO, J.: This concerns the validity of the power of the Secretary of Labor to issue warrants of arrest and seizure under Article 38 of the Labor Code, prohibiting illegal recruitment. The facts are as follows: xxx xxx xxx 1. On October 21, 1987, Rosalie Tesoro of 177 Tupaz Street, Leveriza, Pasay City, in a sworn statement filed with the Philippine Overseas Employment Administration (POEA for brevity) charged petitioner Hortencia Salazar, viz: 04. T: Ano ba ang dahilan at ikaw ngayon ay narito at nagbibigay ng salaysay. S: Upang ireklamo sa dahilan ang aking PECC Card ay ayaw ibigay sa akin ng dati kong manager. Horty Salazar 615 R.O. Santos, Mandaluyong, Mla. 05. T: Kailan at saan naganap and ginawang panloloko sa inireklamo mo? S. Sa bahay ni Horty Salazar. 06. T: Paano naman naganap ang pangyayari? S. Pagkagaling ko sa Japan ipinatawag niya ako. Kinuha ang PECC Card ko at sinabing hahanapan ako ng booking sa Japan. Mag 9 month's na ako sa Phils. ay hindi pa niya ako napa-alis. So lumipat ako ng ibang company pero ayaw niyang ibigay and PECC Card ko. 2. On November 3, 1987, public respondent Atty. Ferdinand Marquez to whom said complaint was assigned, sent to the petitioner the following telegram: YOU ARE HEREBY DIRECTED TO APPEAR BEFORE FERDIE MARQUEZ POEA ANTI ILLEGAL RECRUITMENT UNIT 6TH FLR. POEA BLDG. EDSA COR. ORTIGAS AVE. MANDALUYONG MM ON NOVEMBER 6, 1987 AT 10 AM RE CASE FILED AGAINST YOU. FAIL NOT UNDER PENALTY OF LAW. 4. On the same day, having ascertained that the petitioner had no license to operate a recruitment agency, public respondent Administrator Tomas D. Achacoso issued his challenged CLOSURE AND SEIZURE ORDER NO. 1205 which reads: iyo ng tao/mga taong

HORTY SALAZAR No. 615 R.O. Santos St. Mandaluyong, Metro Manila Pursuant to the powers vested in me under Presidential Decree No. 1920 and Executive Order No. 1022, I hereby order the CLOSURE of your recruitment agency being operated at No. 615 R.O. Santos St., Mandaluyong, Metro Manila and the seizure of the documents and paraphernalia being used or intended to be used as the means of committing illegal recruitment, it having verified that you have (1) No valid license or authority from the Department of Labor and Employment to recruit and deploy workers for overseas employment; (2) Committed/are committing acts prohibited under Article 34 of the New Labor Code in relation to Article 38 of the same code. This ORDER is without prejudice to your criminal prosecution under existing laws. Done in the City of Manila, this 3th day of November, 1987. 5. On January 26, 1988 POEA Director on Licensing and Regulation Atty. Estelita B. Espiritu issued an office order designating respondents Atty. Marquez, Atty. Jovencio Abara and Atty. Ernesto Vistro as members of a team tasked to implement Closure and Seizure Order No. 1205. Doing so, the group assisted by Mandaluyong policemen and mediamen Lito Castillo of the People's Journal and Ernie Baluyot of News Today proceeded to the residence of the petitioner at 615 R.O. Santos St., Mandaluyong, Metro Manila. There it was found that petitioner was operating Hannalie Dance Studio. Before entering the place, the team served said Closure and Seizure order on a certain Mrs. Flora Salazar who voluntarily allowed them entry into the premises. Mrs. Flora Salazar informed the team that Hannalie Dance Studio was accredited with Moreman Development (Phil.). However, when required to show credentials, she was unable to produce any. Inside the studio, the team chanced upon twelve talent performers practicing a dance number and saw about twenty more waiting outside, The team confiscated assorted costumes which were duly receipted for by Mrs. Asuncion Maguelan and witnessed by Mrs. Flora Salazar. 6. On January 28, 1988, petitioner filed with POEA the following letter: Gentlemen: On behalf of Ms. Horty Salazar of 615 R.O. Santos, Mandaluyong, Metro Manila, we respectfully request that the personal properties seized at her residence last January 26, 1988 be immediately returned on the ground that said seizure was contrary to law and against the will of the owner thereof. Among our reasons are the following: 1. Our client has not been given any prior notice or hearing, hence the Closure and Seizure Order No. 1205 dated November 3, 1987 violates "due process of law" guaranteed under Sec. 1, Art. III, of the Philippine Constitution. 2. Your acts also violate Sec. 2, Art. III of the Philippine Constitution which guarantees right of the people "to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose." 3. The premises invaded by your Mr. Ferdi Marquez and five (5) others (including 2 policemen) are the private residence of the Salazar family, and the entry, search as well as the seizure of the personal properties belonging to our client were without her consent and were done with unreasonable force and intimidation, together with grave abuse of the color of authority, and constitute robbery and violation of domicile under Arts. 293 and 128 of the Revised Penal Code. Unless said personal properties worth around TEN THOUSAND PESOS (P10,000.00) in all (and which were already due for shipment to Japan) are returned within twenty-four (24) hours from your receipt hereof, we shall feel free to take all legal action, civil and

criminal, to protect our client's interests. We trust that you will give due attention to these important matters. 7. On February 2, 1988, before POEA could answer the letter, petitioner filed the instant petition; on even date, POEA filed a criminal complaint against her with the Pasig Provincial Fiscal, docketed as IS-88-836. 1 On February 2, 1988, the petitioner filed this suit for prohibition. Although the acts sought to be barred are already fait accompli, thereby making prohibition too late, we consider the petition as one for certiorari in view of the grave public interest involved. The Court finds that a lone issue confronts it: May the Philippine Overseas Employment Administration (or the Secretary of Labor) validly issue warrants of search and seizure (or arrest) under Article 38 of the Labor Code? It is also an issue squarely raised by the petitioner for the Court's resolution. Under the new Constitution, which states: . . . 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. 2 it is only a judge who may issue warrants of search and arrest. declared that mayors may not exercise this power: xxx xxx xxx But it must be emphasized here and now that what has just been described is the state of the law as it was in September, 1985. The law has since been altered. No longer does the mayor have at this time the power to conduct preliminary investigations, much less issue orders of arrest. Section 143 of the Local Government Code, conferring this power on the mayor has been abrogated, rendered functus officio by the 1987 Constitution which took effect on February 2, 1987, the date of its ratification by the Filipino people. Section 2, Article III of the 1987 Constitution pertinently provides that "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 person or things to be seized." The constitutional proscription has thereby been manifested that thenceforth, the function of determining probable cause and issuing, on the basis thereof, warrants of arrest or search warrants, may be validly exercised only by judges, this being evidenced by the elimination in the present Constitution of the phrase, "such other responsible officer as may be authorized by law" found in the counterpart provision of said 1973 Constitution, who, aside from judges, might conduct preliminary investigations and issue warrants of arrest or search warrants. 4 Neither may it be done by a mere prosecuting body: We agree that the Presidential Anti-Dollar Salting Task Force exercises, or was meant to exercise, prosecutorial powers, and on that ground, it cannot be said to be a neutral and detached "judge" to determine the existence of probable cause for purposes of arrest or search. Unlike a magistrate, a prosecutor is naturally interested in the success of his case. Although his office "is to see that justice is done and not necessarily to secure the conviction of the person accused," he stands, invariably, as the accused's adversary and his accuser. To permit him to issue search warrants and indeed, warrants of arrest, is to make him both judge and jury in his own right, when he is neither. That makes, to our mind and to that extent, Presidential Decree No. 1936 as amended by Presidential Decree No. 2002, unconstitutional. 5 Section 38, paragraph (c), of the Labor Code, as now written, was entered as an
3

In one case, it was

amendment by Presidential Decrees Nos. 1920 and 2018 of the late President Ferdinand Marcos, to Presidential Decree No. 1693, in the exercise of his legislative powers under Amendment No. 6 of the 1973 Constitution. Under the latter, the then Minister of Labor merely exercised recommendatory powers: (c) The Minister of Labor or his duly authorized representative shall have the power to recommend the arrest and detention of any person engaged in illegal recruitment. 6 On May 1, 1984, Mr. Marcos promulgated Presidential Decree No. 1920, with the avowed purpose of giving more teeth to the campaign against illegal recruitment. The Decree gave the Minister of Labor arrest and closure powers: (b) The Minister of Labor and Employment shall have the power to cause the arrest and detention of such non-licensee or non-holder of authority if after proper investigation it is determined that his activities constitute a danger to national security and public order or will lead to further exploitation of job-seekers. The Minister shall order the closure of companies, establishment and entities found to be engaged in the recruitment of workers for overseas employment, without having been licensed or authorized to do so. 7 On January 26, 1986, he, Mr. Marcos, promulgated Presidential Decree No. 2018, giving the Labor Minister search and seizure powers as well: (c) The Minister of Labor and Employment or his duly authorized representatives shall have the power to cause the arrest and detention of such non-licensee or non-holder of authority if after investigation it is determined that his activities constitute a danger to national security and public order or will lead to further exploitation of job-seekers. The Minister shall order the search of the office or premises and seizure of documents, paraphernalia, properties and other implements used in illegal recruitment activities and the closure of companies, establishment and entities found to be engaged in the recruitment of workers for overseas employment, without having been licensed or authorized to do so. 8 The above has now been etched as Article 38, paragraph (c) of the Labor Code. The decrees in question, it is well to note, stand as the dying vestiges of authoritarian rule in its twilight moments. We reiterate that 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. To that extent, we declare Article 38, paragraph (c), of the Labor Code, unconstitutional and of no force and effect. The Solicitor General's reliance on the case of Morano v. Vivo 9 is not well-taken. Vivo involved a deportation case, governed by Section 69 of the defunct Revised Administrative Code and by Section 37 of the Immigration Law. We have ruled that in deportation cases, an arrest (of an undesirable alien) ordered by the President or his duly authorized representatives, in order to carry out a final decision of deportation is valid. 10 It is valid, however, because of the recognized supremacy of the Executive in matters involving foreign affairs. We have held: 11 xxx xxx xxx The State has the inherent power to deport undesirable aliens (Chuoco Tiaco vs. Forbes, 228 U.S. 549, 57 L. Ed. 960, 40 Phil. 1122, 1125). That power may be exercised by the Chief Executive "when he deems such action necessary for the peace and domestic tranquility of the nation." Justice Johnson's opinion is that when the Chief Executive finds that there are aliens whose continued presence in the country is injurious to the public interest, "he may, even in the absence of express law, deport them". (Forbes vs. Chuoco Tiaco and Crossfield, 16 Phil. 534, 568, 569; In re McCulloch Dick, 38 Phil. 41).

The right of a country to expel or deport aliens because their continued presence is detrimental to public welfare is absolute and unqualified (Tiu Chun Hai and Go Tam vs. Commissioner of Immigration and the Director of NBI, 104 Phil. 949, 956). 12 The power of the President to order the arrest of aliens for deportation is, obviously, exceptional. It (the power to order arrests) can not be made to extend to other cases, like the one at bar. Under the Constitution, it is the sole domain of the courts. Moreover, the search and seizure order in question, assuming, ex gratia argumenti, that it was validly issued, is clearly in the nature of a general warrant: Pursuant to the powers vested in me under Presidential Decree No. 1920 and Executive Order No. 1022, I hereby order the CLOSURE of your recruitment agency being operated at No. 615 R.O. Santos St., Mandaluyong, Metro Manila and the seizure of the documents and paraphernalia being used or intended to be used as the means of committing illegal recruitment, it having verified that you have (1) No valid license or authority from the Department of Labor and Employment to recruit and deploy workers for overseas employment; (2) Committed/are committing acts prohibited under Article 34 of the New Labor Code in relation to Article 38 of the same code. This ORDER is without prejudice to your criminal prosecution under existing laws. 13 We have held that a warrant must identify clearly the things to be seized, otherwise, it is null and void, thus: xxx xxx xxx Another factor which makes the search warrants under consideration constitutionally objectionable is that they are in the nature of general warrants. The search warrants describe the articles sought to be seized in this wise: 1) All printing equipment, paraphernalia, paper, ink, photo equipment, typewriters, cabinets, tables, communications/ recording equipment, tape recorders, dictaphone and the like used and/or connected in the printing of the "WE FORUM" newspaper and any and all documents/communications, letters and facsimile of prints related to the "WE FORUM" newspaper. 2) Subversive documents, pamphlets, leaflets, books, and other publications to promote the objectives and purposes of the subversive organizations known as Movement for Free Philippines, Light-a-Fire Movement and April 6 Movement; and 3) Motor vehicles used in the distribution/circulation of the "WE FORUM" and other subversive materials and propaganda, more particularly, 1) Toyota-Corolla, colored yellow with Plate No. NKA 892; 2) DATSUN, pick-up colored white with Plate No. NKV 969; 3) A delivery truck with Plate No. NBS 542; 4) TOYOTA-TAMARAW, colored white with Plate No. PBP 665; and 5) TOYOTA Hi-Lux, pick-up truck with Plate No. NGV 472 with marking "Bagong Silang." In Stanford v. State of Texas, the search warrant which authorized the search for "books, records, pamphlets, cards, receipts, lists, memoranda, pictures, recordings and other written instruments concerning the Communist Parties of Texas, and the operations of

the Community Party in Texas," was declared void by the U.S. Supreme Court for being too general. In like manner, directions to "seize any evidence in connection with the violation of SDC 13-3703 or otherwise" have been held too general, and that portion of a search warrant which authorized the seizure of any "paraphernalia which could be used to violate Sec. 54-197 of the Connecticut General Statutes (the statute dealing with the crime of conspiracy)" was held to be a general warrant, and therefore invalid. The description of the articles sought to be seized under the search warrants in question cannot be characterized differently. In the Stanford case, the U.S. Supreme court calls to mind a notable chapter in English history; the era of disaccord between the Tudor Government and the English Press, when "Officers of the Crown were given roving commissions to search where they pleased in order to suppress and destroy the literature of dissent both Catholic and Puritan." Reference herein to such historical episode would not be relevant for it is not the policy of our government to suppress any newspaper or publication that speaks with "the voice of non-conformity" but poses no clear and imminent danger to state security.
14

For the guidance of the bench and the bar, we reaffirm the following principles: 1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and no other, who may issue warrants of arrest and search: 2. The exception is in cases of deportation of illegal and undesirable aliens, whom the President or the Commissioner of Immigration may order arrested, following a final order of deportation, for the purpose of deportation. WHEREFORE, the petition is GRANTED. Article 38, paragraph (c) of the Labor Code is declared UNCONSTITUTIONAL and null and void. The respondents are ORDERED to return all materials seized as a result of the implementation of Search and Seizure Order No. 1205. No costs. SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur.

Footnotes 1 Rollo, 19-24; emphases in the original. 2 CONST., art. III, sec. 2. 3 See Ponsica v. Ignalaga, No. 72301, July 31, 1987, 152 SCRA 647; Presidential AntiDollar Salting Task Force v. Court of Appeals, G.R. No. 83578, March 16, 1989. 4 Ponsica, supra, 662-663. 5 Presidential Anti-Dollar Salting Task Force, supra, 21. 6 Pres. Decree No. 1693, "FURTHER AMENDING ARTICLE 38 OF THE LABOR CODE BY MAKING ILLEGAL RECRUITMENT A CRIME OF ECONOMIC SABOTAGE." 7 Supra, sec. 1.

8 Pres. Decree No. 2018, "FURTHER AMENDING ARTICLES 38 AND 39 OF THE LABOR CODE BY MAKING ILLEGAL RECRUITMENT A CRIME OF ECONOMIC SABOTAGE AND PUNISHABLE WITH IMPRISONMENT." 9 No. L-22196, June 30, 1967, 20 SCRA 562. 10 Qua Chee Gan v. Deportation Board, No. L-10280, September 30, 1963, 9 SCRA 27; Vivo v. Montesa, No. L-24576, 24 SCRA 155. 11 Go Tek v. Deportation Board, No. L-23846, September 9, 1977, 79 SCRA 17. 12 Supra, 21-22. 13 Rollo, id., 15. 14 Burgos, Sr. v. Chief of Staff, AFP No. 64261, December 26, 1984, 133 SCRA 800, 814-816.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 90017-18 March 1, 1994 PEOPLE OF THE PHILIPPINES, plaintiff-appellee, ABANES, accused-appellant. The Solicitor General for plaintiff-appellee. Mariano R. de Joya, Jr. for accused-appellant. BELLOSILLO, J.: ELENA VERANO Y ABANES was convicted 1 of the crimes of illegal recruitment in large scale 2 and estafa 3 in two (2) separate informations 4 filed before the Regional Trial Court of Manila and sentenced thus (a) In Crim. Case No. 88-61017, this court finds the accused guilty beyond reasonable doubt of the crime of illegal recruitment in large scale as defined under par. (b) of Art. 38 in relation to Art. 39 of the New Labor Code of the Philippines; and this court hereby sentences the said accused to suffer the penalty of life imprisonment and to pay a fine of P100,000.00; and to pay to the offended parties, Arturo Espiel and Alfonso Abanes, the sums of P10,000.00, and P7,150.00 respectively, plus interest thereon at the legal rate of 12% per annum from the date of filing of the Information on February 22, 1988. The damages due to the third offended party, Jose Daep, is taken care of in the estafa case, Crim. Case No. 88-61018. (b) In Crim. Case No. 88-6108, the court finds the accused guilty beyond reasonable doubt of the crime of estafa; and this court hereby sentences the accused to suffer an indeterminate sentence of SIX (6) YEARS of prision correccional, maximum period, as minimum penalty, to NINE (9) YEARS of prision mayor medium period, as maximum penalty, and to pay to Jose Daep, the sole complaining offended party in this case, the sum of P15,000.00 as actual damages plus interest thereon at the legal rate of P12% per annum from the date of filing of the Information on February 22, 1988. As found by the trial court, sometime in October 1987, accused-appellant Elena Verano y Abanes persuaded the three (3) private complainants, Jose Daep, Arturo Espiel and Alfonso Abanes to accept overseas employment as salesmen in Bahrain. In consideration thereof, Alfonso, Arturo and Jose were required to pay P10,000.00 each to cover the expenses for the processing of their travel papers, i.e., passports, visas and the cost of their plane tickets, medical examination and recruitment fees. Jose paid the total amount of P15,000.00, while Arturo and Alfonso paid P10,000.00 and P7,150.00 respectively. They were issued separate receipts by accused-appellant. 5 To further convince them of her capacity to send them abroad, accused-appellant even signed a contract of employment with her as employer and Arturo as employee. 6 Assured that they could depart for Bahrain on 27 December 1987, Alfonso, Jose and Arturo went to the Ninoy Aquino International Airport and waited for accused-appellant who was supposed to meet them there to deliver their passports, visas and plane tickets. When she failed to show up, the three (3) recruits proceeded to her residence and there waited for her until she returned four (4) days later. By way of explanation, they were told that their passports and visas were still being processed but were promised they were promised they could leave for their overseas jobs on 15 January 1988. Again, the three (3) hopefuls proceeded to the NAIA but, like before, accused-appellant vs. ELENA VERANO Y

failed to show up. This time they were told that they could definitely leave on 13 February 1988. However, on the appointed date and time, accused-appellant failed to show up for the third time. Jose, Arturo and Alfonso then went to the Western Police District Headquarters to lodge their complaint. Accused-appellant was arrested on the same day and charged with illegal recruitment committed in large scale, and estafa, with Jose Daep as the lone complainant in the latter case. After trial, Elena Verano y Abanes was found guilty in both cases. In her brief filed by the Public Attorney's office, 7 accused-appellant contends that the trial court gravely erred when it imposed the penalty of life imprisonment for the large scale illegal recruitment for the reason that it was too harsh in the light of her good faith in just wanting to help the private complainants secure employment abroad. However, in her Supplemental Brief and Reply 8 filed by her counsel de parte, Atty. Mariano R. de Joya, Jr., accused-appellant changed her position. 9 Instead of pursuing her attack on the "harshness" of the penalty imposed, she now disputes the findings of fact. Thus she argues that, contrary to the trial court's findings, she never represented herself as having the capacity to contract workers for overseas employment; that she merely introduced private complainants Jose, Arturo and Aldonso to a certain Juliet Majestrado who was the one who claimed to have such capacity; and, with respect to her conviction for estafa, she argues that although she herself issued the receipts marked Exhs. "C," "E," "E-1," "E-2" and "H," she never profited from the money paid as it was all given to and personally received by Juliet Majestrado. Appellant's argument is obviously without merit in the light of the well-settled doctrine that findings of fact made by the trial court are final and conclusive and cannot be reviewed on appeal. 10 Except for a few recognized instances, 11 which do not apply in the case at bench, such findings are bindings and will not be reviewed by us for this Court is not a trier of facts. The issues raised by appellant are purely and undisputably factual, as she herself admits. 12 Considering that none of the exceptions apply, as aforesaid, we would not be justified in reversing the judgment of conviction. Hence, the appeal must fail. WHEREFORE, the Decision of the court a quo convicting accused-appellant ELENA VERANO Y ABANES of the crimes of illegal recruitment committed in large scale (Crim. Case No. 88-61017) and estafa (Crim. Case No. 88-61018) is AFFIRMED in toto. Costs against accused-appellant. SO ORDERED. Cruz, Davide, Jr., Quiason and Kapunan, JJ., concur. #Footnotes 1 Decision penned by Judge Sabino R. de Leon, Jr., Regional Trial Court, Br. 28, Manila; Rollo, pp. 26-36. 2 Art. 38. Illegal Recruitment. (a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority shall be deemed illegal and punishable under Article 39 of this Code. The Ministry of Labor and Employment or any law enforcement officer may initiate complaints under this Article. (b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against three

(3) or more persons individually or as a group . . . . Art. 39. Penalties. (a) The penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P100,000) shall be imposed if illegal recruitment constitutes economic sabotage . . . . 3 By using fictitious name, or falsely pretending to possess power, influence, qualification, property, credit, agency, business or imaginary transactions, or by means of other similar deceits (Art. 315, par. [a], Revised Penal Code). 4 Docketed a Crim. Cases Nos. 88-61017 and 88-61018, respectively. 5 Exhs. "C," "E," "E-1," E-2" and "H." 6 Exh. "G." 7 Rollo, p. 46. 8 Id., pp. 78-87. 9 Supplemental Brief and Reply, p. 1; Rollo, p. 78. 10 Surban vs. Court of Appeals, G.R. No. 98457, 1 March 1993, 219 SCRA 309, 312; Donato vs. Court of Appeals, G.R. No. 102603, 18 January 1993, 217 SCRA 196, 203; Paulmitan vs. Court of Appeals, G.R. No. 61584, 25 November 1992, 215 SCRA 866, 875; People vs. Bechayda, G.R. No. 72001, 7 August 1992, 212 SCRA 336, 348; People vs. Pajares, G.R. No. 96444, 23 June 1992, 210 SCRA 237, 244; People vs. Diga, G.R. No. 94546, 24 April 1992, 208 SCRA 306, 315; De Ocsio vs. Court of Appeals, G.R. No. 44237, 28 February 1989, 170 SCRA 729, 732; People vs. Raquinio, No. L-16488, 12 August 1966, 17 SCRA 914, 917-918. 11 (1) When the conclusion is a finding grounded entirely on speculations; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) where there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; and, (5) when the court, in making its findings, went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee (People vs. Rivera, G.R. No. 86491, 11 December 1992, 216 SCRA 363, 374). 12 Supplemental Brief and Reply, p. 2; Rollo, p. 79.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 132376 April 11, 2002 vs. SAMINA ANGELES Y

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, CALMA, accused-appellant. YNARES-SANTIAGO, J.:

Accused-appellant Samina Angeles y Calma was charged with four (4) counts of estafa and one (1) count of illegal recruitment in the following informations:1 Criminal Case No. 94-140585 (Estafa) That on or about September 8, 1994 in the City of Manila, Philippines, the said accused did then and there willfully, unlawfully and feloniously defraud MARIA TOLOSA DE SARDEA Y TABLADA in the following manner to wit: the said accused, by means of false manifestations and fraudulent representations which she made to said Maria Tolosa de Sardea y Tablada to the effect that she had the power and capacity to recruit and employ her as domestic helper in Paris, France, and could facilitate the processing of the pertinent papers if given the necessary amount to meet the requirements thereof, and by means of other similar deceits, induced and succeeded in inducing said Maria Tolosa de Sardea y Tablada to give and deliver, as in fact she gave and delivered to said accused the amount of P107,000.00 on the strength of said manifestations and representations, accused well knowing that the same were false and fraudulent and were made solely, to obtain, as in fact she did obtain the amount of P107,000.00 which amount once in her possession, with intent to defraud, willfully, unlawfully and feloniously misappropriated, misapplied and converted the same to her own personal use and benefit to the damage and prejudice of said Maria Tolosa de Sardea y Tablada in the aforesaid sum of P107,000.00 Philippine Currency. Criminal Case No. 94-140486 (Estafa) That on or about September 8, 1994 in the City of Manila, Philippines, the said accused did then and there willfully, unlawfully and feloniously defraud MARCELIANO T. TOLOSA in the following manner, to wit: the said accused, by means of false manifestations and fraudulent representations which she made to said MARCELIANO T. TOLOSA to the effect that she had the power and capacity to recruit and employ him as contract worker in Paris, France and could facilitate the processing of the pertinent papers if given the necessary amount to meet the requirements thereof, and by means of other similar deceits, induced and succeeded in inducing said Marceliano T. Tolosa accused well knowing that the same were false and fraudulent and were made solely, to obtain, as in fact she did obtain the amount of P190,000.00 which amount once in their possession, with intent to defraud, willfully, unlawfully and feloniously misappropriated, misapplied and converted the same to her own personal use and benefit, to the damage and prejudice of said Marceliano T. Tolosa in the aforesaid sum of P190,000.00, Philippine Currency. Criminal Case No. 94-140487 (Estafa) That on or about September 9, 1994 in the City of Manila, Philippines, the said accused did then and there willfully, unlawfully and feloniously defraud PRECILA P. OLPINDO in the following manner to wit: the said accused, by means of false manifestations and fraudulent representations which she made to said Precila P. Olpindo to the effect that she had the power and capacity to recruit and employ her as contract worker in Canada

and could facilitate the processing of the pertinent papers if given the necessary amount to meet the requirements thereof, and by means of other similar deceits, induced and succeeded in inducing said Precila P. Olpindo to give and deliver, as in fact she delivered to said accused the amount of $2,550.00 on the strength of said manifestations and representations, said Precila P. Olpindo accused well knowing that the same were false and fraudulent and were made solely, to obtain, as in fact she did obtain the amount of $2,550.00 which amount once in her possession, with intent to defraud, willfully, unlawfully and feloniously misappropriated, misapplied and converted the same to her own personal use and benefit, to the damage and prejudice of said Precila P. Olpindo in the aforesaid sum of $2,550.00 or its equivalent in Philippine Currency of P61,200.00. Criminal Case No. 94-140488 (Estafa) That on or about the first week of September 1994 in the City of Manila, Philippines, the said accused, did then and there willfully, unlawfully and feloniously defraud VILMA S. BRINA in the following manner to wit: the said accused, by means of false manifestations and fraudulent representations which she made to said Vilma S. Brina to the effect that she had the power and capacity to recruit and employ her as contract worker in Canada and could facilitate the processing of the pertinent papers if given the necessary amount to meet the requirements thereof, and by means of other similar deceits, induced and succeeded in inducing said Vilma S. Brina to give and deliver, as in fact she gave and delivered to said accused the amount of $2,550.00 on the strength of said manifestations and representations, accused well knowing that the same were false and fraudulent and were made solely, to obtain, as in fact she did obtain the amount of $2,550.00 which amount once in her possession, with intent to defraud, willfully, unlawfully and feloniously misappropriated, misapplied and converted the same to her own personal use and benefit, to the damage and prejudice of said Vilma S. Brina in the aforesaid sum of $2,550.00 or its equivalent in Philippine Currency of P61,200.00. Criminal Case No. 94-140489 (Illegal Recruitment) The undersigned accuses SAMINA ANGELES y CALMA of violation of Art. 38 (a) Pres. Decree No. 1412 amending certain provisions of Book 1, Pres. Decree No. 442 otherwise known as the New Labor Code of the Philippines in relation to Article 13 (b) and (c) of said Code, as further amended in a large scale, as follows: That sometime during the month of September 1994 in the City of Manila, Philippines, the said accused, representing herself to have the capacity to contract, enlist and transport Filipino workers for employment abroad, did then and there willfully and unlawfully for a fee, recruit and promise employment/job placement abroad to the following persons: 1. Marceliano T. Tolosa 2. Precila P. Olpindo 3. Vilma S. Brina 4. Maria Tolosa de Sardea y Tablada Without first having secured the required license or authority from the Department of Labor and Employment. The five (5) cases were consolidated and tried jointly by the Regional Trial Court of Manila, Branch 50. Maria Tolosa Sardea was working in Saudi Arabia when she received a call from her sister, Priscilla Agoncillo, who was in Paris, France. Priscilla advised Maria to return to the Philippines and await the arrival of her friend, accused-appellant Samina Angeles, who will assist in processing her travel and employment documents to Paris, France. Heeding her sisters advice, Maria immediately returned to the Philippines. Marceliano Tolosa who at that time was in the Philippines likewise received instructions from his sister Priscilla to meet accused-appellant who will also assist in the processing of his documents for Paris, France.

Maria and Marceliano eventually met accused-appellant in September 1994 at Expert Travel Agency on Mabini Street, Manila. During their meeting, accused-appellant asked if they had the money required for the processing of their documents. On September 8, 1994, Maria gave P107,000.00 to accused-appellant at Expert Travel Agency. Subsequently, she gave another P46,000.00 and US$1,500.00 as additional payments to accused-appellant. Marceliano, on the other hand, initially gave P100,000.00 to accused-appellant but on September 28, 1994, he gave an additional P46,000.00 and US$1,500.00 to accusedappellant at the United Coconut Planters Bank in Makati. Analyn Olpindo met accused-appellant in Belgium. At that time, Analyn was working in Canada but she went to Belgium to visit her in-laws. After meeting accused-appellant, Analyn Olpindo called up her sister, Precila Olpindo, in the Philippines and told her to meet accused-appellant upon the latters arrival in the Philippines because accusedappellant can help process her documents for employment in Canada. Precila Olpindo eventually met accused-appellant at the Expert Travel Agency on September 7, 1994. Accused-appellant asked for the amount of $4,500.00, but Precila was only able to give $2,500.00. No evidence was adduced in relation to the complaint of Vilma Brina since she did not testify in court. Accused-appellant told Precila Olpindo and Vilma Brina that it was easier to complete the processing of their papers if they start from Jakarta, Indonesia rather than from Manila. Thus, on September 23, 1994, Precila Olpindo, Vilma Brina and accusedappellant flew to Jakarta, Indonesia. However, accused-appellant returned to the Philippines after two days, leaving behind Precila and Vilma. They waited for accusedappellant in Jakarta but the latter never returned. Precila and Vilma eventually came home to the Philippines on November 25, 1994. When she arrived in the Philippines, Precila tried to get in touch with accused-appellant at the Expert Travel Agency, but she could not reach her. Meanwhile, Maria and Marceliano Tolosa also began looking for accused-appellant after she disappeared with their money. Elisa Campanianos of the Philippine Overseas Employment Agency presented a certification to the effect that accused-appellant was not duly licensed to recruit workers here and abroad. In her defense, accused-appellant averred that, contrary to the prosecutions allegations, she never represented to the complainants that she can provide them with work abroad. She insisted that she was a marketing consultant and an international trade fair organizer. In June 1994, she went to Paris, France to organize a trade fair. There she met Priscilla Agoncillo, a domestic helper, and they became friends. Priscilla asked her to assist her siblings, Maria and Marceliano, particularly in the processing of their travel documents for France. Accused-appellant told Priscilla that she can only help in the processing of travel documents and nothing more. It was Priscilla who promised employment to Maria and Marceliano. She received money from complainants not in the form of placement fees but for the cost of tickets, hotel accommodations and other travel requirements. According to accused-appellant, she met Analyn Olpindo in Belgium while she was organizing a trade fair. They also became friends and it was Analyn who asked her to help Precila. Just like in the case of Maria and Marceliano, accused-appellant explained that her assistance shall only entail the processing of Precilas travel documents to Canada. After trial on the merits, the trial court found accused-appellant guilty of illegal recruitment and four (4) counts of estafa and correspondingly sentenced her as follows:

WHEREFORE, in view of the aforementioned premises the accused SAMINA ANGELES is hereby declared: In Criminal Case No. 94-140489 for the crime of Illegal Recruitment, GUILTY (Art. 38 Labor Code) and is hereby sentenced to suffer the penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P100,000.00). In Criminal Case No. 94-140485 for the crime of Estafa the accused is hereby declared GUILTY and is hereby sentenced to suffer the penalty of from twelve (12) years and one (1) day to twenty (20) years. In addition the accused is ordered to reimburse the amount of One hundred seven thousand pesos (P107,000.00) to complainant Maria Tolosa de Sardea. With costs. In Criminal Case No. 94-140486 for the crime of Estafa the accused is hereby declared GUILTY and is hereby sentenced to suffer the penalty of from twelve (12) years and one (1) day to twenty (20) years. In addition the accused is ordered to reimburse the amount of One hundred ninety thousand pesos (P190,000.00) to complainant Marceliano T. Tolosa. With costs. In Criminal Case No. 94-140487 for the crime of Estafa the accused is hereby declared GUILTY and is hereby sentenced to suffer the penalty of from twelve (12) years and one (1) day to twenty (20) years. In addition the accused is ordered to reimburse the amount of Two thousand five hundred fifty dollars (US$2,550.00) or its equivalent in Philippine currency of Sixty one thousand two hundred pesos (P61,200.00), to complainant Precila P. Olpindo. With Costs. In Criminal Case No. 94-140488 for the crime of Estafa the accused is hereby declared GUILTY and is hereby sentenced to suffer the penalty of from twelve (12) years and one (1) day to twenty (20) years. In addition the accused is ordered to reimburse the amount of Two thousand five hundred fifty dollars (US$2,550.00) or its equivalent in Philippine Currency of Sixty one thousand two hundred pesos (P61,200.00) to complainant Vilma S. Brina. With costs.2 Accused-appellant is now before us on appeal, arguing that the prosecution failed to prove her guilt for estafa and illegal recruitment by proof beyond reasonable doubt. Accused-appellant points out that not one of the complainants testified on what kind of jobs were promised to them, how much they would receive as salaries, the length of their employment and even the names of their employers, which are basic subjects a prospective employee would first determine. In sum, accused-appellant posits that the prosecution did not present a single evidence to prove that she promised or offered any of the complainants jobs abroad. Illegal recruitment is committed when two (2) elements concur: 1) that the offender has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and 2) that the offender undertakes either any activity within the meaning of recruitment and placement defined under Article 13(b), or any prohibited practices enumerated under Article 34.3 Article 13(b), of the Labor Code provides, thus: (b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment locally or abroad, whether for profit or not: Provided, that any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. To prove illegal recruitment, it must be shown that the accused-appellant gave complainants the distinct impression that he had the power or ability to send complainants abroad for work such that the latter were convinced to part with their

money in order to be employed.4 To be engaged in the practice of recruitment and placement, it is plain that there must at least be a promise or offer of an employment from the person posing as a recruiter whether locally or abroad. In the case at bar, accused-appellant alleges that she never promised nor offered any job to the complainants. We agree. A perusal of the records reveals that not one of the complainants testified that accusedappellant lured them to part with their hard-earned money with promises of jobs abroad. On the contrary, they were all consistent in saying that their relatives abroad were the ones who contacted them and urged them to meet accused-appellant who would assist them in processing their travel documents. Accused-appellant did not have to make promises of employment abroad as these were already done by complainants relatives. Thus, in the cross-examination of Maria Tolosa de Sardena: Atty. Dinglasan: Q: And you would likewise agree that Priscilla informed you that she can find an employment for you once you entered Paris, is that correct? A: Yes, because according to her that is what Samina Angeles said to her.

Q: But during that time you would agree that you do not know personally or met in person Samina Angeles? A: Not yet sir.

Q: In fact, even when you arrived in the Philippines, and actually met in person Samina Angeles, you did not know who is Samina Angeles and what her business was then that time? A: I recognized because my sister sent me a picture of Samina Angeles.

Q: So, it is clear that when you met Samina Angeles sometime on September 8, 1994, you were already decided to go to Paris because you were then relying on the instruction from the advice of Priscilla? A: Yes, sir.

Q: And that was the reason why you even terminated your employment contract in Saudi? A: Yes, sir.5

Precila Olpindo, on cross-examination, admitted thus: Q: You would like to confirm that before you and Samina met in the Philippines sometime in September of 1995, you were already decided to leave for Canada as per advice of your sister? A: Yes, sir.

Q: And you likewise agree madam witness that even before you met the accused sometime in September of 1995, you were already directed and informed by your sister Ana as to how much and she will pay the accused Samina for the facilitation of your travel in going to Canada, is that correct? A: Yes, sir.6

In the cross-examination of Marceliano Tolosa, thus: Q: A: Q: A: Q: A: Now, would you agree that your sister is working in Paris? Yes, sir. And for how many years working in Paris? Almost 5 years. And how much was she earning or receiving in Paris, France? P20,000.00 or more, sir.

Q: And it was for this reason she advised your sister then in Saudi Arabia and you to also go to Paris because she will be receiving more in Paris, correct? A: She said when we follow to her office, sir.

Q: So what your sister told you if youre also interested to go to Paris you can avail of the help of Samina Angeles, so you can also leave for Paris and join her, is that correct? A: Yes, sir.

Q: And that was the reason why your sister wrote you a letter and gave instruction to go to accused sometime on September, 1994, is that correct? A: Yes, sir.

Q: Now you would agree with me Mr. Witness prior to that date September 8, 1994 you dont know personally the person of Samina Angeles and do not know anything about the nature of her business or personal circumstances, is that correct? A: Yes, sir.7

Plainly, there is no testimony that accused-appellant offered complainants jobs abroad. Hence, accused-appellant Samina Angeles cannot be lawfully convicted of illegal recruitment. Anent the four charges of estafa, Samina Angeles argues that the element of deceit consisting in the false statement or fraudulent representation of the accused made prior to or simultaneously with the delivery of the sums of money is lacking in the instant case. She claims that she never deceived complainants into believing that she had the authority and capability to send them abroad for employment. We are not persuaded. Under Article 315, paragraph 2(a) of the Revised Penal Code, the elements of estafa are: (1) the accused has defrauded another by abuse of confidence or by means of deceit and (2) damage or prejudice capable of pecuniary estimation is caused to the offended party or third person. Clearly, these elements are present in this case.8 Although Samina Angeles did not deceive complainants into believing that she could find employment for them abroad, nonetheless, she made them believe that she was processing their travel documents for France and Canada. They parted with their money believing that Samina Angeles would use it to pay for their plane tickets, hotel accommodations and other travel requirements. Upon receiving various amounts from complainants, Samina Angeles used it for other purposes and then conveniently disappeared.

Complainants trusted Samina Angeles because she was referred to them by their own relatives. She abused their confidence when she led them to believe that she can process their travel documents abroad, thus inducing them to part with their money. When they demanded from Samina their travel documents, she failed to produce them. Likewise, she failed to return the amounts entrusted to her. Clearly, Samina Angeles defrauded complainants by falsely pretending to possess the power and capacity to process their travel documents. Article 315 of the Revised Penal Code imposes the penalty of prision correccional in its maximum period to prision mayor in its minimum period, if the amount of the fraud is over P12,000.00 but does not exceed P22,000.00; if the amount exceeds P22,000.00, the penalty provided shall be imposed in its maximum period, adding one year for each additional P10,000.00. However, the total penalty which may be imposed shall not exceed twenty years.9 In People v. Ordono,10 it was held: Under the Indeterminate Sentence Law, the maximum term of the penalty shall be "that which, in view of the attending circumstances, could be properly imposed" under the Revised Penal Code, and the minimum shall be "within the range of the penalty next lower to that prescribed for the offense." The penalty next lower should be based on the penalty prescribed by the Code for the offense, without first considering any modifying circumstance attendant to the commission of the crime. The determination of the minimum penalty is left by law to the sound discretion of the court and it can be anywhere within the range of the penalty next lower without any reference to the periods into which it might be subdivided. The modifying circumstances are considered only in the imposition of the maximum term of the indeterminate sentence. Thus, in Criminal Case No. 94-140485, Maria Tolosa testified that she gave P107,000.00, P46,000.00 and US$1,500.00 to Samina Angeles. The Information, however, alleged that Maria gave only P107,000.00. Samina Angeles could therefore be held accountable for only that amount. In Criminal Case No. 94-140486, Marceliano testified that he gave P100,000.00, P46,000.00 and US$1,500.00 to Samina Angeles. The Information however alleged that Marceliano gave only a total of P190,000.00; hence that is the only amount that Samina Angeles could be held accountable for. In Criminal Case No. 94-140487, Precila testified that she gave US$2,550.00 to Samina Angeles. The Information alleged that the equivalent amount thereof in Philippine Currency is P61,200.00. Samina Angeles is therefore criminally liable for P61,200.00.Complainant Vilma Brina did not appear in court to testify. Thus, the damage in the amount of $2,550.00 alleged in Criminal Case No. 94-140488 was not proved. WHEREFORE, in view of the foregoing, the appealed Decision is MODIFIED as follows: (1) In Criminal Case No. 94-140485, accused-appellant Samina Angeles is found GUILTY beyond reasonable doubt of the crime of Estafa and sentenced to suffer a prison term of four (4) years and two (2) months of prision correccional, as minimum, to sixteen (16) years of reclusion temporal, as maximum, and is ORDERED to indemnify Maria Sardea the amount of P107,000.00. (2) In Criminal Case No. 94-140486, accused-appellant Samina Angeles is found GUILTY beyond reasonable doubt of the crime of Estafa and sentenced to suffer a prison term of four (4) years and two (2) months of prision correccional, as minimum, to twenty (20) years of reclusion temporal, as maximum, and is ORDERED to indemnify Marceliano Tolosa the amount of P190,000.00. (3) In Criminal Case No. 94-140487, accused-appellant Samina Angeles is found GUILTY beyond reasonable doubt of the crime of Estafa and sentenced to suffer a

prision term of four (4) years and two (2) months of prision correccional, as minimum, to eleven (11) years of prision mayor, as maximum, and is ORDERED to indemnify Precila Olpindo the amount of P61,200.00. (4) In Criminal Case No. 94-140488 for Estafa, accused-appellant Samina Angeles is ACQUITTED for failure of the prosecution to prove her guilt beyond reasonable doubt. (5) In Criminal Case No. 94-140489 for Illegal Recruitment, accused-appellant Samina Angeles is ACQUITTED for failure of the prosecution to prove her guilt beyond reasonable doubt. SO ORDERED. Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Austria-Martinez, JJ., concur. Footnotes
1

Records, pp. 24-30. Penned by Judge Urbano C. Victorio Sr. People v. Saley, 291 SCRA 715 [1998]. People v. Ong, 322 SCRA 38 [2000]. TSN, June 25, 1995, pp. 21-22. TSN, July 27, 1995, p. 3. TSN, September 5, 1995, pp. 20-21. People v. Mercado, 304 SCRA 504 [1999]. People v. Ordono, 335 SCRA 331 [2000] Ibid., citing People v. Gabres, 267 SCRA 581 [1997].

10

Republic of the Philippines SUPREME COURTManila THIRD DIVISION G.R. No. 93666 April 22, 1991 GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners, vs. HON. RUBEN D. TORRES, in his capacity as Secretary of Labor and Employment, HON. BIENVENIDO E. LAGUESMA, in his capacity as Acting Secretary of Labor and Employment, and BASKETBALL COACHES ASSOCIATION OF THE PHILIPPINES, respondents. Sobrevinas, Diaz, Hayudini & Bodegon Law Office for petitioners. Rodrigo, Cuevas & De Borja for respondent BCAP. RESOLUTION FELICIANO, J.: On 1 May 1989, the National Capital Region of the Department of Labor and Employment issued Alien Employment Permit No. M-0689-3-535 in favor of petitioner Earl Timothy Cone, a United States citizen, as sports consultant and assistant coach for petitioner General Milling Corporation ("GMC"). On 27 December 1989, petitioners GMC and Cone entered into a contract of employment whereby the latter undertook to coach GMC's basketball team. On 15 January 1990, the Board of Special Inquiry of the Commission on Immigration and Deportation approved petitioner Cone's application for a change of admission status from temporary visitor to pre-arranged employee. On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien employment permit. GMC also requested that it be allowed to employ Cone as fullfledged coach. The DOLE Regional Director, Luna Piezas, granted the request on 15 February 1990. On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25 December 1990, was issued. Private respondent Basketball Coaches Association of the Philippines ("BCAP") appealed the issuance of said alien employment permit to the respondent Secretary of Labor who, on 23 April 1990, issued a decision ordering cancellation of petitioner Cone's employment permit on the ground that there was no showing that there is no person in the Philippines who is competent, able and willing to perform the services required nor that the hiring of petitioner Cone would redound to the national interest. Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental Motions for Reconsideration but said Motions were denied by Acting Secretary of Labor Bienvenido E. Laguesma in an Order dated 8 June 1990. Petitioners are now before the Court on a Petition for Certiorari, dated 14 June 1990, alleging that: 1. respondent Secretary of Labor gravely abused his discretion when he revoked petitioner Cone's alien employment permit; and 2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor Code is

null and void as it is in violation of the enabling law as the Labor Code does not empower respondent Secretary to determine if the employment of an alien would redound to national interest. Deliberating on the present Petition for Certiorari, the Court considers that petitioners have failed to show any grave abuse of discretion or any act without or in excess of jurisdiction on the part of respondent Secretary of Labor in rendering his decision, dated 23 April 1990, revoking petitioner Cone's Alien Employment Permit. The alleged failure to notify petitioners of the appeal filed by private respondent BCAP was cured when petitioners were allowed to file their Motion for Reconsideration before respondent Secretary of Labor. 1 Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative has no legal basis at all. Under Article 40 of the Labor Code, an employer seeking employment of an alien must first obtain an employment permit from the Department of Labor. Petitioner GMC's right to choose whom to employ is, of course, limited by the statutory requirement of an alien employment permit. Petitioners will not find solace in the equal protection clause of the Constitution. As pointed out by the Solicitor-General, no comparison can be made between petitioner Cone and Mr. Norman Black as the latter is "a long time resident of the country," and thus, not subject to the provisions of Article 40 of the Labor Code which apply only to "non-resident aliens." In any case, the term "non-resident alien" and its obverse "resident alien," here must be given their technical connotation under our law on immigration. Neither can petitioners validly claim that implementation of respondent Secretary's decision would amount to an impairment of the obligations of contracts. The provisions of the Labor Code and its Implementing Rules and Regulations requiring alien employment permits were in existence long before petitioners entered into their contract of employment. It is firmly settled that provisions of applicable laws, especially provisions relating to matters affected with public policy, are deemed written into contracts. 2 Private parties cannot constitutionally contract away the otherwise applicable provisions of law. Petitioners' contention that respondent Secretary of Labor should have deferred to the findings of Commission on Immigration and Deportation as to the necessity of employing petitioner Cone, is, again, bereft of legal basis. The Labor Code itself specifically empowers respondent Secretary to make a determination as to the availability of the services of a "person in the Philippines who is competent, able and willing at the time of application to perform the services for which an alien is desired." 3 In short, the Department of Labor is the agency vested with jurisdiction to determine the question of availability of local workers. The constitutional validity of legal provisions granting such jurisdiction and authority and requiring proof of non-availability of local nationals able to carry out the duties of the position involved, cannot be seriously questioned. Petitioners apparently also question the validity of the Implementing Rules and Regulations, specifically Section 6 (c), Rule XIV, Book I of the Implementing Rules, as imposing a condition not found in the Labor Code itself. Section 6 (c), Rule XIV, Book I of the Implementing Rules, provides as follows: Section 6. Issuance of Employment Permit the Secretary of Labor may issue an employment permit to the applicant based on: a) Compliance by the applicant and his employer with the requirements of Section 2 hereof; b) Report of the Bureau Director as to the availability or non-availability of any person in the Philippines who is competent and willing to do the job for which the services of the applicant are desired. (c) His assessment as to whether or not the employment of the applicant will redound to

the national interest; (d) Admissibility of the alien as certified by the Commission on Immigration and Deportation; (e) The recommendation of the Board of Investments or other appropriate government agencies if the applicant will be employed in preferred areas of investments or in accordance with the imperative of economic development; xxx xxx xxx (Emphasis supplied) Article 40 of the Labor Code reads as follows: Art. 40. Employment per unit of non-resident aliens. Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor. The employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired. For an enterprise registered in preferred areas of investments, said employment permit may be issued upon recommendation of the government agency charged with the supervision of said registered enterprise. (Emphasis supplied) Petitioners apparently suggest that the Secretary of Labor is not authorized to take into account the question of whether or not employment of an alien applicant would "redound to the national interest" because Article 40 does not explicitly refer to such assessment. This argument (which seems impliedly to concede that the relationship of basketball coaching and the national interest is tenuous and unreal) is not persuasive. In the first place, the second paragraph of Article 40 says: "[t]he employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the nonavailability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired." The permissive language employed in the Labor Code indicates that the authority granted involves the exercise of discretion on the part of the issuing authority. In the second place, Article 12 of the Labor Code sets forth a statement of objectives that the Secretary of Labor should, and indeed must, take into account in exercising his authority and jurisdiction granted by the Labor Code, Art. 12. Statement of Objectives. It is the policy of the State: a) To promote and maintain a state of full employment through improved manpower training, allocation and utilization; xxx xxx xxx c) To facilitate a free choice of available employment by persons seeking work in conformity with the national interest; d) To facilitate and regulate the movement of workers in conformity with the national interest; e) To regulate the employment of aliens, including the establishment of a registration and/or work permit system;

xxx xxx xxx Thus, we find petitioners' arguments on the above points of constitutional law too insubstantial to require further consideration. Petitioners have very recently manifested to this Court that public respondent Secretary of Labor has reversed his earlier decision and has issued an Employment Permit to petitioner Cone. Petitioners seek to withdraw their Petition for Certiorari on the ground that it has become moot and academic. While ordinarily this Court would dismiss a petition that clearly appears to have become moot and academic, the circumstances of this case and the nature of the questions raised by petitioners are such that we do not feel justified in leaving those questions unanswered. 4 Moreover, assuming that an alien employment permit has in fact been issued to petitioner Cone, the basis of the reversal by the Secretary of Labor of his earlier decision does not appear in the record. If such reversal is based on some view of constitutional law or labor law different from those here set out, then such employment permit, if one has been issued, would appear open to serious legal objections. ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack of merit. Costs against petitioners. Fernan, C.J., Bidin and Davide, Jr., JJ., concur. Gutierrez, Jr., J., in the result. Footnotes 1 De Leon v. Commission on Elections, 129 SCRA 117 (1984). 2 E.g., Pakistan International Airways Corporation v. Hon. Blas F. Ople et al., G.R. No. 61594, 28 September 1990; Commissioner of Internal Revenue v. United States Lines Co., 5 SCRA 175 (1962). 3 Article 40 of the Labor Code. 4 Cf Javier v. Commission on Elections, 144 SCRA 194 (1986).

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 75112 October 16, 1990 FILAMER CHRISTIAN INSTITUTE, petitioner, vs. HONORABLE COURT OF APPEALS, HONORABLE ENRIQUE P. SUPLICO, in his capacity as Judge of the Regional Trial Court,. Branch XIV, Roxas City and the late POTENCIANO KAPUNAN, SR., as substituted by his heirs, namely: LEONA KAPUNAN TIANGCO, CICERO KAPUNAN, JESUS KAPUNAN, SANTIAGO KAPUNAN, POTENCIANO KAPUNAN, JR., PAZ KAPUNAN PUBLICO, SUSA KAPUNAN GENUINO and ERLINDA KAPUNAN TESORO, respondents. Aquilina B. Brotarlo for petitioner. Rhodora G. Kapunan for the Substituted Heirs of the late respondent. FERNAN, C.J.: This is a petition for review of the decision 1 of the Court of Appeals affirming the judgment of the Regional Trial Court (RTC) of Roxas City, Branch 14 in Civil Case No. V-4222 which found petitioner Filamer Christian Institute and Daniel Funtecha negligent and therefore answerable for the resulting injuries caused to private respondent Potenciano Kapunan, Sr. Private respondent Potenciano Kapunan, Sr., an eighty-two-year old retired schoolteacher (now deceased), was struck by the Pinoy jeep owned by petitioner Filamer and driven by its alleged employee, Funtecha, as Kapunan, Sr. was walking along Roxas Avenue, Roxas City at 6:30 in the evening of October 20, 1977. As a result of the accident, Kapunan, Sr. suffered multiple injuries for which he was hospitalized for a total of twenty (20) days. Evidence showed that at the precise time of the vehicular accident, only one headlight of the jeep was functioning. Funtecha, who only had a student driver's permit, was driving after having persuaded Allan Masa, the authorized driver, to turn over the wheels to him. The two fled from the scene after the incident. A tricycle driver brought the unconscious victim to the hospital. Thereafter, Kapunan, Sr. instituted a criminal case against Funtecha alone in the City Court of Roxas City for serious physical injuries through reckless imprudence. Kapunan, Sr. reserved his right to file an independent civil action. The inferior court found Funtecha guilty as charged and on appeal, his conviction was affirmed by the then Court of First Instance of Capiz. 2 Pursuant to his reservation, Kapunan, Sr. commenced a civil case for damages 3 before the RTC of Roxas City. Named defendants in the complaint were petitioner Filamer and Funtecha. Also included was Agustin Masa, the director and president of Filamer Christian Institute, in his personal capacity in that he personally authorized and allowed said Daniel Funtecha who was his houseboy at the time of the incident, to drive the vehicle in question despite his knowledge and awareness that the latter did not have the necessary license or permit to drive said vehicle. His son, Allan Masa, who was with Funtecha at the time of the accident, was not impleaded as a co-defendant. 4 On December 14, 1983, the trial court rendered judgment finding not only petitioner Filamer and Funtecha to be at fault but also Allan Masa, a non-party. Thus:

WHEREFORE, finding the averments in the complaint as supported by preponderance of evidence to be reasonable and justified, and that defendants Daniel Funtecha, Filamer Christian Institute and Allan Masa are at fault and negligent of the acts complained of which causes (sic) injury to plaintiff, judgment is hereby rendered in favor of the plaintiff and against the defendants, namely: Daniel Funtecha and Filamer Christian Institute, the employer whose liability is primary and direct, jointly and severally, to pay plaintiff the following: (1) to pay the sum of TWO THOUSAND NINE HUNDRED FIFTY PESOS AND FIFTY CENTAVOS (P2,950.50) as medical expenses (Exh. "A"); (2) to pay TWO HUNDRED FORTY ONE PESOS (P241.00) as doctor's fee (Exh. "C"); (3) to pay THREE HUNDRED NINETY PESOS (P390.00) as additional expenses incurred for thirty-nine days at P10.00 a day, for remuneration of plaintiff's helper while recuperating; (4) to pay FOUR THOUSAND PESOS (P4,000.00) as Court litigation expenses; (5) to pay THREE THOUSAND PESOS (P3,000.00) as loss of earnings capacity; (6) to pay TWENTY THOUSAND (P20,000.00) pesos as moral damages; (7) to pay FOUR THOUSAND FIVE HUNDRED PESOS (P4,500.00) as attorney's fees; (8) to pay TWENTY THOUSAND PESOS (P20,000.00)as insurance indemnity on the policy contract; and without prejudice to the right of defendant Filamer Christian Institute to demand from co-defendant Daniel Funtecha part-time employee and/or Allan Masa a full time employee reimbursement of the damages paid to herein plaintiff. The defendant Agustin Masa as director of defendant Filamer Christian Institute has also failed to exercise the diligence required of a good father of a family in the supervision of his employee Allan Masa, being his son. However, the court absolved defendant Agustin Masa from any personal liability with respect to the complaint filed against him in his personal and private capacity, cause he was not in the vehicle during the alleged incident. For failure to prove their respective counterclaims filed by the defendant Daniel Funtecha, Dr. Agustin Masa, and Filamer Christian Institute, as against the herein plaintiff, same are hereby dismissed. The Zenith Insurance Corporation as third party defendant has failed to prove that there was a policy violation made by the defendant Filamer Christian Institute which absolves them from liability under the aforesaid insurance policy. The record shows that the defendant Daniel Funtecha while driving the said vehicle was having a student drivers license marked Exh. "1" and accompanied by Allan Masa who is the authorized driver of said vehicle with a professional drivers license as shown by Exh. "3". This Court finds that defendant Daniel Funtecha while driving the said vehicle is considered as authorized driver in accordance with the policy in question marked Exh. "2-Masa and FCI". Finding the averments in the third party complaint filed by defendant Filamer Christian Institute as supported by preponderance of evidence as shown by their exhibits to be reasonable and justified, judgment is hereby rendered in favor of the said defendant and third party plaintiff Filamer Christian Institute as against third party defendant Zenith Insurance Corporation. The Zenith Insurance Corporation as third party defendant is hereby ordered to pay in

favor of the defendant and third party plaintiff, Filamer Christian Institute, the following: (1) to pay TWENTY THOUSAND PESOS (P20,000.00) as third party liability as provided in the Zenith Insurance Corporation policy (Exh. "2"); (2) to pay TEN THOUSAND PESOS (P10,000.00)as moral damages; (3) to pay FOUR THOUSAND PESOS (P4,000.00) as Court litigation and actual expenses; (4) to pay THREE THOUSAND PESOS (P3,000.00) as attorney's fees; The defendants Daniel Funtecha, Filamer Christian Institute and third party defendant Zenith Insurance Corporation are hereby ordered jointly and severally, to pay the costs of the suit. 5 Only petitioner Filamer and third-party defendant Zenith Insurance Corporation appealed the lower court's judgment to the Court of Appeals and as a consequence, said lower court's decision became final as to Funtecha. For failure of the insurance firm to pay the docket fees, its appeal was dismissed on September 18, 1984. On December 17, 1985, the Appellate Court rendered the assailed judgment affirming the trial court's decision in toto. 6 Hence the present recourse by petitioner Filamer. It is petitioner Filamer's basic contention that it cannot be held responsible for the tortious act of Funtecha on the ground that there is no existing employer-employee relationship between them. We agree. The Civil Code provides: Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. Art. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or omissions but also for those of persons for whom one is responsible. xxx xxx xxx Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. xxx xxx xxx The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observe all the diligence of a good father of a family to prevent damage. (Emphasis supplied). The legal issue in this appeal is whether or not the term "employer" as used in Article 2180 is applicable to petitioner Filamer with reference to Funtecha. In disclaiming liability, petitioner Filamer has invoked the provisions of the Labor Code, specifically Section 14, Rule X of Book III which reads:
7

Sec. 14. Working scholars. There is no employer-employee relationship between students on the one hand, and schools, colleges or universities on the other, where students work for the latter in exchange for the privilege to study free of charge; provided the students are given real opportunity, including such facilities as may be reasonable, necessary to finish their chosen court under such arrangement. (Emphasis supplied).

It is manifest that under the just-quoted provision of law, petitioner Filamer cannot be considered as Funtecha's employer. Funtecha belongs to that special category of students who render service to the school in exchange for free tuition Funtecha worked for petitioner for two hours daily for five days a week. He was assigned to clean the school passageways from 4:00 a.m. to 6:00 a.m. with sufficient time to prepare for his 7:30 a.m. classes. As admitted by Agustin Masa in open court, Funtecha was not included in the company payroll. 8 The wording of Section 14 is clear and explicit and leaves no room for equivocation. To dismiss the implementing rule as one which governs only the "personal relationship" between the school and its students and not where there is already a third person involved, as espoused by private respondents, is to read into the law something that was not legislated there in the first place. The provision of Section 14 is obviously intended to eliminate an erstwhile gray area in labor relations and seeks to define in categorical terms the precise status of working scholars in relation to the learning institutions in which they work for the privilege of a free education. But even if we were to concede the status of an employee on Funtecha, still the primary responsibility for his wrongdoing cannot be imputed to petitioner Filamer for the plain reason that at the time of the accident, it has been satisfactorily shown that Funtecha was not acting within the scope of his supposed employment. His duty was to sweep the school passages for two hours every morning before his regular classes. Taking the wheels of the Pinoy jeep from the authorized driver at 6:30 in the evening and then driving the vehicle in a reckless manner resulting in multiple injuries to a third person were certainly not within the ambit of his assigned tasks. In other words, at the time of the injury, Funtecha was not engaged in the execution of the janitorial services for which he was employed, but for some purpose of his own. It is but fair therefore that Funtecha should bear the full brunt of his tortious negligence. Petitioner Filamer cannot be made liable for the damages he had caused. Private respondents' attempt to hold petitioner Filamer directly and primarily answerable to the injured party under Article 2180 of the Civil Code would have prospered had they proceeded against Allan Masa, the authorized driver of the Pinoy jeep and undisputably an employee of petitioner. It was Allan's irresponsible act of entrusting the wheels of the vehicle to the inexperienced Funtecha which set into motion the chain of events leading to the accident resulting in injuries to Kapunan, Sr. But under the present set of circumstances, even if the trial court did find Allan guilty of negligence, such conclusion would not be binding on Allan. It must be recalled that Allan was never impleaded in the complaint for damages and should be considered as a stranger as far as the trial court's judgment is concerned. It is axiomatic that no man shall be affected by a proceeding to which he is a stranger. 9 WHEREFORE, in view of the foregoing, the decision under review of the Court of Appeals is hereby SET ASIDE. The complaint for damages 10 is ordered DISMISSED as against petitioner Filamer Christian Institute for lack of cause of action. No costs. SO ORDERED. Bidin and Cortes, JJ., concur. Feliciano, J., is on leave. Separate Opinions GUTIERREZ, JR., J., concurring: I concur but limit my concurrence on the employee-employer relationship to labor law situations. Separate Opinions

GUTIERREZ, JR., J., concurring: I concur but limit my concurrence on the employee-employer relationship to labor law situations. Footnotes 1 Penned by Associate Justice Desiderio P. Jurado and concurred in by Associate Justices Jose C. Campos, Jr. and Serafin E. Camilon. Associate Justice Crisolito Pascual did not take part. 2 Annex E of Petition, p. 49. Rollo. 3 Civil Case No. V-4222. 4 Records. pp. 1 and 3. 5 Records, pp, 572-573. 6 Rollo, pp. 177 and 21. 7 Presidential Decree No. 442. 8 Records, p. 569. 9 Church Assistance Program vs. Sibulo, G.R. No. 76552, March 21, 1989. 10 Civil Case No. V-4222.

Digest case: ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC. AND MARLOW NAVIGATION CO., INC. GR No. 167614 March 24, 2009 En banc FACTS: Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., under a POEA-approved contract of employment for 12 months, as Chief Officer, with the basic monthly salary of US$1,400, plus $700/month overtime pay, and 7 days paid vacation leave per month. On March 19, 1998, the date of his departure, Serrano was constrained to accept a downgraded employment contract for the position of Second Officer with a monthly salary of US$1,000 upon the assurance and representation of respondents that he would be Chief Officer by the end of April 1998. Respondents did not deliver on their promise to make Serrano Chief Officer. Hence, Serrano refused to stay on as second Officer and was repatriated to the Philippines on May 26, 1998, serving only two (2) months and seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-three (23) days. Serrano filed with the Labor Arbiter (LA) a Complaint against respondents for constructive dismissal and for payment of his money claims in the total amount of US$26,442.73 (based on the computation of $2590/month from June 1998 to February 199, $413.90 for March 1998, and $1640 for March 1999) as well as moral and exemplary damages. The LA declared the petitioners dismissal illegal and awarded him US$8,770, representing his salaray for three (3) months of the unexpired portion of the aforesaid contract of employment, plus $45 for salary differential and for attorneys fees equivalent to 10% of the total amount; however, no compensation for damages as prayed was awarded. On appeal, the NLRC modified the LA decision and awarded Serrano $4669.50, representing three (3) months salary at $1400/month, plus 445 salary differential and 10% for attorneys fees. This decision was based on the provision of RA 8042, which was made into law on July 15, 1995. Serrano filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042, which reads: Sec. 10. Money Claims. x x x In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. The NLRC denied the Motion; hence, Serrano filed a Petition for Certiorari with the Court

of Appeals (CA), reiterating the constitutional challenge against the subject clause. The CA affirmed the NLRC ruling on the reduction of the applicable salary rate, but skirted the constitutional issue raised by herein petitioner Serrano. ISSUES: 1. Whether or not the subject clause violates Section 10, Article III of the Constitution on non-impairment of contracts; 2. Whether or not the subject clause violate Section 1, Article III of the Constitution, and Section 18, Article II and Section 3, Article XIII on labor as a protected sector. HELD: On the first issue. The answer is in the negative. Petitioners claim that the subject clause unduly interferes with the stipulations in his contract on the term of his employment and the fixed salary package he will receive is not tenable. Section 10, Article III of the Constitution provides: No law impairing the obligation of contracts shall be passed. The prohibition is aligned with the general principle that laws newly enacted have only a prospective operation, and cannot affect acts or contracts already perfected; however, as to laws already in existence, their provisions are read into contracts and deemed a part thereof. Thus, the non-impairment clause under Section 10, Article II is limited in application to laws about to be enacted that would in any way derogate from existing acts or contracts by enlarging, abridging or in any manner changing the intention of the parties thereto. As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of the employment contract between petitioner and respondents in 1998. Hence, it cannot be argued that R.A. No. 8042, particularly the subject clause, impaired the employment contract of the parties. Rather, when the parties executed their 1998 employment contract, they were deemed to have incorporated into it all the provisions of R.A. No. 8042. But even if the Court were to disregard the timeline, the subject clause may not be declared unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted in the exercise of the police power of the State to regulate a business, profession or calling, particularly the recruitment and deployment of OFWs, with the noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may be employed. Police power legislations adopted by the State to promote the health, morals, peace, education, good order, safety, and general welfare of the people are generally applicable not only to future contracts but even to those already in existence, for all private contracts must yield to the superior and legitimate measures taken by the State to promote public welfare. On the second issue.

The answer is in the affirmative. Section 1, Article III of the Constitution guarantees: No person shall be deprived of life, liberty, or property without due process of law nor shall any person be denied the equal protection of the law. Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without distinction as to place of deployment, full protection of their rights and welfare. To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to economic security and parity: all monetary benefits should be equally enjoyed by workers of similar category, while all monetary obligations should be borne by them in equal degree; none should be denied the protection of the laws which is enjoyed by, or spared the burden imposed on, others in like circumstances. Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it sees fit, a system of classification into its legislation; however, to be valid, the classification must comply with these requirements: 1) it is based on substantial distinctions; 2) it is germane to the purposes of the law; 3) it is not limited to existing conditions only; and 4) it applies equally to all members of the class. There are three levels of scrutiny at which the Court reviews the constitutionality of a classification embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification needs only be shown to be rationally related to serving a legitimate state interest; b) the middle-tier or intermediate scrutiny in which the government must show that the challenged classification serves an important state interest and that the classification is at least substantially related to serving that interest; and c) strict judicial scrutiny in which a legislative classification which impermissibly interferes with the exercise of a fundamental right or operates to the peculiar disadvantage of a suspect class is presumed unconstitutional, and the burden is upon the government to prove that the classification is necessary to achieve a compelling state interest and that it is the least restrictive means to protect such interest. Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a closer examination reveals that the subject clause has a discriminatory intent against, and an invidious impact on, OFWs at two levels: First, OFWs with employment contracts of less than one year vis--vis OFWs with employment contracts of one year or more; Second, among OFWs with employment contracts of more than one year; and Third, OFWs vis--vis local workers with fixed-period employment; In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were illegally discharged were treated alike in terms of the computation of their money claims: they were uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally dismissed OFWs with an unexpired portion of one year or more in their employment contract have since been differently treated in that

their money claims are subject to a 3-month cap, whereas no such limitation is imposed on local workers with fixed-term employment. The Court concludes that the subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. There being a suspect classification involving a vulnerable sector protected by the Constitution, the Court now subjects the classification to a strict judicial scrutiny, and determines whether it serves a compelling state interest through the least restrictive means. What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the Constitution and calibrated by history. It is akin to the paramount interest of the state for which some individual liberties must give way, such as the public interest in safeguarding health or maintaining medical standards, or in maintaining access to information on matters of public concern. In the present case, the Court dug deep into the records but found no compelling state interest that the subject clause may possibly serve. In fine, the Government has failed to discharge its burden of proving the existence of a compelling state interest that would justify the perpetuation of the discrimination against OFWs under the subject clause. Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the employment of OFWs by mitigating the solidary liability of placement agencies, such callous and cavalier rationale will have to be rejected. There can never be a justification for any form of government action that alleviates the burden of one sector, but imposes the same burden on another sector, especially when the favored sector is composed of private businesses such as placement agencies, while the disadvantaged sector is composed of OFWs whose protection no less than the Constitution commands. The idea that private business interest can be elevated to the level of a compelling state interest is odious. Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement agencies vis-a-vis their foreign principals, there are mechanisms already in place that can be employed to achieve that purpose without infringing on the constitutional rights of OFWs. The POEA Rules and Regulations Governing the Recruitment and Employment of LandBased Overseas Workers, dated February 4, 2002, imposes administrative disciplinary measures on erring foreign employers who default on their contractual obligations to migrant workers and/or their Philippine agents. These disciplinary measures range from temporary disqualification to preventive suspension. The POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers, dated May 23, 2003, contains similar administrative disciplinary measures against erring foreign employers.

Resort to these administrative measures is undoubtedly the less restrictive means of aiding local placement agencies in enforcing the solidary liability of their foreign principals. Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of petitioner and other OFWs to equal protection. The subject clause or for three months for every year of the unexpired term, whichever is less in the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL.