1. PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS VS. DRILON, G.R.

NO. L-81958, JUNE 30, 1988

FACTS:
The Philippine Association of Service Exporters, Inc. (PASEI) challenges the
Constitutional validity of Department Order No. 1, Series of 1988, of the Department
of Labor and Employment, in the character of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND
HOUSEHOLD WORKERS," in this petition for certiorari and prohibition. Specifically,
the measure is assailed for "discrimination against males or females;" that it "does
not apply to all Filipino workers but only to domestic helpers and females with
similar skills;" and that it is violative of the right to travel. It is held likewise to be an
invalid exercise of the lawmaking power, police power being legislative, and not
executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the
Constitution, providing for worker participation "in policy and decision-making
processes affecting their rights and benefits as may be provided by law."
Department Order No. 1, it is contended, was passed in the absence of prior
consultations. It is claimed, finally, to be in violation of the Charter's nonimpairment clause, in addition to the "great and irreparable injury" that PASEI
members face should the Order be further enforced.
ISSUE: Whether or not the Department Order No. 1 in nature of the police power is
valid under the Constitution?
HELD:
In the light of the foregoing, the petition must be dismissed. As a general rule,
official acts enjoy a presumed validity. In the absence of clear and convincing
evidence to the contrary, the presumption logically stands.
The petitioner has shown no satisfactory reason why the contested measure should
be nullified. There is no question that Department Order No. 1 applies only to
"female contract workers," but it does not thereby make an undue discrimination
between the sexes. It is well-settled that "equality before the law" under the
Constitution does not import a perfect Identity of rights among all men and women.
It admits of classifications, provided that (1) such classifications rest on substantial
distinctions; (2) they are germane to the purposes of the law; (3) they are not
confined to existing conditions; and (4) they apply equally to all members of the
same class.
The Court is well aware of the unhappy plight that has befallen our female labor
force abroad, especially domestic servants, amid exploitative working conditions
marked by physical and personal abuse. As precisely the caretaker of Constitutional
rights, the Court is called upon to protect victims of exploitation. In fulfilling that
duty, the Court sustains the Government's efforts.

The same, however, cannot be said of our male workers. In the first place, there is
no evidence that, except perhaps for isolated instances, our men abroad have been
afflicted with an identical predicament. Suffice it to state, then, that insofar as
classifications are concerned, this Court is content that distinctions are borne by the
evidence. Discrimination in this case is justified.
There is likewise no doubt that such a classification is germane to the purpose
behind the measure. Unquestionably, it is the avowed objective of Department
Order No. 1 to "enhance the protection for Filipino female overseas workers" this
Court has no quarrel that in the midst of the terrible mistreatment Filipina workers
have suffered abroad, a ban on deployment will be for their own good and welfare.
The Order does not narrowly apply to existing conditions. Rather, it is intended to
apply indefinitely so long as those conditions exist. This is clear from the Order itself
("Pending review of the administrative and legal measures, in the Philippines and in
the host countries . . ."), meaning to say that should the authorities arrive at a
means impressed with a greater degree of permanency, the ban shall be lifted.
It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas
deployment. From scattered provisions of the Order, it is evident that such a total
ban has not been contemplated.
The consequence the deployment ban has on the right to travel does not impair the
right. The right to travel is subject, among other things, to the requirements of
"public safety," "as may be provided by law. Neither is there merit in the contention
that Department Order No. 1 constitutes an invalid exercise of legislative power. It is
true that police power is the domain of the legislature, but it does not mean that
such an authority may not be lawfully delegated. As we have mentioned, the Labor
Code itself vests the Department of Labor and Employment with rule-making
powers in the enforcement whereof.
The non-impairment clause of the Constitution, invoked by the petitioner, must yield
to the loftier purposes targeted by the Government. Freedom of contract and
enterprise, like all other freedoms, is not free from restrictions, more so in this
jurisdiction, where laissez faire has never been fully accepted as a controlling
economic way of life.
This Court understands the grave implications the questioned Order has on the
business of recruitment. The concern of the Government, however, is not
necessarily to maintain profits of business firms. In the ordinary sequence of events,
it is profits that suffer as a result of Government regulation. The interest of the State
is to provide a decent living to its citizens. The Government has convinced the Court
in this case that this is its intent. We do not find the impugned Order to be tainted
with a grave abuse of discretion to warrant the extraordinary relief prayed for.
2. CHAVEZ VS. BONTO-PEREZ, G.R. NO. 109808, MARCH 1, 1995.
FACTS:
On December 1, 1988, petitioner, an entertainment dancer, entered into as
standard employment contract for overseas Filipino artists and entertainers

with Planning Japan Co., Ltd., 2 through its Philippine representative, private
respondent Centrum Placement & Promotions Corporation. The contract had a
duration of two (2) to six (6) months, and petitioner was to be paid a monthly
compensation of One Thousand Five Hundred Dollars (US$1,5000.00). On December
5, 1888, the POEA approved the contract. Subsequently, petitioner executed the
following
side
agreement
with her Japanese employer through her local
manager, Jaz Talents Promotion, decreasing her salary to $750, with a managerial
commission agreement of $250.

On December 16, 1988, petitioner left for Osaka, Japan, where she worked for six
(6) months, until June 10, 1989. She came back to the Philippines on June 14,
1989.Petitioner instituted the case at bench for underpayment of wages with the
POEA on February 21, 1991. She prayed for the payment of Six Thousand
U.S. Dollars (US$6,000.00), representing the unpaid portion of her basic salary for
six months.
ISSUE:
WON the side agreement which reduced petitioners basic wage valid.
HELD:
NO, null and void for violating the POEAs minimum employment standards, and for
not having been approved by the POEA.
RATIO:
Firstly, we hold that the managerial commission agreement executed by
petitioner to authorize her Japanese Employer to deduct Two Hundred Fifty U.S.
Dollars (US$250.00) from her monthly basic salary is void because it is against our
existing laws, morals and public policy. It cannot supersede the standard
employment contract of December 1, 1988 approved by the POEA with the following
stipulation appended thereto:
It is understood that the terms and conditions stated in this Employment
Contract are in conformance with the Standard Employment Contract for
Entertainers prescribed by the POEA under Memorandum Circular No. 2,
Series of 1986. Any alterations or changes made in any part of this contract
without prior approval by the POEA shall be null and void;
Clearly, the basic salary of $1,500.00 guaranteed to petitioner under the
partiesstandard employment contract is in accordance with the minimum
employmentstandards with respect to wages set by the POEA.
3. People vs. Panis, 142 SCRA 664G.R. Nos. L-58674-77 July 11, 1990
FACTS:

Serapio Abug was charged with illegal recruitment. His defense was that the
informations filed against him did not constitute an offense because in each of the
four informations filed against him, each denote that he was only recruiting one
person whereas the statute requires two or more persons
ISSUE:
Determination of the proper interpretation of Art 13(b) of PD 442/ Labor Code:
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.
HELD:
The specification of two or more persons is not to create a condition prior to filing
but rather it states a presumption that the individual is engaged in recruitment in
consideration of a fee, however the number of persons is not an essential ingredient
to the act of recruitment or placement, and it will still qualify even if only one
person has been involved.
4. People of the Philippines vs. Capt. Florencio O. Gasacao [G.R. No.
168445 November 11, 2005]
Facts:
Appellant was the Crewing Manager of Great Eastern Shipping Agency Inc., a
licensed local manning agency, while his nephew and co-accused, Jose Gasacao,
was the President. As the crewing manager, Capt. Gasacao's duties included
receiving job applications, interviewing the applicants and informing them of the
agency's requirement of payment of performance or cash bond prior to deployment.
On August 4, 2000, Capt. Gasacao and Jose Gasacao were charged with Large Scale
Illegal Recruitment defined under Section 6, paragraphs (a), (l) and (m) of Republic
Act (RA) No. 8042 or the Migrant Workers and Overseas Filipinos Act of 1995, and
penalized under Section 7(b) of the same law, before the RTC of Quezon City. Only
Capt. Gasacao was arrested while Jose Gasacao remained at large. When arraigned,
appellant pleaded not guilty to the offense charged. Thereafter, trial on the merits
ensued. On March 5, 2001, the RTC of Quezon City, rendered its Joint Decision
convicting appellant of Large Scale Illegal Recruitment.
Issue:
Whether or not Capt. Gasacao was guilty beyond reasonable doubt of the crime of
large scale illegal recruitment
SC Ruling:

RA No. 8042 defines illegal recruitment as follows:

II. ILLEGAL RECRUITMENT
Sec. 6. DEFINITIONS. For purposes of this Act, illegal recruitment shall
mean any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, procuring workers and includes referring, contract
services, promising or advertising for employment abroad, whether for
profit or not, when undertaken by a non-licensee or non-holder of
authority contemplated under Article 13(f) of Pd 442, as amended:
Provided, that such non-licensee or non-holder who, in any manner,
offers or promises for a fee employment abroad to two or more
persons shall be deemed so engaged. It shall likewise include the
following acts, whether committed by any persons, whether a nonlicensee, non-holder, licensee or holder of authority.
(a) To charge or accept directly or indirectly any amount greater than the
specified in the schedule of allowable fees prescribed by the Secretary of
Labor and Employment, or to make a worker pay any amount greater than
that actually received by him as a loan or advance;
xxx xxx xxx
(l) Failure to actually deploy without valid reason as determined by the
Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the workers in connection with
his documentation and processing for purposes of deployment, in cases
where the deployment does not actually take place without the worker's fault.
Illegal recruitment when committed by a syndicate or in large scale shall be
considered as offense involving economic sabotage. Illegal recruitment is
deemed committed by a syndicate carried out by a group of 3 or more
persons conspiring or confederating with one another. It is deemed
committed in large scale if committed against 3 or more persons individually
or as a group. A license is a document issued by the DOLE authorizing a
person or entity to operate a private employment agency, while an authority
is a document issued by the DOLE authorizing a person or association to
engage in recruitment and placement activities as a private recruitment
entity. However, it appears that even licensees or holders of authority can be
held liable for illegal recruitment should they commit any of the aboveenumerated acts.
Thus, it is inconsequential that appellant committed large scale illegal recruitment
while Great Eastern Shipping Agency, Inc. was holding a valid authority. We thus
find that the court below committed no reversible error in not appreciating that the
manning agency was a holder of a valid authority when appellant recruited the
private complainants. There is no merit in appellant's contention that he could not
be held liable for illegal recruitment since he was a mere employee of the manning
agency, pursuant to Section 6 of RA No. 8042 which provides: The persons
criminally liable for the above offenses are the principals, accomplices and

accessories. In case of juridical persons, the officers having control, management or

direction of their business shall be liable.
Contrary to Capt. Gasacao's claim, he is not a mere employee of the manning
agency but the crewing manager. As such, he receives job applications, interviews
applicants and informs them of the agency's requirement of payment of
performance or cash bond prior to the applicant's deployment. As the crewing
manager, he was at the forefront of the company's recruitment activities.
The foregoing testimonies of the private complainantsclearly established that
Gasacao is not a mere employee of Great Eastern Shipping Agency Inc. As the
crewing manager, it was appellant who made representations with the private
complainants that he can secure overseas employment for them upon payment of
the cash bond. It is well settled that to prove illegal recruitment, it must be shown
that 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. Appellant's act of promising the
private complainants that they will be deployed abroad within three months after
they have paid the cash bond clearly shows that he is engaged in illegal
recruitment.
Even assuming that Capt. Gasacao was a mere employee, such fact is not a shield
against his conviction for large scale illegal recruitment. Clearly, the acts of Capt.
Gasacao vis--vis the private complainants, either as the crewing manager of Great
Eastern Shipping Agency Inc. or as a mere employee of the same, constitute acts of
large scale illegal recruitment which should not be countenanced.
Although he informed them that it is optional, he collected cash bonds and promised
their deployment notwithstanding the proscription against its collection under
Section 60 of the Omnibus Rules and Regulations Implementing R.A. No. 8042 which
state that:
SEC. 60. Prohibition on Bonds and Deposits. In no case shall anemployment
agency require any bond or cash deposit from the worker to guarantee
performance under the contract or his/her repatriation. Illegal recruitment is
deemed committed in large scale if committed against three or more persons
individually or as a group.
In this case, five complainants testified against appellant's acts of illegal
recruitment, thereby rendering his acts tantamount to economic sabotage.
5. SEAGULL MARITIME CORP. AND PHILIMARE SHIPPING & EQUIPMENT
SUPPLY VS NERRY D. BALATONGAN, NATIONAL LABOR RELATIONS
COMMISSION
AND
PHILIPPINE
OVERSEAS
EMPLOYMENT
ADMINISTRATION, G.R. No. 82252, February 28, 1989
Facts:

On October 6, 1983 Balatongan met an accident in the Suez Canal, Egypt as a result
of which he was hospitalized at the Suez Canal Authority Hospital. Later, he was
repatriated to the Philippines and was hospitalized at the Makati Medical Center
from October 23, 1983 to March 27, 1984. On August 19, 1985 the medical
certificate was issued describing his disability as "permanent in nature."Balatongan
demanded payment for his claim for total disability insurance in the amount of US $
50,000.00 as provided for in the contract of employment but his claim was denied
for having been submitted to the insurers beyond the designated period for doing
so.
Seagull and Philimare appealed said decision to the National Labor Relations
Commission (NLRC) on June 4, 1986. Pending resolution of their appeal because of
the alleged transfer of the agency of Seagull to Southeast Asia Shipping
Corporation, Seagull filed on April 28, 1987 a Motion For Substitution/Inclusion of
Party Respondent which was opposed by Balatongan. This was followed by an exparte motion for leave to file third party complaint on June 4, 1987 by Seagull.
Issue:
Whether or not the respondent committed prohibited acts by altering or substituting
employment contracts approved and verified by the Department of Labor.
Held:
Yes, it shall be unlawful for any individual, entity, licensee, or holder of authority to
substitute or alter employment contracts approved and verified by the Department
of Labor from the time of actual signing thereof by the parties up to and including
the period of expiration of the same without the approval of the Department of
Labor. The supplementary contract of employment was entered into between
petitioner and private respondent to modify the original contract of employment
The reason why the law requires that the POEA should approve and verify a contract
under Article 34 of the Labor Code is to insure that the employee shall not thereby
be placed in a disadvantageous position and that the same are within the minimum
standards of the terms and conditions of such employment contract set by the
POEA.
6. Stronghold v CA G.R. No. 88050

January 30, 1992

Facts:
Acting on behalf of its foreign principal, Qatar National Fishing Co., Pan Asian
Logistics and Trading, a domestic recruiting and placement agency, hired Adriano
Urtesuela as captain of the vessel M/V Oryx for the stipulated period of twelve
months. The required surety bond, in the amount of P50,000.00, was submitted by
Pan Asian and Stronghold Insurance Co. to answer for the liabilities of the employer.
Urtesuela assumed his duties, but three months later his services were terminated
and he was repatriated to Manila. He filed a complaint against Pan Asian and his
former employer with the Philippine Overseas Employment Administration for
breach of contract and damages.

In due time, the POEA rendered a decision in his favor for the amount of P6,374.94,
representing his salaries for the unexpired portion of his contract. The judgment
eventually became final and executory, not having been appealed on time. A writ of
execution was issued against Pan Asian but could be enforced only against its cash
bond of P10,000.00, the company having ceased to operate. Urtesuela then filed a
complaint with the Insurance Commission against Stronghold on the basis of the
surety bond.
The liability of the surety under this bond didnt exceed the sum of P50,000.00.
After hearing, the Insurance Commission held that the complaint should be
reformed because the provisions in the surety bond were not stipulations pour
autrui to entitle Urtesuela to bring the suit himself. It held that the proper party was
the POEA. This ruling was reversed on appeal by the respondent court in its decision
dated April 20, 1989. It was there declared that, as the actual beneficiary of the
surety bond, Urtesuela was competent to sue Stronghold, which as surety was
solidarily liable with Pan Asian for the judgment rendered against the latter by the
POEA.
The petitioner asked for reversal of the Court of Appeals. It submits that the
decision of the POEA is not binding upon it because it was not impleaded in the
complaint.
Issue:
WON the POEA decision was not binding because Stronghold wasnt impleaded in
the complaint.
Held:
No. Petition dismissed.
Ratio:
In the surety bond, the petitioner unequivocally bound itself:
To answer for all liabilities which the Philippine Overseas Employment
Administration may adjudge / impose against the Principal in connection with the
recruitment of Filipino seamen.
The petitioner agreed to answer for whatever decision might be rendered against
the principal, whether or not the surety was impleaded in the complaint and had the
opportunity to defend itself. There is nothing in the stipulation calling for a direct
judgment against the surety as a co-defendant in an action against the principal.
The petitioner would still have to explain its other agreement that "notice to the
Principal is notice to the surety." This was in fact another special stipulation on the
printed form of the surety bond prepared by the petitioner. Under this commitment,
the petitioner is deemed, by the implied notice, to have been given an opportunity
to participate in the litigation and to present its side, if it so chose, to avoid liability.

The petitioner contends, however, that the said stipulation is unconstitutional and
contrary to public policy, because it is a virtual waiver of the right to be heard to the
prejudice of the surety. Hence, disregarding the stipulation, the petitioner should be
deemed as having received no notice at all of the complaint.
The Court cannot agree. The circumstance that the chance to be heard is not
availed of does not disparage that opportunity and deprive the person of the right
to due process. Due process is not violated where a person is not heard because he
has chosen, for whatever reason, not to be heard. It should be obvious that if he
opts to be silent where he has a right to speak, he cannot later be heard to
complain that he was unduly silenced.
If the petitioner believed then that it was onerous and illegal, what it should have
done was object when its inclusion as a condition in the surety bond was required
by the POEA. Even if the POEA had insisted on the condition, as now claimed, there
was still nothing to prevent the petitioner from refusing altogether to issue the
surety bond. The fact is that, whether or not the petitioner objected, it in the end
filed the surety bond with the suggested condition. The consequence of its
submission is that it cannot now argue that it is not bound by that condition
because it was coerced into accepting it.
7. EASTERN ASSURANCE & SURETY CORPORATION VS SECRETARY OF
LABOR, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION,
ELVIRA VENTURA, ESTER TRANGUILLAN, et al. GR number: L-7943650, January 17, 1990
Facts:
In connection with the application with the Philippine Overseas Employment
Administration (POEA) of J & B Manpower Specialist, Inc. for a license to engage in
business as a recruitment agency, a surety bond was filed on January 2, 1985 by the
applicant and the Eastern Assurance and Surety Corporation, herein petitioner, in
virtue of which they both held themselves
. . . firmly bound unto (said) Philippine Overseas Employment Administration,
Ministry of Labor in the penal sum of PESOS ONE HUNDRED FIFTY THOUSAND
ONLY . . . (Pl50,000.00) for the payment of which will and truly to be
made, . . . (they bound themselves, their) heirs, executors, administrators,
successors and assigns, jointly and severally . .
The bond stipulated that:
a) it was "conditioned upon the true and faithful performance and observance
of the . . . principal (J & B Manpower Specialist, Inc.) of its duties and
obligations in accordance with all the rules and regulations promulgated by
the Ministry of Labor Philippine Overseas Employment Administration and
with the terms and conditions stipulated in the License;

b) the liability of the . . . Surety (petitioner) shall in no case exceed the sum of
PESOS ONE HUNDRED FIFTY THOUSAND (P150,000.00) ONLY, PHILIPPINE
CURRENCY;
c) notice to the Principal is also a notice to the Surety; and
d) LIABILITY of the surety . . . shall expire on JANUARY 02, 1986 and this bond
shall be automatically cancelled ten (10) days after its expiration and the
surety shall not be liable for any claim not discovered and presented to it in
writing within said period of . . . from expiration and the obligee hereby
expressly waives the rights to file any court action against the Surety after
termination of said period of . . . . above cited.
Issues:
EASCO essentially disclaimed liability on the ground that the claims were not
expressly covered by the bond, that POEA had no jurisdiction to order forfeiture of
the bond, that some of the claims were paid beyond or prior to the period of
effectivity of the bond.
Held:
EASCO's liability for the refund, jointly and severally with its principal, was limited to
19 named complainants (in contrast to verdicts of the POEA and the Deputy Minister
which both ordered payment to no less than 33 complainants) and was
correspondingly reduced from P308,751.75 and US $ 400.00 to the aggregate
amount of P 140,817.75.
The penalties of suspension and cancellation of license or authority are prescribed
for violations of the above quoted provisions, among others. And the Secretary of
Labor has the power under Section 35 of the law to apply these sanctions, as well as
the authority, conferred by Section 36, not only, to "restrict and regulate the
recruitment and placement activities of all agencies," but also to "promulgate rules
and regulations to carry out the objectives and implement the provisions" governing
said activities. Pursuant to this rule-making power thus granted, the Secretary of
Labor gave the POEA "on its own initiative or upon filing of a complaint or report or
upon request for investigation by any aggrieved person, . . . (authority to) conduct
the necessary proceedings for the suspension or cancellation of the license or
authority of any agency or entity" for certain enumerated offenses including
1) the imposition or acceptance, directly or indirectly, of any amount of
money, goods or services, or any fee or bond in excess of what is prescribed
by the Administration, and
2) any other violation of pertinent provisions of the Labor Code and other
relevant laws, rules and regulations.
The Administrator was also given the power to "order the dismissal of the case or
the suspension of the license or authority of the respondent agency or contractor or
recommend to the Minister the cancellation thereof."

EASCO's claim that it had not been properly served with summons as regards a few
of the complaints must be rejected, the issue being factual, and the Court having
been cited to no grave error invalidating the respondent Secretary's conclusion that
summons had indeed been duly served.
EASCO's half-hearted argument that its liability should be limited to the maximum
amount set in its surety bond, i.e., P150,000.00, is palpably without merit, since the
aggregate liability imposed on it, P140,817.75, supra, does not in fact exceed that
limit.
Decision:
WHEREFORE, the petition is DISMISSED for lack of merit, and this decision is
declared to be immediately executory. Costs against petitioner.
8. PEOPLE OF THE PHILIPPINES VS. BULU CHOWDURY, G.R. No. 12957780, Feb. 15, 2000
Facts:
Bulu Chowdury was charged with the crime of illegal recruitment in large scale by
recruiting Estrella B. Calleja, Melvin C. Miranda and Aser S. Sasis for employment in
Korea. Evidence shows that accused appellant interviewed private complainant in
1994 at Craftrades office. At that time, he was an interviewer of Craftrade which
was operating under temporary authority given by POEA pending the renewal of
license. He was charged based on the fact that he was not registered with the POEA
as employee of Craftrade and he is not in his personal capacity, licensed to recruit
overseas workers. The compalinants also averred that during their applications for
employment for abroad, the license of Craftrade was already expired.
For his defense Chowdury testified that he worked as interviewer at Craftrade from
1990 until 1994. His primary duty was to interview job applicants for abroad. As a
mere employee, he only followed the instructions given by his superiors, Mr.
Emmanuel Geslani, the agency's President and General Manager, and Mr.
UtkalChowdury, the agency's Managing Director.
Issue:
Whether or not accused-appellant knowingly and intentionally participated in the
commission of the crime charged.
Held:
No, an employee of a company or corporation engaged in illegal recruitment may
be held liable as principal, together with his employer, if it is shown that he actively
and consciously participated in illegal recruitment. In this case, Chowdury merely
performed his tasks under the supervision of its president and managing director.
The prosecution failed to show that the accused-appellant is conscious and has an
active participation in the commission of the crime of illegal recruitment. Moreover,

accused-appellant was not aware of Craftrade's failure to register his name with the
POEA and the prosecution failed to prove that he actively engaged in recruitment
despite this knowledge. The obligation to register its personnel with the POEA
belongs to the officers of the agency.
A mere employee of the agency cannot be expected to know the legal requirements
for its operation. The accused-appellant carried out his duties as interviewer of
Craftrade believing that the agency was duly licensed by the POEA and he, in turn,
was duly authorized by his agency to deal with the applicants in its behalf. Accusedappellant in fact confined his actions to his job description. He merely interviewed
the applicants and informed them of the requirements for deployment but he never
received money from them. Chowdury did not knowingly and intentionally
participated in the commission of illegal recruitment being merely performing his
task and unaware of illegality of recruitment.
9. People of the Philippines
2007

vs Jamilosa, GR No. 169076, January 23,

FACTS:
Sometime in the months of January to February, 1996, representing to have the
capacity, authority or license to contract, enlist and deploy or transport workers for
overseas employment, did then and there, willfully, unlawfully and criminally
recruit, contract and promise to deploy, for a fee the herein complainants, namely,
Imelda D. Bamba, Geraldine M. Lagman and Alma E. Singh, for work or employment
in Los Angeles, California, U.S.A. in Nursing Home and Care Center.
Prosecution presented three witnesses, namely Imelda Bamba, Geraldine Lagman
and Alma Singh.
According to Bamba, she met the appellant on a bus. She was on her way to SM
North Edsa where she was a company nurse. Appellant introduced himself as a
recruiter of workers for employment abroad. Appellant told her he could help her
get employed as nurse. Appellant gave his pager number and instructed her to
contact him is shes interested. Sometime in January 1996, appellant fetched her at
her office, went to her house and gave him the necessary documents and handed to
appellant the amount of US$300.00 and the latter showed her a photocopy of her
supposed US visa. However, the appellant did not issue a receipt for the said money.
Thereafter, appellant told her to resign from her work because she was booked with
Northwest Airlines and to leave for USA on Feb, 1996. On the scheduled departure,
appellant failed to show up. Instead, called and informed her that he failed to give
the passport and US visa because she had to go to province because his wife died.
Trying to contact him to the supposed residence and hotel where he temporarily
resided, but to no avail.
Winess Lagman testified that she is a registered nurse. In January 1996, she went to
SM North Edsa to visit her cousin Bamba. At that time Bamba informed her that she
was going to meet to appellant. Bamba invited Lagman to go with her. The
appellant convinced them of his ability to send them abroad. On their next meeting,
Lagman handed to the latter the necessary documents and an amount of

US$300.00 and 2 bottles of black label without any receipt issued by the appellant.
Four days after their meeting, a telephone company called her because her number
was appearing in appellants cell phone documents. The caller is trying to locate him
as he was a swindler. She became suspicious and told Bamba about the matter. One
week before her scheduled flight, appellant told her he could not meet them
because his mother passed away.
Lastly, Alma Singh, who is also a registered nurse, declared that she first met the
appellant at SM North Edsa when Imelda Bamba introduced the latter to her.
Appellant told her that he is an undercover agent of FBI and he could fix her US
visa. On their next meeting, she gave all the pertinent documents. Thereafter, she
gave P10,000 to the appellant covering half price of her plane ticket. They paged
the appellant through his beeper to set up another appointment but the appellant
avoided them as he had many things to do.
The accused Jamilosa testified on direct examination that he never told Bamba that
he could get her a job in USA, the truth being that she wanted to leave SM as
company nurse because she was having a problem thereat. Bamba called him
several times, seeking advices from him. He started courting Bamba and went out
dating until latter became his girlfriend. He met Lagman and Singh thru Bamba. As
complainants seeking advice on how to apply for jobs abroad, lest he be charged as
a recruiter, he made Bamba, Lagman and Singh sign separate certifications, all to
effect that he never recruited them and no money was involved. Bamba filed an
illegal recruitment case against him because they quarreled and separated.
RTC rendered judgment finding accused guilty beyond reasonable doubt of illegal
recruitment in large scale.
ISSUE:
W/N the trial court erred in convicting accused appellant of the crime of illegal
recruitment in large scale
HELD:
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.
Illegal recruitment shall mean any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers and includes referring, contract
services, promising or advertising for employment abroad, whether for profit or not,
when undertaken by a non-licensee or non-holder of authority. Provided, That any
such non-licensee or non-holder who, in any manner, offers or promises for a fee
employment abroad to two or more persons shall be deemed so engaged.
To prove illegal recruitment in large scale, the prosecution is burdened to prove
three (3) essential elements, to wit: (1) the person charged undertook a recruitment

activity under Article 13(b) or any prohibited practice under Article 34 of the Labor
Code; (2) accused did not have the license or the authority to lawfully engage in the
recruitment and placement of workers; and (3) accused committed the same
against three or more persons individually or as a group. As gleaned from the
collective testimonies of the complaining witnesses which the trial court and the
appellate court found to be credible and deserving of full probative weight, the
prosecution mustered the requisite quantum of evidence to prove the guilt of
accused beyond reasonable doubt for the crime charged. Indeed, the findings of the
trial court, affirmed on appeal by the CA, are conclusive on this Court absent
evidence that the tribunals ignored, misunderstood, or misapplied substantial fact
or other circumstance.
The failure of the prosecution to adduce in evidence any receipt or document signed
by appellant where he acknowledged to have received money and liquor does not
free him from criminal liability. Even in the absence of money or other valuables
given as consideration for the "services" of appellant, the latter is considered as
being engaged in recruitment activities.
It can be gleaned from the language of Article 13(b) of the Labor Code that the act
of recruitment may be for profit or not. It is sufficient that the accused promises or
offers for a fee employment to warrant conviction for illegal recruitment.
10.
EXECUTIVE SECRETARY VS CA and ASIAN RECRUIT COUNCIL,
G.R. No. 131719, May 25, 2004.
FACTS:
Private respondent, in behalf of its eleven (11) licensed and registered recruitment
agencies, filed a petition for declaratory relief before the Regional Trial Court of
Quezon City to declare as unconstitutional some provisions of the Republic Act No.
8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995,
with a prayer that the court issue a temporary restraining order and/or writ of
preliminary injunction to enjoin the enforcement of the assailed provisions of the
law.
Private respondent averred that the assailed provisions of Rep. Act No. 8042
exposed its members to the immediate and irreparable damage of being deprived
of their right to a livelihood without due process.
Petitioners opposed the petition alleging, among other things, that the assailed
provisions do not violate any provisions of the Constitution.
The trial court granted private respondent's plea and issued a writ of preliminary
injunction enjoining the enforcement of the assailed provisions of Rep. Act No. 8042
pending the termination of the proceedings, ruling that the enforcement of assailed
law, pendente lite, would cause grave and irreparable injury to the private
respondent until the case is decided on its merits.
The Court of Appeals affirmed the order and writ of preliminary injunction issued by
the trial court.

Hence, this petition for review on certiorari.

ISSUE:
Whether or not there was grave abuse of discretion in the issuance of the
preliminary injunction.
HELD:
Yes, the trial court committed a grave abuse of its discretion amounting to excess
or lack of jurisdiction in issuing the assailed order and writ of preliminary injunction;
hence, it nullified the same. To be entitled to a preliminary injunction to enjoin the
enforcement of a law assailed to be unconstitutional, the party must establish that it
will suffer irreparable harm in the absence of injunctive relief and must demonstrate
that it is likely to succeed on the merits, or that there are sufficiently serious
questions going to the merits and the balance of hardship tips decidedly in its favor.
In this case, there was no allegation in the petition or evidence adduced by the
private respondent that the officers and employees of its members had been
threatened with any indictments for violations of the penal provisions of Rep. Act
No. 8042. Neither was there any allegation therein that any of its members and/or
their officers and employees committed any of the acts enumerated in Section 6 (a)
to (m) of the law for which they could be indicted. Neither did the private
respondent adduce any evidence in the RTC that any or all of its members or a great
number of other duly licensed and registered recruitment agencies had to stop their
business operations because of fear of indictments under Sections 6 and 7 of the
said law. The respondent merely speculated and surmised that the licensed and
registered recruitment agencies would close shop and stop business operations
because of the assailed penal provisions of the law.
A writ of preliminary injunction to enjoin the enforcement of penal laws cannot be
based on conjectures or speculations. The respondent even failed to adduce any
evidence to prove irreparable injury because of the enforcement of Section 10 (1)
(2) of Rep. Act No. 8042. Its fear or apprehension that, because of time constraints,
its members would have to defend foreign employees in cases before the Labor
Arbiter is based on speculations. Even if true, such inconvenience or difficulty is
hardly irreparable injury. In issuing the writ of preliminary injunction, the trial court
considered paramount the interest of the eleven licensed and registered
recruitment agencies represented by the private respondent, and capriciously
overturned the presumption of the constitutionality of the assailed provisions on the
barefaced claim of the respondent that the assailed provisions of Rep. Act No. 8042
are unconstitutional.
Petition was granted and the assailed decision of the Court of Appeals was reversed
and set aside
11.
FACTS:

Romero vs People

PRIVATE respondent Romulo Padlan went to petitioner Delia D. Romero to inquire

about securing a job in Israel. Convinced by petitioners words of encouragement
and inspired by the potential salary of US$700 to US$1,200 a month, respondent
raised the amount of US$3,600, which he gave to petitioner so that his papers could
be processed.
Respondent left for Israel and secured a job with a monthly salary of US$650.
Unfortunately, after two and a half months, he was caught by Israels immigration
police and deported for lack of a working visa.
On his return, respondent demanded from petitioner the return of his money but the
later refused.
ISSUE: Will the accused be held liable for Illegal recruitment?
Ruling: Yes.
Article 13 (b) of the Labor Code defines recruitment and placement as:
any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not:
Provided, that any person or entity which, in any manner, offers or promises
for a fee, employment to two or more persons shall be deemed engaged in
recruitment and placement.
The crime of illegal recruitment is committed when two elements concur,
namely: (1) 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) he undertakes either any activity within the meaning of recruitment and
placement defined under Article 13 (b), or any prohibited practices
enumerated under Article 34 of the Labor Code.
xxx
Thus, the trial court did not err in considering the certification from the
Department of Labor and Employment-Dagupan District Office stating that
petitioner has not been issued any license by the POEA nor is a holder of an
authority to engage in recruitment and placement activities.
xxx
From the above testimonies, it is apparent that petitioner was able to convince the
private respondents to apply for work in Israel after parting with their money in
exchange for the services she would render. The said act of the petitioner, without a
doubt, falls within the meaning of recruitment and placement as defined in Article
13 (b) of the Labor Code.
12.
PEOPLE OF THE PHILIPPINES vs MARLYN P. BACOS, G.R. No.
178774, December 08, 2010
Facts:

Appellant Marlyn Bacos and her common law husband husband Efren Dimauyga
were charged of illegal recruitment in large scale before the RTC based on the
complaints based on the complaints of 10 individuals. They pleaded not guilty and
trial ensued however Dimayuga died during the trial. The complainants claimed that
Dimayuga represented himself as a recruiter and Bacos assured that they could
sent them to work in Japan.
Based on these representations and assurances, they parted with their money as
placement and processing fees and were given receipts, but were not deployed
within the periods promised. However, Bacos denied her participation by claiming
that she only served snacks to the complainants when they came to their house.
The RTC held that Bacos gave indispensable assistance to Dimayuga in perpetuating
the fraud and found them engaged in illegal recruitment activities. The CA affirmed
CAs decision finding Bacos guilty as principal.
Issue:
Can Bacos be held guilty of illegal recruitment as principal albeit any direct and
clear of active participation?
Laws Applicable:
Republic Act 8042 Migrant Workers and Overseas Filipinos Act
Ruling:
The SC affirmed Bacos conviction. RA 8042 defines recruitment and placement as
any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, and includes referrals, contact services, promising or advertising
for employment, locally or abroad, whether for profit or not. Bacos and Dimayuga
committed illegal recruitment activities.
The prosecution evidence clearly showed that despite the lack of license or
authority to engage in recruitment, Bacos admitted that she gave assurances to
the complainants that she and dimayuga could deploy them for employment in
Japan. Bacos accepted the placement fee, informed the complainants of their
departure and gave them information on how to pay their balance. Her liability
cannot be considered as that of a mere accomplice, but as a principal who directly
and actively engaged in illegal recruitment activities. The argument that she did not
derive any consideration for cannot serve to exonerate her from the crime.
Opinion:
The Courts were correct in convicting Bacos. By its very definition, illegal
recruitment is deemed committed by mere act of promising employment without a
license or authority and whether for profit or not. Whether the accused profit or not
from such act is immaterial. The time when the misrepresentation was made,
whether prior or simultaneous to the delivery of the money of the complainants is
only material in the crime of estafa under Revised Penal Code as amended, and not
on the crime of illegal recruitment.

The acts of Bacos fall within the prohibited acts of illegal recruitment as provided for
by law. She cannot escape liability by merely alleging that she did not gain any
monetary benefits out of those acts. Her admission that she gave assurances to the
complainants is deemed as promising for employment without license. Hence, the
decision of the Court must be upheld.
13.
PEOPLE OF THE PHILIPPINES VS. REYDANTE CALONZO Y
AMBROSIO, G.R. No. 115150, September 27, 1996.
Facts:
Reydante Calonzo Y ambrosio was charged with illegal recruitment in large scale
and 5 counts of estafa by Brenando Miranda, Danilo de los Reyes, Elmer Clamor,
Belarmino Torregrosa and Hazel de Paula. The complainants recounted that they
met the accused-appellant who was then employed in R.A.C Business Agency and
offered to them employment in Italy. The accused was glib and persuasive that they
were lured to give payment for the processing of their application for work in Italy.
The accused-appellant was able to send the complainants to Bangkok and were
brought to P.S Guest Hotel. While in Bangkok, the complainants again gave
additional amounts to the accused. However, they only remain in Bangkok and the
promise of employment in Italy was not fulfilled. Upon return to the Philippines, the
complainants verified from POEA to which the latter issued a certification that the
accused and R.A.C Business Agency were not licensed to recruit workers for
overseas employment. As for his part, accused-appellant denies involvement in any
recruitment activities.
Issue: Whether or not accused-appellant is guilty of illegal recruitment committed
in large scale.
Held:
Yes, Illegal recruitment in large scale is committed when a person "(a) undertakes
any recruitment activity defined under Article 13(b) or any prohibited practice
enumerated under Article 34 of the Labor Code; (b) does not have a license or
authority to lawfully engage in the recruitment and placement of workers; and (c)
commits the same against three or more persons, individually or as a group." The
above requisites to constitute illegal recruitment in large scale are present in this
case, the testimony of complainants evidently showed that Calonzo was engaged in
recruitment activities in large scale. Firstly, he deluded complainants into believing
that jobs awaited them in Italy by distinctly impressing upon them that he had the
facility to send them for work abroad. He even showed them his passport to lend
credence to his claim.
To top it all, he brought them to Bangkok and not to Italy. Neither did he have any
arrangements in Bangkok for the transfer of his recruits to Italy. Secondly, POEA
likewise certified that neither Calonzo nor R.A.C. Business Agency was licensed to
recruit workers for employment abroad. Appellant admitted this fact himself.

Thirdly, appellant recruited five (5) workers thus making the crime illegal
recruitment in large scale constituting economic sabotage.
14.
ATCI Overseas Corp. et al., vs. Echin [GR No. 178551, October
11, 2010]
Facts:
Respondent Echin was hired by petitioner ATCI in behalf of its principal co-petitioner,
Ministry of Public Health of Kuwait, for the position of medical technologist under a
two-year contract with a monthly salary of US$1,200.00.Within a year, Respondent
was terminated for not passing the probationary period which was under the
Memorandum of Agreement.
Ministry denied respondents request and she returned to the Philippines
shouldering her own fair.
Respondent filed with the National Labor Relations Commission (NLRC) a complaint
against ATCI for illegal dismissal. Labor Arbiter rendered judgment in favor of
respondent and ordered ATCI to pay her $3,600.00, her salary for the three months
unexpired portion of the contract.
ATCI appealed Labor Arbiters decision, however, NLRC affirmed the latters decision
and denied petitioner ATCIs motion for reconsideration. Petitioner appealed to the
Court Appeals contending that their principal being a foreign government agency is
immune from suit, and as such, immunity extended to them.
Appellate Court affirmed NLRCs decision. It noted that under the law, a private
employment agency shall assume all responsibilities for the implementation of the
contract of employment of an overseas worker; hence, it can be sued jointly and
severally with the foreign principal for any violation of the recruitment agreement or
contract of employment.
Petitioners motion for reconsideration was denied; hence, this present petition.
Issue:
Whether or not petitioners be held liable considering that the contract specifically
stipulates that respondents employment shall be governed by the Civil Service Law
and Regulations of Kuwait.
Ruling:
Court denied the petition. According to RA 8042:The obligations covenanted in the
recruitment agreement entered into by and between the local agent and its foreign
principal are not coterminous with the term of such agreement so that if either or
both of the parties decide to end the agreement, the responsibilities of such parties
towards the contracted employees under the agreement do not at all end, but the
same extends up to and until the expiration of the employment contracts of the
employees recruited and employed pursuant to the said recruitment agreement. In

international law, the party who wants to have a foreign law applied to a dispute or
case has the burden of proving the foreign law.
Where a foreign law is not pleaded or, even if pleaded, is not proved, the
presumption is that foreign law is the same as ours. Thus, we apply Philippine labor
laws in determining the issues presented before us.
15.
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. vs.
NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 161757, January
25, 2006.
FACTS OF THE CASE :
Sunace International Management Services (Sunace), deployed to Taiwan Divina A.
Montehermozo (Divina) as a domestic helper under a 12-month contract. The
deployment was with the assistance of a
Taiwanese broker, Edmund Wang, President of Jet Crown International Co., Ltd.
After her 12-month contract expired, Divina continued working for her Taiwanese
employer, Hang Rui Xiong, for two more years, after which she returned to the
Philippines. Shortly thereafter, she filed a complaint before the National Labor
Relations Commission (NLRC) against Sunace, one Adelaide Perez, the Taiwanese
broker, and the employer-foreign principal demanding refund of taxes and her
savings for the two year extension, alleging further that the 2-year extended
contract was with the knowledge and consent of Sunace. Sunace, however denies
knowledge and consent of the extension, hence, it had no liability attaching to any
claim arising therefrom.
ISSUES :
1. Whether or not Sunace impliedly consented to the extension of the contract of
Divina thru its continuous communication with its foreign principal.
2. Whether or not upon the termination of the one year contract, the agency
relations was deemed revoked.
HELD :
1. No.
2. Yes.

RATIONALE:
1. The theory of imputed knowledge ascribes knowledge to the agent, not the other
way around. The knowledge of the principal-foreign employer cannot, therefore, be
imputed to its agent Sunace. There being no substantial proof that Sunace knew of
and consented to be bound under the 2-year employment contract extension, it
cannot be said to be privy thereto. As such, it and its "owner" cannot be held

solidarily liable for any of Divina's claims arising from the 2- year employment
extension.
2. There was an implied revocation of its agency relationship with its foreign
principal when, after the termination of the original employment contract, the
foreign principal directly negotiated with Divina and entered into a new and
separate employment contract in Taiwan. Article 1924 of the New Civil Code reading
"The agency is revoked if the principal directly manages the business entrusted to
the agent, dealing directly with third persons".
16.
Vir-Jen Shipping and Marine Services, NLRC (GR L-58011-12, 20
July 1982)
Facts:
Seamen Rogelio Bisula, Ruben Arroza, Juan Gacutno, Leonilo Atok, Nilo Cruz, Alvaro
Andrada, Nemesio Adug, Simplicio Bautista, Romeo Acosta, And Jose Encabo have a
manning contract for a period of 1 year with Vir-Jen Shipping And Marine Services,
Inc. in representation of its principal Kyoei Tanker Co. Ltd. The terms and conditions
of said contract were based on the standard contract of the National Seamen Board
(NSB). The manning contract was approved by the NSB.
Aware of the problem that vessels not paying rates imposed by the International
Transport Workers Federation (ITF) would be detained or interdicted in foreign ports
controlled by the ITF, Vir-Jen and the seamen executed a side contract to the effect
that should the vessel M/T Janu be required to pay ITF rates when it calls on any ITF
controlled foreign port, the seamen would return to Vir-jen the amounts so paid to
them.
On 23 March 1979, the master of the vessel who is one of the seamen involved
herein sent a cable to Vir-Jen, while said vessel was enroute to Australia which is an
ITF controlled port, stating that seamen were not contented with the salary and
benefits stipulated in the manning contract, and demanded that they be given 50%
increase thereof, as the best and only solution to solve ITF problem. Apparently,
reference to ITF in seamens cable made Vir-Jen apprehensive since the vessel at
that time was enroute to Australia, an ITF port, and would be interdicted and
detained thereat, should the seamen denounce the existing manning contract to the
ITF and should Vir-Jen refuse or be unable to pay the ITF rates, which represent
more than 100% of what is stipulated in the manning contract. Placed under such
situation, Vir-Jen replied by cable dated 24 March 1979 to seamen.
On 26 March 1979, Vir-Jen wrote a contract, Vir-Jens principal, Kyoei Tanker Co., Ltd.
terminated the manning contract in a letter dated 4 April 1979. On 6 April 1979, VirJen wrote the NSB asking permission to cancel the manning contract with Vir-Jen.
On 10 April 1979, the NSB through its Executive Director Cresencio C. Dayao wrote
Vir-Jen authorizing it to cancel the manning contract. The seamen were accordingly
disembarked in Japan and repatriated to Manila.
The seamen filed a complaint with the NSB for illegal dismissal and non-payment of
wages. After trial, the NSB found that the termination of the services of the seamen

before the expiration of their employment contract was justified when they
demanded and in fact received from the company wages over and above the
contracted rates which in effect was an alteration and modification of a valid and
existing contract.
The seamen appealed the decision to the NLRC which reversed the decision of the
NSB and required Vir-Jen 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 said contract by Vir-Jen was without valid cause.
Therein, Vir-Jen was ordered to pay the following to the complainant Seamen who
have not withdrawn from the case, namely:
Capt. Rogelio H. Bisula, Ruben Arroza, Juan Gacutno, Leonilo Atok, Nilo Cruz,
Alvaro Andrada, Nemesio Adug, Simplicio Bautista, Romeo Acosta and Jose
Encabo:
(1) their earned wages corresponding to the period from 16 to 19 April
1979;
(2) the wages corresponding to the unexpired portion of their
contracts, as adjusted by the respondent Company effective 1 March
1979;
(3) the adjusted representation allowances of the complainant Seamen
who served as officers and who have not withdrawn from the case,
namely:
Capt. Rogelio Bisula, Ruben Arroza, Juan Gacutno, Leonilo Atok and Nilo
Cruz;
(4) their vacation pay equivalent to months pay after 6 months of
service and another months pay after the completion of the oneyear contract;
(5) their tanker service bonus equivalent to months pay; and
(6) their earned overtime pay from 1 to 19 April 1979. The Court also
directed the Secretariat of the NSB to issue within 5 days from receipt
of the Decision the necessary clearances to the suspended Seamen.
Hence, the present petition for certiorari.
Issue:
WON there was modification and alteration of a valid and existing employment
contract.
Ruling: Yes
Rationale:
The Supreme Court granted the petition, set aside the decision of the NLRC
complained of, and reinstating the decision of the NSB; without costs.
Seamens contracts of the nature in present case are not ordinary ones. There are
special laws and rules governing them precisely due to the peculiar circumstances

that surround them. The employment contract in question is unlike any ordinary
contract of employment, for the reason that a manning contract involves the
interests not only of the signatories thereto, such as the local Filipino recruiting
agent, the foreign owner of the vessel, and the Filipino crew members, but also
those of other Filipino seamen in general as well as the country itself.
Conformably to the power vested in the NSB, the law requires that all manning
contracts shall be approved by said agency. It likewise provides that it shall be
unlawful to substitute or alter any previously approved and certified employment
contract without the approval of NSB (Section 35, Rules and Regulations in the
recruitment and placement of Filipino seamen aboard foreign going ships) and
authorizes the employer or owner of the vessel to terminate such contract for just
causes (Section 32, Ibid). Among such just causes for termination are bad conduct
and unwanted presence prejudicial to the safety of the ship (Guidebook for
shipping employers, page 8) and material breach of said contract.
Seamen breached respective employment contracts
This is so for the Seamen demanded and in fact received from the Company wages
over and above their contracted rates, which in effect is an alteration or
modification of a valid and subsisting contract; and the same not having been done
thru mutual consent and without the prior approval of the Board the alteration or
modification is contrary to the provisions of the New Labor Code, as amended, more
particularly Art. 34 (i) thereof.
Article 34 (i) states that It shall be unlawful for any individual, entity, licensee or
holder of authority:
xxx
(i) To substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties up
to and including the period of expiration of the same without the approval of
the Department of Labor; xxx
The revision of the contract was not done thru mutual consent for the Company did
not voluntarily agree to an increase of wage, but was only constrained to make a
counter-proposal of 25% increase to prevent the vessel from being interdicted
and/or detained by the ITF because at the time the demand for salary increase was
made the vessel was enroute to Kwinana, Australia (via Senipah, Indonesia), a port
where the ITF is strong and militant. A perusal of the Cables coming from the
Seamen addressed to the Company would show the threatening manner by which
the desire for a salary increase was manifested, contrary to their claim that it was
merely a request.
A careful examination of Wallem Philippine Shipping Inc. vs. The Minister of Labor,
G.R. No.
50734-37, February 20, 1981 shows that the same is dissimilar to the present case.
In the Wallem case, there was an express agreement between the employer and the
ITF representative, under which said employer bound itself to pay the crew
members salary rates similar to those of ITF. When the crew members in the Wallem

case demanded that they be paid ITF rates, they were merely asking their employer
to comply with what had been agreed upon With the ITF representative, which
conduct on their part cannot be said to be a violation of contract but an effort to
urge performance thereof. Herein, Vir-Jen and the seamen had a side agreement,
whereby the seamen agreed to return to Vir-Jen whatever amounts petitioner would
be required to pay under ITF rates. In other words, Vir-Jen and the seamen agreed
that Vir-Jen would not pay the ITF rate.
When the seamen used ITF as threat to secure increase in salary, they violated the
manning contract.
Moreover, herein, Vir-Jen terminated the manning contract only after the NSB
authorized it to do so, after it found the grounds therefor to be valid. On the other
hand, the termination of the manning contract in the Wallem case was without prior
authorization from the NSB.
17.
VIR-JEN Shipping and Marine Services, Inc., vs. NLRC, G.R. No.
L-58011 & L-58012 November 18, 1983
Facts:
Certain seamen entered into a contract of employment for a 12-month period. Some
three months after the commencement of their employment, the seamen
demanded a 50 % increase of their salaries and benefits. The seamen demanded
this increase while their vessel was en route to a port in Australia controlled by thye
International Transport Workers Federation (ITF), a militant international labor
organization with affiliates in different ports of the world, which reputedly can tie a
vessel in a port by preventing its loading and unloading unless it paid its seamen
their prescribed ITF rates.
In reply, the agent of the owner of the vessel agreed to pay a 25% increase, but
when the vessel arrived in Japan shortly afterwards, the seamen were repatriated to
Manila and their contract terminated. There is no showing that the Seamen were
given the opportunity to at least comment for the cancellation of their contracts,
although they had served only three (3) out of the twelve (12) months' duration of
their contracts.
The private respondents filed a complaint for illegal dismissal and non-payment of
earned wages with the National Seamen Board (NSB). The Vir-jen Shipping and
Marine Services Inc. in turn filed a complaint for breach of contract and recovery of
excess salaries and overtime pay against the private respondents. On July 2, 1980,
the NSB rendered a decision declaring that the seamen breached their employment
contracts when they demanded and received from Vir-jen Shipping wages over and
above their contracted rates. The dismissal of the seamen was declared legal and
the seamen were ordered suspended.
The seamen appealed the decision to the NLRC which reversed the decision of the
on the ground that the termination of the contract by the petitioner was without
valid cause. Hence, the petition.

Issue:
Whether or not the findings of the NSB is more credible than the NLRC that the
seamen did not violate their contract.
Held:
The decision sought to be reconsidered appears to be a deviation from the Court's
decision, speaking through the First Division, in Wallem Shipping, Inc. v. Hon.
Minister of Labor (102 SCRA 835). Faced with two seemingly conflicting resolutions
of basically the same issue by its two Divisions, the Court. therefore, resolved to
transfer the case to the Court en banc.
We sustain the decision of the respondent National labor Relations Commission.
The contention that manning industries in the Philippines would not survive if the
instant case is not decided in favor of the petitioner is not supported by evidence.
The Wallem case was decided on February 20, 1981. There have been no severe
repercussions, no drying up of employment opportunities for seamen, and none of
the dire consequences repeatedly emphasized by the petitioner. Why should Vir-jen
be all exception?
Filipino seamen are admittedly as competent and reliable as seamen from any other
country in the world. Otherwise, there would not be so many of them in the vessels
sailing in every ocean and sea on this globe. It is competence and reliability, not
cheap labor that makes our seamen so greatly in demand. Filipino seamen have
never demanded the same high salaries as seamen from the United States, the
United Kingdom, Japan and other developed nations. But certainly they are entitled
to government protection when they ask for fair and decent treatment by their
employer.-, and when they exercise the right to petition for improved terms of
employment, especially when they feel that these are sub-standard or are capable
of improvement according to internationally accepted rules. In the domestic scene,
there are marginal employers who prepare two sets of payrolls for their employees
one in keeping with minimum wages and the other recording the sub-standard
wages that the employees really receive, The reliable employers, however, not only
meet the minimums required by fair labor standards legislation but even go way
above the minimums while earning reasonable profits and prospering. The same is
true of international employment. There is no reason why this Court and the
Ministry of Labor and. Employment or its agencies and commissions should come
out with pronouncements based on the standards and practices of unscrupulous or
inefficient shipowners, who claim they cannot survive without resorting to tricky and
deceptive schemes, instead of Government maintaining labor law and jurisprudence
according to the practices of honorable, competent, and law-abiding employers,
domestic or foreign.
Prescinding from the above, we now hold that neither the National Seamen Board
nor the National Labor Relations Commission should, as a matter of official policy,
legitimize and enforce cubious arrangements where shipowners and seamen enter
into fictitious contracts similar to the addendum agreements or side contracts in
this case whose purpose is to deceive. The Republic of the Philippines and its
ministries and agencies should present a more honorable and proper posture in

official acts to the whole world, notwithstanding our desire to have as many job
openings both here and abroad for our workers. At the very least, such as sensitive
matter involving no less than our dignity as a people and the welfare of our
workingmen must proceed from the Batasang Pambansa in the form of policy
legislation, not from administrative rule making or adjudication
Decision:
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.
18.

Suzara vs. Benipayo, G.R. No. 57999

Facts:
A group of Filipino seamen entered into separate contracts of employment with
Magsaysay lines at specified salary rates. When vessel reached Manila Magsaysay
Lines demanded from Seamen over payment made to them in Canada the seamen
demanded and received additional wages prescribed by the International Transport
workers Federation (ITF) in amounts over and above the rates appearing in their
contract approved earlier by the National Seamen Board.
Issue:
Whether the Seaman demanded and received additional wages prescribes
International Transport Workers Federation.
When the vessel docked at Nagoya , an NSB representative boarded the vessel He
called a meeting among seamen, an urged them to sign an agreement, which they
did. It turned out that in the agreement the following statement was inserted the
amounts were received and held by crew members in trust for ship owners when
reached Manila Magsaysay Lines demanded from seamen the overpayments made
to them in Canada. When they refused, it filed charges against them before the
NSB.
NSB declared the seamen guilty of breach of their employment contracts suspended
the seamen for three years, prompting the workers to bring the case up to the
Supreme Court
Ruling:
The Supreme Court reversed and set aside the decision of NSB-National seamen
Board and the NLRC, it held that Seamen were not guilty of the offense for which
they were charged and order Magsaysay Lines to pay the seamen their earned but
unpaid wages overtime pay Special Agreement that the parties entered into
Vancouver. The criminal cases were ordered dismissed. The Court reiterate the Virjen pronouncements.

19.
SEAGULL MARITIME CORP. AND PHILIMARE SHIPPING &
EQUIPMENT SUPPLY VS NERRY D. BALATONGAN, NATIONAL LABOR
RELATIONS COMMISSION AND PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, G.R. No. 82252, February 28, 1989
Facts:
On October 6, 1983 Balatongan met an accident in the Suez Canal, Egypt as a result
of which he was hospitalized at the Suez Canal Authority Hospital. Later, he was
repatriated to the Philippines and was hospitalized at the Makati Medical Center
from October 23, 1983 to March 27, 1984. On August 19, 1985 the medical
certificate was issued describing his disability as "permanent in nature."
Balatongan demanded payment for his claim for total disability insurance in the
amount of US $ 50,000.00 as provided for in the contract of employment but his
claim was denied for having been submitted to the insurers beyond the designated
period for doing so. Seagull and Philimare appealed said decision to the National
Labor Relations Commission (NLRC) on June 4, 1986.
Pending resolution of their appeal because of the alleged transfer of the agency of
Seagull to Southeast Asia Shipping Corporation, Seagull filed on April 28, 1987 a
Motion For Substitution/Inclusion of Party Respondent which was opposed by
Balatongan. This was followed by an ex-parte motion for leave to file third party
complaint on June 4, 1987 by Seagull.
Issue:
Whether or not the respondent committed prohibited acts by altering or substituting
employment contracts approved and verified by the Department of Labor.
Held:
Yes, it shall be unlawful for any individual, entity, licensee, or holder of authority to
substitute or alter employment contracts approved and verified by the Department
of Labor from the time of actual signing thereof by the parties up to and including
the period of expiration of the same without the approval of the Department of
Labor. The supplementary contract of employment was entered into between
petitioner and private respondent to modify the original contract of employment.

The reason why the law requires that the POEA should approve and verify a contract
under Article 34 of the Labor Code is to insure that the employee shall not thereby
be placed in a disadvantageous position and that the same are within the minimum
standards of the terms and conditions of such employment contract set by the
POEA.
20.
Ocean East Agency Corp. v. NLRC (G.R. No. 119320; March
1998)

FACTS:
On September 28, 1991, respondent Capt. Pepito M. Gucor was hired by petitioner
Ocean East Agency Corp. (Ocean East), the manning agent of herein co-petitioner
European Navigation, Inc. (ENI), as master of M/V "Alpine" for a period of one (1)
year with a monthly salary of US$840.00. Sometime in February 1992, while the M/V
"Alpine" was anchored at the Port of Havana, Cuba, respondent was informed of his
repatriation for his subsequent transfer to another vessel.
Perceiving the transfer as an insult to his professional competence, Capt. Gucor
signified that, unless his full benefits are accorded him, he shall refuse to leave the
vessel knowing the cause for his repatriation to be unreasonable. In an effort to
assuage his fears, petitioners Ocean East and ENI advised him that his services
were not terminated at all, the repatriation being solely for documentation
purposes.
On February 29, 1992, after his demands were fully settled, respondent agreed to
be repatriated. Petitioner alleged that in view of respondent's earlier refusal to be
repatriated and to man the newly-acquired MV "Havre de Grace," it was compelled
to assign another master to the said vessel. Thereafter, the company decided to
assign him to MV "Eleptheria-K," whose master was going on leave on February 27,
which, however, respondent likewise missed for failure to disembark when ordered
to do so.
On the ground of serious misconduct or willful disobedience, petitioner terminated
the services of respondent. In a complaint for illegal dismissal, on December 1,
1993, Philippine Overseas Employment Administration (POEA), through
Administrator Felicisimo O. Joson, dismissed the said complaint for lack of merit
finding respondent's apprehension as premature and that petitioners were merely
acting in the exercise of their management prerogative.
On appeal, this decision was reversed by the National Labor Relations Commission
(NLRC) in its decision dated November 29, 1994.
ISSUE:
WON the intended transfer of Capt. Gucor to another vessel was in effect an
alteration of his original contract which could not be done without the approval of
the Secretary of Labor.
HELD: Standard Employment Contract:
The CREWMEMBER agrees to be transferred at any port to any vessel owned or
operated, manned or managed by the same employer provided it is accredited to
the same manning agent and provided further that the rating of the crewmember
and the rate of his wages and terms of service are in no way inferior and the total
period of employment shall not exceed that originally agreed upon.
Article 34(i) of the Labor Code, on the other hand, reads:

(i)

It shall be unlawful for "any individual, entity, licensee or holder of

authority to substitute or alter employment contract approved and
verified by the Department of labor from the time of actual signing
thereof by the parties up to and including the periods of expiration of
the same without the approval of the Secretary of Labor.

Apparently, there is no inconsistency between Article 34(i) of the Labor Code and
the transfer clause under the SEC. On the contrary, the latter even complements
the other by way of resolving the complex demands of seafarers whose services
may entail occasional transfer from one vessel to another.
Obviously, the transfer clause is not without limitations. Thus, a transfer is
sanctioned only if it is to any vessel owned or operated, manned or managed by the
same employer provided it is accredited to the same mantling agent and that the
rating of the crewmember, his wages and terms of service are in no way inferior and
the total period of employment shall not exceed that originally agreed upon.
In the instant case, respondent's assignment to another vessel owned by European
Navigation and accredited to the same manning agent, therefore, under no
circumstance, violated Article 34(i) of the Labor Code. The transfer clause is
deemed incorporated into the original contract; hence, the approval of the
Secretary of Labor is no longer necessary.
Accordingly, we conclude that petitioners merely availed of what the employment
contract allows. Indeed, it was nothing more than an application of the subject
provision.
21.
ATCI Overseas Corp. et al., vs. Echin [GR No. 178551, October
11, 2010]
Facts:
Respondent Echin was hired by petitioner ATCI in behalf of its principal co-petitioner,
Ministry of Public Health of Kuwait, for the position of medical technologist under a
two-year contract with a monthly salary of US$1,200.00.Within a year, Respondent
was terminated for not passing the probationary period which was under the
Memorandum of Agreement.
Ministry denied respondents request and she returned to the Philippines
shouldering her own fair.
Respondent filed with the National Labor Relations Commission (NLRC) a complaint
against ATCI forillegal dismissal. Labor Arbiter rendered judgment in favor of
respondent and ordered ATCI to pay her $3,600.00, her salary for the three months
unexpired portion of the contract.
ATCI appealed Labor Arbiters decision, however, NLRC affirmed the latters decision
and denied petitioner ATCIs motion for reconsideration. Petitioner appealed to the
Court Appeals contending that their principal being a foreign government agency is
immune from suit, and as such, immunity extended to them.

Appellate Court affirmed NLRCs decision. It noted that under the law, a private
employment agency shall assume all responsibilities for the implementation of the
contract of employment of an overseas worker; hence, it can be sued jointly and
severally with the foreign principal for any violation of the recruitment agreement or
contract of employment.
Petitioners motion for reconsideration was denied; hence, this present petition.
Issue:
Whether or not petitioners be held liable considering that the contract specifically
stipulates that respondents employment shall be governed by the Civil Service Law
and Regulations of Kuwait.
Ruling:
Court denied the petition. According to RA 8042:The obligations covenanted in the
recruitment agreement entered into by and between the local agent and its foreign
principal are not coterminous with the term of such agreement so that if either or
both of the parties decide to end the agreement, the responsibilities of such parties
towards the contracted employees under the agreement do not at all end, but the
same extends up to and until the expiration of the employment contracts of the
employees recruited and employed pursuant to the said recruitment agreement. In
international law, the party who wants to have a foreign law applied to a dispute or
case has the burden of proving the foreign law.
Where a foreign law is not pleaded or, even if pleaded, is not proved, the
presumption is that foreign law is the same as ours. Thus, we apply
Philippine labor laws in determining the issues presented before us
(Doctrine of Processual Presumption).
22.
International Management
163657, April 18, 2012]

Services

vs.

Logarta

[GR

No.

Facts:
Recruitment agency, International Management Services (IMS), owned and operated
by Marilyn C. Pascual, deployed respondent Roel P.Logarta to work for Petrocon
Arabia Limited (Petrocon) in Alkhobar, Kingdom of Saudi Arabia, in connection with
general engineering services of Petrocon for the Saudi Arabian Oil Company (Saudi
Aramco).
Respondent was employed for a period of two (2) years, commencing on October 2,
1997, with a monthly salary of eight hundred US Dollars (US$800.00).On April 29,
1998, Saudi Aramco notified Petrocon that due to changes in the general
engineering services work forecast for 1998, the man-hours that were formerly
allotted to Petrocon is going to be reduced by 40% which constrained Petrocon to
reduce its personnel. Thus, on June 1, 1998, Petrocon gave respondent a written
notice informing the latter that due to the lack of project works related to his

expertise, he is given a 30-day notice of termination, and that his last day of work
with Petrocon will be on July 1, 1998.
Petrocon also informed respondent that all due benefits in accordance with the
terms and conditions of his employment contract will be paid to respondent,
including his ticket back to the Philippines. Before his departure from Saudi Arabia,
respondent received his final paycheck from Petrocon amounting SR7, 488.57.Upon
his return, respondent filed a complaint with the Regional Arbitration Branch VII,
National Labor Relations Commission (NLRC), Cebu City, against petitioner as the
recruitment agency which employed him for employment abroad.
In filing the complaint, respondent sought to recover his unearned salaries covering
the unexpired portion of his employment contract with Petrocon on the ground that
he was illegally dismissed. The Labor Arbiter rendered judgment in favor of the
respondent and ordered petitioner to pay the peso equivalent of US$5,600.00 based
on the rate at the time of actual payment, as payment of his wages for the
unexpired portion of his contract of employment. The NLRC on appeal
affirmed the Labor Arbiters decision but reduced the award to only US$4,800.00 or
its peso equivalent at the time of payment. The CA likewise dismissed the petition
and affirmed the NLRC decision.
Issue:
Whether or not respondents dismissal through retrenchment illegal.
Ruling:
No. Retrenchment is the reduction of work personnel usually due to poor financial
returns, aimed to cut down costs for operation particularly on salaries and wages. It
is one of the economic grounds to dismiss employees and is resorted by an
employer primarily to avoid or minimize business losses.
Retrenchment programs are purely business decisions within the purview of a valid
and reasonable exercise of management prerogative. It is one way of downsizing an
employer's workforce and is often resorted to by the employer during periods of
business recession, industrial depression, or seasonal fluctuations, and during lulls
in production occasioned by lack of orders, shortage of materials, conversion of the
plant for a new production program, or introduction of new methods or more
efficient machinery or automation. It is a valid management prerogative, provided it
is done in good faith and the employer faithfully complies with the substantive and
procedural requirements laid down by law and jurisprudence.
Philippine Law recognizes retrenchment as a valid cause for the dismissal of a
migrant or overseas Filipino worker under Article 283 of the Labor Code. Thus,
retrenchment is a valid exercise of management prerogative subject to the strict
requirements set by jurisprudence, to wit:
(1)That the retrenchment is reasonably necessary and likely to prevent
business losses which, if already incurred, are not merely de minimis, but

substantial, serious, actual and real, or if only expected, are reasonably

imminent as perceived objectively and in good faith by the employer;
(2)That the employer served written notice both to the employees and to the
Department of Labor and Employment at least one month prior to the
intended date of retrenchment;
(3)That the employer pays the retrenched employees separation pay
equivalent to one month pay or at least 1/2 month pay for every year of
service, whichever is higher;
(4)That the employer exercises its prerogative to retrench employees in good
faith for the advancement of its interest and not to defeat or circumvent the
employees' right to security of tenure; and
(5)That the employer used fair and reasonable criteria in ascertaining who
would be dismissed and who would be retained among the employees, such
as status,efficiency, seniority, physical fitness, age, and financial hardship
for certain workers.28
Applying the above-stated requisites for a valid retrenchment in the case at bar, it is
apparent that the first, fourth and fifth requirements were complied with by
respondent's employer. However, the second and third requisites were absent when
Petrocon terminated the services of respondent. As aptly found by the NLRC and
justly sustained by the CA, Petrocon exercised its prerogative to retrench its
employees in good faith and the considerable reduction of work allotments of
Petrocon by Saudi Aramco was sufficient basis for Petrocon to reduce the number of
its personnel.
As for the notice requirement, however, contrary to petitioner's contention, proper
notice to the DOLE within 30 days prior to the intended date of retrenchment is
necessary and must be complied with despite the fact that respondent is an
overseas Filipino worker.
In the present case, although respondent was duly notified of his termination by
Petrocon 30 days before its effectivity, no allegation or proof was advanced by
petitioner to establish that Petrocon ever sent a notice to the DOLE 30 days before
the respondent was terminated.
Thus, this requirement of the law was not complied with. In the case at bar, despite
the fact that respondent was employed by Petrocon as an OFW in Saudi Arabia, still
both he and his employer are subject to the provisions of the Labor Code when
applicable.
The basic policy in this jurisdiction is that all Filipino workers, whether employed
locally or overseas, enjoy the protective mantle of Philippine labor and social
legislations. Also, respondent is entitled to the payment of his separation pay.
However, this Court disagrees with the conclusion of the Labor Arbiter, the NLRC
and the CA, that respondent should be paid his separation pay in accordance with
the provision of Section 10 of R.A. No. 8042.
A plain reading of the said provision clearly reveals that it applies only to an illegally
dismissed overseas contract worker or a worker dismissed from overseas

employment without just, valid or authorized cause. In the case at bar,

notwithstanding the fact that respondent's termination from his employment was
procedurally infirm, having not complied with the notice requirement, nevertheless
the same remains to be for a just, valid and authorized cause,i.e., retrenchment as a
valid exercise of management prerogative.
To stress, despite the employer's failure to comply with the one-month notice to the
DOLE prior to respondents termination, it is only a procedural infirmity which does
not render the retrenchment illegal. In Agabon v. NLRC, this Court ruled that when
the dismissal is for a just cause, the absence of proper notice should not nullify the
dismissal or render it illegal or ineffectual. Instead, the employer should indemnify
the employee for violation of his statutory rights. Consequently, it is Article 283 of
the Labor Code and not Section 10 of R.A. No. 8042 that is controlling. Thus,
respondent is entitled to payment of separation pay equivalent to one (1) month
pay, or at least one-half (1/2) month pay for every year of service, whichever is
higher.
Considering that respondent was employed by Petrocon for a period of eight (8)
months, he is entitled to receive one (1) month pay as separation pay. In addition,
pursuant to current jurisprudence, for failure to fully comply with the statutory due
process of sufficient notice, respondent is entitled to nominal damages in the
amount P50,000.00.
23.
STOLT-NIELSEN TRANSPORTATION GROUP, INC. AND CHUNG GAI
SHIP MANAGEMENT vs SULPECIO MEDEQUILLO, JR.,
FACTS:
Sulpecio Medequillo (respondent) filed a complaint before the Adjudication Office of
the Philippine Overseas Employment Administration (POEA) against the petitioners
for illegal dismissal under a first contract and for failure to deploy under a second
contract. He prayed for actual, moral and exemplary damages as well as attorneys
fees for his illegal dismissal and in view of the Petitioners bad faith in not complying
with the Second Contract.
The case was transferred to the Labor Arbiter of the DOLE upon the effectivity of the
Migrant Workers and Overseas Filipinos Act of 1995.
The parties were required to submit their respective position papers before the
Labor Arbiter. However, petitioners failed to submit their respective pleadings
despite the opportunity given to them.
Labor Arbiter Vicente R. Layawen rendered a judgmentfinding that the respondent
was constructively dismissed by the petitioners. The Labor Arbiter found the first
contract entered into by and between the complainant and the respondents to have
been novated by the execution of the second contract. In other words, respondents
cannot be held liable for the first contract but are clearly and definitely liable for the
breach of the second contract.

The petitioners appealed the adverse decision before the National Labor Relations
Commission assailing that they were denied due process, that the respondent
cannot be considered as dismissed from employment because he was not even
deployed yet and the monetary award in favor of the respondent was exorbitant and
not in accordance with law.
NLRC affirmed with modification the Decision of the Labor Arbiter. The NLRC upheld
the finding of unjustified termination of contract for failure on the part of the
petitioners to present evidence that would justify their non-deployment of the
respondent.
The petitioners filed a Petition forCertioraribefore the Court of Appeals. Finding no
grave abuse of discretion, the Court of Appeals AFFIRMED the Decision of the labor
tribunal.
ISSUE:
Whether or not the first employment contract between petitioners and the private
respondent is different from and independent of the second contract subsequently
executed upon repatriation of respondent to Manila which justifies termination of
respondent?
HELD:
Court of Appeals decision is sustained.
The POEA Standard Employment Contract provides that employment shall
commence upon the actual departure of the seafarer from the airport or seaport in
the port of hire.We adhere to the terms and conditions of the contract so as to credit
the valid prior stipulations of the parties before the controversy started. Else, the
obligatory force of every contract will be useless. Parties are bound not only to the
fulfillment of what has been expressly stipulated but also to all the consequences
which, according to their nature, may be in keeping with good faith, usage and law.
We rule that distinction must be made between the perfection of the employment
contract and the commencement of the employer-employee relationship. The
perfection of the contract, which in this case coincided with the date of execution
thereof, occurred when petitioner and respondent agreed on the object and the
cause, as well as the rest of the terms and conditions therein. The commencement
of the employer-employee relationship, as earlier discussed, would have taken place
had petitioner been actually deployed from the point of hire. Thus, even before the
start of any employer-employee relationship, contemporaneous with the perfection
of the employment contract was the birth of certain rights and obligations, the
breach of which may give rise to a cause of action against the erring party.
Thus, if the reverse had happened, that is the seafarer failed or refused to
be deployed as agreed upon, he would be liable for damages.
24.
Antonio M. Serrano vs. Gallant Maritime Services, Inc. and
Marlow Navigation Co., Inc. [GR No. 167614 March 24, 2009]

Facts:
Sailor Antonio Serrano entered into a 12-month overseas employment contract with
respondents Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd., initially
signing up for the position of Chief Officer. Sailor Serrano, however, was persuaded
to submit to a downgraded contract as Second Officer, on the assurance of
eventual promotion to Chief Officer by the end of the following month. Having
wandered around respondents ship for more than two months without being
granted any promotion whatsoever, he refused to stay on as Second Officer and
was repatriated back to the Philippines, with still nine (9) months and twenty- three
(23) days left unserved. Sailor Serrano afterwards filed a complaint with the Labor
Arbiter, charging respondents with constructive dismissal and demanding that he be
paid the salary as corresponds to the remaining term of his contract. The Arbiter
ruled for him, concluding that there was illegal dismissal; however, Sailor Serrano
was only awarded with salary equivalent to 3 months. The Arbiter relied on Section
10, parag. 5 of R.A. 8042 (the Migrant Workers and Overseas Filipino Act of 1995),
which puts forth that
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.
Gritty, our man now condemns the provision as unconstitutional, wailing how it
impairs the terms of their contract, deprives them of equal protection and denies
them due process.
Issue: WON the aforementioned provision is constitutional and valid.
SC Ruling:
Though it scoffed at the argument that the law unduly impairs their contract
enacted in 1995, the law is thus deemed read into the agreement forged between
the parties in 1998 the Court, with straitlaced hesitation, declared the assailed
clause for three (3) months for every year of the unexpired term, whichever is less
unconstitutional, in that it did deny workers in similar situations (particularly
OFWs) the right to equal protection and due process.
the subject clause creates a sub-layer of discrimination among OFWs** 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.
Further magnifying the clauses incompatibility with the right to equal protection of
laws is the fact that it deprives overseas workers of a benefit granted without

exception to domestic workers (the right to recover in cases of illegal dismissal the
salary for the entire unexpired portion of the contract), with the government not
being able to prove any compelling state interest warranting such damaging
discrimination. As a matter of fact, before the laws enactment, both domestic and
overseas workers enjoyed the same right.
...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..
25.
Pert/CPM Manpower Exponent Co., Inc. Vs. Amando A. Vinuya,
et al.
Facts:
The respondents alleged that the agency deployed them was to work as aluminum
fabricator/installer. However, they were shocked to find out what their working and
living conditions were in Dubai. They were required to work from 6:30 a.m. to 6:30
p.m., with a break of only one hour to one and a half hours. When they rendered
overtime work, they were most of the time either underpaid or not paid at all.
Burdened by all the expenses and financial obligations, they signed new
employment contracts. Due to agencys inaction, the respondents expressed to
Modern Metal their desire to resign.Out of fear, as they put it, that Modern Metal
would not give them their salaries and release papers, the respondents, except Era,
cited personal/family problems for their resignation. It took the agency several
weeks to repatriate the respondents to the Philippines.
The agency countered that the respondents were not illegally dismissed; they
voluntarily resigned from their employment to seek a better paying job.The agency
further alleged that the respondents even voluntarily signed affidavits of quitclaim
and release after they resigned
Issue:
W/N petitioners were illegally dismissed
Held:
The agency and its principal, Modern Metal, committed a prohibited practice and
engaged in illegal recruitment when they altered or substituted the contracts
approved by the Philippine Overseas Employment Administration (POEA). Article 34
(i) of the Labor Code provides: It shall be unlawful for any individual, entity,
licensee, or holder of authority to substitute or alter employment contracts
approved and verified by the Department of Labor from the time of actual signing
thereof by the parties up to and including the period of expiration of the same
without the approval of the Secretary of Labor. Meanwhile, Article 38 (i) of the Labor
Code, as amended by R.A. 8042, defined illegal recruitment to include the

substitution or alteration, to the prejudice of the worker, of employment contracts

approved and verified by the Department of Labor and Employment from the time
of actual signing thereof by the parties up to and including the period of the
expiration of the same without the approval of the Department of Labor and
Employment.
Furthermore, the agency and Modern Metal committed breach of contract by
providing substandard working and living arrangements, when the contract
provided free and suitable housing.
We thus cannot accept the agencys insistence that the respondents voluntarily
resigned since they personally prepared their resignation letters in their own
handwriting.
26.
SAMEER OVERSEAS PLACEMENT AGENCY, INC., vs JOY C.
CABILES, G.R. No. 170139, August 05, 2014
FACTS OF THE CASE:
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and
placement agency. Responding to an ad it published, respondent, Joy C. Cabiles,
submitted her application for a quality control job in Taiwan, and signed with a oneyear employment contract for a monthly salary of NT$15,360.00.
The agency required her to pay a placement fee of 70,000.00 when she signed the
employment contract.
She was deployed to work in Taiwan for Wacoal, but was given a position as a cutter.
Sameer Overseas Placement Agency claims that on July 14, 1997, a certain Mr.
Huwang from Wacoal informed Joy, without prior notice, that she was terminated
and that she should immediately report to their office to get her salary and
passport. She was asked to prepare for immediate repatriation.
Joy claims that she was told that from June 26 to July 14, 1997, she only earned a
total of NT$9,000. According to her, Wacoal deducted NT$3,000 to cover her plane
ticket to Manila.
She filed a filed a complaint with the National Labor Relations Commission against
petitioner and Wacoal for illegal dismissal.
Sameers Defense:
o
Respondents termination was due to her inefficiency, negligence in
her duties, and her failure to comply with the work requirements [of]
her foreign [employer];
o
The agency also claimed that it did not ask for a placement fee of
NT$70,000.00 (evidenced by an OR bearing NT% 20,360.00);
o
Petitioner added that Wacoals accreditation with petitioner had
already been transferred to the Pacific Manpower & Management
Services, Inc. (Aug. 06, 1997) thus, obligation is substituted with
Pacific, which the latter denied

Labor Arbiter Ruling:

o
Case is dismissed Rationale: Complaint is based on mere allegations.
o
No excess payment of placement fees, based on the official receipt
presented by petitioner
o
Transfer of obligation to Pacific is immaterial
NLRC Ruling:
o
Joy is illegally dismissed
o
Reiterated the doctrine that the burden of proof to show that the
dismissal was based on a just or valid cause belongs to the employer
o
It found that Sameer Overseas Placement Agency failed to prove that
there were just causes for termination.
o
There was no sufficient proof to show that respondent was inefficient in
her work and that she failed to comply with company requirements.41
Furthermore, procedural due process was not observed in terminating
respondent.
o
Did not rule on the issue of reimbursement of placement fees for lack
of jurisdiction
o
It refused to entertain the issue of the alleged transfer of obligations to
Pacific.
o
It did not acquire jurisdiction over that issue because Sameer Overseas
Placement Agency failed to appeal the Labor Arbiters decision not to
rule on the matter.
Sameer filed for MR but NLRC dismissed; filed for petition for certiorari at CA
CA Ruling:
o

Affirmed NLRC with respect to the finding of illegal dismissal, Joys

entitlement to the equivalent of three months worth of salary,
reimbursement of withheld repatriation expense, and attorneys fees.
o
Remanded case to NLRC to address the validity of petitioners
allegations against Pacific.
ISSUE OF THE CASE:
1. WON the Court of Appeals erred when it affirmed the ruling of the National Labor
Relations Commission finding respondent illegally dismissed and awarding her three
months worth of salary, the reimbursement of the cost of her repatriation, and
attorneys fees despite the alleged existence of just causes of termination;
2. WON there was a just cause for termination because there was a finding of
Wacoal that respondent was inefficient in her work;
3. WON Pacific that should now assume responsibility for Wacoals contractual
obligations to the workers originally recruited by petitioner
SC RULING/RATIONALE:
1.) JUST CAUSE:

Sameer Overseas Placement Agencys petition is without merit. SC find for

respondent.
Sameer Overseas Placement Agency failed to show that there was just cause for
causing Joys dismissal. The employer, Wacoal, also failed to accord her due process
of law.
Indeed, employers have the prerogative to impose productivity and quality
standards at work. They may also impose reasonable rules to ensure that the
employees comply with these standards.59 Failure to comply may be a just cause
for their dismissal. Certainly, employers cannot be compelled to retain the services
of an employee who is guilty of acts that are inimical to the interest of the employer.
While the law acknowledges the plight and vulnerability of workers, it does not
authorize the oppression or self-destruction of the employer. Management
prerogative is recognized in law and in our jurisprudence.This prerogative, however,
should not be abused. It is tempered with the employees right to security of
tenure. Workers are entitled to substantive and procedural due process before
termination. They may not be removed from employment without a valid or just
cause as determined by law and without going through the proper
procedure.Security of tenure for labor is guaranteed by our Constitution
With respect to the rights of overseas Filipino workers, follow the principle of lex
loci contractus.
Pinned - Triple Eight Integrated Services, Inc. v. NLRC
Article 282 of the Labor Code enumerates the just causes of termination by the
employer. Thus:
Art. 282. Termination by employer.
An employer may terminate an employment for any of the following causes: (a)
Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;(b) Gross and habitual
neglect by the employee of his duties;(c) Fraud or willful breach by the employee of
the trust reposed in him by his employer or duly authorized representative;(d)
Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives;(e) Other causes analogous to the foregoing.
Petitioners allegation that respondent was inefficient in her work and negligent in
her duties may, therefore, constitute a just cause for termination under Article
282(b), but only if petitioner was able to prove it.
The burden of proving that there is just cause for termination is on the employer.
The employer must affirmatively show rationally adequate evidence that the
dismissal was for a justifiable cause. Failure to show that there was valid or just
cause for termination would necessarily mean that the dismissal was illegal.

To show that dismissal resulting from inefficiency in work is valid, it must be shown
that:
1) the employer has set standards of conduct and workmanship against
which the employee will be judged;
2) the standards of conduct and workmanship must have been
communicated to the employee; and
3) the communication was made at a reasonable time prior to the employees
performance assessment.
The regular employee must constantly attempt to prove to his or her employer that
he or she meets all the standards for employment. Courts should remain vigilant on
allegations of the employers failure to communicate work standards that would
govern ones employment if [these are] to discharge in good faith [their] duty to
adjudicate.
2.) DUE PROCESS REQUIREMENT
Petitioner failed to comply with the due process requirement
A valid dismissal requires both a valid cause and adherence to the valid procedure
of dismissal.The employer is required to give the charged employee at least two
written notices before termination.
One of the written notices must inform the employee of the particular acts that may
cause his or her dismissal.77 The other notice must [inform] the employee of the
employers decision. Aside from the notice requirement, the employee must also
be given an opportunity to be heard.
3.) Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995
Respondent Joy Cabiles, having been illegally dismissed, is entitled to her salary for
the unexpired portion of the employment contract that was violated together with
attorneys fees and reimbursement of amounts withheld from her salary.
Sec 10 of RA 1082 MONEY CLAIMS
SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND
The reinstatement of the clause in Republic Act No. 8042 was not yet in
effect at the time of respondents termination from work in 1997.
Republic Act No. 8042 before it was amended by Republic Act No. 10022
governs this case.
Republic Act. No. 10022, violates the constitutional rights to equal protection and
due process.

SC reiterate their finding in Serrano v. Gallant Maritime that limiting

wages that should be recovered by an illegally dismissed overseas worker
to three months is both a violation of due process and the equal
protection clauses of the Constitution.
Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her
contract, in accordance with Section 10 of Republic Act No. 8042. The award of the
three-month equivalence of respondents salary must be modified accordingly. Since
she started working on June 26, 1997 and was terminated on July 14, 1997,
respondent is entitled to her salary from July 15, 1997 to June 25, 1998. To rule
otherwise would be iniquitous to petitioner and other OFWs, and would, in effect,
send a wrong signal that principals/employers and recruitment/manning agencies
may violate an OFWs security of tenure which an employment contract embodies
and actually profit from such violation based on an unconstitutional provision of
law.
Respondent is also entitled to an interest of 6% per annum on her money claims
from the finality of this judgment.
4.) LIABILITIES OF EMPLOYER
SC clarify the liabilities of Wacoal as principal and petitioner as the employment
agency that facilitated respondents overseas employment.
Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 provides that
the foreign employer and the local employment agency are jointly and severally
liable for money claims including claims arising out of an employer-employee
relationship and/or damages. This section also provides that the performance bond
filed by the local agency shall be answerable for such money claims or damages if
they were awarded to the employee.
This provision is in line with the states policy of affording protection to labor and
alleviating workers plight.
The Migrant Workers and Overseas Filipinos Act of 1995 ensures that overseas
workers have recourse in law despite the circumstances of their employment. By
providing that the liability of the foreign employer may be enforced to the full
extent against the local agent, the overseas worker is assured of immediate and
sufficient payment of what is due them.
Pinned Prieto vs NLRC
The Court is not unaware of the many abuses suffered by our overseas workers in
the foreign land where they have ventured, usually with heavy hearts, in pursuit of
a more fulfilling future. Breach of contract, maltreatment, rape, insufficient
nourishment, sub-human lodgings, insults and other forms of debasement, are only
a few of the inhumane acts to which they are subjected by their foreign employers,
who probably feel they can do as they please in their own country. While these
workers may indeed have relatively little defense against exploitation while they are
abroad, that disadvantage must not continue to burden them when they return to

their own territory to voice their muted complaint. There is no reason why, in their
very own land, the protection of our own laws cannot be extended to them in full
measure for the redress of their grievances.
The decision of the Court of Appeals is AFFIRMED with modification.
Petitioner Sameer Overseas Placement Agency is ORDERED to pay
respondent Joy C. Cabiles the amount equivalent to her salary for the
unexpired portion of her employment contract at an interest of 6% per
annum from the finality of this judgment. Petitioner is also ORDERED to
reimburse respondent the withheld NT$3,000.00 salary and pay
respondent attorneys fees of NT$300.00 at an interest of 6% per annum
from the finality of this judgment.
The clause, or for three (3) months for every year of the unexpired term,
whichever is less in Section 7 of Republic Act No. 10022 amending
Section 10 of Republic Act No. 8042 is declared unconstitutional and,
therefore, null and void.

27.
Medline Management Inc. vs. Roslinda, G.R. No. 168715,
September 15, 2010
Facts:
Petitioner Medline Management, Inc. (MMI), on behalf of its foreign principal,
petitioner Grecomar Shipping Agency (GSA), hired Juliano Roslinda (Juliano) to work
on board the vessel MV "Victory." Juliano was previously employed by the petitioners
under two successive separate employment contracts of varying durations. His
latest contract was approved by the POEA on September 9, 1998 for a duration of
nine months. In accordance with which, he boarded the vessel MV "Victory" on
October 25, 1998 as an oiler and, after several months of extension, was discharged
on January 20, 2000.
Months after his repatriation, or on March 6, 2000, Juliano consulted Dr. Pamela R.
Lloren (Dr. Lloren) of Metropolitan Hospital. He complained about abdominal
distention which is the medical term for a patient who vomits previously ingested
foods. From March 8 to August 24, 2000, Juliano has undergone Hemodialysis, a
method of removing waste products such as creatinine and urea, as well as freeing
water from the blood, when the kidneys are in renal failure.
On August 27, 2001, Juliano died. On September 4, 2003, his wife Gliceria Roslinda
and son Ariel Roslinda, respondents herein, filed a complaint against MMI and GSA
for payment of death compensation, reimbursement of medical expenses, damages,
and attorney's fees before the Labor Arbitration Branch of the NLRC.

Instead of filing an answer, they filed a Motion to Dismiss on the grounds of

prescription, lack of jurisdiction and prematurity. Petitioners contended that the
action has already prescribed because it was filed three years, seven months and
22 days from the time the deceased seafarer reached the point of hire.
Issue:
Whether or not the claim is not yet barred by prescription despite the fact that it
was filed beyond the one-year prescriptive period provided by the POEA Standard
Employment Contract.
Ruling:
The employment contract signed by Juliano stated that "Upon approval, the same
shall be deemed an integral part of the Standard Employment Contract (SEC) for
seafarers." Section 28 of the POEA SEC states:
SECTION 28.JURISDICTION
XXX
Recognizing the peculiar nature of overseas shipboard employment, the employer
and the seafarer agree that all claims arising from this contract shall be made within
one (1) year from the date of the seafarer's return to the point of hire. (Emphasis
supplied)
On the other hand, the Labor Code states:
ART. 291.Money claims. All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three (3)
years from the time the cause of action accrued; otherwise they shall forever be
barred.
In Southeastern Shipping v. Navarra, Jr., we ruled that "Article 291 is the law
governing the prescription of money claims of seafarers, a class of overseas
contract workers. This law prevails over Section 28 of the Standard Employment
Contract for Seafarers which provides for claims to be brought only within one year
from the date of the seafarer's return to the point of hire." We further declared that
"for the guidance of all, Section 28 of the Standard Employment Contract for
Seafarers, insofar as it limits the prescriptive period within which the seafarers may
file their money claims, is hereby declared null and void. The applicable provision is
Article 291 of the Labor Code, it being more favorable to the seafarers and more in
accord with the State's declared policy to afford full protection to labor. The
prescriptive period in the present case is thus three years from the time the cause
of action accrues."
In the present case, the cause of action accrued on August 27, 2001 when Juliano
died. Hence, the claim has not yet prescribed, since the complaint was filed with the
arbitration branch of the NLRC on September 4, 2003.
28.
ACE NAVIGATION CO., INC. VS. FERNANDEZ (G.R. NO. 197309,
10 OCT 2012)
Facts:

On October 9, 2008, seaman Teodorico Fernandez (Fernandez), assisted by his wife,

Glenita Fernandez, filed with the NLRC a complaint for disability benefits, with
prayer for moral and exemplary damages, plus attorneys fees, against Ace
Navigation Co., Inc., Vela International Marine Ltd., and/or Rodolfo Pamintuan
(petitioners).
The petitioners moved to dismiss the complaint,4 contending that the labor arbiter
had no jurisdiction over the dispute. They argued that exclusive original jurisdiction
is with the voluntary arbitrator or panel of voluntary arbitrators, pursuant to Section
29 of the POEA Standard Employment Contract (POEA-SEC), since the parties are
covered by the AMOSUPTCC or AMOSUP-VELA (as later cited by the petitioners)
collective bargaining agreement (CBA). Under Section 14 of the CBA, a dispute
between a seafarer and the company shall be settled through the grievance
machinery and mandatory voluntary arbitration.
Fernandez opposed the motion.5 He argued that inasmuch as his complaint involves
a money claim, original and exclusive jurisdiction over the case is vested with the
labor arbiter.
On December 9, 2008, Labor Arbiter Rioflorido denied the motion to dismiss,
holding that under Section 10 of RA No. 8042, the Migrant Workers and Overseas
Filipinos Act of 1995, the labor arbiter has original and exclusive jurisdiction over
money claims arising out of an employer-employee relationship or by virtue of any
law or contract, notwithstanding any provision of law to the contrary.6 The
petitioners appealed to the NLRC, but the labor agency denied the appeal.
Accordingly, it remanded the case to the labor arbiter for further proceedings. The
petitioners moved for reconsideration, but the NLRC denied the motion, prompting
the petitioners to elevate the case to the CA through a petition for certiorari under
Rule 65 of the Rules of Court.
The CA Decision
Through its decision of September 22, 2010,7 the CA denied the petition on
procedural and substantive grounds. On the merits of the case, the CA believed that
the petition cannot prosper. The CA clarified that while the law9 allows parties to
submit to voluntary arbitration other labor disputes, including matters falling within
the original and exclusive jurisdiction of the labor arbiters under Article 217 of the
Labor Code as this Court recognized in Vivero v. Court of Appeals10, the parties
submission agreement must be expressed in unequivocal language. It found no
such unequivocal language in the AMOSUP/TCC CBA that the parties agreed to
submit money claims or, more specifically, claims for disability benefits to voluntary
arbitration.
Taking note of Section 29 of the POEA-SEC11, the CA explained that the relevant
POEA-SEC provisions should likewise be qualified by the ruling in the Vivero case,
the Labor Code, and other applicable laws and jurisprudence.
In sum, the CA stressed that the jurisdiction of voluntary arbitrators is limited to the
seafarers claims which do not fall within the labor arbiters original and exclusive
jurisdiction or even in cases where the labor arbiter has jurisdiction, the parties

have agreed in unmistakable terms (through their CBA) to submit the case to
voluntary arbitration.
The petitioners moved for reconsideration of the CA decision, but the appellate
court denied the motion.
ISSUE:
Who has the original and exclusive jurisdiction over Fernandezs disability claim
the labor arbiter under Section 10 of R.A. No. 8042, as amended, or the voluntary
arbitration mechanism as prescribed in the parties CBA and the POEA-SEC?
RULING:
We find merit in the petition.
The States labor relations policy laid down in the Constitution and fleshed out in the
enabling statute, the Labor Code (Art. 260, 261 and 262) and the POEA-SEC1
provide that the voluntary arbitrator or panel of voluntary arbitrators has original
and exclusive jurisdiction over Fernandezs disability claim. There is no dispute that
the claim arose out of Fernandezs employment with the petitioners and that their
relationship is covered by a CBA the AMOSUP/TCC or the AMOSUP-VELA CBA. The
CBA provides for a grievance procedure for the resolution of grievances or disputes
which occur during the employment relationship and, like the grievance machinery
created under Article 261 of the Labor Code, it is a two-tiered mechanism, with
voluntary arbitration as the last step.
Contrary to the CAs reading of the CBAs Article 14, there is unequivocal or
unmistakable language in the agreement which mandatorily requires the parties to
submit to the grievance procedure any dispute or cause of action they may have
against each other.
What might have caused the CA to miss the clear intent of the parties in prescribing
a grievance procedure in their CBA is, as the petitioners have intimated, the use of
the auxiliary verb "may" in Article 14.7(a) of the CBA which provides that "if by
reason of the nature of the Dispute, the parties are unable to amicably settle the
dispute, either party may refer the case to a MANDATORY ARBITRATION
COMMITTEE."28
While the CA did not qualify its reading of the subject provision of the CBA, it is
reasonable to conclude that it viewed as optional the referral of a dispute to the
mandatory arbitration committee when the parties are unable to amicably settle the
dispute.
We find this a strained interpretation of the CBA provision. The CA read the
provision separately, or in isolation of the other sections of Article 14, especially
14.7(h), which, in clear, explicit language, states that the "referral of all unresolved
disputes from the Grievance Resolution Committee to the Mandatory Arbitration
Committee shall be unwaivable prerequisite or condition precedent for bringing any
action, claim, or cause of action, legal or otherwise, before any court, tribunal, or
panel in any jurisdiction"29 and that the failure by a party or seaman to so refer the

dispute to the prescribed dispute resolution mechanism shall bar any legal or other
action.
Read in its entirety, the CBAs Article 14 (Grievance Procedure) unmistakably
reflects the parties agreement to submit any unresolved dispute at the grievance
resolution stage to mandatory voluntary arbitration under Article 14.7(h) of the CBA.
And, it should be added that, in compliance with Section 29 of the POEA-SEC which
requires that in cases of claims and disputes arising from a seafarers employment,
the parties covered by a CBA shall submit the claim or dispute to the original and
exclusive jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators.
Since the parties used unequivocal language in their CBA for the submission of their
disputes to voluntary arbitration, we find that the CA committed a reversible error in
its ruling. It bears stressing at this point that we are upholding the jurisdiction of the
voluntary arbitrator or panel of voluntary arbitrators over the present dispute, not
only because of the clear language of the parties CBA on the matter; more
importantly, we so uphold the voluntary arbitrators jurisdiction, in recognition of
the States express preference for voluntary modes of dispute settlement, such as
conciliation and voluntary arbitration as expressed in the Constitution, the law and
the rules.
It is settled that when the parties have validly agreed on a procedure for resolving
grievances and to submit a dispute to voluntary arbitration then that procedure
should be strictly observed.31
29.
PHILIPPINE
TRANSMARINE
CARRIERS,
NAVIGATION, LTD., vs. SILVINO A. NAZAM.

INC.,

GLOBAL

FACTS:
Seafarer Silvino Nazam (respondent) was hired by petitioner Philippine Transmarine
Carriers, Inc. (Transmarine) on behalf of its principal-co-petitioner Global Navigation,
Ltd. for the position of Bosun under a 9-month contract.
Respondent was deployed on August 26, 2004 at Ulsan, South Korea on board the
vessel M/V Maersk Durban, but was repatriated to the Philippines twenty three days
later or on September 18, 2004, pursuant to his handwritten letter requesting that
he be relieved.
Respondent filed with the National Labor Relations Commission (NLRC) a complaint
for payment of disability benefits, sickness allowance, damages, and attorneys fees,
alleging that the hostile working conditions at the vessel exposed him to humiliation
and verbal and mental abuse from the Chief Officer and Master, causing him to
suffer hypertension and depression.
Three weeks after filing his complaint or on October 27, 2004, respondent consulted
with an independent physician, Dr. Jesus Alberto Q. Poblete (Dr. Poblete), who
diagnosed him to be suffering from "Major Depression with Psychotic Features R/O
Traumatic Disorder."

Labor Arbiter Ramon Valentin C. Reyes found for respondent and directed
petitioners to pay him permanent total disability benefits. On appeal, the NLRC set
aside the Labor Arbiters Decision and dismissed respondents complaint, noting that
respondent indeed made a request to be relieved; that respondent failed to undergo
the mandatory post-employment medical examination; that respondent failed to
show that his repatriation was due to a work-related illness; and that depression is
not an occupational disease, hence, not compensable.
On further appeal, the CA reversed the decision of the NLRC and reinstated that of
the Labor Arbiter, holding that respondents depression which rendered him unfit to
work was a direct result of the demands of his shipboard employment and the harsh
and inhumane treatment of the vessels officers towards him. Upon denial of the
motion for reconsideration, the present petition is filed.
ISSUE:
Whether or not the CA erred in reversing the NLRC decision
HELD:
For an injury or illness to be duly compensated under the terms of the Philippine
Overseas Employment Administration-Standard Employment Contract (POEA-SEC),
there must be a showing that the injury or illness and the ensuing disability
occurred during the effectivity of the employment contract.
Section 20(B) of the POEA-SEC, paragraph (3) requires: upon sign off from the
vessel for medical treatment, the seafarer is entitled to sickness allowance
equivalent to his basic wage until he is declared fit to work or the degree of
permanent disability has been assessed by the company-designated physician but
in no case shall this period exceed one-hundred twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three working days upon his
return except when he is physically incapacitated to do so, in which case a written
notice to the agency within the same period is deemed as compliance. Failure of the
seafarer to comply with the mandatory reporting requirement shall result in his
forfeiture of the right to claim the above benefits.
Respondents claim of having reported to petitioner Transmarines office within three
days from his arrival in the Philippines remains just that. As duly observed by the
NLRC, respondent merely consulted a private practitioner more than one month
after his arrival three weeks after he had already filed his complaint for disability
benefits; and he secured a medical certification that he was unfit for sea duty from
another private physician only on March, 2005 or six months after his arrival.
For an occupational disease and the resulting disability or death to be compensable,
all of the following conditions must be satisfied:
[1] The seafarer's work must involve the risks described herein;

[2] The disease was contracted as a result of the seafarer's exposure to the
describe risks;
[3] The disease was contracted within a period of exposure and under such
other factors necessary to contract it; and
[4] There was no notorious negligence on the part of the seafarer.
Specifically with respect to mental diseases, for the same to be compensable, the
POEA-SEC requires that it must be due to traumatic injury to the head which did not
occur in this case. While disability should be understood less on its medical
significance but more on the loss of earning capacity, the appellate courts sweeping
observations that "the hostile working environment and the emotional turmoil
suffered by herein respondent from his employers caused him mental and emotional
stress that led to severe mental disorder and rendered him permanently unable to
perform any work," and that "his working condition increased the risk of sustaining"
the illness complained of do not lie.
By respondents claim, he became depressed due to the frequent verbal abuse he
received from his German superiors within less than one month that he was on
board the vessel. Aside from a "To whom it may concern" handwritten letter of
respondent attached to his Position Paper filed before the arbiter detailing the
alleged instances of verbal abuse, which letter bears the alleged signatures of some
of respondents colleagues, respondent failed to proffer concrete proof that, if indeed
he was subjected to abuse, it directly resulted in his depression.
GRANTED
30.
LEONIS NAVIGATION CO., INC. and WORLD MARINE PANAMA,
S.A., Petitioners, v. CATALINO U. VILLAMATER and/or The Heirs of the
Late Catalino U. Villamater, represented herein by Sonia Mayuyu
Villamater; and NATIONAL LABOR RELATIONS COMMISSION,
Respondents.
FACTS:
Private respondent Catalino U. Villamater was hired as Chief Engineer for the ship
MV Nord Monaco, owned by petitioner World Marine Panama,S.A., through the
services of petitioner Leonis Navigation Co., Inc., as the latter's local manning
agent. Prior to his deployment, Villamater underwent the required Pre-Employment
Medical Examination (PEME).He passed the PEME and was declared Fit to Work.
Thereafter, Villamater was deployed on June 26, 2002. Around four (4) months after
his deployment, Villamater suffered intestinal bleeding and was given a blood
transfusion.He consulted a physician in Hamburg,Germany, who advised hospital
confinement.He was advised to undergo chemotherapy and continuous supportive
treatment, such as painkillers and blood transfusion. Villamater was later
repatriated and as soon as he arrived in the Philippines, Villamater was referred to
company-designated physicians.
The diagnosis and the recommended treatment abroad were confirmed.He was
advised to undergo six (6) cycles of chemotherapy. However, Dr. Kelly Siy Salvador,
one of the company-designated physicians, opined that Villamaters condition
appears to be not work-related, but suggested a disability grading of 1. In the

course of his chemotherapy, when no noticeable improvement occurred, Villamater

filed a complaint before the Arbitration Branch of the National Labor Relations
Commission (NLRC) for payment of permanent and total disability benefits.
The Labor Arbiter rendered a decision in favor of Villamater, holding that his illness
was compensable, but denying his claim for moral and exemplary
damages.Petitioners and Villamater appealed to the NLRC. The NLRC issued its
resolution,dismissing the respective appeals of both parties and affirming in toto the
decision of the Labor Arbiter. Aggrieved, petitioners filed a petition
forcertiorariunder Rule 65 of the Rules of Court before the CA.The CA rendered its
assailed Decision, dismissing the petition.
ISSUE: Whether or not Villamater is entitled to total and permanent disability
benefits.
HELD: Court of Appeals decision is affirmed.
Under Section 32-A of the POEA Standard Contract, only two types of cancers are
listed as occupational diseases (1) Cancer of the epithelial lining of the bladder
(papilloma of the bladder); and (2) cancer, epithellematous or ulceration of the skin
or of the corneal surface of the eye due to tar, pitch, bitumen, mineral oil or
paraffin, or compound products or residues of these substances.Section 20 of the
same Contract also states that those illnesses not listed under Section 32 are
disputably presumed as work-related.Section 20 should, however, be read together
with Section 32-A on the conditions to be satisfied for an occupational disease and
the resulting disability or death to be compensable, to wit: 1. The seafarers work
must involve the risk described herein; 2. The disease was contracted as a result of
the seafarers exposure to the described risks; 3. The disease was contracted within
a period of exposure and under such other factors necessary to contract it; 4.There
was no notorious negligence on the part of the seafarer.
In the case of Villamater, it is manifest that the interplay of age, hereditary, and
dietary factors contributed to the development of colon cancer.By the time he
signed his employment contract on June 4, 2002, he was already 58 years old, an
age at which the incidence of colon cancer is more likely.He had a familial history of
colon cancer, with a brother who succumbed to death and an uncle who underwent
surgery for the same illness.Both the Labor Arbiter and the NLRC found his illness to
be compensable for permanent and total disability, because they found that his
dietary provisions while at sea increased his risk of contracting colon cancer
because he had no choice of what to eat on board except those provided on the
vessels and these consisted mainly of high-fat, high-cholesterol, and low-fiber foods.
The Labor Arbiter and the NLRC were correct in granting total and permanent
disability benefits in favor of Villamater, as it was sufficiently shown that his having
contracted colon cancer was, at the very least, aggravated by his working
conditions,taking into consideration his dietary provisions on board, his age, and his
job as Chief Engineer, who was primarily in charge of the technical and mechanical
operations of the vessels to ensure voyage safety.Jurisprudence provides that to
establish compensability of a non-occupational disease, reasonable proof of work-

connection and not direct causal relation is required.Probability, not the ultimate
degree of certainty, is the test of proof in compensation proceedings.
By reason of Villamater's entitlement to total and permanent disability benefits, he
(or in this case his widow Sonia) is also entitled to the award of attorney's fees, not
under Article 2208(2) of the Civil Code, when the defendant's act or omission has
compelled the plaintiff to litigate with third persons or to incur expenses to protect
his interest, but under Article 2208(8) of the same Code, involving actions for
indemnity under workmens compensation and employers liability laws.
DENIED.

31.
JERRY M. FRANCISCO vs. BAHIA SHIPPING SERVICES, INC.
and/or CYNTHIA C. MENDOZA, and FRED OLSEN CRUISE LINES, LTD.,
G.R. No. 190545: November 22, 2010
FACTS:
Jerry M. Francisco (petitioner) entered into a shipboard employment contract on
April 5, 2004 with respondent Bahia Shipping Services, Inc. (Bahia Shipping) to work
for its co-respondent foreign principal Fred Olsen Cruise Lines Ltd. as ordinary
seaman. Petitioner went through the mandatory Pre-Employment Medical
Examination (PEME) with Maritime Clinicwhich noted that he was repatriated in
January 2004 while serving under a previous contract with respondents due to
aGeneralized Tonic-Clonic Type Seizure Disorder.
Petitioner boarded the vessel on April 24, 2004 but was repatriated on June 3, 2004,
after histonic-clonic seizures recurred, having suffered four to five fits of seizures
nighttime of May 26, 2004, and the ship doctor having found that petitioner was not
fit to continue employment at sea.
Petitioner continued to avail of his follow-up check-ups and re-evaluations with the
company-designated physicians from June to September 2004. After the lapse of the
120-day period following petitioners repatriation, respondents informed him that
further medical expenses would be on his own account.
Petitioner consulted a private, independent physician, Dr. Efren R. Vicaldo (Dr.
Vicaldo. Dr. Vicaldo deemed petitioners illness as work-aggravated, found him unfit
to resume work as seaman in any capacity and was not expected to land a gainful
employment.
Thus, petitioner filed a a Complaint with the National Labor Relations Commission
(NLRC) for payment of disability benefits, illness allowance, reimbursement of
medical expenses, damages and attorneys fees against respondents.

The LA ruled in petitioners favor, holding that he got ill during the effectivity of his
employment contract, hence, entitled to disability benefits. Had the illness been
pre-existing, the Labor Arbiter held that it could have been discovered during the
PEME.
NLRC overturned the Labor Arbiters Decision holding that the illness of petitioner
was pre-existing in nature because it was the same illness for which he was
medically repatriated under a previous contract with respondents.
On appeal, the CA upheld the NLRC decision. Petitioner filed a motion for
reconsideration but the same was denied. Hence, this petition.
ISSUE:
Whether or not petitioner is entitled to disability benefits
HELD:
Given that the employment of a seafarer is governed by the contract he signs every
time he is rehired and his employment is terminated when his contract
expires,petitioners illness during his previous contract with respondents is deemed
pre-existing during his subsequent contract.
That petitioner was subsequently rehired by respondents despite knowledge of his
seizure attacks does not make the latter a guarantor of his health. A seafarer only
needs to pass the mandatory PEME in order to be deployed on duty at sea. Notably,
petitioner was consistently declared "fit to work" at sea after every PEME. However,
while PEME may reveal enough for respondents to decide whether a seafarer is fit
for overseas employment, it may not be relied upon as reflective of petitioners true
state of health. The PEME could not have revealed petitioners illness as the
examinations were not exploratory.
But even granting arguendo that petitioners illness was not pre-existing, he still had
to show that his illness not only occurredduringthetermofhiscontractbut also that it
resulted from awork-relatedinjury or illness, or at the very least aggravated by the
conditions of the work for which he was contracted for.Petitioner failed to discharge
this burden, however.
That the exact and definite cause of petitioners illness is unknown cannot be used
to justify grant of disability benefits, absent proof that there is any reasonable
connection between work actually performed by petitioner and his illness.
It bears noting that the company-designated physician of respondent who
monitored petitioners condition and treatment for several months categorically
stated that petitioners illness is not work-related was controverted by petitioners
own physician, however. Section 20 (B) of the POEA Standard Contract provides that
if a doctor appointed by the seafarer disagrees with the assessment, a third doctor
may be agreed jointly between the employer and the seafarer. The third doctors
decision shall be final and binding on both parties. This procedure however was not
availed of by the parties.

While the Court adheres to the principle of liberality in favor of the seafarer in
construing the POEA Standard Contract, it cannot allow claims for compensation
based on surmises. When the evidence presented then negates compensability, the
claim must fail, lest it causes injustice to the employer.
DENIED